FISCAL TRANSPARENCY IN ST. VINCENT AND THE GRENADINES

UNCLAS BRIDGETOWN 000007

SIPDIS
STATE FOR EEB/IFD/OMA
STATE ALSO FOR WHA/CAR

E.O. 12958: N/A
TAGS: EAID ECON EFIN PREL XL
SUBJECT: FISCAL TRANSPARENCY IN ST. VINCENT AND THE GRENADINES

REF: STATE 1923; 11-25-2009 CDA HARDT-SAUNDERS E-MAIL


1. (U) This cable responds to ref A request for information on
fiscal transparency in St. Vincent and the Grenadines. Responses
are keyed to reftel questions.



-- Is the central government expected to receive or is it already
receiving U.S. foreign assistance funding using FY 2010 SFOAA?



St. Vincent and the Grenadines benefits from regional programs for
the Eastern Caribbean funded out of USAID's Eastern Caribbean
program, as well as a few targeted bilateral programs, but these
funds are not provided directly to the central government. St.
Vincent and the Grenadines is slated to receive foreign assistance
funding in 2010 through FMF and IMET, and will also receive
assistance under Enduring Friendship programming. St. Vincent and
the Grenadines may also be eligible for 2010 funding under the
Caribbean Basin Security Initiative (CBSI).



-- Is the host country's annual budget publicly available?



The Government of St. Vincent and the Grenadines practices fiscal
transparency by making its national budget publicly available on an
annual basis. The government does this by announcing and detailing
the budget in an open forum of parliament annually and doing a full
budgetary review in parliament at the end of the fiscal year. The
government also allows for public debate on the budget, with wide
and open participation from political parties and civil society.
The national budget is also posted to the government's main public
website, at http://www.gov.vc . (Although the
site is currently undergoing a complete revamp, the Prime
Minister's Office, as well as the Ministry of Finance, has assured
us that the current and previous budgets will be displayed via the
link to the Finance Ministry.) In addition, St. Vincent secured a
USD $2.3 million zero-interest World Bank loan to implement an
Organization for Eastern Caribbean States (OECS) regional
e-government integration program. According to the World Bank, the
program is designed to improve the efficiency, quality and
transparency of public services, including public financial
management to integrate existing budgeting, accounting and
reporting systems and develop a web-based public information system
to provide easily understandable information on government
finances.



-- Are incomes and expenditures included in the publicly available
budget?



Yes, the budget is open for public scrutiny through its budgetary
offices. The publicly-available data are generally accurate and
meaningful, and include all revenues and expenditures. The
relevant laws governing fiscal transparency in St. Vincent and the
Grenadines have been entered into force in the Constitution at
independence, in the form of a "Chapter on Finance of the
Constitution with Authorization of Expenditure from Consolidated
Fund by Appropriation and Authorization by Expenditure in advance
of appropriation." These laws, which were originally adapted from
New Zealand's constitutional framework, are adequate and
well-implemented.



-- What is post's assessment of the extent to which the
publicly-available budget accurately reflects actual government
incomes and expenditures?



Given the clear transparency of St. Vincent and the Grenadines'
political system -- which was modeled on and parallel those of the
British and New Zealand parliamentary systems -- post believes
thoroughly that the publicly-available budget accurately and
clearly reflects actual government incomes and expenditures.
Budgetary transparency is further buttressed by the Eastern
Caribbean Central Bank, which plays a central role in monetary

policy throughout the Eastern Caribbean and monitors the overall
economic and financial environment in OECS countries, including St.
Vincent and the Grenadines, that share a common currency. The ECCB
is the Central Bank for all of the Eastern Caribbean countries, all
of whom are required to provide detailed, regular reporting on
public revenues and expenditures and operate within fiscal
limitations monitored by the Bank.



-- Have there been any events since the 2009 review that may have
affected fiscal transparency (e.g., a coup)?



There have not been any events since the last review that may have
affected St. Vincent and the Grenadines' evident fiscal
transparency.



-- Since last year's review, what efforts has the host government
undertaken to improve fiscal transparency? What progress has been
made, pursuant to the 2009 demarches on the subject?



Per ref B, post chose not to deliver any demarche to the Government
of St. Vincent and the Grenadines, given St. Vincent's proven
transparent budgetary process. Post continues to believe strongly
that the initial decision to declare St. Vincent and the Grenadines
as non-compliant on budgetary transparency was flawed. Thus, there
were no steps that could or can be taken to encourage St. Vincent
to make its budget more transparent than it already is. In this
regard, Post strongly encourages the Department to revisit the
original decision to declare St. Vincent and the Grenadines as
noncompliant, to rescind that decision, and to restore its full
eligibility for foreign assistance.
HARDT