Of late, the Team Unity administration is taking to forum after forum to propagandize on the issue of the economy, but time and again the Prime Minister, Dr. Timothy Harris, continues to fail to convince citizens that the economy is thriving under his watch, better than it ever has before. It seems that the Team Unity administration is just completely lacking in the ideas and competence necessary to create vibrancy in the economy, this despite inheriting a bonanza in the public coffers of St. Kitts and Nevis from the former Labour Administration. Since taking office in 2015, the economy has ground almost to a screeching halt with the GDP growth rate slowing from highs of 6.22% and 5.96% in 2013 and 2014 to a steady decline of 3.98% in 2015 to 2.21 in 2016 and 1.74% in 2017. No matter how hard he tries, Dr. Harris as the Minister of Finance in the Federal Government just can’t seem to recreate the magic that resided with the Labour Administration under whose astute leadership St. Kitts and Nevis was transformed from a regional backwater to a thriving, globally-integrated and economically diverse high income country in just twenty short years.
The success of the Labour Administration in managing the economy despite unprecedented challenges is one that has become the subject of much marvel and study in the OECS region to this day. By the time the Labour Party left office in 2015, the economy was experiencing a golden era that was marked by steady year over year surpluses, increases in government savings and increases in the SIDF funds. The only thing that was trending downwards under the Labour Party was crime and the national debt, the former being evidenced by an almost 50% reduction in the number of homicides from a high of 34 in 2011 to 18 in 2012 and the latter being reduced at a rapid clip of upwards of 10% per year which took the debt from a staggering 156% of GDP in 2011 to 66% by 2015.
No matter how much Dr. Harris tries to pull figures from a hat to mislead the people of St. Kitts and Nevis, the facts and the figures, as reported by reputable financial institutions such as the Eastern Caribbean Central Bank in its Annual Financial Review or the International Monetary Fund (IMF) Article IV Consultation reports, speak for themselves. No matter how much Dr. Harris tries to stitch together disparate figures, he just has not been able to convincingly weave his web of lies to trick the people once again. The thing about economic growth is that it is not only about abstract figures on a paper, it is something that is lived and felt. Everyone can remember what 2014 felt like. Businesses were thriving, manufacturing output was increasing, consumer prices were going down and the sense of wellbeing and prosperity was felt by everyone. From the taxi-drivers, the local small business owners, the street-side vendors, the farmers to the professionals, everyone had a spring in their step and was looking to the future with hopefulness and high expectations.
The fact of the matter is that under the capable and competent stewardship of the Labour Administration the economy was successfully steered through some of the worst challenges that have ever been faced by our nation. Despite three back-to-back major hurricanes between 1998-2008 that left in their wake loss and damage costing a colossal USD $700; the closure of the sugar industry which had been the economic mainstay of the country for centuries; the 911 terror attacks; and the global economic and financial crisis, St. Kitts and Nevis emerged stronger and better than ever and its citizens and residents felt confident and secure that no matter what, their government would see them through.
This is why the disappointment that is being felt by the people in Team Unity’s amateurish management of the economy has been so palpable. Everyone is asking: after inheriting such a treasure trove from the Labour administration, why is the economy still stagnating? Why are so many businesses down-sizing or closing? Why are consumer prices and the cost of living still rising? Why is manufacturing output declining? Why is there no sign of any new foreign direct investment project? Why are family-sustaining jobs so hard to find? Where are the houses and other social benefits to me and my family?
On every metric, not just GDP growth, Team Unity is failing. For example, Dr. Harris likes to talk about the fiscal surplus. But since 2014 there has been a dramatic decline in the surplus. In 2014, there was an overall fiscal surplus of a whopping $104.9 Million EC dollars, in 2017 this surplus has narrowed by almost half to $64.7 million EC dollars, down even from what it was in 2016.
Even the much touted CBI programme has been grossly underperforming. St. Kitts and Nevis used to be the standard bearer for all CBI programmes in the region. Now its exclusive, platinum standard has been reduced to a “come one, come all” programme, thereby exposing the programme to even greater risk. The SIDF Fund which used to generate non-tax revenue in amounts that exceeded the amount generated in income taxes, property taxes and taxes on goods and services put together has seen its earning power dramatically reduced. Since the end of 2014, the last full year of the Labour Administration, the revenue in the SIDF fund has dropped from $414.30 Million to $253.61 Million in 2017, a decline of almost half.
Government savings have also dramatically declined. When the Labour Party left office in February 2015 there were cash deposits mainly in our national bank in excess of $544 million EC dollars. In fact in the last four years of the Labour administration, government savings went up from $206.5M to $544.0, an increase of $338 Million in 4 years. Now, there is a mere $635.7 Million in cash deposits, just an increase of $91.7 Million in the last THREE YEARS.
The Team Unity Administration is realizing, very belatedly that voodoo economics just doesn’t work. An economy cannot grow when foreign direct investment has ground to a halt and no revenue-generating project has been attracted to the country. An economy cannot grow when there is a dramatic increase in spending while no additional source of revenue is flowing back in. An economy cannot grow when a government tries to cover up its failures by pouring money into immense capital expenditures that only serves to enrich their friends and family who benefit from lucrative government contracts. An economy cannot grow when Dr. Harris has to continually appease his friends in the CCM by pumping over EC$4 million in budgetary support per month to Nevis above and beyond what is required under federal law.
The Team Unity Government is spending much more and saving much less than any government before them ever has. The last three and a half years of Team Unity has been a veritable squandermania and if something doesn’t change very soon, the inept coalition of convenience will run the economy of St. Kitts and Nevis completely aground. The people of St. Kitts and Nevis must beware.