An article on Grenada this week by the Financial Times in London, England has been making the rounds in the country.
It relates specifically to a letter which our international creditors have written to our Prime Minister Dr. Keith Mitchell on their annoyance over the attitude of his one-year old New National Party (NNP) government in agreeing to sit down with them to discuss the issue of the millions of dollars that were borrowed from them over the years and which the island has defaulted on payments in recent months.
THE NEW TODAY is urging the government to engage the creditors as a matter of urgency since an ugly picture is being painted about the Spice Isle in the international financial markets.
The government should take urgent steps to ensure that Grenada is not seen as a bad pay customer that is prepared to borrow money and do not repay.
Our newspapers are littered with advertisements from the local commercial banks with properties that they have been forced to sell due to non-payments of mortgages.
Some persons can be left homeless for being in breach of the agreement signed with these lending institutions who are looking to make something on their monies.
Readers can turn to page 14 of this current issue of the newspaper to see the contents of the Financial Times article on the bad attitude being displayed by the Mitchell government with our creditors.
It is clearly emerging – despite the “ole talk” from some within the NNP regime – that the Mitchell government is lacking in ideas on dealing with the current financial and economic mess that the country has now found itself in recent months.
The country has been definitely living above its means for the past 15 to 20 years due to insensitive political actions and decisions.
The current lot in government should shoulder most of the blame for the financial predicament that has plunged Grenada into what an IMF official recently described as a cancer patient in need of therapy, which in effect means that the island is back into the status of being virtually uncreditworthy.
A recent report posted by the IMF on its internet site gave enough hints that Grenada’s current problems did not start after independence 40 years ago under the Father of Independence, Sir Eric Matthew Gairy, or the 1979-83 period of revolutionary rule by Maurice Bishop but after the 1999 victory at the polls by Dr. Mitchell – his second term in office.
The report said the following on the Grenadian economy: “Since 2000, economic growth slowed significantly and became more volatile. Expansionary fiscal policy, to counteract slowing growth, led to a rapid buildup of debt by 2002. While the additional spending was mainly on capital projects, the impact on growth was limited. In addition, the rise in indebtedness severely constricted fiscal space to counteract shocks and put a further drag on growth”.
This is not all. The IMF report went on to say the following: “Grenada’s debt more than doubled from about 35% at the end of the 1990s to about 80% of GDP by 2002 as growth slowed and the government borrowed heavily on capital markets to finance capital expenditures”.
If the above is not fiscal irresponsibility then tell us what is? The NNP and Dr. Mitchell were in charge of the nation’s affairs in those years – no other political party.
Is it the IMF that is now pushing the government to introduce Fiscal Responsibility legislation given the past record of current Prime Minister Mitchell with his handling of the financial purse of the nation?
The NNP in its 15 years rule has plunged Grenada into a deep fiscal hole with its brutal policy of borrow and spend in order to remain popular in office.
That philosophy was driven by one of its main financial backers when it came to power back in June 1995 who often said that even if Grenada borrowed and could not pay its creditors, there is no record anywhere in the world where a country was ever sold for not paying its debts.
40 years after independence, those who really created the financial mess are now making moves to introduce Fiscal Responsibility legislation.
One does not know what the legislation entails but it should make provisions for very punitive actions to be taken against our government leaders for causing serious financial embarrassment to the country.
THE NEW TODAY welcome the initiative but hope that it is back-dated to 1984 – the year in which the island was returned to the Westminister parliamentary system of government.
If the 1995-2008 NNP or the 2008 to 2013 National Democratic Congress (NDC) government of Tillman Thomas are found wanting then so be it.
It is time for our elected leaders to understand that the national interest overrides any other considerations especially those who are looking for legacy on a platform of reckless spending as if money is not a problem.
Money is indeed a problem for Grenadians today – whether a wage freeze, increases in property tax or paying more for services rendered by government.