Next in Grenada: a welcome 'invasion' of US economic aid

As security problems fade into a dim threat which may still be lurking in the hills, Grenadians' thoughts are beginning to focus more on economic matters. The islanders' outlook is both expectant . . . and tinged with trepidation. Although Grenadians welcome what they hope will be an influx of United States aid, many worry about what a flood of foreign monies might produce.

As one American foreign aid expert who is not in the US government put it, ''There have been two invasions: first the military one, and now the invasion of technical assistance.''

After watching their economy slide down the skids for months, if not years, Grenadians are cheered by the promise of $3 million in US reconstruction aid. Even more encouraging is the prospect of an eventual $20 million to $30 million per year which, if Grenadian and US government sources here are correct, the Reagan administration has slated for the island.

But Grenadians do not want the money spent in a way that infringes on the island's sovereignty or puts them in a position of dependence. At present, the main targets of US aid will be:

1. Reconstructing the economy after the damage inflicted by military intervention and weeks of political turmoil.

2. Employing as many Grenadians as possible, especially the hundreds of young islanders whom recent events have thrown out of work.

Specifically, US sources here say that one-third of the US funds will be devoted to health care (including funds to rebuild the mental hospital that was bombed by US forces); $700,000 will be used to repair the road network; $570,000 is to be spent on the water system; $535,000 for electric power; and $185,000 for education.

In the months before Prime Minister Maurice Bishop's government was overthrown, unemployment among Grenada's 38,000-man labor force stood at 19 percent. With 50 percent of the population under age 25, unemployment of the young was a critical problem. This has been exacerbated by the invasion and the dismantling of the Grenadian Army.

Between 1,500 and 2,500 people were put out of work when the Army was disbanded and construction work ended on the airport and other Cuban and East-bloc projects. Many other Grenadians saw their incomes cut off when their workplaces were damaged in the invasion.

US and Grenadian officials are aware that most of the unemployment is among that sector of the young who were, to an extent, radicalized by the regime of Prime Minister Bishop. Officials want to put these people to work as quickly as possible - partly in order to reduce potential political and security problems.

At the same time, the US is trying to be careful not to lavish attention on Grenada at the expense of its neighbors.

Looking at the general economic assistance picture, one US official says, ''Our policy in the region will not be to reward exclusively the Grenadian prodigal son.''

The US view is that it might be destabilizing to shower aid on Grenada and neglect other English-speaking countries in the eastern Caribbean. Officials estimate that the region as a whole will receive $30 million to $40 million a year in US aid, of which $20 million to $30 million will go to Grenada. They believe that Congress will agree to these figures because of the new consciousness the US public now has of the problem of the eastern Caribbean.

One reason for the high level of the US assistance is the perceived need to match the aid the Bishop government got from East-bloc and other sources.

In 1982, Grenada got almost $20 million from East-bloc countries and $10-12 million from the West. An important part of this assistance was funneled into the international airport, a project Cuba had sponsored and that almost all Grenadians want the US to finish. US sources speculate that the US will complete the airport.

These sources predict that after several years of channeling most assistance bilaterally - directly to a government - the administration will probably return to a more multilateral approach and give substantial aid to such regional Caribbean economic institutions as the Caribbean Common Market (CARICOM), and the Caribbean Development Bank.

US officials acknowledge that military and security assistance will increase, but stress that they are well aware of the political fragility of area regimes.

They note that most of the islands only have police units and do not possess military forces. These sources say neither the US nor the islands themselves wants to establish such forces in the individual countries. There are plans however, for Barbados and the small islands together to form a regional security unit, which Grenada is expected to join in time.

The individual island police units could be trained by US military security teams on the islands or police officers could take classes in the US. Training assistance will probably amount to about $1 million a year for the region, sources say.

But ''The US should avoid using the big stick and trying to dictate what our people's needs are,'' said a prominent Grenadian government official.

''Most Grenadians have a fairly independent way of doing things. Because of all the foreigners who came in under Bishop . . . Grenadians are fed up with non-Grenadians telling them what to do. The more high visibility the US adopts in Grenada, the more it might find that the sympathy it had for the intervention will erode.''

Grenadian businessmen have their own concerns. One who welcomes the aid and expects the private sector to receive important subsidies worries that US aid projects may ''unduly inflate'' wages. He also hopes the US will use Grenadian firms whenever possible.

The White House has sent a team of economic analysts from several agencies to Grenada to explore how US aid should be spent and to what degree it should be extended to the private sector. Some prominent moderate Grenadians have cautioned that the US should not tie itself in too closely with the private sector.

An Caribbean economist wonders about the ability of the island to absorb so much money. He thinks the aid can be positive, but worries the US might sponsor ''white elephants'' - grandiose projects that are not needed and that drain the economy.

He also recommended development of agro-industry and discouraged emphasizing textile industries since textiles can be produced at lower wage rates elsewhere and thus are not competitive.

''The trick is,'' he said, ''to identify a few key areas where people can be productive, train them . . . give them some of the necessary cash, give them competitive access to US markets, and then let them do it themselves.''

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