|Letter: Grenada's debt begins|
|Published on October 8, 2013||
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This is the first in a series of three articles where I look at the debt stock of Grenada: (i) how it began; (ii) why we became unable to service the debt; and (iii) what are some possible solutions.
It was President John F Kennedy who said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” Surely, as we debate and examine the calamity of Grenada’s debt situation, at this point the only relevant question is how do we move forward from here? All other questions are absolutely irrelevant from an economic viewpoint.
However, from a historical standpoint one may want to look to the past for answers regarding how did we get here? Any well-meaning neutral, intellectually honest observer would trace this problem to somewhere around the NNP government of Prime Minister Herbert Blaize in the late 1980s.
This would coincide with the point in time where the United States government stopped granting budgetary support to the government of Grenada and the island was forced to commence flogging assets and borrowing money in an effort to maintain its standard of living.
In 1990 the first NDC government rose to power. By the end of its tenure in
1995 the government of Grenada was declared uncreditworthy and bankrupt.
Within five years the island had moved from huge budgetary surpluses to crippling debt obligations.
Indeed, the dissatisfaction of the general public with the handling of the economy by the NDC would play a key role in the NNP coming to office in 1995.
The NNP government of 1995 would embark upon a massive regeneration of the economy using innovative taxation, heavy capital expenditure, new direct foreign investment and people’s empowerment all resulting in tremendous economic growth.
By 2000 the debt stock was $1.2 billion and being serviced comfortably. The recurrent budget was in surplus and the economy had generated savings. The NNP won fifteen seats in the election of late 1999. The nation was happy. NNP was unassailable.
As is normal in any democratic contest, the NNP would lose its infallibility over the following eight years and get booted out of office in 2008. At that point the debt stock was $1.7 billion.
Now this is where the story gets interesting. The NDC would form the government in 2008 with the singular objective of reducing the untenable level of debt stock left by the marauding NNP.
Under the NDC all major capital projects were suspended, wages were frozen, routine road and building maintenance programs would be scrapped and generally the island would be placed in a state of apathy all in the name of the relentless pursuit of debt servicing and reduction.
So wouldn’t it be shocking to discover that by its own admission during the period of the NDC the debt stock of the country grew. The debt stock moved to $2.3 billion or by 35%. This must be a marvel.
Remember the purpose of this article is not to point fingers at which politician or political party contracted the debt or to assess their rationale for so doing.
Indeed, if we were to mathematically distribute the responsibility it would look a bit like this: The old NNP two years, NDC ten years and the new NNP 13 years, a total of 25 years. (There are several reasons why Grenada’s debt stock prior to
1988 is irrelevant to this discussion).
Therefore the question that should be on everyone’s mind at this time is: where do we go from here?
Garvey Louison FCCA
Chartered Certified Accountant
CEO Louison Consulting
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Sir Accountant, we all hear you loud and clear, but how much was the actual debt made in 1980 by Blaize, how much was made by NDC in 1990 and 1995, and how much was the debt after Dr. Keith Mitchel took over? Now you of all people know the correct numbers and of course the only possible solution is that it has to be paid back. One does not borrow money to pay back another debt. It only compounds the problem, so what are you suggesting?
Grenada is sleeping. we need a government o wake up Grenada and Grenadians. it is impossible for a country to make progress, when citizens go to bed from 8:00 pm to 7:00 am. We have to put Grenada to work and stop blaming politicians fro the debts. Grenada is sleeping. we need a government o wake up Grenada and Grenadians. it is impossible for a country to make progress, when citizens go to bed from 8:00 pm to 7:00 am. We have to put Grenada to work and stop blaming politicians fro the debts.
We have to stop “Marcoing” each other private business too. How can we sleep for 11 hours ever day and expect the country to make progress?
The mentality of our people is the problem. Our religious mentality industry is the biggest obstacle.
Garvey, giving us the several reasons why Grenada's DEBT STOCK prior to 1988 are IRRELEVANT would be quite helpful to the discussion and readers' enlightenment. An incomplete analysis tends to be essentially flawed and pragmatically deficient. LET US ALL HAVE THE REAL ROOTS OF THE PROBLEM, and the full genesis of the parlous national financial situation today.
Were you, incidentally, fearful of treading on some highly dangerous and very sensitive toes?
Are the noses of political idols and ideological sacred cows so extremely sacrosanct to you?
IF you step forward to tell CNN readership the story of Grenada's current DEBT, then BY ALL MEANS tell us the full tale - - - the whole hog, Citizen Louison.
Le Grenade, peyi nous tout!