World Bank pulls plug on Grenada - Baltimore Post-ExaminerBaltimore Post-Examiner

World Bank pulls plug on Grenada

The World Bank has unplugged Grenada.

Not welcoming news to the already financially strapped Caribbean island. The bank had cautioned Prime Minister Keith Mitchell that he had to make the payment, which was due after an extension on Feb. 15,  under the Tillman Thomas led National Democratic Congress (NDC) Government.

The payment was previously due on Sept. 15, 2012, but former Prime Minister Thomas  sought extra time to meet the deadline.

Mitchell’s request for an even further grace period to make payments toward the $193 million bond was rejected by the World Bank.

Mitchell wrote the global creditor asking for leniency for the tri-island state to restructure the debt.

“The global financial crisis has taken a heavy toll on the country and aggravated the severe debt overhang that continues to weigh down our economy. It is now time for Grenada to confront the fact that it cannot continue to pay its debts on current terms,”  Mitchell said.

In spite of the Prime Minister’s plea, the World Bank pulled the plug on Grenada.

In a statement it said: “No new loans will be issued to Grenada unless the country makes good on seven overdue payments.”

The payments range from over $5,000 to more than $317,000. The loans cover varied projects such as disaster management, OECS education, and skills for inclusive growth and hurricane Ivan recovery.

Wall Street-based Moody Investors Service said the default is Grenada’s second since 2004 under the previous Keith Mitchell led NNP Government.

Grenada’s hope of redeeming itself from this financial sink hole was further wounded by hurricanes Ivan and Emily, with Ivan devastating 90  percent of the country’s natural resources, leaving in its wake, simply land, rivers and people. Months later, Emily devastated the remaining 10 percent of the islands crops in the rural side of the Spice Isle.

Additionally, separate overdue amounts of more than $6,000, $17,000, $20,000,  $95,000, and $255,000 are owed to the global bank.

In a letter to Prime Minister Mitchell, the World Bank cautioned that Grenada’s failure to fulfill the loan payments on time will hamper the global lender’s ability to assist other member countries.

“As of today, March 18, 2013, we have not been advised by our Depository Banks that the payments cited above have been paid into our accounts,” the statement said.

The financial loans giant whose slogan reads: “Working for a world free of poverty” told the cash-strapped country that their, ability to mobilize resources for the benefit of their member countries “depends critically on the punctual servicing of loan and credits. For this reason, we insist on settlement of all payments when they fall due”.

Small islands like Grenada and the rest on the Eastern Caribbean States Islands (OECS) are reliant on the International Monetary fund’s (IMF) “stand-by” programs, which comes with conditionality and “structural reform requirements,” Moody’s reported.

Those islands including St. Vincent and the Grenadines, St. Lucia and Dominica depend on the IMF for relief funding in the wake of natural disasters like hurricanes.

 

 


About the author

Marcia Braveboy

Marcia Braveboy is a journalist from Grenada based in Trinidad and Tobago. She has over 20 years experience in media; mainly in copy writing, news and broadcast journalism. Braveboy was a senior reporter at Power 102 FM radio, CNC3 television and producer of the investigative Frontline program on CCN’s i95.5 FM talk-radio station. You can follow Marcia on Twitter: @mbraveboy Contact the author.
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