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Grenada attacks economic doldrums
The Miami Herald / December 15, 1997

By Larry Luxner

ST. GEORGE'S, Grenada -- One of the most enduring reminders of the 1983 U.S. invasion of Grenada -- the former Marxist regime's bombed-out headquarters overlooking St. George's harbor -- will soon be torn down and replaced with a five-star luxury hotel.

The $140 million undertaking, which includes a 500-berth concrete and fiberglass marina for the super-rich, is being financed by Daventree Ltd., a Bahamas-based holding company controlled by Czech investor Viktor Kozeny.

"People are very excited about this project," says Winston Whyte, managing director of Blue Lagoon Real Estate Corp., which is supervising the effort. "Our marina will accommodate the best of the best. That's why we're planning a 180-room hotel, chateaus and villas coming down to the waterfront. It'll be absolutely beautiful. It'll be like a city on the water."

If the Blue Lagoon project ever comes to pass, it will be a badly needed shot in the arm for this poor Caribbean island -- where tourism is stagnant, the banana industry is in crisis and manufacturing investment almost nonexistent.

"Not a single genuine investor has come into Grenada since June 1995," charges former Prime Minister George Brizan. "There is no confidence and no macroeconomic climate to attract investors. The Mitchell government has no plans or policies, and they're not guided by anything except how to protect and preserve their political power."

Brizan, who now heads the opposition National Democratic Congress, makes no secret of his dislike for the nation's current premier, Dr. Keith Mitchell. In yellow leaflets distributed around the island, Brizan refers to Mitchell as a "Devil Leader" whose New National Party "butchers and crucifies the people."

Mitchell -- a former math professor at Washington's Howard University -- says Brizan is completely wrong. Grenada's GDP will have expanded by 5% in 1997, he said -- with this growth being fueled by Grenadians returning home from the United States, Great Britain and Canada, as well as large infrastructure projects like the $23 million National Stadium Complex and a $75 million Ritz-Carlton that'll boast the country's first 18-hole golf course.

"There is an upbeat mood as far as a willingness of people to take initiative, to do things for themselves," the prime minister said in a recent interview. "We came in on a platform that government is not the best avenue to create opportunities or jobs. I think the message is getting out. People are now getting involved in little businesses, setting up manufacturing and microenterprise activities. The perception of Grenada as a country that's not willing to settle down has certainly changed. I think we're settling down politically, and that is convincing people of the need to invest in this country."

One of the smallest nations in the Western Hemisphere, the 133-square-mile island was discovered by Columbus in 1498 and settled by the French in 1650. After oscillating between French and British rule for 130 years, it was ceded to Great Britain in 1783, finally achieving independence in 1974. Its current population is estimated at 98,000.

Besides being the world's second-largest exporter of nutmegs after Indonesia, Grenada's chief claim to fame is its 1979 Marxist coup that toppled Prime Minister Eric Gairy and brought Maurice Bishop to power, and Bishop's 1983 execution by supporters of Bernard Coard. That led to President Reagan's Oct. 25 invasion, the re-establishment of democracy in Grenada, and Washington's eventual passage of the Caribbean Basin Initiative to stem Communist influence in the region.

Dr. Bob Jordan -- an anatomy professor who has taught at Grenada's St. George's University since 1979 -- remembers the U.S. invasion well.

"Everybody says it was a ploy to get Castro out of this country," recalled the Miami native. "But during the last two weeks [of the regime], our students' and faculty's lives were really threatened. I thought they could easily go the other way, make us hostages and set us up for a real bloodbath."

These days, things are much calmer at St. George's University, and Jordan -- who's also associate dean of admissions -- focuses on more pleasant subjects like the university's aggressive expansion plans, which will pump an estimated $25 million into the Grenadian economy. To an observer, the impeccably neat campus, with its pastel buildings overlooking sparkling blue waters, looks more like an expensive Caribbean resort than a med school.

Yet despite CBI benefits and years of European preferential quotas for its bananas, Grenada is still essentially a Third World country whose per-capita income hovers around $2,300. The UN Development Program lists Grenada 54th in the world, with a human development index of 0.843 -- just ahead of neighboring St. Lucia and St. Vincent but way behind other Caribbean islands such as Barbados, Bahamas, Antigua, Trinidad & Tobago and Dominica.

"With the declining agriculture sector over the past two decades, we have been looking at the service sector -- primarily tourism -- to take up the slack," says Anthony Boatswain, general manager of the Grenada Industrial Development Corp. "I think we could compete with other tourist destinations, unlike manufacturing, where we are regarded as a high-priced producer due to economies of scale."

One way the Mitchell government hopes to attract investors is by turning Grenada into an offshore tax haven, and collecting hefty bank fees on secret accounts.

"We are convinced this is the way to go," said Mitchell. "We are quite aware of the possibility for misuse and money laundering, but we -- like many other countries -- will do everything possible to get the business. Let's face it, bankers and people with lots of money want to diversify. They don't want to concentrate their investments in any particular area. If I had money like them, I'd do the same thing."

Meanwhile, the Grenadian government is quietly resuming its once-close ties with Communist Cuba. Mitchell toured Havana last year as a guest of Cuban President Fidel Castro, and has invited Castro to visit Grenada next February, just before the beginning of the annual Caricom summit to be held there Mar. 2-3.

Despite Washington's unhappiness over the warming of ties between Cuba and its Caribbean neighbors, Mitchell says his position is quite clear.

"Cuba was very helpful to Grenada from 1979 to 1983, particularly in the building of our international airport. That cannot be questioned," he said. "Besides that, it played a very crucial role in the development of our human resources, the education of hundreds of children of very poor parentage who would never have had an opportunity to become doctors and engineers. We are not doing anything behind the scenes, and we are not against anyone's security or national interests."

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