READ, QUESTION, KNOW.

 

In his autobiography, Malcolm X(1925-1965) stated that “the ability to read awoke inside me some long, dormant craving to be mentally alive”.I don’t think he was using the word “ability” literally. I think, instead, that he was referring to his disposition and desire to read.

And Confucius, the ancient Chinese thinker and political figure (551-479 BC), believed that “no matter how busy you may think you are, you must find time for reading, or surrender yourself to self-chosen ignorance”.

So for Malcolm X, by reading we become mentally alive, and for Confucius, by not reading, we condemn ourselves to ignorance.

Mental death and ignorance lead to dire consequences.

Do enough of us Kittitians & Nevisians read? Are we, through reading, sufficiently informed to provide the foundation for a stable modern society, economy and democracy?

The answer, sadly, is no. And who should we blame?

Malcolm X spoke about an awakening inside him, and Confucius said that if we don’t find the time to read, it’s we who are perpetuating our own ignorance. So the blame is on us.

That said, is it fair to suggest that the severe fiscal, economic and social crisis which today is breaking our backs might in some way be related to the fact that we’re not a nation of readers? And could the present crisis have been averted, or at least significantly reduced, if we were?

I think so, because  too many of us, by not reading, are depriving ourselves of useful information and knowledge, of the opportunity to become independent thinkers, to engage in civil and productive discussion and debate and, in the process, to demand, establish and sustain higher standards of governance.

It’s we who are choosing mental death and self-ignorance.

A reading populace is an enlightened populace, and  an enlightened populace  makes, and tolerates, less mistakes. That’s it, plain and simple. So let’s now change our choices and begin to read.

For starters, I’m inviting you to read: the 2011  Article IV Report of the International Monetary Fund(IMF) on  St. Kitts & Nevis that was published this month.

It’s just over 100 pages long, but there’s quite a bit of repetition in it, so you can (if you can’t take it all) pick out sections to read. I assure you that you will find  information that’s very important and interesting to you as a citizen or resident of this country. I’m especially calling on the private sector, the professional groups in our society, students of economics, finance and government, the CFB student body, SKNYPA, the media and the clergy to take the time to read it.

Allow me to refer to some parts of it.

n  The national debt is close to EC$3 billion, of which 70% is owed locally( with by far the biggest creditor being the National Bank).

n  The level on concern with regard to pressure on our local banks is so high that of the money being borrowed from the IMF, about US$17.1 million is to be put into a Banking Sector Reserve Fund(BSRF) to be managed by the Eastern Caribbean Central Bank(ECCB) and to be used, if necessary, to provide support to any local bank which might have liquidity problems. And if a local bank receives an advance from the BSRF, it is not to pay dividends until its obligations to the BSRF are discharged.

n  The measures that have been introduced, and are to be introduced, are intended to bring down the debt-to-GDP ratio from 200%( highest in the region, third highest in the world) to 162% by 2016, and to the internationally accepted ceiling of 60% by the year 2020.

n  Notwithstanding the introduction of strong tax adjustment measures, the debt will still be at an uncomfortably high level between now and 2020, and any shocks occurring in the interim could set it on an “explosive path”.

n  Increases in the cost of food, fuel, etc are having an inflationary effect, as businesses( I spoke to two prominent businessmen a few days ago and they told me that on the basis of increased electricity and other costs, their businesses cannot be sustained) and consumers struggle.

n  The Government hasn’t been keeping up with its debt obligations. The IMF is saying that arrears have been accumulating since 2008 and  that “despite a tradition of timely payments, as at 31st December, 2010,  Government’s Budget Expenditure Arrears stood at EC$183 million, and the country “also started to miss payments to external private creditors”.(You’ll no doubt recall our Prime Minister’s repeated declarations up to relatively recently that Government was paying all of its debts on time. Well, the IMF says that’s not true).

n  The Government has been meeting with creditors to seek arrangements to reschedule and restructure its debt obligations to them( the “haircut” of which I have been speaking for over a year). Indeed, it has engaged lawyers and negotiators for this. (How much are they being paid?)

n  The IMF and our Prime Minister have stated that there will be no distinction between creditors. All creditors will be called upon to make a sacrifice . How will that play out among Government’s local creditors, who, remember, hold 70% of Government’s debt?

n  The situation is so severe that the IMF has brought into the picture the Paris Club, which is an informal group of financial officials established in Paris, France, in 1956, representing nineteen major creditors in the world’s most powerful countries, to help out Argentina, and which has continued in existence, providing financing to countries which have  faced exceptional difficulties, much as we are facing today. The point here is that if the IMF is the Intensive Care Unit, then the Paris Club is the inner sanctum of that Unit, as there is nothing in terms of ‘life support’ beyond the Paris Club. The next step after the Paris Club is the morgue.

n  Under the agreement with the IMF the Government will have to “produce a set of fully integrated accounts on a regular basis, and to institute a mechanism for the regular reporting of financial data on the rest of the public sector.” It’s to be noted that the most recent data produced by the Government  published in the Government Financial Statistics Yearbook  are for 2003 and 2006.  The reporting has been unsatisfactory.

n  To enable monitoring of performance, Government will provide the IMF with certain data within eight(8) weeks of the end of every month, namely, central government budgetary accounts, capital expenditure, total monthly disbursements and grants receipts, central government domestic debt data, stock of domestic arrears, including unpaid cheques issued, unprocessed claims due and invoices pending, interest and amortization on domestic debt, stock of external arrears by creditor, detailed monthly external debt reports from the Debt Unit of the Ministry of Finance (showing year-to-year fiscal disbursements, amortization, interest payments and outstanding debt for the central government and public enterprises), copies of loan agreements for any new loans contracted, (including financing involving the issue of government paper and of any renegotiated  agreements on existing loans), monetary surveys as prepared by ECCB, consumer price indices, quarterly reports on capital expenditure on a project-by-project basis and the composition of financing, the financial positions of public enterprises,, economic indicators under the real sector, and annual reporting of GDP and its components, balance of payments accounts, reports on legislative matters pertaining to economic matters, notification on the establishment of any new public enterprises, and all disbursements and outstanding balances from the use of the Banking Sector Reserve Fund on a weekly basis.

Now, included in the IMF Report is the letter of intent dated 13 July, 2011,  from our Prime Minister to IMF Managing Director Ms. Christine Lagarde.

In an attachment to that letter, he gave certain Government undertakings to the IMF, some of which were:

  1. To commit, by 30th June,2011, to publicly announcing the process of debt restructuring, to appoint legal advisers for the due diligence on existing debt contract, to put in place a framework to monitor payments of arrears, and to agree with the ECCB on the modalities of the BSRF.
  2. To commit, by 30th September,2011,to do a valuation of at least 600 acres of Government land, to make substantial progress in  the consultative phase of debt restructuring with creditors, and to review public enterprises ( so some of our friends who still receive paychecks from statutory bodies might soon find themselves having to hunt for bread elsewhere).
  3. To submit to Cabinet, by 31st March,2012, the proposal to rationalize the subsidy of Liquid Petroleum Gas(LPG, or cooking gas), which means that we can expect the price to rise.
  4. To introduce by 30th June,2012, further public sector reform, suggesting that more people might be sent home and sent into an economy and job market which has little to offer.
  5. To review the Social Security Scheme by 30th September,2012, with a view to taking steps to prevent liquidity problems from as early as 2026 and possible complete meltdown by 2041. This means that contributions will have to be increased.
  6. To draft, by 30 June, 2013, a proposal for a comprehensive pension reform, which suggests that: (a) contributions will now have to be made by public sector workers, which is the right thing to do and should have been done long ago in better times before all of this mess had piled up, together a national health insurance plan, a private sector pension plan, and other progressive and prudent measures; (b) pensions could very well be reduced; and ( c) and the pension age raised to 65 or older.

All of this has been coming, and could have been noticed( and avoided, or at least mitigated) if more of us had taken the time to read the IMF Reports and other documents over the last eleven years. But we chose not to read.

And now that this Report has come out, we’re seeing this abundance of information that our Prime Minister has undertaken to send to the IMF and to Government’s creditors on a regular basis. Indeed, here is what he said to the IMF( see page 42 of the Report):

“With the assistance of our debt advisors, we have developed a strategy that emphasizes information transparency and dialogue with all creditor groups”.

Please note that his commitment to the creditors for information and transparency  is not based on any particular desire on his part to report to them. Instead, it’s based on the fact that they read, and they question and they know. And they’re not playing with him as we are. So he must report to them!

Yet while that is the case, he has no desire to report the same information to us, the people who are being sent home into a nearly jobless market, who are being taxed to death, whose  roads  are bad and electricity supply disgracefully unreliable, who are desperately clinging on for survival, and whose money he’s taking to pay off the ‘macko’ debt.

We’re facing taxation, but getting no representation, no accountability and no transparency from him.

And we let him get away with it. Because as a people, have chosen not to read, not to question, and not to know. Malcolm X would say that we’ve chosen mental death, and Confucius would say that we’ve chosen self-ignorance.

We have to make a different choice. We have to choose mental life  over mental death, and knowledge over ignorance. We can start by reading and discussing this IMF Report, and by forcing our Prime Minister to report and account to us, and to be transparent with us, as he is being with the people who we allowed him to cause us to become so deeply indebted to.


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