Grenada - Economic development

Government policy has aimed toward sustained development of agriculture and tourism as the prime sectors of the economy, with respect to both employment and foreign exchange earnings. Import substitution has been the focal point of the agricultural development plan. The PRG was committed to nationalizing agriculture and turned the large estates that had belonged to former Prime Minister Gairy into cooperative farms.

Following the 1984 election, the Blaize government reversed the trend toward state control and embarked on an economic policy that encouraged private sector participation and modified the fiscal system to encourage economic growth. The establishment of the Industrial Development Corporation and of the National Economic Council early in 1985 were essential components of the new policy, as was the privatizing of 18 state enterprises. The tax structure was modified in 1986 to offer incentives to the private sector.

Economic growth averaged 7% a year from 1998–2000, based on new foreign investment. Tourism, the main foreign exchange earner, was adversely affected by the 11 September 2001 terrorist attacks on the United States. Large expenditures for infrastructure and tourism projects, and the global economic downturn in 2001, led to a decline in GDP by 3% in 2001. The government is expanding its cargo ports to handle the growing volume of cargo. In 2002, tropical storm Lili damaged crops and infrastructure, and the International Monetary Fund (IMF) approved $4 million in emergency assistance to Grenada.

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