By Caribbean News Global contributor 
BASSETERRE, St Kitts – Former prime minister of St Kitts and Nevis, Dr Denzil L Douglas has accused his successor, Dr Timothy Harris giving a deceptive and dishonest account and distorting the facts in relation to the financial assistance given to his Labour administration following the global economic and financial recession which began in 2008.
Dr Douglas, during his weekly radio programme “Ask the Leader” on Kyss 102.5 FM Tuesday evening, said Dr Harris’ statement to nationals in New York that the former administration borrowed EC$255 million from the International Monetary Fund (IMF) to pay civil servants “is a blatant lie.”
“Blatantly lying to the people only shows how utterly shameless, dishonest and deceptive Harris is,” said Dr Douglas, who reminded listeners that Dr Harris was in his Cabinet as senior minister, when the decisions were made to get the assistance of the IMF.
“Harris had access to all the information. When the first approach to the IMF was made, Dr Harris was minister for finance,” Dr Douglas pointed out, adding: “He knows full well that IMF arrangements, much less a Standby-Arrangement, cannot be used to pay civil servants or pay anyone for that matter.”
Dr Douglas, now leader of the opposition said when his labour party administration took office in July 1995, it inherited from the former People’s Action Movement (PAM) administration of then prime minister, the Dr Kennedy Simmonds “a society and economy that were in shambles.”
“There were poor infrastructure – roads, schools, access to adequate water and electricity; high levels of poverty and destitution; extremely limited housing with PAM when only 250 houses were built in the entire 15 years they were in government and these were of inferior quality and there were little or no foreign direct investment and a dying sugar industry,” said Dr Douglas.
He said that despite those challenges his labour administration worked hard and was able to shift the economy of St Kitts and Nevis from one economic pillar, sugar agriculture to a more modern, diversified and globally integrated economy based on tourism, hospitality services, a budding financial services industry and manufacturing.
Dr Douglas spoke of the success in making the transition and pointed to the strong growth of up to ten percent of GDP and eight percent of GDP in 2000 and 2005 respectively.
He further pointed out that during the first three terms in office, the Federation was hit by three back to back major hurricanes between 1998 and 2008 that decimated nearly 80 percent of the housing stock and tourist infrastructure at a cost of over US$700 million (EC$1.8 billion).
“This was followed by the 911 terror attacks in New York that led to a very sharp decrease in tourist arrivals from the US; then we were hit by the global financial crisis that threw the economies of the world into a recession equal to the Great Depression,” said Dr Douglas, those rapid natural and man-made disasters in the global environment led to a worsening of the Federation’s debt dynamics.
“The cumulative effect was that St Kitts and Nevis was plunged into a recession between 2009 and 2011 with negative growth, despite the valiant and strong efforts of the civil servants in the ministry for finance to reign in our fiscal imbalances,” said Dr Douglas.
He said the decision was finally made to rectify the situation and return St Kitts and Nevis to a sustainable economic path and discussions were initiated with the creditors to restructure the debt.
“Our biggest creditors were our domestic banks. We devised a homegrown restructuring programme with the IMF ourselves – we never allowed the IMF to dictate to us our policy prescriptions. We also entered into what is called a Stand-by Arrangement that was intended to restore fiscal and debt sustainability and to keep our domestic banks stable and solvent during the debt restructuring period.
In July 2011, we entered into this arrangement that was rolled out over 36 months to the tune of US$84 million dollars,” said Dr Douglas, who reminded the nation that Dr Harris, who was still a Cabinet minister of his administration “knows that the Stand-by Arrangement was always a precautionary measure that acted similar to a bank overdraft that provided financial stability to our domestic banks just in case liquidity might be needed.”
Dr Douglas said most of the designated funds were never used and his administration almost immediately began a repayment schedule as the new policies began to have a positive effect on the economy.
“The IMF loan was mostly repaid by the time Dr Harris got to office. Because he had the cash to do it with so much money in the treasury and the Sugar Industry Diversification Foundation (SIDF), he paid off the remaining US$30 Million by the fourth quarter of 2015,” Dr Douglas, who emphasized that Dr Harris inherited a thriving economy.
“Despite the recession between 2009 and 2011, in just three short years, my administration was able to return St Kitts and Nevis to robust growth averaging near seven percent of GDP for 2013 and 2014.
” By the end of 2014, not only had the financial sustainability of our country improved but we also managed to substantially reduce the national debt from 159 percent of GDP in 2010 to 103 percent of GDP by 2013 to 78 percent in 2014. The IMF review reports verified that we were more than on track to reduce the national debt to 60 percent of the GDP before or by 2020, surpassing the regional benchmark,” said Dr Douglas, who pointed out that St Kitts and Nevis was one of only two countries in the world, Iceland being the next, to completely recover from the global financial crisis in just three years.
St Kitts and Nevis also became the first country in the world to return the IMF loan.
“By the time Dr Harris got to office, he inherited a fiscal surplus of EC$104 million. We left behind cash deposits of over EC$540 million and over EC$900 million in the National Treasury. The economy Dr Harris inherited from my administration was way stronger than what my administration inherited in 1995 after taking over from PAM and we were able to do ten times as much with the little we had even while battling global crisis after crisis,” Dr Douglas said.
The 2015 the IMF report on St Kitts and Nevis (No 15/248) dated September 2015 had stated “that stronger growth in 2013 and 2014 and sizable advance repayments have improved the debt outlook of the twin-island Federation and St Kitts and Nevis’ Debt-to-GDP ratio declined to 79 percent of GDP at the end of 2014.” Since taking office in mid-February 2015, the economy of St Kitts and Nevis has decelerated to 2.2 percent in 2015; 2.3 percent in 2016; 1.2 percent in 2017 and 2.5 percent in 2018.
