There are some major challenges facing our domestic economy, if not properly addressed, can led to serious social and economic reversals of the gains the country has made over the last twelve years.
 
Paramount among these challenges are:
-         The High price of fuel on the international market, and
-         Rising prices of basic food items, like milk, sugar, rice, flour.

 
There are several reasons that can be advanced for rising prices. Among these reasons is the adverse weather conditions in the producing countries that result in reduced supply; and economics teaches us that a shortage in supply increase the price of goods. Another reason is a noticeable shift from using food commodities, such as corn, for the production of food items into the production of the bio-fuels, thus again aggravating the food shortage. Additionally, there was a decision taken by some industrialized countries to remove the subsidies on some manufactured items which has resulted in higher prices to the importing countries.
 
These are all external forces at work and these rising prices, affect no only us in Grenada, but the entire region, if not the entire world.
 
I have heard certain persons say on national radio and television that the cost of living is higher in Grenada that in any other OECS country. This statement is both false and misleading, and if such persons had taken the time off to do some basic research, they would have availed themselves of the facts.
 
The latest available data from the ECCB clearly reveals that the price of a sample commodity consumer basket (a basket of similar goods), range from $282.74 in St. Vincent, to a high of $482.76 in Dominica. The price of that same food basket in Grenada is $368.13. The average price for this shopping basket in the OECS is $386.92 which means that in Grenada the consumer basket is $18.79 below the OECS average; therefore it is not correct to that Grenada has the highest prices in the region.
 
Additionally, it must be noted that Grenada is among the lowest taxed economy in the OECS - and that is a fact - because of the decision taken by this Government to remove Income Tax for the vast majority of the working population.
 
A third major challenge that we, as a people, have to face in this complex global environment is that of Climate change resulting from global warming and other natural phenomena. We have witnessed in recent times, an increase in the frequency and intensity of hurricanes and other natural disasters. We know that if global warming continues, then there could be serious threats to coastal habitation, where over 70% of our people reside and make their living. As such we have to take the threat of climate change and global warming very seriously in these times.
 
The fourth major challenge that government is now faced with is that of negotiating economic partnerships arrangements (EPAs). This as we know, is negotiations taking place between the European Union (EU) and ACP countries, whereby the waiver granted by the WTO (world Trade Organisation) for the continuation of the principle of non-reciprocity in trade, will come to an end this year, and will be replaced eventually, by the principle of reciprocity, meaning that while we ask the EU to give us duty free access to the markets, they in turn will be asking us to open our markets, over a period of time to their commodities. We know that some items that we import are very revenue sensitive and as such if we are not careful in negotiating these efforts, we end up with a situation where our revenue base could be severely eroded over time. Therefore we have to be extremely careful how we negotiate since we know that by the end of this year, if we do not conclude the EPA negotiations, we would all be subjected to the GSP (generalized system of preference), which means that we would not be accorded any preference with regards to any other country with which the EU trade. So, a s Government, we have to take this development very seriously, both in terms of our trade and our revenue and how it will impact on our ability to raise increased revenue in order to undertake the much needed development programmes that Government has on-stream.
 
These are just a few of the external challenges that we must engage our minds with.
 
At the same time however, we must give critical attention to other pressing domestic issues, such as employment creation, reviving the agricultural sector, providing safety nets for the vulnerable, and providing better housing conditions. This government has been in the forefront ever since the passage of hurricanes Ivan and Emily in making very strenuous efforts at improving the livelihoods of our people, and in almost every county that we visit, people are asking, how did we create this economic miracle in Grenada to restore the country to such a state after being devastated to the extent of 200% of its GDP only 3 – 4 years ago?  This is a tremendous attribute to the resilience, foresight and vision, of this present administration.
 
Therefore as we focus on our plans for the upcoming year, it is a time for us as patriotic Grenadians to summon our collective energies and united will in finding solutions to problems that confront us all, while at the same time forging a singular path to prosperity and growth in our nation.