ST. JOHN’S, Antigua – Antigua and Barbuda’s Finance Minister Harold Lovell issued a statement on receipt of US$50 Million from the Bollivarian Republic of Venezuela:
The Government of Antigua and Barbuda is indeed very grateful for this generous and timely financial support from the Government and People of the Bolivarian Republic of Venezuela. Like many developing countries, including our Caribbean counterparts, Antigua and Barbuda has been facing considerable fiscal pressures as a result of the global economic and financial crisis, which has reduced economic activity and led to a substantial decline in the level of Government revenues.
The past few months have been extremely challenging for the Government and people of Antigua and Barbuda.
In response to these challenges, this Government, under the unswerving leadership of Prime Minister Baldwin Spencer, has been exploring a number of options in an effort to ensure that Antigua and Barbuda can effectively maneuver these difficult economic times.
As indicated by the Honourable Prime Minister, we presented a proposal for assistance to the Government of the Bolivarian Republic of Venezuela on Thursday 6th August 2009 and were heartened to receive a positive response within seven days.
This injection of funds will be extremely instrumental in allowing the Government to close the fiscal gap in 2009. In particular, the resources will be utilized in a manner that will help the Government to meet its recurrent obligations and to undertake a number of activities that would provide some economic stimulus, enhance revenue administration and collection, improve expenditure management, and provide some social protection for the poor and unemployed.
The purposes for which the Government intends to utilize the US$50 million include:
1. US$35 million will be used as budgetary support and will allow the Government to meet basic financial obligations such as payment of wages and salaries, and other payments that will allow the Government to function on a day to day basis.
2. US$7 million will be used for economic stimulus. Specifically, this will involve construction projects with particular emphasis on renovation and refurbishment of Government buildings. This will create immediate jobs for many Antiguans and Barbudans and, upon completion of these renovation and refurbishment projects, the Government would be better positioned to reduce expenditure on rental payments for office spaces through the utilization of its newly renovated properties. The resources saved in this regard will then be channeled into other areas.
3. US$6.5 million will be used for enhancing revenue administration and expenditure management – this will entail the acquisition of property to house the Inland Revenue Department (IRD). The IRD is currently facing significant challenges with effective tax administration due to severe limitations in respect of its operating environment. It is expected that with a new base of operations and a comprehensive reorganization and institutional strengthening exercise, the Inland Revenue Department will be able to boost its level of revenue collection by at least 2 percentage points of GDP. The Government intends to complete the relocation and reorganization of the Inland Revenue Department by October 2009.
Further, the resources allocated for this purpose would be utilized to finance the implementation of a financial management system across all Government Ministries. The Integrated Financial Management System will afford the Ministry of Finance greater control over expenditure by line ministries and thereby allow for better management of fiscal accounts.
The remaining US$1.5 million will be used to fund activities and programmes that provide social protection for the poor and unemployed.
It should be noted that while this injection of US$50 million will be of enormous benefit to the Government and People of Antigua and Barbuda, there still remain significant challenges that must be addressed over the coming months. As a nation, we will need to make some sacrifices in order to overcome these difficulties and emerge a stronger, more prosperous nation.
In this regard, the Government is about to finalize the elements of its longer term strategy to restructure its debt and undertake some key fiscal reforms that are essential to ensuring the long term fiscal and economic sustainability of Antigua and Barbuda. The implementation of this strategy will require considerable technical and financial resources. As such, the Government has engaged partners in discussions at the bilateral, regional and international levels in an effort to secure the requisite technical and financial support.
On behalf of the People and Government of Antigua and Barbuda, I wish to thank the Government and People of the Bolivarian Republic of Venezuela for this unambiguous expression of goodwill and solidarity. There can be no question that the provision of this support is demonstrative of an innovative approach to social and economic partnership – a partnership that is clearly premised on the principle of shared development. We look forward to fi nalizing the terms of this arrangement, which will involve some grant element and a loan on very concessionary terms.
Once again, I wish to say thank you to the Government of Venezuela. Also, I wish to extend this Government’s appreciation to the people of Antigua and Barbuda for their patience and continued support. By working together with the shared purpose of creating a better nation, we will not only overcome these trying times but will secure a bright future for Antigua and Barbuda.
Finance Minister Harold Lovell
