A chronicle of his sterling leadership in rescuing Dominica from fiscal and economic collapse and his impact on the regional and international stage five years after the death of Dominica’s 6th Prime Minister, Hon. Pierre Charles (January 6, 2004).
By Government’s Press Secretary, Sean Douglas
The great civil rights leader, Martin Luther King Jr. once said: “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”
The 5th anniversary of his untimely death is an opportunity for recalling the leadership role he played in stabilizing the public finances and laying the foundation for the economic recovery and growth our country is now experiencing.
At an ecumenical service in memory of the late Hon. Pierre Charles, his successor, Prime Minister, Hon. Roosevelt Skerrit said: “I have inherited from Pierre Charles a road map for the future social and economic development of this country. He did not live to see it implemented, but the final product will be a lasting monument to his memory.”
And that final product is an economy on a firmer footing than what he inherited. He was brave enough to tackle head-on an economic crisis, the genesis of which started in the 1990s. Had the Government led by Hon. Pierre Charles not implemented the strong fiscal measures between 2002 and 2003, the economy would have plunged into crisis, a situation that would have reduced Dominica to the status of a ‘failed state’.
Let us cast our minds back to the state of our economy in late 2001-2002. Back then the Government relied on bank overdrafts, arrears and the postponement of payments to the Dominica Social Security (DSS) as a form of unofficial short-term financing for Government.
The overdraft at the National Commercial Bank had reached unsustainable levels, surpassing the $36 million mark at one point, more than three times what was stipulated by law. The DSS was heavily exposed to Government to the point where the entire scheme was under threat of collapse. Government could not honour its commitments to the private sector for goods and services and arrears to the Public Utilities and international donor agencies were increasing.
Late Prime Minister, Hon. Pierre Charles
During fiscal year 2000/2001, recurrent expenditure as a share of recurrent revenue was distributed as follows: Wages, personal emoluments and retiring benefits- 65%; Debt Service (Principal and Interest) - 27%; Goods and Services -28% and Transfers 13%. Judging from these figures, there was an obvious mismatch between revenue and expenditure and as such Government was unable to pay its bills. The situation was dire and it required urgent and decisive action to restore fiscal balance and place the country unto a path of sustainable growth and development.
In the 2002/2003 budget, the Government introduced a number of measures aimed at narrowing the yawning gap between revenue and expenditure.
Pierre Charles demonstrated not only great political courage but also personal courage by risking his own political future. He mounted a major campaign of public education on the economic situation in the country in a punishing series of meetings that took him and his Cabinet colleagues to every part of Dominica.
Protest action organized by the Opposition United Workers Party outside Parliament in September 2002 almost turned bloody when an angry mob surrounded the vehicle of Government Senator Johnson Boston and jostled Ministers of Government in their passing vehicles. Pierre Charles himself was rushed out of Parliament that day via a side entrance by his security detail to avoid the melee outside. The fracas however did little to dent the resolve of Pierre Charles, passionate in his conviction that he was doing “the right thing”. At a Town Hall Meeting in Grand Bay in 2002 when he called on his people to “fight back” in defence of their Government, he was criticized by his detractors.
By late 2002, it emerged that Dominica had not met some of the fiscal and economic targets agreed to with the IMF in the first Stand-By arrangement partly because Government may have underestimated the severity of the economic crisis and the capacity required to implement such a programme.
The year 2003 proved to be a very difficult year for Pierre Charles. He was Chairman of CARICOM for the first half of the year and was faced along with his Cabinet with the challenge of having to place the Programme back on track following the slippages of the first Stand-By arrangement. In addition to that he had health concerns, including having to undergo two coronary angioplasty procedures in January and November of 2003 and a long-standing problem of Deep Vein Thrombosis, exacerbated by travelling for long periods by plane.
It is said that a CARICOM leader, upon hearing of the package of measures the Government of Dominica was contemplating in the upcoming 2003/2004 Budget told Pierre Charles that he was either preparing himself for “political suicide” or he possessed “testicular fortitude”.
In May of 2003, Pierre Charles, Charles Savarin and Swinburne Lestrade travelled to Washington D.C to negotiate with the IMF the size of the fiscal adjustment that was still required in advance of the 2003/2004 budget presentation. Officials from the IMF were also in Dominica twice in May 2003 in hard fought negotiations and discussions. The Fund initially suggested a 6% cut in nominal salaries, a measure Government found hard to accept but in the end settled for a 5 % cut for two years.
In the days and weeks prior to the presentation of the 2003/2004 budget, Pierre Charles soldiered on, working 12 and 14 hour days criss-crossing the country and meeting people in Town Hall Meetings. There were also meetings with other groups like the Unions, the DAIC, the Economic Stabilization Consultative Group, the Economic Advisory Council among others.
By the end of 2003, there appeared early signs of an incipient economic recovery. Pierre Charles actually cut short his leave by two days to take Dominica’s case for debt restructuring to a meeting of donors’ and creditors in Barbados on December 17, 2003.
At his last press conference as Prime Minister in late December, 2003, he appeared relaxed and in ebullient mood when he announced that Dominica had achieved a significant milestone, by entering into the IMF’s Poverty Reduction and Growth Facility Arrangement (PRGF). Dominica had also qualified for a structural adjustment loan from the World Bank.
The fact that the programme succeeded was in large part due to the fortitude of the Cabinet of Ministers led by Pierre Charles and of course the acceptance of the programme by the Dominican people.
Today our economy is in better shape due in large measure to the sturdy foundation built by Pierre Charles. The large fiscal imbalances have largely been eliminated. His contribution on the regional and international stage must also not go unnoticed.
Much of the structural measures of the stabilization programme, which included income tax reform, reform of the electricity sector and increased private sector participation in the shareholding of the National Commercial Bank among other measures were initiated under the stewardship of Hon. Pierre Charles.
After several years of non-payment it was in January 2003, that Government started paying again in a timely manner its contributions and the contributions of its employees to the Dominica Social Security.
Pierre Charles took the bold decision to establish diplomatic relations with Libya and strengthened ties with the Republic of Cuba. He laid out a vision for a greater diversification in Dominica’s foreign relations and like his immediate predecessor, Hon. Roosevelt Douglas, embraced a Non-Aligned Foreign Policy. He significantly enhanced Dominica’s prestige at the United Nations by appointing for the first time a full-time Permanent Representative/Ambassador to that august body in the person of Mr. Crispin Gregoire in 2002.
At the United Nations World Summit on Sustainable Development in Johannesburg, South Africa, in September, 2002, he laid out his vision for renewable energy development in Dominica and ending the country’s dependence on fossil fuel for electricity generation.
At the 58th Session of the United Nations General Assembly, in New York on September 25, 2003, Pierre Charles called for special and deferential treatment for Small Island Developing States. He also called for greater attention to be paid to the indigenous peoples of the world and added that “the world community must demonstrate greater responsiveness to improving their condition through more generous contributions to the Voluntary Fund”.
Pierre Charles was firmly committed to the idea of ‘One Caribbean’ and as a member of the Prime Ministerial Sub-Committee on Economic Union, he provided guidance to the process of Economic Union among OECS member states.
The contribution of Pierre Charles to the Dominica Labour Party must also be highlighted. The success of the Dominica Labour Party in the period following the death of Michael Douglas in 1992 was built on two pillars. On one pillar Rosie Douglas spent much time abroad building links and forging alliances with Social Democratic and Labour Parties in Europe and the Caribbean and the Democratic Party in the United States. The other pillar was built on the work of Pierre Charles who mobilized and reorganized party branches and groups.
News of the passing of Pierre Charles on January 6, 2004 reverberated well beyond the village of Grand Bay, a constituency he represented in Parliament for nearly two decades. The years since his passing have given us time to reflect on his contribution to Dominica at a critical juncture in our development as a nation.
Pierre Charles should take his rightful place alongside some of the great Dominicans of the last century in recognition of his herculean role in saving Dominica from financial, social and political disaster and making the ultimate sacrifice - his own life- for the cause of economic recovery. In his own words, “if it is for the good of the country, it must be done”.
05/01/09
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