IMF advised against removal of FRL

An International Monetary Fund (IMF) team headed by Nicole LaFramboise has advised against the removal of the Fiscal Responsibility Legislation (FRL) as it would be detrimental to the progress Grenada has made under its Structural Adjustment Programme.

Members of Government and IMF representative at media conference

The team was in Grenada last week to conduct the final review of the programme that was forced onto the ruling New National Party (NNP) government of Prime Minister Dr. Keith Mitchell to address a severe fiscal situation facing the island.

La Framboise told reporters in St. George’s that one of the concerns raised by the island’s trade unions was that the FRL was infringing on their right to free collective bargaining.

This, she said is far from the truth and suggested that nothing should be changed in the legislation.

“I understand that they (the trade unions) think that this element of the law will inhibit their right to free bargaining and negotiation. I would not change the act, I will not make any changes because it’s just been started and it’s critical for confidence and credibility and sustaining the progress that has been achieved…”, she remarked.

“…I do not think that particular element of it, I do not think that it does inhibit their ability to bargain collectively freely,” she said.

One of the recommendations coming out of the final review was for government to follow through with the FRL.

In responding to a question as to who will be affected by the legislation, Prime Minister Mitchell said it was definitely the government and possibly the Trade Unions.

“The first person that will be affected is me and the government. We “mannersing” ourselves so to speak and that usually doesn’t happen at least during the period of serving in government”, he said.

‘We have never passed legislation to manage ourselves. So it would tell us, you can’t do this because this is in effect of what you’re going to be doing”, he added.

Prime Minister Mitchell went on to say: “…I think our brothers in the Trade Union movement and in the public sector may feel that that is something that can affect them because certain demands of wage increases may not be attainable. So they may see it that way but I don’t see it that way because the ability to pay certain wages is based on the productivity of the country”.

According to PM Mitchell, if people are not producing sufficiently then it will be difficult to make certain payments to workers.




“If you attempt to pay more than what you are able to earn, you will go into deficit and who is going to suffer when the taxes are imposed to meet those debts that we have to meet, the workers again are the ones that are going to be called upon…I don’t see it at any serious level as being a positive for the workforce,” he said.

Government and two unions representing public sector employees were at loggerheads over salary increases for the island’s estimated 5, 500 civil servants.

Agreement was reached last week for a one-off payment of $1000 to be made to public officers by the end of April, and for the discussions to continue in July on the remaining $2000 that is being demanded by the unions.

Government had been insisting that the FRL was preventing it from making the payments as demanded by the workers.

Public Relations Officer of PWU, Brian Grimes told THE NEW TODAY newspaper that despite what the government is saying the FRL does infringe on the rights of the unions to bargain freely.

“There is a school of thought that Trade Unions cannot operate like (past) times before based on the current industrial relations climate and economic climate. This school of thought emanates from the hierarchy of our local government, even international governments. However, that new wave of industrial relations as far as we are concerned cannot involve the sacrifice of our trade unions most sacred tenet which is collective bargaining”, he said.

“…The FRL clearly upon examination by past and current stalwarts and the trade union movement infringes upon collective bargaining. So some middle ground has to be established which does not involve the hampering of collective bargaining”, he added.

Prime Minister Mitchell believes that there is a misunderstanding on the part of the union when it comes to the legislation.

“What the Union wish to achieve in certain increases and demands that they are making can still be obtained under present law but there must be an element of growth in a particular area to justify it.

“…If we get more grants, the fiscal room broadens, then more can be accommodated which is the point I’m making to the Union. Let’s settle here and as the time goes we are on the table together, you’re monitoring government’s performance, you’re part of the Social partnership, you know all that’s being achieved, so we are going to make decisions together.

“It (FRL) does not inhibit what they wish to achieve but there are certain conditions…I get the impression that they say they can be no conditions applied to it…the government will find itself in trouble if it operates with no rules and no discipline.

The IMF has forced Grenada into signing FRL legislation in order to curtail a massive spending spree from the Central government.

The 1995-2008 rule of Mitchell’s former New National Party (NNP) governments is blamed for the significant increase in Grenada’s national debt now standing at around EC$2.7 billion.

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