It’s not often that Grenada’s two main political parties – the ruling New National Party (NNP) and the main opposition National Democratic Congress (NDC) will have to sit on the same side of a battle.
However, former executive member of the now defunct Grenada United Labour Party (GULP), Lincoln St Louis has filed a lawsuit in court against the two parties in connection with the EC$2 billion plus national debt that is a millstone around the fiscal neck of the country.
THE NEW TODAY has seen documents which indicate that the landmark lawsuit was filed on January 12 with the Registry of the local Supreme Court.
Experienced Court Bailiff Terry Registe served the documents Tuesday on former Head of the state-run National Insurance Scheme (NIS), Ashton Frame at the NNP head office on Lucas Street at approximately 9.50 a.m. and later at 4.49 p.m. on NDC executive member, Dr. George Vincent as he made his way to the party office on H.A Blaize Street.
St. Louis, an economist by profession is hoping to get a high court judge to find both NNP and NDC guilty of “fiscal mismanagement” for the mounting national debt of the country over a period of 20 years.
In an interview with THE NEW TODAY newspaper on Tuesday, the former President of GULP said that he was forced to file the lawsuit as a “perse petitioner” as local lawyers are refusing to get involved in the case.
“I am doing the work myself…I am my own attorney. I couldn’t get a qualified lawyer to do the work for me so I have to do it myself. I did approach (lawyers), I am not telling you how many either but I did approach and no one was willing to do it”, he added.
According to St. Louis, Grenada needs a new direction than the course being pursued by the two leading political parties over the years.
“I am accusing them of fiscal mismanagement and I am leaving it to the court to decide. I am a Grenadian and I think those two political parties have been guilty of fiscal mismanagement over a period of 20 years. It is time we take a new direction. I may or may not want to be part of this new direction….it all depends”, he said.
St. Louis denied suggestion that he was bringing the lawsuit for political gains due to his association with the GULP, founded by late Prime Minister Sir Eric Matthew Gairy.
He said: “I am not a young man anymore so I don’t have the ambitions of a 35-year-old but I have to see this through because I am absolutely convinced of the rightness of what I am trying to do”.
The lawsuit states that “fiscal mismanagement is not cost free” and listed a number of bad deals undertaken especially by the Keith Mitchell-led NNP administration over the years.
He cited “opaque dealings” with the Republic of China on Taiwan before the Mitchell government expelled Taipei diplomats from the island for a more lucrative deal from Mainland China, excessive risk taking, and an “unsustainable increase in Debt to GDP ratio”.
With specific reference to the debt restructuring reached with Taiwan as part of the IMF-assisted Structural Adjustment Programme, St. Louis is suggesting that it came at a high price for Grenada.
He said: “The fifty percent (50%) haircut was negated by the increase in the rate of interest from two percent (2%) to six percent (6%)”, he said.
The court documents pointed to borrowing being undertaken over the years “without liquidity and solvency”, the so-called “sweetheart deal” given to the Russian outfit known as Global Petroleum Group (GPG) for the island’s oil and gas resources, and the sale of “profitable” state-owned utilities.
St. Louis also referred in the lawsuit to the two debt restructuring programmes that Grenada was forced to undertake within a 10 year period as reasons for the “fiscal mismanagement” of the country by both NNP and NDC.
He charged that the second debt restructuring which was undertaken between 2013-15 by the Mitchell government had severe consequences on the island’s fiscal situation.
The lawsuit said the consequences included loss of a 3+ credit rating by Standards and Poor, higher future borrowing costs, as well as a haircut of 58.7% to domestic National Insurance Scheme holders of the Eastern Caribbean (EC) $ 2025 bonds, and losses to banks and investment funds.
St. Louis blasted the NNP government for the “sweetheart deal” with the Russians on the island’s oil and gas resources since it will “allow GPG to freely export its share of petroleum found in the territorial waters of Grenada free of all taxes, among other things”.
St. Louis believes that the two major political parties on the island have been passing blame to each other over the years for the country’s debt situation but that both are equally liable.
There has been no official reaction either from NNP or NDC to the lawsuit filed against them.