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- Category: Week ending Oct 08th, 2011
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OFFICIAL RESPONSE BY THE NEW NATIONAL PARTY TO THE ADDRESS DELIVERED BY THE HON. PRIME MINISTER AT HIS TOWNHALL MEETING ON SEPTEMBER 8TH, 2011 (Delivered by Sen. Anthony Boatswain)
Fellow Grenadians,
I greet you in the name of our Political Leader, our National Executive, and Members of our Party. As the Official Opposition spokesperson on Finance and the Economy I have been asked by the Executive of my Party to respond to the address delivered by the Hon. Prime Minister at his Town Hall meeting held on the 8th of September 2011 at the Trade center.
Many of you might be asking why we did not respond sooner.
There are two reasons:
First, there was a need to build consensus among our members as to whether a response was indeed necessary, given the lack of dept and substance in the Prime Minister’s presentation. Secondly, having decided that we would respond, we felt it was necessary to solicit the views and comments of as wide a cross section of society as possible so that our response would be reflective of the collective wisdom of the Grenadian people.
Overview of Prime Minister’s Presentation.
We observe that the Prime Minister made his presentation on the same day and about the same time that the United States President Barak Obama was addressing a joint sitting of the United States Congress. If this move was intended to draw a parallel between the Tillman Thomas Administration and the Obama Administration, then it was indeed a very poor comparison.
Prime Minister Tillman Thomas is no Barak Obama. Barak Obama preaches inclusiveness, and appeals to a higher national consciousness; Tillman Thomas on the other hand preaches exclusiveness and appeals to a baser political instinct.
Mistruths and Misconceptions
Before I go into the substantive issues arising out of the Prime Minister’s presentation I believe it is necessary to clear up some mistruths and misconceptions in the Prime Minister’s address.
The Prime Minister began his Town Hall address by informing the nation that it has come and I quote: “on the heels of a successful carnival season”. We would like to know what yardstick was used by the Prime Minister and his Administration to measure this “success.” It seems that our Prime Minister was not aware that many calypsonians and mass band leaders had not yet receive payment for their performances at the time when he delivered his address.
The Prime Minister then went on to list some of the major achievements of his Administration over the past three years. In our opinion, there was nothing new for the Prime minister to report about, just a repetition of what was said several times before. One of the achievements or successes that the Prime Minister reminded us about was the so-called Free School Book Program. Once again we would like to know the criteria used by this Administration to measure the success of this program.
For example, although there were some outstanding individual performances in the recent CXC Examinations, overall, there was a reduction in the pass rate. Although no one single factor can be identified as being responsible, it is observed that children from vulnerable and disadvantaged households are usually at the lower end of the scale. Maybe this is an appropriate signal to government to refocus its educational assistance program to this targeted group.
A noted Caribbean Economist and former Caribbean Development Bank Vice President, Mr. Marius St. Rose, on a recent visit to Grenada strongly opposed the use of scarce government resources to finance school books for children of parents who can afford to buy their books. This view, as expressed by Mr. Marius St. Rose, is consistent with the policy stance of the New National party. We, therefore, do not regard the free school book program in its present format as a success story.
On the economic front, the Prime Minister informed us that there was positive growth in the economy for the last three quarters. We challenge the Prime Minister to identify the economic sectors that have contributed to this growth, and the time period for comparison. In any event, when you are at the bottom, any movement can only be upward. The Prime Minister also informed the nation that his Administration has stabilized the economy. We strongly disagree. This statement is both false and misleading.
We wish to advise the Prime Minister and his Economic Advisors that a mere reduction in the negative rate of growth, cannot create a stabilized economy. Economic stabilization cannot be achieved when there is deterioration in both internal and external macro-economic balances such as:a widening of the fiscal gap; increasing Debt to GDP ratio; rising unemployment; rising prices and a widening trade deficit.
As the Minister of Finance himself admitted, our economy is still in the intensive care unit.
The Economic Plan
In our opinion, the centerpiece of the Prime Minister’s presentation was the unveiling of his government’s Economic Plan for the next two years. It is quite perplexing indeed that this Administration would consider it necessary to present an Economic Plan as it approaches the end of its term in Office. Conventional wisdom dictates that a serious government would present its Economic Plan at the beginning of its term in Office, not at the end.
This “back to front” approach to economic management gives support to the popular view that NDC is more preoccupied with planning to win elections rather than planning to govern the country.
We of the New National Party do welcome any genuine initiative by this Administration that is designed to alleviate the economic hardship being experienced by the Grenadian people at this time. However, we must admit that the presentation by the Hon. Prime Minister fell far short of satisfying even the basic needs and aspirations of our people. In short, the majority of Grenadians were disappointed.
The major socio-economic problems confronting our people at this time have been identified as (1) high levels of unemployment (2) negative growth in the economy and (3) high cost of living. Over the last three years, unemployment has increased from about 25 percent to about 39 percent of the labour force. During that period, Grenadians have not only lost jobs, but also they lost hope. Some unemployed workers have lost their families, their homes and other possessions. During that same period our economy experienced three consecutive years of negative growth. The annual average rate of price increase was in excess of 6 percent,the highest in the Eastern Caribbean Currency Unit (EECU).
Today, there are more people living in poverty than at any other time in our history. A recent opinion poll revealed that more than 70 percent of Grenadians consider themselves worse off today than they were over three years ago.
Against this very bleak economic background, many Grenadians who remained glued to their radio or television set, or who followed the Town Hall presentation via the internet, were high in expectation that the Prime Minister was going to reveal a package of relief measures to create immediate and long-term jobs; stimulate economic activity in the private sector; and curb rising prices. This was not to be. Instead, what we got from the Prime Minister was basically a repeat of the 2011 budget presentation, or as others have said, an early presentation of the 2012 budget with the same empty promises, false hope and unrealistic expectations.
Some in our society even expressed the view that the Town Hall meeting was the official launch of the NDC’s 2013 re-election campaign.
Old Projects Revisited
The Prime Minister, in his presentation, listed a number of projects in the public sector that are likely to come on stream within the next two years. Careful examination, however, would reveal that many of these projects, such as the Grenville Market Square, the Agriculture Feeder Roads and Stadium Rehabilitation are not new, and should have been implemented a long time ago. It is our stated view that if these projects were implemented on a timely basis, our economy would not be in the terrible state that it is in right now.
Were these projects deliberately delayed to coincide with the NDC’s re-election campaign? This is a question some people are asking.
Impact Analysis
The Prime Minister also informed the nation that the projects identified have an estimated cost of $268m; would create 1000 temporary jobs and a few hundred permanent jobs. This is a far cry from the 15000 temporary jobs and the 1500 permanent jobs that the Minister for finance promised the nation in his 2011 budget presentation.
With over 16000 persons out of work , we doubt very much whether the creation of only 1000 temporary jobs and a few hundred permanent jobs would make a significant dent on the present unemployment situation. The employment impact is further minimized, when we take into consideration the fact that many of these projects will not come on stream within the next 12 to 18 months. In local parlance we would say, and I quote: “while the grass is growing the horse is starving.”
Our people need jobs now! As a matter of fact job creation should have been at the top of this Administration’s agenda on taking Office in July 2008. Given the present situation, it is estimated that it would require sustained capital investment of approximately $500m a year over the next five years to achieve sustained economic growth of 4 percent to 5 percent, and reduce unemployment to a range of 10 percent to 15 percent.
Omitted Projects
It is rather interesting that the Prime Minister made no mention of the US$85m St. Patrick’s Port and yacht marina project, although he had given the people of St. Patrick’s the assurance that his government was committed to the project.
Also no mention was made of the proposed multimillion dollar hotel project to be funded by the ExIm Bank of China. Are these projects no longer part of the government’s economic development agenda for the next two years? We need answers.
The Athletics Stadium
We of the New National Party welcome the announcement by the Prime Minister that his government will rebuild the Athletics Stadium. However, we are extremely disappointed that this administration did not have the VISION to undertake this project before, in anticipation of the tremendous achievements of our national athletes in the likes of Kirani James, Rondell Bartholomew, Jenell Redhead and Genard Paul, and many others.
The question that we must ask our Prime Minister is this:
If Kirani James did not win a gold medal at the IAAF World Championship Games, would his government still be committed to the rebuilding of the Athletics Stadium?
We ask this question in light of the position previously taken by the NDC Government on the stadium issue. We recall the Minister of Sports making reference to the rebuilding of the Athletics stadium as a “mistake” that the NNP Administration was about to make, and he was thankful for July 8th 2008 to put a stop to it..LISTEN HERE.
We also recall the Minister of Finance making the unwise statement to the effect that if he had the resources he would rather use it to build a hotel or build houses for our people, rather than invest in a stadium. It is therefore rather short sighted and hypocritical of this Administration to reallocate resources previously earmarked for low income housing for the poor, to build the Athletics stadium. All that was required of this Administration, was to kindly request of the Chinese Government that they honor the commitment given to the previous NNP Administration to rebuild the Athletics Stadium. With proper and effective negotiations, this Administration could have succeeded in having the much-needed 2000 housing units as well as a refurbished athletics stadium.
Impact on the Public Debt.
When the NDC was in opposition, the NNP was heavily criticized for increasing the size of the public debt. However, over the last three years we have experienced an annual average increase in the public debt that exceeded the annual average increase under the NNP.
The $268m investment package announced by the Prime Minister would further increase the debt stock from approximately $1.8billion to about $2.1billion. At the last sitting of Parliament this Administration, using its majority in the Parliament, received approval to borrow in excess of $115m from various sources to finance recurrent and capital projects.
Listed among its borrowings was a loan of 3.2m SDR’s (approximately EC$13m) from the International Development Association to finance social safety nets with particular emphasis on increasing public assistance allowance, probably to make good its election promise to increase public assistance allowance to $400.
This is quite unusual as such transfers are normally financed from current revenues and not external loans.
Two important questions must be answered:
1. How will this increase in public assistance allowance be sustained after the loan funds are exhausted?
2. How will this money be paid back,and from what source?
The $268m investment program announced by the Prime Minister would require local counterpart financing of approximately $26 to $30 million. With government finances in the terrible state that it is in, the question to be asked is: where is the counterpart financing coming from?
Similarly, we have noted that this administration has increased its allocation for youth development from $4m to $12m for this year, at a time when there is no improvement in its fiscal operations. We are indeed happy for this short-term training opportunity for our young people who are, no doubt, very frustrated.
The question that must be answered, however is : where will these young people obtain sustainable employment after their training program is over? The Prime Minister’s presentation has generated more questions than answers.
The Private Sector Omitted
In our economy, the private sector is still regarded as the engine of economic growth.
Economic stimulation and job creation therefore, should require a collaborative approach between the public and private sector. This relationship was certainly not articulated or even encouraged in the Prime Minister’s presentation.
For example, there was no mention of any tax breaks, or new incentive measures to stimulate economic activity in the critical areas of Tourism, Small Business Development, Agriculture and Construction. No mention of any constructive engagement with local and foreign investors to get stalled investment projects moving again. The Prime Minister was silent on major private sector initiatives like the St. George’s Renaissance project, the Grand Beach project, the Carriacou Free Port project, among others.
Nothing was said by our Prime Minister to give hope and restore the shattered confidence of hundreds of Grenadians who lost millions of dollars in the Clico/Baico/CapBank/ SGL fiasco.
This is of concern because CONFIDENCE is what drive economic activity.
Energy
On a more positive note, we welcome the announcement by the Prime Minister that his government will be embarking on a number of initiatives geared towards diversifying our energy base as well as lowering the cost of energy. However, we must caution against inflated expectations and the instant gratification syndrome. This will not be an overnight affair. While on this issue of energy, the Grenadian people are anxiously awaiting the receipt of tangible benefits from the signing of the Boundary Delimitation Treaty with Trinidad and Tobago, as promised by our Commissioners.
It is rather interesting to note that while our Minister of Finance is still talking about a collaborative approach with Trinidad and Tobago on the issue of seismic surveys to determine whether there is oil and gas, Trinidad and Tobago is already drilling for oil and gas and maybe even tapping into our reserves. Grenada has lost out big time!
We support the decision of this government to roll back the price of the 20lb cylinder of cooking gas to under $50.00. However, it must be recalled that this decision was taken after early resistance from the Minister for Finance, and repeated calls from the New National Party, to do so.
St. George’s University
We commend the government on its decision to continue to build on the solid foundation and the good relationship that was established by the previous NNP Administration of Dr. Keith Mitchell on the one hand, and the St. George’s University on the other. We welcome the idea of a teaching hospital and other projects that are likely to redound to our overall benefit.
We should not forget however, the contribution made by the late Sir Eric Matthew Gairy who had the vision to grant a Charter to the then Medical School to establish operations here in Grenada, against tremendous odds. Thirty-five years later, the St. George’s University is now the main contributor to our Gross Domestic Product.
Conclusion
Earlier in the year at our General Council, I warned the Grenadian people to look out for the NDC gravy train. LISTEN HERE. By all indications that gravy train has left the station, loaded with goodies earmarked for a vulnerable and unsuspecting public.
For three long years this NDC Administration did very little or nothing to ease the economic burden on the backs of the Grenadian people. Cries fell on deaf ears. The NDC used as an excuse for its non-performance, the effects of the global recession, high public debt and an empty treasury inherited from the NNP.
We in the New National Party certainly knew very well that those were mere smoke screens created by the NDC to disguise their more sinister motives. As far as we are aware, the global recession is still on; the public debt is higher today than it has ever been; and the treasury is even more “empty” now than before. Yet, this Administration is in a mad rush to implement all kinds of projects and do everything under the sun.
The question everyone is asking: why now? Has the NDC now awaken from its long slumber?
Where is the fiscal prudence that our Minister of Finance so liked to talk about in the past?
Is our Minister of Finance no longer interested in receiving accolades from the IMF for good fiscal management?
This strategy being pursued by the NDC, smacks of political opportunism of the cheapest kind. It is quite clear that the NDC is prepared to sacrifice the economic future of our people on the altar of political expediency.
If this country is to grow and prosper, we have to put country before party. The good and welfare of our nation MUST take precedence over selfish political interest.
History will not be kind to those who attempt to do otherwise.
May God bless our nation. I thank you.
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