Antigua strikes deal for IMF loan
Lovell said that the measures of the fiscal consolidation programme remain the same as previously announced. (Photo: antiguahotels.org)
ST JOHN’S, Antigua, March 16, 2010 – Antigua and Barbuda’s Finance Minister Harold Lovell has announced that the International Monetary Fund (IMF) has agreed, in principle, to lend the government US$124 million, granted it doesn’t increase its existing arrears or get into any short-term debt.
The announcement came days after a team from the IMF visited the island and submitted its findings to the Cabinet.
Lovell told a press conference earlier today that final approval for the StandBy Arrangement could be given in another two months.
“This arrangement will provide Antigua and Barbuda with a loan of about US$124 million over a three-year period, through quarterly disbursements, provided that Antigua and Barbuda meets the mutually agreed fiscal targets and benchmarks,” he said, adding the targets include achieving a balanced budget; strengthening capacity in the Inland Revenue and Customs departments to improve tax administration and increase revenue collection; and commencing work on public sector and pension reforms.
“The next step is for the Fund management to review and approve the arrangement. Once this is done, we are hopeful that the IMF Executive Board will sign off on the agreement by May of 2010,” Lovell added. “The government of Antigua and Barbuda cannot, during his engagement with the IMF, increase its stock of arrears, or contract short-term debt.”
The Finance Minister added that the administration will also be required to pay promptly for goods and services contracted by the government and make its contributions to the Social Security Board, the Medical Benefits Board and other creditors, like contractors and other suppliers, in a timely manner.
The Standby Agreement is based on the National Economic and Social Transformation (NEST) Plan which the Baldwin Spencer administration put together to tackle the social economic crisis, to build on belt-tightening measures already implemented.
The four major components of the NEST plan are a fiscal consolidation programme, an economic stimulus package, financial sector stability, and a comprehensive social safety net.
Lovell said that the measures of the fiscal consolidation programme remain the same as previously announced.
"By 2013, we will have a sustainable fiscal position."
--Finance Minister Harold Lovell
On the expenditure side, the focus will be on reducing wages and salaries by 20 percent by 2012. That is to be achieved by reducing expenditure on overtime; attrition; reallocating workers within the government service to fill vacancies and reduce the growth of the wage bill; outsourcing a number of government services, starting next year; identifying and eliminating waste in all departments; and reducing transfer payments to various statutory corporations and overseas offices.
“Much of this reduction will come from rationalising and consolidating the services and functions of our overseas operations,” Lovell said.
As for enhancing revenue, he said the most important measure would be improving the administrative systems and procedures to raise the rate of compliance by tax payers at every level.
That includes increasing the revenue yield from the Antigua and Barbuda Sales Tax (ABST). A reduced basket of zero-rated items went into effect on Monday and government is expecting to get more money not only from the increased number of items now being taxed, but through increased compliance.
An excise tax on alcohol, tobacco, ammunition and guns and to replace the current tax on luxury vehicles will also be introduced in coming months.
“As our national programme to achieve fiscal and debt sustainability goes into high gear, this government will continue to protect the most vulnerable members of society through our social programmes including those that benefit the elderly, indigent, persons with disabilities and our students,” the Finance Minister sought to assure.
"This arrangement will provide Antigua and Barbuda with a loan of about US$124 million."
--Finance Minister Harold Lovell
“This responsible approach will set the framework for sustainable growth and development for future generations. We expect that by 2013, we will have a sustainable fiscal position and the debt stock and debt to GDP ratio will be declining.”
The IMF and the government of Antigua and Barbuda have been in negotiations on securing financial assistance for several months.
But the opposition Antigua Labour Party (ALP) has made it clear that it does not support the government seeking IMF assistance.
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AIG (American International Group)which is bankrupt is run by Edley of Goldman Sachs!
All roads lead to: Goldman Sachs!
Goldman Sachs is a bunch of arbitrage wielding sycophants & sociopathic criminals who profit by destroying the system
There several new alternatives to the IMF-World Bank now! Why deal with the IMF?
The IMF (World Bank) admits it is bankrupt! So it has little or no real resources to act as lender very soon – In fact, even the IMF is scrambling to replace the US Dollar as the world currency because the Chinese are about to unfold their new alternative to the IMF! One CURRENT alternative permitted by the IMF is alternative currency swaps between Asian countries without the US Dollar, (google: Chiang Mai Initiative)
http://www.larouchepub.com/other/2001/2847imf_bankrpt.html
Joe Stiglitz is a leading critic of international development organizations — especially the International Monetary Fund, (IMF & World Bank). And yet, in his book, Globalization and its Discontents, he points to one country that got it right — Botswana. How did it succeed? By ignoring advice from Washington-based institutions, as Mr. Stiglitz explains. He also speaks how Botswana beat the criminal Diamond monopoly De Beers:
http://www.theglobalist.com/storyid.aspx?storyid=2507
Here is news on the developing Asian alternative to the IMF & World Bank:
http://www.globaleconomicgovernance.org/blog/2009/05/watch-out-imf-and-watch-out-washington-dc/
60 Questions about the World Bank debt scam:
http://www.cadtm.org/60-Questions-on-the-IMF-World-Bank
Actually, there are several excellent books on the World Bank debt scam here:
http://vakindia.org/shop-online-page4.html
How the World Bank caused America & European financial bankruptcy (free download):
http://vakindia.org/pdf/IE.pdf
How Malaysia dumped the World Bank (IMF) & thereby prevented economic and social chaos:
http://www.twnside.org.sg/title2/gtrends1.htm
Another interesting book on the topic – World Bank & IMF, Fifty Years is Enough:
http://www.alternativeradio.org/programs/KEND001.shtml
In summary, the IMF and World Bank will only extend loans if countries agree to accept 'structural adjustment programmes' (SAPs). SAPs are forced down the throats of the people of the former colonial world. To pay off the loans, the IMF and World Bank demand governments raise money by selling off public assets and companies (privatization) and cutting state expenditure on social services like health care, education, and pensions. SAPs require countries de-regulate and "open up" their economies by cutting subsidies to local industries and creating bogus trade barriers and tariffs. Countries must open up their economies to the multinationals (usually based in Western countries), remove restrictions on foreign investments, and allow corporation’s access to the workers and natural resources of the country at bargain basement prices.
The vast majority of the profits made by the multinationals are taken out of the country and brought home (repatriated) to the West. SAPs encourage export-oriented growth (selling cheap raw materials or commodities on the world market, like cash crops, garments, or computer chips) to generate hard currency. All in all, the IMF and World Bank SAPs turn countries into loan repayment machines, generating easy profits for the world's biggest companies and banks. IMF policies also both directly and indirectly impact on workers in, for example, Europe and the US. Because they are partially funded with public money, the IMF and World Bank redistribute wealth from working people in the West (through their taxes) and funnel it to programmes which benefit the multinationals.
The effects of IMF/World Bank programmes are to lower wages and working conditions worldwide, which exerts a downward pressure on workers' living standards in the industrialised countries as well.
The IMF and World Bank loans have created a huge debt trap. This overwhelming debt has led to the poorest countries in the world allocating enormous portions of their national incomes towards paying interest. Debt is one of the most important weapons with which the big capitalist powers dominate poor countries. It is used as a means of blackmailing the poorest countries and tightening the screw on the vast majority of the people in Africa, Asia and Latin America.
However, due to the collapse of the US Dollar & all Central Bank controlled European nations, many alternatives to the World Bank have opened up! Dominica will be wise to use an alternative to the World Bank – Besides; even the World Bank admits it & the US Dollar are bankrupt!
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