Opposition Leader warns of harsher economic times ahead

ST JOHN'S, Antigua (CMC):

The main opposition Antigua Labour Party (ALP) is warning citizens to brace themselves for harsher economic conditions over the next few months, saying that the Baldwin Spencer government had agreed to new strategies with the International Monetary Fund (IMF) to improve the ailing economy.

ALP leader Lester Bird, in his weekly radio broadcast, said the recent announcement that the island had passed the first- and second-quarter fiscal targets under the US$117.8 million stand-by arrangement (SBA) was due to the government changing its position on a number of economic matters.

Finance Minister Harold Lovell said over the weekend that despite the challenges faced by the country, the targets were met by containing expenditure in the face of the lower-than-expected yields from revenue.

But Bird, a former prime minister, said that the government passed the IMF test by not paying public servants on time and also being unable to meet the financial obligations to various contractors.

"In its press release, dated September 10 ... the IMF stated quite clearly that the UPP (United Progressive Party) regime passed the test because the authorities have succeeded in restraining expenditure growth, in other words, by not paying their bills including the wages of public servants."

Updated letter of intent

Bird said that the IMF statement also declared that the two parties have "agreed on an updated draft letter of intent that outlines policy responses to the challenge posed by lower-than-expected revenues.

"This means that the UPP regime has been forced to accept more and tougher conditions from the IMF. These include raising prices still further on gasolene, diesel and bottle gas; charging people for medicines, visiting doctors and using the Mount St John Medical Facility, despite contributions to the Medical Benefits Scheme; freezing wages and salaries; dismissing more public servants and raising the age of retirement; and recalibrating pension payments.

"My friends, I want you to be aware that while the UPP regime, in a press release on Friday, said that they had passed the IMF test, the IMF itself has stated that its management is still to agree to new conditions, and will not do so until the end of October," Bird added.

He told listeners that what is important for them to understand is that the Spencer government has not disclosed the new conditions to which they have agreed.

"But, I can tell you now that they are draconian," he said, adding that apart from new harsh conditions, the IMF is also calling on the government to impose sales tax on even more goods and services that you have to buy.

"The cost of living will increase even more. And, the ability of people to make ends meet will become even more difficult. The UPP is desperately trying to keep itself in office at the expense of the workers and business people of this country," Bird added.