A precarious situation!!!

2014 is only a few hours old.

It will undoubtedly be a year that finance and economics will dominate the national agenda from Sauteurs in the north to Point Salines in the south of the island.

Prime Minister Dr. Keith Mitchell and his eleven month old New National Party (NNP) government have given the people enough notice about the need for sacrifice since the Structural Adjustment Programme (SAP) to be imposed will create a certain amount of pain on the backs of Grenadians.

The spending power of many persons will be curtailed as they will be forced to pay out more money from their pockets whether through the adjustments being made to the Income Tax threshold, user fees for some government services and the huge hikes expected from a tinkering with the Property tax law.

As Scholar will say, “we have to band we belly” and be prepared to face the challenges ahead since our strong feeling is that the Structural Programme being talked about will be much more than three years as being advocated by the Prime Minister.

Grenada’s fiscal situation is in a mess and no short term measures will be able to fix it.

At this point in time, THE NEW TODAY would like to pose the following question to our government leaders – Is the country into a Structural Adjustment Programme with the blessings of the Washington-based International Monetary Fund?

This newspaper is asking the question in light of reports circulating around the place that government has not signed off as yet on the important Letter of Intent with the IMF.

The belief among many in the country is that the programme will only start and become effective when a deal is reached with the fund. If the programme has not started then when will it take effect?

Without an agreement, it is clear that the IMF will not release the funds that are so badly needed by the current rulers in St. George’s.

The longer the government takes to sign this important letter it means that no real or serious structural programme is in place to tackle the fiscal mess.

Visiting officials from the IMF have been dropping strong hints in meetings with Social Groupings that funds will only be made available when Grenada takes positive steps to show that it is doing the things that it has committed to doing in keeping with the so-called home grown structural programme.

Unfortunately, the government is currently sending mixed signals not only to the IMF but to the rest of the country on the US$5 a night tax to be levied on stay-over visitors at our hotels. The impression is being given that the tax was not thought out properly by the government and was not discussed in any forum with the membership of the Grenada Hotel & Tourism Association (GHTA).

Whether true or false, the uncertainty will do no good for boosting people’s confidence in the economy and which is so badly needed at this point in time.

Indeed, THE NEW TODAY is quite worried about the prospects for Grenada in 2014.

The Number One problem facing the government of Prime Minister Mitchell still remains the massive wage bill that is eating up most of the island’s monthly revenue.

Sadly, the 2014 Budget as presented by our Prime Minister and Minister of Finance did not offer any practical or lasting solution to the problem.

This newspaper sees only a few feasible options and both are painful to the country and the persons to be affected based on the presentation made in the budget.

The NNP as a government will either have to engage in retrenchment of civil servants or cut salaries in order to reduce the fiscal deficit in the budget. No other workable option can be on the cards at this point in time.

It would be a rather painful thing for Prime Minister and party to do since they campaigned on the promise of, “Job, Jobs and more jobs”.

The new administration is also helping to make worst an already bad situation with the recent decision taken to appoint a number of new Permanent Secretaries. That will also impact on the monthly wage bill in the civil service.

There is also talk that a number of police officers among the junior ranks will soon be promoted – even as early as the middle of January – and that it is possible that a few promotions will take place within the hierarchy of the force.

These development will fly in the face of a wage bill that is already too high to maintain and needs to be drastically reduced.

Finally, THE NEW TODAY would like to wish the best possible New Year for all and sundry in our Tri-island State of Grenada, Carriacou & Petite Martinique.

We wish to apologise for omitting in our Christmas greetings in the last issue of the paper, the invaluable contributions made to the pages of this newspaper by our many columnists. We sincerely value all of the contributions made by the columnists and letter writers.

For our part, THE NEW TODAY reiterates its commitment to be of service to the nation as one of the leading weeklies as we embark on the next uncertain 12 months that make up 2014.


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