The ruling New National Party (NNP) campaigns on the result of an economic rebound that is mentioned as a GDP growth rate of four percent.
Looking at publicised figures (e.g. IMF Country Report No. 17/131 Grenada Sixth Review … May 2017) we see:
Real GDP 2015: 6.2 percent, 2016: 3.9 percent, 2017: 2.5 percent
The three-year average is 4.2 percent. Apparently, they take the 2016 value of 3.9 percent and round it up to 4 percent. More appropriate would have been to use the latest value for 2017 of 2.5 percent.
These isolated values, albeit important, tell us little if not compared to the performance of comparable countries. The recently published Inclusive Development Index 2018 Report from the WEF World Economic Forum is very helpful.
The GDP growth rates are displayed by income group: advanced, upper middle income, lower middle income and low income.
The calculation expands over a five-year period from 2012 to 2016. The input is compiled from the World Bank and World Economic Forum data and includes nations worldwide.
The values for GDP growth are:
Advanced 5.31 percent
Upper Middle Income 7.04 percent
Lower Middle Income 8.54 percent
Low Income 6.08 percent
Grenada is in position 62 of the country list by income, and falls into the upper middle income category (Wikipedia 2016 list).
Grenada’s values for the same period 2012 to 2016 are:
2012: -1.2 percent, 2013: 2.4 percent, 2014: 7.3 percent, 2015: 6.2 percent, 2016: 3.9 percent (IMF Country Reports 15/333 and 16/389). The average is 3.72 percent.
Grenada’s economic performance of 3.72 percent should be compared to the rest of the world in this category with a GDP growth of 7.04 percent.
This means Grenada achieved only 52 percent of the performance of all comparable countries.
By analysing these statistics over a period of many years, it becomes apparent that forecast figures predict pretty precise future development. We must therefore take the projection very serious.
The IMF assessment for future real GDP growth in Grenada is:
2018: 2.7 percent, 2019: 2.7 percent, 2020: 2.7 percent, 2012: 2.7 percent
These low numbers are frustrating. The world economy is booming and continued underperformance of the ruling NNP would leave us again at the tail end of economic development.
Mismanagement and corruption lead to wrong priorities and wrong decisions.
A decline in agriculture and many failed projects like Mount Hartman are just two examples. A change is necessary; we need honest and competent leaders.
The low and disappointing performance of the ruling NNP has caused even more consequences. Our rank in the World Bank Ease of Doing Business Ranking 2018 is 142, in the last third of 190 countries.
All other Caribbean Islands are better or significantly better rated, e.g. Saint Lucia in the first half, rank 91.
The Transparency International Corruption Perception Index is an important indicator for business people. Grenada ranks lower than Barbados, Saint Lucia, St Vincent and the Grenadines and Dominica.
Shocking is the Standard and Poor’s financial rating. The rating list covers 198 countries. Grenada has the lowest rating of them all: SD “Has selectively defaulted on some obligations”, outlook negative. Source: Wikirating.org
In summary, the four percent GDP growth rate is only 52 percent of what comparable countries achieve. The bad or very bad results in rankings of reputable organisations are poison for our economy. This is the reality.
Neither the Budget Speech nor any other action of the government gives hope to come out of this trough. More of the same is not an option.
The NDC has a well-documented vision for real growth of the economy. The strategy is coherent and it is doable. It plans for a diversified economy and has defined priorities. The building blocks are feasible.
The team is composed of experienced leaders. And last but not least they all have an impeccable reputation of honesty and good character. It is exactly what we need.