Grenada’s church leaders warn against IMF

Church leaders have urged the Grenada government to resist any attempt by the International Monetary Fund (IMF) to increases taxes and cut social services as the island grapples with attempts at turning around a sluggish economy.

The Conference of Churches Grenada in a statement said that it is deeply concerned about the prevailing socio-economic situation in the country and any attempt to impose additional taxes on the Grenadian population should be resisted. Officials from the Washington-based financial institution are here conducting an assessment of the economic situation in Grenada and the religious leaders reminded the Keith Mitchell administration that many people were finding it extremely difficult to “make ends meet”.

The religious group said in addition that there were a number of people, including those with academic qualifications, who have not been able to find employment and that the social problems here have reached alarming proportions. “It is against this background that we strongly urge our government to resist any pressure to increase taxes or to make further cuts to social, medical or educational services. Revenue can be increased by ensuring that existing taxes are not evaded and that all taxes, especially VAT (Value Added Tax), are efficiently collected from all who are liable,” the religious group said.

The Conferences of Churches Grenada said that it is supportive of the efforts to create jobs and to find sources of investment funding that can be channelled into productive projects. “We are convinced that further austerity measures are not the way out of Grenada’s debt crisis. We strongly support the Government of Grenada in its resistance against austerity and we are actively mobilising support internationally towards this end,” said the statement. The religious group urged the Mitchell administration to give “serious consideration” to the nine points in the document “A Jubilee for Grenada Now” that came out of a workshop on debt held here in May.

The document prepared by the staff of the IMF argues that to reach a sustainable level of debt Grenada would need to reduce 90 per cent of its present debt. “We support the government’s efforts to achieve this and we again emphasise the point that any reduction in debt must go towards the socio-economic development of our country with a preferential option for the poor,” the church leaders said.

In July, Prime Minister Mitchell presented Parliament with an EC$711 million (One EC dollar = US$0.37 cent) budget outlining a series of measures he hopes would stimulate a sluggish economy. Mitchell said that the government would move to cut expenditure and that the new economy requires that it puts its fiscal house in order including cutting more than EC$60 million from the recurrent budget this year.

Mitchell said that effective immediately, his administration would implement a freeze on net hiring, saving approximately EC$8 million and that a major challenge would be to manage the payroll, which accounts for 65 per cent of government expenditure.

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