The Public Debt, tag lines and political gamesmanship

by Sandra CA Ferguson

I am listening with keen interest to the utterings of 2 political leaders on the issue of the size of the public debt:

• The incumbent prime minister and minister of the finance, self-styled ‘Papa’, aka ‘the Great Provider of Food’
• The political leader of the main opposition party – a former Minister of Finance in the last administration, aspirant to the office of prime minister and maybe minister of finance. I will refer to him as The Aspirant.

While some may be temporarily dazzled by the chimera of brilliance of both leaders, others among us are simply baffled.

1. Papa – Is Not the Size of the Debt:

Not too long ago, Papa undertook a series of face-to-face encounters with his ‘young flock’, some of whom who may have voted in the 2013 elections and many of whom are going to be FIRST TIME ELECTORS in 2018.

I thought that I was too old to be surprised anymore by anything that Papa says or does.  But I have to admit, that when Papa responded to a question about the size of the debt from a member of his young flock, I was flabbergasted! Papa cavalierly dismissed the concern by responding as follows – Is not the SIZE of the debt!! Is the ABILITY to pay! Papa told his young flock that, instead of the size of the debt, they should look at the ratio of the debt to the Gross Domestic Product. He ridiculed the ability of his political foe to work out fractions and he also referenced the United States as having a huge public debt which did not pose a problem for that country.

I could not believe the response of Papa, the Minister of Finance who had presided over the recently concluded Structural Adjustment Programme. After 3 elections – 2003, 2008 and 2013; 2 hurricanes – 2004 & 2005; 2 debt restructurings – 2005 and 2015; 2 IMF programmes – 2006 and 2014, I expected Papa ‘to come better’!! After all, this was the EXACTLY the same response that he and his team gave on the campaign platform in 2003. At that time, intentionally or otherwise, they had forgotten about the impact of phenomena called ‘external shocks and natural disasters’ on small, open, dependent and vulnerable economies like Grenada:

• Natural disasters – Hurricanes Ivan, 2004 and Emily, 2005
• External shocks – financial, fuel and food crises of 2007 – 2010
• Other shocks – the court judgment in favour of Taiwan’s Exim Bank against the Government of Grenada which froze monies that should have been coming into the accounts of statutory agencies, necessitating court challenges and a lot of other unexpected expenses that Grenada could have ill-afford at that time! While the Exim Bank could not ‘go with Grenada’, it certainly ‘went with the money’!!

One would have thought that Papa, the elder statesman – member of the Honourable House since 1984 – would have taken the time to have a sober ‘heartical’ face-to- face with his young flock about: the sacrifices made; the lessons learnt; changes and paradigm shifts that need to be made; the importance of education, hard work and productivity; working together etc etc etc – to inspire leadership, hope and belief in self!! But that was not to be.

Papa is a high order ‘…ICIAN’ – a mathematician, a statistician and politician. So, of course, he is quite comfortable pontificating about numerators, denominators and ‘approximate’ numbers. In addition, he likes to PLAY!!!

I do recall when, back in November 2013, he announced at a press conference[1] – the theme of which was sacrifice and patriotism for the success of the Structural Adjustment Programme – that SACRIFICES HAVE TO BE BORNE. I found 2 things particularly noteworthy:

• Political Game: Papa admitted to the members of the press that politics was a game and he could play it better than any of his political foes.
• Removed from the Equation: On that occasion, Papa also explained that he wanted to REMOVE himself ‘from this equation’ of sacrifice since he would not be seen as making the biggest sacrifice. And we all remember years before when he had told teachers that he did not depend on his salary to pay his mortgage.

So one can conclude:

• Papa’s Political Game: At Papa’s ‘face-to-face’ encounter with the youth electors, he was ‘playing’.
• Sacrifices and Consequences: Because Papa is ‘removed from the equation’ given that he does not depend on his meagre ministerial salary, he does not ‘feel’ the hardships and consequences of the sacrifices and is insensitive to the BURDEN of the public debt on the youth electors in particular. Clearly, Papa was/is blissfully unaware of the concerns that are being raised in respect of the implications of US debt[2] for its youth.
• National Piggy Bank: And of course, Papa, the Great Provider, seems to have full control of the National Piggy Bank, the National Transformation Fund. So, he spends at will and whim – $9.8 million on ‘special projects’ compared with the allocated sum of $5.0 million in 2017 while the General Hospital lacks all basic health supplies!

Papa, the Great Provider of Food, and members of his team are clearly not really ‘in touch’ when it comes to the implications of the public debt and youth. It is not just about food! In the long term, it is about FISHING!! That is a Chinese lesson! Papa does not appreciate the Chinese lesson. And natural resources are essential to support fishing!! Without these resources, that Papa and the team are giving away or selling, eventually there will be NO FISHING and NO FOOD!!

2. The Aspirant – What is the Size of the Public Debt:

On the other hand, The Aspirant, the former minister of finance and political leader of the national colours party is – an …’ICIAN’ (politician); an ‘…ER’(lawyer) and an ‘…IST’(economist).

He first brought to the attention of we the people, discrepancies identified in the 2016 Annual Report of the FROC[3] (dated November 2017) as it pertained to the size of the public debt in 2016.  Then, on a recent MTV newscast aired this week, The Aspirant, was also referencing the Budget Estimates 2018, numerators and denominators and Gross Domestic Product and debt to GDP Ratio of 84 percent.  It was unclear to me whether The Aspirant was speaking as an …ician, …er or …ist and whether he was ‘playing’. However, I would suggest that he leave matters of numerators and denominators to Papa.

While he brought to attention the discrepancies noted by the FROC, he Aspirant, as a parliamentarian with access to the Budget Estimates could have told us so much more had he gone on to also cross check the Debt Schedule which is available in the Budget Estimates. After all, he had just recently debated the 2018 Estimates which gives the 2016 and the 2017 figures. Of course, one understands that it is necessary to cross check all information. So, he could check the Budget Information with the information from the FROC Report.

• Total Public Debt: According to the Budget Estimates 2018, the total public debt at the end of 2017 was EC$1.99 billion for the total external and domestic debt.
• Loan Authorisation of US$100,000: He could have noted that the recent loan authorisation of US$100,000 was not accounted for so that is another EC$270,000 is to be added to that total, so that it is now EC$2.2 billion.
  • He could also have wondered out loud whether or not this authorisation was linked to the Chinese airport loan of US$66 million and the Kuwaiti US$37 million for roads.
• Debt/Gross Domestic Product Ratio: While he noted the figure 84% as the debt to GDP Ratio, I was surprised that he did not directly challenge the figure that was being used by Papa, 69%. Because again, as with the FROC observations of discrepancies, 2 figures are being used – 84% and 69%. And they are both noted in tables in the Budget Statement.
• Increasing Domestic Debt: He could also have also raised alarm at the steady increase in the level of the domestic debt.
• Recurrent Expenditure: He could have also brought to the attention the issue of the persistent and significant deficit re recurrent revenue vis-à-vis recurrent expenditure. The recurrent expenditure includes the servicing of the debt and principal debt repayments.
• Addressing the Public Debt: But while The Aspirant to the office of Prime Minister has pointed out the discrepancies identified by the FROC 2016 Report, a further detail to be addressed by the Aspirant is the proposal of him and his team for tackling the problem of the debt should they be successful at the polls. We already have an idea of what Papa is doing – taxing the citizens whose ‘nable string bury here’; tax concessions for the ‘investors’ who come here; selling citizenship and passports to questionable characters; selling out the country’s natural assets and debt swap.

• How?

The mantra of The Aspirant’s platform is: lower taxes; more jobs; better health care; more opportunities for young people. While there is a policy agenda (I have read it) the Aspirant is advised that be needs to do more than mention it. He needs to broach the question of HOW the platform will be achieved.

• Other Pronouncements of the Aspirant:
  • GBN’s Beyond the Headlines:

As a guest of the Beyond the Headlines Programme (GBN’s second programme of the year, the aspirant to prime ministerial office advised as follows:

• Honouring Agreement with Investors: On assuming office, his party would honour all agreements with investors. I do not understand why the Aspirant would want to make such a ‘carte blanche’ statement. What will the Aspirant and his team do, if on assuming office, it is found: –
  • Camerhogne Park: There is an agreement re lease/sale of Camerhogne Park for the purpose of 5-star resort development? What is the party going to do? Is the party prepared to defend the interests and rights of the people to enjoy Camerhogne Park or honour dubious agreements with investors?
  • Quarantine Point and Debt Swap: What will be the response of the Aspirant and his team if they find out that Quarantine Point is part of some debt swap arrangement which will impinge on the people’s right to enjoy this other public green space held in trust by the Rotary Club of Grenada?
• Citizenship by Investment Programme: The Aspirant advised that his party would not scrap the Citizenship by Investment Programme. It would enhance due diligence. I am an unapologetic, uncompromising opponent of this parasitic, sleazy programme. I do recall The Aspirant’s party flirting with the introduction of this programme in 2011 and bringing in Henley and Partners for talks. Well, Henley and Partners are currently in control. A damn lot more than enhanced due diligence is required to bring real benefits to the people of this country and respectability to this programme I COMMIT to be an UNRELENTING opponent!

When I heard the Aspirant’s pronouncements, I wondered what the hell was different??!!

We the electors need to listen to all those presenting themselves for office. Let us not accept gamesmanship and tag lines! Let us interrogate them on the issues and on their proposals for addressing OUR issues. Do they understand food vs fishing??!!

Let us MIND OUR BUSINESS! GRENADA DESERVES BETTER!

[1] Press Conference 12 November 2013

[2] http://dailysignal.com/2013/01/11/generation-y-a-taste-of-what-is-to-come-for-generation-debt/

[3] Fiscal Responsibility Oversight Committee