Economists: Hurricane Relief Fund could be holding back IMF Country Report

The alleged failure to account for millions of dollars received from the hastily introduced Hurricane Relief Fund (HRF) is said to be one of the major concerns for the blocking of the International Monetary Fund (IMF) report on the economy of St Kitts and Nevis?

One economist thinks it is while another has privately expressed concern that the review of St Kitts and Nevis economy for the second half of 2018 by the Basseterre-based Eastern Caribbean Central Bank (ECCB) could also suffer a similar fate.

The first economist, who is very much familiar with the economic affairs of St Kitts and Nevis and the OECS, noted that when the Timothy Harris-led Team Unity Government took office in mid-February 2015, nearly US$300 million would have been in the account of the Sugar Industry Diversification Foundation (SIDF).

The economist, who will not be identified because permission was not sought to use the name, noted that the funds derived from the Hurricane Relief Fund, introduced as a new option under the Citizenship by Investment Programme in September 2017, could not be placed in the SIDF account which was established in 2005 with parliamentary legislation.

“By putting the millions of dollars from the Hurricane Relief Fund into a separate account without parliamentary approval and adequate oversight, may have resulted in the disappearance of millions and millions of dollars,” the person said.

“This concern could have been brought to the attention of the IMF Team that visited St Kitts and Nevis in June/July 2018 to assess the local economy in accordance with the IMF’s Article IV Consultation and with its new policy and mandate to stamp out the possibility of corruption,” the first economist said.

Another area of possible concern by the IMF seems to be the hesitancy of the Timothy Harris-led government to implement the Growth and Resilience Fund it promised to implement in 2016 and 2017.

“An area of possible concern to the IMF would be the government’s continued granting of large-scale concessions to close family and friends of the prime minister especially and other government ministers that deprive the treasury of well-needed funds to adequately finance the various sectors of the economy,” the individual articulated.

Two other major issues of concern raised are the financial state of the St Kitts-Nevis-Anguilla National Bank and the promised repeal of the land for debt swap.

Meanwhile, another Caribbean economist, who wishes to remain anonymous, in an invited comment said the people of St Kitts and Nevis should closely watch for the Eastern Caribbean Central Bank’s Economic and Financial Review for the second half of 2018.

“Will it suffer the same fate as the IMF Article IV Consultation? Be watchful,” he quipped and declined further comment.

The ECCB states on its website that it prepares an Economic and Financial Review for the Eastern Caribbean Currency Union and each individual member territory for the periods ending June and December of each year respectively. The Review for December is still to be posted.

Nearly a year after the IMF completed its Article IV Consultation on St Kitts and Nevis, Prime Minister and Minister of Finance, Dr the Hon Timothy Harris continues to deny the people, businesspersons and investors access to the IMF Report on the economy.

In September 2018, the IMF published a notice that stated: The authorities have not consented to publication of the staff report and the related press release.”