Grenadians are again called upon to brace themselves and prepare to make aserious sacrifices as the cash-strapped island awaits the word from the International Monetary Fund (IMF) whether it will give support to the home-grown fiscal adjustment and structural reforms to be undertaken by the Keith Mitchell-led government in St. George’s.
The country’s financial plight was a key component of the 2013 Throne Speech delivery last week Friday by Governor General, Dame Cecile La Grenade.
She disclosed Government’s intent to pursue a homegrown programme of fiscal adjustment and structural reforms with the support of the IMF, and other development partners such as the World Bank, European Union, Caribbean Development Bank (CDB), the Department for International Development, Canada and the Eastern Caribbean Central Bank (ECCB).
Since April, Grenada has been defaulting on payments to international creditors on its national debt of EC$2.3 billion.
Dame Cecile said that the main objective of the homegrown programme to be initiated by the Mitchell government is to create conditions for higher economic growth that is both sustainable and job creating.
“This programme demands strong policy actions and will require all citizens to make some sacrifices. In doing so, we must be mindful of the sacrifices being asked of Grenada’s creditors, at this time, and the financial and technical support of development partners,” she told a joint sitting of Parliament.
The female Head of State said that the NNP regime would ensure that adequate safety nets are maintained through its homegrown programme to protect the poor and vulnerable in the country.
In seeking to justify government’s exorbitant national debt, the Governor General said, “Government spends 30 cents of every dollar on debt. This is the second largest expenditure after wages and salaries. Nevertheless, it must never be forgotten that a significant portion of the Public Debt was contracted for reconstruction of our country following the devastation of Hurricanes Ivan and Emily”.
Dame Cecile did not give a breakdown on the debts that were contracted after the passage of the two hurricanes.
However, the then ruling Mitchell government has often been accused of embarking on a borrowing and spending spree for a number of ill-conceived projects like the Garden Group of Hotels in the south of the island and the Marketing & National Board (MNIB) project at the Lagoon in St. George’s.
Dame Cecile announced that the Mitchell government would proceed with a major restructuring of the Public Debt that will result in a significant reduction in debt servicing costs, a reduction in the debt to GDP ratio and a reduction in debt per capita.
“This means Government will be able to spend a larger proportion of revenues on investing in the Grenadian people including training and support for small business development as well as providing key infrastructure”, she said.
“These investments will raise the long-term growth potential of Grenada. As a result of the debt restructuring, there will be a stronger economy, higher growth, more jobs and timely debt servicing”, she added.
The female Head of State, a close cousin of former leftist Prime Minister, Maurice Bishop, described her administration’s top priority as building a New Economy for Grenada to provide jobs for those who wish to work, as well as business opportunities for those who choose to invest, opportunity for wealth creation and prosperity for those prepared to sacrifice and play by the rules and social justice for all who believe in equality and human rights.
She said that Government’s plans and programmes for the New Economy would soon be presented in the new Growth and Poverty Reduction Strategy.
This strategy, she added will include a Core Public Sector Investment Programme for the next five years.
Dame Cecile pointed out in the speech that is normally written by the government itself that the eight month old administration has already started to engage citizens and social partners on Grenada’s challenges and the way forward for the structural transformation of the country.
She said that the pace and scope of these consultations will intensify in the coming weeks leading up to the presentation of the 2014 Budget scheduled for December.