Budget Loan Authorization Bill, 2019

Bill, Budget, Commentary, Sandra Ferguson, We The PeopleAugust 15, 2019

Sitting of House of Representatives, Aug. 9^th, 2019:

On the eve of Carnival – Friday, August 9^th – the honourable House of Representatives met to “deliberate” on a suite of bills. Among them were the Integrated Coastal Zone Management Bill, 2019 and two money bills:

ASupplementary Appropriation Bill, 2019 for an amount of $9,967,790 for the period August 1^st to December 31^st, 2019. There is an attached Schedule which details how the money is to be allocated among the different ministries.
A Budget Loan Authorization Bill, 2019 to authorize the Minister to borrow an amount not exceeding EC$118.8 mn., from various sources. The schedule provides the following information:-
- Purpose: The purpose of the loan is to finance the 2019 Supplementary Budget.
- Lenders: The lenders will be the International Development Agency (IDA).
- To Be Negotiated: The interest rate, terms and repayment and fees are to be negotiated.
- Tabling of Agreements: The schedule advises that “All agreements signed pursuant to this Loan Authorisation Act will be tabled in Parliament as soon as practicable.” (my emphasis).

Queries:

I am baffled!

Absence of Pertinent Information: How can a Parliament give authority to the Minister of Finance to incur a debt of EC$118.8 mn. WITHOUT any information being proffered about interest, repayment etc. and the agreements pertinent to the loan? Given that in the current “clean sweep” configuration, Parliament equals Cabinet, perhaps this information is already known to the honourable members of the House but Parliament is also where we the people should get to find out what is going on with OUR business!! After all, it is we the people that will have to pay back that loan!!
Finance Supplementary Budget 2019: How can this amount be to finance the Supplementary Budget 2019? A Supplementary Appropriation Bill, 2019 was also tabled for an amount of $9,967,790. The Math is NOT adding up!!
Capital Expenditure Budget Estimates 2019: The Budget Estimates 2019 provide for loan financing of EC$9.7 mn for capital expenditure.
Various Sources: And I do not understand what is meant by “borrow an amount not exceeding EC$118.8 mn., from various sources when the lender has already been identified as the International Development Agency (IDA)!!
Development Policy Credit Loan: Is the Loan Authorization Bill in respect of the second of the two development policy credits under the IDA loan of US$65 mn, that was announced by the Rt. Hon. Prime Minister back in May 2017 and the Moh-neeeeey that he alluded to at the Tanteen rally one week before the 2018 general election?
Prior Actions and Triggers: If it is the 2^nd DPL, what are the “prior actions” and “triggers” in respect of this second DPL? Prior actions are actions that the government must implement in order to access the loan. Certain of these prior actions will trigger the disbursement of the loan.
Loan Authorization: Was there a loan authorization by Parliament in respect of the first development policy credit loan (DPL) in July 2018 under this IDA arrangement?
Disbursements to Date: How much of that US$30mn. has been disbursed to date?
Results of 1^st DPL: And, to date, what have been the results of the first DPL?

World Bank IDA Loan[1]:

It is useful to recall that back in May 2017, at a post –Cabinet briefing PM Mitchell advised we the people that US$65 mn. was earmarked for Grenada “over the next three years” (that should be 2018 – 2020) from IDA’s fund for small states. At that time, the Rt. Hon. PM Mitchell was also the chair of the World Bank’s Small States Forum. He further advised that if Grenada performed well, “there can even be more US dollars for Grenada”. Grenada could also “frontload”, i.e. get 80 percent of the USD 65 mn. up front.

First Fiscal Resilience and Blue Growth Development Policy Credit Loan[2]:
A World Bank Press Release, June 25^th, 2018[3] advised that a US30 mn. loan had been approved for Grenada. This loan was the first in a series of two and would be complemented by technical and capacity support. The purpose of the loan was to support Grenada in strengthening its climate and fiscal resilience and helping the country transition to a blue economy.
Announcement in Parliament – Almost Free Money: And, then at a sitting of Parliament sometime in July 2018, the Prime Minister announced that the loan was a 40-year loan with a 10 year grace period and repayable at less than 1 percent interest rate. He suggested that given the low rate of interest it was almost free money. He also commented that HE WOULD NOT HAVE TO WORRY ABOUT PAYING IT BACK since HE would definitely would be OUT of Parliament by the time the grace period was up!!

Prior Actions and Triggers re First DPL:
Compensation Management Policy Framework[4]. This was one of the prior actions in support of Pillar 1 of the first DPL – Support fiscal measures and compliance with the Fiscal Responsibility Law
Operationalisation of the Compensation Management Policy Framework: The trigger action was/is the operationalisation of the policy framework by:-
- adopting guidelines and standards for payroll management and wage negotiation for public sector workers in line with the parameters of the wage bill rule; and
- conducting an audit of the payroll.
Industrial/Impasse/Stalemate: Given that the industrial impasse/stalemate between the government and public sector workers including teachers, on the issue of pensions and gratuity payments, we the people would like to know what is the status of this prior action?
Triggers re Pillar 2 – “Support Grenada’s transition to a Blue Economy by strengthening marine and coastal management, marine ecosystem health, and climate resilience” – are just being fulfilled:-
- CBF-SDTF Agreement: A Partnership Agreement between Sustainable Development Trust Fund (SDTF) and the Caribbean Biodiversity Fund (CBF) has been signed.
  - Note: The agreement between the CBF and the GSDTF was just recently signed the annual meeting of the CBF in June 2019[5].
- Strengthen management of its coastal and marine assets enabled by Cabinet:- enactment of the Integrated Coastal Zone Management (ICZM) Act; and approval of the Nagoya Policy.
  - Note: The Integrated Coastal Zone Management (ICZM), 2019 Bill has only just been introduced to the House at the same time as the Loan Authorization Act.
Points to Ponder:
What does it mean? What do these Appropriation and other bills – introduced on the eve of Carnival and to be concluded right after Carnival at a sitting of the Senate – portend?
Blue Growth Coastal Master Plan: Is it an ominous sign of the rollout of the Blue Growth Coastal Master Plan[6] whose proposals can only be described as:-
- coastal and marine areas GRAB which seems bent on displacing we the people from the use and enjoyment of the coastal areas and marine spaces in favour of marinas, marine protected areas and luxury resorts funded by sale of OUR passports;
- technically flawed in the context of building climate resilience;
- Whose plan? Whose Agenda?
Transparency in respect of the Loan Authorization Bill: The lack of information and the absence of transparency are chilling! We must MIND OUR BUSINESS!