The Grenada economy has fallen victim to the vote! After four decades of Independence, persistent poverty and steeple-high unemployment dog the society. But why are we besieged with this fragile condition? The short answer is that the dictatorship of the political parties, expressed through economic choices and political conduct, has caused us to ‘bung-away’!
A powerful indictment against regimes since 1974, with the temporarily promising exception of the PRG, is that there has been no serious guiding national development philosophy. The limitations of the political parties therefore became or have become the limitations of the society and the economy, as a whole.
In these circumstances, economic jargon such as growth in GDP, fiscal sustainability, primary balance, revenue surplus, debt to GDP ratio and all in that family provide comfort only to paid academics and politicians at ease with ‘tricks and traps’.
Fixing the ‘fiscal algebra’ under the Structural Adjustment Program is just that. The most important indicator of our future welfare is what is happening on the production side. Increased Government revenue derived from taxing the people and not new production is no indicator of progress. What we have is record revenues from record taxation!
Investment is critical for moving the production needle. Where are the investment resources to come from?
The servicing of high debts cripples Government’s ability to invest on the capital side. High taxation on incomes constrains investments by individuals. Private sector investment is conditioned on prospects for the economy as a whole, export competitiveness and cost of money, among others. Decent, face-up foreign investors are few, far and ‘in- between’. The situation is now so unhappy that for some GDP growth means growth in greed, decadence and poverty!
Between 1995 and 2008 the Government borrowed two billion dollars and spent most of it on roads! When that money was being spent, many told themselves that Grenada was doing well! The private sector was happy as was the small man, both of whom are dependent on Government spending. Today, they are taxing the people ‘two billion dollars’ to fix the problem of borrowing and spending without investing. The result, on both scores, is that future generations have been and are being ‘sold-out’, and virtual economic standstill.
The situation with the agricultural sector provides a clear example of a broken, if not dying, economic fig tree (system). Since the Revolution, Governments have been building Farm Roads with very little to show for it, especially since the late 1990s. The indicated cost of the current project is sixty million dollars, with most of the money borrowed from the Kuwaiti Fund. Where is the agricultural production to justify the policy?
Sadly, no one insists that better use be made of these loaned funds, for example, expanding the fishing fleet, building a suitably-scaled processing facility or a housing project. And while on agriculture, who would have imagined that in 2016 Grenadians would be celebrating the arrival of Ukrainian potato investors in the Spice Isle! What about those Ukrainian labourers working on an estate in Grenada? Globalisation, eh! Work permits, eh!
The political appetite for ‘gold-plated’ projects such as the proposed two billion dollars (US$) Grenada Resort Complex (Mt Hartman) is understandable for the political reason of helping to secure votes by delivering jobs. Recent developments (court action, not investigation) involving the main player in that project must affect its implementation prospects, at least in terms of realisation timeframe and investment sources. It also affects prospects for the Grenada economy, as a whole. No Minister of Government can deny this.
Fraud, whether classified as civil or criminal wrong-doing creates a stigma from which prudent people and countries normally beat a hasty retreat! If a man is in the business of raising big dollars for big projects, his image (good name and standing) must be his primary asset as it goes to trust, reliability and confidence. A negotiated pre-trial settlement is usually aimed at avoiding a permanent mark in the court records (a conviction or a finding of wrong-doing) against the one charged; otherwise red-flagged anywhere in the world. A second objective is to end negative international media coverage so as to minimise the ‘optics’ problem.
Mr. Forrester acting as employee or agent or associate of Mr. Liu told the public last Sunday that the matter is being settled. In fact he promised a settlement during the last week. Research indicates that settlement is an option the SEC exercises in some cases.
The implications for Grenada’s economy flow from the fact that Liu is a mobiliser of money for an important Government-endorsed project and that he, through an associated or directly-owned company, appears to be an agent under the Economic Citizenship Program. Whichever way, Liu is tied up with the Grenada economy and this information is known worldwide, especially by internet advertisement and general news.
Most people here may not know Liu as a human being, but will certainly now know of his reputation. The same is true of potential investors who were or are targeted by Liu to participate in the Grenada project. In this context, potential legal action against Liu for breach of trust, for example, will entail tracing of funds from the US to banks elsewhere, including Grenada and the likelihood of mixing of funds in accounts controlled by Liu. This is a real and serious matter for all Grenadians and the Government, as the investment integrity of the country is at stake.
The current official position of Government appears to be favourable towards Liu, basing itself on natural justice grounds i.e. due process, specifically. Taken to its logical conclusion, Government will be challenged to sustain that position if Liu arranges a settlement with the SEC. Simply put, will a settlement outcome to the case give investors confidence as to his trust-worthiness? Further, is Government saying it would have confidence in Liu if a settlement is reached?
Clearly, in the settlement scenario, the person charged implicitly or otherwise discloses his assessment that he would be hard-pressed to defend the charge. If he were confident of success he would hardly be interested in a settlement! A settlement brings certain benefits and relief (regarding quantum of penalties and interest) to the one charged with wrong-doing, but is not a confidence- booster.
Our economic misfortune is nothing to celebrate for partisan political reasons. When the economy fails, we all must drink the bitter bush and suck the sour seed. Better now that we seek to establish PLAN 2030 and to broaden our governance arrangements. Citizen John Rullow is right; the paradigm must be changed radically. We need new constitutional arrangements to diminish the dictatorship of the political parties, bring governance closer to the people, and settle responsibility for national development in its proper place, not the political parties.
The young people of Grenada should not be made to grow up in an un-productive ‘diva culture’. The enthusiasm of winning votes ought not to impose a price on the economy such that the latter becomes a fallen victim, a cursed ‘fig tree’!