Response to Preliminary report on the last poverty Assessment 

Fellow Grenadians, as you would have noticed, since the last General elections I have made a concerted effort to avoid responding to, and commenting on, the many blunders and false statements made by the NDC Government which assumed office in July 2008. 

I took this decision as I felt it was necessary to give the new administration sufficient time to settle down in office so they can continue with the governance of our beautiful Grenada, Carriacou and Petite Martinique.  It is now almost one year since the NDC administration has been elected into office and all signs indicate that there is no intention to continue building on the solid foundation that they inherited.  It is against this backdrop that I deliver this address today in response to erroneous statements made by the Minister for Finance.

As a responsible Opposition, we are truly concerned about the recent media reports in which the Minister of Finance broadcast to the world a most biased and inappropriate interpretation of the results of the Poverty Assessment commissioned under our watch in February 2007, and with preliminary results presented in May 2009.

The Minister of Finance unsolicited broadcast to the World that Grenada has made no progress in the fight against poverty in ten years.  I therefore present this response in defense of the efforts of the People of this country, since hurricanes Ivan and Emily and because too, that the evidence employed by the Minister does not support the Political position adopted by the Minister.

The NDC Government must always remember that their lies, propaganda and misleading statements about the NNP (in Government) cannot have the same effect with the NNP while in opposition. To tell Grenadians that overall they became poorer in the last ten years under the NNP is tantamount to attempting to disrespect the intelligence of all Grenadians and ignore the one fundamental fact. Figures mean nothing if it does not reflect the feelings of the people it is purporting to describe.

All Grenadians know that their quality of life improved tremendously under the NNP. They received: Pipe Borne Water, Electricity, Roads and Bridges, Telephone, Community Centers, Health Centers and Health Services, New Schools as well as Refurbishment of almost every school and improved educational opportunities, programs and scholarships and training; Thousand of Jobs, Tremendous Increases in Income for all Workers, Road Workers, Cooks, Health Workers (including Nurses), Public Servants, Policemen and Women, Teachers, Carpenters, Masons, Contractors, dockworkers, farmers, fishermen  and others.

Undoubtedly, the pronouncements of the Minister of Finance left many confused; one has to wonder what this Government is truly about and what its plans are for Grenada and its people.  In short, for something like poverty to be celebrated in the manner expressed by the Minister, is nothing but a clear demonstration of the philosophy that guides the thoughts of this government.  Many in Grenada share the view that the present NDC is a group that is out to punish hard working Grenadians and is envious of successful people especially the poor working class.

Therefore, the overwhelming majority of Grenadians must be reminded that they should not expect to get any projects or programmes aimed at their social and economic transformation, but instead are most likely to find a proliferation of laws to stifle their entrepreneurial and creative spirit and to keep them poor and vulnerable. It must also be stated up front that as early as 2005 months after Ivan, the Government supported a Core Welfare Information Questionnaire (CWIQ) study undertaken by UNDP in which it was reported that Hurricanes Ivan and Emily would have seriously affected the livelihoods of many Grenadians and that the country would have been sunk into greater poverty.

In that sense, we are not too surprised by the results for we know that even with the greatest of efforts the poverty level would have still remained high five or six years after the hurricanes.   We need to also state with emphasis that as the data will show that the single sector that would have contributed to growth shortly after Ivan and up to 2008 was Construction, but today there are few construction projects around, hence the level of employment would have fallen thereby contributing to higher poverty, under the present Government.  

For these reasons it is imperative that we set the record straight, and in so doing, re-establish the credibility intended when we commissioned the Poverty Assessment Study during our tenure.  We warn at the outset though, that it is dangerous when studies that are intended to be used as foundation pillars in the

fight against poverty and in the social development process, even before they are properly presented should find themselves employed largely for political ends as the Minister of Finance has sought to do but that is his usual style.  The results of the Poverty Assessment were never intended to be interpreted across time and space or circumstance in the manner that the Minister has sought to do.

In this context, it is important to first understand a little bit about the methodology.  Accordingly, the measure usually carries a basic structure which reports on food entitlement or other such measures (“indigence”) and a non-food component.  The methodology employed, involves the use of a standard measure, usually 2,400 kilo calories as well as the cost of such daily requirement of an average adult/person (usually 18-25 years). This measure is then extrapolated to the elderly and children.  The measure employs the Caribbean Food and Nutrition Institute’s (CFNI’s) software to optimize the cost of providing for the daily food requirements for a household.

The non-food component is based on a measure of rents or some imputed owner provision for rent and as well for the cost of other non-food services, such as electricity, water, etc.  It is important to understand that previous studies, altered the methodology (such as the 1998) study, sufficiently so, to preclude any such direct comparisons across time periods. This is a theme which I will return to, later in the presentation.

More importantly, results from two different studies cannot be compared in the face of “exogenous shocks”- this is basic economics. So for example, if one study is undertaken in “normal circumstances” without any such exogenous shock (such as a hurricane), it cannot readily be compared with another result which occurs in the face of such a shock.  What this means is that the Minister’s statement ignores very basic economic principles –

which indicate that in 2004 and 2005 the country suffered two major hurricanes-exogenous shocks. We consider this to be regrettable.  Since it is a matter of economic history and there exists a full public record that our country lost the equivalent of two-and-a-half years GDP.  Even the NDC in opposition acknowledged that it will take 12 to 15 years to build back Grenada to where it was before Ivan. 

Moreover, the Minister omitted to present that in respect of food entitlements, usually measured by the level of “indigence”, that the results actual showed improvement over the 1998 figure.  Indigent refers to persons without basic food.  But we maintain that it would be grossly inappropriate to compare the two figures.  Inaccurate as it may be, we wonder why it is that that Hon Minister of Finance, Burke again refused to come clean and to truthfully present the facts as they are – even though, again on this occasion, his understanding of basis economic statistics appears highly suspect.

We want to be clear, using the Minister’s flawed comparisons across the 10 years, the numbers show that the level of food poverty (if you will) actually declined.  So what about non-food poverty?  I promised to return to this point.

The study shows that this metric (number) actually deteriorated, but this is where we must retreat to the methodology to seek answers.  In fact, the answers are not difficult to come by.  Cursory analysis would indicate that the 1998 study did not include cell phone expenditures at all.  But the 2007 and 2008 study, carried out at a time when the level of cell phone usage is at an all time high, does account for such expenditures.  Can you imagine, at a time when many people actually own two cell phones, not accounting for this in any recognition that a significant structural shift has occurred in non-food expenditure patterns.  But again we warn, that it would be improper to compare the result of these two studies undertaken 10 years apart in the manner that the Minister has sought to do. We can become even more analytical about the meaninglessness of the comparison by the Minister.  But it would be useful to present more positive though generic comparisons.

For example we are aware that countries that share close proximity, barring political influences, do share a strong similarity in terms of economic growth.  In the case of Grenada, our patterns would bear a close relationship to that of St. Vincent and the Grenadines and Trinidad and Tobago.  Grenada’s indicators lead St. Vincent and the Grenadines but we lag Trinidad’s in terms of economic growth and related measures. Prior to the Hurricane and in several respects still, since the hurricanes, Grenada’s economic indicators have led that of St. Vincent and the Grenadines.  So when you begin to see a “switching” of the indicators, such that St. Vincent’s poverty and in some respects employment indicators begin to lead Grenada’s then you have to begin looking at the “root cause”.  In this context the clear “root cause” is that you CANNOT undertake any assessment about Grenada after 2004, without taking into account the effects of the hurricane(s)-the so-called exogenous factors.

We suspect too, that the study when it is finally released will show that Grenada’s unemployment has increased, but this is not a mystery since the hurricane which devastated the agricultural sector and so much of our hotel stock would be the key variable in explaining this increase.

Even accounting for the Hurricane, though we cannot deny that the anti-investment rhetoric as well as the inaction by the present Government, would have accounted for some share of the increase

in unemployment, as of July 2008.  Since there is a clear linkage between employment and poverty it would be true to say that the policies of the present Government “wittingly” or “unwittingly”, would have contributed to a worsening of the situation.

Finally, the Minister of Finance consistently comes across as gleeful and jubilant even, over anything that would appear to damage the position of the country internationally.  Even where the facts do not support the very damaging political statements being adopted by the Minister of Finance, he so twists them such that un-enquiring minds would be  apt to believe them as such, solely because they emanate from no other than the Minister of Finance. We take this opportunity to again warn of the incompetence of the Minister of Finance, the entire administration and to set the record straight as regards the manner in which the Poverty assessment study is to be taken.  Instead of using derogatory vocabulary to score cheap political points on a study that does not reflect the real hardworking and patriotic nature of the Grenadian people, the Minister should instead celebrate the efforts and sacrifice of the Grenadian People to rebuild our country in a record breaking time following its destruction from Ivan and then Emily. He should indicate to the world that the Grenadian people have to be applauded for their efforts in restoring growth and improving their livelihoods since, had it not been for such great effort, the results of the survey could have been even worse.  The Minister must be reminded of the basic facts that before Ivan Grenada had a diversified economy.  In 2003 for example, agriculture contributed 8.95% of GDP; manufacturing 5.7%; construction 9.6%; the wholesale and retail trade 10.1%; hotels and restaurants (a proxy for the Tourism sector) 8.0%; transport 12.5%; banks & insurance 10.9% and government services 16.1%.  In other words there were eight sectors which generated income, employment and output for the people of Grenada. 

With the destruction of the economy by Ivan in 2004, by 2005 agriculture contribution to GDP fell to 4.7%; manufacturing fell to 5.35; wholesale and retail trade fell to 9%; hotels and restaurants fell to 3.7%; banks and insurance fell to 9.5%; and government services fell to 15.8%.  The only sector that recorded major growth in 2005 was construction, and its contribution to GDP was 18.5%.  This high level of contribution from the construction sector reflects the concerted and conscious effort of the people of Grenada to develop their country in the aftermath of Ivan.  This is what the Minister should be speaking about, for had they not done so, the poverty numbers he is boasting (I repeat boasting) about could have been much worse. 

As a result of this effort of the people of Grenada, today, we have seen that the major growth sectors of the economy have now returned to their pre-Ivan levels, and that the economy of Grenada is no longer dependent on one sector (construction) as was the case in 2005.  For example, in 2008 agriculture contributed 7.3% of GDP; manufacturing 5.1%; construction 11.5%; wholesale & retail 8.5%; hotels and restaurants 5.9; banks and insurance 9.7%; and government services 17.3.   In other words, in less than five years after Ivan and four years after Emily, the economy of Grenada has returned to its high pre-Ivan growth levels and this is far more rewarding for the Minister to tell the international community, as it speaks to the positive work attitude and resilience of our people, thereby portraying a good image of our people and encouraging greater foreign direct investment in our country.            

This, in effect, is what the Minister of Tourism and Foreign Affairs should be saying to the Minister of Finance.  For in so doing he will be making the work of his junior, the Minister of Tourism and Foreign Affairs much easier. After all, as we understand it, much of this Foreign Affairs Minister’s efforts are aimed at attracting foreign investment.

I therefore remind the Government that if they want us to take them seriously when they produce data, they must remember that data must reflect the actual feelings on the ground, not some numbers (concocted or otherwise) given by anyone no matter how mighty they may be.

In closing I wish to announce that in my capacity as Leader of Her Majesty’s Opposition, I intend hereafter to continue addressing the nation on matters of national importance.  I assure you that you can depend on the New National Party’s team to seek the interest of our people and to protect the rights of every citizen of Grenada, Carriacou and Petite Martinique as we perform our role as members of Her Majesty’s Opposition.  May God continue to bless all the people of our beautiful nation