Bousquet’s Bulletin: The science of flashing mirrors

By Earl Bousquet

Former prime minister Allen Chastanet is tearing the new government of Saint Lucia to bits over its handling of the COVID-19 crisis six weeks after taking office – and simultaneously offering to help the new Philip J. Pierre administration to better handle the grave national health crisis it inherited.

In a letter on the official letterhead of the Office of the Leader of the Opposition dated September 22, 2021, Chastanet took new prime minister Pierre – and his entire administration – to task “regarding the current COVID-19 crisis in Saint Lucia.”

The letter cited the latest official COVID-19 figures and accused PM Pierre of not taking his own advice on “Science” and “Evidence-based decisions” […]

Following are some excerpts from the four-page letter of over 1,700 words:

Government costs

“When our United Workers Party came into office in 2016, the cost to operate the country was approximately $103 million per month – $43 million for wages and salaries, $30 million for debt financing and $30 million for operating costs (rent, utilities, consultancies etc.) and government’s monthly revenue was approximately $85 million per month and government ran a deficit of approximately $20 million per month.

“By 2019, the policies implemented in 2016 to address this fiscal imbalance, had started to bear fruit. The unemployment rate had dropped from 25% to 16% and the Debt-to-GDP ratio was at 59%. We had had three years of economic growth and foreign direct investments were showing promise, with several projects on the verge of commencing.

“The reduction of the Value Added Tax (VAT) rate, combined with the application of a gas tax and increasing the airport tax helped government revenue to grow steadily – peaking in 2019 to $105 million per month. During this same period, government used these new revenue streams to increase the allocations to education, health, security and infrastructure. Government targeted key expenses by critically reviewing operations, in particular that of statutory agencies.”

COVID impact

“In early 2020, we started to feel the negative impact of COVID – both from a health perspective, and an economic perspective. By later that year, it got progressively worse.”

“The policy we adopted then, which was different to many other countries in the Region, was to co-exist with COVID. Even then, we understood it was about lives and livelihoods and that we had to find the equilibrium between them. That equilibrium was guided by the science and the resulting policies were evidenced-based.

“Try as we may, we could not prevent people from being infected by the virus, but given the limited health infrastructure and the vulnerability of the population to the virus, all we could do was to slow the infection rate to limit the number of people infected within our health system.

“We had to make sure when people got infected, especially those with underlying conditions, that we would be able to take care of them, avoiding what we saw transpire in Italy, England and New York, where the number of cases taking place simultaneously overwhelmed the health system.

“Initiatives like using hotels as quarantine stations and isolation facilities helped reduce the infection rate. We also came to understand that social activities, house parties, public functions, funerals, weddings, and any mass crowd events combined with alcohol contributed significantly to increasing the infection rate. Hence, curfews and limiting/eliminating alcohol consumption were very effective.

“We also learnt that businesses, public offices and schools were very successful in imposing the necessary social protocols like social distancing, wearing face masks and sanitizing. In other words, people were actually safer at work than staying home.

“Tourism, manufacturing, construction and our call centers all required unique protocols to stay open while keeping the population safe and preserving livelihoods.

“We also understood the precarious economic situation we were in. As a result of closing the economy for three weeks in April and reopening slowly until September, government’s revenue dropped from $110 million a month to $60 million and our costs increased from $100 million a month to $120 million a month.

“The increase in cost was primarily due to the cost of the isolation facilities, the operationalizing of OKEU, converting Victoria Hospital into a dedicated respiratory facility, national security, and importantly, the redemption of government bonds…”

Catastrophic fallout

“A catastrophic fallout from COVID-19 was the financial impact on many businesses and personal incomes, which resulted in many companies, institutions and individuals redeeming their bonds.

“In 2020, the government had $700 million due and approximately 25% were redeemed. The government had to pay close to $170 million in cash. This left the government with a deficit of approximately $500 million entering the Budget of 2020/21. This revenue shortfall was partially made-up through the support of the CDB, WB, IMF and ECCB. Recognizing the fallout of COVID, all of these institutions moved unprecedentedly quickly to approve funds to help with budgetary support.

“I was very proud of the team in finance and economic development for the incredible job that they did in the most difficult of times. Tasked with the efforts to extract ourselves from the EU Blacklist, juggling the sudden and drastic drop in revenue and increase in costs, the introduction of a new Finance Act, the arduous task of applying to multiple agencies for funds, all while designing a social and economic stabilization and recovery plan, this team was able to accomplish all of these tasks.

“The government of Saint Lucia continued to meet all of its financial obligations, specifically all wages and salaries, all debt commitments including the bond redemptions, government operating costs, and the increased costs due to COVID protocols.

“The financial institutions provided approximately EC$300 million in very concessionary loans to the GOSL. The IMF funds and WB funds could not be used for debt payments, so they had to be allocated to other operating costs, including costs associated with COVID. The remaining shortfall came from increasing the overdraft facility with ECCB and the local/regional banks, and increasing our payables.

“Payables normally average $30 million, and, as you know, they are now in excess of $100 million. It means individuals and business who have provided goods and services to the government have not been paid, or it has taken an excessive amount of time to be paid. While we have had no choice, this can only continue for a while before these entities will want to be paid in advance for any services.

“While we were able to provide some income and food support, it clearly was not enough, a fact you will now have a greater appreciation for.

Current crisis

“The current crisis is at a point where we will have to reintroduce some of these programs. The question is, where are the resources going to come from?

“This reality will be made worse if the entire economy must be shut down again. Sir, this problem will not resolve itself, nor will it disappear any time soon.

“This letter is not meant to dictate to you, but to advise you that your government must act urgently and decisively before the health and economic systems totally collapse… You cannot wait for the situation to get so overwhelming that we have no choices.

“Our COVID-19 statistics continue to increase at an alarming rate. More concerning is the high rate of deaths, in part, because people cannot access timely help.

“Unfortunately, when you came into office many of the front-liners were already exhausted and the current situation is only making it worse.

“By now you must realize that you will have to adopt some of the same policies that have proven successful in the past. We need to urgently slow-down and temper the COVID-19 infection rate.

“To achieve this, we must reduce public socializing. To do so will require longer curfew hours and prohibiting alcohol sales and consumption. It may also require the use of 758/759 zoning for a period of time to help the police enforce these protocols.

“You have on many occasions commented on the poor and limited housing conditions and that is why using some of the hotels to facilitate isolation of positive cases would be useful, but I do appreciate the extraordinary cost.

Offering assistance

“If your government does not act now, as I have alluded, the country will very soon reach a point where it will shut itself down, jeopardizing many more livelihoods to save lives.”

“Finally, we need to step up the campaign on vaccination. We note the number of Saint Lucians getting vaccinated is far below the target and propose a broad community outreach programme where we bring the vaccine to the people and engage in a rigorous education campaign.

“The opposition stands in solidarity with the people of Saint Lucia and we are willing to offer our assistance. For the sake of our people and country you need to change course.”

“I fear that if you do not heed this advice, it will be catastrophic.”

Coincidence?

While the ex-prime minister’s letter is dated September 22, it was released on Saturday, September 25 – coincidentally the same day prime Minister Pierre was carded to deliver his maiden address to the United Nations General Assembly as Saint Lucia’s new leader.

It pokes poor fun at prime minister Pierre’s insistence on the need to follow “the science” in COVID matters, but the facts and figures only now being revealed tell new stories in opposition not heard that way before the uniter Workers Party (UWP) was voted out of office.

The letter explains the last UWP government’s COVID strategy in ways the then prime minister didn’t during his 16 months leading the national fight against COVID-19, comparing the results of its 16 months without the Delta variant yet detected, with the new administration’s six weeks facing its deadly effects.

Triumphalism

The letter also reveals a sense of partisan triumphalism over the worsening COVID situation — the type Choiseul-Saltibus member of parliament, Bradely Felix warned about when he told a UWP press conference last week that persons thinking that way “need to have their heads examined.”

Coming at the end of a week during which so much was revealed and alleged about a controversial deal under his watch to purchase 100,000 COVID-19 vaccines for Saint Lucia that were never delivered (and with over $7 million still outstanding), there was no offer of any explanation in the lengthy statement.

Not-a-Word

The letter also followed prime minister Pierre’s startling revelations in parliament about untold millions spent on the St Jude hospital project, but there was no reference to the purported vaccines scam.

The statement seems to suggest that the Delta Variant would not have been a factor had the UWP not lost the last general elections, blaming everything that’s gone wrong on something the new government either did, or failed to do.

It explains why “juggling” finance and created economic problems was difficult during the pandemic, but without accepting that the UWP administration, led by Chastanet, bequeathed to its successors the accumulated effects of all those same financial blues.

The statement also totally ignores the fact that the new administration has embraced and entrusted the same health officials that served the previous one throughout its 16 months directing the war against COVID from the Command Center.

Flashing mirrors

Yet, after completely dissing prime minister Pierre and his administration in-and-out and top-to-bottom, the letter offers the UWP’s full support to cure a national sore that festered on its shift and under its watch.

Anyone with the time can go through the statement and extract as many questions requiring answers as those it ignored.

But too, anyone who’s been around long enough will also know that this is just par for the proverbial partisan political course by any party humiliatingly rejected by the electorate and trying hard to look and sound attractive on its first post-election outing on the same day the new prime minister would be delivering his maiden address at the United Nations General Assembly – or, what prime minister Pierre would typically call “flashing mirrors”.