DEBATE NEEDED ON NATIONAL DEBT!
Written by NEW TODAY on January 19, 2018
A lawsuit filed in the local courts last Friday should lead to a healthy debate among the two main political parties on the island – The New National Party (NNP) and the National Democratic Congress (NDC) – on the precarious state of the nation given the massive national debt.
Some persons might choose to slam the lawsuit filed by former President of the Grenada United Labour Party (GULP), Lincoln St. Louis as frivolous and vexatious but the issues raised are relevant to this generation and succeeding ones.
THE NEW TODAY is not about to venture into any speculation as to how the Court might treat with the lawsuit, as it was put together and filed by an individual who is not schooled in law.
However, Mr. St. Louis has opened the door for the public to call for a serious debate between Prime Minister Dr. Keith Mitchell and Nazim Burke as Political Leader of Congress on the millstone around the necks of Grenadians – the $2 billion plus national debt.
The upcoming election campaign should not be allowed to degenerate into which leader can dance and go down low and much better than the other, and which one of them will win a 100 yards race at Queen’s Park to prove physical fitness. The electorate should be spared an assault on their intelligence by “ole talk” about who is dyeing hair to look young and even the dyed hair not hiding those gaps of hair that have already gone from the head.
This newspaper has consistently indicated that the national debt will continue to have serious and significant bearings on the upward mobility of the Grenadian economy for years to come.
It is generally agreed that the debt stock was as a result of non-prudent borrowing by Dr. Mitchell and NNP during the 1995-2008 period when the regime embarked upon a massive borrowing and spending spree on a number of unfortunate projects.
Mr. St. Louis might have been prompted to file the suit given the historical context in which the debt stock should be looked at by the people of Grenada, Carriacou & Petite Martinique.
When the GULP government of Sir Eric Matthew Gairy was overthrown in a 1979 coup d’etat by the left-leaning New Jewel Movement (NJM) of Maurice Bishop, the country was virtually debt free.
The end of leftist rule after four-and-a-half years by Bishop’s People’s Revolutionary Government (PRG) did not do too much damage to Grenada’s national debt. However, it is well documented that the advent of the NNP under Dr. Mitchell’s leadership took a toll on the debt as the emphasis was on winning elections through massive borrowing at high commercial interest rates and spending on very questionable vote-catching projects in key areas of the country.
There is a lot of boasting going on from within the NNP Camp that the latest Structural Adjustment Programme under the supervision of the Washington-based International Monetary Fund (IMF) resulted in massive “haircuts” on the national debt. There are no figures put to the nation to back up this claim as PM Mitchell has consistently refused to give the exact figure of the national debt at this point in time.
Mr. St. Louis alluded to the possibility of Grenada paying more in debt payments over the long haul as the much-talked about haircut came with a rise in interest rate payments. He said the following in reference to the Taiwanese debt: “The fifty percent (50%) haircut was negated by the increase in the rate of interest from two percent (2%) to six percent (6%)”.
There has been no information coming from the corridors of power to refute this kind of assertion. Furthermore, a large portion of Grenada’s debt stock was contracted with commercial institutions at very high interest rates in the region of 9% and not the usual 5% and 6% when borrowed from places like the Caribbean Development Bank (CDB) and Eastern Caribbean Central Bank (ECCB).
A Mitchell/Burke debate or a court battle involving St Louis’ lawsuit should help clear up once and for all whether the haircut given is not being eaten up due to the rise in interest rate payments. The court case is important because the Technocrats in the Ministry of Finance will be called upon to share pertinent information about the national debt and give a true analysis of the debt situation.
THE NEW TODAY is warning Grenadians that when the dancing is over on the campaign platform it does not mean that the problem with the huge national debt will also go away.
This is just a distraction from the real issues that should be up for debate in Campaign 2018.
The NDC should not be afraid of a debate since it was in office for only four-and-a-half years to tackle the island’s national debt while the NNP served for the bulk of the time.
Perhaps, there is a role for the smaller and lesser known political parties to light the national debt fire and keep it burning until a proper and comprehensive national debate takes place on the issue between PM Mitchell and Mr. Burke of Congress.