It’s the ugly truth everybody is thinking but nobody ever dared to call Grenada, our proud nation, “beggar nation” – until Clarice Modeste-Curwen. For decades only streams of international aid flows and concessionary loans have saved us from “failed state” ignominy. Consider our portfolio of political mendicancy in multilateral and bilateral relations and you decide.
We receive charity from United Nation’s UNESCO for education, science, and culture, UNICEF’s Children Emergency Funds, and World Health Organisation (WHO) volunteer services.
Canada’s Foreign Affairs, Trade, and Development Department (DFATD/CIDA) and United States’ USAID grant aid for philanthropy, humanitarian welfare, and development, example, Bureau for Latin America and the Caribbean.
The World Bank’s generous “soft” loans support our Poverty Reduction Initiatives and the Organisation of American States (OAS) funds human capacity building.
The International Monetary Fund (IMF) has twice rescued Grenada’s economy from collapse with instruments like Extended Credit Facilities and Standby Windows. In 2015 it controls our fiscal destiny again with Structural Adjustment Programs (SAP) while we beg creditors’ debt forgiveness with “hair-cuts” for $2.7 billion national debt.
As a collective and individually, European Union gives technical and financial assistance including EDF Development Funds, China contributes infrastructure, free housing (and gazebos!), and Venezuela cheap oil. Our benevolent benefactors include United Kingdom, United Arab Emirates, Japan, Cuba, and myriads of non-governmental organisations.
For decades following independence all our international diplomatic relationships gave begging top agenda priority and, as the “big business” of foreign policy, our begging skills are elevated to sophistry that yields maximum dividends. Overtime all macro-economic development strategies are budgeted on begging aid for annual “guesstimates” of revenue and expenditure.
Hence, we have earned beggar nation status and need to diagnose the cause of this chronic malaise to make sense of it. We find its genesis in the four hundred years of psyche-altering stigma imposed on Caribbean people through the social engineering systems of slavery, neo-colonialism, and the monocultural economic architecture that built it.
After decolonialisation, Europe launched a network of “protective” trade mechanisms like Lome’ Conventions and Cotonou Protocols. Overtime these cozy arrangements pampered our people into comatose complacency, comfortable with Motherland providing all our needs, but inflicting on us an endemic dependency psychosis.
The “glory days” of agriculture were the fifties to the seventies. With guaranteed markets, Grenada achieved world nutmeg production (25%) ranking second to Indonesia (70%) and exporting sugar and banana to Europe.
FAO (Food and Agriculture Organisation) reported agriculture averaged 80% export earnings employing 70% the island’s workforce.
Then trade liberalisation caused a paradigm shift in rules of engagement radically changing international market dynamics. In the World Trade Organisation (WTO/1997), U.S. Latin-American multinationals Chiquita and Del Monte challenged the legitimacy of Europe’s preferential trade and won. Europe was forced to terminate, decimating Caribbean agriculture industries, and putting whole island populations on the breadline, e.g. St Kitts.
The backbone of one-crop monocultural economies was broken sealing their faith to aid dependency. Once a Grenada export icon, banana had to be imported sometimes just to meet domestic needs. We had suffered a fall from the sublime to the ridiculous.
In sum, begging is a historically institutionalised legacy invariably compounded by widespread corruption, gross economic mismanagement, protracted political turmoil, exogenous financial shocks, and natural disaster vulnerabilities.
Throughout the years Grenada has had one single choice for sustainable economic development. With no viable base of infrastructure diversification, no natural endowments like mineral and hydrocarbon deposits, without a technologically-oriented service economy, lacking all indicators of genuine development our only option was maximum exploitation of our agriculture-based economy – but we messed up “big times”.
Faced with bankruptcy, our last resort became begging and a multiplicity of draconian tax measures.
The biggest downside to aid dependency is that moral hazard keeps propping up failure and creating disincentives to work and productivity using our own domestic resources. This limits internal revenue streams for socio-economic growth and development trapping countries forever in a vicious cycle of aid dependency and underdevelopment.
Moreover, aid comes with “strings attached” to give up policy autonomy and its volatility and unpredictability erode long-term expenditure planning. Yet, breaking the shackles of aid dependency is not “mission impossible”.
ActionAid (2011) reports the Botswana “success story” where the foreign aid/government expenditure ratio (10:1) dropped 60% to 6% in twenty years (1975-1995). With Grenada’s trade gap in the 5:1 ratio correlating with aid dependency, Botswana shows we can do much better.
The solution going forward is rapid infusions of science and technology in everything. Fundamentally and critically, traditional agriculture must remain the generic base for national food sovereignty, value-added product commercialisation, agro-processing industries, agro-tourism, animal feedstock complimentaries, and biomass energy production.
Non-traditional industrialisation including soursop, marijuana, and biogenetic plant resources must be exploited for their vast economic potentials. And while renewable solar, wind, and geothermal energy come on stream, exploration for hydrocarbon oil and gas is imperative.
Begging is not an economic strategy and will not prevail.