The emotive, unresearched views perpetuated by some people regularly on our airwaves, is fast becoming a media staple. In the process they do much damage to the psyche of many Grenadians as they are influenced negatively. Is it that the media has a penchant for those types on their many programmes? Or is it that there is a certain type of people who are quite willing to be heard and welcomes any opportunity to let their voices be heard?
Still, is it that these types have a particular agenda or is it that the media is demonstrating irresponsibility by frequently choosing strange people to be on their programmes regularly?
Sunday’s George Grant programme on the electricity sector clearly fits that mold. Despite the knowledge, wisdom and experience of Mr. George who brought much objectivity to the discussions others did not wise up quickly. The hotelier persisted in making uninformed and loaded statements that only served to inflame misguided passions. He proffered that if electricity rates did not go down unemployment will not go down and that will lead to serious social unrest. If rates do not go down we will not be able to produce eggs at a competitive cost to that of Miami. May sound nice but it is utter nonsense and does not reflect truth and an understanding of the issues.
However before treating with these dangerous statements, the electricity issue must be put into context. This is necessary to deal with all the political noise that cloud facts and truth. When the Brathwaite-led NDC privatised Grenlec, Grenada was in a difficult economic predicament. It was rendered uncreditworthy by the world following a disastrous economic performance under the then NNP.
What did that mean? It meant that financial institutions were not lending Grenada any money and investors were not willing to come willingly. Grenada had little choice but to subject itself to a home grown restructuring programme or to enter into one with the IMF. What were the prescriptions? It meant among other things that hard difficult things had to be done. These included cutting costs, growing revenues, increasing efficiencies, privatising some state entities among other things. Grenada had no bargaining power.
The process to privatise Grenlec was open and transparent. There were only a few bids. That meant that there was not much international interest given Grenada’s size and the state of the country’s economy. Our back was against the proverbial wall. Faced with a situation of power outages and mounting frustrations by businesses and private citizens, Grenada’s options were poor.
In the context of a home grown structural adjustment program monitored by international institutions, action was required. So to look back and blame the then government for a so-called poor deal is mischievous. A country’s weak economic situation is a large determinant and renders one incapacitated with little leverage.
Just look for example at the situation in Barbados. Given its economic challenges and declining ratings, businesses particularly in the financial sector are finding it difficult to transact business with the international community. This has led their largest financial conglomerate to take the decision to relocate their headquarters elsewhere.
So what has happened since the privatisation of Grenlec? Well it is widely accepted that Grenada has enjoyed reliable, consistent supply of electricity over the past twenty years. Better than most Caribbean countries! WRB and the other investors including government have enjoyed good returns.
Despite this the company and the NDC have come under consistent criticisms by KCM and Gregory Bowen. Veiled threats were used and promises of the reversal of the current agreement were made. The main investor in my opinion, managed the company to ensure that returns were made quickly to safeguard against possible arbitrary actions if the NNP returned and to please the Grenadian public. They made sure that the customers were happy with the supply. In other words, they minimised the potential impact of the NNP’s criticisms. NNP could not fault them on performance. What this means is that the NNP’s behaviour in my view was factored into the prices consumers were made to pay.
So what contributed to the high rates? What constitutes high rates? Is it true as the NNP and some hoteliers are saying that Grenada has the highest rates in the world? KCM and some hoteliers say so. Some hoteliers have joined him and are suffering from foot and mouth disease. No research, no commonsense and no truth.
What are the facts? Grenada’s rate is not more expensive than the average in the OECS, the Caribbean or for comparable island countries around the world. But why are rates high in the Caribbean with few exceptions? Basically two reasons! We use fossil fuel which has been expensive since 1974. Secondly we are small economies with low consumption. So companies have to ensure redundant generating capacity which is expensive and maintain alternative routes for resilience. There is nothing that we can do about that. The pain of high prices was accentuated recently with the high price of fuel and the deep recession. So we were all hard pressed.
Under such conditions people appear to be vulnerable and easily duped looking for solutions anywhere. So they fail to think for themselves and follow idiotic false witnesses. So it’s easy to say that we have the highest rates in the world and that our societies will explode if rates and consequently unemployment do not go down. But that’s irresponsible and untrue. Running a small hotel does not qualify one to lecture on how countries are run. Inflammable loaded statements will only contribute to negative outcomes.
We would all like lower rates and to see the backs of monopolies. So what do we do? Well we must first seek to understand the business, shut up and listen to the experts and do some basic research. Accelerated exploitation of renewables, the pursuance of the development of our marine fossil resources, the implementation of conservation measures and a renegotiation of the monopoly arrangement, all have to be pursued. Our size, cost structure and consumption will be key determinants.
Full stakeholder consultations are a must. Antagonistic approaches will not help deliver better solutions for Grenada. And for our tourism friends, they need to appreciate that lower electricity costs will not result in the price of eggs dropping to the prices of American produced eggs. There are many more factors that are responsible for the price of eggs being what it is in Grenada, so stop misleading the small man. Reduced electricty prices will not significantly improve the lot of an inefficient hotel whose business model is deficient. So let not the blind lead the blind.