Deputy Leader of the Opposition and Castries East MP Philip Pierre closed the first day of the budget debate. His presentation began just after 8pm on Monday April 18 and finished around 10pm.
His primary concern was the realistic effects of the current economy growth Prime Minister Stephenson King announced on Thursday in his Budget Address.
“The government tells us there was a 4.4 percent growth in the economy. The prime minister goes further to say that this growth is made on the new calculation of the Gross Domestic Product and if the old method of calculation was used, it would have been 16 percent less in the old method. The unemployed young person, the businessman, the vendor, the farmer, understands much better than the honourable prime minister that this growth that he describes can be said to be lies, damn lies and statistics.”
Pierre continued, “The 4.4 percent growth does not yield the sufferings of the people. The people cannot afford to buy the cylinder of gas for $40. The statistical new method means nothing to the housewife who cannot make ends meet. This method only pleases the egos of economists not the people of the country. The people do not trust or care (for) rebate figures. They want bread, freedom and justice.”
Pierre opined the statistical growth does not add up to the reality of the people of St Lucia. He said, “The government is telling us that even though they borrowed substantially from 2007 to 2010, the debt to GDP ratio has actually declined under the rebate method. This means that when the St Lucia Labour Party ruled the country, the debt to service ratio was much lower than was stated in the Social and Economic Review because those figures were not based on the rebate method. So all the talks about debt and cost overruns have been debunked by their own calculations. But what these rebate figures say is that between the years 2003 to 2006 the St Lucia Labour Party created a cumulative total of 34.43 percent growth in the economy of St Lucia.”
Pierre quoted from an International Monetary Fund (IMF) report which warned the government, “St Lucia’s debt profile is heavily dependent on private financial sources which has increased the cost of financing and the roll over risks. Due to the small pool of creditors in the regional markets, the risk of exhausting financing sources have increased.”
The IMF report also says that if it becomes necessary to tap private international markets, St Lucia will attain an unfavorable credit rating which will result in the country facing higher interest on borrowing.
In light of this, Pierre noted, “In this budget the government will borrow a further $96 million and it intends to undertake a private airport financing arrangement over half a billion dollars of debt.”
Pierre wondered where exactly the 4.4 percent growth actually came from. He said, “While the prime minister speaks of a 4.4 percent growth, the department of management studies in a recent CARICOM Consumer Sentiment survey it says that St Lucia is in the lower bracket in the Consumer Sentiment Index. It also said that St Lucia found its self in the lower bracket in the Consumer Expectation Index. St Lucia stood in the lower bracket in the Current Economic Situation Index. It stood in the lower bracket in the Current Personal Financial
Situation Index. St Lucia stood in the lower bracket in the Current Personal Financial Expectations Index. The only index where St Lucia was equal was in the Current Buying Conditions Index.
Pierre told the House he has no issue with the calculation of the growth. However, he continued to emphasize: “The people of the country are not feeling this growth. It is statistics. We can boast about the statistics but the reality of the situation is that the people do
not feel it.”
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