Many of us were absolutely delighted that the Honourable Prime Minister took the time out from his very busy schedule to cross a hazardous strait to appear on Von RadioÕs LetÕs Talk show. But, despite his many kind words, we were provided little or no relief from the stark realities that exist as they relate to his governmentÕs fiscal recklessness and the resultant harmful effects on the hopes, dreams and aspirations on the people of Nevis.
It would be a big mistake for the prime minister to conclude that the reduced decibel level in the cries of our leaders for full independence for the people of Nevis suggests, somehow, that all is at peace on this side of The Narrows. The reality is that the persistent grabbing of this NationÕs resources by the central government of Basseterre that has persisted unchecked from Bradshaw to Douglas has been as vicious, as brutal and as cold as it has always been. Nothing has changed.
In response to the prime ministerÕs claim that the central government pays its debt financing obligations in a timely manner, one caller drew attention to the devastating effects that this legally binding commitment has on curtailing the delivery of services for which there are no legally binding commitments. The contractual agreement between borrower and lender clearly specifies the specific date on which each periodic repayment of the loan is to be made. Thus the federal government is left with no choice, but to make these payments on time.
By contrast, there is no binding legal agreement for cleaning up the Basseterre Waterfront thru which Nevisians enter and exit daily and which has been described as an eyesore. There is no legal agreement to share with Nevis any portion of the $32.5 million of free money that Taiwan donated for World Cup Cricket; or the user fees for the sale of our UN whaling vote to Japan that funded the construction of two fishing complexes in St. Kitts.
There is also no legal agreement that mandates a reversal in the cuts in police staffing positions in Basseterre from 421 in 2001 to 398 in 2007; at the same time that the hoodlums on the street are beefing up their own armed forces and fanning out to different parts of the country.
Our Honourable Prime Minister is to be reminded that the count of staffing positions in the fire department and defense force are recorded as separate entries in his budget. They are not commingled with his police personnel. The taking of a meat axe to the staffing of the police department has occurred smack in the middle of a stepped up reign of terror. While the criminals on the street have beefed up their forces our government has reduced the number of police who are patrolling their neighbourhoods.
Robbing Peter to pay Paul provides little comfort to us over on this side of The Narrows. The Labour government of Basseterre has been fiscally reckless with the public purse. It has failed in each and every year that it has been in office to balance its books on current account, racking up deficits for several years in a row of well over $50 million in each year. This has not been the case in Nevis where a more fiscally prudent government has produced budget surpluses in 8 out of 14 years.
As a consequence, the cumulative public debt of Basseterre now approaches 190 percent of gross domestic product and is described by the IMF as being Òamong the highest in the [entire] worldÓ. In this year alone, the central government will pay debt service charges in the amount of $155,658,808. These services charges will soak up a whopping 37 percent of the $425,584,639 in recurrent revenues that the central government estimates that it will collect this year. This debt must be paid on time just as we pay the finance charges on our credit cards.
Because these obligations must be met, it means lost opportunities for providing other critical services These debt service charges must be paid even if it means that there are no funds left over for beefing up our security forces to curb a record high per capita homicide rate that now stands at an astonishing 59 per 100,000, among the highest in the entire world. His proud boast that he pays his debt service charges on time ignores the wake of destruction that is left in its path. The feeding frenzy that ensues as each ministry in Basseterre jockeys for position for its turn to feed at the public trough means that Nevis is muscled out and deprived of the funds that are critical to its development.
BasseterreÕs fiscal crisis has a devastating effect on us in Nevis. Because of our joint membership status with a number of international donor assistance agencies, Nevis is not able to provide its own financial guarantees for funding major infrastructure projects. It must therefore suffer the ultimate humiliation by begging those who are in worse fiscal shape than we are to endorse a federal loan guarantee, even though every red cent of the underlying loan would be paid in full by the sweat and brow of hard-working Nevisians. It doesnÕt get any more humiliating than this.
To add insult to injury, our Honourable Prime Minister makes the heroic claim that he has endorsed all federal loan guarantees that Nevis has requested. The only problem is that he doesnÕt seem to be aware of our Honourable PremierÕs request for a federal loan guarantee for funding the completion of the Main Road project. On August 11, 2006, in reporting to the people of Nevis on his first month in office, our Honourable Premier said, ÒÉ.I am also pleased to report that I have had the first meeting with Prime Minister Douglas. He has given his support in regard to the guarantee for a loan to complete the Nevis Island Main RoadÉÉÓ
It is estimated that this federal guarantee would save the people of Nevis an estimated $5 to $8 million for a deeply-discounted World Bank loan compared to a loan from a regional or local lender at substantially higher commercial retail lending rates. Yet, no one can find this guarantee.
It was also unfortunate that our Honourable Prime Minster picked on Williams and Thomas of Gingerland to perpetuate and extend his practice of fiscal recklessness. His mistaken notion that somehow Williams is made better off by purchasing a $250,000 home than Thomas who does not, demonstrates a bad case of money illusion of the worst sort imaginable. The prime minister is to be reminded that the average Kittitian or Nevisian earns $22,222 a year.
He is neither Williams nor Thomas who may be regarded as rich, and more likely than not a member of the upper crust. The monthly payments on a 15-year mortgage note, at 8 percent, with a 10 percent down-payment are going to be in the neighbourhood of $2,150 a month. Mr. Prime Minister, the average Kittitian earns $1,851 a month. You are asking your people who you have entrapped in a $1,851 monthly per capita income bucket to get out and hustle 14 jobs to make ends meet to pay for this impossibly high mortgage note of $2,150 a month.
Your expectations of illusory gains from the appreciation in value of the property does not advance your case. As the size of the family increases, the borrower will quickly discover that he will not be able to cash-in on these fictitious gains in property values because every house that he would like to purchase has also appreciated in value, leaving him in the same lousy state as he was before. Moreover he will blame our Honourable Prime Minister for his a failure to hold the rate of inflation in check that has led to the escalation in home prices.
Mr. Prime Minister, consider setting this example aside. Fiscal recklessness is neither good for the government, nor good for the masses.
