Grenada is far from being out of the woods financially.
THE NEW TODAY is making this pronouncement in light of statements made by Prime Minister and Minister of Finance, Dr. Keith Mitchell at a recent meeting of the so-called Group of Social Partners that was set up to meet on a monthly basis to review the performance of the island’s economy under the Structural Adjustment Programme.
This newspaper understands that Father Sean Doggert of the Roman Catholic Church, who is a member of the committee, asked the Prime Minister whether government had started to make payments on the outstanding millions of dollars owed to the international creditors.
The Prime Minister indicated that no agreement was signed as yet and he expected it to be done in a month or thereabout because of a few hiccups on mainly legal issues.
It was earlier announced by government that as part of the deal worked out with the Washington-based International Monetary Fund, an agreement was struck to start making payments to the creditors from the first half of next year..
What was not said then and even up to now is where will the money come from to fulfill these obligations with the international creditors who were very reluctant in the first place to agree to a “hair cut” on the repayments of millions in outstanding loans?
As far as this newspaper is concerned this is the key question that ought to be addressed by government in light of the already burdensome taxes placed on the backs of the people of Grenada, Carriacou & Petite Martinique as part of SAP.
How does the government intend to raise the additional millions to meet its debt obligations to these creditors? Are we in for a new barrage of taxes on the backs of the workers of the country?
It is also our view that government’s ability to honour the repayment of the millions due to the creditors would have some bearing on the date to be set for the holding of the next general elections.
The current Prime Minister and Minister of Finance is the one who contracted if not all but the vast majority of the commercial debts of Grenada during the earlier 13 year period in government of his New National Party (NNP).
The millions were borrowed to make payment on the EC$180 million plus that were contracted for the first national stadium which was a financial disaster for the country, as well as some other debts.
The NNP lost the 2008 general elections and it was left to the National Democratic Congress (NDC) of Tillman Thomas and his Finance Minister Nazim Burke to grapple with the repayment of these commercial loans that were borrowed at the very high interest rates of around 9%.
The arrangement with the creditors called for payments of close to EC$19 million to be paid every six months on the huge and unfortunate loans that Grenada took from the international creditors.
Congress found difficulty in making the first payment in February/March 2012 and civil servants were paid their salaries late. Another payment to the creditors was due in August/September 2012 and again Civil Servants did not get their salaries on time.
It is extremely difficult for an economy the size of Grenada to find $20 million dollars in the first half of any given month and within a ten day window soon after come up with another $30 million to pay salaries and do the other things that a government is duty bound to do like meeting medical expenses, upkeep of the prison among others.
Congress did a very poor public relations job of explaining this predicament to the people because of its pre-occupation with the split among its ranks as a group of dissidents led by ex-Foreign Affairs Minister, Peter David who is now part of the NNP set-up was battling for political leadership.
One of the first acts of Dr. Mitchell when he took office following the February 2013 general elections was to default on the payments of millions to the same international creditors because Grenada did not have the monies to fulfill its obligations.
However, as past of the SAP deal with the IMF, the country is coming around full circle in terms of having to face the creditors and the ball is now in the hands of the NNP administration to make good on the promises.
But the million dollar question is this: Where are the additional millions coming from to pay the creditors once an agreement is signed? If the Prime Minister and Minister of Finance can make the payments then that will be good news for the country.
However, if something happens and payments cannot be made then Grenada will once again be back to square one in which the NNP administration will find itself in the same predicament as Tillman Thomas, Nazim Burke and Congress back in 2012.
The Prime Minister and the virtually defacto Minister of Finance, who happens to be PS in the Ministry of Finance, Timothy Antoine need to inform the country about the source of funds to make these huge payments to the international creditors beginning in 2016.
Already, there are reports circulating in the country that most of the monies picked up from the sale of Grenadian passports primarily to Chinese nationals are being diverted through the state-owned NAWASA to do the infrastructure work at the so-called Silver Sands project on the Grand Anse beach.
This newspaper calls on PM Mitchell to give an account to Parliament and the people of Grenada on the status of the funds received from the sale of our passports and the source of funds to make good with the international creditors.