Gonsalves explains the money given to Grenada

Dear Sir:

I am dismayed that the leadership of the Public Service Union (PSU) unreasonably criticised my decision to permit Grenada to use part of the allocation for St. Vincent and the Grenadines available for it at the Eastern Caribbean Central Bank (ECCB).

Prime Minister Dr. Ralph Gonsalves of St. Vincent & The Grenadines

They ill-advisedly referred to it as a loan by St. Vincent and the Grenadines to Grenada in the sum of $5 million. They then compounded this profound misunderstanding of my decision by enveloping it in opportunistic distortions or falsehoods, namely: That Grenada pays its civil servants better than St. Vincent and the Grenadines does; that I lent Grenada money to pay civil servants; and that this is the money which I should be using to pay Vincentian public servants their due increase.

Let me, for public information, explain the process by which the government of St. Vincent and the Grenadines permitted the government of Grenada to use a part of its allocation in the recent past.

At the beginning of each fiscal year the ECCB allocates, on the basis of a formula, access to financial resources for each member country with very clear limitations and conditions as set out in the ECCB Agreement. When countries reach that limit they can only have access if another country or countries make(s) available a part to the country in need. The country which receives the allocation has to replenish it as soon as possible but definitely by the end of the fiscal year before new allocations are made.

This facility has been in operation since the establishment of the ECCB in 1983, and has been used by countries with a pronounced short term volatility in revenues, which affects their cash flow and liquidity. This is part of the normal operations of a Central Bank in a currency union; that is, mutual assistance to maintain monetary and fiscal stability.

The government of St. Vincent and the Grenadines never “lent” Grenada any money. I never sent any money to Grenada from the Consolidated Fund (the Treasury) or from any entity owned by the government of St. Vincent and the Grenadines.

Last year, September 2011, the Minister of Finance of the government of Grenada requested permission from me the use of $5 million of St. Vincent and the Grenadines’ allocation at the ECCB. I gave permission for this to be done on the undertaking that the monies be replenished in five months time; the replenishment was done by Grenada.

In July 2012, a similar request was made of me by Grenada in the sum of $4.5 million to be replenished before the end of October 2012. I again acceded to Grenada’s request.

The only real risk to St. Vincent and the Grenadines attendant upon my decision to assist Grenada as aforesaid is that if the government of St. Vincent and the Grenadines were to have urgent need of those funds, prior to Grenada’s replenishment, they would not be available for the use of St. Vincent and the Grenadines.

The idea that Grenada would fail and/or refuse to replenish is unthinkable for members of the Eastern Caribbean Currency Union (ECCU). In any event, at the end of each year, when accounts are rendered, the replenishment will occur as a matter of course.

Grenada is not the first or only member-state of the ECCU to which St. Vincent and the Grenadines has extended a helping hand in their time of extreme fiscal distress. I had never, hitherto, made such help publicly known since I consider it to be a solemn unspoken obligation of solidarity with other member-states of the ECCU.

That is part of what a currency union is about! It embarrasses St. Vincent and the Grenadines that its Prime Minister is virtually coerced by the leadership of the PSU, who ought to know better, to proclaim publicly its fulfillment of such an unspoken solidarity commitment.

By so doing, the leadership of the PSU has cheapened our country and sullied its Christian grace in being “our brothers’ keeper”. I feel sure that the overwhelming majority of public servants are at one with me on this matter; they ought to make it known to their PSU leadership. Remember this: Today for you; tomorrow for me. That is the principle of mutuality established in the Currency Union.




Incidentally, I should point out that the Director-General of Finance and Planning in the Government of St. Vincent and the Grenadines, Mr. Maurice Edwards, has advised me that the salaries of public servants in Grenada are lower, not higher as asserted by the PSU leadership, than the comparable salaries for public servants in St. Vincent and the Grenadines.

But even if this were not so, my decision in the circumstances would have been no different. Mean-spiritedness is not in the make-up of the government and people of St Vincent and the Grenadines.

More broadly, my government seeks always to uphold the precept and practice of a committed and mature regionalism as a vital matter of public policy. Its record is clear and unequivocal in this regard. Moreover, this is not the first publicly-known case of specific assistance by St. Vincent and the Grenadines to our Caribbean brothers and sisters.

Vincentians would no doubt recall the $3 million, low-interest loan which St. Vincent and the Grenadines made to Dominica in 2002 when that country was about to enter the temporary clutches of the International Monetary Fund (IMF).

So, too, the $10 million loan to Belize by the National Insurance Services of St. Vincent and the Grenadines shortly after that country was struck by a hurricane, in particular the area known as Dangriga, the home of the descendants of our ancestral Garifuna forebears. These cases were publicised at the time because they involved actual loans of monies from St. Vincent and the Grenadines.

Grenada, like all Caribbean countries, has a very special place in the hearts, minds and souls of Vincentians. We have been selfless to Grenada; and Grenadians have been selfless to us. For example, at the time of Hurricane Ivan in 2004, when Patrick Manning, then Prime Minister of Trinidad and Tobago announced that he was making an initial grant of $10 million in the aggregate, available to Grenada and St. Vincent and the Grenadines in equal sums, I advised him to give it all to Grenada since our sister-island was completely devastated while St. Vincent and the Grenadines was merely “badly damaged”.

Manning, in acknowledging St. Vincent and the Grenadines’ selflessness, gave the whole of the $10 million to Grenada, but still provided $5 million for St. Vincent and the Grenadines. That is solidarity!

In the immediate aftermath of Hurricane Ivan, Vincentians poured out their hearts, souls, and wallets in generosity to Grenada even though St. Vincent and the Grenadines was badly damaged. Several organisations, including a flotilla loaded with relief supplies, spearheaded by Sir James Mitchell, came to Grenada’s aid.

Our schools opened their doors to Grenadian students, free of cost. Indeed, one such visiting Grenadian student who excelled at the CAPE “A” Levels Examinations received a special university scholarship from the Government of St. Vincent and the Grenadines in the name of the Grenadian-born Vincentian, Sir Sydney Gun-Munro, who toiled selflessly as a surgeon in the vineyard of St. Vincent and Grenadines and who became our country’s Governor-General.

Grenada and Grenadians have been most helpful, too, to us in St. Vincent and the Grenadines. Examples abound. I shall list only a few. Sir Sydney Gun-Munro, trained at Grenada’s expense as a medical doctor, served for most of his working life as St. Vincent and the Grenadines’ only surgeon.

I feel sure that many parents, grandparents and great-grandparents of members of the PSU, including its leadership, were attended to, often free of charge, by Sir Sydney. Further, every week, Grenadian and Vincentian fishermen help one another at sea.

In the Southern Grenadines, residents of Union Island and those of the Grenadian territory of Carriacou, interact daily to their mutual benefit. Additionally, at this very moment the Grenadian government is assisting the Ministry of Agriculture of St. Vincent and the Grenadines with the re-introduction of cocoa cultivation in St. Vincent and the Grenadines.

I urge public servants to view the issue of the promised salary increase to them as quite separate and distinct from any assistance by the government of St Vincent and the Grenadines to Grenada through the ECCB or otherwise. Please, let us not demean ourselves further by traversing a path, wrong-headedly prepared, with selfishness, a lack of regional solidarity, and plain falsehoods.

My government remains committed to pay the promised increase of salary. The public servants have done very well under the ULP administration and they can continue to trust us to do well for them on an ongoing basis. It is the ULP government which has provided for public servants, among other things, the following: Meaningful salary increases up to the end of 2010; a series of annual bonuses; the reclassification exercise; 100-percent mortgages for housing construction; exceptional educational and training opportunities; better conditions of work; enlarged freedoms; and good governance generally.

Did the Bible not tell us to cast our bread upon the waters? Did it not say we will get a return “ten fold”? Is this not happening to St. Vincent and the Grenadines through other countries’ generosity and solidarity?

Dr The Hon. Ralph E. Gonsalves
Prime Minister
St. Vincent and the Grenadines

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