By J. K. Roberts / 12 Nov. 2013
This is a ‘compelled’ second article and a third may follow, as a feedback to the National Address by Prime Minister Keith Mitchell on Grenada’s Home Grown ‘austerity’ Programme, which was delivered on Wednesday 30 October 2013. The articles are done despite great efforts to resist doing so, but leaving the necessary ‘critical responses’ to front-line politicians, Social Partners / Civil Society Organisations, and Economic and Financial professionals. The Address also makes for good case-studies for students of Political Science.
To associate and declare Grenada’s Home Grown Programme as “A Time of Shared Sacrifice” is unfair and offensive to the average Grenadian, especially when considering the circumstance which leads to this state of affairs. The hardship and pain of this programme, whether it is home-grown or otherwise, is a ‘punitive burden’ which is placed on the citizens due to no real faults of theirs; but even if this is not the case, the Programme must be executed equitably with the sacrifice proportionally shared.
It would be argued that the people elect the Governing Administration and so the people are responsible for its’ success or failure and have to take whatever consequences thereof. The reality though is that after every general election, the Administration neglects the people and revels in partisan politics, spending sprees, foreign indulgences and excessiveness with unscrupulousness and impunity. Only when a crisis develops or results, there is the ‘call and order’ for a national response.
Fundamentally, a Home Grown ‘socio-economic’ Programme should have always been identified with the Independence of the nation; a programme which is designed and developed with the population and built on sound and sustainable vision, objective and evolving policies, and strategic plans and approaches within a sovereign interdependent construct. In fact, with such ‘indigenous and sovereign’ programme in every country of the Caribbean, the International Financial institutions and the More Developed nations, as well as this current global economic crisis, would not have a stranglehold on these countries as now exists, but that the Caribbean Single Market and Economy (CSME) would have been much flourishing; the excellent wide diversity of the potentials of the Region should speak to this.
Dr. Mitchell sought to put in perspective the New Economy for Grenada, which his New National Party (NNP) campaigned-on during the February 2013 Elections and saw it winning all fifteen seats in the Parliament. He expressed that the first element is to achieve “fiscal and debt sustainability”, with “the necessity for a home-grown programme of fiscal adjustment and reforms including debt restructuring”. This situation surrounds Grenada’s high debt and high level of unpaid claims, and the grave financial imbalance as a result of successive governments have spent far more than they have collected and because of their borrowings. But; are the attitudes and actions of the governments justified, and were the governments aware of the predicaments which are ahead from this?
Whilst it’s normal for governments to borrow, the borrowings must be guided by ‘proof protocols’ and ‘risks analysis’; this is especially important so that Small Island States like Grenada do not go in ‘receivership’. The need for the money must be verified, a ceiling for the debt must be observed, the capacity to repay the money must be evident, and a control and monitoring debt regime must be diligent; with consideration for the ‘recurrent and routine and reserve’ obligations of the State.
In accepting the position of the Prime Minister, it is critical to qualify what is meant by “fiscal and debt sustainability”. Solutions to the desperate fiscal situation would put Grenada back into the ‘borrowing mode and debt syndrome’, having creditworthiness to draw-down on grants and loans and to facilitate non-productive projects and speculative investors. The experiences and lessons from past Structural Adjustments and Debt Restructurings need to be also brought into focus on the way forward.
If the Home Grown Programme requiring commitment and sacrifices by all citizens is an “important and noble endeavour”, then transparency and accountability by the Administration have to be readily realised to the understanding and satisfaction of the people. This must mean making public ‘thorough and explicit breakdowns’ on the true fiscal accounts of Grenada. Details at least on the status of the debt must include the amount of monies owed, the reason for the owing, the period when the monies were incurred and owed, and the ‘default clauses’ for the monies owed. The extent to which the central bureaucracy, statutory bodies and State corporations contributed to this debt is also relevant.
The point must be made that much of the debt would have been incurred from closed-door deals, with no parliamentary clearances, with no genuine consultations and negotiations with the population, and against pertinent advices and warnings of many accredited financial authorities. Civil Society bodies have been castigated and ridiculed when they promote restraints in national transactions, especially attending to the public’s assets and debts. Issues of economic mismanagement and fiscal ill-discipline, with allegations of corruption, irregularity and wastage, have always been of concern. Whilst persons have been conscious of and crying over the repercussions, the politicians have been unconscionable.
The Administration has not being upfront with the people but often misleads them in making uninformed decisions. The commentary on Grenada’s Debt published in October as a three-part series, by former senior public officer and Chartered Certified Accountant Garvey Louison (FCCA) is very instructive; he states: “It is usual for NNP politicians to blame the hurricanes (Ivan 2004 and Emily 2005) for the island’s struggle with debt repayment and the need for restructuring of the debt obligations. However … the facts show that the hurricanes gave Grenada a sharp, extraordinary boost in total revenues, total expenditure, capital expenditure and economic growth …”. Any attempts to fix problems without affixing blame will be futile; to excuse persons for reckless decisions is repugnant.
It is very unfortunate to have persons believing that Grenadians are ‘far better’ than the citizens of most of the other Caribbean countries, in terms of taxation, salaries and cost of living; and that they are ‘opposed to contributing’ to National Development. The philosophy and structure of the tax system including Property Tax and Customs and Excise with the hidden ‘built-in’ charges need to be revealed; and so too is the administration, accountability and application of the taxes/duties/levies collected.
J. K. Roberts is not an expert on the professional disciplines highlighted in his writings, but sees himself as having keen and passionate interest in public policies’ advocacy and analysis. He is a ‘premature retiree’ of the Public Service of Grenada, an author of two books (“Into The 21st Century”, 1995 and “Management Practices in The Public Service of Grenada”, 2011) and the founder of a civil society organisation called National Initiative for Prolific Policies (NIPP, Grenada. Inc) well over a decade and a half now and have staged publicly many ‘technical meetings’.