Saving Grenada’s dying economy

Time and again we are looking overseas for grants and help to save Grenada’s dying economy. We can’t live without masters local or foreign, economic or spiritual. This dependency and slave mentality are the main reasons for our problems.

We pretend that we do not see the international reality with BRIC, Islamic activity, Ukraine and the EU gas predicament to name a few. Our foreign and economic policy is made mostly by blind activists. They continue to mislead and explain their failure by blaming the Global recession.

However we should blame no one and accept our responsibility for the scandalous bankruptcy and double standards of our political machine. We elect our leaders and we allow them to do whatever they wish at our cost and on our behalf. Unfortunately political goals and national goals are not synonymous.

True, to reduce the unemployment rate the economy must grow at a pace above that average. To achieve a 1 percentage point decline in the unemployment rate, GDP must grow approximately 2 percentage points faster than the average rate of growth.

There is a certain relationship between investment and employment i.e., for creating one reasonable life-time job, a certain amount of money needs to be invested. This is called a job-investment coefficient.

Is it possible for Grenada?

Investments made from a depreciating fund, do not generate new jobs, they maintain existing jobs. The multiplier effect of investment applies to sectors of sustainable growth and not for speculative sectors such as retail and real estate which are dominant in Grenada.

Investment oriented on advanced technologies and knowledge results essentially in higher wages and continuous training of employees, but do not reduce the unemployment significantly. Reduction of banks interest rate can be applied on the short-term for economic recovery, but this is not our case. The ECCB is not under our control.

Grenada does not generate rising levels of GDP and has no money for recovery. The country is plunging into the unemployment trap.

The present economic policy in Grenada will lead to bankruptcies with the immediate effect of increasing unemployment and fiscal and social instability that will kill the country completely.

We may believe our leaders, hope or pray for salvation, but we will only cheat ourselves and lose valuable time. Our own children do not believe us. We have created a country where the youth see no job opportunity and future and dream to emigrate overseas at the first chance.

In fact the children of many of our leaders and business people are already in the US or the UK for their education and will never come back. Cutting bush for $35 a day is their likely job opportunity in Grenada. Our labour is continuing to degrade to this level. Those who are qualified for better jobs flee the country.

Having said that, we see that existing approaches to tackling unemployment do not work. We propose an alternative, innovative way.

First of all we consider that it is necessary to restore and develop the confidence lost due to political games played since our Independence.

The application of democratic principles in the governance, free and responsible press, reducing the size of our public service plagued with corruption and bureaucracy and increasing the efficiency of state administration are all necessary.

Equal sanitation should be made in Social Partnership to create a competitive and effective private-public decision-making machine.

Secondly, we need to mobilise our existing capital frozen in the NIS and commercial banks to create a new economy and new jobs. For this, special investment funds with professional fund management should be created. This seed capital will generate the interest of foreign investors and will create a multiplying positive effect.

Thirdly, our main employment opportunity is in the absolutely new alternative economy. It will be based on the realities of globalisation with a clear shift of demand from quantities and debt-and import- based national economies – to quality methods and self-sufficient independent states with balanced export-import ratios.

No foreign advisors or donors will do this job for us, and they have no interest in doing it. Only a seriously renovated (and reinforced with professionals) national public-private Think Tank can offer the long term solution.

The Taxpayers Association of Grenada is ready to create such an independent and professional think tank, but funding is required to hire high profile national and international experts.

In addition to voluntary contributions and subscriptions, we need public support to allocate a Government subvention for this urgent and vital research, to propose an alternative solution and to turn the country around.

Budget 2015 is our next opportunity between elections to control and influence our MPs to make this responsible decision.

(The above reflects the views of the newly formed Taxpayers Association of Grenada)

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