The Tribune

FREE National Movement leader Michael Pintard said Prime Minister Philip “Brave” Davis is “lost” on the fiscal impacts of major storms, labelling him “misinformed” on how these natural disasters affected the national debt.

In response, the Office of The Prime Minister accused Mr Pintard of downplaying the economic and fiscal impact of Hurricane Dorian.

“I read with sincere concern and astonishment the sad attempted rebuttal of the Prime Minister’s report in today’s (newspaper) related to my earnest suggestion to him that he clarify his apparent misstatement on the impacts of climate events in the country for the period of 2015 to 2019,” Mr Pintard said in a statement.

“The Prime Minister erroneously stated that the $3.4 billion in estimated economic damage from Hurricane Dorian should be considered as a direct element of the overall national debt.

“I am frankly embarrassed to have to point out to the Prime Minister of our country that the $3.4 billion sum is the estimate of the total economic damage - including private sector and public sector damage and losses - as estimated by a report commissioned by the InterAmerican Development Bank (IDB) and published in November 2019. Indeed the lion’s share of that sum is in losses to private sector assets and commercial activity. That $3.4 billion sum is not an addition to our national debt.

“The portion of that loss that does contribute to the debt is the sum that the government borrowed to deal with the aftermath of Dorian and the loss of public sector income only. That same IDB report on page 148 estimated the loss of public assets to be some $229 million.

“Sadly, the Prime Minister is badly misinformed on the subject. That is a frightening prospect if we are now to conclude that his pronouncement to an international audience regarding the climate related contributions to our debt was based on his lack of understanding of some very simple concepts. We ask again that the Prime Minister examine the source of his information on the key contributors to our national debt and correct his statements as necessary.”

In response, OPM said it is bizarre that Mr Pintard is seeking to undermine Mr Davis’ climate change advocacy.

“Bizarrely, the leader of the Opposition is so determined to undermine this advocacy for our country, that he is downplaying the impact of Hurricane Dorian, pretending that the entirety of the impact was measured in a November 2019 IDB report,” OPM said.

“But the damages measured in that report are only part of the picture.

“When hurricanes wipe out homes, schools, hospitals, businesses, roads, water and sewage pipes – the impact to the economy lasts a long time. The people affected don’t pay taxes. Visitor numbers are impacted. The effects cascade forward, for years afterwards. The costs associated with Hurricane Dorian continue to accumulate, three years later.

“And, of course, there’s the price of our debt – the interest rates we pay.

“We have to borrow to rebuild, increasing our debt burden, and the more our debt grows in overall size, the more we pay in interest to compensate for that increase in risk to lenders.

In addition, the risk of future hurricanes is priced in as well -- our interest rates would be lower if those who hold our debt were not worried about the next Dorian or Matthew.

“There’s the opportunity cost of rebuilding and adaptation measures – that’s money that could otherwise have been used to pay down debt or invest in our people and our economy.

And, of course, our risk insurance becomes more expensive.

“Of course, there are other important contributors to our current, outstanding debt, including the very substantial impact of the pandemic and lockdowns, but no one could seriously argue about the very harmful impact of climate change.

“Other leaders in our region understand the significance and are rallying alongside our Prime Minister to make this case to the world. The Leader of the Opposition should join us.”

Last week, Mr Davis spoke of the country’s $12.131bn national debt at the opening Plenary Session of the Caribbean Regional Heads of Government Meeting (CHOGM) in preparation for the COP27.

He said that 50 percent or more of the sum was connected directly to consequences of natural disasters.

The disasters, Mr Davis said at the time, occurred between 2015 and 2019, requiring government to borrow money for recovery.