Commentary

The Formula of One Mathematician

During the NDC’s term of 1990-1995, Grenada embarked on its only successful structural adjustment program, which was totally homegrown. That effort was led by then Finance Minister George Brizan and his technical team that included Hon. Anthony Boatswain and Richard Duncan. Under that program, Grenada moved from being debt ridden and on the black list to having AAA credit rating in 1995.

Keith Mitchell, on assuming office in June 1995, immediately set about squandering the gains of the program. He went on a spending spree, dishing out sovereign guarantees to crooked, pseudo investors like E.J. Miller and Viktor Koseny; and to dubious ventures like the Garden Group Ltd and the ill-fated chicken farm in Victoria.

Soon, Grenada’s national debt ballooned from $372 million in 1995 to $2 billion in 2008 when NDC assumed office. Painfully, our people had nothing sustainable to show for this.

In the midst of the worst global economic crisis since the great depression of 1929, the new NDC administration in 2008 inherited a depressed and highly indebted economy. Despite the propaganda spewed by Mitchell and his surrogates, the NDC under Tillman Thomas was able to stabilise the economy and manage our debt servicing to the extent that on 20th September 2011, Finance Minister Nazim Burke signed agreements with the World Bank under which Grenada received funding for its single largest project approval ever.

Over $70 million was received, and allocated to infrastructure and rehabilitative projects including: The Lance and Hubble bridges, Holy Cross & St. Patrick’s Anglican schools, the Hills View & Cadrona Homes for the aged, Sendall’s Tunnel and River Road rock fall mitigation. Over $13 million was spent on social safety net programs, like public assistance for the elderly and transportation for students. Almost $8 million was allocated to the energy sector.

For all his empty boasts, Mitchell has not been able to attract this kind of trust and confidence from outside lenders and donors. In fact, in every budget presentation since 2013, the figures show that actual revenues from grants have fallen way below estimates.

Government’s reaction to this failure has been to raise revenue by over taxation. Mitchell at one time said that a government whose main source of revenue is taxation is following a “stupid philosophy”. This is exactly what he is doing, because between 2013 and 2017, there were 32 new and increased taxes, duties and fees and no sustainable productive initiatives.

Just as we thought we were going to be relieved from the austerity measures, we are now faced with higher property taxes, higher cost for passports, higher NIS contributions and soon, higher VAT. At the same time, salaries have not moved in years. The result is that people’s spending power is significantly constricted.

Meanwhile, Mitchell continues to skew the figures to give false impressions. The latest report of the Fiscal Responsibility Oversight Committee clearly exposes this fact. When stating the national debt, he deliberately omits debts of state-owned entities. When stating the overall surplus, he deliberately omits monies paid as interest on loans.

If the figures are honestly presented and analysed, they will show that we are performing worse each year.

The figures show that between January and June 2019, the Customs Department collected $2 million less than it did for the same period last year and Inland Revenue Department collected $3.1 million dollars less in the same period. At the same time, the amount received in grants was $56 million less than expected. These statistics confirm that it is indeed a stupid philosophy to rely on taxes as the main source of revenue, yet, there is no indication that government intends to do anything to boost real production and spur economic activity in the country.

Another boast of government is reduction in expenditure. That means government is spending less. Between January and June 2019, expenditure was recorded at $69.5 million less than budgeted.
If our economic situation is as healthy as government claims, how come then, there is much deficiencies and hardship in the areas of education, healthcare, workers’ emoluments and infrastructure? The answer lies in the reduced spending.

The evidence is clear, that Mitchell is prepared to spend less and sacrifice the wellbeing of the people in order to boast of favourable figures and to build his election war chest with our money. Our roads are in a deplorable state with the Inland Revenue Department collecting duties from the importation of tyres and spare parts (more pressure). The healthcare sector is in free fall with an exodus of nurses and doctors; while expired medicine is being administered to patients at our hospitals.

Schools like Bishop’s College, both of the TAMCC campuses, the St. David’s Catholic Secondary School and many others are in abject disrepair. Others, like the GBSS lack decent furniture for students. The free school books program is now destroyed, while parents are asked to pay school fees at the beginning of each school term.

All of the above conditions exist while government boasts the brazen lie, even in the Throne speech, that Grenada has the fastest growing economy in the region.

The truth is that this Mitchell government is inept. To mask this ineptitude, they are prepared to cook the figures, mislead and sacrifice the wellbeing of the nation by refusing to spend in critical areas. The Grenadian people are already onto them. Their time is up with the tomfoolery.

(The above was submitted by the main opposition National Democratic Congress)

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