The Keith Mitchell-led government in St. George’s is making moves to go-ahead with plans that were formulated under the former congress administration to facilitate a Brazilian company that expressed interest in setting up a free zone on the island.
The government took legislation to Parliament last week Tuesday in connection with the Free Trade and Processing Zone Bill (2015).
The Bill seeks to establish a free port area in the country with special customs and fiscal regimes in order to promote the industrialisation of goods and rendering of services to foreign markets.
Brazilian development company, Urbaniza had signed an agreement with the former National Democratic Congress (NDC) government of Tillman Thomas in 2011.
According to Economic Development Minister, Oliver Joseph, who presented the revised Bill to the Lower House for consideration, the “free export processing zones presents the best opportunity for development and wealth creation in any country, with a high potential of job creation.”
He noted that free zones currently exists in many country’s around the world in North, Central and South America, the Caribbean, Europe, Middle East and Africa.
Minister Joseph expressed the view that “if we can get the free zone operating here it would create jobs that would significantly reduce the unemployment figure in the country”.
The Mitchell government has indicated that based on figures from the Statistics Division within the Ministry of Finance, Grenada’s unemployment currently stands at 29%.
Minister Joseph has described the venture from the Brazilian company as one with “good potential”, as well as “a good initiative”.
He said: “In the Caribbean we have 51 free zones – the Dominican Republic alone has 35. Costa Rica has been very successful…reaping tremendous benefits; 256 companies operating the free zone have created more than 18,000 direct jobs and 110, 000 indirect jobs in Costa Rica. So the potential of job creation is huge”.
“Having seen the successes around the world, imagine Mr. Speaker, what this free zone would do for a small island like Grenada with a population of 100, 000…and that is why we embraced the opportunity…”, he added.
Prime Minister Mitchell said the Brazilian initiative will result in major development in St. Andrew and would go a long way in attracting investors to the country.
“It will encourage people to take risk in Grenada at this time,” Dr Mitchell told reporters following Tuesday’s sitting of the Lower House.
Dr. Mitchell told the House that “the Free Trade and Processing Zone Bill (2015) is a clear indication that his government is laying “a solid foundation for the future of our beautiful country”, adding that “this initiative was not started by us (but) we took our time looking at all aspects of this project and concluded that it was in the best interest of the country to proceed because we have all to gain and nothing really to loose.”
The Prime Minister also made a linkage in the Bill with the International Monetary Fund’s (IMF’s) strong endorsement of Grenada’s economic performance over the last year following the second review that was conducted last month.
He concluded that the project by the Brazilian company will be sending the “right message to investors”.
“This is the kind of thing that you are seeing here in this Bill (Free Trade and processing Zone Act (2015) that we are seeing coming forward at this particular time”, he remarked.
In its latest report, the IMF reported major gains by the Mitchell-led government with the implementation of the three-year Structural Adjustment Programme (SAP) and that “significant progress has been made,” but it pointed out that the country’s unemployment situation remains “elevated.”
Dr. Mitchell told the House at its last sitting that the Fund sees Grenada as having “one of the better performing economies in the Eastern Caribbean at this particular time,” noting that “in just over two years the country’s economy moved upwards from being one of the worst in the Organisation of Eastern Caribbean States (OECS).
He added that despite no major project on stream last year, “our growth rate reached 4.8 per cent.”
The Prime Minister described the IMF endorsement as “an extremely positive thing in terms of how people perceive the direction the country is going and the fact that having the IMF endorsement with the support from the World Bank and the European Union (EU) and the Caribbean Development Bank (CDB), we will get further support for our Home Grown Programme and economic activity in our country….”
Dr. Mitchell announced that Grenada is expected to receive “EC$8 Million” from the IMF within the next two weeks and millions more from the World Bank, Caribbean Development Bank (CBD) and the European Union in the form of grant support.
He said the monies will be used to further develop economic activities in the country to help small businesses to develop training opportunities and training opportunities in agriculture and tourism.