This observation was made on Friday (31st January, 2014), by an IMF delegation that is currently in the federation meeting with government representatives at both the federal and local levels.
The meeting on Friday with IMF Chief of Mission Judith Gold and Prime Minister Dr. Denzil Douglas and Premier Vance Amory, along with their respective Cabinet colleagues, was organized to provide some sector feedback coming out of meetings held by the IMF with local stakeholders, having undertaken its Article IV assessment of the economic situation in St. Kitts and Nevis.
The IMF is said to have reported an overall strengthening of the fiscal position in St. Kitts and Nevis largely due to increasing income flows into the Treasury from the Citizenship by Investment Programme. While tax revenues were and continue to be stagnant, income from the Citizenship by Investment Programme provided a cushion for the St. Kitts Nevis Government’s financial position, said the IMF
The IMF however cautioned that the Citizenship by Investment programme was subject to potential risks and therefore overall strengthening of the tax collection was necessary.
Overall debt has been reduced due to the debt restructuring exercise undertaken and the debt to GDP position now stands at 105% of GDP. Whilst that is much lower than it has hitherto been, it is still 25% above the rest of the Eastern Caribbean Currency Union (ECCU) and well about the recommended level of 60%. The IMF was clear that more sustained effort was necessary.
The prediction is that St. Kitts and Nevis should lead the ECCU in terms of economic growth for 2014 albeit it will continue to lag behind the rest of the wider Caribbean region.
A commitment was made by Prime Minister Douglas to working with the Nevis Island Administration to ensure that improvements extend to the whole of the country.
Premier Amory also used the opportunity to raise issues of capital projects for Nevis and confirmed the need for the private sector to shoulder more of the responsibility in terms of investment. He also raised the issue of the Citizenship by Investment programme and its use to attract foreign direct investment to Nevis.
The program was established in 1984, during the PAM administration of former Prime Minister Dr. Kennedy Simmonds and remains the longest of such initiatives in the world. Variations of the model have also been introduced in other countries, while many more are eyeing their chances to enter the market, offering citizenship for large investments in their countries.