It's now offical.

Grenada has formally approached the Wshington-based International Monetary Fund (IMF) for further financial assistance to help the island whose finances have been left in further tatters following hits by two hurricanes in less than a year.

Faced with a massive and mounting natoinal debt of over 1.5 billion E.C dollars, Finance Minister Anthony Boatswin has written to the Managing Director of the Fund to put forward Grenada's case for additional financial help.

"The Government of Grenada hereby requests a three-year arrangement under the Poverty Reduction and Growth Facility in an amount equivalent to SDR 10.53 million (90 percent of quota)", Boatswain said in the letter.

Following is the full text of the letter:

St. George's
Grenada

March 21, 2006

Mr. Rodrigo de Rato
Managing Director
International Monetary Fund
Washington, D.C. 20431
UNITED STATES OF AMERICA

Dear Mr. de Rato:

Reconstruction activity is proceeding well following the unprecedented 200 percent of GDP damage caused by Hurricane Ivan in September 2004.

Visitors to our shores cannot believe the tremendous progress that we have made in such short time, particularly in light of the additional damage and delay caused by Hurricane Emily in July 2005.

This success owes much to policies that have sought to cushion the adverse impact of the hurricanes on the population, donor and creditor support, as well as the fortitude of the people of Grenada. With reconstruction broadly on track, the government has proceeded to prepare and launch a home-grown medium-term reform programme, "Enhancing Growth, Poverty Alleviation and Macroeconomic Stability".

The objectives and policies the government intends to pursue during 2006-08, with particular emphasis on policies for 2006, are detailed in the attached memorandum of economic policies (MEP).

The main goals of the program are to:

*Promote sustained high economic growth by improving the climate for private investment.

*Restore fiscal and debt sustainability through fiscal consolidation and reform.

*Reduce vulnerabilities by safeguarding the soundness of the financial system; and

*Reduce poverty through more effective social development programmes and safety nets.

In support of our economic policies and objectives, the Government of Grenada hereby requests a three-year arrangement under the Poverty Reduction and Growth Facility in an amount equivalent to SDR 10.53 million (90 percent of quota).

We believe that the policies and measures set forth in the attached MEP will achieve the objectives of the programme. The government also stands ready to take additional policy measures as appropriate to ensure the attainment of these objectives.

The MEP reflects the objectives for poverty reduction that we outlined in our 2004 Poverty Eradication Strategy, which is being submitted to the Boards of the World Bank and IMF under separate cover as the country's Interim-Poverty Reduction Strategy Paper.

Grenada will consult with the Fund on the adoption of these measures, and in advance of revisions to the policies contained in the MEP, in accordance with the Fund's policies on such consultation.

We expect the first review under the arrangement to be completed by September 15, 2006 and the second review by March 15, 2007.
The government authorizes you to make public the contents of this letter and MEP as well as the accompanying staff report.

Yours sincerely,

Honorable Anthony Boatswain
Minister of Finance