An­tho­ny Wil­son

New­ly re-elect­ed Grena­di­an Prime Min­is­ter, Dr Kei­th Mitchell, has one of the more chal­leng­ing as­sign­ments of any po­lit­i­cal leader in the re­gion.

One of the im­me­di­ate chal­lenges that the Prime Min­is­ter faces is to in­crease the is­land's out­put be­cause, ac­cord­ing to the Caribbean De­vel­op­ment Bank's 2012 an­nu­al re­port, out­put in Grena­da fell last year.

What's more, the CDB es­ti­mat­ed that the num­ber of stay­over tourists vis­it­ing Grena­da fell by 5.1 per cent in 2012. Tourist ar­rivals al­so de­clined by 6.2 per cent in Bar­ba­dos, 2.3 per cent in An­guil­la (Jan­u­ary to No­vem­ber) and 2 per cent in St Lu­cia.

Ac­cord­ing to the CDB, the de­cline in tourist ar­rivals "re­flect­ed a com­bi­na­tion of re­duced air­lift par­tic­u­lar­ly out of the US; con­trac­tion in the UK econ­o­my; and the ad­verse ef­fects of the Air Pas­sen­ger Du­ty on flights out of the UK.

The re­gion­al de­vel­op­ment bank's analy­sis in­di­cat­ed that the 2012 Olympics Games in Lon­don, as well as the run-up to the US pres­i­den­tial elec­tions al­so had sig­nif­i­cant damp­en­ing ef­fects on North-South trav­el in 2012. The high cost of in­tra-re­gion­al trav­el al­so con­tin­ued to ad­verse­ly im­pact the sec­tor.

Grena­da al­so suf­fered a 21.7 per cent de­cline in cruise ship pas­sen­ger ar­rivals as the is­land was im­pact­ed by the re­de­ploy­ment of cruise ves­sels, par­tic­u­lar­ly dur­ing the sum­mer months to more lu­cra­tive mar­kets.

Kei­th Mitchell sworn in

Grena­da is one of about nine Cari­com coun­tries whose debt bur­den ac­counts more than 70 per cent of their out­put as mea­sured by gross do­mes­tic out­put (GDP).

The debt bur­der of Grena­da along with An­tigua, Be­lize, and St Lu­cia is about 80 per cent of eco­nom­ic out­put, while Ja­maica, St Kitts and Bar­ba­dos have debt-to-GDP ra­tios over 100 per cent and Do­mini­ca and St Vin­cent are about 70 per cent.

Grena­da missed a Sep­tem­ber 15 pay­ment on US$193 mil­lion of bonds be­fore pay­ing in­vestors with­in a 30-day grace pe­ri­od. That pay­ment was even­tu­al­ly made in full on Oc­to­ber 15, which "cured the sov­er­eign de­fault," of Grena­da and led to the is­land be­ing up­grad­ed from Se­lec­tive De­fault (SD) to 'CCC+/C'.

Along with the up­grade, oth­er pos­i­tive eco­nom­ic news for the is­land in­cludes that it ben­e­fit­ed from a 20.3 per cent in­crease in co­coa pro­duc­tion for the first six months of 2012, com­pared with da­ta for the cor­re­spond­ing pe­ri­od in 2011, and the fact that the is­land re­ceived a glow­ing­ly pos­i­tive re­view in the New York Times last Fri­day in an ar­ti­cle head­lined "In Grena­da, ocean views with a spice scent.

The ar­ti­cle in­vit­ed vis­i­tors to "ven­ture be­yond the beach on this Caribbean is­land and you'll find every­thing from nut­meg and co­coa to hid­den wa­ter­falls."

The is­land al­so re­ceived a huge boost last No­vem­ber when Ja­maican hote­lier Gor­don "Butch" Stew­art snapped up the 100-room La Source Grena­da ho­tel, which had closed down the pre­vi­ous month, putting about 150 Grena­di­ans out of work.

Stew­art, the own­er and founder of the San­dals Brand, which is prob­a­bly, along with An­gos­tu­ra one of the most glob­al­ly recog­nised Caribbean brands, said: "It's in­valu­able to us and will be in­vest­ing US$100 mil­lion in the com­ing years as we turn this prop­er­ty from 100 rooms to 265. The ad­di­tion­al de­vel­op­ment will be the Tahi­ti Vil­lage." he told a cer­e­mo­ny here last Thurs­day night.

The prop­er­ty on Pink Gin Beach will be re­named San­dals La Source Grena­da Re­sort & Spa, and is due to re-open in the first quar­ter of 2013.

"We would have liked to open soon­er but the up­grade will take a lot more than what was orig­i­nal­ly in­tend­ed. We are spar­ing no ex­pense for this re­sort, it's world class, it is top­notch and it will be new for San­dals," said San­dal's chief ex­ec­u­tive of­fi­cer, Adam Stew­art.

But S&P, in its Oc­to­ber 16 up­grade of Grena­da's for­eign cur­ren­cy sov­er­eign debt rat­ing stat­ed that the is­land's "fis­cal and ex­ter­nal pres­sures re­main acute as a re­sult of weak eco­nom­ic growth, high fis­cal and ex­ter­nal debt and li­a­bil­i­ty bur­dens, and very lim­it­ed fis­cal and ex­ter­nal flex­i­bil­i­ty."

And while the rat­ing agency raised the is­land's cred­it rat­ings to 'CCC+/C,' its out­look is neg­a­tive, which "re­flects the po­ten­tial for a down­grade if the gov­ern­ment fails to strength­en its debt man­age­ment." S&P's out­look on the long-term rat­ings is neg­a­tive.

Even though Grena­da was able to make the in­ter­est pay­ments on the US$193 mil­lion debt, in S&P's opin­ion: "The liq­uid­i­ty pres­sures on the gov­ern­ment of Grena­da's over­all fi­nances re­main acute.

"We project eco­nom­ic growth of less than 1 per cent in 2012, as for­eign di­rect in­vest.ment re­mains low and the tourism in­dus­try con­tin­ues to strug­gle.

"The con­tin­u­a­tion of sev­er­al tax ex­emp­tions have con­tributed to low­er-than-bud­get­ed rev­enues. The gov­ern­ment plans to re­duce planned cap­i­tal ex­pen­di­ture dras­ti­cal­ly for the sec­ond half of 2012 and like­ly in­to 2013, which will be ac­com­pa­nied by low­er for­eign grants and mul­ti­lat­er­al loan dis­burse­ments. Al­though the gov­ern­ment has re­mained cur­rent on its lo­cal cur­ren­cy oblig­a­tions and was able to is­sue EC$12 mil­lion (US$4 mil­lion) of Trea­sury bills on the Caribbean Re­gion­al Gov­ern­ment Se­cu­ri­ties Mar­ket re­cent­ly, liq­uid­i­ty pres­sures have caused the gov­ern­ment to de­lay pub­lic-sec­tor wage pay­ments twice in re­cent months."

In its man­i­festo for Tues­day's gen­er­al elec­tion, Mitchell's New Na­tion­al Par­ty (NNP) promised Grena­di­ans "a new vi­sion" for de­vel­op­ment over the next five years.

"It is our view that when a gov­ern­ment is elect­ed to of­fice the ex­pec­ta­tion of all its cit­i­zens is that they must ben­e­fit and there­fore gov­ern­ment must pro­vide lead­er­ship and good gov­er­nance which in­cludes im­prov­ing the qual­i­ty of lives of all the peo­ple of the coun­try," Mitchell said at the launch of the man­i­festo.

Ac­cord­ing to a wire ser­vice re­port, he NNP is promis­ing to de­vel­op an econ­o­my that is "fu­elled by an ed­u­cat­ed so­ci­ety ca­pa­ble of ad­just­ing to chang­ing cir­cum­stances" and that is part of and con­tributes mean­ing­ful­ly to the de­vel­op­ment and in­te­gra­tion process­es in the Or­gan­i­sa­tion of East­ern Caribbean States (OECS) Eco­nom­ic Union, the Caribbean Com­mu­ni­ty (CARI­COM) and the West­ern hemi­sphere.

The NNP said that job cre­ation would be a ma­jor pri­or­i­ty giv­en that the rate of un­em­ploy­ment has more than dou­bled be­tween the pe­ri­od 2008 to 2012 with on­ly the pub­lic sec­tor reg­is­ter­ing any form of growth.

The doc­u­ments al­so lists the ac­tiv­i­ties the par­ty plans to im­ple­ment if elect­ed to of­fice in ar­eas of hous­ing, tourism, health and for­eign pol­i­cy.

"The NNP un­der­stands the chal­lenges of re­ces­sion but will not be dis­tract­ed from at­tend­ing to what mat­ters most to Grena­di­ans- a sta­ble job which en­ables us to sup­port our fam­i­lies and achieve our per­son­al goals".

It said it would re­duce un­em­ploy­ment through poli­cies that would stim­u­late pri­vate sec­tor ac­tiv­i­ties, im­prove fis­cal in­cen­tives, re­vi­talise key eco­nom­ic sec­tors and im­ple­ment a gen­uine eco­nom­ic stim­u­lus pro­gramme.

"Grena­da's "New Econ­o­my must pro­vide job op­por­tu­ni­ties for those who wish to work; busi­ness op­por­tu­ni­ties for those who choose to in­vest ; op­por­tu­ni­ty for wealth cre­ation and pros­per­i­ty for those pre­pared to sac­ri­fice and play the rules," the NNP said.

The par­ty said it would al­so seek to re­struc­ture the tax regime to make it more trans­par­ent and eq­ui­table. It said there would al­so be an over­haul of the Val­ue Added Tax (VAT) to im­prove ef­fi­cien­cy and sim­pli­fy its op­er­a­tions.

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