Operation Rescue Responds to Government’s Debt Exchange Initiative

Firstly, Operation Rescue repeats its often stated shock at the profligate and cavalier approach over the years by the Prime Minister-Minister of Finance, Dr. Denzil Douglas, with regard to the relentless increase in the national debt to the point where, today, it stands at EC$3 billion, with a debt-to-GDP ratio of 199%. 

The Prime Minister’s public comment “national debt, me arse” as well as his ongoing disregard for the red flags that were being waved by the International Monetary Fund(IMF) and other organizations for the past twelve(12) years, have already caused, and will, for many years to come, continue to cause, great pain to the people of St. Kitts & Nevis, and, because of the magnitude of the problem, to the people of the Organization of Eastern Caribbean States(OECS). 

It is Dr. Douglas’ obsession with winning elections, his lust for power, and his poor administrative skills and discipline, rather than the feeble excuses offered by him, such as the hurricanes of the 1990’s, the closure of the sugar industry in 2005, and, more recently, the global financial crisis, that have been the major causes of the financial, fiscal and national shame that has been visited upon the people of St. Kitts & Nevis. 

Curiously, in December, 2009, he had boasted that his deft leadership had caused St. Kitts & Nevis to avoid the brunt of the global crisis, yet just two months later, just after the elections of January 25, 2010, he launched his onslaught of taxes, added charges, and threats to citizens that if they did not pay up they would be prosecuted (while friends still owe millions and are allowed to get away with it. 

We are now at the point where, only 38 years after Robert Bradshaw claimed the sugar lands, which are the core of the patrimony of the people of St. Kitts & Nevis, Dr.  Douglas, through no fault of the people, is looking for a bail out by selling off vast tracts of land, thereby reversing history and putting the people of this country into the disenfranchised past, and exposing them once again to the ignominy of being strangers and underlings in their own land. This is not acceptable. 

Operation Rescue notes with grave concern that this act of disenfranchisement and shame comes on the heels of the 2011 Nevis Island Elections election in which, only 59 years after the fight had been won to get the ordinary man and woman the right to vote in this country, over 200 Nevisians were disenfranchised when their names were cruelly and wrongly removed from the Voters’ List.

In 1952, the people got the vote, and in 2011, over 200 Nevisians had their vote taken away from them. And in 1974, the people got the land, and in 2012, Dr. Douglas is looking to have it taken away from them. 

Operation Rescue views these two dastardly acts as being morally treasonous to the people of this country, and will make every effort to ensure that the perpetrators are brought swiftly to political justice. 

The subject press release is more troubling in what it does not state than in what it does state. 

Firstly, it should have been accompanied by a press conference, held after the media and the general public would have been given adequate notice. 

Secondly, it does not indicate a number of things. 

1. How much of the Government’s debt is to be targeted by the “offer” and the reduction in terms of gross debt figures and debt-to-GDP ratio that is expected as a result? 

2. Which bonds and commercial bank loans are being targeted? With regard to this, the Government needs to publish a list of all of its creditors and the amounts owed to each creditor. This is a debt that has been imposed on the people of this country and the people will now demand full details. The people will no longer allow Dr. Douglas to run the Government like a secret society. 

3. What is the anticipated effect on the Social Security Board (SSB), the National Bank, the Bank of Nevis and the Credit Unions? (Incidentally, Operation Rescue views with concern the fact that the financial statements of the SSB for the year 2010, although tabled in Parliament, have not been posted on its website, and we call on SSB to have such posting done without any further delay). 

4. A detailed breakdown of the two ‘haircut’ scenarios outlined in the subject press release needs to be provided so that the general public can have a clear understanding of the actual loss that will be incurred by Government’s creditors in the process. For example, the bond “offer” calling for a 50% discount on the principal debt represents a loss to creditors of more than 50%, because that discount on the principal sum is accompanied by a reduction in interest for the creditor (a further loss) and an extension of the creditor’s maturity date (his or her ability to recover the investment) by at least 20 years. 

But there are further losses that will be suffered by creditors. For example, if one of the Government’s  creditors, himself, herself or itself owes a debt to a financial institution which uses his/her/its bond as collateral for such debt. With the value of the bond now substantially reduced, the financial institution’s collateral is similarly reduced, and this can create a massive problem for the creditor and the financial institution; and if the problem is sufficiently substantial, it could cause severe harm to others. 

5. Regarding treasury bills, a mere statement that they are not to be affected is not satisfactory. If the Government has made an effort in the past three months or so to have treasury bills’ maturity dates extended from 90 days to a year, then that in itself is a haircut for treasury bills holders, as their money will now be tied up for a significantly longer period, and their rate of return might be reduced as a result. This is vital information for the general public of St .Kitts & Nevis, and, indeed, the OECS.

Finally, regarding the Government’s fiscal situation, Operation Rescue calls on the people of this country to stop allowing themselves to be overdosed with taxation while at the same time being starved of information. In this regard, Operation Rescue calls upon the people to agitate for a full accounting on the finances of the Sugar industry Diversification Foundation, and to give their full support to the effort to have Integrity in Public Life and Freedom of Information legislation passed and justly administered in our country. 

Operation Rescue also calls upon the people of the OECS to make their leaders know that what is happening in St. Kitts & Nevis must not happen in their countries, and to show their solidarity with their suffering brothers and sisters in St. Kitts & Nevis who are now threatened with being pushed back into colonialism as a result of unsound, reckless, power-hungry leadership.

 

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