It’s now three years since the New National Party (NNP) of Dr. Keith Mitchell was swept back into power after five years in the opposition in a landslide routing of the then ruling National Democratic Congress (NDC) government of Prime Minister Tillman Thomas.
The NNP, under Mitchell’s leadership had been in power from June 1995 to July 2008 – one of the longest reigns by a political party since the attainment of independence in 1974.
Congress’ rise to power in 2008 led many to believe that the party was virtually assured of at least two-terms in office with its 11-4 victory at the polls.
However, less than three years later the writing was on the wall for NDC as factional infighting between two distinct groups – one that backed Prime Minister Tillman Thomas and the other that appeared to be loyal to the party’s General Secretary and Minister of Foreign Affairs, Peter David – disappointed the people and led to its downfall.
The reality of the situation is that whichever party formed the government after the 2013 general election had to engage in some form of a Structural Adjustment Programme (SAP) because the country was sadly living way above its means.
Unfortunately, Grenada had found itself in a deep financial hole as a result of the massive borrowing and spending spree employed by of the previous NNP regime in its 13-year governance of the country.
The advent of Hurricanes Ivan and Emily in 2004 and 2005 brought a little grace period for the country as the Creditors understood that their debt payments had to be rescheduled.
It was not only the bitter internal feuding and global recession that affected the Congress government in power.
The Tillman Thomas administration found that it had to start repaying millions of dollars in outstanding debts at high commercial interest rates that were contracted by the former Mitchell administration.
As the then government tried to meet those debt obligations it found itself in trouble in paying salaries on time to public sector employees on two occasions leading up to the 2013 general elections.
It was difficult for the economy to generate in excess of $50 million dollars in the month in which the payment to the foreign creditors was due and to pay civil servants at the end of the month.
As such it was not surprising that within a month of returning to office in February 2013 that Dr. Mitchell was forced to default on these debt payments and look to the International Monetary Fund (IMF) and World Bank for some form of a financial bail-out.
The NNP found itself in a financial quagmire and could not deliver on its over ambitious promises made to the electorate to win the general election.
It is not surprising that the ruling party is not making too much fanfare on its 3 years back in the seat of government.
Why? What is there to celebrate? The NNP is doing everything in the opposite direction to what it promised the electorate in its manifesto for the election and on the campaign platform.
No other government in the history of this country has slapped on the back of Grenadians so many taxes in such a short period of time.
The new dispensation in Grenada runs vastly different to the philosophy advocated by Prime Minister Mitchell during his entire political career.
His mantra was that the less taxes placed on the people, the more spending power they will have and the better for the economy.
Today the spending power of the “little man” is all but evaporated and the private sector – an ally of the government – is complaining of below par performance in terms of monetary collections from the public.
This sad state of affairs will be present in Grenada, Carriacou and Petite Martinique for some time.
There is no magic solution to the problem. The new controllers in the Ministry of Finance have their work cut out. It will be a challenge for the new man at the helm, Mike Sylvester.
His biggest test will come in the next few months, as Grenada will have to start paying millions of dollars to the bondholders as part of the SAP deal that was brokered with the help of the IMF.
The million-dollar question still remains – where is this additional money coming from to pay those particular creditors? Is it through another set of new taxes or increases in old ones that will be forced onto the people?
Is Dr. Mitchell planning a snap election before mid-year in order to buy himself another 5 years and then bring on these new taxes to start paying the creditors?
Only time alone will provide the answers.