ST. JOHN’S: The Government of Antigua & Barbuda does not have any intention of re-engaging the International Monetary Fund (IMF) even after the U.S.-based financial institution said the island had successfully completed a multi-million dollar Stand By Agreement (SBA).
Finance, Economy and Public Administration Minister, Harold Lovell, said the government of Prime Minister Baldwin Spencer will continue to maintain a constructive policy dialogue with the IMF.
“I’ve said it before in another forum but it is worth repeating, Antigua & Barbuda is at the dawn of a new era,” said Lovell. “We weathered the worst of the storm presented by the global economic and financial crises, as well as home grown realities like the collapses of BAICO/CLICO and R. Allen Stanford. We did this with the grace of a mature nation, not the grief of mendicants expecting the outside world to solve our problems.”
Lovell said there was trepidation when Antigua & Barbuda began the 36-month IMF program as part of the National Economic and Social Transformation (NEST) Plan.
“I am certain we all understood that we had to chart a new and very different economic and fiscal path, there was fear,” he said. “Some of that fear came from a combination of the unknown coupled with yesteryear experiences. There was also serious and deliberate fear mongering.”
Last week, the IMF said the government will receive an immediate disbursement of US$25.4 million following the last review of the SBA, which expired on June 6.
The 36-month SBA was approved on June 7, 2010 for an original amount of US$121.9 million. The IMF said that the aims of the program were “largely achieved despite considerable challenges”.
It said the fiscal deficit dropped from 18 per cent of gross domestic product (GDP) in 2009 to just over one per cent last year.
In a statement, the IMF said that much of the adjustment under the program has come from cuts in public spending and investment, while tax revenue targets for 2013 have been met largely through one-off payments of back taxes.
“Another risk looms in the expiration of debt relief and upcoming payments due to foreign creditors. Further improvements in the collection of tax revenues are necessary to allow the authorities to meet their targets and while making needed public investment. In particular, the elimination of tax exemptions and a broadening of the tax base could help.”
The IMF said it had also approved Antigua & Barbuda’s request for a waiver of non-observance of the performance criterion on the central government budget expenditure arrears accumulation.
It said the waiver was granted on the basis of the temporary and minor nature of the deviations from the program objectives and the corrective measures undertaken by the authorities.
Lovell said in addition to the tangibles, the nation had received a psychological boost and its achievements over the past few years in areas such economic and debt management under extremely testing circumstances are indicative of the competence of the present government.
“This is a testament to the government’s commitment to disciplined, sound and sustainable economic policies and practices,” said Lovell. “That we are today seeing the green shoots of that commitment is also a credit to the people of this nation, from the technicians to man in the street, who all understood that 30 years of independence demanded nothing less of us. We have a way to go, but we are buoyed by the fact that the record speaks for itself, and we can move forward as a nation with renewed confidence.”