Politics
Grenada to sign letter of intent with IMF by the end of the month
St. Georges - Capital of Grenada
Grenada’s Economic Affairs Minister, Oliver Joseph, advised that the Grenada government will sign the Letter of Intent to implement the International Monetary Fund (IMF) backed home grown structural adjustment program by the end of February even if trade unions fail to reach an agreement with regards to a three year wage freeze. He went on to say, “We are still trying to get an agreement with the union, a consensus for in best interest of all.”
The Technical and Allied Workers Union (TAWU) and the Public Workers Union (PWU), two of the unions that represent government workers are schedule to meet with their membership this week to discuss the matter. Joseph also said that while the Dr. Keith Mitchell government has given the assurance there would be no job losses as a result of retrenchment once the program goes into effect, the promise could be fulfilled only if the unions agree to the wage freeze.
“If the government was to go ahead and sign without an assurance from the union that there will be no increase in salaries for the period of the three year program which commence officially as of January 1, 2014, then government will have to use the option of retrenching workers in order to reduce on Government monthly wage bill,” he said during Tuesday’s post Cabinet news conference.
The Education Minister, Anthony Boatswain, agreed saying, “This is not a threat…we are not coercing anyone, what we are expressing is real facts.” Boatswain also explained that if government don’t go through with the structural adjustment program there would be some uneasiness with regards to the social and economic development of Grenada.
“If we don’t go through with the programme it will be total chaos. We will have a country to run with no money,” he added while explaining that once the letter of intent is signed with the IMF, the government will receive grants and other financial and technical support from institutions such as the Caribbean Development Bank, European Union and World Bank.”
Pleading for all the relevant stakeholders to join in the efforts to address the island’s fiscal situation, Boatswain, a former finance minister, said that there was need for everyone to contribution towards solving the problem. He stated, “This is a national issue, it’s not a polarize issue, it’s not a yellow or Green issue, its national issue that needs national attention.”
Last week, President of the Grenada Trades Union Congress (TUC), Madonna Harford, raised issues with the manner in which the government was going ahead with the strategy. She said, “If your are freezing salaries for three years, the public worker above EC$3,000 (One EC Dollar = US$0.37 cents) would have to pay income tax. So with no increase in income tax, then you have increases in user fees, properties etc, so in the long run the public sector worker would be at a serious disadvantage.”
However, Harford admitted that while Grenada was not isolated from the impact of the global economic and financial crisis, “the fact remains that somehow…decisions that would have not been very good or wise decisions coming back to haunt us right now.”
Late last year, Prime Minister Mitchell told nationals that while the international community was willing to restructure the island’s debt, the country would have to make sacrifices. Mitchell, whose New National Party (NNP) came into office in February last year, said 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 several activities aimed at finding a solution to restructuring the debt that is estimated at more than two billion EC dollars (One EC Dollar = US$0.37 cents). The government has also appointed the London-based White Oak Advisory, which describes itself as an independent financial advisory firm providing specialist, high-level and impartial advice to governments and other clients on matters relating to sovereign finances and sovereign debt, to advise it.
Source: Caribbean360