St Kitts and Nevis miraculous economic recovery, lessons for Jamaica?

“St. Kitts and Nevis is at a turning point, where it has the opportunity to establish itself on a sustainable long-term growth path. This will require difficult decisions and careful choices to preserve the hard-earned gains. It will also require continued fiscal discipline and the implementation of structural reforms to expand growth potential.

“Macroeconomic conditions improved significantly over 2013 and 2014. The economy recorded two years of strong growth, averaging about 6 percent per year, the strongest in the region by far. This reflects primarily a construction boom fueled by inflows under the Citizenship-By-Investment (CBI) Program; government and Sugar Industry Diversification Foundation (SIDF) investment and spending, including on the People’s Employment Program (PEP); and a continued recovery in tourist arrivals. Employment expanded by 23 percent over the two years, while inflation has remained low. Banks have remained stable following debt restructuring, although the NPL ratio significantly increased notably due to removing public sector loans from the total loan portfolio following the debt-for-land swap. Credit to the private sector is still sluggish, expanding by 0.5 percent in 2014.

The IMF report stated further and here we must take note.

“The strong fiscal outcome, combined with additional progress with the debt/land swaps, and some advance debt repayment, led to a further decline in the share of public debt in GDP to 80 percent at end-2014, compared to over 100 percent at end-2013, and about 160 percent in 2010. St. Kitts and Nevis’ debt-to-GDP ratio is now below the ECCU average.

Note the Debt/GDP ratio in St Kitts and Nevis was much higher than Jamaica when they began the IMF program and to get it chopped by 50% in just 4 years( 2010 – 160% to 80% – 2014) nothing short of miraculous, but you don’t hear a work from all our most decorated and brilliant economist or financial analyst on this, do you?

Some other things about St Kitts and Nevis that most of you would not know.

  1. Debt to Gdp ratio 2010 – 160%
  2. Debt to GDP ratio 2014 – 80%
  3. Healthcare in St Kitts and Nevis is FREE at the public hospitals and that includes medication.
  4. There are no schools fees at high schools
  5. Exam fees are free for the most needy, those who can pay, will pay.
  6. The exchange rate has been fixed 1US$ = EC$2.7 for other 30 years (Zero devaluation)
  7. There is No personal income tax.
  8. Employers pay 1% of income into severance fund, used to pay off employees if a company packs up and leave without paying severance to the workers.
  9. Government Ministers live in their own homes, no free housing
  10. Government Ministers buy their own vehicles expect PM and Deputy PM
  11. St Kitts and Nevis has more public holidays than Jamaica
  12. St Kitts and Nevis is short on  labour and has to import workers from the rest of the region.
  13. Off shore companies pays zero duty 0n imported raw materials that goes into manufacturing providing that all the finished good are exported.

I bet you that, our local economist and financial analyst would not have mentioned this to most of you, simply because they are unable to use their analysis of the Jamaican economy to explain how St Kitts and Nevis could have accomplish so much with so little.

Don’t tell ,me the following

  1. Its a small island state so it’s needs are less
  2. The population is small and its infrastructure is less demanding
  3. The Jamaican economy is much larger and therefore more complex
  4. etc etc

It’s all about being relative ie a small country will have smaller needs and smaller population but that is all relative.

These countries have less resources to weather the economic shocks of the world markets, than a larger country such as Jamaica.

So I want someone without referring to the items I said don’t tell me about, explain very carefully and deliberately how St Kitts and Nevis was able to pull this off.

Is the the IMF’s first real success story and why have our economist failed to tell Jamaicans about the economic miracle that has taken place in St Kitts and Nevis.

( Dem say if you caan explain something, keep quiet and avoid it) 🙂




2 Responses

  1. Can’t trust the numbers, cause economic growth isn’t national prosperity (JLP in the 60s) but we could have fixed a lot of stuff if we used that NHT money to a construction programme.

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