St. George’s, July 31, 2012 – Two members of the Upper House of Parliament are warning of an economic crisis in Grenada. But a government minister says the administration of Prime Minister Tillman Thomas is not to be blamed.

Senator Glen Noel, Minister of Information and National Mobilization, said Grenada is being impacted by the economic difficulties being experienced worldwide.

“Grenada is not isolated,’’ said Noel, adding that the responsibility of stimulating the economy is not just a matter of government but it also needs the involvement of the private sector that must be “innovative and creative.’’

Noel’s comments were in response to comments Tuesday in the Upper House from Senators Christopher De Allie and Chester Humphrey, who both painted grim pictures of Grenada’s economy.

“The problems are becoming precarious,’’ said De Allie, manager of Sissons Paints Grenada Ltd., and private sector representative in the senate.

Grenada, De Allie claimed, is “heading to a precipice,’’ with unemployment “approaching 50 percent.’’

He revealed that there has been “significant closure of businesses’’ operating at malls, and the tourism sector has begun rotating workers.

“It is becoming critical,’’ De Allie emphasized.

His assessment was corroborated by Humphrey, the labour representative in the senate.

“I can confirm that the situation is deteriorating,’’ said Humphrey who chaired Tuesday’s sitting of the house in the absence of Joan Purcell, President of the Senate.

Senator Humphrey, who is also President General of the Technical and Allied Workers Union, has said that unemployment has been exacerbated by recent closure of a motor company and also the shutdown of Cromwell Scott & Company Ltd. in St. George’s.

There has also been retrenchment or rotation of workers at places such as Scotiabank, Jonas Browne & Hubbard Grenada Ltd, and Gravel, Concrete & Emulsion Production Ltd., Humphrey said.

Very soon, said Humphrey, two or three more motor companies could shut their doors, and retrenchment could hit the Grenada Breweries Ltd. and LIME, the communications provider.

“The situation is getting very, very desperate and grave,’’ Humphrey said.

Senator De Allie said the private sector still has concerns with the Value Added Tax that was introduced by government about two years ago as an “instrument of policy’’ that has been “proven to be very effective in promoting economic efficiency, removing distortion of prices in the production process, and minimizing cascading of taxes.’’

De Allie said attempts to sit down and discuss the situation with Ministry of Finance officials have been met with “constant postponements and lack of sensitivity.’’

However, Senator Noel retorted that it was “unfair’’ to say government has been insensitive and not making itself available to meet with members of the business community.

“We are willing to work with stakeholders to confront the issues,’’ Noel said.