DECEMBER 1983 - VOLUME 4 - NUMBER 12
Revo Out. U.S. In.
by Tim Shorrock
After trying to destabilize Grenada for four years and then crippling the island's infrastructure in a military invasion, the Reagan Administration has announced a plan to rebuild the island's economy and "help the Grenadians help themselves."
Based on the free market models of Jamaica and Puerto Rico, the U.S. plan will grant a generous dose of economic aid to the private sector of Grenada in order to return the economy "to a normal state of activity."
The program will be coordinated by the U.S. Agency for International Development (AID), which has pledged $3.4 million in emergency aid and sent an intergovernmental team to the island to investigate what role private business and multinational corporations can play in Grenada's economy. Details were announced at a November 8 press conference by AIDĽ administrator Peter McPherson.
At the session, McPherson stated that the U.S. had "no plans" to finish construction of the international airport that the Reagan Administration had said was being built for military purposes. The economic program for the island, McPherson said, would be centered around tourism and agricultural exports.
The emergency AID money will be used to rebuild the water system, roads, and other facilities destroyed in the November invasion. AID is also attempting to meet immediate social needs disrupted by the invasion. Since the hostilities, the free monthly distribution of powdered milk and butter has stopped, while medical care and education have been interrupted by the expulsion of Cubans from the island. McPherson noted that U.S. Army doctors were filling the immediate gap caused by the "repatriation of foreign personnel," but did not indicate how medical services would be provided in the long-run.
McPherson also admitted that a "disaster-assistance survey team" from the Pentagon had entered Grenada "almost in conjunction with the troops" and that the "Department of Defense people and the AID people have been working closely, really together, as a team."
The AID mission to Grenada-made up of representatives from the State Department, the Department of Commerce, and the Overseas Private Investment Corporation-left on November 14 to spend a week meeting with Grenadian businessmen to see how their needs can be met by the U.S. government and American businesses. AID will be "particularly sensitive to the needs of the Grenadian private sector as a central instrument for economic recovery," said McPherson.
The AID mission will be followed by a delegation of representatives from the U.S. hotel, airline, small manufacturing, and tourist industry, who will look for investment possibilities. These businesses will be assisted through grants or credit guarantees through the Export-Import Bank, and other agencies, McPherson said.
The rationale for the AID program is that the Grenadian economy had "deteriorated" under Bishop. "We thought, frankly, that the Grenadians weren't doing the best thing for themselves in terms of using the resources they had to build the economy," said McPherson. "Agriculture, for example, in Grenada has been going down steadily for several years."
Echoing President Reagan, McPherson also said that the new airport being built by the Cubans was not meant for tourism because the island country "had only a few hundred hotel beds." But he stumbled over his words trying to avoid the issue of the airport's importance to the tourist trade.
Originally, McPherson said, the airport "served the economic interest" of the country and had boosted local employment. But "the problem," he continued, wasn't "so much the facility of the airport" but the "lack of direct flights... [and hotel] accommodations." When a reporter pointed out that this was precisely why the airport was being built, McPherson changed his mind: "Direct flights wasn't [sic] a critical part of encouraging tourism," he replied.
To many people, the U.S. arguments about the economy are weak justification for what is widely considered an illegal invasion and occupation. The U.S. action was overwhelmingly condemned in the U.N., while many U.S. legal experts have criticized the invasion as a violation of both U.S. and international law. Forty professors at Harvard Law School, for example, signed a petition against the invasion. Among their criticisms:
"There's no way that by self-help we can impose democracy in other countries," one Harvard law professor said at a panel discussion, November 1. "What we are spreading is lynch justice."
The U.S. rationale for the occupation is also contradicted by people familiar with the situation in Grenada under Maurice Bishop. They point to the many improvements in education and health care and in creating conditions for economic growth as examples of the revolution's vitality. After taking power in a near bloodless coup in 1979 for example, the government built a fish processing plant so Grenada could begin processing and exporting fish for the first time. According to Cathy Sunshine, staff person of the Washington-based Ecumenical Program for Inter-American Communication and Action (EPICA), IMF figures showed that Grenada was "one of the few countries in the hemisphere to enjoy positive economic growth." Writing in the November 16, 1983 issue of the Guardian, Sunshine also quotes from a World Bank memorandum of August 1982, which stated that the Grenadian government "is now addressing the task of rehabilitation and of laying better foundations for growth within the framework of a mixed economy. .. Government objectives are centered on the critical development issues and touch on the country's most promising development areas." Under Bishop, says Sunshine, unemployment fell from 49 percent to 14 percent.
Despite the Reagan Administration's claims that Grenada was "on the verge" of being taken over by Cuba or the Soviet Union, at least half of the island's economy was in private hands (the Washington Post says 50 percent). According to the Journal of Commerce, "the private sector controlled agriculture, manufacturing, commercial banking... the insurance business, and services." Private investment, the newspaper reports, "had been increasing in the areas of beverages, the garment industry, flour production and furniture making." And in his press conference, McPherson referred to the private sector in Grenada as "the engine that provided the income and growth."
Many private firms-and some multinationals-were involved in the construction of the airport as well, including companies from the U.S., Finland, and England. The Venezuelan government was supplying oil for both paving the runways and for the use of construction vehicles. The English firm, Plessey, Ltd.-one of the world's largest construction companies-has strongly denied the U.S. claims that the airport was a military installation.
The new airport would have been an important stimulus to Grenada's tourist trade, according to a spokesperson for the Grenadian Ministry of Tourism in New York. Under the Bishop government, she says, tourism was a major priority. In 1980, tourism offices were opened and expanded in North America and the United Kingdom, while staff for the Ministry was quadrupled. "It was a very ambitious effort given the resources of the island," she says.
The spokesperson also says that tourism had increased this year (visitors from the U.S. had increased 13 percent from 1982) and that 28,000 tourists were expected in 1983-only five thousand less than the peak of 33,000 in 1974. Tourism has been in decline throughout the Caribbean region because of the recession.
As for AID's claims that Grenada lacked the hotel rooms to accomodate tourists, she notes that "Plans were underway to expand the hotels because tourism was starting to come back. New investment codes had been issued to try to get more hotel investments."
Sir Paul Scoon, the Governor General of Grenada and the only legitimate authority recognized by the U.S., has asked that the airport be completed to help the tourist trade.
One person who was certain that the airport would provide important help to the economy of Grenada was G.A. Menezes, head of the Grenada Chamber of Commerce and Managing Director of Geo. F. Huggins and Company, an export-import firm which is one of the largest companies on the island. Well before the invasion, at a June 6 reception for travel agents in New York City, Menezes told reporters how the airport would help his chicken growing business and expand his floral exports.
As things stand now, air freight is flown into Barbados, whose airport can handle the larger planes. There the freight is unloaded and packed on smaller planes for the trip to Grenada. For perishables, that arrangement is slow and expensive-and, for Menezes, has meant a lot of dead baby chicks.
The motives behind the sudden U.S. interest in the welfare of the Grenadian people are highly questionable-especially when the past attitude of the Reagan Administration is considered. On the day of the AID press conference, the U.S. revealed it had opposed Grenada's application for a $14.2 billion loan from the IMF in August, 1983-three months after Prime Minister Bishop had supposedly reached a "secret agreement" with then National Security Advisor William Clark to ease tensions between the two countries. According to the Administration, opposition to that agreement in the Grenadian government led to the overthrow of the Bishop government by Bernard Coard, allegedly at the behest of Moscow, Havana, or both.
Since 1979, the U.S. took measures on at least six other occasions to block both emergency and economic aid to Grenada (see box).
When questioned by a reporter about the legality of the U.S. economic efforts in Grenada, AIDĽ administrator McPherson stated that "we think that it's important that these countries have viable economies, that they have democracies. Democracies really generally flourish when there are viable economies." But he added: "I see our stimulating and assisting, in areas like agriculture, basically in a self-help kind of way. We think that people need to be helped to be put back on their feet so that they can earn their own money and run their own lives."
To many observers of the Grenadian revolution, this was precisely what was happening before the tragic overthrow of the Bishop government and the subsequent U.S. invasion.