Despite becoming one of the first Caribbean destinations to reopen to tourism on June 1, Prime Minister Gaston Browne says the Government of Antigua & Barbuda will have no choice but to increase the country’s debt burden.
He says this is due directly to the effect that the coronavirus lockdown has had on the country’s economy.
“The truth is we have to be engaged in some level of borrowing even though very sparingly,” Browne told listeners to his radio programme.
“I can see us borrowing about 150 million dollars to help to stimulate the economy and not to give people cash grants but to provide for certain sectors, to stimulate certain sectors especially agriculture and light manufacturing and even to generate construction work so that people can be put to work,” he said.
The prime minister disclosed that as the months go by “it is becoming increasingly difficult for us to pay public servants.”
He said this is why a direct cash stimulus would be a poor decision for the government to make. He said the government would have to borrow millions to make this possible
“When you borrow you increasing the debt to GDP and you not creating any significant value there and by the way if anything you will be reducing economic output,” Browne who is also finance minister said.
He said even with the $150 million loan the amount government pays monthly to service loans will increase.
“There is going to be an automatic increase in the debt to GDP. It may not shoot up…because we moved quickly to reopen but I’m quite sure that our debt to GDP will be about 80 something percent and even the debt service ratio will increase,” he said.
The prime minister has also defended the government’s decision to reopen the economy.
“In the case of Antigua and Barbuda, if we were to keep our borders closed until September then we would see a reduction in GDP [Gross Domestic Product] of 30 per cent in a single year,” Browne said.
“I want Antiguans and Barbudans to understand the consequences of such a decision and that is why we did not opt for such an option, that is why we opted to open first thing in June in order to reduce the financial and economic consequences of remaining closed for several months.”
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This administration is going to send Antigua into debtor’s bondage at this rate! We need to pay attention! With the rate that the Government is “borrowing”, we may end up in long term servitude! No attempt has been made to raise funds through intelligent programs and cut cost – all they ever do is borrow! Yet, in the end, we see very little or no result!
The government ever thought that if they stopped all them incentives to hotels they wouldn’t have to be borrowing all them money ?
@Sample so true and hotels acting like they’re so broke and can’t sever staff
Don’t know who would be giving a debt riddled country like Antigua more loans and what collateral Antigua will have to give. Antiguans will be paying for these loans long after Gaston has left the scene, and will Have nothing to show in terms of development. The tourist may not return until there is a vaccine which could be two years. What is going to happen next year? More loans?
It’s funny how the Antigua CIP program actually increased the ‘government administration fee’ for applicants during a time in which most CIP programs are talking about reducing fees. The CIP revenues are supposed to be a lifeline for us in situations like this, but the CIU continues to market the program poorly.
We should reduce our CIP fees ASAP and give more benefits to applicants, like the the right to hereditary or marriage citizenship without having to pay extra fees in the future. St. Kitts and St. Lucia are kitting our butts right now, and soon our CIP revenues will be $0 because of the lack of good strategy by PM and CIU folks.
Not sure where you get your info from but fact is SKN not only has a higher cost for NDF than ANU (150K vs 100K) but they also increased fees. Grenada the donation begins at 150K and if you include a spouse its 200k, family of four 250K. Yes their fees are lower but overall ANU ‘s price is less Lets do a comparison (SKN:ANU):
SKN:
Minimum investment: $150,000 Sustainable Growth Fund (SGF) or $200,000 (Real Estate)
Government / Processing Fee: $35,000 main applicant and $20,000 for spouse and $10,000 for children regardless of age (real estate only)
Passport fee: $350 per person
Due diligence fee: $7500 per person hence a family of 4 that’s 30K
ANU:
Contribution $100,000
Due Diligence $7,500($7,500 + $7,500 for spouse, $2,000 per dependent 12-17,$4,000 per dependent 18 and over)
Passport fee 300
Processing fees $30,000 for a family of 4
Guy Clearly SKN is much more expensive and yet as you say more persons are applying hence the market is not just driven by price
The market like any other is driven by confidence. Antigua has little to none under the ALP.
That is why St. Kitts and St. Lucia kicking our asses although we are selling our birthright buy one get one free like mangoes in mango season.
When wealthy people hear Antigua and ALP in one sentence they tend to run as fast and far away as they can.
Why dont you use your usual pseudonym anyway?
If you are a Antigua CIP citizen and you get married in the future, or have a child in the future, Antigua charges either $75,000 USD extra for a new husband/wife or $10,000 for a newborn child. This is outrageous!
Yes, for those of us who lack drive, resilience, initiative, patriotism and yes, plain old balls, I guess that the glass will always be half empty. Oh well, it’s back to the couch from whence cometh my daily inspiration…literally my two cents worth.
China again??
Well if it is China, heaven helps Antiguans. China is hell bent on taking over black countries from Fiji to Africa and the Caribbean. What is the collateral for these loans. He who writes the cheques controls you.
I am Fijian. All you have to do is Google China and Fiji to see what they have done to my beautiful country and ecosystem.
@Smh
Don’t blame the Chinese. All these incompetent corrupt black governments allowed it to happen.
Are you saying that Antigua has $3.5 billion in debt with a population of around 100,000. With all this money plus CIP, what does Antigua have to show for all this money. A lot of this money have to have gone into a lot of individuals personal accounts. Think of the projects this government got involved in that have millions in costs overrun and no accountability. Think of the private company that is building houses for a million dollars for Antiguans who can’t afford to pay $300,000 for them.
And now you are attempting to borrow another $150million. Dominica just unveiled a plan for its CIP money to improve its infrastructure and education. St Kitts can afford to keep its borders closed and still pay a stimulus to its people. These countries did not have a PM bragging about Economic Powerhouse. As an Antiguan, I am really ashamed of this government and the situation the country is in.
Using the loan to provide employment is not a bad idea as this will stimulate the economy. The only question is how is Antigua ever going to repay these loans and still develop the country.
Introduce PIT for all individuals making over $4000 per month. Call it an emergency tax and when the situation improves leave it in place to help pay the bills. Don’t be afraid to impose the tax because politicians will have to pay. They can sure share the burden with salaries of over $100,000 per year. There are many countries with emergency taxes in place for over twenty years. We know politicians will say what they think they have to say.
Most of the people making over 4000 dollars monthly are home now. Not Sure PIT would help.
@Antiguan
Most of the people making over $4000 per month are in banking and upper echelons of the government and corporations. The others hopefully will be back to work soon. What is the alternative, more borrowings? Antiguans have a tendency to like everything for free. Unless this government does what has to done and make unpopular decisions the sinking ship of Antigua will only sink deeper.
I don’t agree with a personal income tax. Personal income tax is a dumb dumb idea.
All so-called developed countries have personal income tax. Baldwin Spencer on taking over the government realized there was no money in the treasury to repay the high debt load he inherited and run the country. Rather than borrowing more money, he decided that Antiguans should make a contributing through PIT. VC Bird would say that the debtors can’t take the country. I told a woman recently that the Chinese have war ships that can blockade St. John’s Harbour if they don’t receive their money.
Our current spark of leader said he inherited $2billion in debt, yet he followed through on his campaign promise to abolish PIT. Where did he intend to find money, more borrowings, now up to tune of $3.5 billion and rising. VC bird did the same thing and gave up a lot of the people’s lands for loans he could not repay.
Governments only raise money through taxation. All you people who don’t think you should make a contribution through PIT, will look forward to the day when your children don’t have a country as Antigua will have been taken over by creditors.
@jackie
Creditors not debtors.
That money will not go towards stimulating the economy but to pay salaey and wages, and even bloat the publ8c sector even more. This govt had no creativity; no plan; no vision but only exists to win election and personally enrich.
Here we go again,borrowing money,again.This time who are we going to borrow from.I observe the DAWG did not say.I think he says things to be noticed.This man is a NARCISSIST.He has excessive admiration of himself.
Mr. Prime Minister,
How is it that we have to depend on borrowing to survive after you proclaimed that our economy grew so much in the budget speech?…… your statements are not adding up.
Let’s face it. It’s a stark reality. Gaston Brown and the ABLP CANNOT manage this country. They have failed. And miserably too. I call upon their supporters to admit this for your own sake and the sake of our country. Don’t say like I heard one day: I know he killing but I backing him to death.
This guy is really borrowing into, rather than out of debt as he said. Of course it was nonsense when he said it and only ABLP supporters could understand it now: if they can.
Of course going to the IMF would cost us less but their would be oversight which ABLP absolutely hates.
I feel offended that they are telling us that IMF report on them is so wrong that we the people ought not to see it.
Tranparency MUCH! NOT!!!!
This man is going to borrow the country out of debt.Go back and read the clips by him.You would see that he said so.He is following his own logic.By the time he leaves office.Antigua and Barbuda would be under water like a submarine.Without any means of coming to the surface.Hard,hard times,are in store.For the poor the poorer and poorest of the society in Antigua and Barbuda.As old people used to say inna Antigua,band you belly.
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