Government explains St. Lucia’s request from IMF

The approval by International Monetary Fund (IMF) to Saint Lucia of US$10.7 million available under the rapid-access component of the Exogenous Shock Facility(ESF), formed part of Prime Minister Stephenson King’s core budget presentation when he address matters of finance, in the House of Assembly.
The Minister of Finance meticulously explained that the engagement with the IMF was on special terms of a soft loan component and not the usual austerity measures infamously known as structural adjustment.
Structural Adjustment Policies (SAPs) have bee imposed by the IMF and the World Bank to ensure debt repayment and economic restructuring. Lamentably, the way it has happened has required poor countries to reduce spending on things like health, education and development, while debt repayment and other economic policies have been made the priority. In effect, the IMF and World Bank have demanded that poor nations lower the standard of living of their people.
It is therefore understandable that with such an unforgettable historical approach and trend much concern about dealing with the IMF will trigger concerns of fear, trepidation and involuntary trembling by the public. It is to be noted that such misgivings are well placed and understood with the historical context of the IMF and the World Bank.
However the good news is that there is no need for such misgivings, anxiety or apprehension. The terms of the IMF loan are highly concessionary and are not at all a structural adjustment Programme and as such there is nothing to fear.
When the context for which the IMF loan was sort is examined it will be realized that St Lucia is merely utilizing its privilege as a member of the IMF Club and that is perhaps that’s how Dwight Venner would probably put it. The facts on the global economic down turn which our island is not at all immune to, tells us explicitly that there has been negative impacts from the financial crisis.
This has resulted in a lackluster performance of the tourism sector in the fourth quarter of 2008; there was a further sharp decline in visitor arrivals in the first quarter of 2009. Falling visitor and spending levels have led to job losses in the tourism sector, and are affecting plans for the construction of new (and expansion of existing) hotels and resorts. Given that government tax revenues, foreign exchange reserves, and employment levels are inextricably linked with the performance of the tourism sector, the damage to the economy from the crisis has been widespread.


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