Opposition leader, and former Prime Minister, Dr. Keith Mitchell has dismissed as nonsense the notion that the longstanding unpaid debt to Libya had hindered the country’s ability to access money from international funding agencies.
“I note the announcement of the payment of the debt to Libya and the notion that this has affected Grenada’s ability to access funding. Nonsense, this is absolutely false,” Dr. Mitchell informed the Lower House as he addressed the issue during his contribution to the 2023 Budget debate.
The ruling Congress regime recently announced that it had successfully negotiated the settlement of US $5 million in long-standing debt arrears owed to Libya, which was contracted in the 1980s by the People’s Revolutionary Government (PRG).
New Economic Development Minister Lennox Andrew signed the debt settlement agreement in October when he attended the 2022 annual International Monetary Fund (IMF) meetings in Washington, D.C. on behalf of the Minister of Finance.
Foreign Affairs Minister Joseph Andall previously told reporters that longstanding debts to Libya, Algeria, and Trinidad and Tobago have adversely affected Grenada’s credit rating, putting the country in the category of “Selective Default or “SD.”
However, the Opposition leader contended that “this thing about money that we owed to Libya (blocking access to funding) that’s the greatest laugh you can get” because the government has acknowledged meeting “a lot of money in the treasury” when it took office in June.
“It was said by the present Minister of Finance, and Prime Minister, that he met a lot of money in the treasury,” Dr. Mitchell reminded the House, arguing that “it’s because we (the former New National Party administration) were given support because we performed well, and we did what we had to do.”
“So, what happened, they were giving us money under pretenses, is that what the Minister of Finance and Prime Minister want us to believe? The former Prime Minister contended.
Explaining why his former New National Party (NNP) administration had not moved to pay the debt, Dr. Mitchell told the Lower House that “there are three (3) fractions of governments in Libya to date, and we were being advised that you don’t know who to pay…”
He said that “the governments of Trinidad and Tobago, Libya and Algeria were very understanding,” and that the International Monetary Fund (IMF), which was at the time overseeing the Structural Adjustment Programme (SAP) , was satisfied with the rationale.
“They (the IMF) understood, and we worked with them,” explained the Opposition Leader, who used the opportunity to recall “in the early 1990s, the then “NDC government had to impose some form of structural adjustment to address the challenges that they faced in Grenada, which was further aggravated by the collapse in oil prices in 1991.”
This, he said resulted in “people from the lower, economic strata like the estate workers lost their jobs, social programs were cut, and the marginalised those between the have and the have nots,” and that “this situation manifested itself again with the world financial crisis in 2008 under the NDC administration, and in 2011 they could not pay salaries, or buy essentials to keep the government running, and no one would give the government a loan.”
“The overdraft was exceeding, and the administration resorted to selling assets to pay salaries and other current expenditures, ” added Dr. Mitchell, who expressed concern over the trend observed in past NDC administrations.
“…I see in the (2023 Budget) document one way of financing government recurrent expenditure is the sale of assets. I am waiting, I am waiting…” I will hear about this government, stated Dr. Mitchell.
Shortly after making his Parliament debut in September, Prime Minister Dickon Mitchell announced plans to implement strategic measures to reduce or cease borrowing unless necessary, and to grow the economy through investments in areas and sectors that can spur economic growth.
At the end of June 2022, Grenada’s public debt stood at $2.1 billion, which represents 66.2% of the country’s Gross Domestic Product (GDP).