The fifth review of Grenada’s Structural Adjustment Programme (SAP) has been concluded with the International Monetary Fund (IMF) making the observation that while unemployment is falling, it continues to remain high at 29 percent.
An IMF delegation headed by Nicole La Framboise, who was in Grenada from September 7-14 and submitted a report, which said that more Grenadians are actively seeking work and employment, has expanded slightly.
One of the issues facing Grenada right now is Structural Unemployment, said La Framboise who was hosting a press conference in conjunction with Acting Permanent Secretary in the Ministry of Finance, Mike Sylvester at the Ministry’s conference room last Wednesday.
According to the IMF representative, focused policies are needed to address skills gaps and improve job search tools in order to address the structural unemployment.
She said if the right incentives were put in place, the goal to improve the labour supply response and strengthen incentives for employment creation would be met.
La Framboise explained Grenada’s issue with structural unemployment.
She said: “There is unemployment that is affected by the Economic Cycle. So, when there is a gross period generally we don’t have structural unemployment and the unemployment numbers tend to react fairly quickly to growth and when it is very strong, unemployment can go down to below its natural rate and when there is recession, unemployment rises.
“Outside of that there is unstructured unemployment which means that beyond the impact of the cycle of the economy, the structural issues causing potential supply of labour force to not reach the labour market or not be employable in the labour market. So that’s the issue that needs to be addressed…this is why you see high unemployment particularly among the youth,” she added.
One of the recommendations made to the Keith Mitchell-led New National Party (NNP) government by the IMF team is to realign over time, the education curriculum to produce graduates who are well prepared or better prepared for the jobs that are available.
“…We looked at technical training and certification. There are some programmes that government is considering – how to improve or expand those but there are skills and training … that could be done in short term to help to match the needs of the labour market with the supply”, she told reporters.
“…We looked at ways that the government could help but also the private sector in market efficiency. In other words, finding and uniting people that are searching for the jobs…” she said.
The IMF believes that if these programmes are synchronised with the private sector, they can help improve the unemployment situation in Grenada.
Acting PS in the Ministry of Finance, Mike Sylvester who also addressed reporters said that the government is approaching the growth issue from two points with one being on the reforms that would remove bottlenecks to growth.
Sylvester noted that in terms of investment and facilitating investment both at the level of the private and public sectors, this is something that is very high on the priority list of government as part of the continued reform.
The NNP regime was forced to embark on a programme of austerity measures in order to address a severe fiscal situation facing Grenada including a debt problem.
The measures included a wage freeze in the public service in the past three years, as well as increases on a number of existing taxes and a widening of the income tax net.