BUDGET 2016: MILLSTONE OR PANACEA

BrianFrancisLet me be the first to admit that I do not have a crystal ball. I do not have any insider information in relation to the Budget for 2016. Worse yet, I do not have a magic wand that I can use to determine what is likely to be included in the new Budget.

Further, the Budget for 2016 would have been presented to Grenadians two days prior to the publication of this column. That situation, by definition, means that anything that appears in this piece about the Budget would have been pure speculation on my part.

But, there is some glimmer of hope. You see, there are two documents in existence that provide sufficient background information that your humble servant can and has used as the basis for taking a shot at what can or should be included in Budget 2016. The documents to which this writer refers are the NNP’s 2013 Manifesto and Grenada’s Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding to the International Monetary Fund (IMF), dated June 12, 2015.

Having taken all matters of relevance into consideration, I feel fairly confident in the conclusion that our Prime Minister and Minister of Finance must have been faced with a conundrum when finalising Budget 2016. Why?

The Merriam-Webster dictionary defines a conundrum as a confusing and difficult problem or question. Dictionary.com defines a conundrum as anything that puzzles. However conceptualised, a conundrum is probably the most appropriate way to characterise the Budget for fiscal year 2016 that was delivered two days ago by the Right Honourable Prime Minister and Minister of Finance to the Parliament and country.

The confusion in the Budget comes from both sides of the aisle. On the one hand, the Prime Minister must have been forced to praise the performance of his government in relation to the economic management of the country and the delivery of some of the many promises made to the Grenadian people during the election campaign.

As part of that exercise, the Prime Minister must have blown his own horns by confirming to all and sundry his government’s fulfillment of many of the targets set by the IMF as part of the “home-grown” structural adjustment programme that is sucking the life out of so many poor and vulnerable people.




On the other side of the coin, the Prime Minister has to put forward a mix of policies, programmes, plans and strategies to convince Grenadians and the international community that there is hope on the horizon as the economic fortunes of many ordinary folks is about to take a 360 degree turn.

After all, the hardships that have been heaped upon the backs of the poor and vulnerable among us over the past two years cannot continue without massive disruptions to the socio-economic environment in the country. Jobs, a renewed sense of hope and the restoration of the pride and joy of NNPites must be placed on the front burner of the Prime Minister’s action plan for 2016 given that general elections in Grenada could be called at anytime.

But when one examines critically the challenges faced by the Prime Minister from either side of the coin a million dollar question comes immediately to mind: To what extent would Budget 2016 reflect some of the contents of the NNP’s 2013 Manifesto and Grenada’s Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding to the International Monetary Fund (IMF), dated June 12, 2015?

In the Manifesto, the NNP promised the country inter alia a new vision for the development of Grenada; putting people first; improved health and well being; more efficient and effective government; and, most importantly, a new economy that would have resulted in more job creation, sounder macroeconomic policy-making and “sustainable economic growth, employment and economic justice”. Were any, some or all of these issues addressed in Budget 2016?

In the June 12, 2015 letter of intent, the Prime Minister said this: “Grenada has concluded the first year of its home-grown programme…The progress made to stabilise the Grenadian economy and put it on a path to sustainable development is significant.The Government outperformed its 2014 fiscal targets by a large margin, completing almost half of the adjustment effort required to restore fiscal sustainability…We have also jumpstarted growth-boosting reforms, including in the electricity sector. We have met all but one of the quantitative performance criteria under the programme and completed significant progress on the structural reform agenda. The steadfast implementation of our Home-grown Programme is beginning to bear fruit, with confidence gradually returning and the economic recovery underway continuing to strengthen. While encouraged by the progress made thus far, we recognise that significant challenges remain, the most pressing of which is elevated unemployment. Together with our Social Partners, we will overcome these challenges and set the stage for strong, sustainable and job rich growth.”

Simple question: Did Budget 2016 incorporate these matters?

Having heard the Budget and having had two days to reflect on its contents, I pose this question to you: Will Budget 2016 be a continued millstone to the Grenadian people, especially the poor and vulnerable; or will the Budget present the deserved panacea to the economic woes we face daily and from which relief is desperately needed?

(Dr. Brian Francis, a former Permanent Secretary in the local Ministry of Finance, is currently a Senior Lecturer in the Department of Economics at the Cave Hill Campus in Barbados of the University of the West Indies)

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