ST. GEORGE’S, Grenada, Aug 30, CMC – Governor of the Eastern Caribbean Central Bank (ECCB), Timothy Antoine, has described as “more than a bold experiment’ the decision by Grenada to constitute its first ever Fiscal Responsibility Oversight Committee (FROC) that the government said is an important institutional pillar underpinning the island’s rules-based fiscal framework.
Grenada is the first country in the Eastern Caribbean Currency Union (ECCU) and the second, after Jamaica, in the Caribbean Community (CARICOM) to have Fiscal Responsibility Law, to monitor and report on compliance with the fiscal rules and targets.
Antoine, speaking at an orientation seminar organized by the Ministry of Finance for members of the FROC, said that the Fiscal Responsibility Act is the most fundamental and far-reaching fiscal reform in Grenada’s history, binding the state to operate within its means.
“The FRA – Fiscal Responsibility Act – is more than a bold experiment. It is a binding commitment, to law and order, fiscally speaking, and if you’re on Twitter you could tweet that one. It is more than a bold experiment. It is a binding commitment to law and order – fiscally speaking,” he said.
He told the FROC members that they are custodians of the legislation and that “parliament will rely on you and through the parliament, the people of Grenada, will rely on you”.
The FROC is chaired by Richard Duncan and includes Zanna Barnard, senior economist with the St. Kitts-based ECCB.
Antoine said another message he wanted to examine dealt with realizing Grenada’s leadership position, in fiscal governance, among small states.
“People are looking at us, to see how we’re going to do this. So, this is a bold step. Grenada has assumed a certain leadership in the area of fiscal management. Accordingly, there are many admirers, home and abroad, but perhaps especially abroad.
“I hear them a lot, but we must also be aware that there are a few skeptics. There are those who doubt the efficacy of this arrangement. Can this law survive the test of time, including change of administrations? Does it reduce the flexibility of the state to govern?
“Those are some of the questions that the skeptics ask and, on that note, I am pleased to observe that at the first time of asking, during the last, recent salary negotiations, Grenada passed this test in flying colours,” he added.
Antoine said that public servants and teachers have been awarded increases and, “at the same time, the fiscal responsibility law has been respected.
“That was the first test of the law,” Antoine said.
Permanent Secretary in the Ministry of Finance, Dr. Wayne Sandiford, describes the FROC as a crucial institutional pillar, in the public finance management architecture of Grenada, directed at sound economic management.
He said members will play a role in reinforcing the credibility of sound economic management in general and fiscal management, in particular.
“The Fiscal Responsibility framework represents, in some sense, a new model – a new paradigm, as some may say – for the conduct of fiscal management, whose prime objectives are to promote fiscal discipline and to imbed fiscal sustainability, again, both of which are directed at laying the foundations for economic growth and development.
“In other words, the fiscal responsibility law has not been instituted, for its own end. It’s directed at a larger, grander purpose, of fostering – at least laying the conditions – for economic growth and development,” Sandiford said.