Budget Speech 2011 - Government of Grenada

And Grenada is not alone.
Having regard to the impact of the crisis on the Eastern Caribbean
Currency Union, all countries adopted the Eight Point Stabilization and
Growth Programme to which I have already alluded.
Grenada successfully completed the first review under Extended Credit
Facility in November 2010.
As I have done in my previous Budget Statements, the performance
criteria and structural benchmarks for our arrangement with the Fund are
appended to this Statement.
Why Grenada Must Pay Its Debts?
Mr. Speaker, in recent months some persons in Grenada have been arguing,
with passion and strong emotion, that our decision to continue to pay our
debts during this economic crisis is insensitive. They contend that since
our first responsibility is to feed and provide jobs for our people, then the
monies currently used to repay our debts should be invested in capital
works for the time being, leaving the payment of our debts for a later date
when our economy is doing better.
Despite its intuitive appeal, such an approach would be a recipe for
disaster. Indeed, our political opponents, by whom this dangerous recipe
was concocted, understand this only too well and this is why they have
been peddling it and playing on the emotions of the people.
It is therefore necessary to spend a few minutes explaining why our debt
is so high and why we cannot simply refuse to satisfy our debt obligations
notwithstanding the pressure to increase capital expenditure.
The simple answer to the question why does such a large percentage of our
budget go to debt servicing every year is that:
1. We have borrowed beyond our ability to service the loans;
2. The assumptions/forecasts made as to economic growth were
either unrealistic or put another way, the present economic decline
could not be anticipated;
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2011 Budget Statement