Caribbean & Central America - December 2016 (ISSN 1741-4458)

*** SVG OPPOSITION LEADER TO STEP DOWN. Arnhim Eustace, the 72-year-old leader of the main opposition party in St Vincent & the Grenadines, the New Democratic Party (NDP), is to step down. The NDP lost the December 2015 general election to the incumbent Unity Labour Party (ULP), led by Prime Minister Ralph Gonsalves, by just one seat. The ULP’s slim victory secured it a fourth consecutive term in office. Eustace has been reluctant to accept defeat, and he has taken to the courts in a so far forlorn effort to overturn the result.

Eustace took over the NDP, and the premiership, from Sir James Mitchell in October 2000. Mitchell had kept the party in power for 17 years. But the party lost power in March 2001, only managing to hold on to three seats in the 15-seat parliament. Eustace, who was prime minister for just five months, led the NDP to three further election losses, and even if the party has now clawed its way back to within one seat of regaining power, it was not enough for Eustace.

*** SURINAME ECONOMIC OUTLOOK “REMAINS CHALLENGING”. Following its latest Article IV consultation, the International Monetary Fund (IMF) is forecasting a 9% contraction this year for the Suriname economy. This follows on from a contraction of 2.7% in 2015. Inflation for end-2016 is expected to be 60%.

The budget deficit for 2016 is expected to come in at 6% of GDP, with the debt-to-GDP ratio reaching 70% of GDP.

The IMF mentions favourably preparations to introduce VAT, but it expresses concern about “the decisions to freeze fuel pump prices in nominal terms and partially reverse the increase in electricity prices”.

The IMF warns: “Without a significant policy adjustment, Suriname risks deepening instability, with sharp exchange rate depreciation and accelerating inflation. There is limited financing to cover essential government spending - including public wages, pensions, and social support to the most disadvantaged - and the risk of resorting to central bank financing of the budget exists.”

*** GRENADA REJECTS CONSTITUTIONAL CHANGES. The government led by Prime Minister Keith Mitchell has lost its bid to secure public support for seven constitutional changes in a referendum held on 24 November.

Among the proposals were the abolition of appeal to the Privy Council in London in favour of the Caribbean Court of Justice (CCJ), fixed term parliaments, a maximum three terms for prime ministers, and a change in the oath of allegiance from the Queen to the state of Grenada. The proposals were decisively rejected, all by over 56% and some by over 70%, but on a low turnout of only 32%.

The prime minister has sought to put a brave face on the outcome, but he is not under any great political pressure. The ruling New National Party (NNP) controls all 15 seats in the House of Representatives after the National Democratic Congress (NDC) failed to win a single seat in the 2013 general election. The NDC had gone into the election with four seats to the NNP’s 11.

After the referendum, Mitchell said: “The only celebration we should have in this is the fact that we brought in for the first time an initiative [holding a referendum] that has never been attempted…I think history would record that during the period of my term in government the fact that we have started a process of looking and attempting to change our constitution.”