In a recent press release, Hamilton explained that, “The grim reality facing the federation of St. Kitts and Nevis has finally been exposed for all to see. The smokescreen of “its working”, “we have weathered the storm”, “debt is good for development” and other such ridiculous platitudes has been blown away by the harsh economic storms wrought by disastrous fiscal mismanagement.”
Hamilton’s statement was made in light of the “austerity measures” spelt out in the during the recently-concluded budget debate presentation.
“After years of fiscal irresponsibility and wanton spending the country has now emerged battered and bruised washed up on the doorstop of the IMF,” Hamilton lamented
The budget appears to be a carbon copy of the austerity measures that the IMF recommended in its Public Information Notice just last month. According to Hamilton it is hard to imagine a government as bankrupt as ours having any latitude at all in choosing which IMF measures to accept or being able to reject any. Thus the very similar nature of the measures announced to those recommended by the IMF.
The release suggests that economists have declared that with a national debt that reaches 196% of GDP at the end of this year (2010), St. Kitts and Nevis is completely at the mercy of the IMF with absolutely no power to bargain, not even for the price of our lands.
“Our sad and dire economic situation has precipitated the IMF to recommend the selling of our lands,” said Hamilton. “As any sensible person knows when the seller is desperate for cash the buyer has the power to haggle down the price. Who knows how low this Labour government will be forced to go to hand over our patrimony only to in turn hand over the proceeds to our creditors” Hamilton questioned.
Hamilton further opined that, “This is an ignominious state to be in and this is no accident. This economic and consequent social disaster is the direct result of the corrupt policies of Prime Minister Douglas and his Labour government.”
“The prime minister claims that the National Budget is $2.6 billion so we can accept that it is at least that amount. The question then is; how much will these harsh measures ameliorate this situation. How much can this Labour government gain from raising electricity rates, reintroduced Unincorporated Business Tax, VAT, raising social services levy, removing the subsidy from gas, defunding UWI students, eliminating civil service jobs and the other austerity measures?” Hamilton questioned
“An even more pressing question is whether the increased revenues will even go where it should. A significant portion of the National Debt is the result of corruption; of inflating infrastructure contracts, of imaginary consultancy fees, of a reserve contingency fund for which there is no accountability, of nepotism and waste in statutory corporations and of plain old theft….” Hamilton continued
He further questioned whether anyone actually believes “that a government that has proven singularly incapable of managing an economy will suddenly be able to? No, I think that the rose coloured glasses have finally been removed and as a people we are resigned to a near future of even more bitter pills but for how long?”
The government recently announced steep increases for electricity, increases for the Housing and Social Development Levy and an end to many duty free concessions effective January 2011. Prime Minister Dr Denzil Douglas said the measures were aimed at tackling the massive $3 billion national debt.