It is not surprising that the New National Party (NNP) government of Prime Minister, Dr. Keith Mitchell is gloating over the most recent report put out by the Washington-based International Monetary Fund (IMF) on the performance of the 3-year old structural Adjustment Programme.
As expected it was another very positive report from the IMF team that has been monitoring the programme, which started in 2014 to help Grenada grapple with a serious fiscal situation.
The 1995-2008 rule of the island by Mitchell and NNP was largely responsible for the heavy debt burden that the island faced in recent years.
It was a period that was marked by a dangerous borrowing and spending spree and guaranteeing loans for investment projects that never materialised.
Quite frankly, THE NEW TODAY did not expect the IMF to give a poor grade to the performance of SAP because it was really a programme that was put in place by the powers-that-be in Washington and they were the ones behind most of the policies.
The truth of the matter is the IMF was able to force fiscal discipline on the Mitchell-led NNP administration since its return to power in 2013.
The Fiscal Responsibility legislation that came into play in the Spice Isle is very much a creature of the IMF as can be seen by anyone who study the Fund’s programme in Jamaica.
A look at the latest report would see that the IMF team has highlighted some significant vulnerabilities remaining in relation to Grenada and its overall development.
These are instability/vulnerability of several of the revenue sources of government, a national debt still too high given the extreme vulnerability of a micro-economy and continued high unemployment especially among young people.
The IMF also pointed to some worrying signs for Grenada such as an underperforming agricultural sector and an education system with its curriculum out of sync with the skills requirements of the economy, leading to a structural mismatch between vacancies and the unemployed.
Another glaring issue pointed out by the fund was a public sector deficiency in compensation, incentives, training, and hence management capabilities; and the need for broader-based growth on the supply side.
The NNP government would have to address these critical issues given its commitment to build a new economy for the island, which is still very far away.
As far as this newspaper is concerned, the IMF Team has failed to address some very important issues that augurs well for the future development of Grenada.
A key one is income and wealth distribution especially among the bottom 30% of the population.
The taxation polices of the past 3 years have battered the Grenadian middle class.
The SAP has not pointed to any strategy to arrest the Brain Drain and how this can be ameliorated? Is there a role for the Grenada Diaspora in the strategy of growth and development?
Both the IMF and government have not articulated clear policies on the role of the Banks in terms of Credit provision in any crafted strategy for growth and development.
What about the critical importance of the Creative Industries combined with the unlimited possibilities created by the Internet given the extraordinary talent of Grenadians, and the exponential growth in the world market in this area as global incomes rise and more people have leisure time, money, and a desire to experience different cultures.
The IMF imposed programme has also not addressed the vast economic potential of Export Services Industries in Education.
St. George University (SGU) is a shining example, but the T.A Marryshow Community College (TAMCC) has the potential to be another.
There are also real possibilities for Grenada in the areas of Health, Financial, Accounting, Advanced ICT, and other Services but no clearly defined policies have been articulated by government and IMF.
As simple as it might sound the role of planning in economic development in order to achieve all of the above has not been adequately addressed by the IMF and government over the past 3 years of the programme.
It is the view of THE NEW TODAY that while government and the IMF might be singing the success of the structural adjustment programme, the truth is the Grenadian economy remains in a rather fragile state because the focus in 2014-17 was simply to meet some specific targets set out in the Letter of Intent that PM Mitchell signed with the fund.
The fundamental issues plaguing the Grenadian economy still remain unresolved like high debt to creditors and the need to tackle unemployment especially among the youth.
If these issues are not dealt with sooner rather than later the prospects for real economic growth and development will continue to remain “a pie in the sky” for a very long time.