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Dickon Mitchell: IMF statement lacks creative approaches to enhance government’s revenues

Political Leader of the National Democratic Congress (NDC) Dickon Mitchell - legalisation of marijuana can help address the government’s cash flow issues

While the Washington-based International Monetary Fund (IMF) has complimented the Keith Mitchell-led government in St George for its response in limiting the impact of COVID-19, the view has been expressed in some quarters that the brief 1-page statement that followed the IMF’s 6-day meeting with local authorities last week, does not indicate the proposed plans to address the many challenges presented by the ongoing pandemic in going forward.

Headed by Senior Economist, Huidan Lin, a team from the IMF met virtually with local officials from January 6 -12, to discuss recent economic developments, policy priorities raised in 2019, and the 2020 request for disbursement under the rapid credit facility, among other major issues.

According to the IMF statement, while the Grenadian economy is gradually recovering from the pandemic, the main risk to the outlook is a prolonged pandemic, with implications for recovery in the tourism and offshore education sectors.

The statement quoted Senior Economist Lin as saying that “the main risk to the outlook is a prolonged pandemic, with implications for tourism, and students’ return to Saint George’s University (SGU).”

It states that “the ongoing outbreak globally and locally, coupled with a slow vaccination rate with only one-third of the total population, or less than half of the eligible population, having received two doses, due to vaccine hesitancy, could weigh on tourism recovery and students’ return to the SGU campus, tourism and offshore education directly account for one-quarter of the economy,” which “could then require additional government spending, exacerbating fiscal and external imbalances.”

Additionally, the IMF document states that the country’s public debt is estimated to have declined to 68.9% of Gross Domestic Product (GDP) in 2021, from 71.7 percent in 2020, and is expected to continue declining supported by the economic recovery.

There is also brief mention in the report that the government’s “fiscal policy in the near term aims to continue supporting the vulnerable, resilience building and aggregate demand.”

However, newly elected Political Leader of the National Democratic Congress (NDC), Dickon Mitchell, who commented on the contents of the IMF statement during an interview with the host of Grenada’ Broadcasting Network (GBN) To the Point Programme in St. George’s on Tuesday, contended that the IMF report gave “no indication that the government had given thought to where do we go from here in the next 24 to 48 months.”

“And, I think that this is the critical issue that we have to address as a nation,” added Mitchell, who described the IMF’s statement as “a regurgitation” of what it was told by the Government of Grenada.

Related:  IMF praises the Dickon Mitchell-led government for handling of the economy

“In a nutshell, the report in my view says that we are in survival mode…we know we still have significantly unsustainable debt (and) high unemployment. We know that one of our major industries – tourism is going to be continuously affected for the foreseeable future by the COVID-19, and so, the question is where is the government’s resources going to come from, and what are the creative approaches that we will take to try and ensure that the government revenues are enhanced,” he contended.

Dickon Mitchell expressed the view that “the legalisation of marijuana is one of the avenues that we need to pursue to put us in a position that we can address where the government’s revenues are gonna come from.”

He also reiterated the NDC support that it was not just for the decriminalisation but the complete legalisation of marijuana.

Noting that “marijuana doesn’t grow everywhere,” the 44-year-old Congress leader, who is a barrister-at-law by profession, pointed to the “unique opportunity if we have not already lost that, to be creating an industry that has the potential to give us cash, and frankly withstand some of the disruptions that are being posed by an ongoing COVID-19 pandemic, or other medical pandemics.”

“…We are not seizing upon the opportunity,” Dickon Mitchell said, noting that “our colleagues in St. Vincent for example (recently) shipped out their first shipment of marijuana as a cash crop, Jamaica is way advanced, Barbados similarly, and I am saying these are examples that are an arm’s length away, and we are still toying around with the question of simply attempting to decriminalise five (5) marijuana plants or 28 grams of marijuana when in fact we will face significant challenges as a nation as to where our revenues are going to come from to meet all of the challenges that we need to meet in the next 24 to 48 months…,” he said.

“The IMF does not run a country…and at the end of the day, to say that you have a good report from the IMF doesn’t mean anything if you have significant unemployment, persons who are hungry within our country (and) if we have children who are not going to school because they do not have access to the Internet, and tablets” the Congress leader contended.

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