PRESS RELEASE:- The Saint Lucia Labour Party is left dumbfounded by the economic analysis of Senator Ubaldus Raymond as it relates to the roll-over of debt, and overall debt management.
While the SLP accepts that the renewal or roll-over of debt is a practice used in public finance, it asserts that the country must always benefit from these actions.
The explanations put forward by Senator Raymond are inconsistent, illogical, and require further clarification because the country will not benefit in the long run.
- Senator Raymond is on record as stating that previous coupon payments for the servicing of a specific debt instrument were set at 4.5%, while the new rate negotiated by his Government shall be at 5.5%.He goes on to state that this roll-over will not result in additional debt servicing costs to the Government. Such an assertion defies fundamental economic and financial logic.
- The Leader of Government Business in the senate went on to assert that it is the position of his government to replace existing short term debt arrangements with longer-term instruments in order to ease the cash flow constraints of the Government. However, the Saint Lucia Labour Party notes that such a shift will result in a larger cumulative debt obligation. The SLP states that the ability for government to undertake long term borrowing is a function of prevailing market conditions. It is a verifiable fact that the market due to factors beyond the control of the government was not conducive to attractive interest rates. Therefore, further clarification on the economic rationale for such a policy position is required
The SLP urges Senator Raymond to rely more heavily on his technocrats in the Ministry of Finance before making pronouncements on matters of the economy, as his utterances thus far are inconsistent and not based on sound economic principles.