Structural adjustment!!!

Three words were scoffed at by Grenadians in the 1990’s – the Structural Adjustment Programme (SAP) that was initiated by the late George Ignatius Brizan as Minister of Finance in the National Democratic Congress (NDC) government of Sir Nicholas Brathwaite.

The same three words might be forced to be put back on the front burner of the national landscape and agenda in light of the current economic and financial predicament facing the country.

It is apparent that some of the leading churches in the country are waking up to the reality that Grenada is facing a serious situation in terms of servicing a national debt of some $EC 2.3 billion and beyond manageable proportions for this cash-strapped island.

The Conference of Churches of Grenada along with the Non-Governmental Organisations met in recent days with a team from the new government at which the national debt was the subject for debate.

Some people might question whether the churches have the necessary expertise to offer serious suggestions to government on the way forward in tackling the national debt.

It should not be forgotten that our church leaders if not on a daily basis but certainly every week meet with thousands of persons who form their congregation and in many cases have to find ways of providing some kind of sustenance for their poor and down-trodden flock.

THE NEW TODAY understands that certain proposals were put forward by the churches to the government delegation and hopefully these would be taken seriously by the new controllers of our affairs.

The three-month old Keith Mitchell-led New National Party (NNP) which was largely responsible for a swelling of the country’s debt stock has already signalled its intention to engage in debt restructuring with the creditors who are mainly private financial institutions.

In this week’s issue of THE NEW TODAY, readers are invited to look at an article that was written ten years ago by Sandra Ferguson in which she focused on the growing national debt. It provides a lot of food for thought.

This newspaper is suggesting that the Mitchell government give serious consideration to imposing some kind of a National Debt Service Levy similar to what was attempted by Brizan and NDC in the 1990’s to deal with the grave financial and fiscal situation facing the country.

It was the correct decision then and it is even more relevant today. Our leaders must put Grenada’s interest above their own legacy. This is no time for borrowing and spending for popularity since the future of the country is at stake.

This newspaper holds the view that those who benefitted from the largesse of the past 18 years or thereabout must be able to make sacrifices in the national interest and help to fix the problem in Grenada.

It is no longer a case of “wanting to eat a food” at the expense of the state known as Grenada, Carriacou & Petite Martinique. All hands must be put on deck in the interest of trying to secure a stable environment for the future generations.

The current government also needs to pay particular attention to its own approach in meeting with the creditors to engage in serious negotiations on our debt restructuring.

Grenada is in no position to play hard ball in the talks. It is a time for us to go down on our knees and make a plea to the creditors for some kind of ease-up in the present conditions.

It is not the creditors but our own elected political leaders by the people who have mismanaged the country and put it into this serious predicament.

The Grenada Team should be headed by someone with international stature who can put forward a good case for us in terms of getting the creditors to be understanding and to take a “hair-cut” that is as deep as possible in the circumstances. A big stick approach will not work.

This newspaper was privy to some correspondence from an interest party in the upcoming negotiations between Grenada and its creditors.

The document said in part: “Grenada’s creditors formed a negotiating committee this month, led by the same group that negotiated on Belize. We have not seen any concrete negotiating proposals yet, and it may be a while. It took the Belize government and creditors several weeks to coordinate their proposals. The negotiations themselves took several weeks. Grenada also has more official debt from multilateral and bilateral sources than Belize proportionally, which makes the long-term debt sustainability analysis more complicated. Typically, the multilaterals do not accept official write-offs of their debt”.

The above speaks for itself and only serves to remind us about the seriousness facing the country.

In the current circumstances, Grenada itself must be seen to be doing something on its own to tackle the debt mess that it has found itself in due to reckless policies pursued of borrowing at high interest rates and spending on non-income generating projects.

Former Minister of Finance, Anthony Boatswain as a member of the Cabinet should use his influence to get the government to take a series of measures to send a clear signal to the creditors that Grenada is serious about tackling its financial problems.

He was a part of the Brizan team that helped put together the home-grown Structural Adjustment Programme (SAP) that was accepted by the international community to help Grenada avoid going into a programme to be administered by the Washington-based International Monetary Fund (IMF) in the early 1990’s.

Today, Jamaica has no choice but to go to the IMF. And going to the IMF is a last resort by countries in economic and financial difficulties. Grenada’s debt to GDP ratio is not that far off from Jamaica.

The George Brizan programme was scoffed at by many political pundits but it has come full circle to face all of us in Grenada as the country can only be described at best right now as a sick patient in need of medicine to cure it off its fiscal and economic malaise.

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