Dominican Prime Minister, Roosevelt Skerrit, has scoffed at suggestions that his Government was in need of a helping hand from the International Monetary Fund (IMF). Photo: Caribbean 360

As he wrapped up debate on the EC$918.2 million (US$339.7 million) budget on Tuesday night, Skerrit fended off suggestions from the Opposition United Workers Party (UWP) that the island’s mounting debt would drive the country to the Washington-based financial body.

“Our debt to GDP is not at 120 per cent or more. That’s when the IMF comes in – when your debt to GDP is 120 (per cent) plus; they are coming to rescue you,” he told Parliament.

Skerrit pointed out that Dominica’s debt to GDP ratio stood at 67 per cent and could be lowered to as much as 51 per cent, if Government cut guarantees to the Dominica Agricultural Industrial and Development Bank and the Dominica Water and Sewerage Company Limited.

Insisting that both guarantees were investments for Dominicans, Prime Minister Skerrit maintained his Government has a strong handle on the country’s financial affairs and there was therefore no need for an IMF programme.

“The IMF is our friend. They are my friends; I like them, they like me too, but we don’t need them, because they have confirmed…that there is no fiscal unsustainability in Dominica at this stage,” he said.
During his budget, Skerrit reported that the economy performed well in 2016, recording 2.8 per cent growth despite the devastation and setbacks caused by Tropical Storm Erika in 2015.

The Eastern Caribbean Central Bank has projected that the economy will grow by 3.1 per cent in 2017 and 2018.

“This buoyant outlook contrasts sharply with the rest of Latin America and the Caribbean. The IMF warns that growth for this region will only be about 1.1 percent this year. The growth experienced by Dominica is clearly better than that of the region and it has also surpassed the average for the Eastern Caribbean Currency Union area,” Skerrit noted.

However, Opposition Leader Lennox Linton told Parliament in his reply that this year’s budget comes against the backdrop of some very interesting disclosures from the IMF’s Article IV Consultation on Dominica in March.

He said that over the past 17 years, the Washington-based financial institution has made recommendations for the Dominica economy, including the need for improving the conditions for private investment, especially for export activities, as the key to accelerating growth.

“These IMF recommendations for an economy managed by a group, which, according to the prime minister, should be ‘unafraid to regularly expose itself to independent expert scrutiny’, are contained in a press statement issued by the mission chief at the end of the Article 4 Consultation in March 2017.

But four months later, the full Article 4 report is yet to be published.”

Linton said the IMF executive board in May considered and endorsed the appraisal without a meeting.

“I understand the IMF executive board to be saying, the 2017 Article 4 report is in the hands of the Dominica authorities and those authorities have not yet decided to publish it. And I wonder why,” he added.

Linton further charged that they were warning signs since 2005 that Dominica was struggling to achieve growth, falling short of the required five to seven per cent growth to sustain jobs and reduce poverty on the island.