There is optimism that a change of government in Grenada could result in the country seeing greater "checks and balances" being put in place for good governance.

That's the prediction from Standard & Poors, the international organisation which rates countries around the world on their creditworthiness. In its latest review on Grenada, Standard & Poors said that  should the main opposition National Democratic Congress (NDC) win the next elections, the change of leadership and new faces in the government "may improve the checks and balances system and the transparency of Grenadian policymaking".
The Keith Mitchell-led New National Party (NNP) government which has been in power for the past three terms has been dogged by widespread allegations of corruption and bribery.

Two of the principal figures in the government, Prime Minister Mitchell himself and his deputy, Agriculture and Energy Minister, Gregory Bowen have been accused of engaging in bribery. Dr. Mitchell is being investigated for allegedly accepting a substantial payment from an international con man in exchange for a diplomatic job while Bowen is denying claims from U.S oil investor, Jack Grynberg that he asked for bribe payments in connection with a 1996 oil and gas agreement.

Following is the political outlook for Grenada as concluded by Standard and Poors:

There has been no change in the level of support for either NNP or NDC.

The ruling party continues to suffer from allegations of corruption and economic mismanagement, while the opposition party lacks the constructive criticism and proactive stance to benefit from these allegations. As a result, more of Grenada's population has become embittered and dis empowered regarding political representation. General elections are due by November 2008, but could happen earlier.

Given the difficult economic and fiscal situation the country faces, the room for policy maneuvering is quite limited in Grenada.  Therefore, the economic and social platforms of NNP and NDC are quite similar and focus on fiscal consolidation, economy revitalisation, and improvement of the social indicators.

Despite similar agendas, should NDC win the next elections, change of leadership and new faces in the government after three consecutive terms of NNP in office, may improve the checks and balances system and the transparency of Grenadian policymaking.
Grenada benefits from close cooperation with the IMF, both in terms of technical and financial assistance.

 In April 2006, Grenada entered into a three-year Poverty Reduction and Growth Facility (PRGF) program with the Fund. Under the PRGF, the targets for central government primary surplus and debt reduction trajectory have been established.

On the structural front, the program targets measures to improve the investment climate and flexibility of labor and financial markets. The arrangement is for a total amount of SDR10.53 million, of which SDR1.56 million (about US$2.2 million) was disbursed at the commencement of the program.

However, due to Grenada's setbacks on the fiscal front in 2006, no further disbursements have been made and fiscal targets have to be revised. On the positive side, some progress has been made on improving the investment legislation and addressing the issue of costly tax holidays.

The new investment code, legislated in 2006, clarifies the legal investment system in Grenada, outlines investor rights and obligations, and details investment procedures and the means to access the fiscal incentives.

In addition, the government started publishing the information on granting tax concessions in the public domain, an important step in increasing decision-making transparency. Grant donors also continue to support Grenada, albeit not to the extent initially pledged.
Of US$290 million of financial support pledged in 2004, only US$110 million has been disbursed thus far.

Last year's grants inflow was US$43 million, and is projected at US$35 million in 2007.

With declining aid from traditional donor community, Grenada is turning to new donors, such as the Bolivarian Republic of Venezuela and People's Republic of China, which recently financed important infrastructure and housing projects in the country.