St. George,
Grenada, March 15th, 2010:
The New National
Party (NNP) has repeatedly warned
the nation of the misleading
statements by the Minister of
Finance on key economic and
financial matters. Time and time
again, attention has been drawn to
statements by the Minister of
Finance, which raises serious
questions about his credibility and
which over the last several years
have evidenced him reciting, quite
often with both conviction and
authority, positions which were
evidentially at variance with the
facts.
On this occasion
the NNP wishes to draw the attention
of the nation to the statements made
by the Minister of Finance on the
Vulnerability Flexibility mechanism
(V-Flex) made by the Minister of
Finance in the Budget and again on
the popular television programme
“Beyond the Headlines”, where he put
it to the nation that the funds
received from this V-Flex facility,
was largely the result of sterling
economic management - ostensibly
under his watch.
The facts about
the V-Flex facility are well known
and are available on the World Wide
Web. On the basis of the publicly
available information the NNP
refutes the Mr. Burke’s idle boasts
based on the following:
1. The V-FLEX
is a short-term instrument
supporting the most vulnerable
African, Caribbean and Pacific (ACP)
countries to cope with the impact of
the global financial and economic
crisis and to mitigate its social
consequences.
2. The
European Commission (EC) decided to
confine its action to one of a
“donor of last resort” and help only
the most vulnerable countries
meeting the criteria of
(a) High
degree of “vulnerability” assessed
by quantified benchmarks concerning
government revenue, foreign reserves
and the fiscal deficit;
(b) A
“residual fiscal financing gap, not
covered by other donors or by
foreign and/or domestic borrowing”;
(c) Capacity
of the European Commission to close
or “significantly” reduce this gap.
(d) V-Flex is
demand-driven and targeted at
countries with a high degree of
economic, social and political
vulnerability, the right policies in
place to fight the crisis and
sufficient absorptive capacity.
Because the
V-Flex works pre-emptively, based on
forecasts of fiscal losses and other
vulnerability criteria, helping to
ease the impact rather than acting
after the damage is done, two
situations can emerge. First, while
a country might have applied it may
not have been vulnerable enough to
qualify for the facility.
Secondly, while a
country may qualify at the time of
application, when the forecast are
undertaken prospects of fiscal
losses and other vulnerability
criteria have improved, thus
preventing that country from
qualification for the funding.
While several
CARICOM countries did apply, Grenada
and Haiti were the only two CARICOM
Countries to qualify. It can
therefore be surmised that these
countries did not qualify either
because they were not sufficiently
vulnerable or because the forecasts
of this vulnerability was not
sufficiently dim, since the V-Flex
is a pre-emptive facility.
Whatever the
specific factor for the
“non-qualification” of other
countries, what is crystal clear is
that the qualification by Grenada
had little to do with the sterling
economic management of the Minister
of Finance as he attempted to sell
to the nation.
The NNP
reiterates its position that the
Minister of Finance is a stranger to
the truth and regrets that once
again on a matter where the facts
would have sufficed, Minister Nazim
Burke has demonstrated that he is
“bound to lie”.
In all this it
should be clear that the NNP
applauds the efforts of the
European Commission in approving the
financing decisions in favour of
eleven African and two Caribbean
countries. We view this as a
tangible expression of the new
partnership being pursued by the
European Union and the Countries of
the Caribbean and anticipate that
such partnership will extend to
other creative means of development
funding.
We affirm though
that the qualification for the
facility cannot be linked in any way
to the Minister’s management of the
economy. If anything, it is because
of the Minister’s gross
mismanagement of the economy that
our Country today finds itself in a
position of having to require
funding from the V-Flex facility!
It is to be
recalled that the fiscal gap was
never as wide under the NNP and
therefore on the basis of the
criteria used Grenada would not have
been vulnerable enough to qualify.
Indeed it is the first time that
Grenada finds itself keeping company
with countries such as Haiti, in
terms of economic, social and
political vulnerability.
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