Int’l community to help Grenada restructure its debt

By Linda Straker

Prime Minister Dr. Keith Mitchell says that the international community is willing to assist Grenada with restructuring its debt and providing external financial support, but the country will have to show that it is willing to make its own sacrifices.

“We expect significant reduction in our debt size and debt programme, we expect to see reduction through a haircut, we expect to see the debt move over a long period with a lower interest rate,” Dr. Mitchell said in an interview after meetings with representatives from the International Monetary Fund (IMF) and the OAS last week Friday.

While reiterating that important to all these promised assistance is approving and implementing a “home-grown restructuring programme”, he said that Grenada was promised soft loans and grants which can put the island on a path of “sustain economic activity with ability to meet its challenges to the most vulnerable citizens”.

Upon taking up office following the February 19, 2013 General Elections, Dr. Mitchell, who is also the Minister for Finance, declared that Grenada was unable to pay its creditors and was seeking the assistance of the international community to restructure its debt.

Since then, there have been a number of activities aimed at coming up with a solution to restructuring the debt situation. Among the activities was a visit from a delegation representing the IMF, the Caribbean Development Bank and other donors who met with a number of stakeholders, including the Grenada Trades Union Council and the Business Community.

The Conference of Churches Grenada has also held two workshops aimed at explaining the debt to its stakeholders and at the same time, deciding on recommendations and suggestions to the Government.

These recommendations, which were presented to Economic Affairs Minister, Oliver Joseph, noted however that whatever strategy is decided on should not impact negatively on the vulnerable and marginalised.

Grenada, at present, is unable to receive any external funding, but with the implementation of the home-grown restructuring programme, it is expected that the island will be able to have access to approximately US$300 000. Though a formal announcement outlining the component of the programme is yet to be announced, Prime Minister Mitchell recently indicated that there will be a reduction in income tax threshold from EC$5 000 to EC$3 000.

“Whatever happens, the majority of people will still not be paying taxes because most people are not earning EC$3 000 a month,” Dr. Mitchell told a recent meeting held in the parish of St. John last week.
At present, income tax is 30 per cent on earnings above EC$5 000 per month.