Gov't Pumps $15M into Economy: Treasury pays-up on local private sector debts

Contact: Press Secretary to the Prime Minister

Friday, May 04, 2001 - Prime Minister and Minister of Finance Dr. Kenny D. Anthony has confirmed that the Government of St. Lucia has paid out some $15 million in outstanding debts to private sector companies and agencies, as publicly promised not too long ago.

In his budget address, the Prime Minister noted that the liquidity in the financial system available for private enterprise "is undoubtedly affected by the timeliness with which government pays its bills to the private sector."

Offering figures to back his analysis, the Prime Minister also noted that the year of highest liquidity and moderately low payables of $11.4 million occurred in 1992, when St. Lucia had the second highest level of banana earnings on record. Since then, government's local debts rose dramatically by some 300% to a whopping $33.9 million in 1996.

Dr. Anthony said if the previous administrations had embarked on a necessary and concerted policy of injecting liquidity into the system by reducing government's payables since 1993, the trend of reduced economic growth would have been reversed and the resulting prolonged economic slowdown would have been avoided.

The Prime Minister said in his budget address that unlike the previous administration, the Labour government "recognizes the importance of the private sector to this economy and the need to reduce government's indebtedness to that sector" That is why, he said, by 1999 government's outstanding payables had been reduced by one million dollars, as part of a determined effort to reduce the overall debts to the private sector.

The Prime Minister announced in the Budget Address that he had instructed the Ministry of Finance to pay off $20 million of the outstanding payables during this financial year, with $15 million to be paid by the end of April.

Accordingly, Dr. Anthony announced Friday that the Finance Ministry had paid the promised $15 million on schedule.

He said; "This $15 million will go a long way to put greater liquidity in the hands of private businesses and enhance their ability to consolidate, expand, and in general, finance their operations."

The announcement of the government's intention to pump $20 million dollars into the economy was welcomed by the St. Lucia Chamber of Commerce, as well as by two prominent local accounting firms, Chase, Skeete & Boland and PriceWaterhouseCoopers.

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