You are here
What does Grenada whitewash mean? (with CNC3 video)
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.
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.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff. Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Please help us keep out site clean from inappropriate comments by using the flag option.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments. Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.