SVG

St. Kitts debt default could negatively affect entire OECS – Eustace

Opposition Leader Arnhim Eustace (File photo).

KINGSTOWN, St. Vincent – Opposition Leader Arnhim Eustace believes that the St. Kitts and Nevis default on bond payments last November can negatively affect investments in the entire sub-regional Organisation of Eastern Caribbean States (OECS).

The Dr. Denzil Douglas government, in the midst of developing a debt-rescheduling package to meet International Monetary Fund (IMF) stringencies, announced in November its “inability to make payments for a bond which became due on November 25”.

And Eustace, an economist and former prime minister and minister of finance, said that this could affect investor confidence in the eight-member OECS, which shares a common currency and economic union.

He said on Monday during his weekly radio appearance that the international community does not see the OECS as individual nations. “… the OECS is about having one economy, one economic space for all the countries. And therefore, what happens in one country affects all of us,” he said.

“In other words, we are supposed to be one economic space attracting investments and so forth, both domestic and foreign.”

According to Eustace, the international community considers what happens in each OECS nation “in the same way that today, in Europe, people are looking at what is happening in Greece, … Spain, … Portugal and how it affects the whole of Europe, the whole European economy”.

He said that the first address of newly-elected French President Francois Hollande on Sunday “was directed at Europe, … saying that the measures that Europe has proposed to deal with the economic problems are too austere and he would want that pact renegotiated.

“We are in a similar situation here — maybe not as bad as some of the countries in Europe — but we have some serious problems, very, very serious problems in the OECS, which have to be addressed.

“And when it affects one, it affects all … to different degrees and it … hampers the future of the integration movement itself,” said Eustace, who last week attended in Castries a meeting of OECS opposition parliamentarians and St. Lucia Prime Minister Dr. Kenny Anthony.

The meeting discussed a proposal for an OECS assembly and Eustace said that in the face of these talks there are “serious financial problems in some of our OECS countries which could impact on all of us”.

He said that after Basseterre could not pay the bond issue, the Douglas government substituted a new bond that was half the value of the old one and at a lower interest rate.

“The loss of money to those who invested in those bonds is significant. I heard some discussion, which range from a loss of 75 to 85 per cent on those bonds.

“… Now, when an investor sees that happening in one OECS country, they are wondering what would happen in another … All these things are critical and some people may say it has nothing to do with them but I am telling you it has to do with everyone of us as citizens of OECS countries,” Eustace said.

He further said that such developments “send messages internationally and will affect investment” which in turn affect job creation and a state’s ability to provide services, such as healthcare, to its citizens.

Antigua misappropriates IMF funds

The government of Antigua and Barbuda, Eustace said, did not use some IMF monies for the intended purposes and the international financial institution stopped disbursing to St. John’s, forcing the government to renegotiate.

Eustace noted that Antigua is one of the largest OECS economies — representing, when coupled with St. Lucia, 48 per cent of the OECS economy.

“So, when these economies have serious financial problems, they impact on us,” he said, noting that the OECS has had to withstand international pressure to devalue its currency, which has been pegged to the U.S. Dollar at EC$2.70 for more than 20 years.

“We want to maintain the value of that E.C. dollar and it is important that all sectors of our economy get a jump, move forward to bring less pressure and less desire by the World Bank and others to try to devalue our currency. … But we have to keep our exports going. We have to strengthen our economies because the pressure to [devalue] will mount if we don’t do it.

“So, when we have those financial things that I spoke about, all those have implications. They have impact. And I am not being alarmist here. I am worried about it. If all of us are having problems at the same time, a lot more pressure is going to come on us internationally,” he said, adding that the IMF previously insisted every year that the E.C. Dollar be devalued.

“And the countries have stood together in all those time. But they didn’t just stick together. The big economies were doing well. And we have to watch that,” Eustace said.

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Discussion

14 thoughts on “St. Kitts debt default could negatively affect entire OECS – Eustace

  1. Some outside forces could conceivably come in to DECIDE FOR US who may or may not comprise our actual Government, ultimately. That serious. Quite possible, indeed, no matter how improbable. Just a warning …

    Posted by STEVE_ HUGGINS | May 9, 2012, 12:02
  2. Why do i always have to listen to the opposition leader to hear matters about the economy and economics. It is getting quite clear to most people that the Prime Minister is a serious job, and few are capable of handling the job. As much training as our PM has had in Law, he knows little about economics and his “I know everything” attitude stops him from listening to the people who do know about such matters. So our economy is down to levels that few have seen, while he will continue to hug you up and tell you how he love poor people.

    He didn’t think he was going to win the last election, so he deliberately mash up the country, so the NDP could get it. Then he thought that he would blame them for the bad state of the country and get back in power Next election. But God don’t sleep, and he got back the same country he mashup in the first place, and the same trap he set, came back and catch him. hahaahah. Sometimes i just have to laugh.

    Posted by blane | May 9, 2012, 14:00
    • How asinine could BLANE be?

      Is Blane saying that clueless Arnhim is an example for anyone to follow? Should that be the case, then Blane should ask the great USA exactly what they think of Arnhim Eustace. Or closer to home, Blane should ask Sir James what he thinks about Arnhim.

      Why doesn’t Blane ask AMNESIA and FRANK Da SILVA what they know about clueless Arnhim?

      So Blane says that our economy is down. Has Blane heard what clueless Arnhim recently had to say about the economies of St Kitts, Antigua and St Lucia? Blane, put your brain in gear before you attempt to move off. …Or learn something, before you attempt to shoot your mouth off.

      While at it, why doesn’t Blane ask the USA what they think of Dr Ralph Gonsalves, his intelligence, and his abilities?

      Posted by BLANE EXTINGUISHER | June 4, 2012, 15:58
      • hahaahaahahahaahaha, i just have to laugh at the foolishness i see on this site. Ask Canada what they think of Dr Ralph and ask the police woman who he wanted to kiss aT 4 in the morning or better yet ask the Canadian lawyer … The Prime minister of SVG, is 2 time accused of rape, you want me to ask about that too?? I am not a part of the NDP idiot, and i never will join any political party, my loyalty lies with my country and it’s people.

        I am not going to defend Mr Eustace, he’s a grown man and could more than defend himself against minor idiots like yourself. You’re just a groupie of Dr Ralph, who destroyed allllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll the industries that ST Vincent had. Ralph cannot buy my vote with no spec man, and their is not enough money in SVG to be able to buy my vote, because my vote is not for sale, what about yours?. Sellouts like you,who sold your morals and conscience for nothing, are who would bare the shame for the things that are still presently happening in SVG. Talking a whole bunch of nonsense when our economy is in the shitters, it is worst than it was, when i left Vincy in 2000.

        You do know that progress means you should go forward and not backwards right??

        The airport is the “dream” that you bunch of idiots are holding onto. Mash up the roads, the health care system, over charge for electricity, over charge for water, mash up the banana industry. So when the country mashup and our airport is done, who would go their?? not tourist for sure. I want an airport too, i would like to be able to take one flight home, but not at the cost of the people’s lives and standard of living in SVG.

        You are either foolish or you sold us out, either way, you’re an idiot. Wheeeeeeeeeeeellllll and come again.

        Posted by blane | June 4, 2012, 17:04
      • Vincy powa again parading around as Blane Extinguisher

        Posted by vincy in bad shape | June 4, 2012, 20:19
  3. Saint Kitts and Nevis
    Due to non-profitability, the government closed the sugar industry in 2005.
    Tourism is a major and growing source of income to the island, although the number and density of resorts is less than on most other Caribbean islands. Shipping, agriculture, manufacturing and construction are the sectors of the economy showing growth.

    St. Kitts is currently dependent on tourism to drive its economy. The tourism trend for Saint Kitts has been increasing since 1978. In 2009 there was 587,479 arrivals to Saint Kitts compared to 379,473 in 2007, which represents an increase of just under 40% growth in a 2 year period. As tourism grows the demand for vacation property increases in conjunction

    Saint.Kitts & Nevis also acquires foreign direct investment from their ‘Citizenship by Investment Program’, outlined in their ‘Citizenship Act of 1984‘. Interested parties can acquire Citizenship if they pass the government’s strict background checks and make an investment into an approved real estate development. One such project is the Silver Reef development. Purchasers who make a minimum investment of US$350,000 are entitled to apply for citizenship of the Federation of St. Kitts and Nevis.

    In Saint Kitts and Nevis the Prime Minister can be removed from office by the assembly, or by the Governor General if he feels that the Prime Minister no longer enjoys the support of the majority of representatives. The assembly is elected every five years unless the Governor General dissolves it before the end of this period, which he may do on the advice of the Prime Minister.

    Prime Minister Denzil L. Douglas is prime minister and minister of finance.

    The R.L. Bradshaw International Airport is 100% government owned. Formerly known as Golden Rock, is capable of handling large jet traffic since the runway was extended to its current dimensions of 8,000×150 ft (2,439×45.7m) in 1974. Lying approximately two miles (3km) from the island’s capital city of Basseterre, the airport was renamed after its first Premier, R L Bradshaw, in 1995.
    The government is constrained by a high public debt burden equivalent to nearly 185% of GDP by the end of 2006, largely attributable to public enterprise losses and the extending and running of the airport which is a huge drain on the economy.

    Saint Kitts currently holds observer status at ALBA, and has decided to join ALBA at sometime in the near future. The terms of joining are shown below.

    To promote trade and investment between member governments, based on cooperation, and with the aim of improving people’s lives, not making profits.
    For member states to cooperate to provide free healthcare and free education to people across the ALBA states.
    To integrate the ALBA member’s energy sectors to meet people’s needs.
    To create alternative media [TV and Newspaper] to counterbalance the US and regional neo-liberal media and promote an indigenous Latin American identity.
    To ensure land redistribution [the Robin Hood Syndrome] and food security within the member states.
    To develop state-owned corporations.
    To develop basic government owned industries so that ALBA member states can become economically independent.
    To promote socialist workers’ movements, student movements, and socialist movements.
    To ensure that projects under ALBA are environmentally friendly

    Saint Kitts is a member of PetroCaribe since September 2005.

    THEY DEFAULT, PROBABLY BECAUSE OF THE COST OF THE AIRPORT AND THE STRAPPING OF THE COUNTRY TO THE SALE OF BONDS AND TREASURY BILLS, WHICH IS A BAD IDEA, BECAUSE SOONER OR LATER THEY HAVE TO BE REPAID

    Posted by PETER | May 9, 2012, 18:17
  4. MAYBE DOUGLAS SHOULD OF SORT SOME ADVICE FROM GONSALVES

    Posted by PETER | May 9, 2012, 18:28
  5. These crises tend to have contagion effect,hence why nobody is talking about it,ie if nvestors realize ec countres can default they wont lend us money,and gonsalves wont be able to pay the workers every month..so shhhhh Arnhim…..ssssssssshhhhh Kenton don’t talk de secret l.o.l

    Posted by Joe | May 10, 2012, 01:45
  6. Their Commonwealth neighbour, CANADA, would probably step in AS A LAST RESORT, to economically rescue ST. KITTS-NEVIS. Similar to what they and the USA, plus EUROPE, did some time ago with MEXICO’s ECONOMIC COLLAPSE, circa 1995. The Canadians are quite able, and would most likely be willing so to do.

    Failing this, the EUROPEAN UNION, its economic powerhouse GERMANY, with their cultural allies in the wider NON-COMMUNIST Latin America, would render some assistance.

    If these traditional friends do not spot and alleviate the crisis early enough, then the POLITICAL CANCER OF COMMUNISM would rear its UGLY LENINIST HEAD, in pretending to help, but meanwhile sabotage and overthrowing the sovereignity and independence of our ST. KITTS-NEVIS COUSINS.

    Many of our VINCENTIAN nationals, especially on the East Coast, do not realize that there are solid historic special ties between our SVG people and the Kittitians and Nevisians — in the very historic composition of our Vincy population. Many of our LEEWARD or WESTERN COAST OF SVG pioneer nationals were people from ST. CHRISTOPHER, NEVIS, and ANTIQUA. Several of the colonists from the “Old Colonies” of the LEEWARD ISLANDS, re-located to the newer, greener pastures, of north leeward St. Vincent island, upon the BRITISH gaining effective control of this homeland. Innumerable Black or Afro-West Indian peoples, then subjugated in colonial slavery, were consequently also brought over to THE ROCK by these enterprising British-French settlers. Most of these new arrivals were settled on our more sparsely peopled WESTERN COAST. One of my family names is derived from one of these NEVISIAN settlers in SVG. They became prominent in TRINIDAD, also, and GRENADA, and at least two female descendents returned to SVG and married/remarried into the HADLEY families.

    A curious spin-off phenomenon of this historical occurence of LEEWARD ISLANDS SETTLERS moving on to try their fortunes in SVG, instead, is the very close sense of afinity that some of us specifically note in the MONTSERRAT people, generally, toward their Vincentian counterparts. Probably at least partially accounted for by the common set of like/related settlers, slaves and freedmen from the same “stop-over” colonial points. Quite a few inter-marriages have taken place between partners from SVG and Monserrat, seemingly disproportionate to their respective populations. These part-French creole influenced new settlers from the Leeward islands, also, tended to very easily fit in with and accultrate with, especially, the more heavily French influenced populations on the central and south western areas of St. Vincent, and BIABOU. For many years, these Leeward Islands-originaged foreparents greatly influenced our Vincy dialect — and some amateur linguists would say this is even so, significantly, to this very day.

    So, we in SVG may safely consider our ST. KITTS brethren as even much more closer ancestral cousins and collateral relations. This phenom has all-important implications for our SVG National History, of which our school-teachers need to be ever more greatly aware. So, our West Indian cousins in St. Kitts, and Nevis, are preceded us — at least OPENLY — down to road of economic collapse. They are our integral O.E.C.S./Eastern Caribbean Currency Authority partners and brethren.

    The O.E.C.S. currency system was foundationally set up, requiring UNANIMOUS decision making. Even one weak break in the FINANCIAL-FISCAL CHAIN LINK could conceivably have dire repercussions — especially for us in SVG. This is a most definite ill economic wind. This current KITTICIAN enigma which bodes no good must be tackled with dispatch and utmost urgency. The financial future of the entire Eastern Caribbean would be negatively impacted. There would be attendant major damage to CARICOM and our regional integration movement.

    Let us properly treat this as AN EASTERN CARIBBEAN EMERGENCY of the first order.

    Posted by STEVE_ HUGGINS | May 11, 2012, 11:08
  7. Is it true that a consignment of adult nappies were delivered to the prime ministers official residence?

    Posted by Peter | May 12, 2012, 08:36
  8. Is he pampering himself again?

    Posted by Peter | May 12, 2012, 08:36
  9. HOW AOUT THIS SCENARIO.

    ON A NUMBER OF OCCASSIONS TREASURY BILLS AND BONDS HAVE BEEN UNDERSUBSCRIBED AND THE SVG N.I.S. HAVE BEEN REQUIRED BY THE GOVERNMENT TO BUY THE UNDERSUBSCRIPTION TO HIDE FROM THE MARKET ANY WEAKNESS IN SALES.

    DOING THIS THE MARKET BELIEVES THAT OUR BONDS AND BILLS ARE ALWAYS FULLY SUBSCRIBED OR OVER SUBSCRIBED.

    WE KNOW WHO THE APPOINTED BROKERS ARE IN EACH SALE, BUT THE NAME OF THE BUYER IS NOT ALWAYS REVEALED.

    WE KNOW THE NCB BANK AND SAINT VINCENT BANK BUY AND HAVE FREQUENTLY BOUGHT ON BEHALF OF BUYERS IN SVG.

    THE QUESTION IS WHAT VALUE OF BOND AND BILLS IS THE SVG NIS CURRENTLY HOLDING?
    WE NEED TO KNOW BECAUSE IF THE GOVERNMENT ARE GOING TO DEFAULT, THEY WILL DEFAULT ON THE NIS NOT OTHER INVESTERS AND WE WILL NEVER KNOW UNTIL YEARS LATER.

    AND WHILE WE ARE ASKING THE QUESTION WE NEED KNOW IF ITS TRUE THE GOVERNMENT HAVE RECENTLY BORROWED FROM THE NIS.

    ALSO HOW MUCH DOES THE ARGYLE AIRPORT COMPANY NOW OWE THE NIS?

    THIS MONEY BELONGS TO THE PEOPLE NOT THE GOVERNMENT, IT SHOULD SACROSANT,

    STOP ROBBING OUR NIS.

    YOU PEOPLE IN THE DIASPORA SUPPORTING THIS WICKED REGIME, PLEASE WAKE UP AND SMELL THE DUNG.

    DING DONG DUNG

    Posted by Peter | May 13, 2012, 11:07
  10. GONSALVES HAS GOT HIS HEAD STUCK IN THE SAND, BEHIND HIM ARE EACH OF HIS SUPPORTERS, THE FIRST HAVING THEIR HEAD UP GONSALVES ARSE, THE REST FOLLOWING THE ONE IN FRONT WITH THEIR HEADS UP EACH OTHERS ARSE, NO ONE IS WILLING TO SEE WHAT IS REALLY HAPPENING.

    PLEASE LETS HAVE AN UPDATE ON GONSALVES HEALTH, AT LEAST WE MAY HAVE SOMETHING THEN TO REJOICE ABOUT.

    Posted by Peter | May 13, 2012, 11:15
  11. So Blane, you still refused to ask the USA what they think about Arnhim Eustace? Ah wonder why?

    And Blane, you did not ask AMNESIA and Frank Da Silva about Arnhim’s lack of vision and intelligence. Ah wonder why?

    And Blane, let me ask you this, which political party in SVG do you support? WHEN YOU ANSWER THAT QUESTION, YOU WILL UNDERSTAND WHY YOUR MIND IS SO TWISTED AND YOU ARE SO IGNORANT.

    PS: NO, THIS IS NOT VINCY POWA……….This is me, your worst nightmare!

    Posted by Blane Extinguisher | June 4, 2012, 22:41

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