September 14, 2019, marked one full year since the Prime Minister and Minister of Finance of St. Kitts and Nevis, Dr. Timothy Harris, has refused to release the International Monetary Fund’s (IMF) Country Surveillance Report for St. Kitts and Nevis. This is after much public outcry from experts, social commentators and the Parliamentary Opposition for the report to be released in order to obtain an independent assessment as to the true state of the economy of St. Kitts and Nevis in the face of flagging growth. The GDP per capita for St. Kitts and Nevis has dropped from highs of 6.2% and 5.89% of GDP for 2013 and 2014 respectively to 1.2% in 2017 and 2.5% for 2018, below the regional average of 3.3% according to the Caribbean Development Bank’s Country Economic Review 2018.
After several weeks of denying that his administration had refused to consent and claiming that he was “still in consultation with the IMF” after the report became due last September, Harris has since dropped this charade and now openly and brazenly refuses to release the IMF 2018 report. He has adopted a defiant and hostile posture towards the IMF claiming in a recent forum, “If you don’t owe the bank, you don’t have to take their advice,” a policy position that is juvenile and highly irresponsible. Releasing the IMF Country Surveillance Report has nothing to do with whether or not a country decides to follow the advice provided, it is about open and transparent governance which allows the public as well as the business community to have access to the information that they need to make important business decisions and investment choices.
According to the IMF’s website, “when a country joins the IMF, it agrees to subject its economic and financial policies to the scrutiny of the international community. It also makes a commitment to pursue policies that are conducive to orderly economic growth… and to provide the IMF with data about its economy. The IMF’s regular monitoring of economies and associated provision of policy advice is intended to identify weaknesses that are causing or could lead to financial or economic instability.”
The St. Kitts-Nevis Labour Party continues to insist that the failure by the Prime Minister and Minister of Finance to release the IMF Country Report robs all citizens and stakeholders, such as our business, investment and development partners, from critical information about the health of the economy of St. Kitts and Nevis, as well as opportunities for investment. Harris’ recalcitrant position becomes especially alarming when considering that both the Eastern Caribbean Central Bank (ECCB) and the Caribbean Development Bank’s (CDB) country reviews for 2018 raised a red flag regarding the high risk of insolvency posed to the domestic banks of St. Kitts and Nevis, particularly, the National Bank of St. Kitts-Nevis and Anguilla.
According to the CDB report:
“The domestic banking system remains under pressure from worsening asset quality. The ratio of NPLs [Non-performing loans] to gross loans increased from 16.5% in September 2017, to 24.9% in September 2018. Net of loan loss provisions, NPLs as a percentage of banks’ capital rose from 33.4% to 55.7% putting banks’ solvency at higher risk.”
This raises several questions about why the Prime Minister and Minister of Finance continues to hide the IMF Report for 2018. Is he hiding the IMF Report in order to hide further and more detailed warnings about the risk being posed to the National Bank and Development Bank of St. Kitts and Nevis? Neither the Prime Minister nor the Financial Secretary in the Ministry of Finance has ever directly answered the question as to precisely what is the policy advice or data point that has been presented in the 2018 IMF report that they take issue with and why. This is the million dollar question that remains unanswered and which Dr. Harris flat out refuses to address.
Hiding the IMF report flies in the face of the democratic tenets of transparency and accountability that this country stands for and the Parliamentary Opposition joins with the people of St. Kitts and Nevis in demanding to know what the IMF has reported.
In just one day, on October 8, 2019, the Harris administration will be hosting the 2019 National Consultation on the Economy. We in the Parliamentary Opposition join with the people of St. Kitts and Nevis in highlighting the hypocrisy and futility of any national consultations on the economy when such a critical assessment about our economy is being hidden. It appears that the only story about the economy that the Prime Minister and Minister of Finance wants to be told is the one that he conjures himself, where facts and figures are manipulated to present a rosier picture about the economy than the present reality in order to score political points.
It is possible that it is also for this very reason that we understand from credible sources that the IMF’s Article VI consultations for 2019, which had been scheduled to be convened in September 2019 has been postponed indefinitely.
The present posture of the Prime Minister and Minister of Finance has raised suspicions about the precise nature of the information that the Prime Minister is hiding and therefore, calls into question the very credibility of whatever information and data that the Ministry of Finance hopes to present at tomorrow’s consultations on the economy. In our view, for as long as the Prime Minister refuses to release the 2018 IMF Country Surveillance Report and prevent the IMF from conducting its regular Article IV consultations, any national consultation on the economy will be considered pointless and illegitimate.
The St. Kitts-Nevis Labour Party and the Parliamentary Opposition calls on the Prime Minister and Minister of Finance, once again, to release the IMF report.
Official Statement By: The St. Kitts and Nevis Labour Party