An orthodox cabinet as the Westminster system prescribed
By Melanius Alphonse ICIA, AIPFM
Nov 27, 2018 - 12:26:18 PM
Reactions to the announcement by the office of Prime Minister Allen Chastanet of adjustments to ministerial portfolios effective November 1, 2018, that many regard as a measly de-cluster of the hitherto cluster cabinet of ill-defined intentions in Saint Lucia, reinforce the planned vote of no confidence that has the government on the defensive.
There is also the analysis that the current adjustment in portfolios augments the superficial nature of a cabinet that is unable to condense the expenditure of central government and improve performance, albeit the prime minister’s thinking “to ensure greater synergy, efficiency and improve responsiveness to the needs of Saint Lucians.”
Meantime, numerous government and/or administrative “influencers” have been actively attempting to recruit a true and credible minister for finance in the person of Dr Claudius Preville. Suffice to say, multiple overtures have been unambiguously turned down.
In 2014, Preville contested the leadership of the United Workers Party (UWP). Back then, he was told by a current special minister that commands special treatment in the UWP hierarchy, in Cabinet and parliament, to fall in line and wait his turn.
On the other hand, government continues to borrow heavily to finance day to day operations and capital expenditure from the National Insurance Corporation (NIC) and local banks.
Previously, established facts laid the foundation for opposition leader Philip J Pierre to put in perspective the government’s deliberate threats to loot the NIC trust fund. He explained the widening disconnect as follows:
“Borrowing from pensioner’s savings to pay government debt seems at variance with the UWP government’s frequent announcements of increase confidence of investors in the government, increase revenue collection from VAT, the airport tax, the CIP, increase in tourism arrivals and a general improvement in the economy.”
On August 6, then minister in the ministry of finance, Dr Ubaldus Raymond, disclosed that government raised EC$80 million for bond LCG100718 [with a value of $70 million, maturity of ten years with a 7.5% yield] and bond LCG080718 [with a value of $47 million, maturity of eight years with a 7.5% yield,] was “fully subscribed” and that “EC $100 will be repaid to NIC by August 26.”
Addressing the Saint Lucia Labour Party (SLP) conference, Pierre said:
“A few months ago we heard that the government had to borrow from the NIC pay its debt. It would be an act of grave irresponsibility if, as the opposition, we did not warn the government to be cautious with pensioners’ funds. We sounded the warning of caution on behalf of the people whose money is being secretly juggled in a Ponzi scheme.
“In other words, the NIC bought bonds so that government could pay them back.”
Emma Hippolyte, former director of NIC and former minister for commerce, business development, investment and consumer affairs in the previous administration, also shared key pointers in her letter published in Caribbean News Now:
“The NIC makes an annual payout of some EC$90 million in the economy; EC$5 million is paid to government as a contribution to healthcare; and EC$85 million is paid out directly to contributors in the form of benefits with pensioners receiving the largest chunk of EC$65 million or EC$5.5 million every month.
“If government continues to make huge demands on the fund at interest rates lower than what is recommended by the actuary, the life of the fund will be significantly reduce and this would not be for the benefit of us all.
“In accordance with the NIC Act, the NIC is required to undergo an actuarial review every three to five years. As part of the exercise, the actuary advises the NIC of the minimum rate of returns it should obtain from its investments and assets. I am told that the actuary at the last review advised that a five percent rate of return was needed.
“Who is protecting the NIC funds and who is protecting the interest of the pensioner?”
At the October 30 sitting of parliament, the minister for finance was authorized to guarantee a line of credit in the amount of EC$20 million towards the repayment of a loan obtained by the Saint Lucia Development Bank from the National Insurance Corporation for on-lending to the housing and productive sectors to be repaid at an interest rate of three percent per annum, subject to review every fifth year after the date of first disbursement.
Debating that resolution Pierre argued in part that:
“So we’ve moved now from borrowing on the Regional Government Securities Market, to borrow from the First National Bank and now NIC [pensioner’s trust funds].
“The government cannot meet its requirements. They are facing serious cash flow problems. They find themselves in a situation where there not generating enough cash for the government’s day to day expenses.”
Prime minister and minister for finance Allen Chastanet attempted to justify this by saying that “NIC has a lot of money,” to which Pierre responded:
“Though this may seem plausible, NIC funds are for the future commitment of contributors and the pensioners of Saint Lucia.
“Already, NIC loans in 2017 are at EC$70 million and increasing yearly. The projections are that, if immediate measures are not taken, NIC will run out of money by 2050.”
Former cabinet minister Richard Frederick continues to shed light on land transfers and deeds of transfer documentation as proof that the NIC facilitated the government acquisition of 210 acres of land, in the quarter of Micoud, at a cost of EC$11 million for the purpose of relocating farmers and others displaced by the Desert Star Holdings (DSH) project.
In the meantime, the NIC annual report 2017 is expected to come to parliament, the board of NIC has commissioned, Syntegra Change Architects Ltd, based in Trinidad and Tobago, with expertise in the field of organisational development, to focus on the implementation of strategic organisational change.
Nevertheless, I can’t help but leave you with Dr Kenny Anthony’s comments at the last sitting of parliament, November 20, 2018:
“I remember just after the elections, the prime minister announced that we are creating a clustered cabinet, because we are going to have a coherent approach. We will be running efficient government, we will be implementing a plan, and we will be focused. But what have we seen with the cluster cabinet?
“Step by step, it has been dismantled. The final rites were given to the cluster cabinet a few days ago when certain individuals were elevated to ministerial positions. Now, I don’t know, I am not asking any questions. I don’t want any explanations; I don’t know whether some motion of no confidence has something to do with it, where these changes were made.
“But all I know, the inspiration from the prime minister called Holness out of Jamaica finally entered a deep hole and mercifully Saint Lucia was spared the consequences of it. Today, we have now returned to what essentially is an orthodox cabinet as the Westminster system prescribed.”
Alphonse is a management and development consultant. He is an advocate
for community development, social justice, economic freedom and
equality; the Lucian People’s Movement (LPM) critic on youth initiative,
infrastructure, economic and business development. He can be reached at
The views expressed here are solely those of the author in his/her
private capacity and do not in any way represent the views of
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