Amidst the unfolding pandemic and imminent threat of an explosive eruption from the La Soufriere volcano, Prime Minister Dr. Ralph Gonsalves cautions that the Vincentian economic outlook would worsen over the coming months, if current trends hold.
Dr. Gonsalves repeated this warning twice on Wednesday, in separate appearances, as he updated audiences tuned to 2 government owned media outlets.
He stressed, “the economic situation is difficult, it’s challenging. [Do] you think it has been easy over the last year plus, every month to be paying $30M in salaries and wages and pensions for former public servants and the NIS contributions for present public servants?
“In January we collected $15M less than we collected in January 2020. Thankfully in February we made it up and there are some specific reasons why we made it up.”
Earlier on Wednesday PM Gonsalves told the nation that his government collected some 17 percent of the value of “a couple of big alien landholding license transactions in Mustique.”
Although he claimed, “there are a couple more [such transactions] in the pipeline he underscored, “I am not saying … that it will happen punctual – that you ain’t go get yo money at the end of the month or in any particular month but I am saying that the thing is so challenging that for the first time a real prospect arises that that can be so.”
In an effort to ascertain the government’s fiscal response to this specter we reached out to MP Camillo Gonsalves amongst whose ministerial portfolio falls the Ministry of Finance. He agreed with his political leader’s projection but urged, “that does not then mean that salary cuts and austerity measures are the logical next step. There are other possible measures, at least in the short term that can be taken.
“But ultimately, we either get revenue from taxes and fees, we borrow it, we seek assistance, we reallocate it from other sources or we spend less.
“The larger point that the PM is making, is that we have to all work together for a return to normalcy in the society, the economy, and the country.
“If public servants are only working on half shift, they are obviously not producing as they normally would if they work full time. Reduced productivity has an economic impact. Workers staying at home have an economic impact. Schools and businesses being closed have an economic impact. If economic activity is down, the government collects less money and then really has to juggle to meet its most pressing requirements.
“For two years in a row, the labour unions of this country have been very understanding about the economic implications of the COVID pandemic and have agreed to forego any demands for salary increases, which would obviously be impossible in the current circumstances. A majority of workers have also been very flexible in putting up with various disruptions and impositions. I am grateful for their maturity and cooperation.
“What we’re asking now is that everyone do their part to prevent the economy from completely grinding to a halt. We can mitigate the challenges the PM mentioned by returning to work, by getting vaccinated, and by acting responsibly in terms of masks and sanitization et cetera.
“The near term challenges are every bit as severe as the PM has intimated. Not just in SVG, but across the Caribbean. However, the solution to those problems is still within our collective control. It begins with vaccination, testing, and responsible behaviour as we return to normalcy.”
One online media outlet reported that Opposition MP St. Clair Leacock has since dismissed PM Gonsalves’ latest economic pronouncement as the proverbial spider’s welcome to a fly. According to the publication, MP Leacock believes that “the Prime Minister will always have money to pay Public Servants.” A feat the government would accomplish even if they must resort to frequently floating treasury bonds.