Caribbean & Central America - November 2019

On 8 October, St Kitts & Nevis prime minister, Dr Timothy Harris, gave the feature address at the National Consultation on the Economy at which he highlighted his administration’s undoubted economic successes. Amongst other things, he said: “We note that the largest number of jobs created in our economy occurred under a Team Unity administration.” However, later in October, he was in Washington DC for the Small States Forum (SSF) where he argued that financial help for small islands facing natural disasters should not be curtailed because of their relative economic success.

Harris told the National Consultation audience that the economy would grow 3.7% in 2019, according to the financial secretary, and that this marked the fifth straight year of growth. He also reported a fiscal surplus for the first eight months of 2019. And he highlighted in particular the 26,000 jobs created between January and June 2019. Tourism has been a strong driver of the economy, with cruise passenger arrivals up 7% in 2018 and visitor arrivals up 5.7%.

Not unnaturally, the prime minister compared the economic record of his government favourably with that of his predecessor. He said: “For the period 2010 to 2014, the economic growth averaged just about 1% with negative growth of 3.8%, 1.9%, and 1.0% in 2010 2011, and 2012 respectively.” Team Unity, under Harris’s leadership ousted the Saint Kitts and Nevis Labour Party, led by Denzil Douglas, in February 2015. Team Unity is an alliance of the Concerned Citizens' Movement, the People's Action Movement, and the People's Labour Party.

In other good news, it was reported in late October that SKN had attained the Eastern Caribbean Currency Union (ECCB) target of a 60% debt-to-GDP ratio as early as March 2016, considerably earlier than the December 2018 date previously reported. To put this achievement in context, it means that SKN was the first independent state within the ECCU to meet this target, and it met it 14 years ahead of the 2030 target date. As of June 2019, the country’s debt-to-GDP ratio was 55.5%. In June 2014, the ratio had been 85%.

There are, however, some downsides to all this good news. At a meeting with International Monetary Fund (IMF) officials in Washington DC on 19 October he highlighted the dangers of using GDP as an indicator when assessing whether or not a country needed emergency funding to overcome a natural disaster. Harris argued that this was unfair on Small Island States. He was in Washington for the Small States Forum.

Judging by the remarks of United Nations Secretary General António Guterres to the SSF, Prime Minister Harris’s point is well received. Guterres told the forum: “For small states, recovery and reconstruction bills, including the cost of restoring people’s livelihoods, can total more than 100 per cent of Gross Domestic Product. Successive storms can trap small island states in particular in an accelerating cycle of disaster and debt. Small states cannot be expected to pay for climate disasters alone.”