“The NDC, in my judgement, remains the best alternative for the development of Grenada”.
Those were the words issued by one of the country’s top economists, Dr. Brian Francis, now a Senior Lecturer in Economics at the Cave Hill Campus in Barbados of the University of the West Indies (UWI).
Dr. Francis flew into the country over the weekend to deliver the key note address at the annual convention of the National Democratic Congress (NDC) which suffered a humiliating 15-0 drubbing at the polls in February 2013 to the New National Party (NNP) of Prime Minister, Dr. Keith Mitchell.
The former Permanent Secretary in the Ministry of Finance under a previous Mitchell administration has heaped the blame on the current financial and economic malaise facing Grenada at the feet of those who were voted back into office almost one year ago by the electorate.
He accused Dr. Mitchell and his NNP Government of plunging the country into “economic chaos with their borrow and spend mentality” in the 1995-2008 period after the fiscal situation was stabilised by the Congress government of Sir Nicholas Brathwaite through the much criticised Structural Adjustment Programme (SAP) in the early 1990’s.
Dr. Francis stressed that the task ahead for the newlook executive of the NDC under former Finance Minister, Nazim Burke who was elected on Sunday to replace Tillman Thomas as party leader is to immediately begin the task of re-organising the party for another rescue mission of the Grenadian economy.
The university lecturer urged the NDC supporters to learn the key lessons from its two earlier defeats at the polls in 1995 and 2013 after serving only one terms on both occasions.
Following is an edited version of the speech delivered to the NDC leaders and their supporters at a rally held on the grounds of the Westerhall Secondary School (WSS) on Sunday night.
This Convention is being held under the theme; “Learning From the Past to Shape the Future”.
As I reflected on this theme, I cannot hesitate to acknowledge its bearing and aptness at this crucial juncture in our country’s socioeconomic development.
But perhaps more importantly, to quote Rick Warren: “We are products of our past, but we don’t have to be prisoners of it.”
Ladies and Gentlemen, our beautiful country has witnessed significant political and economic upheaval. Your gorgeous Party has had its fair share of internal strife.
The question now before us is: Are we going to be prisoners of our past or will we allow the lessons of the past to help determine our future?
With the election of your new Executive, the Party now has a wonderful opportunity to heel old wounds and march forward united. And that is my only wish!
Let’s be candid! Despite its many successes, the Party has failed you in the past. The Party has let down Grenadians on two occasions. In the words of Sugar Aloes, I was hoping that never again would we have Keith Mitchell as our Prime Minister and the NNP as our Government!
I ask you, Ladies and Gentlemen, how could a Party created by the likes of the late George Brizan and Dr. Francis Alexis and led with distinction by Sir Nicholas Brathwaite and our very dear Uncle Tilly fail twice to retain the Government after only one term in office?
The answer is simple, yet complex! It has to be obvious to all and sundry that for too long the NDC has allowed itself to be the victim of a culture of self destruction.
As a student at Cave Hill, I was thought that politics was all about taking control of Government. How come, then, that the NDC continued up to February 2013 to behave as if it is more interested in being in Opposition than in Government?
That crab in a barrel mentality which was allowed to engulf the Party has now led Grenada to the point where according to the calypsonian, Red Plastic Bag, we are all seeing red under a highly incompetent NNP Administration!
But unlike Bico, our pigmentation does not necessarily have to turn red, because yellow is here! The NDC, in my judgement, remains the best alternative for the development of Grenada.
But for that to happen, it simply cannot be business as usual! Change must come and it must start immediately with the new Executive. And you as members and supporters of the Party must demand change and hold the leadership of the Party responsible for inaction.
As a Party, waiting in the winds to retake the Government, old wounds must be heeled and seriousness of purpose must rein!You see, too often, we lose focus on important things. Take it from me, if as a Party, you cannot get the politics right, irrespective of what happens on the economic front, the Government heart will stop beating. And that indeed has been the experience with the last two NDC Administrations.
Let’s look at the past! The NDC Administration of 1990-1995 successfully developed and implemented a Structural Adjustment Programme that restored Grenada’s international creditworthiness and stabilised the macro economy. Yet, the Party loss the 1995 general elections!
During the period 1995-2008, on the strength of what the previous NDC Administration had accomplished, Mitchell and his NNP Government plunged the country into economic chaos with their borrow and spend mentality. And once again, the NDC was called upon to rescue Grenada in 2008!
Times were tough! The economic challenges seemed insurmountable! Yet, the Government performed relatively well, constrained by a global financial and economic crisis and the economic madness the NNP left behind.
And I am not saying this lightly! The record speaks for itself! During the period 2008-2012, here are the facts:
MACROECONOMIC INDICATOR 2008-2012
Real GDP – USD 677.1M
Nominal GDP – USD 787.4 M
GDP growth -1.2 %
Nominal Per Capita Income – USD 7,500
Real Per Capita Income – USD 6,500
Inflation – 3.3 %
Gross Capital Formation – USD 194.5 M
Foreign Direct Investment, Net Inflows – USD 86.6 M
Current Revenue – USD 367.9 M
Current Expenditure – USD 371.5 M
Agriculture, Value Added – 5.0 % of GDP
Industry, Value Added – 17.7% of GDP
Services, Value Added – 77.3% of GDP
Do you know what is amazing about these Economic Statistics? No other previous Administration since 1979 has performed better! Yet, the NDC lost the 2013 General Elections 15-0!
Why? If by now, Ladies and Gentlemen, you are not fully with me, then, maybe a picture isn’t worth a thousand words! So the NDC’s past isn’t all pretty and you cannot change anything.
However, I am confident you can look forward to the future with renewed hope.Your Party must learn from the experiences of the past and fully incorporate the various lessons going forward.
I cannot in the time allocated to me fully exhaust all of the lessons from the past which the Party can use to shape the future. But, as the saying goes, charity begins at home and the Party must fully embrace that adage.
You see, a few days after the Party’s grand victory at the Polls in 2008, I wrote a piece in the then Grenada Today and said this:
“Mitchell and his NNP are gone and so should all of the institutions he has created in his own image and likeness.
The destruction of those institutions cannot be delayed. The new Government should never allow itself to be bullied into submission and inaction by those shameless NNPites who are now calling fowl and making noises of victimisation. The destruction of those institutions cannot be completed without the removal of some Public Officers from their current Offices. The Prime Minister is on record as saying that there will be no victimisation. I agree there should be no victimisation. However, I hope the Prime Minister does not see the removal of some Public Officers from their current positions as victimisation…those who behaved like politicians as well as those who facilitated Mitchell’s activities have to go.”
But my ranting didn’t end there.
I also said this:
“Now to the Government as a whole: You have to govern for all Grenadians. But, I urge you to look out for the supporters of the NDC. Make sure that the NDC supporters are taken care of. Do not ignore them. Do not alienate them. Your objective should be to build upon your Party’s support base. As the saying goes, charity begins at home!”
So, tell me, what went wrong?
Ladies and Gentlemen, Grenada’s economy is in real trouble. And that perhaps is the greatest understatement of the evening. What is worse is that our present Government has little clue as to how to resolve the country’s economic nightmares!
We have an economy that is burdened by:
*A huge and rising fiscal deficit
*Clearly unsustainable debt
*Low economic growth rates
*High unemployment particularly among our young
*Mounting frustration among the population
*Cries of despair from several quarters
*And above all a Government with no real leadership at any level!
Something has to give! To me, the way forward is clear!
Once more, your Party – the National Democratic Congress – has to come to the rescue of our country and economy! And the realisation of that goal should be the main focus of the new Executive and all Party members and well-wishers!
But how do we resuscitate the Grenadian economy?Once more, a huge question with no straightforward answer!
What I now propose to do is share with you my thoughts in relation to four (4) issues that are critical to the reconfiguration of our economy:
(1). Economic Growth
Our tax revenues, debt burdens and unemployment problems can only be resolved with economic growth. As economists, the challenge in relation to this matter is generally the lack of consensus on what precisely constitutes a growth-enhancing mix of policies.
Indeed, some theories emphasise the domestic resource base; Others underscore the openness of markets and the extent of international trade. Still, some stress the importance of factors such as human capital, infrastructure of the economy, the “quality” of government, domestic and foreign investment, and the level of international debt.
The bottom line, therefore, is that we have to grow our economy based on those economic policies, plans, programmes, and strategies we know to have worked in the past.
Additionally, we have to become more innovative.
We have to practice good governance and harness good government.
We have to construct institutions to facilitate growth and development.
We have to practice learning-by-doing!
(2). The Role and Size of Government
Empirical evidence has proven that big Governments generally
retard economic growth!
The 2008/2009 global recession has reignited the debate re:Governments versus Markets.
Like Governments, markets do fail. However, I think it is fair to say that given all we know historically an anecdotally, economies that are market-oriented perform comparatively better than those in which big Governments dominate!
That said, Governments in our types of economies do have significant roles to play in influencing economic activities and it is up to us to figure out the extent to which we can fulfill this important mandate.
What, however, we need to emphasise and appreciate is that the Government can’t solve the country’s problems! Hence, our Government will be better served by focusing on creating the environment that will allow us as individuals and businesses to solve our economic problems.
In other words, our model going forward has to be socio-economic transformation through partnerships and inclusiveness.
We have to be able to forge effective working relationships with our private sector, trade unions, nongovernmental organisations, churches, other political parties, and all stakeholders to truly create an economy with built-in flexibility to withstand potentially destructive forces from both within and outside.
(3). Economic Strategy
For several years, tourism has been our only real growth-driver. Yet, our tourism product is under-developed and grossly under-promoted.
Let’s hope that the new Tourism Authority will reverse course and treat tourism as a true engine of our economic growth and development, if that is the strategic position of the Government.
Given our recent economic history, it would be foolhardy for us to continue to rely on a one-legged economy for economic prosperity!
Hence, we must diversify! Agriculture, for example, does have the potential to increase exports and to achieve some import substitution!
Admittedly, the previous NDC Administration has done a tremendous job in putting agriculture back on track. However, our agricultural sector is hampered by weak institutions and continues to be used as an employment sink.
The sector largely remains highly inefficient due in part to inadequate incentives and political patronage and interference!
Change must be inevitable! We need, therefore, an economic strategy that incorporates all of the important issues at the micro, macro, institutional, and sectoral levels in order to restore macroeconomic balance, confidence and credibility to our country and economy!
This strategy must address all of the factors that have us in a strangle hold:
In the short run, we must solve the unemployment problem through job-creation in the private sector, Government’s programmes and projects, and entrepreneurial development.
In the medium term, we have to target the return of consumer and investor confidence to stimulate domestic as well as foreign investment.
For the long-run, we have to generate sustained levels of economic growth rates to expand Government’s revenue without increases in taxes, bring down our public debt, create permanent jobs, and lower poverty.
(4). Economic Ideology
For an ongoing project, I asked our former Minister of Finance, Bernard Coard this question:
As Minister of Finance, were you guided by any particular philosophy/ideology and if so why? This was his response:
“Yes, socialist. Not dogmatic, however, as IMF and World Bank reports can attest. I frequently told New Jewel Movement (NJM) members: “I have studied ‘bourgeois economics’ in the US and in the UK, and I have studied Marxist economics on my own; and if I ever tried to implement either, Grenada’s economy would be mashed up in no time!” Before the term ‘market mechanism’ became a catch phrase, I employed that approach in building the state sector.”
My friends, Bernard was absolutely correct! As an already small, highly open and vulnerable economy we cannot chart the way forward by adopting economic ideologies from other countries and institutions!
If we do, we will continue to fall victim to the “False Paradigm” Model. In short, no one-size fits all!
As I conclude my presentation, allow me to return to the theme of this year’s Convention: “Learning from the past to shape the Future.”
As a Party, mistakes have been made in the past with devastating outcomes!
Politics and ineptitude continue to hamstringing your efforts to enact real change within the Party and by extension the country.
In 2011, the then newly elected Chairman of the Party said this:
“Let no rumours fool you again. Differences are not division…There is no divided NDC…There is the National Democratic Congress under the leadership of Tillman Thomas…The baton has been passed for the forward
movement of the Party…We will continue to work together in building the NDC…Peace, unity and togetherness are the hallmarks of success.”
Distressingly, those words meant little to some within the Party! But as a serious Party, you ought to take heed of those very wise words – words of wisdom if you are so inclined to characterise them!
For there can be no denying that: NDCites deserve better! Grenada deserves better! Grenadians deserve better!
Above all, in economics we say that stability equals prosperity! If Grenada is to return to economic prosperity, then, surely, we need a stable NDC!
I can only urge you, therefore, to start the process of building that stability from today!
I wish you all success!