Grenada - Domestic policy

In its first term, the NNP government vowed to promote job creation and job training, as well as entrepreneurial activity, especially at the level of small business. Instead, the focus has been on the creation of needed infrastructural development (roads and water projects) and on major construction projects, including a fisheries complex, a vendor's mall, and school rehabilitation projects. More visible and much-criticized projects, such as the erection of an expensive national stadium and the construction of major hotels, have also been undertaken. Concerns have been expressed about the government's weak commitment to small business, despite the initiation of a micro-enterprise project. Related to this is the downturn in light manufacturing, which has suffered from regional competition. Tourism has grown only modestly and the impact of new hotel development on employment and on the local agricultural and handicraft sectors remains unclear. Although the government correctly boasts that unemployment has been cut in half (to about 14%), it is still high. Moreover, the rural sectors have suffered as agriculture continues to experience downturns. A mealy bug infestation that plagued fruit production for many years has finally been brought under control. However, the banana and cocoa industries have been depressed by quality issues and lack of financial resources, as well as uncertainties affecting the continuation of the important European banana regime. Thus the government urgently needs to initiate activities to help those sectors that do not perceive themselves as benefiting from macro planning and restructuring. Finally, one of the NNP's early promises was to remove the personal income tax for most residents in order to stimulate growth. The abolition of income taxes has indeed been accomplished but has resulted in increased reliance on international trade taxes. There is concern that this will lead to increased government debt. On the other hand, the government has been cautiously successful in increasing compliance with regard to tax collection on goods and services and non-personal income.

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