Foreign Investment Sought : Grenada Confident--but Jobs Are Scarce

ST. GEORGE'S, Grenada — The new government has settled in, U.S. aid is flowing and business confidence is high, but Martin Lewis is still out of work.

Of all the troubles that have plagued this little island-nation, unemployment is proving to be the most persistent. Lewis, a 23-year-old dockworker, has not had a steady job for four years.

“I check all over this place,” he said not long ago. “They say they aren’t taking on workers at this time.”

About 30% of the labor force is still out of work, and in Grenada, a former British territory of about 110,000 people, that means 10,000 or more people are unemployed. To create jobs for them, officials say, private foreign investment is needed. But investment has been slow in coming.

Some Grenadians fear that unemployment could make it difficult to maintain political stability after the remaining U.S. and Caribbean peacekeeping forces complete their pullout later this year.

“Many of the youth are out of work right now,” Lewis said. “They have to be upset in these times.”

Lewis was a supporter of the leftist government that took power in a 1979 coup. That government ended with internal strife and the U.S.-led invasion in October, 1983. The present government, headed by Prime Minister Herbert Blaize, was elected last December and has strong U.S. support.

Lewis said he does not support this government but is not against it, either. What he cares about is whether it can get the unemployed back to work, he said, adding: “All of us are watching to see what will happen.”

Lewis, smoking a marijuana cigarette-- ganja, they call it in the islands--talked with a visitor in the shade of a shelter house at St. George’s cemetery, which overlooks the hillside city and the blue Caribbean Sea. He said he works in the vegetable garden at his parents’ house, plays some soccer and hangs out at the cemetery.

‘It’s the Same Thing’

“Every day it’s the same thing, over and over,” he said. “If I have a little ganja, I smoke, relax my mind.”

Charles (Laddie) McIntyre, president of the Grenadian Chamber of Commerce, said he and many other Grenadians believe that the withdrawal of the U.S. military police and the peacekeeping forces sent here by other Caribbean countries will be premature.

Withdrawal of the 250 U.S. servicemen is scheduled to begin April 15 and be completed in mid-June. McIntyre said he thinks the American troops should stay until the unemployment rate is reduced significantly.

“A hungry man is an angry man,” he said. “It could very well become a serious problem.”

Local business expansion would help create jobs, McIntyre said, and foreign investment is essential.

After the invasion, the Reagan Administration began encouraging private investment in Grenada. But foreign businesses that started the paperwork on possible projects often ran into bureaucratic delays and confusion over government policy. Other potential investors are said to have awaited the outcome of the elections before making any commitment.

Three Projects Started

In February, the new government created the Industrial Development Corp., which is aimed at streamlining procedures for investment. The IDC, as it is called, has the authority to approve investment projects and grant tax breaks and other concessions.

Since the invasion, there have been only three instances of foreign investment that have produced jobs for Grenadians. And two of those operations, both American, closed in December.

One of the two, started by the Ingle Toy Co. of New Jersey, was a factory producing toys out of scrap wood. It employed 78 people.

The other, owned by Ben Vernazza of Oakton, Va., was a plant where nutmeg kernels were bottled and packaged along with a recipe book and a grater. It had 32 workers.

Both apparently had trouble marketing their products in the United States.

Grenadian and American officials had hoped that other foreign investors would quickly establish operations in Grenada after the moderates won the December elections. But three months later, the only project under way is a $5-million hotel of 50 rooms on the small nearby island of Carriacou. Ground was broken not long ago. The project is being financed by West Germans. Other hotels are in the planning stages.

“Nothing has really come on stream as yet,” said Anthony Boatswain, manager of the Industrial Development Corp. In many cases, the delays are due to financing problems, he added.

The best and most immediate prospects for foreign investment and for new employment are in the tourist industry, according to Boatswain. He listed five major hotel or condominium projects that have been approved and could start this year. They are expected to cost more than $80 million in all and to add more than 1,000 rooms to Grenada’s existing stock of about 600 rooms.

However, Boatswain said he expects no more than 2,000 or 3,000 jobs to be added this year through the new hotels.

Among potential investors considering industrial projects is an American group interested in assembling computer parts here, Boatswain said. That project, now in the exploratory stage, would employ 500 people.

Traditionally, Grenada’s principal exports have been nutmeg, cocoa and bananas, but prices for nutmeg and bananas are depressed on the world market.

$57 Million in U.S. Aid

Since the 1983 invasion, foreign aid has helped keep the economy afloat. The largest donor has been the United States, with a total of $57.2 million--more than $600 for every Grenadian.

About 1,440 Grenadians are at work on U.S. aid projects, mostly on what U.S. officials call “infrastructure revitalization”--repairing roads, waterworks and other basic support systems needed for economic development.

U.S. officials say it is not just the infrastructure that needs to be strengthened but also the government’s capacity to deal with foreign companies as well.

A U.S. official who once expressed hope for an investment boom in Grenada has resigned himself to a slower pace.

“I am actually beginning to think things are moving just about as fast as the island can absorb,” the official said. “I’m not depressed at all about the future. I think it’s all going in the right direction.”

Geoffrey Thompson, a leading Grenadian businessmen, said he and other local entrepreneurs are expanding without hesitation.

“To a man, we are mortgaging all our assets to finance plans we have been sitting on for years,” Thompson said. “You can just see things sprouting up.”