Categorized | Local, News, Regional

Grenada Prime Minister urges nationals to accept sacrifices in order to rebuild economy

 By Peter Richards
Dr. Keith Mitchell speaking to reporters (CMC Photo)

Dr. Keith Mitchell speaking to reporters (CMC Photo)

ST. JOHN’S, Antigua, CMC – Grenada’s Prime Minister Dr. Keith Mitchell Thursday urged support for a proposal seeking to reduce the debt owed to the National Insurance Scheme under the same terms and conditions being proposed to international creditors.

Mitchell, speaking to reporters here, said that while his administration is fully aware of the important role of the NIS the request for the haircut must be put in the context of the island seeking assistance to deal with its debt burden.

“…we have also understood in the process of going forward with our structural adjustment programme and asking everyone regionally and internationally to help us and provide some haircut that we must in fact ask our own (to do the same)

“The question therefore is how do we go forward. So we will be working with the NIS…and the workers and unions and all concerned to ensure that nothing is done to reduce the capacity of the NIS to meet its fundamental responsibilities,” he said.

The Technical and Allied Workers Union (TAWU) has already said it would not support the government after Communications and Works Minister Gregory Bowen confirmed that the Mitchell administration would seek the haircut as part of debt restructuring initiative.

The amount of money owed to the NIS has not been disclosed but it represents workers’ contributions the government has failed to pay over the years.

“Our union understands the fiscal difficulties faced by the State and the challenges that confront the country but the debt to the National Insurance Scheme (NIS) cannot be equated to the debt to the commercial banks or other financial institutions,” TAWU said in a statement, adding that workers were already making great sacrifices by the payment of increased taxation as family income continues to fall
and the unemployment rate continues to rise.

TAWU described the NIS as “sacred territory” and called on the called on the Grenada Trades Union Council (GTUC) “to resolutely resist all attempts to cut Government indebtedness to the NIS and this must be clearly understood by all”.

However, the business sector representative in the Senate Christopher De Allie believes that government is taking the right approach because it will be unfair to ask international creditors for a haircut and not
local lenders.

“There is need to have equity with all lenders,” De Allie said.

Mitchell told reporters that the decision of the International Monetary Fund (IMF) to approve a US$21.9 million structural adjustment programme for the island last week, would help in the payment of outstanding arrears to many creditors.

The government announced Thursday that the World Bank had already approved US$15 million for Grenada and Mitchell said “this is further evidence of the confidence of the international community in Grenada’s policies, especially as regarding the homegrown programme”.

He said one of the conditions for the funds to Grenada is that “we must pay some of the suppliers of services to our country which over the last two, three years have not been paid so a lot of business in the country have provided services to the government over the past two or three years and have not been paid”.

Mitchell said that some of these businesses have had to use overdraft facilities which are very expensive and “therefore we have to meet our responsibility.

“In doing so that will be a big plus for us because it will release some disposal income in the country as a whole and help businesses and others to take additional initiatives and expand economic opportunities in the country.

“So we will be paying off some of the local debt and some of our regional organisations like the Supreme Court of the OECS, the Caribbean Community (CARICOM) Secretariat, the OECS Secretariat and a number of regional and international institutions that we have reneged on our responsibilities…”

Mitchell, who is attending the annual summit of the CARICOM leaders here, said his administration would also be establishing a number of programmes involving the private sector and the trade union including a housing programme to “’aid the development of house repair programme in the country and soft loans for people to expand their homes.

“In some cases looking at building low income houses for people…and there are many other programmes including small business development,” he told reporters.

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A Moment with the Registrar of Lands

 By Peter Richards
Dr. Keith Mitchell speaking to reporters (CMC Photo)

Dr. Keith Mitchell speaking to reporters (CMC Photo)

ST. JOHN’S, Antigua, CMC – Grenada’s Prime Minister Dr. Keith Mitchell Thursday urged support for a proposal seeking to reduce the debt owed to the National Insurance Scheme under the same terms and conditions being proposed to international creditors.

Mitchell, speaking to reporters here, said that while his administration is fully aware of the important role of the NIS the request for the haircut must be put in the context of the island seeking assistance to deal with its debt burden.

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“…we have also understood in the process of going forward with our structural adjustment programme and asking everyone regionally and internationally to help us and provide some haircut that we must in fact ask our own (to do the same)

“The question therefore is how do we go forward. So we will be working with the NIS…and the workers and unions and all concerned to ensure that nothing is done to reduce the capacity of the NIS to meet its fundamental responsibilities,” he said.

The Technical and Allied Workers Union (TAWU) has already said it would not support the government after Communications and Works Minister Gregory Bowen confirmed that the Mitchell administration would seek the haircut as part of debt restructuring initiative.

The amount of money owed to the NIS has not been disclosed but it represents workers’ contributions the government has failed to pay over the years.

“Our union understands the fiscal difficulties faced by the State and the challenges that confront the country but the debt to the National Insurance Scheme (NIS) cannot be equated to the debt to the commercial banks or other financial institutions,” TAWU said in a statement, adding that workers were already making great sacrifices by the payment of increased taxation as family income continues to fall
and the unemployment rate continues to rise.

TAWU described the NIS as “sacred territory” and called on the called on the Grenada Trades Union Council (GTUC) “to resolutely resist all attempts to cut Government indebtedness to the NIS and this must be clearly understood by all”.

However, the business sector representative in the Senate Christopher De Allie believes that government is taking the right approach because it will be unfair to ask international creditors for a haircut and not
local lenders.

“There is need to have equity with all lenders,” De Allie said.

Mitchell told reporters that the decision of the International Monetary Fund (IMF) to approve a US$21.9 million structural adjustment programme for the island last week, would help in the payment of outstanding arrears to many creditors.

The government announced Thursday that the World Bank had already approved US$15 million for Grenada and Mitchell said “this is further evidence of the confidence of the international community in Grenada’s policies, especially as regarding the homegrown programme”.

He said one of the conditions for the funds to Grenada is that “we must pay some of the suppliers of services to our country which over the last two, three years have not been paid so a lot of business in the country have provided services to the government over the past two or three years and have not been paid”.

Mitchell said that some of these businesses have had to use overdraft facilities which are very expensive and “therefore we have to meet our responsibility.

“In doing so that will be a big plus for us because it will release some disposal income in the country as a whole and help businesses and others to take additional initiatives and expand economic opportunities in the country.

“So we will be paying off some of the local debt and some of our regional organisations like the Supreme Court of the OECS, the Caribbean Community (CARICOM) Secretariat, the OECS Secretariat and a number of regional and international institutions that we have reneged on our responsibilities…”

Mitchell, who is attending the annual summit of the CARICOM leaders here, said his administration would also be establishing a number of programmes involving the private sector and the trade union including a housing programme to “’aid the development of house repair programme in the country and soft loans for people to expand their homes.

“In some cases looking at building low income houses for people…and there are many other programmes including small business development,” he told reporters.