A team from the Washington-based International Monetary Fund (IMF) was in Grenada on official visit lasting two days and met with members of Government and different organisations as a regional mission.
The purpose of the meeting was aimed at generating a picture of Grenada’s economic challenges.
Trevor Alleyne who is Chief of the IMF Caribbean division and oversees OECS gave an outline of the progress behind the IMF visit.
“The team is doing consultations with the region as a whole in addition to the bilateral consultation it has with individual countries, so I’m here to do the regional consultation and in that context we have gone to all the capitals of the OECS countries to meet with the Ministers of Finance as part of this discussion,” he said.
Alleyne pointed out that this particular IMF visit is different from the more normal ones.
“We tend to focus on those issues that are of regional importance and therefore, we will be touching on issues as they affect the region and getting the perspective of the individual Ministers of Finance on those topics,” he said.
When Grenada and the rest of the region are looked at, Alleyne said they all face the same critical challenges.
“It is the same issue that Grenada faces as an individual country which is low growth coming out of the global crisis and the issue of high debt and the need for physical consolidation in order to put the public financings back on a sustainable footing,” he remarked
According to the IMF official, there is an issue with the financial system in the region and it must be strengthened.
Alleyne said that Grenada needs to put some work in that area so that it can bounce back from the problems it is currently facing.
“I think the reality of the situation is that there are some hard decisions to be made in the region and what we want to do is discuss with the authorities towards getting the (countries) back on a strong sustainable footing,” he added.
Alleyne said that in the case of Grenada, government might have to look at some short-term sacrifices and not doing business as usual.
He said that Grenada needs to do things a lot differently and that after scrutinising the findings of the visit over the next few months, viable actions will then have to be looked at and taken.
Faced with a debt of EC$2.4 million, Grenada has defaulted on payments to creditors as it awaits funding from the IMF to help implement a Structural Adjustment Programme (SAP).
The one-year old Keith Mitchell-led New National Party (NNP) government in St. George’s has announced a series of austerity measures including a widening of the Personal Income Tax net, as well as huge rises in Property Taxes in order to raise declining revenue.
The administration is seeking a wage freeze over the next three years of the programme from public sector unions in order to avoid retrenchment.