The need for a Ministry of Industry in Grenada

by Yao Atunwa

The present construct which we inherited as a former colonial post of the British Empire, where government takes a backseat in the commercial life of the nation or simply facilitate an environment for investors in the private sector to play the dominant role predestined by the gods of commerce, is one that poses an array of social and economic questions for our nation.

Such a model, on its face, does not have a wide-angle view in terms of societal impact and long-term planning. Quite frankly, it is one that keeps us in a stagnant and vulnerable state vis-à-vis the dependency syndrome it continually perpetuates in pretty much all spheres of life in society, starting with capital input, particularly foreign direct investment.

Our current economic model dictates that the private sector should principally serve as the economic engine for the economic and social life of the nation, to reiterate the opening proposition. But how effective is this model for the social development of the nation’s populace, given the barrage of societal issues and challenges we continue to confront decade after decade? If the state’s role is to ensure the education of its citizenry by way of academic training in its primary, secondary, and tertiary institutions, as the primary pillar in accommodating the fertile grounds for private interest to then thrive in seeking to utilise the human capital in their enterprises, and in turn the wages received do not generate much in the living standards for the workers, or does not adequately employ in the first place a large segment of the working-age population (over 35% in the northern rural parishes of St Mark and St Patrick and over 10% overall, according to official sources) — how effective is such a model?

Grenada’s population count hovers roughly around 117,000 people. The segment of working-age Grenadians pre-2020 has averaged roughly half the general population, with older citizens and children under 15 accounting for the other half. There has been an increase in the working-age portion to 68% of the general population. Another interesting aspect of this general reality is that the largest single employer on island is the state, and the second largest employer is St George’s University. Moreover, the largest industry in Grenada (outside of tertiary education) for more than 2 decades remains the tourism industry, the principal area that has attracted the lion’s share of direct foreign investment. It is where the greatest focus has been placed by governments post-1984, since the construction of the sole international airport in the state and our eventual departure from an agrarian-based society after the collapse of the plantation system (the gravest blow being the removal of favourable terms in the UK market for bananas in the 1990s coupled with labour shortage) to one characterised as predominantly service-based.

The sheer volume of foreign direct investors in the tourism industry has relegated a situation whereby less than 30 cents of each dollar in profits is retained in the home country, and such is widespread throughout the tourism sector in the Eastern Caribbean. The one exception at present is Jamaica, which retains some 41% within the last 3 years (up from 35% initial threshold). Providing major concessions to potential foreign direct investors in the form of decades-long tax holidays remains the chief strategy of the government in bringing those international brands to our shores, and in return, our citizens employed at these hotels, providing great hospitality, earn next to nothing. They can barely take care of their basic necessities, such as covering the cost of healthcare, affording to construct a modest home from savings after many years of working in the industry (without mortgage) and in some cases government intervention in providing basic amenities such as indoor plumbing, including bathroom and toilet facilities, or even being in a position to adequately support their children’s education, even when there is no tuition at the primary and secondary levels or very little at the sole state-owned tertiary institution. The point being made is that our constant clamour for more hotel rooms on island (supposedly to secure more airlifts by major airlines) really and truly only represents our perennial survival mode. Ten more spanking new hotels with a thousand more rooms would not dramatically change our general reality. One may argue it would not make a dent to alter the present architecture of our economic model, thus general reality.

The social conditions are only getting more dire for our people, and government is finding it more difficult not to intervene, even when state resources are barely adequate to address the things already on the table for government — the traditional areas receiving coverage from government such as maintaining the road networks, healthcare at the nation’s health centres and hospitals, etc. After 50 years of political independence from Great Britain, we find ourselves grappling with the most basic of challenges insofar as the general welfare of the great majority of our people — no mistake about it. The description of the additional areas that the state is seeking to address on behalf of its citizens, many of whom are employed or retired, such as the WASH programme that seeks to provide indoor bathroom and toilets, the elimination of all school fees, the Imani programme that is currently undergoing a re-branding and restructuring to better serve the great many graduates unable to secure employment in the economy, are all indication that little progress has been made in bringing about a society that is just, equitable and prosperous.

It is why I am seeking to advocate for the state to play a greater role, not merely in employing more of our citizens but in the very creation of the economic infrastructure that will give rise to a more sustainable growth structure for our nation as a whole. Ultimately, the creation of a ministry of industry will be needed to begin to put the building blocks in place to do so. The very act in creating this ministry will signal the seriousness of the government to play a more direct role in establishing an economic platform that will create an environment where little to no unemployment will exist in the country; thus, seeking to ensure that the human and social capital brings about a greater return for individual families and the nation at large. Such an aim is reminiscent, one can argue, of the very approach employed by Great Britain when it prioritised an economic thrust that propelled the kind of growth that ultimately lifted all boats in the home country in the social wealth created, albeit such came at a great expense to other populations around the world, namely of the global south. Chief among them were, of course, the Africans and East Indians, the descendants of whom are yet to receive reparations. That was the priority for Great Britain in the creation of the Royal East India Company and others, in structuring the commercial relations and dynamics in those offshore territories for the colonial power/government. In other words, there was a commerce department of sorts created by parliament under the prevailing ideology (referred to as mercantilism in the history books) of that epoch to guide trade, commerce, etc. in a longitudinal manner.

The need for a ministry of industry is most critical in pivoting from the current model that does not factor in its scope a wide and long-range vision for the economic and social development of our nation. The current model, by design, is a piecemeal approach that emphasises mere private interest and a modus operandi that views competition as the lynchpin for development, which, in effect, limits the growth and development it espouses. I think this is our opportunity, in a time of greater reliance on Citizenship by Investment (CBI) funding for investment ventures for the private sector, to take stock of a model that only seeks to keep us in survival mode as a people by and large, as it only exacerbates a deepening of our reliance on foreigners to provide the capital investment for the creation and expansion of our industries. The state must not only create incentives for private interests to exploit, and in turn very little is provided for the populace, but it must also contemplate the very infrastructure on which development is engaged.

As such, it is imperative that greater guidance and opportunities are provided by the state apparatus in ensuring that areas of vital importance are spotlighted every turn of the way. Therefore, more than incentives are warranted in the process of boosting investment for tourism and agriculture, for instance. With a ministry of industry, a comprehensive approach can be entertained instead of the short-term/snapshot view that is the norm under the current model, whereby the developmental goals are pretty much in the hands of private investors from the outset. Under the present model, there is little imagination and planning on the part of the state for development in agriculture, for instance, irrespective of how much lip service we pay to the notion that we ought to grow the sector and become more self-sufficient and food secure.

To complement a ministry like the one being proposed on the occasion, government ought to see the need to invest directly in the creation of manufacturing facilities in the agricultural sector, for example. This has been the missing component in our launching pad as a nation (except for a very brief moment when the People’s Revolutionary Government took the leap). Little has been done by the private sector to facilitate the kind of large-scale production warranted to buttress the economic life of our citizens. For agriculture to become truly viable from a business standpoint, more must be done in adding value to the raw materials, and such can only be done with greater investment, in bringing on stream the financial and physical infrastructure needed on the ground. Government can start by seeking to channel greater investment in agriculture with the current CBI programme, with added incentives for those interested in building factories and trading companies to create and distribute products for regional and international markets.

The idea is not to leave it up to the CBI entity as such to provide this necessary platform, but instead one that is overseen by a ministry of industry. In fact, the CBI entity can be situated under the said ministry. In fact, all statutory bodies can come under the oversight of the ministry of industry. Speaking of statutory bodies, the restructuring that is underway with the MNIB, with the government allowing for part ownership by private investors, can serve as a model in the wider agricultural sector, be it in the poultry industry or any other in that sector. Government can provide a leading role in propelling agriculture, in getting the farmers to invest in the next phase of production, i.e., adding greater value to their products and securing markets. If Mott Green, someone who made Grenada his adopted home, and his colleagues, with very little resources, could launch a chocolate revolution, imagine the potential that resides in the professionalism and all else that government can bring to the table with concerted efforts and greater reach. Despite the great strides made in the cocoa/chocolate industry by these many individuals, more can be done in terms of scaling up the operations.

Hence, it makes perfect economic sense for the government to play a vital role in establishing processing plants and other commercial spaces for farmers and fishers to be able to engage in greater commercial activities in terms of the consumer products they seek to provide to markets. Cooperatives would be incentivised, under such a model, to reach their potential as commercial agents of the society (serving as de facto chartered companies not of a British or American empire but the Grenadian people). Imagine, in short order, the fisherfolk throughout the nation, with their cooperatives, were to come under one umbrella organisation to partner with the government to establish a fish processing plant on the island. This would be a game changer not only for the fisherfolk but the nation as a whole, for it means the nation will be equipped to benefit more from the fishing industry. A ministry of industry will be the incubator for those ventures, in ensuring that it is not merely the dreams of fisherfolk in Grenville, Grand Mal and Gouyave, but in realising such a platform with the necessary concerted efforts to bring such to fruition. A statutory agency can be established to undertake the implementation of such a plan in conjunction with multiple stakeholders, including the fisheries department, regional and international partners of the blue economy, etc.

The end goal would be to foster greater productivity and overall increased production through local ownership of the means of production by everyday citizens in conjunction with greater government involvement. In other words, the economic space would reflect greater participation from the Grenadian citizenry, from the private, public, and cooperative sectors. Put another way, to go beyond the piecemeal, short-sighted approach presently employed, the state apparatus ought to play a more direct and impactful role in leading that charge. I anticipate that a petroleum ministry will be created to spearhead the petroleum industry, with the confirmation of oil and natural gas reserves anticipated in the coming years. They certainly can be structured as separate entities for their specialised interest or focus. Nonetheless, in the interest of greater diversification of our economy, a ministry of industry can be provided with the authority to coordinate state resources to support the productive sector of the economy. As the reader might have envisioned, the ministry of industry will serve as the major investment arm of the state. Investing in the productive sector through its coordination and distribution of state and other resources will be its primary function, as well as guiding the facilitation and implementation of world-class commercial infrastructure for greater commercial activities of the Grenadian citizenry. When such features are activated, more synergy will take place among the people in business ventures and beyond. More importantly, our nation’s development will be on a more sustainable path guided by long-term vision and planning, reaping greater economic and social rewards for our people.