• Home
  • About us
    • Our Vision & Values
    • The Jubilee Scotland Team
    • Jobs and volunteering
    • Campaign successes
    • Annual reports
    • Members
    • Contact
  • The Issue
    • History of Debt
    • Campaigning for cancellation
    • Guide to debt jargon
    • Country case studies
  • Campaigns
    • Scottish Local Council Debt
      • Open the books on PFI!
    • Defuse the debt crisis
    • Global calls to action
      • Debt Cancellation for Nepal
    • Build a Movement
  • Get involved
    • Sign the debt justice pledge
    • Donate
    • Events
    • Become a member
    • Resources
      • Order form
    • Find campaign groups
  • Articles & Blogs
You are here: Home / The Issue / Country case studies / Grenada

Grenada

Grenada map Grenada location
Grenada Factfile

View more country profiles in Caribbean.

Grenada is a textbook example of why the economies of small island-states are so vulnerable to external factors. In the early 2000s Grenada had one of the highest growth rates in the Caribbean before it suffered from the double blow of natural disasters and the global financial crisis. In an attempt to help regenerate growth and correct its fiscal imbalances, the government has since taken out IMF bailout loans. However, these loans are said to have actually further destabilised and stagnated the national economy. Grenada now has debts totaling almost $679 million after a recent restructuring agreement.

Spread the word...Share on FacebookShare on Google+Tweet about this on TwitterEmail this to someone

Further information

Where Did The Debt Come From?

As a small island Grenada relies on a few sectors, particularly the export of nutmeg and the tourism industry, to fuel its economy. When Grenada was struck by two hurricanes – Ivan in 2004, and Emily in 2005 – these sectors took a hit as 95% of the buildings on the island were damaged and the vast majority of nutmeg trees were toppled. Indeed, estimates suggest total damage exceeded 2.5 times Grenada’s annual GDP. Such severe problems were exacerbated by the global banking crisis in 2008 as potential tourists could no longer afford to visit. As a consequence, Grenada had to find a way to rebuild the national economy without the overseas revenues from exports and tourism. With no grants on offer despite the country’s sudden vulnerability, Grenada was forced to take out substantial loans. The results have been nothing short of disastrous as the fiscal restructuring has severely hurt service provision yet still failed to generate the envisioned growth. Without it, Grenada’s previously sustainable debts have spiraled out of control.


Costs To The Grenadian People

Without the availability of grant funding to help rebuild, cuts have had to be made in social service expenditure, which is having disasterous impacts upon the Grenadian population. The country’s education structure has taken a strong hit with the number of teachers being reduced, and those in work often only being given temporary or short-term contracts. Furthermore, in the public health system important medical drugs have become scarce as funding dries up. The inability of the government to create opportunities for those affected by the hurricanes has meant that unemployment levels have reached an unsettling 33.5%. As a result many young Grenadians are moving abroad, creating a ‘brain drain’. This has further reduced the country’s ability to move past its current predicament.


Default Plan

In March 2013, seeing no chance of recovery from its situation, Grenada defaulted on its debt to private and most bilateral creditors (including the UK). At the same time, the government called for a creditors’ conference in which it hoped to bring together the various stakeholders and reduce all its debts into something more sustainable. This novel and forward-thinking idea would have been the first of its kind, and was widely celebrated by campaigners. However, the creditors refused to partake in such an event and Grenada had to negotiate seperately with each individual creditor. Whilst the government did achieve reductions in the debt payments due to some lenders, it was subsequently encouraged to accept a three-year $21.9 million loan arrangement with the IMF to pay off other debts. Grenada exemplifies everything that is wrong with disaster loans. A disaster will always upset an economy’s delicate balance but to counter this with loans instead of grants seems to only make the situation worse; the balance is further disrupted.

Spread the word...Share on FacebookShare on Google+Tweet about this on TwitterEmail this to someone
Spread the word...Share on FacebookShare on Google+Tweet about this on TwitterEmail this to someone

The Issue

  • History of Debt
  • Campaigning for cancellation
  • Guide to debt jargon
  • Country case studies

Sign up for our e-news updates

News

How the response to the last crisis laid the foundations for the next

This article was written by Bodo Ellmers,  Policy and Advocacy Manager – Debt and Financial Reforms. Eurodad, European Network on Debt and Development Ten years after the last crisis began, global debt levels are higher than before, and debt vulnerabilities are increasingly hard to manage. That’s why activists all over the world are standing up to call […]

Make Poverty History Limited Edition sketch available now!

Make Poverty History Limited Edition sketch available now!

Half of all proceeds will support Jubilee Scotland's campaigns for debt justice.

Get in touch

Jubilee Scotland is an independent coalition of organisations and local groups across Scotland who campaign for cancellation of the unjust and unpayable debts which are ruining the world’s poorest countries.

JUBILEE SCOTLAND
41 GEORGE IV BRIDGE
EDINBURGH
SCOTLAND
EH1 1EL

T: 0131 225 4321
E: mail@jubileescotland.org.uk

Latest Tweets

  • RT @brettonwoodspr: BWP & @Eurodad just sent an open letter to the @WorldBank ​Board and @KGeorgieva​ calling for an open & democratic… https://t.co/mZnCvwZ5ON

    February 15, 2019 8:48 am

  • RT @eurodad: “This case illustrates how some EU governments are giving special ’sweetheart’ tax deals, which allow multinational… https://t.co/j8S5lS5HJJ

    February 15, 2019 8:48 am

  • RT @goodmovesjobs: Passionate and economic and social justice? @jubileescotland are recruiting for a Campaign Director!… https://t.co/Vx1ZjIJa2M

    February 14, 2019 4:08 pm

  • Accessibility
  • Sitemap
  • Privacy and Cookies

Scottish Charity Number: SC031827 Company Number: SC220549

Copyright © 2019 Jubilee Scotland · Site built by graphics.coop · Powered by WordPress
/* ----------------------------------------- */ /* Content Template: Single Case Study - start */ /* ----------------------------------------- */ #factbox .factfile-link { background: url("/wp-content/themes/jubilee-scotland/images/file_pdf.png") no-repeat; padding-left: 26px; padding-top: 2px; min-height: 24px; } .location-map { width: 100px; margin: 0 3px 3px } #factbox p { clear: both; text-align: left; font-size: 95%; margin-bottom: 0; } /* ----------------------------------------- */ /* Content Template: Single Case Study - end */ /* ----------------------------------------- */