As Government continues its effort to decide on the best solution to resolving the island’s debt situation with its creditors, the Conference of Churches Grenada believes that emphasis should be placed on a people centred resolution that will reduce the debt stock by two-thirds.
“We urge the government to push for a reduction in Grenada’s debt stock to a maximum level of 50% of GDP, due to the harmful effects of debt above this level on economic growth. This will require, in practice, an upfront debt stock reduction of approximately two-thirds. It is essential that debt restructuring in Grenada restore long-term debt sustainability and support a return to economic growth,” is one of recommendations the CCG presented to Economic Affairs Minister Oliver Joseph, following a two day workshop organized by the umbrella religious grouping.
The workshop which had participation from the Grenada Civil Society Organisation, the Caribbean Debt Network, Jubilee Germany, Jubilee USA and the United Nations Development, also called for an independent debt sustainability assessment, external mediation, and a creditors’ conference.
Explaining that the debt restructuring process should involve all external creditors — commercial, multilateral and bilateral, the CCG said: “This will ensure fairness between creditors, and means that each creditor is subject to a lower ‘haircut’ on its claims. This will also be an incentive for all creditors to take part. We encourage the government to explore options for a comprehensive solution.”
The CCG said that while it appreciates that the government wishes to resolve the current debt situation in a timely manner and secure access to new sources of external finance to meet the country’s needs, they will want for Government to seek consensus from the people in advance of any agreement with the IMF.
“Before government signs any programme, it must seek consensus with the people on the package of reform measures the country will undertake. This will ensure that the programme respects the priorities of the local people. We therefore insist that the government share all documents with the Committee of Social Partners and the public with ample time for review and debate before any agreements are signed,” said the recommendations which were developed by the more than twenty participants at the workshop presented to the Minister Joseph by Rev. Osbert James.
Looking ahead, the CCG said that it will be essential for Grenada to reduce the risk of future debt crises and insist that the government strengthen its legal and administrative structures to ensure greater transparency, accountability and participation.
“Specifically, we insist that the Government commits to a mechanism which monitors and evaluates new debt commitments. This mechanism must involve the social partners. There is also a need to improve debt management capacities. These reforms will help put in place the tools to reduce the risk of future debt crises,” the recommendations elaborated.