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Friday, October 24, 2014
- As the International Monetary Fund shares initial proposals for Grenada’s debt restructuring during the Washington DC meetings this week, the Caribbean island could gain a reputation for more than nutmeg, calypso, beaches and the 2012 gold medal sprinter Kirani James.
Because Grenada is listening to the nation’s religious leaders, it may become famous for a debt resolution deal that includes the participation of its citizens, protects the most vulnerable from austerity programmes and keeps current employment on the island intact.
Part of what could make possible protecting jobs and the island’s social safety net is curbing corporate and professional tax avoidance in Grenada.
The most interesting part of what propelled this debt deal is that the churches of this tiny island have staked a place at the negotiating table. On this island nation of 100,000 people, where most people on the street are debating any debt deal, religious institutions have taught or served a significant portion of the island’s government leaders.
As in so many parts of the world, often religious groups are the primary social service providers and in the case of Grenada they’ve earned the people’s respect.
Before Grenada defaulted on some of its debt this past March, the Conference of Churches in Grenada had called for a biblical Jubilee or national debt cancellation. The island’s various religious bodies didn’t stop there, and they strategically inserted themselves in the government and IMF discussions.
In fact, from almost every pulpit across Spice Isle last week, pastors and ministers asked for the faithful to pray for their national religious leaders who would meet for two days of discussions with the government, its parliamentary leadership, and an observer from the IMF. The Churches invited their own international partners and experts to support them in their discussions on Grenada’s debt deal.
The religious leaders, themselves long astute in Sunday School lessons on human dignity, became experts in the concepts and terminology that economists and lawyers utilise when negotiating debt restructuring. The meeting was opened by the head of the Conference of Churches in Grenada where participants heard what may be the first prayer on poverty that included the word “debt restructuring.”
For a place that is perhaps wrongly faulted for a Mayberry carefree attitude, one stands in awe when you see how savvy the religious leaders are. They know any reforms they move forward that protect people in Grenada could mean better IMF deals for millions of other poor people around the world who are always the most affected when a country restructures its debt.
In their discussions, the Conference of Churches set and discussed their expectations with their government and the IMF to judge the success of both the actual debt restructuring and transparency in the process. Here they are:
- The IMF should publicly recommend an upfront debt stock reduction of at least two-thirds in line with suggestions made in recent IMF staff papers and other analyses
- The Grenadian government should continue its spirit of openness. When the government of Grenada receives IMF proposals for debt restructuring it should share those documents with the broadest possible public constituencies for discussion and to seek national consensus before Grenada signs
- Grenada should seek an impartial financial assessment in addition to the IMF assessment
- Any deal should be comprehensive and include all external creditors to prevent holdout creditors from exploiting Grenada’s economic recovery or targeting public services for collection
- There must be accountable and transparent processes for the citizens of Grenada to monitor future lending and borrowing of their government
- Current employment and social protections for the poor and vulnerable should be maintained in any IMF supported agreement
Since the global financial crisis moved more than 70 million people, mostly women and children, into extreme poverty, it does not seem like the IMF has learned its lessons on austerity promotion. Perhaps, the tiny Grenada IMF Sunday School will shift how future debt restructurings take place and whether or not there are necessary protections for the poor in place.
If you ever find yourself on Grenada’s world renowned Grand Anse Beach on a Sunday, consider wandering into Sunday School at Blessed Sacrament Catholic Church; you’ll walk away with an unforgettable lesson in international economics.
Eric LeCompte is the Executive Director of Jubilee USA Network and serves on UN expert working groups that focus on debt restructuring and financial reforms. He recently returned from Grenada where he supported the Conference of Churches in Grenada during their recent debt restructuring negotiations.