St. Lucia says no to IMF assistance

Prime Minister Dr. Kenny Anthony has warned that his administration intends to take strong and brave decisions to deal with the economic problems confronting St. Lucia, adding that the island will not seek assistance from the International Monetary Fund (IMF).

Parliament last week approved a government motion allowing it to borrow EC$135.5 million (US$50 million) from a private sector concern to finance projects under the capital expenditure component of the 2012-2013 national budget.

Anthony said the move is aimed at ensuring that his administration never sees the door of the International Monetary Fund as has been the case with two countries Antigua & Barbuda and Grenada - which were now engaged in agreements with the Washington-based financial institution.

Recent events in Antigua and Grenada emphasize that this is a period of caution as both countries needed to undertake some adjustments insisted upon by the IMF.

That is why it is critical and crucial that our country take strong and brave decisions in the months ahead as it attempts to deal with the financial issues that confront us, Anthony said.

He said that over the past nine years, St. Lucia had secured millions of dollars in bond financing from the Regional Government Securities Market (RGSM), making it the largest holder of bonds in the region.

There is a feeling that with such a huge outlay of bonds, St. Lucia may be crowding out other governments who wish to enter the RGSM market, he said.

The motion makes provision for the St. Lucia government to go beyond the RGSM in its bid to secure other funds for projects.

Therefore it has become necessary to engage a trusted entity, a trusted player that we know very well. In this instance it is our Eastern Caribbean Finance Holdings (ECFH) Global Investment Solutions, he said.

However, Anthony said that St. Lucia will not be abandoning the RGSM but with a budget requiring such heavy borrowing it would not be fair to overburden the RSGM at this time. He promised that the island would continue to invest in the RGSM in the near future.

CMC