Foreign Affairs Minister Dwight Fitzgerald Bramble has warned opposition senator Carlos James that officials of the former Unity Labour Party (ULP) government could face consequences if they are found to have engaged in misconduct.
Bramble’s warning in Parliament on Thursday came as he debated a bill authorising St. Vincent and the Grenadines’ membership in the Development Bank of Latin America and the Caribbean (CAF).
Bramble’s remarks followed his challenge to James, a former tourism minister and North Leeward MP, over the contingency fund, after James alleged that the 11-month-old New Democratic Party (NDP) administration had used money from the “rainy day” fund.
James said that the NDP had broken the law if it had used the Contingency Fund, as he alleged.
“You want to talk about breaking law? You want me go back to the overdraft and talk about breaking law? Don’t start! And don’t sit too comfortable over there because when it becomes necessary, we will do what we have to do once you’re found for misbehaviour in public office.
“Don’t sit down and feel everything nice and dandy. You know, everything takes time. Everything takes time, my brother. And I want the people of this country to understand that.
“We’ve been in office for 11 months. Can you imagine this? 11 months, and you guys are coming like you want us to perform miracles and undo what you did in 25 years.”
While Bramble did not say that the NDP administration had used the country’s “rainy day” money, as James alleged, he pointed to instances in which the ULP administration had broken the law.
“You left us with an overdraft of over $200 million,” he siad, noting that a government is legally allowed to operate an EC$85 million overdraft.
Bramble, who is an economist, explained that the overdraft is a legal instrument that the government can resort to to help cover budget shortfalls.
“You, your administration, your party, when you were in government … racketed it, the overdraft up to over $200 million, exposing our main commercial bank, the Bank of SVG, exposing them to liquidity problems and other problems,” he said.
The East Kingstown MP said that to compound the situation, the ULP government then floated bonds, short-term financial instruments, at way higher interest rates to try to offset the overdraft.
“And you guys got the gall to come and tell us about how to spend money and how not to spend money?” Bramble said, adding that the ULP’s actions contributed significantly to the country’s debt servicing ratio.
“That is why we have to spend so much out of every tax dollar to service all of our debt,” he said.
He explained that almost 50 cents out of every tax dollar the government receives has to be allocated “to paying back the debt that those guys left us”.
Bramble pointed out that he was not saying that debt is bad.
“… but certainly, certainly, your history and your record of debt incurrence and debt management is no example for anyone to follow,” he told James.
He also said that the ULP had a bad record as regards its debt to local businesses and local suppliers.
“Over 100 and something million dollars you owe local businesses. That’s where you left us with — $178 million. Local businesses and vendors, and then you come and complain and say that businesses are not paying their taxes. Well, what you expect?”
He said the situation represented a “double whammy” of the government incurring an unpaid debt, which triggers non-compliance by the same vendors and suppliers that the government owes.
“So when you talk about the challenges and you don’t take pleasure in talking about the challenges, I can understand why,” Bramble told James.
He said the country has a current account deficit of about 12% of its GDP, noting that the current account deficit is the amount of money that the government spends in excess of what they collect in revenue.
“Twelve per cent of GDP. That is almost $400 million. Almost $400 million in shortfall … on the government’s current account. And you’re coming and talking about challenges.
“We have to find money to pay that. We have to close that gap. All of the international financial institutions tell us, and they’ve been warning you as a matter of fact.”
Bramble said that all the Article IV reports from the IMF and other international financial institutions told the ULP administration from as early as 2016 that SVG must mind its fiscal behaviour.
“…because if we want to encounter sustainable growth, we have to try to approach our fiscal situation and try to accomplish something in the region of two to 3% surplus on our current account. We dey 12% deficit. That’s a 15 percentage point swing.”
Bramble said that the NDP government also had to find money to fix this “because all of the international financial institutions, none of them want to do business with us”.
He said that Moody’s downgrade of Kingstown’s credit rating was a warning that the country was “on the precipice of economic disaster”.
On June 30, Moody’s downgraded the Government of SVG’s long-term local- and foreign-currency issuer ratings to Caa1 from B3, affirmed the short-term local- and foreign-currency non-Prime ratings, and changed the outlook to negative from stable.
That downgrade was the result of “prolonged neglect” during the ULP’s 25 years in office, Minister of State in the Office of the Prime Minister, Chiefain Neptune, said in a statement shortly after the downgrade.
Bramble said:
“… the message that Moody’s wanted to send to us is that, ‘Look, you guys on the precipice of economic disaster, and we’re giving you warning.’
“That is the message I took from Moody’s downgrading, and then your acolytes coming on social media and talking about, ‘Oh, under ULP, we never got downgraded’, and all kind of foolishness. Those are the realities…
“And when an agency, an institution such as Moody’s, downgrades you, it sends a signal to your international partners, funders, and lenders, even investors. They start to get antsy.”
He said the NDPP government has to and is fixing the situation, adding that this was part of Prime Minister Godwin Friday’s mission at the World Bank-IMF annual meetings in Thailand the previous week.
“We went there to interact with the people and the institutions that matter and that can help us to fix this problem,” said Bramble, who was a part of the delegation, adding that Friday would have more details to report.
“You talking about contingency fund? Tell us how much of the contingency fund’s contribution you did not put into the contingency fund. Tell us. We will tell the people in due course. Don’t worry,” Bramble told James.
“I say we will tell the people in due course,” he said and rejected James’ argument that his response was an admission that the NDP government has used monies from the contingency fund.
“What kind of logic [is that]? … Wah school you go? No, I am asking you what school you went to,” as James interjected from across the floor.
“If I am saying to you that you did not put some money into the contingency fund, how do you come to the conclusion? How do you come to the conclusion that I am admitting that we went into the fund?
“I am asking you what school you went to. Not even Miss Muggy School could have accommodated you with that line of reasoning. Give me a break.”
Bramble said SVG’s membership in CAF can widen its options as the government tackles “harsh realities”.