New Internationalist

Country Profile - Grenada

November 2012

Zoe Leigh Smith reports on the tiny Caribbean island’s strangling debt burden.

Touching down at Grenada’s international airport, few visitors to the tiny Caribbean island may be aware that the 900-metre runway on which they have landed played a central role in one of the country’s bloodiest episodes. In 1983, US President Ronald Reagan sent thousands of US troops to ‘liberate’ the island, claiming that the Cubans were constructing an airbase.

Photographs by Zoe and Gabrielle Smith
Carnival revellers celebrate, St Georges Photographs by Zoe and Gabrielle Smith

Grenada’s insistence that it was building a commercial airport (with Cuban help), and not a hub for shipping arms to Marxist insurgents across Latin America, failed to prevent the invasion. Over 280 people were killed, including Grenada’s charismatic young leftist leader, Maurice Bishop, shot by firing squad along with many of his ministers. The last of those jailed for the murders were released from prison in 2009 but the country’s revolutionary past remains very much part of its present – the airport is now named after the slain leader.

Revolutions and invasions aside, many Grenadians believe theirs to be an island blessed by God. Such beliefs were shaken when the island was struck by two ferocious tropical storms – Ivan in 2004 and Emily in 2005. The hurricanes damaged 95 per cent of the buildings and destroyed the equivalent of two-and-a-half times the country’s annual GDP. The call of then Prime Minister Keith Mitchell was for the country to ‘build back better’ and today the freshly tarmacked roads, sturdy new jetties and massive national stadium seem to testify to the success of the reconstruction project.

Photographs by Zoe and Gabrielle Smith
Paradise Beach, Carriacou Photographs by Zoe and Gabrielle Smith

Yet high up in the mountains amid the country’s rainforests a more complex story is revealed. The trees are no longer in their post-hurricane state – stripped bare of fruits, bark and leaves – but what on first glance seem to be green shoots of recovery are in fact thick blankets of ivy that are slowly choking the regrowth. It could be seen as a metaphor for the country as a whole. Grenada seems to be back on its feet but more damaging than any storm has been a rising debt burden that is strangling its prospects of economic improvement.

Between 2003 and 2008 Grenada’s average growth rate was one of the highest in the region. The island’s construction boom saw a wealth of projects funded by foreign finance enrich a newly emerging middle class. Yet when, in early 2012, the International Monetary Fund placed Grenada on a list of 12 states at high risk of debt default – alongside the likes of Haiti, Tajikistan and DR Congo – many wondered what had gone wrong in this middle-income country.

Much of the trouble centred on a loan dispute. In the aftermath of the hurricanes, tempted by lucrative offers from the Chinese, Grenada abruptly severed its diplomatic ties with Taiwan. In response the Taiwanese recalled a series of bilateral loans dating from between 1989 and 2001. When a US court ruled in 2011 that Taiwan’s Development Bank could receive payments owed to Grenada by airlines and cruise ship companies into an escrow account controlled by Taipei, it posed a lethal blow to an island hugely dependent on tourism.

The affair underlines how vulnerable the country remains to external factors. As it struggles to supplement foreign loans with economic strategies that can stimulate internally driven development, it slips deeper into debt. The implications for the average Grenadian are that poverty, especially in rural areas, remains a stubborn blight that successive governments have failed to erase.

As Grenada approaches the 30th anniversary of the US invasion, Maurice Bishop’s warning to shun the ‘easy approach’ of aid and foreign assistance in favour of self-reliance and self-sufficiency seems less like revolutionary talk and more like common sense.

Country Profile - Grenada Fact File
Leader Prime Minister Tillman Thomas
Economy GNI per capita $5,560 (Trinidad & Tobago $15,380, UK $38,540).
Monetary unit East Caribbean dollar.
Main exports Nutmeg, bananas, cocoa. Grenada is more than ever dependent on tourism since the devastation wreaked upon its agriculture by the two hurricanes. Yet tourism has itself been heavily hit by the economic downturn in the rich world.
People 104,000. Population growth rate 0.4% pa. People per sq km 306 (UK 253).
Health Infant mortality 9 per 1,000 live births (Trinidad & Tobago 24, UK 5). Decent drinking water, sanitation and infant immunization are all almost universal.
Environment CO2 emissions per capita 2.4 tonnes pa (UK 8.5). In 2009 Grenada made a name for itself at the Copenhagen conference when, on behalf of the Association of Small Island States, it made an impassioned plea for action to combat climate change. The country is slowly beginning to put its rhetoric into practice and has brought in Nobel Prize winner Mohan Munasinghe to develop methodologies for mainstreaming environmentally progressive policies.
Culture The vast majority of Grenadians are descended from African slaves brought to the island by the British (and before that, in the mid-18th century, by the French). There are small South Asian and European minorities.
Religion Largely Christian, with rather more Catholics than Protestants.
Language English is the official and dominant language, though there are local patois derived from English and French.
Human development index 0.748, 67th in the world (Trinidad & Tobago 0.760, UK 0.863).
Last profiled link August 2002
Country Profile - Grenada ratings in detail
Income distribution
Grenada is a middle-income country yet 38% of its inhabitants live below the national poverty line, with wealth concentrated in the hands of the urban élite.
Previously reviewed
Life expectancy
76 years. Grenadians are living longer but there are rising rates of heart disease, diabetes and obesity that disproportionately affect the poor.
Previously reviewed
96%. The country has successfully achieved the MDG of universal primary education. However, 85% of tertiary educated students leave the island, creating an effective ‘brain drain’.
Previously reviewed
Position of women
Grenada made progress in 2011 with the implementation of the Domestic Violence Act but gender-based violence, inequality and discrimination remain significant problems.
Previously reviewed
Freedom of speech, press, worship, movement and association are safeguarded in the constitution. But there have been persistent allegations of corruption and prisons are overcrowded.
Previously reviewed
Sexual minorities
Consensual male same-sex sexual activity is criminalized under current legislation, and punishable by up to 10 years’ imprisonment. LGBT individuals are subject to stigma and discrimination.
NI Assessment (Politics)
Despite a global recession, the Tillman government has delivered foreign investment and agricultural output has improved. Yet its manifesto pledge of ‘Making Grenada Work For All’ has floundered. Rising unemployment, the introduction of value added tax and late payment of public-sector wages have left many disillusioned and hurting. The National Democratic Congress party struggles to govern effectively amid infighting, resignations and numerous no-confidence motions.

Front cover of New Internationalist magazine, issue 457 This column was published in the November 2012 issue of New Internationalist. To read more, buy this issue or subscribe.

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Country ratings (details)
Income distribution2
Previously reviewed3
Life expectancy4
Previously reviewed4
Previously reviewed4
Position of women3
Previously reviewed4
Previously reviewed4
Sexual minorities1
NI Assessment (Politics)2

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This article was originally published in issue 457

New Internationalist Magazine issue 457
Issue 457

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