Revo Out. U.S. In.

After trying to destabilize Grenada for four years and then crippling the island's infrastructure in a military invasion, the Reagan Administration has announced a plan to rebuild the island's economy and "help the Grenadians help themselves."

Based on the free market models of Jamaica and Puerto Rico, the U.S. plan will grant a generous dose of economic aid to the private sector of Grenada in order to return the economy "to a normal state of activity."

The program will be coordinated by the U.S. Agency for International Development (AID), which has pledged $3.4 million in emergency aid and sent an intergovernmental team to the island to investigate what role private business and multinational corporations can play in Grenada's economy. Details were announced at a November 8 press conference by AID� administrator Peter McPherson.

At the session, McPherson stated that the U.S. had "no plans" to finish construction of the international airport that the Reagan Administration had said was being built for military purposes. The economic program for the island, McPherson said, would be centered around tourism and agricultural exports.

The emergency AID money will be used to rebuild the water system, roads, and other facilities destroyed in the November invasion. AID is also attempting to meet immediate social needs disrupted by the invasion. Since the hostilities, the free monthly distribution of powdered milk and butter has stopped, while medical care and education have been interrupted by the expulsion of Cubans from the island. McPherson noted that U.S. Army doctors were filling the immediate gap caused by the "repatriation of foreign personnel," but did not indicate how medical services would be provided in the long-run.

McPherson also admitted that a "disaster-assistance survey team" from the Pentagon had entered Grenada "almost in conjunction with the troops" and that the "Department of Defense people and the AID people have been working closely, really together, as a team."

The AID mission to Grenada-made up of representatives from the State Department, the Department of Commerce, and the Overseas Private Investment Corporation-left on November 14 to spend a week meeting with Grenadian businessmen to see how their needs can be met by the U.S. government and American businesses. AID will be "particularly sensitive to the needs of the Grenadian private sector as a central instrument for economic recovery," said McPherson.

The AID mission will be followed by a delegation of representatives from the U.S. hotel, airline, small manufacturing, and tourist industry, who will look for investment possibilities. These businesses will be assisted through grants or credit guarantees through the Export-Import Bank, and other agencies, McPherson said.

The rationale for the AID program is that the Grenadian economy had "deteriorated" under Bishop. "We thought, frankly, that the Grenadians weren't doing the best thing for themselves in terms of using the resources they had to build the economy," said McPherson. "Agriculture, for example, in Grenada has been going down steadily for several years."

Echoing President Reagan, McPherson also said that the new airport being built by the Cubans was not meant for tourism because the island country "had only a few hundred hotel beds." But he stumbled over his words trying to avoid the issue of the airport's importance to the tourist trade.

Originally, McPherson said, the airport "served the economic interest" of the country and had boosted local employment. But "the problem," he continued, wasn't "so much the facility of the airport" but the "lack of direct flights... [and hotel] accommodations." When a reporter pointed out that this was precisely why the airport was being built, McPherson changed his mind: "Direct flights wasn't [sic] a critical part of encouraging tourism," he replied.

To many people, the U.S. arguments about the economy are weak justification for what is widely considered an illegal invasion and occupation. The U.S. action was overwhelmingly condemned in the U.N., while many U.S. legal experts have criticized the invasion as a violation of both U.S. and international law. Forty professors at Harvard Law School, for example, signed a petition against the invasion. Among their criticisms:

• After U.S. citizens were evacuated in the early stages of the invasion, the President had no constitutional authority to continue the invasion which had not been preceded by a formal declaration of war.

• Several clauses of the 1981 treaty of the Organization of Eastern Caribbean States, which was invoked to justify the invasion, were violated, including a by-law requiring unanimous consent for armed intervention. Three member nations, including Grenada, had not participated in the vote.

"There's no way that by self-help we can impose democracy in other countries," one Harvard law professor said at a panel discussion, November 1. "What we are spreading is lynch justice."

The U.S. rationale for the occupation is also contradicted by people familiar with the situation in Grenada under Maurice Bishop. They point to the many improvements in education and health care and in creating conditions for economic growth as examples of the revolution's vitality. After taking power in a near bloodless coup in 1979 for example, the government built a fish processing plant so Grenada could begin processing and exporting fish for the first time. According to Cathy Sunshine, staff person of the Washington-based Ecumenical Program for Inter-American Communication and Action (EPICA), IMF figures showed that Grenada was "one of the few countries in the hemisphere to enjoy positive economic growth." Writing in the November 16, 1983 issue of the Guardian, Sunshine also quotes from a World Bank memorandum of August 1982, which stated that the Grenadian government "is now addressing the task of rehabilitation and of laying better foundations for growth within the framework of a mixed economy. .. Government objectives are centered on the critical development issues and touch on the country's most promising development areas." Under Bishop, says Sunshine, unemployment fell from 49 percent to 14 percent.

Despite the Reagan Administration's claims that Grenada was "on the verge" of being taken over by Cuba or the Soviet Union, at least half of the island's economy was in private hands (the Washington Post says 50 percent). According to the Journal of Commerce, "the private sector controlled agriculture, manufacturing, commercial banking... the insurance business, and services." Private investment, the newspaper reports, "had been increasing in the areas of beverages, the garment industry, flour production and furniture making." And in his press conference, McPherson referred to the private sector in Grenada as "the engine that provided the income and growth."

Many private firms-and some multinationals-were involved in the construction of the airport as well, including companies from the U.S., Finland, and England. The Venezuelan government was supplying oil for both paving the runways and for the use of construction vehicles. The English firm, Plessey, Ltd.-one of the world's largest construction companies-has strongly denied the U.S. claims that the airport was a military installation.

The new airport would have been an important stimulus to Grenada's tourist trade, according to a spokesperson for the Grenadian Ministry of Tourism in New York. Under the Bishop government, she says, tourism was a major priority. In 1980, tourism offices were opened and expanded in North America and the United Kingdom, while staff for the Ministry was quadrupled. "It was a very ambitious effort given the resources of the island," she says.

The spokesperson also says that tourism had increased this year (visitors from the U.S. had increased 13 percent from 1982) and that 28,000 tourists were expected in 1983-only five thousand less than the peak of 33,000 in 1974. Tourism has been in decline throughout the Caribbean region because of the recession.

As for AID's claims that Grenada lacked the hotel rooms to accomodate tourists, she notes that "Plans were underway to expand the hotels because tourism was starting to come back. New investment codes had been issued to try to get more hotel investments."

Sir Paul Scoon, the Governor General of Grenada and the only legitimate authority recognized by the U.S., has asked that the airport be completed to help the tourist trade.

One person who was certain that the airport would provide important help to the economy of Grenada was G.A. Menezes, head of the Grenada Chamber of Commerce and Managing Director of Geo. F. Huggins and Company, an export-import firm which is one of the largest companies on the island. Well before the invasion, at a June 6 reception for travel agents in New York City, Menezes told reporters how the airport would help his chicken growing business and expand his floral exports.

As things stand now, air freight is flown into Barbados, whose airport can handle the larger planes. There the freight is unloaded and packed on smaller planes for the trip to Grenada. For perishables, that arrangement is slow and expensive-and, for Menezes, has meant a lot of dead baby chicks.

The motives behind the sudden U.S. interest in the welfare of the Grenadian people are highly questionable-especially when the past attitude of the Reagan Administration is considered. On the day of the AID press conference, the U.S. revealed it had opposed Grenada's application for a $14.2 billion loan from the IMF in August, 1983-three months after Prime Minister Bishop had supposedly reached a "secret agreement" with then National Security Advisor William Clark to ease tensions between the two countries. According to the Administration, opposition to that agreement in the Grenadian government led to the overthrow of the Bishop government by Bernard Coard, allegedly at the behest of Moscow, Havana, or both.

Since 1979, the U.S. took measures on at least six other occasions to block both emergency and economic aid to Grenada (see box).

When questioned by a reporter about the legality of the U.S. economic efforts in Grenada, AID� administrator McPherson stated that "we think that it's important that these countries have viable economies, that they have democracies. Democracies really generally flourish when there are viable economies." But he added: "I see our stimulating and assisting, in areas like agriculture, basically in a self-help kind of way. We think that people need to be helped to be put back on their feet so that they can earn their own money and run their own lives."

To many observers of the Grenadian revolution, this was precisely what was happening before the tragic overthrow of the Bishop government and the subsequent U.S. invasion.

U.S. versus Grenada A chronology of destabilization Since 1979, when a revolution led by Maurice Bishop toppled the regime of Edward Gairy, the U.S. has taken a number of political and economic measures to undermine the government-including a CIA destabilization program that was overruled by the U.S. Senate. Included here are the economic measures taken by both the Carter and Reagan Administrations to weaken the Grenadian revolution: October 1980 After Hurricane Allen destroys 40 percent of Grenada's banana crop, the U.S. Agency for International Development (AID) offers rehabilitation aid to the Regional Banana Exporting Association with explicit conditions that Grenada be excluded. March 1981 U.S. Director on the Board of the IMF opposes Grenada's application for $63 million for capital projects in agriculture, agro-industry, tourism, and housing. Bowing to U.S. pressure, the IMF grants only $4 million credit for short term financial stabilization but not for capital projects. March 1981 William Dyess, spokesperson for the Reagan Administration, is quoted in the Miami Herald as saying that the Reagan Administration has engaged in intense diplomatic lobbying aimed at discouraging European economic assistance to the airport project. Meanwhile, the Washington Post reveals that a U.S. official was sent to headquarters of the EEC to pressure it to halt economic aid to Grenada. Spring 1981 U.S. uses its influence in the World Bank to withhold the Bank's endorsement of Grenada's public investment program, blocking Grenada's access to $3 million in funds from the International Development Agency. Lack of endorsement makes it difficult for Grenada to raise funds from other international banks and lending agencies. June 1981 U.S. offers $4 million package to the Caribbean Development Bank on the condition that none of the money go to Grenada. Bank refuses money on these conditions. August 1983 U.S. blocks $14.2 million loan from the IMF to Grenada.

COMMENTARY: The Jamaican Model Is A Shaky One by George Lowrey When the Reagan administration unfurls its geopolitical map of the Caribbean Basin, it points to one small island as the shining example of the success of unfettered private enterprise over democratic socialism. This island is, of course, Jamaica. Unfortunately for Reagan and his ally in Jamaica, Prime Minister Edward Seaga, free-wheeling capitalist development and the medicine from the International Monetary Fund are not delivering for Jamaica what they promised. Instead, stead, the economy is steadily deteriorating, creating a serious dilemma for Seaga and a public relations problem for the U.S. Given its dismal economic and political standing in other Caribbean countries, the Reagan administration cannot afford to let Jamaica slip too far away as a model. Jamaica is the country in the area that has received the lion's share of U.S. praise and attention - and played a key role in approving and planning the Grenada invasion. Its relations with the U.S. since the fall of democratic socialist Michael Manley in 1980 provide a good example of what the U.S. may have in mind for Grenada. The IMF and World Bank welcomed the election of Seaga and quickly granted him a new loan and easy repayment conditions. The U.S. sent millions of dollars in low cost loans for buying food and feed, and more millions in aid. The U.S. Agency for International Development office in Jamaica was expanded, and American businessmen were recruited and encouraged to expand investments in Jamaica. But Grenada might look to Jamaica's recent economic performance to see where this model leads. While the Jamaican economy did in fact grow during 1981 and 1982, it stayed way below target. Some 32,500 new jobs a year were planned under a three-year IMF agreement, but only about 8,000 per year were created during the first year and a half. Production of bananas, sugar, and bauxite were all lower in 1983 than in 1980, the last year of the Manley government. Moreover, what growth did occur in Jamaica in 1981 and 1982 was unbalanced. Because of the aid, imports were up, and the commerce and distribution sectors of the economy expanded. Overall, the productive sector shrank while the service industries like trade and transportation grew, but only because of the imports - the largesse of the U.S. Now foreign exchange is drying up. With exports down and no new loans on the horizon, Jamaica has been using its foreign exchange reserves to pay for imports. But those are disappearing fast. There are only enough reserves left in Jamaica to pay for imports for another three months - a dangerously low level. Clearly, Seaga and Reagan will have to do some fast work to restore Jamaica's image. Given past events, it is easy to see what they might do. Since they both want to ensure that Jamaica stays loyal to American interests, they might plot out a strategy along the following lines: Prepare to have Seaga move his election date up to 1984. He doesn't have to stand for reelection until 1985, but Ronald Reagan may not be in office then. And Reagan and U.S. support may be the biggest single factor in the Jamaican elections. So they might watch the U.S. presidential campaign closely and be ready to act fast if Reagan appears headed for defeat. Pump up the economy. Use the Reagan advantage and throw some more government-to-government, loans, bilateral assistance, and imports to Seaga. This will give the illusion of further growth. (This, or course, is the opposite of what the U.S. did when Manley was in power.) In addition, increase efforts of the last three years to push business executives through the U.S. Business Committee on Jamaica, (headed by banker David Rockefeller), and get more money into the Jamaican economy. Maybe a Presidential vacation in Jamaica to boost Seaga and encourage tourism as a follow-up to the recent trip by Vice President Bush. Whip up a little violence that can be blamed on the left. In the months preceding the last presidential election in 1980, 750 people died a a result of violence, according to former prime minister Michael Manley. (Many members of Manley's party suspect U.S. involvement.) That should work again, if it is made to appear that the left is engaging in "terrorism" to win the elections. Then use that as a pretext for crackdown on the opposition, politicize the military, and make Seaga look like the savior of law and order. (The Puerto Rican National Guard, most of whose budget is paid by the U.S., is already training the Jamaican Army.) If Jamaicans start showing support for Manley, remind them of the example of Grenada. With that strategy, the message to Jamaicans and the rest of Caribbean peoples would come across loud and clear: flirtation with socialism will not be tolerated. As Michael Manley warned in the American press several weeks ago, what happened in Grenada could happen again. George Lowrey is the pen name of a New York-based economics writer.