The Governor of the Eastern Caribbean Central Bank (ECCB), Timothy Antoine, describes Grenada’s vision to ensure fiscal responsibility, through the inaugural Fiscal Responsibility Oversight Committee, as a quantum leap in good governance for a small state.
Grenada is the 1st independent country in the Eastern Caribbean Currency Union (ECCU) and the 2nd, after Jamaica, in the Caribbean Community and Common Market (CARICOM), to have fiscal responsibility law.
The members of the committee are Chairman, Richard Duncan; Angus Smith; Adrian Hayes and Sabina Gibbs. Zanna Barnard, a senior economist at the ECCB, is the regional expert. As required by law, the members are skilled in accounting; business management; public administration; law and economics. The Fiscal Responsibility Oversight Committee (FROC) is a requirement of the Fiscal Responsibility Law, to monitor and report on compliance with the fiscal rules and targets.
During an orientation seminar organised by the Ministry of Finance and conducted on 23 August for members of the committee, Antoine delivered 3 key messages. The 1st of these highlighted that the Fiscal Responsibility Act is the most fundamental and far-reaching fiscal reform in Grenada’s history, binding the state to operate within its means.
“The FRA – Fiscal Responsibility Act – is more than a bold experiment. It is a binding commitment, to law and order, fiscally speaking, and if you’re on Twitter you could tweet that one. It is more than a bold experiment. It is a binding commitment to law and order – fiscally speaking. That’s how important this legislation is. The 2nd key message is this: embrace – and this is for you, the Fiscal Responsibility Oversight Committee, embrace the high duty of care bestowed on you. Embrace the high duty of care bestowed on you. You are the custodians of this legislation. Parliament will rely on you and through the parliament, the people of Grenada, will rely on you,” Antoine said.
The Fiscal Responsibility Law confers tangible benefits, including low and more manageable debt, fiscal stability, forward looking salary settlements and higher levels of growth.
Antoine’s 3rd key message dealt with realising Grenada’s leadership position, in fiscal governance, among small states.
“People are looking at us, to see how we’re going to do this. So, this is a bold step. Grenada has assumed a certain leadership in the area of fiscal management. Accordingly, there are many admirers, home and abroad, but perhaps especially abroad. I hear them a lot, but we must also be aware that there are a few sceptics. There are those who doubt the efficacy of this arrangement. Can this law survive the test of time, including change of administrations? Does it reduce the flexibility of the state to govern? Those are some of the questions that the sceptics ask and, on that note, I am pleased to observe that at the 1st time of asking, during the last, recent salary negotiations, Grenada passed this test in flying colours. Public servants and teachers have been awarded increases and, at the same time, the fiscal responsibility law has been respected. That was the 1st test of the law,” Antoine said.
Permanent Secretary in the Ministry of Finance, Dr Wayne Sandiford, describes the Fiscal Responsibility Oversight Committee as a crucial institutional pillar, in the public finance management architecture of Grenada, directed at sound economic management. Members will play a role in reinforcing the credibility of sound economic management in general and fiscal management, in particular.
“The Fiscal Responsibility framework represents, in some sense, a new model – a new paradigm, as some may say – for the conduct of fiscal management, whose prime objectives are to promote fiscal discipline and to imbed fiscal sustainability, again, both of which are directed at laying the foundations for economic growth and development. In other words, the fiscal responsibility law has not been instituted, for its own end. It’s directed at a larger, grander purpose, of fostering – at least laying the conditions – for economic growth and development,” Sandiford said.
The orientation seminar was designed to prepare members of the FROC, so that they can effectively discharge the legislated responsibilities of the committee.