A WORLD BANK COUNTRY STUDY PU B-5606 ( ~~tSt GRENADA llv-5 Economic Report 077-0t 0036oo; choke I Bro ooir HS .F.t-001) A WORLD BANK COUNTRY STUDY . , 1. GRENADA Economic Report The World Bank Washington, D.C., U.S.A. Copyright © 1985 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing October 1985 World Bank Country Studies are reports originally prepared for internal use as part of the continuing analysis by the Bank of the economic and related conditions of its developing member countries and of its dialogues with the governnents. Some of the reports are published informally with the least possible delay for the use of govem- ments and the academic, business and financial, and development communities. Thus, the typescript has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. The publication is supplied at a token charge to defray part of the cost of manufacture and distribution. The designations employed, the presentation of material, and any maps used in this document are solely for the convenience of the reader and do not imply the expression of any opinion whatsoever on the part of the World Bank or is affiliates conceming the legal status of any country, territory, city, area, or of its authorities, or concerning the delimitation of its boundaries or national affiliation. The most recent World Bank publications are described in the annual spring and fall lists; the continuing research program is described in the annual Abstracts of Current Studies. The latest edition of each is available free of charge from the Publications Sales Unit, Department T, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from the European Office of the Bank, 66 avenue d'lena, 75116 Paris, France. Library of Congress Cataloging-in-Publication Data Main entry under title: Grenada, economic report. (World Bank country study) 1. Grenada--Economic conditions. 2. Grenada-- Economic policy. 3. Public investments--Grenada. I. Series. HC156.5.Z7G844 1985 338.97298'45 85-20393 ISBN 0-8213-0626-X PREFACE AND ABSTRACT 1. This report is based on the work of an economic mission to Grenada during January 1985. The mission consisted of Theresa P. Jones (Mission Chief-IBRD), Vincent M. Rague (IBRD), Ramesh Chander (IBRD) H. David Davis (Tourism Consultant), Gerard Byam (IARM), and Wallace Joefield-Napier (CDB). Much of the Statistical Appendix draws on previous work of the International Monetary Fund. 2. After a decline in real GDP in 1983 of 2%, it is estimated that the economy grew marginally in 1984 (.6%) because of a rebound in the latter half of the year. As a result of measures taken as part of an IMF program, the government generated surpluses on current acount in 1982-83. However, the sharp increase in capital expenditures, primarily associated with the construction of the new international airport, caused the overall deficit to widen after 1979. Much of the deficit was covered by inflows of external grants and concessional loans. 3. However, the use of nonconcessional financing, which had been negligible before 1981, rose to nearly 12% of GDP by 1982. In 1983 the government began to experience a liquidity crisis, largely because of delayed external flows, which was exacerbated by the political disruptions and military intervention in 1983. Fiscal performance deteriorated in 1984 with the current surplus on central government operations dropping to EC$.7 million, compared to EC$6.9 million the previous year. It is estimated that the current account deficit of the balance of payments dropped as a share of GDP in 1983 (to 23%); imports declined given the smaller public sector investment program and tourism receipts rose. On the capital account, official grants doubled from the 1983 level, enabling the current account deficit to be financed with relatively little recourse to public external borrowings. Outstanding public external debt (including the IMF) at the end of 1984 was estimated at US$48 million, about 55% of GDP. 4. The new government, which was elected in December 1984, is in the process of formulating its economic strategy. It has, however, confirmed its objectives of promoting a large private sector role in the economy and undertaking a comprehensive fiscal reform. The main issues identified in the report include the need for: - a comprehensive fiscal reform to improve incentives for productive activities; - a strengthening of public sector finances through the reorganization and reduced role of the public sector and reform of the public enterprises; - promotion of private investment through an improved incentive system and upgraded economic infrastructure; - reduction of the high level of unemployment; and - continuation of the liberalization of the economy, particularly in the areas of trade and price controls. CURRENCY EQUIVALENTS Currency Unit: East Caribbean Dollar When it was created in 1965, the East Caribbean Dollar was tied to the pound sterling at a rate £1.00 - EC$4.8. In July 1976 the link with sterling was broken, and the East Caribbean Dollar was aligned with the US dollar at a rate US$1.00 - EC$2.70. Since July 1976 it has been EC$1.00 - US$0.370, or US$1.00 - EC$2.70. Page 1 of 2 COUNTRY DATA - GRENADA AREA POPULATION DENSITY 300 km2 92,322 (end-1983) 308 per km2 Rate of growth: -.8% (from 1970 - 1981) 462 per km2 of arable land POPULATION CHARACTrR1STICS 1983 HEALTH 1979 Crude Birth Rate (per 1,000) 31.4 Population per physician 431.0 Crude Death Rate (per 1,000) 8.7 Population per hospital bed 170.0 Infant Mortality (per 1,000 live births) 21.2 INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP (1971) % of national income, highest quintile - % owned by top 10% of owners 46.4 lowest quintile - % owned by smallest 10% of owners 1.0 ACCESS TO PIPED WATER 1975 ACCESS TO ELECTRICITY (1978) % of population - urban 100.0 % of population - Total 73.0 - rural 77.0 NUTRITION 1977 EDUCATION 1979 Calorie intake as X of requirements 86.0 Adult literacy rate % Per capita protein intake (gr./day) 57.0 Primary School Enrollment % 108.0 GNP PER CAPITA IN 1983: US$836 a/ GROSS NATIONAL PRODUCT IN 1983 ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. % 1980-82 1983 GNP at Market Prices 81.3 100.0 5.5 -2.9 Gross Domestic Investment 34.3 42.2 34.5 -15.2 Gross National Saving 5.3 6.5 Current Account Balance -20.0 24.6 Exports of Goods, NFS 38.6 47.5 -1.5 1.7 Imports of Goods, NFS 74.2 91.3 12.0 -.9 OUTPUT 1983 Value Added Labor Force (1981) US$ Mln. % Thousands % Agriculture 18.5 22.8 8.0 28.8 Industry 13.6 14.3 4.9 17.6 Other 52.1 62.9 14.9 53.6 Total 84.2 100.0 27.8 100.0 GOVERNMENT FINANCE Central Government (EC$ Mln.) %of GDP 1981 1982 1983 1981 1982 1983 Current Receipts 63.0 74.4 81.3 29.6 34.0 36.3 Current Expenditure 64.4 71.6 74.4 30.2 32.7 33.2 Current Surplus b/ -1.4 2.8 6.9 -.7 1.3 3.1 Capital Expenditures 74.8 103.6 92.2 35.1 47.3 41.1 External Borrowing (net)S/ 53.9 67.3 70.0 25.3 30.7 31.2 a] AtLas method, revised national accounts. J Before external budgetary assistance. includes external capital grants. .. not applicable Page 2 of 2 COUNTRY DATA - GRENADA NONEY, CREDIT AND PRICES 1979 1980 1981 1982 1983 Money and Quasi Money 129.0 136.2 146.1 153.0 152.2 Bank Credit to Public Sector 18.6 14.2 17.9 48.8 54.8 Bank Credit to Private Sector 72.3 84.4 87.3 89.7 89.0 (Percentages or Index Numbers) Money and Quasi Money as Z of GDP 87.5. 77.6 68.6 69.9 67.9 General Price Index (1979-100) 113.3 136.2 161.8 174.4 185.1 Annual Z Changes in: General Price Index - 21.2 18.8 7.8 6.1 Bank credit to Public Sector - -23.7 26.1 172.6 12.3 Bank credit to Private Sector - 16.7 3.4 2.7 -.8 BALANCE OF PAYMENTS (US$ millions) MERCHANDISE EXPORTS (AVERAGE 1981-1983) 1980 1981 1982 1983 US$ 'mill. Z Exports of Goods, NFS 39.9 39.6 38.2 38.9 Cocoa 5.2 27.6 Imports of Goods, NFS 63.2 73.7 82.7 78.5 Nutmeg 3.1 16.5 Resource Gap Bananas 3.4 18.1 (deficit = -) -23.3 -34.1 -44.5 -39.6 Mace .8 4.2 Fresh Fruits 2.1 11.2 Factor Payments (net) 0.4 0.3 -0.2 -0.2 Clothing 2.1 11.2 Net Transfers 9.6 10.4 11.0 10.8 Other 2.1 11.2 Balance - Current Account -13.3 -23.4 -33.7 -29.0 Total 18.8 100.0 EXnEgWAL DEBT, DECEMBER 31, 1984 NET MLT Borrowing 1.3 7.5 9.5 14.7 USS Mln. Disbursement 1.8 8.2 10.1 15.3 Public Debt, inc. guaranteed 1/ 48.2 Aimrtization 0.5 0.7 0.6 0.6 Non-guaranteed Private Debt - Total Outstanding & Disbursed - Capital Grants 12.7 12.9 16.7 12.8 Other Capital (Net) -0.6 -4.6 7.8 -0.8 DEBT SERVICE RATIO FOR 1984 1/ 2/ Increase in Reserves (-) -0.4 1.0 -0.2 -0.1 X Public Debt, incl. guaranteed 13.0 Non-guaranteed Private Debt - Total Outstanding & Disbursed - RATE OF EXCIRANGE IBRD/IDA LENDING (April 1985) (Million US$): IBRD IDA Since - May 1976 US$1.00 - EC$2.70 1.00 - US$0.37 Outstanding inc. Undisbursed 5.0 1/ Includes debt due to IMF. 2/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. GRENADA TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS I. RECENT ECONOMIC DEVELOPMENTS .......................... 1 A. Background and Recent Economic Performance .......... 1 B. Population and Employment ....... ....... 2 C. Savings and Investment .... ............ . . . . . . . . . . . . . 2 D. Central Government Finances ......................... 3 E. Money and Credit ................................... 5 F. Prices and Wages ................................... 5 G. External Sector ... ..* ....................... ........... 6 II. DEVELOPMENT POLICY ISSUES ............................. 8 A. Agriculture .................................... 8 B. Tourism ....... 14 C. Manufacturing ........*.. . .................................. 20 D. Economic Infrastructure and Public Enterprise Issues . . .............................. . 25 III. PUBLIC SECTOR INVESTMENT PROGRAM....................... 31 A. Performance in 1984 ....................... 31 B. Projected Program for 1985-87...... 31 C. Financing the Program and Future Govt. Strategy.... 33 IV. PROSPECTS ................... ...................... 35 A. Economic Growth .... .............. ................. 35 B. Fiscal Operations . ................................ 37 C. Balance of Payments ............................... 37 D. External Debt .... ......................... . . ......... 39 GOVERNMENT'S PROJECT LISTS ............................ 40 STATISTICAL APPENDIX .. ................... ............ 51 Summary and Conclusions i. A revolution in March 1979 brought the People's Revolutionary Government (PRG) to power. The PRG established new trading and aid links and expanded the role of the public sector in agriculture, manufacturing and commerce. After growing on average by 6% a year in 1981-82, GDP declined by an estimated 2.0% in 1983. Construction activity, which had been the main impetus of economic growth, fell by about 20% in real terms, primarily because work on the international airport stopped after the coup d'etat and subsequent military intervention by the United States and several Caribbean countries in October 1983. An interim administration took office in December 1983, followed by elections in December 1984 in which the New National Party (NNP) came to power. It is estimated that GDP rose by slightly less than 1% in 1984 because of a strong upturn in the second half of the year. However, because of layoffs in the manufacturing sector and those displaced after the change in government, officials estimate that about a quarter of the labor force currently is unemployed, compared to 17.4% in 1981. One of the major challenges the new government faces is to encourage investment so that more jobs will be generated. ii. In August 1983 the People's Revolutionary Government entered into an Extended Facility arrangement with the IMF and made an initial drawing at that time. However, in the aftermath of the October events, the interim administration decided to cancel the EFF in January 1984. The central government's current surplus fell from 3.1% of GDP in 1983 to .3% of GDP in 1984. Current expenditures increased by 17% to reach 37% of GDP because of a wage increase awarded to government employees and higher interest payments. Tax revenue rose by only 10% to a level of 33% of GDP because of a reduction in the stamp duty on imports and lower receipts from the corporate income tax. Because of a sharp drop in the government's capital program the overall deficit narrowed from 38% of GDP in 1983 to 30% in 1984. The overall deficit was financed by external current and capital grants and, to a lesser extent, by net external borrowing. The newly elected government believes that Grenada's present system of taxation does not offer sufficient incentive for productive activities and has committed itself to a comprehensive fiscal reform. The 1985 budget indicates a continued deterioration in fiscal performance, primarily because of tax relief measures and some extraordinary current expenditures. iii. Net banking system credit to the public sector dropped sharply in 1984 as the government liquidated part of a special deposit requirement. In an effort to make the determination of interest rates more flexible, the government raised the ceiling on lending rates to 16% from 12.5%, effective August 31, 1984. In addition, the minimum rate for savings deposits was increased to 4% in early 1985. Continued moderation of international prices and the appreciation of the US$ (to which the EC$ is tied) against major currencies resulted in an average annual increase of 5.6% in the retail price index in 1984, comupared to 8% in 1982. iv. Following a period of widening external imbalances, in 1984 the current account deficit dropped to 23% of GDP. Imports fell because of the smaller public investment program and receipts from tourism rose. On the capital account, official grants doubled from the 1983 levels, enabling the current account deficit to be financed with relatively little recourse to public external borrowings. Outstanding public external debt had risen from US$14.4 million (36% of exports) in 1980 to US$48.4 million (124% of exports) in 1983, primarily because of nonconcessional borrowings to finance the international airport. Since the level of external debt increased only marginally in 1984, its share of exports dropped to 114%. Debt due to the IMF accounted for 13% of total public external debt at the end of 1984. Debt service as a share of receipts from exports of goods and nonfactor services jumped to 13% in 1984. Under the interim administration the system of foreign exchange restrictions was liberalized with the dual objectives of improving private sector confidence and increasing the market orientation of the economy. Approval from the Ministry of Finance is no longer required for remittances of documented imports and most services. In addition, the limits on foreign exchange purchases for travel were raised. The medium-term objective of the government should be to reduce the list of items subject to import licensing, including those goods produced locally, and to replace any quotas with tariffs. These actions are needed in order to promote some degree of competition in the manufacturing sector and also to ensure that potential exporters have easy access to the imported inputs they need. v. The newly elected government is making the revitalization of agriculture the keystone of their efforts to promote economic growth. About 75% of the sector's value added comes from four exported commodities--bananas, cocoa, nutmeg and mace. During the past seven years production of these crops has trended down. The reason for this decline includes depressed world prices during most of the period, deterioration of agricultural support services, low yields because of the maturation of plants (cocoa and bananas), marketing difficulties (nutmeg), poor harvesting practices (mace), and a shortage of agricultural labor. In addition, the appreciation of the US$ (to which the EC$ is tied) against the pound sterling has reduced revenues in local currency and has made Grenada less competitive. Priority should be given to the ongoing projects to rehabilitate cocoa and bananas so as to reverse the production decline, given the assured markets which these crops have. For bananas, measures need to be taken to lower the operating costs of the Grenada Banana Growers Society, to improve post-harvesting activities, and to raise productivity so as to ensure a viable industry. The export duty on cocoa and nutmeg is currently equivalent to slightly under 20% of the average export price. Since lowering the duty, thereby increasing returns to the farmer, would encourage production, a gradual decrease in the export duty should be given priority within the planned fiscal reform. In the 1985 budget speech the government announced an initial reduction. vi. Tourism arrivals (excluding Grenadians residing abroad) increased by nearly 20% in 1984 to reach 29 thousand, still short of historical highs. Total receipts from all visitors in 1984 amounted to US$17.3 million, recovering to the 1982 level but still below the 1980 peak. The major constraint on the development of tourist traffic is the limited availability of accommodations. vii. The new airport at Point Salines began operating at the end of 1984 although it is not scheduled to be fully completed until the end of 1985. The prospective level of traffic over the next five years indicates that there is little chance of the airport investment showing an adequate rate of return. However, it appears that the airport will be able to cover operating costs through receipts from the ticket and departure taxes if the latter is increased to EC$30. The government has already raised the tax from EC$15 to EC$20 effective May 1, 1985. A major increase in air services will only take place when increased accommodation capacity convinces carriers that the market justifies the services. At present, the airport does offer an important advantage in that night landings are possible. Improvements in specific tourism zones are essential before future hotel development can be permitted. In particular, sewerage, drainage and beach erosion at Grand Anse require special attention. viii. Further development of the tourist trade after 1985 depends heavily on the construction of additional hotel capacity. Early action is required if substantial capacity is to come on stream in the next three or four years. As a first step, the government has decided to lease the Grenada Beach Hotel and is seeking an experienced hotel company which would invest in an agreed schedule of work and to operate the hotel. It is recommended that the government privatize or lease the properties of the Grenada Resorts Corporation. The government should obtain professional assistance to advise on negotiations with foreign hotel developers and on privatization of the various hotel facilities. ix. The manufacturing sector in Grenada has grown little in recent years because of a variety of constraints, including policies which discouraged investment. In addition, an emerging clothing export business was curtailed drastically after Trinidad and Tobago imposed exchange controls, accompanied by a foreign exchange budget which established ceilings on the amount to be allocated for imports (not just from Grenada, but from all trading partners), particularly consumer goods, in late 1983. In order to promote growth in the sector, the interim administration and the newly elected government have moved quickly to restore investor confidence by modifying incentives and setting up an institutional framework to streamline the investment approval process. In addition, actions need to be taken in the following areas: improvement in vocational training; promotion of manufacturing geared to export to extra-Caricom markets (through use of 807 ventures, for example); successful completion of projects to add more factory space and planning for future industrial sites; and some reduction in the corporate income tax; in addition to consideration of a tax drawback scheme for exporters. x. In order for Grenada to achieve the goals of increasing investment and production in agriculture, manufacturing, and tourism, significant improvements are needed in supporting economic infrastructure. The main problems now confronting the electric utility (GRENLEC) are insufficient capacity, the need for rehabilitation of some units, and a tariff structure which does not enable the company to generate enough revenue to cover maintenance and new investment. In order to remedy these problems GRENLEC is now carrying out a program to rehabilitate and expand generating capacity to meet the immediate needs of the economy. A tariff study, currently in progress, needs to be completed without delay. In addition, a study needs to examine capacity needs over the next 5-10 years and, on that basis, recommend an investment program. In recent years the telephone company consistently has improved its gross profits. However, the company operates under a serious capacity constraint which has resulted in poor service. The company has drawn up plans to modernize and expand its operations and plans to seek external financing. The Central Water Commission (CWC) confronts both operational and financial problems. The problem is an important one which particularly affects future developments in the tourism sector. Current capacity is not sufficient to meet demand, in part because old pipes result in high system leakages. During 1985 the CWC will receive technical assistance to carry out an assessment of the water supply system and develop a 10 year investment plan. xi. Grenada's extensive road network has deteriorated badly because of years of neglected maintenance. The economic losses caused by the poor state of the roads are acute in the agricultural sector in terms of produce damage, particularly in the case of bananas. The primary investment priorites are road maintenance and reconstruction and an expanded agricultural feeder road network. It is important that the road maintenance unit within the Ministry of Works and Communications be upgraded and that a system of controls and standards for the work undertaken be established. xii. Over the past few years the non-financial public enterprises in Grenada have contributed only marginally to public savings. The new government is now reviewing existing public investments with a view to privatizing wherever warranted. The government needs to establish clearcut performance targets for the public enterprises with the objective of increasing current savings and reducing transfers. xiii. Expenditures of the public sector investment program amounted to EC$77.4 million in 1984, equivalent to 33% of GDP. This compares with expenditures of EC$105 million (48% of GDP) in 1982 and EC$92 million (41% of GDP) in 1983. Transport accounted for 58% of the program with about EC$34 million spent on the Point Salines Airport. The proposed public sector investment program for 1985-87 totals EC$240 million. A drop in capital spending by the public sector is expected after 1985, reflecting the government's objective of increasing the role of the private sector in the economy. Approximately a fifth of the three year program is projected to be spent on directly productive projects, primari'ly in agriculture. Two-thirds of expenditures are for supporting economic Infrastructure. Expenditures to complete the international airport are estimated at EC$38.6 million in 1985. Investments to rehabilitate and reconstruct roads account for about a quarter of the three year public investment program. xiv. Committed external financing covers roughly two-thirds of the total 3 year investment program. This leaves about EC$80 million to be mobilized for the investment program plus a projected EC$56 million in external amortization payments and IMF repurchases. After including the contribution of central government savings and likely external budgetary support for 1985-86, EC$77 million (US$29 million) needs to be mobilized of which about a third would be needed in the form of external budgetary assistance or local cost financing of the public sector investment program. xv. It is expected that the economy of Grenada will grow by about 3% in 1985. Thereafter, economic growth should average about 4% per annum based on several key assumptions: a sharp rise in private investment (given the changes in the investment code and expanded promotion activity); an increase in tourist accommodations from 400 currently to nearly 1,000 by 1990; successful implementation of the rehabilitation projects for bananas and cocoa; and continuation of external budgetary assistance (although declining amounts) through 1987. xvi. The 1985 budget shows a significant deterioration in public finances in 1985 (central government current deficit of 2% of GDP). The government recognizes the priority of reducing the fiscal deficit because external budgetary assistance is unlikely to continue at current levels. Thus, fiscal performance is projected to strengthen from near balance on the current account in 1986 to a current surplus equivalent to 4% of GDP by 1990. In light of the government's intention to undertake a comprehensive fiscal reform, the share of tax revenue in GDP is not projected to increase significantly during the period. A significant reduction in current expenditures as a share of GDP is projected based on the government's plan to improve the efficiency of the civil service and to reduce the role of the public sector in the economy. After 1985, public capital expenditures are projected to drop to more normal levels, averaging 14% of GDP in 1988-90. Since the government wishes to refrain from public borrowing to the extent possible, gross loan disbursements are projected to average only 6% of GDP per annum during 1985-1990. xvii. Exports of goods and nonfactor services are projected to rise by nearly 50% in real terms between 1984 and 1990 because of higher production of cocoa and bananas, recovery of manufactured exports, and a sharp rise in tourist arrivals beginning in 1987. Higher production of cocoa and bananas is based on the successful implementation of ongoing rehabilitation projects. The current account deficit is projected to rise to 33% of GDP in 1985, largely because of higher imports associated with the public sector investment program, but thereafter would decline gradually to 18% of CDP by 1990. xviii. Financing of the current account deficit changes throughout the projection period from dependence on official grants in 1985 to a greater role for private foreign investment. After net outflows of public borrowing in 1985 net disbursements on borrowing are expected to average US$3.5 million a year. Scheduled annual repayments to the IMF peak at US$2.5 milion in 1985 and then decline gradually to only US$400 thousand in 1990. xix. Projections on debt operations show a gradual decline in the ratio of total debt outstanding to exports from 114% in 1984 to 62% by 1990. Based on future obligations due on debt already contracted and the assumption that additional borrowing during the projection period would be on concessional terms (i.e., primarily from CDB), the debt service ratio (including IMF debt) would drop from a high of 29% estimated for 1985 to 8% by 1990. Measured in terms of the burden on central government finances, debt service (including IMF and domestic debt) is projected to amount to about 30% of total revenue in 1985, drop to about a quarter in 1987 and to 12% by 1990. External debt servicing will be a burden on the economy in 1985 when timely debt servicing will be severely constrained by the government's cash flow, and, to a lesser extent, in 1986-87. The mission strongly supports the government's plan to minimize additional commitments, except on highly concessional terms. Given the low debt service ratio after 1988 and assuming that export performance improves as already outlined, Grenada would have the capacity to borrow small amounts on commercial terms by 1989-90. I. RECENT ECONOMIC DEVELOPMENTS A. Background and Recent Growth Performance Background 1.01 Grenada, one of the less developed countries of the Eastern Caribbean, is situated in the Windward Islands chain. Including its dependencies of Carriacou and Petite Martinique, it covers an area of 342 sq km and has an estimated population of 92,000. The soil conditions and abundant rainfall (during the June-December season) make the island well suited for the cultivation of several tropical crops. Grenada, after Indonesia, is the second largest producer of nutmegs and mace in the world. The island's cocoa production is of premium quality and bananas are also an important crop. Finally, its superb beaches, beautiful landscape and agreeable climate offer potential for developing a significant tourism industry. Growth Performance_/ 1.02 A revolution in March 1979 brought the People's Revolutionary Government (PRG) to power. One of its stated objectives was to eliminate the fundamental constraints to economic development. The PRG established new trading and aid links and expanded the role of the public sector in agriculture, manufacturing and commerce. In 1981-82 the economy of Grenada grew on average by 6% a year in real terms spurred by a recovery in agriculture (in 1981) and manufacturing production and by further increases in public sector construction, primarily associated with the new international airport. Tourism, however, continued to drop off. In 1983, GDP fell by an estimated 2.0%. Manufactured exports dropped sharply because of the trade and payments difficulties experienced in the Caribbean Community (CARICOM) region during the year. Construction, which had been the main impetus of Grenada's economic growth, fell by about 20% in real terms, primarily because work on the international airport stopped after the coup d'etat and subsequent military intervention by the United States and several Caribbean countries in October 1983. On the other hand, agricultural output was up because of higher production of cocoa and most fresh fruits. However, production of bananas and nutmeg declined. 1.03 The chief objective of the interim administration, which took office in December 1983, was to achieve an economic, social and political 1/ During the World Bank mission in January-February 1985, the GDP series for Grenada (1980-83) was revised. The work is part of a wider study on the national accounts of small island economies which is being carried out by the World Bank jointly with the Commonwealth Secretariat and the Asian Development Bank. This report uses the revised figures, which are significantly lower than previous ones. The figures should- be considered preliminary and subject to further revision. environment which could provide the proper basis for the reinstatement of the democratic process and the holding of elections. In elections held in December 1984, the New National Party (NNP) came to power. The new Government has confirmed the objective of promoting a larger private sector involvement in the economy. Priorities for further actions include lowering the public debt burden, undertaking a comprehensive fiscal reform to improve incentives for productive activities, and reorganizing the public sector to bring it within manageable proportions. 1.04 It is difficult to estimate the performance of the economy in 1984. Most activities were depressed, particularly construction and wholesale and retail trade, during the first half of the year. However, there was a strong upturn in the second half of the year, particularly in the last quarter, as construction of the airport resumed, work was started on other projects such as road reconstruction and public confidence grew. Still, on the basis of preliminary data, real economic growth in 1984 was slightly less than 1%. B. Population and Employment 1.05 Primarily because of migration there was a fall in total population between 1970 and 1981 (the latter being the time of the most recent population census) from an estimated 96,500 in 1970 to a mid-year 1981 estimate of 89,000. Since 1981, total population has risen slightly to reach 92 thousand. The age structure has caused the labor force to increase at a higher rate than total population and faster than the economy can generate new jobs. Information on the labor force and unemployment is scanty. At the time of the 1981 Population Census estimated unemployment was 17.4%. Given the lay-offs in the manufacturing sector and those displaced during the change in government, officials estimated that in 1984 about a quarter of the labor force is unemployed. One of the major challenges the new government faces is to encourage both domestic and foreign investment through an appropriate incentive structure and the upgrading of economic infrastructure, so that mare jobs will be generated. C. Savings and Investment 1.06 It is estimated that domestic savings remained negative in 1984, reflecting the economy's dependence on current external grants. National savings rose from 6.7% of GNP in 1983 to 11.3% in 1984, largely because of an improvement in private savings. Gross domestic investment is estimated to have fallen for the second consecutive year, reaching 34% of GDP in 1984, as compared to an average of 50% of GDP in 1981-82, because of a lower public sector investment program. Public investment continues to account for about 90% of total investment, as it has since 1982. Private sector activity remained depressed in the aftermath of the October 1983 intervention and the political uncertainties prior to the December 1984 elections. -3- D. Central Government Finances 1.07 In 1979 the People's Revolutionary Government of Grenada entered into a Stand-By arrangement with the International Monetary Fund. As part of the program, the government improved revenue collection, raised taxes and instituted better expenditure controls. A small current surplus was recorded that year. Although this improvement changed to a deficit equivalent to about 1% of GDP in 1980, the deficit was reduced the following year as a result of measures under the IMF program; current account surpluses were recorded in 1982 and 1983, equivalent to 1.4% and 3.1% of GDP, respectively. Most of the measures focused on the revenue side, including increased rates for the stamp duty on imports, the consumption duty on gasoline and the company tax; and the imposition of an international airport levy on the value of imports. Although the October intervention made tax collection difficult in the final months of 1983, by that year this source of revenue, as a share of GDP, had risen to 31.4%, compared to 25.5% in 1981. 1.08 Nevertheless, because of the sharp increase in capital expenditures in 1979-82, primarily associated with the construction of the new international airport, the overall deficit (before external grants) widened to 35% of GDP by 1982. Much of it was covered by inflows of external grants and concessional loans, which averaged 30% of GDP in 1981-82. Then in 1983 the government began to experience a liquidity crisis, largely because of a delay in external flows. This situation caused a shortfall in counterpart contributions for projects other than the international airport, a build-up of domestic and international arrears, and greater recourse to overdraft facilities and nonconcessional external borrowing. Primarily because of the drop in capital expenditures, the overall deficit dropped to 40% of GDP in 1983. In August 1983 the People's Revolutionary Government entered into an Extended Facility arrangement with the IMF and made an initial drawing at that time. However, in the aftermath of the October events, the interim administration, which took office in December 1983, decided to cancel the EFF in January 1984. 1984 Outturn and Future Policy Directions 1.09 At the beginning of 1984, the interim administration lowered the stamp duty on imports and lowered taxes on pensions. In addition, receipts from the corporate income tax were down because of the depressed manufacturing sector and export taxes fell because of lower export volume for nutmeg and cocoa. Nevertheless, as a share of GDP, tax revenue rose to 33%. At the same time, current expenditures rose from 33% of GDP in 1983 to 37% of GDP in 1984. Outlays for wages went up as a result of an 11% increase awarded to public sector employees. Interest payments also increased, largely because of large borrowings on commercial terms in 1983. As a result, the central government's current account surplus fell from the 1983 level of 3.1% of GDP to 0.3% in 1984. However, because of a 20% drop in capital expenditures in 1984 the overall deficit was further narrowed from 38% of GDP in 1983 to 30% of GDP in 1984. This deficit was financed by current external grants from USAID and STABEX (equivalent to 12% of GDP), external capital grants (equivalent to 16.8% of GDP) and net external borrowing (equivalent to 6% of GDP). On a net basis, the central - 4 - government put resources back into the commercial banking system, through the liquidation of part of the 20% special deposit requirement the government had levied in 1982 (the previous level had been 10%). Further, a small portion of the arrears that had been built up in 1983 was paid off in 1984. 1.10 The thrust of the 1985 budget, which was announced in late April, was to provide some tax relief, particularly on personal incomes, before the more fundamental fiscal reforms are made (now planned for 1986). In addition, the government wished to make some improvements in incentives for productive activities. The main tax measures announced were: a reduction in export duties; concerning the personal income tax, an increase in personal allowances and a change in the tax structure, reducing the number of brackets and lowering the highest marginal rate from 65% to 50% and elimination of the tax on dividend income; a reduction in the company tax from 55% to 50%; and a change in the method of calculation of the stamp duty from the previous base of c.i.f. plus import duty to only c.i.f. As a result, tax revenue in 1985 is expected to remain at approximately the 1984 level, with the anticipated revenue losses offset by higher import duties on some items, the rise in the airport departure tax, and the impact of the higher level of economic activity expected this year. Other revenue is expected to increase significantly, primarily because of the increased fees to be realized from operation of the international airport and proceeds from lease of an aircraft. Total revenue is budgeted at EC$95.0 million, about 9% above the 1984 level. 1.11 Current expenditures are expected to rise by about 16% to reach EC$100 million. Payments for personal emoluments are expected to be nearly 20% higher primarily because of the addition of two departments to the central government's budget (the central garage and the international airport), more police staff, and spending for the parliament. There is also a large increase in miscellaneous charges because of trial expenses and payments of arrears (EC$5 million) on contributions to international organizations. The projected current deficit is about EC$5.0 million (2% of GDP). Capital expenditures (which are discussed more fully in Chapter III) are estimated at EC$107 million, resulting in an overall deficit equivalent to 43% of GDP. A combination of external budgetary assistance and capital grants (equivalent to 38% of GDP), most of which has been committed, would finance the current account deficit and the large capital program. 1.12 The government that was elected in December 1984 believes the system of taxation now in place in Grenada does not provide sufficient incentive for productive activities. Reviews conducted by the IMF and consultants financed by USAID in 1984 concluded that the tax system was inelastic and contained provisions which discouraged private sector activity. In general, their preliminary recommendations called for lowering some tax rates, broadening the tax base and simplifying the structure of indirect taxation. The newly elected government has committed itself to a comprehensive fiscal reform that will reduce the heavy tax burden. A team of consultants is scheduled to begin work on a comprehensive fiscal reform in mid-1985 and to design a program which the government can begin to implement in the 1986 budget. -5- E. Money and Credit 1.13 During the first half of 1984 the government reduced its net indebtedness with the banks by using a USAID grant of EC$6.8 million to liquidate part of the special deposit requirement. As a result, during the first half of 1984, net credit to the central government dropped by 30%. This decline, coupled with a strong growth in private sector deposits, enabled the net foreign assets position of the commercial banks to make a strong recovery from the previous negative position. 1.14 Between 1980 and 1983, credit to the private sector increased by only 9% (excluding the Grenada Cooperative Bank), reflecting the tight liquidity position of the banks (particularly in 1982-83) and the low level of private sector activity during the period. There was a strong expansion in commercial bank credit to the private sector during the latter part of 1984, largely for personal loans for consumer durables and motor vehicles. Credit to the private sector increased by 11% in 1984 with personal loans accounting for 27% of the outstanding credit, followed by distributive trades with 26%. 1.15 During the period 1980-83 interest rates changed very little in Grenada. Rates for savings deposits remained between 2-1/2 - 4-1/2%, well below the inflation rate, while the prime lending rate was 9 - 10-1/2%. Rates for consumer loans did tend upwards, to reach a high of 12-1/2%, the legal usury limit which had been set by the government. Both the real negative interest rates on deposits and the higher interest rates abroad contributed to the decline in the ratio of private sector liabilities to GDP from 74% at the end of 1980 to 64% at the end of 1983. In an effort to make the determination of interest rates more flexible, the Money Lending Ordinance was amended on August 31, 1984, to raise the ceiling on lending rates to 16%. By mid-1985 most commercial banks in Grenada had raised the interest rate charged on consumer loans to about 15%. Other lending rates remained unchanged. In order to comply with an Eastern Caribbean Central Bank (ECCB) directive, the minimum rate for savings deposits was increased to 4%, effective January 15. F. Prices and Wages 1.16 Given the openness of the economy, Grenada's inflation parallels international rates. The average annual increase in the retail price index was about 20% in 1980-81, but fell to 8% in 1982. Continued moderation in international price trends and the appreciation of the US$ (to which the EC$ is tied) against major currencies resulted in an average annual increase of 5.6% in 1984. Historical data on wage agreements indicate that increases in both the public and private sectors fell slightly short of price rises as measured by the retail price index, during 1980-81. Awards in 1982-83 did not moderate as much as retail prices did, so that both public and private employees achieved real increases in wages. In November 1984, public sector workers received an average increase in wages of 11%, retroactive to the beginning of the year. Since the EC$ is tied to the US$, strong real increases in wage levels which affect general price trends -6 - result in a misalignment of the exchange rate and a reduction of competitiveness at a time when Grenada is trying to promote investment in manufacturing and tourism. 1.17 Prior to 1985, the government maintained price controls on about 100 imported products, setting maximum markups over landed cost at both the wholesale and retail levels, 7.5% and 15% on average, respectively. Prices also were fixed on a few staple items produced domestically. The goal of the recently elected government is gradually to relax these price controls. Following a decision taken before the elections, effective January 29, 1985, price controls were removed on four domestically produced goods (bread, eggs, whole chickens and pork) and on a range of imported items, including some food and textile products. G. External Sector Balance of Payments 1.16 The deficit in the current account of Grenada's balance of payments doubled from 20% of GDP in 1980 to 42% in 1982. Although agricultural production for export recovered from hurricane damage in 1980, prices for Grenada's major crops declined. In addition, tourism receipts fell, while imports for the public sector investment program (primarily the airport) sharply increased. Excluding expenditures related to the airport (imports and foreign workers' salaries), the current account deficit increased to 26% of GDP by 1982. The growing current account deficit was financed mostly by grants and concessionary loans to the public sector. In 1981 Grenada borrowed nearly US$6 million from the IMF under the Compensatory Financing Facility and a Stand-By arrangement. 1.17 In 1983, the current account deficit dropped to 35% of GDP largely because the surplus on the services account improved as a result of a drop in payments for Cuban labor working on the international airport and for miscellaneous transactions. However, inflows of external grants declined sharply, and the gap had to be made up largely by public external borrowings, including commercial credits to finance the international airport, and to a lesser extent, by additional IMF borrowing. The improvement in the current balance continued in 1984, with the deficit dropping to 23% of GDP. Imports fell because of the smaller public investment program, while receipts from tourism rose. Or. the capital account, official grants doubled from the 1983 levels, enabling the current account deficit to be financed with relatively little recourse to public external borrowing. External Public Debt 1.18 Outstanding external public debt rose from US$14.4 million (36% of exports) in 1980 to US$48.4 million (124% of exports) in 1983, largely because of borrowing to finance the international airport. In addition, use of commercial bank loans, which had been negligible before 1981, increased so that, by 1983, they accounted for nearly 30% of outstanding external public debt. Debt due the IMF was 16% of total external public debt at the end of 1983. Debt service as a share of receipts from exports of goods and nonfactor services was about 4% in 1980-81, but rose to slightly above 6% in 1982. The debt service ratio fell in 1983, but only because of the accumulation of arrears. The stock of outstanding debt scarcely increased in 1984, so the ratio to exports dropped to 114%. However, debt service jumped to 13%. Although part of the 1983 interest arrears (about US$100,000) was paid off, additional overdue obligations on amortization accumulated. Liberalization of Foreign Exchange Controls and Import Licensing 1.19 The previous government had subjected foreign exchange transactions to several restrictions and regulations: payments for imports required the submission of documentary evidence to the Ministry of Planning, Finance and Trade; payments for invisibles had to have foreign exchange approval; and individual allocations of foreign exchange for travel were limited. Foreign exchange proceeds from exports or services had to be surrendered; and all outward capital transfers required exchange approval. The Ministry of Planning, Finance and Trade was responsible for most foreign exchange approvals. 1.20 Beginning in September 1984, the interim administration took several measures to liberalize the system of foreign exchange restrictions with the dual objectives of improving private sector confidence and increasing the market orientation of the economy. Approval is no longer required for remittances of documented imports; most services (study, medical, educational, gift and maintenance); investment income, royalties and management fees; and proceeds from the sale of local property and legacies. The limits on vacation and business travel were raised from EC$3,000 and EC$7,000 to EC$5,000 and EC$10,000, respectively. The government also delegated more authority to authorized dealers (the commercial banks). Finally, local residents are now permitted to open a foreign currency-denominated account. Before, only non-residents could do so. 1.21 In November 1983 the interim administration liberalized the import licensing system by reducing the number of products requiring a license from about 80 to 48. However, since that time many items have been added to the list of goods requiring a license including eggs, soft drinks, about twenty textile products. Although it is difficult to judge precisely the overall impact of the recent additions because some product categories are rather broad, it is clear that the liberalization achieved in November 1983 has been eroded considerably. The medium-term objective of the government should be to reduce the list of items subject to licensing, including those goods produced locally, and to replace any quotas with tariffs. These actions are needed in order to have some degree of competition in the domestic market and to ensure that exporters have easy access to the imported inputs they require. -8 II. DEVELOPMENT POLICY ISSUES A. Agriculture 2.01 Agriculture plays a leading role in the Grenadian economy as an important source of income, export earnings and employment. The newly elected government has made the revitalization of agriculture the keystone of the efforts to promote economic growth. In 1984, it is estimated that the sector's contribution to GDP (at constant factor cost) was about 25%. About 75% of the sector's value added comes from four export commodities (bananas, cocoa, nutmeg and mace); the remaining 25% comes from other fruits and spices, vegetables, sugarcane, root crops and livestock products. The f.o.b. value of the major agricultural exports was EC$41 million (US$15 million) in 1984, about 90% of the courtry's total exports. Fruits and vegetables were the major agricultural export in 1984 (33% of total agricultuiral products), moving ahead of the traditional ones. Cocoa's share is 30%, bananas, 20%, nutmegs, 14% and mace, 3%. 2.02 According to the Agricultural Census of 1981, the agricultural labor force, including farm owners, was 12,500, about one-third of the country's labor force. There were 8,200 farm owners, 49% of whom were full-time and 51% part-time. About 31% of the latter worked as hired labor on other farms. Traditional Export Crops 2.03 The traditional exports--cocoa, bananas, nutmeg and mace--are usually grown together in a mixed stand. The estimated area planted with these crops is about 9,000 ha, about half the total agricultural land. 'During the past seven years, production of these crops has followed a downward trend (see Table 1.1). The reasons for this decline include depressed world prices during most of the period, deterioration of agricultural support services, low yields because of the maturation of plants (cocoa and bananas), marketing difficulties (nutmeg), poor harvesting practices (mace), and a shortage of agricultural labor. Since the EC$ is tied to the US$, the latter's strong appreciation against the pound sterling has had an adverse impact on revenues (expressed in EC$) from agricultural exports, most of which are sold in the UK market and has lowered Grenada's competitiveness. Table 1.1: MAJOR EXPORT CROPS PRODUCTION - ANNUAL AVERAGE INCREASE, 1978-841/ Crop Growth Rate Cocoa -2.6 Nutmeg -1.3 Mace -14.7 Bananas -10.0 1/ 1984 figures based on preliminary export data. Source: Statistical Appendix Table 7.1 and Statistics Office. -9- 2.04 Cocoa has been the leading export crop in Grenada for many years, usually accounting for about 30% of the value of agricultural exports. The main institutions in the sector are the Grenada Cocoa Association and its executive arm, the Grenada Cocoa Industry Board. The Board's primary functions are: quality control; setting standards for grading; processing of about half the production; purchasing and marketing cocoa for export; and fixing prices. Most marketing is done through the London Exchange, although some sales are made directly to manufacturers in the United States. Grenada has no difficulty marketing its cocoa because of its high quality; as such it receives a premium, currently equivalent roughly to 5% of the world price. 2.05 The most important factors affecting the sector are the serious deterioration of physical productive capability because of the overage of bearing trees and the recent low international prices for cocoa. It is estimated that more than 50% of the cocoa trees in Grenada are 30-50 years old. Once trees reach this age, yields drop below optimum levels and the trees become less resistant to pests and disease. As a result, returns to the farmer are very low. The CIDA-financed Cocoa Rehabilitation Project which began in 1982 is aimed at remedying this situation. It supports nursery production and field planting of cocoa seedlings to replace the old, low-yield trees on a target area of 10,000 acres. The objective is to triple cocoa production within 20 years. Unfortunately, progress has been much less than anticipated because farmers have not been willing to replant. In part the reason has been previous political uncertainties and the risks involved in new plantings, but in part also because their income will fall as the trees will not bear fruit for three-five years. CIDA is planning to re-evaluate the project during the first half of 1985. One way to increase farmer receptivity may be to include in the project other crops (bananas and vegetables) that could be interplanted among the young cocoa trees so as to provide some interim revenue to the farmer. 2.06 The second major factor affecting the sector has been the recent low world market prices for cocoa. During the period 1971-77 cocoa prices generally increased, at an average annual rate of 18%. Prices dropped in 1978-79, although they were still relatively high by historical standards. However, they continued to decline thereafter and by 1982 were only a third of the 1977 peak. There was some moderate recovery in 1983-84. Since Grenada's major market for cocoa continues to be the United Kingdom revenues also have been affected by the depreciation of sterling against the US dollar. 2.07 The Grenada Cocoa Association has moderated the impact of the low international cocoa prices on farmer producer prices by dipping into its reserves. Producer prices peaked at EC$2.40/pound in the 1979-80 crop years but by 1984 had dropped to only EC$1.90/pound. As a result, the retained earnings of the Association have dropped from EC$12.4 million as of September 30, 1980, to EC$1.3 million as of September 30, 1984. 2.08 In the case of nutmeg, international demand has been weak in recent years because of the impact of the recession on the food processing industry, the major user. As a result, production stagnated and the Grenada Cooperative Nutmeg Association accumulated stocks of unsold spice. Its stocks rose from 3.1 million pounds in June 1979 to 7.8 million - 10 - pounds in June 1982 before dropping to 6.4 million pounds by June 1984. The average export price for nutmeg has fallen by over 40% since 1980. Prices to growers declined from EC$1.45 in 1980 to EC$.80/pound in 1983 before rising slightly to EC$.90/pound in 1984. In recent years, the Association has dipped into its reserves to cover the trading loss and to make payments to growers. In addition, the Association received nearly EC$900,000 in STABEX payments from the European Community during 1983-84. In 1984 the major markets for Grenada's nutmeg production were Holland (35%), the Federal Republic of Germany (34%), and the UK (17%). The Nutmeg Association has endeavored to tap new markets, particularly in the US, but the relatively high fat content of the Grenada variety makes processing by standard grinders difficult. The Association is currently looking into the possibility of a joint venture with an experienced European firm to distill nutmeg oil, which would facilitate market diversification and higher sales. 2.09 The international markets for nutmeg began to revive during the last six months of 1984. The corresponding increase in sales has resulted in a further decline in stocks to 4.8 million pounds, out of which 1.2 million pounds already has been contracted for. It is likely that stocks will continue to fall during the first half of 1985 because of lower deliveries of nutmeg by farmers. The reasons are cyclical factors that are affecting production adversely and the continued low price for nutmeg in the international markets. 2.10 Mace production is linked to nutmeg, since it is the outside covering of the nut. Prices for high grade mace rose by 58% between 1981 and 1984, a result of the recent shortage of the product caused by the farmers' decision not to harvest nutmeg because of its depressed price and a deterioration in harvesting practices. The prices for lower grades of mace declined by about 40% between 1981 and 1983, before rising sharply in 1984. Although the Nutmeg Association accumulated some stocks, primarily of lower grade mace, during 1978-80, these fell sharply in 1983 and are now at moderate levels. Producer prices for high grade mace peaked at EC$3.29/pound in 1981 before falling to EC$2.60/pound in 1982-83. In 1984, the prices were set at EC$3.02/pound. For lower grade mace, the prices to farmers peaked at EC$1.24/pound in 1980, dropped to EC$1.04/pound in 1980-82, but these rose again to EC$1.56 in 1984. 2.11 About 75-80% of banana production is exported to the UK. The total annual quota for the four Windward islands of the Eastern Caribbean is about 120,000 tons, of which Grenada's share is 20,000. However, the islands have not met their quota since 1978, while Grenada has not met its share since 1970. In recent years, banana production has dropped mainly because of deteriorating performance at the field level, the low level of application of fertilizers and pesticides and inefficient post-harvest activities. Other problems in the banana industry include the maturation of plants, high costs for disease control because of mixed stand cultivation, poor husbandry and cultural practices, and inconsistent quality. Banana yields are now only about 8 tons/ha., way below potential. The export market price for bananas (after deducting loading and unloading expenses and freight) increased by 80% between 1975 and 1980. Although the price dropped in 1981, since then it has risen to about EC$988 per ton (compared to an international market price of EC$1,053) before deducting freight and unloading expenses. This price level is a - 11 - relatively satisfactory one and could bring some profit to efficient growers if the post-harvest activities are also handled efficiently. The producer prices paid flbr bananas more than doubled between 1975-80, rising from EC9.8 cents/pound in 1975 to EC 21.7 cents/pound in 1980. While producer prices dropped sharply in 1982 (-20%), they rose somewhat in 1983. 2.12 The Grenada Banana Cooperative Society (GBCS) provides fertilizer to growers, with funding provided by a cess on farmers. Because of its cash flow problems, the GBCS sometimes has been unable to stock sufficient quantities of fertilizer to sell to growers. Moreover, in the past, the supply to growers was determined as a ratio of fertilizer to production. As production declined, farmers received less fertilizer which made it difficult to break the downward cycle. Currently, the Ministry of Agriculture is trying to help farmers increase banana production by providing fertilizer financed by a grant from USAID. 2.13 The Banana Society's other main activities include: disease control services for farmers, purchasing of bananas from farmers, performing the necessary post harvest activities, and exporting bananas through Guest Industries, Ltd. Because of declining fruit sales over the past six years, the Society has incurred deficits (with the exception of 1982). Other factors responsible for the deficit were the high cost of packing materials and the inefficiency of most post harvest activities. Relative Returns to Farmers 2.14 Table 1.2 gives the estimates of the ratio of farmgate prices to f.o.b. export prices for cocoa, nutmeg and bananas. It shows the impact of the pricing policies and cost structures of the commodity associations on the farmer. For cocoa, it is evident that farmers were protected from the decline in prices by a rising ratio, financed mainly through a drawdown in the reserves of the Association. The ratio for farmers did deteriorate somewhat in 1984, however, as the association tried to stem the decline in reserves. In the case of nutmeg, in addition to the deterioration in the export price after 1980, the ratio dropped by 34% between 1978-79 and 1982, although there was an increase in 1983-84. The ratio for bananas was stable during 1978-81, but then dropped in 1982, only to show some improvement in 1983. Table 1.2: Ratio of Farmgate Prices to FOB Export Value Crop 1978 1979 1980 1981 1982 1983 1984 Cocoa .49 .47 .53 .66 .79 .89 .77 Nutmeg .67 .66 .58 .56 .44 .50 .50 Banana .55 .55 .54 .56 .41 .47 - Source: Commodity Association accounts and marketing statements. - 12 - Recommendations 2.15 For the traditional export crops, priority should be given to the rehabilitation of cocoa and bananas so as to reverse the production decline, given the assured markets for these crops. For bananas, it is critical that measures be taken to lower the operating costs (boxing, materials, handling, and administrative expenses) of the Grenada Banana Growers Society and to improve productivity so as to ensure a viable industry. Administrative and selling expenses (excluding pesticides and fertilizer) in the other two commodity organizations have averaged ECc46/lb., 17% of the average export price, for cocoa and ECc 86/lb., 30% of the average export price, for nutmeg. These levels indicate the importance of streamlining operations where possible, particularly for the Nutmeg Association, and of examining the scope for some consolidation of marketing. The export duty has been equivalent to slightly under 20% of the average export price for cocoa, mace, and nutmeg. Lowering the duty and thereby increasing the returns to farmers would be an incentive to production. However, in light of the tight fiscal situation, the reduction would have to be gradual, although export taxes account for a small share of government tax revenue (an average of 7% during the last five years). Priority should be given to lowering the export duty on cocoa, given the more optimistic prospects for that crop. During the April 1985 budget speech, the Government announced a change in the calculation of the export duty and a reduction in the effective levy. Previously the duty (except for bananas for which the charge is negligible) was comprised of a specific charge based on weight and an ad valorem charge tied in some measure to price developments. Now the charge is a specific one based on weight and implies a 25% reduction based on the effective levy per pound in 1984.2/ The disadvantage in levying a specific charge is that if the price of the commodities decline, the levy would take a higher share of export revenue, resulting in lower returns to the farmer. However, it is the intention of the Government that the duty will be phased out over a period of time depending on the performance of the economy. Finally, the government should continue the process of increasing the representation of growers on the boards of the commodity associations. Support Services and Infrastructure 2.16 Although the number of extension agents in Grenada is sufficient (300 farmers per extension agent of the Ministry of Agriculture), these services reach only a small number of farmers because of: inappropriate methods; a shortage of trained manpower, vehicles and audio-visual equipment; and excessive staff turnover because of the lack of incentives and motivation. Both the cocoa and banana commodity organizations also provide limited extension services to their members, but their coordination and cooperation with the Ministry of Agriculture's extension service needs to be strengthened. 2/ Effective May 1, 1985 the new rates are as follows with the 1984 effective rates in parentheses: nutmeg - 15 cents/lb. (19 cents); mace - 97 cents/lb. ($1.29); cocoa - 38 cents/lb. (50 cents); and banana - 11.25 cents/100 lbs. (15 cents). - 13 - 2.17 Most agricultural loans for on-farm investments are provided by the Grenanda Development Bank (GDB) or rural credit unions. Among the credit institutions operating in Grenada, only the GDB has trained staff working full-time on agricultural loans. Aside from the scarcity of trained staff, there do not appear to be major problems in the delivery of agricultural credit. In recent years, farmers' demand for credit has been low for several reasons: low profitability in the sector; the availability of alternative sources of informal credit; political instability; and a lack of promotion related to the proper use of agricultural credit. The requirement for collateral also had been a factor but ir recent years some lenders, particularly the Grenada Development Bank, have been willing to use alternate forms of security such as crop liens. 2.18 The marketing systems for the traditional export crops are organized and have adequate physical facilities. However, marketing of vegetables and fruits (including hucksters, traffickers, and the Marketing and National Import Board) suffers from a lack of physical facilities, i.e., collection centers, as well as packing and storage facilities; accepted standards for sorting, grading and packing; market information; adequate transportation; and trained personnel. 2.19 The Marketing and National Import Board (MNIB) is a government-owned statutory body that has the primary responsibility for (1) handling and marketing the agricultural products of Grenada that are not marketed by another statutory organization; and (2) importing basic foodstuffs such as sugar, bulk rice, powdered milk and cement (effective January 1985 the MNIB no longer has a monopoly on the importation of cement but does have exclusive rights over the other products mentioned). The MNIB accounts for only a small share (10-15%) of the market for the fruits, vegetables and root crops produced on the island. Currently it contracts with about 800 farmers at a specified minimum guaranteed price. 2.20 Although the MNIB has made a profit over the past three years, the level has declined from EC$900,000 in 1982 to EC$200,000 estimated as of November 1984 (accounts are on a calendar year basis). Gross annual sales have averaged EC$15 million, about two-thirds of which comprises products for which it has (or had in the case of cement) exclusive import rights. Because of the sharp increase of 66% in the payments of wages and salaries in 1983, administrative expenses appear high, equivalent to 12% of sales revenue. The MNIB's margins for retail operations range between 25-50%. Although an attempt is made to keep prices below those of private retailers, this objective is usually not met. The MNIB also suffers from a lack of proper grading and packing facilities. 2.21 The government has decided that, in the absence of other wholesale marketers of farm produce, the MNIB will remain the principal agency in this area, but without monopoly power. In this way, the government hopes to encourage private sector participation. The government also has begun to reorganize the MNIB so as to strengthen its management and improve its financial position. In the new structure, it is recommended that the MNIB focus on providing marketing information and facilities, and on wholesale operations, and that it should reduce retail operations. - 14 - 2.22 Grenada has about 184 km of access roads to agricultural areas and farms out of a total network of 1,100 km, including primary, secondary and tertiary roads. Over the last decade, the entire road network, but particularly that in agricultural areas, has deteriorated because of lack of maintenance. As a result, motor vehicles cannot travel on many feeder and farm roads, and losses of perishable produce are high. To support the program of revitalizing agriculture, the government will need, as it has planned, to fund the rehabilitation and renovation of feeder roads. The CDB is already lending to Grenada for agricultural feeder roads. Government Policies 2.23 Reflecting the priority it attaches to the agricultural sector, one of the first tasks of the newly elected government was to prepare a preliminary assessment of the sector and outline initial goals and objectives. The major goals are to increase and diversify agricultural production; to improve the quality of support services and infrastructure; to promote agro-industries; to reduce and, if possible, gradually remove the export duty on nutmeg and cocoa in order to raise producer prices; and to carry out a land settlement scheme using model farms on uneconomic and unviable state farms. In addition, to encourage people to stay and farm in the rural areas, the government wishes to take measures to improve living standards through improvements in housing and health facilities. It also views marketing as a serious problem and plans to strengthen the exporting division of the MNIB and to improve its coordination with the extension service. Finally, the Ministry of Agriculture is also considering some limited range of guaranteed prices. 2.24 In general, implementation of the strategy outlined above would support the government's goal of promoting agriculture. Caution will have to be exercised in implementing a minimum price scheme, however, so as not to weaken the financial performance of the MNIB. In addition, the necessary ancillary investments and support services necessary for a land settlement scheme could be quite substantial. The government should, therefore, consider sale or lease of some of the lands of the Grenada Farms Corporation. In fact, the government is taking steps to return some of these lands to their former owners. In any case, it is important that the government make a decision soon regarding the future of the state farms. B. Tourism Visitor Trends 2.25 Even though tourism has been an important economic activity in Grenada since the late 1960s, visitor trends have fluctuated because of various exogenous and domestic factors. Stay-over visitors, after peaking at about 38,000 in 1972, fell back to about 14,000 in 1974 following the 1973/74 oil shock and a period of local political and social instability. Thereafter, the number climbed steadily, reaching more than 32,000 in 1979, when the second oil shock, together with further local uncertainty, constrained continued growth. Stay-over visitor arrivals drifted downwards in the early 1980s, a time of economic recession in the US and Western - 15 - Europe, and totaled only 23,000 in 1982. The apparent recovery to 32,495 in 1983 derives from the inclusion in official statistics for the first time of visiting Grenadians resident abroad, amounting to 9,121; otherwise the data would show no increase over the previous year. Likewise, the figure for 1984--39,503 stayover arrivals, an all-time high--includes 10,685 Grenadians residing abroad, without them stay-overs become 28,818, which while a healthy increase of 18.9% over the previous year is markedly short of historical highs. 2.26 Cruise passenger visits have been an important element in Grenada's tourist trade. After recovering from the 1973/74 oil shock, this element totaled well over 100,000 annually from 1976 until 1980, increasing steadily each year. Visits dropped by half in 1981 and continued to decline in 1983-84, as cruise ship calls went from a peak of 236 in 1980 to 65 in 1984. This trend was exacerbated by the military intervention in October 1983, which eliminated cruise ship calls during the fourth quarter of 1983 and severely reduced them in the first quarter of 1984, the two quarters that are the high season for cruise operations. 2.27 The sources of stay-over visitors, by nationality, appear to have been relatively balanced in the early 1980s among North Americans, Europeans, including British, and Caribbean citizens. In 1984, however, the profile changed somewhat. Arrivals from other Caribbean countries went up substantially to one-third of total traffic, while visits by Grenadians resident abroad were the second largest category. Of non-regional visitors, only those from the US showed an increase, from 5,277 in 1983 to 8,426 in 1984. Virtually all of this substantial increase (59.7%), however, is thought to have been comprised of government officials, technical consultants and some business visitors. Vacation visits from the US are thought to have declined in 1984. While traffic from Canada and Europe/UK was relatively stable, the proportion of vacation visitors is also thought to have declined. Commercial Accommodations 2.28 A major constraint on the development of tourism, particularly from outside the Caribbean region, has been the limited availability of accommodations. By 1984, the total number of rooms available to the tourist trade was only 397, down from 747 five years ago. While several smaller establishments ceased operations, the major reason was the changing fortunes of the Grenada Beach Hotel, by far the largest establishment on the island. Originally comprising a Holiday Inn of 126 rooms and the adjacent Grenada Beach Hotel of 58 rooms, the latter was merged as an annex to the former and the entire complex of 184 rooms was operated as a single Holiday Inn. Then, in 1981, fire destroyed all the central facilities of the original Holiday Inn (those of the original Grenada Beach Hotel were not affected) and badly damaged 30 rooms. Holiday Inns thereafter withdrew, and the remaining 154 rooms were operated as a single hotel named then, as now, the Grenada Beach Hotel. In April 1983 the government acquired the hotel. A further 13 rooms were completely destroyed in October 1983 during the military intervention. Thus only 141 rooms remain intact, and they have not been available to the tourist trade as they have - 16 - been used to house US military forces. For a similar reason, a few other accommodation establishments have likewise been unavailable to tourists. 2.29 Of the 397 rooms still in commercial operation, only 257 are in hotels and inns, the remaining 140 are in guest houses, or non-catering cottages and apartments. Hotel size is quite small, averaging 16 rooms, with the largest one containing 40 rooms and the smallest 7. The small average size of hotels militates against effective marketing and efficient operation. Since these hotels do match a certain market segment, industry efforts to market Grenada as a destination and careful attention to overheads and staff size in the small establishments become important. 2.30 The relatively heavy incidence of business traffic in 1984 reduced the room density per occupied room, as business visitors have a greater tendency than vacation visitors to occupy a room singly even though it contains two beds. It is estimated that the average room density per occupied room was 1.5, that is, half the rooms were occupied by a single person and hal:E by two persons. Thus, although average room occupancy for the whole year is estimated at 52%, bed occupancy was only 39%. A low room density, of course, reduces the traffic-bearing capacity of a given quantity of rooms. Further, it reduces revenue potential since food and beverage (and other) sales per occupied room are less than for higher room densities. 2.31 It is estimated that the total number of visitors staying in commercial accommodations in 1984 was slightly less than half the total stay-over traffic, or just over 18,000. Those staying outside commercial establishments were more than 21,000. Tourism Receipts 2.32 Gross receipts from stay-over visitors in 1984 are reported at EC$44.3 million (about US$16.4 million), or an average of EC$1,122 per visitor (about US$415). Expenditure surveys indicate that visitors staying in commercial accommodations spend nearly three times as much as those staying elsewhere. The EC$44.3 million comprised about EC$30.6 million (US$11.3 million) from visitors in commercial accommodations and EC$13.7 million (US$5.1 million) from those staying elsewhere. Cruise passengers contributed another EC$2.3 million (US$0.85 million), or an average of EC$66 (US$24). Total receipts from all visitors in 1984 amounted to EC$46.6 million (US$17.3 million), up from the 1982 level but still below the 1980 peak. Employment 2.33 Direct employment in tourism in 1984 is estimated at about 950, of whom 570 worked at commercial accommodation facilities and another 380 in other tourism activities and services (local transport, restaurants, entertainment, handicrafts, water sports, etc.). In addition, tourism generates employment in a variety of other services (agriculture, fishing, banking, retail, postal, airport, etc.). Total employment in tourism, direct and indirect amounted to about 5% of the work force. - 17- Airport and Air Services 2.34 The new airport at Point Salines became operational at the end of 1984. However, work is still in progress with full completion scheduled for the end of 1985. The total investment cost is estimated at about US$90 million, of which US$18.2 million was financed by external loans and US$53.7 million by external grants, the remainder being in local currency. Airport personnel are now being trained, and the airport is expected to be fully operational at international standard before the end of 1985. It is critical that airport personnel receive sufficient training and that navigational and other necessary equipment be installed so that the facility will meet the standards of international carriers. The government is planning to establish an airport authority with responsibility for operations. 2.35 While the airport is capable of handling every type of aircraft, the prospective level of traffic in the years immediately ahead (see below) indicates there is little chance of the airport showing an adequate rate of return on investment. In addition, deficiencies in the design of the terminal may lead to problems with check-in and cargo congestion. However, Canadian advisors in airport management (who have been seconded for two years) calculate that the airport should be able to cover operating costs (through receipts from the ticket and departure taxes), particularly if the passenger departure tax is raised to EC$30 (US$11.11). Since the latter amount is on the same order of magnitude as that charged elsewhere in the Caribbean and in other countries, the tax should be raised as soon as possible in order to ensure that the airport has sufficient funds to cover operating costs. Recently the Government took an initial step in this area by announcing an increase in the departure tax from EC$15 (US$5.55) to EC$20 (US$7.40) during the 1985 budget speech presented in late April. 2.36 The availability of a major airport does not, of course, guarantee a major increase in air services. That will only take place when accommodation capacity convinces prospective carriers that the market justifies the service. At present, the main advantage of the new airport is that it offers the possibility of night landings (which were not possible at the old airport at Pearls) and thus permits more effective scheduling of present air services, which are constrained by fleet utilization needs over the entire network. LIAT, the regional feeder carrier, operates three flights a day from Barbados (the main access point from North America and Europe), one of which is after dark. In addition, BWIA, the major regional and long-haul carrier, operates two flights a day (one on Sundays) from Trinidad, one of which is after dark. With new equipment scheduled to be delivered by the end of 1985, LIAT will be capable of increasing service as justified thereafter. On December 31, 1984, BWIA added Grenada as a call on its Sunday service from Miami via Antigua and St. Lucia to Trinidad. Since then, an average of 15-20 passengers have been on-loaded and off-loaded at Grenada on the flight. BWIA is planning a call at Grenada once weekly on iWs New York route. In addition, US air carriers have landing rights that they have not yet exercized. A few charters, carrying mainly passengers visiting friends and relatives, are expected. - 18 - Other Infrastructure 2.37 Tourism development is constrained by the present status of other infrastructure. The general improvements underway in the road network, supply of electricity, telecommunications, water and sewerage will have a positive impact on tourism. Improvements in the specific tourism zones--Grand Anse, Morne Rouge and Lance aux Epines--are essential before further hotel development is permitted. In particular, the problem of sewerage, drainage and beach erosion at Grand Anse requires special attention, because the high water table and water runoff from the hills behind pose difficult problems. 2.38 The erosion of the beach, a major tourism asset, has already been studied by technical experts sponsored by the OAS. The major cause of the erosion seems to be the general orientation of the beach, which faces sea swells from the north. However, construction too close to the beach and pollution from sewerage, which has affected the ecology of offshore reefs, also seem to be contributing factors. Enforcing the existing regulation that restricts construction to behind the 50-meter line from the high water mark is essential, while improvement of the sewerage and drainage system, important for public health reasons, will sharply reduce the pollution. However, the major factor-- the action of the sea--can only be combatted by such measures as the construction of groins and the mechanical replacement of sand. Expert examination of the options and subsequent action should not be delayed. Future Development 2.39 Further development of the tourist trade after 1985 will depend heavily on the construction of additional hotel capacity. Because of unavoidable delays in implementation (land acquisition procedures, technical and other feasibility studies, completion of financing arrangements, actual construction and equipment, management and marketing lead requirements), early action will be required if substantial capacity is to come on stream in the next three or four years. 2.40 Relatively small expansions of existing hotels could add about bO rooms by 1986. however, the first major addition to hotel capacity will be the re-entry of the Grenada Beach Hotel into the commercial tourist trade. While the US forces are expected to vacate its premises during the middle of 1985, extensive refurbishing of all existing 141 rooms will be required, as will reconstruction of 43 rooms and the central facilities. In addition, extensive on-site sewerage and storm drainage and landscaping work needs to be done. Finally, there is a proposal to construct an additional 51 rooms. 2.41 Technical designs for various options have been outlined, together with tentative cost estimates. The total expense of all works described above was estimated at EC$38 million (about US$14.1 million). A more modest proposal, which would postpone the addition of the new rooms and certain public facilities, would cost EC$20.5 million (US$7.6 million). A minimum proposal, which would also delay the refurbishment of the 58 rooms of the original Grenada Beach Hotel, together with certain - 19 - other general works, is estimated to cost about EC$14 million (US$5.2 million). 2.42 The government has decided to lease the hotel for two reasons. First, its policy is to leave commercial enterprises to the private sector. Second, given its large public capital program and the priority for investment in economic infrastructure, providing the financing for the hotel would be difficult. Accordingly, the government is seeking an experienced hotel company to acquire the assets with an agreement to invest in a defined schedule of works and subsequently to operate the hotel on a lease. The basis for remuneration of the government would be negotiated. Given this plan, the earliest the Grenada Beach Hotel could be in operation (even partially) is sometime in 1987. 2.43 In addition, 20 new hotel projects, comprising 1,126 rooms, have been approved by the government, but only 3, comprising 27 rooms, were actually under implementation in early 1985. Most of the remainder, particularly the larger ones, have not completed funding arrangements. Government Organization and Policy 2.44 Tourism in Grenada blends the public and private sectors. The Ministry of Tourism is assisted by a Tourist Board that represents private sector interests. The Ministry, although modest in its staff and operations, is appropriately organized for the present level of tourist development. Its total budget for 1984 was estimated at EC$2,053,200 (about US$760,400) of which EC*846,800 (US$133,630) was for the Ministry's own operations. Its total staff was 36,of which 8 were professionals. In addition, it has tourist offices in the US, Canada and UK (also covering Europe) attached to Grenada's diplomatic missions. There is also an office at the Barbados airport to expedite onward travel to Grenada. Finally, the Ministry also has retained a public relations firm in the US. In all, EC$1,188,400 (US$440,000), or 58% of total expenditures, was spent marketing overseas. 2.45 Tourism enjoys a similar range of investment incentives as those for industry. Approved projects benefit from a company income tax holiday and an exemption from customs duties on imported equipment and materials. In the case of foreign investment in tourism, there is also an exemption from the withholding tax on the repatriation of profits. These incentives also apply to extensions of existing properties, provided they comprise at least 10 rooms. At present, imported equipment to replace and upgrade the facilities of existing hotels is not, however, exempt from customs duties. In view of the unavoidable rundown in recent years, a case could be made that such an exemption be offered on a temporary basis. 2.46 Sources of finance for hotel development are very limited locally; when available, the interest rates and the amortization schedules short. It is thus inevitable that new hotels, if large, will be built and operated by foreign investors. Since it is important that Grenadians continue to participate in tourism development, local investors in small hotels, which in any event correspond to a particular market segment, should be encouraged while foreign investors who can demonstrate - 20 - their access to funding should be encouraged to build the larger establishments. Options on hotel sites on prime beach land should be of limited duration, so that their exploitation is not blocked by promoters without adequate capital and sources of loan financing. 2.47 The government owns the Grenada Resorts Corporation (GRC) which operates four small hotels, comprising 39 rooms, and a restaurant. The GRC as a whole incurs operating losses, as do all the individual establishments except one. The structure of the GRC is inappropriate for the scope of its operations and has resulted in excessive staff. There is no justification for a head office administration to supervise the operation of 39 rooms, nor can hotels ranging in size from 8 to 12 rooms support the salaries of employed managers, who are in any event poorly trained and motivated. Accordingly, the GRC should be disbanded and the hotel units transferred by means of suitable lease-purchase agreements to individual Grenadians to operate directly. This approach would support the policy of encouraging local investment in small hotels. 2.48 The government wishes to promote growth in tourism and several private investors have proposed large projects. Given the infrastructure and environmental requirements already discussed, it may be useful for the government to appoint a small group (including representatives from the private sector) to outline a general strategy for development of tourism and the priority ancillary investment requirements. Such matters as negotiations with foreign promotors who propose large hotel projects for prime sites, examining the technical and commercial features of such projects, finding an operating company for the Grenada Beach Hotel on terms viable to all parties, monitoring the redevelopment of the Grenada Beach Hotel and leasing or selling the individual units held by the GRC require a professional and impartial input not currently available in Grenada. Technical assistance in these respects should be acquired without delay. C. Manufacturing 2.49 The full potential of the manufacturing sector in Grenada which accounted for an average of 3% of GDP betwen 1980 and 1984 is yet to be developed. It has exhibited very little growth in recent years because of a variety of constraints. In particular, investment policies, which included price controls, high tariffs, high corporate taxes, an emphasis on investment by the public sector rather than the private sector or foreign investors, discouraged potential investors. Now, however, to promote growth in this sector, the interim administration and the newly elected government have moved quickly to restore investor confidence. They have modified investment incentives and are setting up an institutional framework to foster faster development and to streamline the investment approval process. The corporate tax structure is likely to be reviewed as part of the comprehensive fiscal reforms the government plans. In addition, the government is committed to giving the private sector the primary role as a source of growth in the manufacturing sector and the economy as a whole. - 21 - Structure 2.50 According to the 1981 census, manufacturing activity employed about 1,500 persons (4.6% of the total labor force) in that year. Since then, the level of employment has declined because of layoffs, particularly in the garment industry, and because of the recession, trade restrictions and payments problems in the CARICOM region. 2.51 According to a "Survey of the Manufacturing Sector", conducted by the Project Development Assistance Program (PDAP) in October 1984, the typical company in Grenada is small, with an average of 25 employees. Out of the 34 firms surveyed (there were fewer than 40 manufacturing enterprises on the island), 15 had fewer than 10 employees. Only 3 firms had more than 100 employees in 1983 (the latter figure may have declined as a result of the recession and the recent trade and payments difficulties in the region). The majority of the firms are owned by local families or small entrepreneurs, with minimal foreign participation--only 5 firms had any form of foreign participation in 1983. There is little modern manufacturing because of a shortage of capital, managerial talent and skilled labor. Most firms are engaged in simple assembly or jobshop type operations, especially wood products, garments and building materials. 2.52 The dominant manufacturing subsector identified by the PDAP study was: beverages and tobacco, with 6 firms, total employment of 294, and an annual sales turnover of EC$13 million. The food products subsector was next with 10 firms, 146 employees and a sales turnover of EC$11 million. Third was the the garment subsector with 7 firms, 252 employees and a sales turnover of EC$5 million a year. Other activities are the manufacturing of wood products, building materials and miscellaneous goods with an aggregate annual turnover of EC$2.5 million, with 11 firms and 175 employees. 2.53 The manufacturing sector is heavily oriented toward supplying the domestic market. An emerging clothing export industry was drastically curtailed after Trinidad and Tobago, the major market, imposed exchange controls accompanied by a foreign exchange budget which established ceilings on the amount to be allocated for imports (not just from Grenada but from all trading partners), particularly consumer goods, in late 1983. In 1984, the value of exports of garments, the only manufactured product being sent abroad in any significant quantity, was US$526,000, equivalent to 3% of total estimated domestic exports, compared to US$2.4 million in 1982, or 14% of domestic exports. A few garment producing companies have signed 807 agreements3/ that they hope will increase capacity utilization on currently idle production lines. However, the poor infrastructure on the island makes operating costs (particularly transport and telecommunication) relatively high, which further reduces the narrow margins allowed by these arrangements. Therefore, most garment firms in Grenada feel that 807-type operations offer only limited opportunities. 3/ 807 operations refer to a special provision in the US tariff code on offshore assembly schemes. Under the schemes, inputs are made and cut in the US as finished goods. US duty is charged only on the value added by assembly, not on the inputs originally shipped from the US. - 22 - 2.54 The Department of Trade, part of the Ministry of Finance, has embarked on an export promotion effort that it hopes will lead to an increase in Grenada's traditional exports. The Commonwealth Fund for Technical Cooperation (CFTC) has been providing a marketing expert in export promotion. The expert's preliminary initiative has been to draw up a list of products to be promoted and to organize the participation of Grenadian enterprises in international trade fairs. Given the limited size of the CARICOM market, promotional efforts should target the extra-CARICOM markets. The government should also encourage low-cost textile and garment producers from the Far East who may wish to relocate to Grenada because of its relatively lower labor costs within the region and access to Caribean Basin Initiative (CBI) benefits. The success of these promotion efforts to penetrate CARICOM and extra-CARICOM markets will have a large bearing on growth in the manufacturing sector. Development Constraints 2.55 The government of Grenada has placed high priority on promoting investment and creating employment in the manufacturing sector as the basis for faster economic growth. However, manufacturing faces numerous constraints. First, the domestic market is small yet the previous industrial orientation was toward import substitution enterprises, that cannot benefit from the economies of scale and competition which accrue from participating in the international market. Because of these limitations, capacity utilization in most enterprises has been low, and locally produced products are often uncompetitive because of doubtful quality and high production costs. Second, there is a severe shortage of semi-skilled, skilled, entrepreneurial and managerial talent on the island, which limits the level of domestically generated investment. Third, the lack of factory shells and inadequate infrastructure (power, water, transport and communications) discourage investors from considering Grenada as a prospective site. However, the government, with loan funds from CDB, is to complete construction of 40,000 sq. ft. of factory space by 1986. USAID is assisting with the rehabilitation of factory shells as well as funding a credit line, administered through the ECCB, to finance private construction of factory space. These efforts should help alleviate the shortage. The road network connecting industrial sites with the new airport is unmotorable in some sections. However, USAID is funding a rehabilitation program that will upgrade roads and is completing the airport access road. While the opening of the new international airport at Point Salines should improve external air links, there are no direct sea cargo links between Grenada and the major extra-CARICOM markets. There were serious problems with the supply of water and electricity in 1984, but improvements are being made. There is a shortage of telephone lines and the waiting list is in excess of 2,000. 2.56 Fourth, Grenada has high corporate and indirect (particularly on imports) taxes relative to the other islands in the Eastern Caribbean. Although the government announced a reduction in the rate of corporate tax from 55% to 50% in the 1985 budget speech, the rate is only 40-45% in the other islands. In 1983, the taxes on imports averaged 20% of the total value of imports, compared to below 20% on most of the other islands. In 1984, the interim administration took an initial step to reduce the burden - 23 - by lowering the stamp duty on imports from 20% to 15%. Although foreign investors and local investors in new ventures may receive tax holidays, the tax regime does discourage the expansion of existing private sector domestic investment. In addition, the investment incentives do not include tax holidays from the 5% tax on purchases of foreign exchange nor on the international airport levy (5% of the c.i.f. value of all imports). Investment Incentives 2.57 To stimulate growth in the manufacturing sector, both the interim administration and the new government adopted a strategy that aims at creating a more favorable climate for private investment. It includes efforts to encourage private foreign investment as a source of the necessary capital,entrepreneurial, managerial and technical skills not available in Grenada. For its part, the government will continue to provide infrastructure (water, power and communications) and financial assistance to local businesses through the Grenada Development Bank (GDB). 2.58 The first step was for the interim administration to revise the investment code. The new legislation removed the restrictions on foreign participation in certain sectors of the economy (i.e., retail and distribution trading, tourism services, real estate, agriculture, food catering and entertainment services.) There are only a few requirements in the new code. First, foreign investment must conform with the overall economic and social objectives of Grenada. Second, foreign investments should bring foreign currency into the economy. Third, the investments should employ and train local labor. The legislation also encourages investments oriented toward the use of local inputs and transfer of technology to the island. It replaces the plethora of discretionary tax exemptions in Grenada's incentive scheme with the concept of tax holidays based on the type of enterprise and amount of value added. Foreign and local investors who are eligible may also apply for exemptions from certain taxes, including income tax, customs and consumption duty on imported inputs, excise taxes and stamp duty. These measures harmonize Grenada's investment incentive legislation with that in other members of the Organization of East Caribbean States. The government also has liberalized exchange control policies and installed a modified administration system that will simplify import and export procedures. Industrial Development Corporation 2.59 To facilitate industrialization the government is establishing the Grenada Industrial Development Corporation (GIDC) to replace the Grenada Development Division (GDD) of the Ministry of Agriculture, Natural Resources and Industrial Development. The new institution, which will share certain facilities (such as its board of directors) with the GDB, will have primary responsibility for promoting investment in tourism and manufacturing and the management of industrial estates in Grenada. In effect, the IDC will act as a one-stop agency for both local and foreign investors and will be charged with: (1) identifying and publicizing investment opportunities in Grenada; (2) providing information; (3) carrying out sectoral surveys and feasibility and pre-investment studies; (4) assisting companies with application procedures in order to help - 24 - eliminate the previous slow and cumbersome process; (d) coordinating investments and serving as a liaison between the business community and the Government and public service agencies; (6) assisting in identifying financing; and (7) initiating or conducting skill enhancement programs and seminars. The government is committed to finding ways to streamline and speed up the approval process of the IDC. These efforts would need to focus on making decisions more automatic and less subject to discretion. The institution has the added responsibility of providing technical, financial and marketing assistance to small local enterprises. Special efforts will be devoted to encouraging the eventual emergence of strong local entrepreneurial talent and businesses that could enter into joint venture arrangements with foreign investors. Recommendations 2.60 To increase investment and generate employment in the manufacturing sector, the government will need to address the numerous constraints in the sector by developing a clear strategy and comprehensive set of policy measures (to complement the recently instituted fiscal investment incentives). The mission makes the following recommendations: (1) Grenada's most valuable resource is its low-cost labor force relative to neighboring islands with similar economic characteristics. Thus, the island's comparative advantage lies in labor-intensive manufacturing activities (such as electronic component assembly, information processing, handicrafts, and textiles and garments) which produce light products that can be exported by air. To help overcome the current severe shortage of semi-skilled, skilled, entrepreneurial and managerial talent, a vocational training scheme should be devised to give school-leavers work and technical experience. (2) Given the importance of economies of scale in many industries and the limited domestic market, the scope for expanding manufacturing activity lies in producing for export, particularly to the extra-CARICOM markets. Promotional activity should, therefore, focus on encouraging manufacturers and investors to target these markets. (3) Adequate and efficient supporting infrastructure is critical to industrialization. As such, major development efforts need to be placed on planning ahead for industrial estates to assure potential investors that operational factory space will be available. The measures being taken to increase reliability of the supplies of water, electricity and telecommunications need to be completed and, in some cases, broadened. Finally, improvements in containerized cargo handling and more diversified routes in and out of the port are needed if the export initiative is to succeed. (4) A phased reduction in the levels of both corporate and indirect taxes should be considered a priority within the planned comprehensive fiscal reforms, to be carried out as the budgetary situation permits. As already mentioned, the Government recently reduced the corporate - 25 - income tax from 55% to 50%. The government may also wish to consider implementing a tax drawback scheme for exporters. Although the interim administration took the initial step of reducing the stamp duty on imports, it will probably be impossible to reduce import duties, which have been levied over and above the common external tariff of CARICOM, and other indirect taxes immediately. In fact, in the most recent budget speech it was announced that an additional 15% duty would be charged on some 90 items from extra-regional sources, in line with the decision taken at the CARICOM Heads of Government meeting in Nassau in 1984. Of much less importance was a 50% reduction in import duty on 30 products imported from within the region, in accordance with a previous CARICOM Agreement, and announced at the same time. 2.61 To help develop and strengthen the new institutional framework that is being created, it will be necessary to ensure that the activities and mandates of the IDC and GDB (which share the same board of directors, and certain staff services) do not hinder entrepreneurs. In addition, the role of the IDC should be primarily to facilitate rather than to regulate industry. Once the IDC is operating , it may be necessary to create a review committee (composed of representatives from industry, IDC, the financial sector and government) to review and evaluate the adequacy of existing incentive schemes and approval process. Finally, the IDC should set up a unit to monitor companies that have received investment incentives in order to carry out its specific mandate in this area. D. Economic Infrastructure and Public Enterprise Issues 2.62 As noted, for Grenada to achieve its goals of increased investment and production in agriculture, manufacturing and tourism, significant improvements are needed in the supporting economic infrastructure. Without increased capacity and more reliable services from the public utilities and rehabilitation of the road network, foreign investors are unlikely to set up operations, and domestic entrepreneurs will not expand or go into new areas, thereby limiting the generation of much needed employment. 2.63 Grenada Electricity Services Ltd. (GRENLEC) is a government-owned company, responsible for providing electricity services in Grenada. The main problems confronting the utility are insufficient actual capacity because of the age of the generating plant and the need for rehabilitation of some units, and a tariff structure that does not enable it to earn sufficient revenue to cover maintenance and new investment. Although the total nameplate rating of the 8 engines installed in the system is about 12MW, actual capacity is now slightly below 7 MW. Given system losses of 17%, the peak capacity of 5MW is barely met, with little reserve capacity. Three units have been shut down either because of lack of needed spare parts or extensive damage. As a result, service was quite unreliable during 1983 and the first part of 1984 with frequent outages caused by the need to load-shed. - 26 - 2.64 To remedy this problem, GRENLEC is now carrying out a program both to rehabilitate and expand generating capacity. Two units are being completely overhauled, with financing provided by the UK and two new engines with a total rated capacity of 2.4 MW were purchased with funds lent by the European Investment Bank (EIB), and were commissioned in July-August 1984. Once the engine overhauls are completed by the end of 1985, GRENLEC management expects its rated installed capacity to increase to about 10MW. Already, the reliability of electricity service has improved substantially. The company is also undertaking some investments to improve the power factor of the distribution system and to improve meter security so as to reduce losses from pilferage. Completion of this investment program is only a short-term solution, however. Four engines with a total capacity of 3MW have been in service for 80,000-90,0000 hours and are approaching the 100,000 hours that is considered their normal life. In addition, even moderate projections of demand indicate a need for about 2.5MW of new capacity by the end of 1987. As part of its assistance to GRENLEC, the EIB financed a pre-feasibility study to examine the potential for hydro-power. The study, which was completed in mid-1984, identified 2 MW of potential, comprising several mini-hydros, with a total estimated investment cost of EC$16 million. 2.65 The financial performance of GRENLEC between 1981 and January-October 1984 was poor. In that period, GRENLEC accumulated total losses before taxes (but after depreciation and interest charges) of EC$1.4 million. Because of its poor financial position GRENLEC currently is not able to service its EIB loan, which is being paid instead by the central government. Morever, GRENLEC has had to resort to an overdraft facility to meet its working capital needs (the highest level has been EC$630,000). An area of weakness in GRENLEC's financial management has been control of its accounts receivable: at the end of 1983 they stood at EC$3.0 million, representing two to three months of billing. Slow billing on obsolete machines and tardy payments have been responsible for the high accounts receivable. The government's arrears (including the Central Water Commission) accounted for about a third of receivables as of September 30, 1984. A reduction in the level of accounts receivable would help the company stabilize its working capital position. What GRENLEC needs is an improved accounting system and computerized billing. The financial weakness of the company has in turn prevented it from carrying out the necessary expansion and upgrading of the electricity system, from implementing staff training programs and from recruiting the technical personnel to ensure efficient and reliable service. 2.66 The interim administration recognized that electricity tariffs were inadequate but found it difficult to raise them when service was so poor. As a temporary measure, the base rate and fuel adjustment clauses were merged in October 1984 so that the company benefits from lower fuel costs through reduced prices or improved efficiency rather than the consumer. As a basis for a more fundamental solution, a tariff study is now underway, supported by a technical assistance component of the EIb loan. The loan also provides for advisors to help mitigate the acute shortage of technical personnel at GRENLEC. In addition, the hiring of two new engineers has helped raise the skills levels at the utility. - 27 - 2.67 As the economy expands, the demands on the management of GRENLEC for efficient, adequate and reliable service will be great. It is critical that the company be able to generate sufficient profits to expand and upgrade its operations. The tariff study needs to be completed without delay and a decision taken to establish a tariff that reflects the company's operating realities. In addition, the capacity needs over the next 5-10 years should be examined and, on that basis, an investment program developed. 2.68 The Grenada Telephone Company Limited (GTC), set up in February 1969 as a public liability company, is charged with responsibility for operating domestic telephone services. Before the government purchased its shares in 1982, Continental Telephone Corporation of the US held 50% of the share capital of GTC and managed the company under contract. Cable and Wireless operates overseas telecommunications services. 2.69 In recent years, the GTC has consistently improved its gross profits. Its net income, after depreciation and interest but before paying company tax, has more than doubled from EC$350 million in 1981 to EC$924 million in 1983. However, it had a serious problem with accounts receivable, which resulted in some cash flow problems in 1981-83. Receivables rose to 5.5 months of sales in 1983, of whch 42% was overdue government accounts. There has been some improvement during 1984, particularly since the interim administration and new government endeavored to keep their payments current. Because of the cash flow difficulties, the company received transfers from the government in both 1982 and 1984. 2.70 GTC's revenues are estimated to have declined in 1984 because of interruptions in the exchange at Morne Rouge and the loss of the Westerhall exchange during the events of October 1983. In order to maintain service GTC has been leasing an exchange from Northern Telecon, but it has not yet made arrangements for a permanent replacement. The company also has a loan from the German Democratic Republic, in the form of a cross-bar telephone exchange and related equipment, but these items are not functional because of missing parts. The government has assumed responsibility for servicing the loan but is also considering the option of returning the equipment. 2.71 Beyond those exchange problems, GTC faces a serious capacity constraint that has resulted in poor service, for both domestic and overseas calls. The company currently has only 32,000 connections from 3,358 lines on outdated and undependable equipment, most of which was acquired in the mid-1950s. Moreover, no expansion of the system has taken place since 1976. By the end of 1984 there was a growing waiting list of more than 2,000 applications. The inadequate access and poor service adversely affect the economic development of the island and discourage foreign investors wishing to locate in Grenada. 2.72 The company has drawn up plans to modernize and expand its operations, including installing digital equipment in all the exchanges, upgrading external line plant and establishing radio links with Carriocou and Petit Martinique. The program has a total estimated cost of US$4.8 million . The Government is exploring the possibility of financing the modernization through either an external donor or some form of private participation in the company. This project does not include upgrading and - 28 - expanding the overseas service, but GTC has begun discussions with Cable and Wireless to establish more direct transmission links for overseas calls and to increase the circuits available (currently all calls are routed through Trinidad or Barbados. The company also plans to computerize its billing system, which would help speed up the collection of receivables. To manage its labor costs, GTC is relying on a process of natural attrition and retraining of staff for new tasks. Given the critical need to expand the telephone system and the corresponding requirement for GTC to generate sufficient funds to cover the local costs of the project and to service external financing, it may be necessary to raise tariffs, which were last adjusted in 1981. 2.73 The Central Water Commission (CWC) is beset by both operational and financial problems. There is a water supply shortage; demand estimated at 8.5 million gallons a day (mgd) against a supply of 6 mgd after system losses of about 20%, primarily because of old pipes. Although the critical scarcity of water that affected Grenada during much of 1984 eased with the onset of the rainy season, the problem remains an important one, which particularly affects future development of the tourism sector. The CWC is completing several projects that will expand capacity by slightly more than 1 mgd by the end of the year, with financing provided by CUB, CIDA and USAID. Even with that additional capacity, however, the supply will still fall short of demand, even without considering future needs. 2.74 The Commission made modest profits before taxes (but after depreciation charges and interest expenses) during the last three years, compared to a loss of EC$144,000 on revenues of EC$1.8 million in 1981. However, the profit in 1984 was EC$159,000 on revenues of EC$2.6 million, about 20% below the net income generated in the previous year. Much of the increased revenue in 1982-83 was a result of a special drive to put all customers on the rolls. The company has had a significant problem with accounts receivable, which rose from 2.9 months of sales in 1982 to 6.4 months of sales in 1984. Given the CWC's modest profits and the growth in its accounts receivable, it has not been able to contribute adequately to maintenance of the needed expansion of facilities. While it is covering the interest payments associated with the most recent CDB loan, the central government is having to cover both the interest and amortization payments from a previous CDB loan. 2.75 During 1985 the CWC will benefit from the technical assistance provided by the UNDP to carry out an assessment of the water supply system. The objective is to develop a 10-year plan, including detailed designs and cost estimates for new capital projects and rehabilitation. The preliminary strategy that the CWC has already developed is to expand existing plants to produce at maximum levels and to build two new plants (Spring Gardens and Concord). The assessment should provide a list of projects for possible donor financing, establish investment priorities within the sector and suggest some improvements in the management of the utility. The study's results will also be useful in determining the need for increased revenue generation by CWC and the best way to achieve this--by extending metering to more customers, by adjusting tariffs, etc. In addition, its rates have not been raised since 1980, even though operating expenses have increased by 25% between 1981 and 1984. At the least, the Commission should generate sufficient revenue to cover its debt - 29 - service, contribute to the investment program and adequately cover maintenance expenses, particularly under an expanded system. 2.76 The government established a Port Authority in 1981 to operate port facilities in Grenada; it replaced the ports division of the Department of Customs and Excise. The Authority is a sound, commercially oriented and managed entity that has recorded modest profits since it started operations. In 1983, it realized a profit after depreciation of EC$620,000 on revenues of EC$1.5 million. However, the political turmoil of October 1983 sharply reduced port traffic during the first part of 1984, and as a result, profits for the first eleven months of 1984 were only EC$371,000 on revenues of EC$1.4 million. One reason for the good financial performance of the Port Authority has been its ability to change its rates based on international trends and its own requirements. It raised its rates by 20% in 1982 and by 16% in 1984. The port has just completed a major expansion project that included construction of cruise ship and schooner berths, additional open storage for container stacking, and cargo handling equipment. The Authority is covering the debt servicing of the CDB loan for the project, but at the lower lending rate provided to the government (4X), not the higher on-lending rate of 9% specified in the loan. Payment of the higher rate of interest would reduce the Authority's profits substantially. 2.77 Grenada's relatively extensive road network (in comparison to the other OECS countries) has deteriorated badly because of decades of neglected maintenance. Most roads damaged during the October 1983 intervention have been repaired using the relief assistance provided by the US. The economic losses caused by the poor state of the roads are particularly acute in the agricultural sector in terms of produce damage (particularly in the case of bananas), etc. Besides the need for an expanded agricultural feeder road network, the primary investment priority is road maintenance and reconstruction, not construction. In view of this need, the Ministry of Works and Communications plans to upgrade the road maintenance organization and to set up a system of controls and standards for the work undertaken. In view of the numerous projects, both ongoing and new, in road maintenance, it is important that this unit be upgraded as quickly as possible. It is also important to increase the skills level of those who work on road projects in order to improve productivity and standards. 2.78 The government's position regarding the Public Transport Services (formerly National Transport Services), which the previous government established in 1982, is still uncertain. The company operates about 40 buses, a small number compared to those run by private operators. No one in the company's management is qualified to supervise its day to day operations. As a result of inefficiencies and an outdated fare structure, which is set way below private rates, the PTS incurred deficits in both 1982 and 1983, in spite of subsidies received from the government on equipment and fuel. The company's financial performance in 1984 could not be established by the mission because of the lack of financial data and the staff to prepare such statements. 2.79 There is an urgent need for the Government to make decisions regarding the future of the National Housing Authority (NHA), which - 30 - is responsible for developing and selling homes to low and middle-income families. Most of the homes are too expensive for low-income households, so most of the loan recipients have been middle-income. The NHA is not able to meet its operating expenses or to pay the interest charges on CDB and domestic loans out of its revenue. Because of the shortage of working capital, arrears have built up on debt service payments. In large measure, these financial difficulties can be traced to the low interest rate on NHA loans (7%) and the maturity for the loans of 20 years, easier terms than NHA's own borrowings. Recently the government has amended the legal provisions of the Grenada Development Bank, in order to enable it to do mortgage financing, using funds from a CDB credit line and the National Insurance Scheme. This action should move most mortgage financing, particularly for middle-income families, from the NHA to the GDB. In addition, the Government has appointed a ministerial committee to examine the need for low-income housing and to make recommendations on cost and design. Public Enterprise Issues 2.80 Over the past few years, the non-financial public enterprises in Grenada, which number just under 20, have made only a marginal contribution to public savings. In 1983, the consolidated surplus of the non-financial public enterprises was only 0.4% of GDP; transfers from the central government, including on-lending of external funds, was 5% of GDP. In an effort to deal with the problem, the interim administration set up a committee to review the viability of state enterprises. The main recommendation of the report, which was submitted in June 1984, was that the government should sell or lease six companies, including several agro-industry facilities and the Grenada Resorts Corporation. In early 1984 the IMF provided the interim administration with techinical assistance on the public enterprises. 2.81 These recommendations and analysis have formed the basis of the new government's decision to review, case-by-case, the government-owned companies with a view to working out a program of privatization wherever warranted. As a first step, the government has decided to use some of the land of the Grenada Farms Corporation for a land settlement scheme and is returning some property to the former owners. It is also looking for a partner for the Grenada Beach Hotel. On the other hand, the government is leaning toward retaining companies that serve a specific social role (such as the Sugar Factory, Public Transport Services, National housing Authority and Marketing and National Import Board) and the public utilities (electricity, telephone and water). A team of experts has begun work on a study for the government which will facilitate decisions or. privatization. 2.82 Given the poor financial and operating performance of the Public Transport Services and the National Housing Authority, the mission recommends that the government consider the privatization or termination of these two enterprises, in addition to the Grenada Resort Corporation, which was mentioned earlier in the report. In addition to the tssue of privatization, the government needs to establish clearcut policies and performance targets for the public enterprises. The enterprises should be able to cover at least a share of their investment program from internally generated funds and should be responsible for servicing their debt obligations, including funds that have been onlent by the central government. - 31 - III. THE PUBLIC SECTOR INVESTMENT PROGRAM A. 1984 Performance 3.01 Capital expenditures amounted to EC$77.4 million in 1984, equivalent to 33% of GDP and about 80% of what had been projected initially by the interim administration. This level compares with expenditures of EC$105 million (48% of GDP) in 1982 and EC$92 million (41% of GDP) in 1983. The main reason for the decline was lower outlays on the international airport because construction was suspended during the first half of the year. In addition, implementation of several ongoing projects and commencement of various new projects were delayed in the aftermath of the October intervention. 3.02 Agriculture accounted for 10% of the total capital program. Major projects included the Cocoa Rehabilitation Project (EC$2.3 million) and Agriculture Sector Revitalization (EC$1.1 million). As already mentioned, cocoa rehabilitation is proceeding more slowly than anticipated. An interim evaluation by CIDA is being conducted in 1985, and the government hopes at that time to discuss some changes in the project design in order to increase farmer participation. The measures would include financing other crops to provide income to farmers before the cocoa seedlings mature and some streamlining of procedures. The Agriculture Sector Revitalization aims at expanding private sector involvement in agriculture by providing fertilizer to banana and cocoa producers and by rehabilitating the central market in St. George's. In addition, the project is providing assistance to the government in analyzing future policy regarding state-owned farms and processing facilities. It will also provide financial assistance to facilitate the transition to a greater role for the private sector. Pending the government's decision regarding the Grenada Farms Corporation, implementation of the Grenada Farms Rehabilitation Project has been slowed. 3.03 Transport accounted for 58% of capital expenditures. A large part, EC$34 million (about 40% of the total investment program), was spent on the Point Salines Airport. Work there is proceeding smoothly, and, as noted, the terminal building and access road will be completed by September 1985. Other transport projects included completion of port expansion (EC$2.8 million) and continuation of the construction of feeder roads (EC$1.0 million) and the Eastern Main Road (EC$4.0 million). 3.04 Expenditures in the power sector represented 9% of the investment program. Two new generators (each with an actual capacity of 1,700KW) were commissioned in July-August 1984, thereby easing considerably the problems experienced earlier in the year with electrical outages. The major project in the water sector was the Mama Cannes scheme, which at completion (now scheduled for March 1985) will provide one-half million gallons of water a day for the eastern part of the island. B. Projected Program for 1985-87 3.05 The proposed three year program for 1985-87 (Table 3.1) totals EC$240 million, of which about half is for ongoing projects. Completion - 32 - of the airport accounts for 16% of the outlays which is the main reason why about 45% of expenditures are projected to occur in 1985. The drop in capital spending by the public sector after 1985 (-25% in 1986 and -36% in 1987) reflects the government's objective of increasing the role of the private sector, particularly in the expansion of manufacturing and tourism. In addition, there are some project "ideas" that, if further developed, would expand the program in 1987 and in subsequent years. Finally, given the recent election of the new government, some aspects of bilateral and multilateral aid programs remain to be finalized. Table 3.1: GRENADA - SUMMARY OF PUBLIC SECTOR CAPITAL EXPENDITURE BY SECTOR, 1985-87 Amount (EC$'000) (US$'000) Directly Productive Projects 53)304 19,742 22.2 Agriculture, Forestry & Fisheries 45,383 16,809 18.9 Industry 6,732 2,493 2.8 Tourism 1,189 440 .5 Economic Infrastructure 159,951 59,241 66.7 Transportation 98,985 36,661 41.3 Air (38,625 (14,306) (16.1) Roads (59,743) (22,126) (24.9) Sea (617) (229) (.3) Power Supply 5,130 1,900 2.1 Communications 16,023 5,934 6.7 Water Supply & Sewerage 34,589 12,811 14.4 Other 5,224 1,935 2.2 Social Infrastructure, Administration and Other 26,499 9,814 11.1 Health 8,235 3,050 3.4 Education 5,300 1,963 2.2 Housing 1,865 691 .8 Administration & Other (includes public safety, global credit lines and land acquisition) 11,099 4,110 4.7 TOTAL 239,754 88,797 100.0 Source: Statistical Appendix Table 5.7 - 33 - 3.06 Approximately a fifth of total public capital expenditures is projected to be spent on directly productive projects, primarily in agriculture. In addition to the ongoing Cocoa Rehabilitation and Agricultural Sector Revitalization projects, implementation of an Agricultural Rehabilitation and Crop Diversification project will begin in 1985 with total expenditures through 1987 estimated at EC$9.5 million. This project will provide medium- and long-term credit to farmers and agro-industries; the upgrading and institutional strengthening of support services and infrastructure; and the establishment of a feeder road maintenance management system. The most important project in the manufacturing sector is the refurbishing of factory shells, a critical activity in view of the government's promotion of private investment, both foreign and domestic, and the current shortage of suitable factory space. 3.07 Two-thirds of the proposed three-year development program covers projects in the area of supporting economic infrastructure. Expenditures to complete the international airport are estimated at EC$38.6 million in 1985. In addition to the completion of the terminal building and access road, Hardy Bay will be armored in order to prevent soil erosion. Investments to rehabilitate and construct roads account for about a quarter of the three-year public investment program, reflecting the critical need for deferred maintenance and the importance of good feeder roads to agriculture. About 20% of road outlays are for rehabilitation, while the remainder is for more extensive renovation, including the Western Main Road I, West Coast Roads, Feeder Roads III, and Eastern Main Road II. In the water sector, which accounts for 14% of the investment program, work is scheduled to begin on several schemes to expand supply, a prerequisite for further development of tourism facilities. In communications, which represents 7% of the program, the major investment is a project to expand lines and install a digital-type system for the telephone network. 3.08 Projects under the category of social infrastructure and other account for only 11% of the public sector investment program. The major ones include repair and renovation of schools, construction of health centers and pre-fab housing. Included as part of the investment program, but not as fixed capital formation, are continued disbursements under lines of credit provided by the CDB to the Grenada Development Bank for on-lending to the private sector. C. Financing the Program and Future Government Strategy 3.09 Of the required financing for the public sector investment program ECS160 million has been committed in external capital grants or loans (excluding budgetary assistance), covering roughly two-thirds of the total. This leaves about EC$80 million to be mobilized for the investment program plus a projected EC$56 million for external amortization payments and IMF repurchases. The contribution of central government savings and the National Insurance Scheme is projected to be EC$11.0 million. 4/ 4/ Although no savings of the non-financial public enterprises have been included because of the uncertainties regarding the continued operation of some of them, it is likely that additional resources will be available from their consolidated current account balance. - 34 - This would leave roughly EC$125 million (US$46 million) to be raised from external sources and from the domestic banking system. Financing from the latter is estimated at EC$4-5 million a year. Given delayed disbursements of external budgetary assistance committed in 1984 and ongoing negotiations for additional support, the mission estimates that the likely financing from this source is roughly EC$32 million. Thus about EC$77 million (US$28 million) still needs to be mobilized, of which about a third would have to be in the form of external budgetary assistance or local cost financing. 3.10 Government Strategy 1989-90. The government of Grenada has prepared a first draft of a 5-year investment program covering 1985-90. The program is based on a preliminary review of the social and economic infrastructure investments required in order to lay the base for sustained economic growth. The strategy for the 5-year program continues the main thrust evidenced in the 3-year program described in this chapter which is to concentrate on areas which support private sector development. In agriculture, the priorities are diversification, reconstruction and maintenance of feeder roads, rehabilitation of the traditional export crops, and the upgrading of marketing infrastructure in order to reduce post-harvest losses. In tourism, the main projects are private sector, but the government would support through efforts to arrest beach erosion, the upgrading and development of tourist attractions, and manpower training. For industry, the priority is additional factory space. In addition, there are substantial requirements for supporting infrastructure - roads (including drainage), electricity, water, and telephone - which already have been discussed in this report. In the area of social infrastructure the major projects are the rehabilitation, rebuilding, and maintenance of schools; low-income housing; sewerage and waste disposal, and the upgrading and construction of hospitals and clinics. 3.11 Projects for which detailed cost estimates are available and particularly if negotiations for financing are well advanced (for example, telephone modernization) are included under new projects in Table 5.7. Additional projects (for example, sewerage, road rehabilitation, and the hospital) appear in the list of projects under preparation. The government expects to seek external financing on concessional terms for these projects. - 35 - IV. PROSPECTS A. Economic Growth 4.01 It is expected that the economy of Grenada will grow by about 3% in 1985 with the major impetus coming from construction and some improvement in performance in agriculture and tourism. Thereafter, it should average about 4% a year in real terms. This scenario is based on several key assumptions: Private (both foreign and domestic) investment will increase sharply after 1985 and will, after 1986, account for a 50% share of investment in the economy; Tourist accommodations will increase from the current 400 rooms to nearly 1,000 by the end of the period, in part through the return to the market of the Grenada Beach Hotel by 1987 and through the completion of new facilities toward the end of the period; The programs to promote growth in the agricultural sector, particularly bananas and cocoa, will succeed in increasing production, although because of the gestation period, no significant output increases are projected until 1989 for cocoa; There will be progress in diversification into fruits and vegetables; Grenada will continue to receive external budgetary assistance (although in declining amounts) through 1987. 4.02 The main sources of growth (Table 4.1) will be agriculture because of ongoing rehabilitation and diversification projects; tourism and, manufacturing. Because of the large projects expected in the tourism sector, construction will grow somewhat from the 1984 level. Since the government has announced that it wishes to reduce the role of the public sector in favor of greater private sector activity, its services are projected to grow less than the overall economy. - 36 - Table 4.1: GROWTH OF OUTPUT, 1983-1990 (annual % change) Sector 1983 1984 1984-90 (average) Agriculture 12.8 -2.6 5.0 Export - - 6.1 Other - - 2.3 Manufacturing -17.5 0 6.3 Construction -20.1 2 2.6 Hotels & Restaurants 4.2 5.4 20.9 Government Services 0 4.4 1.3 Other -3.6 1.4 2.0 GDP -1.4 .6 3.6 TOTAL -2.0 0.6 3.9 Source: Mission estimates 4.03 The resource gap is projected to rise in 1985 because of the increase in imports for the public sector investment program, but thereafter to drop to average above 45% of GDP in 1986-88 and then to an average of 32% of GDP in 1989-90 as receipts from exports and tourism expand and investment levels gradually drop. In order to improve the overall savings performance, private consumption is projected to increase at a rate somewhat less than GDP growth. As a result, the share of private consumption in GDP would fall from 75% in 1985 to 71% by 1990. In line with the government's intention to streamline and reduce the public sector, the share of public consumption in GDP is also projected to decline after 1985. Investment would rise to account for 57% of GDP in 1985 given the sharp rise in the public sector investment program. Investment would continue to account for a relatively large share of GDP (45% on average) over the next three years because of anticipated private investments in manufacturing and tourism and the need for the government to upgrade infrastructure. In 1989-90 the share would drop below 40%. The relative shares of public and private sector investment are projected to change from a 87/13 ratio in 1985 to approximately 50/50 after 1986. This trend is in line with the government's emphasis on the private sector. Given the anticipated inflows of foreign investment and donor financing, the share of investment financed by national savings is not expected to show a rising trend until the latter part of the projection period, increasing from less than 30% in 1984-88 to 40% by 1990, largely because of an improvement in public sector savings. Private sector savings will show a sharp rise in 1985, reflecting the increase in interest rates and the return of confidence after the recent elections. - 37 - B. Fiscal Operations 4.04 The recently announced budget shows a significant deterioration in public finances in 1985. Primarily because of tax relief measures and some extraordinary current expenditures (trial expenses and payment of arrears on contributions to international organizations) a current deficit equivalent to 2% of GDP is projected. The government recognizes the priority of reducing this deficit in the future, particularly because external budgetary assistance is unlikely to continue at the current levels. A combination of external budgetary assistance and capital grants (equivalent to 38% of GDP), most of which has been committed, would finance the current account deficit and the large capital program. Thereafter, the fiscal performance of the central government is projected to strengthen from near balance on the current account in 1986 to a current surplus equivalent to 4% of GDP by 1990. The improved performance would derive from the impact of higher economic growth on tax revenues and controls on current spending. In light of the government's intention to undertake a comprehensive fiscal reform, the share of tax revenue in GDP is not projected to increase significantly during the period. However, it is clear that additional tax reforms should be implemented within the constraint of improving fiscal performance. The decline in the share of current expenditures in GDP would result from the implementation of the recommendations of the organization and methods study of the public service, which the government recently commissioned, and the reduction in the public sector's role in the economy. Expenditures on personal emoluments are projected to increase by about 8% a year in nominal terms, slightly above the rate of inflation, but well below the average annual increase of 22% in 1983-85. After 1985, public capital expenditures are projected to drop gradually to more normal levels, averaging 14% of GDP by 1988-1990. 4.05 It is assumed that external budgetary assistance continues in 1986-87, although at diminished levels, primarily because of the priority of tax reform and the high debt service burden. After 1985, financing provided by external capital grants drops under the assumption that they would cover slightly less than half of the investment program, the remainder being supplied out of local resources and borrowings. Since the government wishes to refrain from public borrowing to the extent possible, gross disbursements of loans are projected to average only 6% of GDP a year during 1985-90. Given the substantial principal repayments due, particularly in 1985-88, net disbursements of public borrowings would average only about 2% of GDP a year. It should be noted that the estimates of current savings are somewhat conservative, as those of the non-financial public enterprises are not included. If the government takes action to improve their financial performance and divests some entities, it could be expected that additional savings in the range of 3-4% of GDP could begenerated, thereby lowering the government's recourse to the domestic banking system. C. Balance of Payments 4.06 Exports of goods and nonfactor services are projected to increase by nearly 50% in real terms between 1984 and 1990. The volume of cocoa - 38 - exports is not projected to rise until after 1987, however, because of the slow start of the rehabilitation program and the impact of poor weather conditions in 1985, but would increase to 6.5 million pounds by 1990, compared to 5 million pounds in 1983-84. Banana exports are expected to increase from 20 million pounds in 1983-84 to 30 million pounds by 1990, a level that is still below Grenada's quota in the UK. For both cocoa and bananas, achievement of increased production is closely tied to the success of ongoing rehabilitation programs. Exports of fresh fruits are also expected to expand. In line with the government's efforts to promote foreign and domestic investment in manufacturing and the revised investment code, it is anticipated that these exports will recover from their currently depressed levels to the 1982 peak (US$2.5 million) by 1986 and should continue to rise thereafter, reaching about US$10 million by 1990. 4.07 An increase in stay-over visitors of only 5% is expected in 1985 because of the continued scarcity of accomodations. As more rooms come on the market, higher rates of increase in arrivals are projected, with the peaks (20%) occurring in 1987 (with the re-entry of the Grenada Beach Hotel) and 1989 (with the completion of one of the new facilities currently being discussed by private developers). As a result, gross tourism receipts will rise from an estimated US$16.4 million in 1984 to US$45 million in 1990. Imports are projected to increase slightly faster than GDP between 1985 and 1988 because of the high import content of major public, manufacturing and tourism investments and the substantial leakages in the tourism sector. By 1989-90 import growth is projected to be in line with GDP growth. 4.08 Under investment income, interest payments will drop marginally after 1985 and thereafter will change little in nominal terms through the projection period. A rise in factor payments is projected, associated with the foreign management/ownership of hotels. The current account deficit is projected to rise to 33% of GDP in 1985, largely because of the higher imports associated with the public sector investment program, but thereafter would be reduced to 18% of GDP by 1990. 4.09 Financing of the current account deficit would change throughout the projection period. In 1985, the major source is official grants (including external balance of payments support). Then in 1986, private investment is likely to be more important, as the expected inflows from official grants drop somewhat; this trend continues to the end of the projection period. During 1988-90, for which the government has drawn up a preliminary public investment program, it is assumed that slightly less than half of the expenditures would be covered by grants, the remainder by domestic resources and concessional borrowing. The largest private investment inflows are expected during the period 1987-89, reflecting the construction of new hotel capacity. The government has stated its intention of limiting foreign borrowing in the immediate future because of the country's high debt service burden. After net outflows of public borrowing in 1985, net disbursements on borrowing are expected to average only US$3.5 million a year for the rest of the period. Scheduled annual repayments to the IMF will peak at US$2.5 million in 1985 and then decline gradually to only US$400,000 in 1990. - 39 - D. External Debt 4.10 The government's intention to be prudent in contracting additional external public debt has been mentioned. The projections related to debt operations thus show a gradual decline in the ratio of total debt outstanding to exports from 114% in 1984 to 62% by 1990. Based on future obligations due on debt already contracted and the assumption that additional borrowing during the projection period would be on concessional terms (i.e., primarily from the CDB), the debt service ratio (including IMF debt) would drop from the high of 29% estimated for 1985 to 8% by 1990. Measured in terms of the burden on central government finances, debt service (including IMF and domestic debt) is projected to amount to about 30% of total revenue in 1985, drop to about a quarter by 1987 and to 12% by 1990. It is clear that external debt servicing will be a heavy burden on the economy in 1985 when timely debt servicing will be severely constrained by the government's cash flow, and to a lesser extent in 1986-87. The mission strongly supports the government's desire to minimize the accumulation of additional commitments, except on highly concessional terms. However, in light of the sharp drop thereafter in the debt service ratio and assuming that export performance improves significantly (particularly tourism) as outlined previously, Grenada could have the capacity to borrow small amounts on non-concessional terms by 1989-90. - 40 - GRENADA GOVERNNMENT'S PROJECT LIST GRENADA: MAJOR ONGOING PROJECTS AND SOURCE OF FINANCING 1985-1987 TOTAL COST EXTERNAL FINANCING TRMS AND COiDITIONS DURATIONl PROJECT (ECSOOO) (EC$OOO) (X) Source Int. Rate Aaort. Per. Crace rer. Est. Come. Est Co1. TATUS FIXED INVESTMENTS Economic Services Agric.. Forestry b Fisheries Mirabeau Training School 1,300 1.200 92 EDF, HIVOS. - - - 1982 1985 On schedule after some delays CIDA (HAF) Carriacou Sheep Development 321 298 90 CD8 4.0 15 5 1982 1985 On schedule Reafforestation 515 450 87 CD5/BHN _ - - 1985 1985 On schedule Grenada Farms Rehabilitation 7,321 5.505 75 CDB 4.0 15 5 1982 Possible reduction of the siz* of the project Banana Regional Input 924 813 88 CDB 4.0 15 5 1985 1987 Proj. was delayed in 1984 Banana Development 1.511 960 64 UK - 25 7 1982 1985 On acbedule Cocoa Rehabilitation 19.008 15.768 83 CIDA - - - 1982 1990 Slow progress due to downturn In cocoa markets Artisanal Fisheries 7.095 5.999 85 IFAD; VIF 4.0; 2.0 15; 20 5; 5 1982 1986 On schedule after initial delays Crenville Market Rehab. 419 389 93 UK - 25 7 1984 1985 On schedule Agric. Sector Revitalization 7,262 5.303 73 USAID - - - 1984 1986 On schedule Koko Eradication 514 514 100 EDF - - - 1984 1985 On schedule Carriacou Soil & Water Management 189 189 100 CDH/8HN - - - 1985 1985 On schedule Manufacture. Mining & Quarr-ing Industrial Estates 4,194 3.780 90 CDB 4.0 15 5 1985 1986 On schedule Factory Shells Refurbishing 459 405 88 USAID - - - 1985 1985 On schedule Quarry Dev. - Feasibility Study I 523 523 85 CDB 1985 1985 On schedule Tourism Tourist Attractions 969 830 84 USAID - - - 1985 1985 Onschedule Communications Westerhall Telephone 1,080 1.080 100 USAID - 1985 1985 On schedule Transportation Pt. Salines Airport 242.933 210,688 87 1979 1985 Petit Martinique Jetty 304 250 82 EDF - 1 - 1984 1985 On achedule Carriacou Jetty (Hillsborough) 1,154 818 71 EDF - - 1984 1985 On schedule Port Developwent 6,U44 6.200 91 CD8;CIDA 6.5; 15; - 5; _ 1982 1985 On schedule Pt. Salines Navigational Aids 101 101 100 CIDA - - 1985 198 On schedule Feeder Roads II 6,522 5,870 90 CDs 4.0 15 1983 3985 On schedule Farm Rands 3,728 870 23 EDP/STABEX - 1984 1985 on schedule Eastern Main Road 6,585 3,010 46 gM, - 1984 1985 On schedule Emergency Road Repair 1.350 1.350 100 USAID - - 1 1984 1985 On schedule Infrastructure Revitalization - Roads 9.871 8.100 82 IISAID - 398 1986 On schedule Western Main Road 1 7,425 6.750 91 CDI 4.0 15 5 1985 1986 Onlsyed TOTAL COST EXTERNAL FINANCING TERMS AND CONDITIONS DURATION PROJECT T?!M (ECSOOO) (z) Source Int. Rate Amort. Per. Grace Per. Est. Comm. Est. Compl. STATUS Power Grenlec Spare Parts 842 842 100 Ut - -; 2S -; 7 1984 1985 On schedule Grenlec *7 Generator 1,328 1,328 100 UK - 25 7 1985 1985 On schedule Grenlec 88 & 19 Generators 5,752 4.b79 81 EIB 2.0 20 5 1984 1985 On Schedule Infrastructure Revitalization - Electrity 647 434 67 USAID - - 1985 1985 On schedule Water Mama Cannes System - COB 4,692 4,223 90 CDB 4.0 IS 5 1983 1985 System is functional Mama Cannes System - CIDA 900 900 100 CIDA - - - 1983 1983 do infrastructure Revitalization (Water) 2.015 2,015 100 USAID - - - 1985 1985 On schedule (Name Cannes Supply Ext.) (540) (540) (100) (Annandaje Expansion) (594) (594) (100) 'Les Avocats Filtration) (181) (181) (100) (Woodlands Borehole) (149) (149) (100) (Leak Detection) ( 84) ( 84) (100) (bulk Metering) (167) (167) (100) ((rand Anse - Belmont Lines) (300) (300) (100) Douugaldston Expansion 1 449 449 100 CDB/BHN - - - 1985 1985 On schedule Tufton Hall Expansion 1 337 337 100 CDB/BHN - - - 1985 1985 On schedule Water Resources Study 58 36 62 UNDP - - - 1985 1986 On schedule CWA Spare Parts 600 600 100 UK - - 1984 1985 On schedule Stream Gaging 100 100 100 CDB - - - 1985 1985 On schedule Other Economic Services I. Central GaraRe Unit - CIDA 6,978 6,458 92 CIDA - - - 1982 1986 On schedule Central Garage Unit - UK 207 207 100 IUK _ - - 1984 1985 On schedule UIomens Motor Mechanic Apprentice 408 208 Sl UNDP - - 1985 1987 Project delayed due to lack of a venue Social Services Education School Rehab. (Infr. Rev.) 1,890 1,890 100 USAID - - - 1984 1985 On schedule Curriculum Development 260 225 87 OAS - - - 1985 1985 On schedule Adult Education 184 124 67 OAS - - - 1985 1985 On schedule IFE Expansion 900 900 100 EDF - - - 1985 1986 On schedule Library Renovation 580 580 100 EDF - - - 1985 1986 Project was delayed in 1984 School Rehabilitation 500 500 100 CDB /BHN - - - 1985 1985 On schedule Health and Sewerage Princess Anne Hospital kepairs 466 466 100 CD/MHN - - - 1984 1985 On schedule Health Centres 1 315 265 84 CDO/BHN - - - 1985 1995 On schedule Health Centres 11 3,850 3.700 96 Sweden - - - 1985 1986 On schedUile Project Hope 4,128 4.128 100 USAID - - - 1984 1985 On schedule Infr. Rev. - Waste Disposal 970 878 91 USAID - - - 1985 1986 On schedule GnU7sin. Grand Anae Nousnin 314 314 100 UK _ 25 7 1985 1985 On schedule TOTAL COST EXTERNAL FINANCING TERMS AND CONDITIONS DURATION PROJECT (EC$QOO) (EC$OOO) (Z) Source Int. Rate Amort. Per. Grace Per. Est. Comm. Est. Compl. STATUS Housing Con't Pre-fab Housing 2.100 1,800 86 Venezuela 2.0 20 5 1985 .. Project delayed pending satisfaction of conditions precedent General Public Services Public SafetY Police Stations and Equipment 548 548 100 UK - - - 1984 1984 On schedule Police Buildings 548 518 95 UK - 25 7 1985 1985 On schedule Fire Station 237 237 0OO UK - 25 7 1984 1985 On schedule Other Docunentation Ce,,ter 78 68 87 Carisplan - - - 1984 1985 On schedule 1i Contingent Loan 2/ Wighted average interest rats on CDI loans. GRENADA: MAJOR NEW PROJECTS AND SOURCE OF FINANCING 1985-1987 TOTAL COST EXTERNAL FINANCINC TERMS AND CONDITIONS DURATION PROJECT (EC$000) (EC$O0O) (X) Possible Source Int. Rate Amort. Per. Grace Per. Est Com Est. Compl. STATUS FIXED INVESTMENTS Economic Services !Rric.. Forestry 4 Fisheries Agric. Rehabilitation and Crop Div. 14,637 !3,500 96 IDA 0.75 40 10 1985 1990 Approval is expected in 1985 Forestry Developnent 11 324 324 100 UK - 25 7 1985 1986 do Sawmill Development i85 185 100 UK - 25 7 1986 1986 Project has been proposed to BDD Agric. Coop. and Marketing Depots 396 360 91 France - - - 1986 1986 Project is to be submittted Koko Eradication Tl 486 486 100 EDF - - - 1986 1986 Discussions are ongoing Communicat ions Telepbone Digitization Plan 14,631 14,631 100 Unknown . . . 1986 1987 Project is to be submitted to donors Transportation A West Coast Roads IT 7.500 6,700 89 CDB 4.0 15 5 1986 1987 Pending completion of Wertern Main Road Feeder Roads III 10,340 9.400 91 CDB 4.0 15 5 1986 1987 Pending compl. of Feeder Rds. II Eastern Main Road 11 10.0DOm 9.000 90 EDF - - - 1986 1987 Pending compl. of E. Main Rd. I Power Rural Electrification I 840 840 100 EDF - - - 1986 1986! Projects are to be sumitted. Rural Electrification 11 840 840 100 CIDA - - - 1986 1986 1 Water Peggy's Whim Expansion 2,160 2,160 100 EDF - - - 1986 1987 Proj. has been submitted to EDF Mount Horne Expansion 1,500 1.500 100 Unknown - - - 1987 1987 Proj. will be submitted to dcnors Tufton Hall & Dougaldston 11 2,900 2,900 100 CIDA - - - 1986 1987 Proj. has been submitted to CIDA Social Services Health Solid Waste Disposal Trucks 1,512 1,512 100 CIDA - - - 1985 1985 Proj. has been submitted to CIDA Educat ion Hillsborough School 900 900 100 CIDA - - - 1986 1986 CIDA will be approached CTVI Expansion 400 llS 94 CIDA - 1986 1986 do_ - 45 - GRENADA - PROPOSED NEW PROJECTS REQUIRING ADDITIONAL PREPARATION Total Cost Status (EC$000) Establishment of Stud Centres 113 Project profiles have been prepared and projects are to be Delivery of Veterinary Services 2,300 submitted to the Government of France. Cruise Ships Berthing Docks n.a. Project is in idea stage. Sewerage Disposal - Grand Anse - n.a Project development will depend Morne Rouge on the outcome of proposed sewerage study. Grand Anse Housing Scheme 2,365 Project profiles have been Telescope Housing Scheme prepared and projects are to be submitted to the Government of Italy. Police Building -Melville St. 750 Project is in idea stage. Repairs to Min. of Education 150 Project profile has been Building prepared Upgrading of Sport Facilities n.a. Project is in idea stage. Road Rehabilitation 125,000 Project has been submitted to USAID for consideration. Grenville Port Expansion 56,700 Project has been submitted to USAID for consideration. Extension and upgrading of Project has been submitted to Lauriston Airport, Carriacou 10,000 USAID for consideration. Construction of General Project has been submitted to Hospital n.a. USAID for consideration. GRENADA LIST Of Ttl CL CM1 ATto4t P&g1M6 195 - 1967 1 of 5 (IEC$ 00o) CLASSIFICATION TOTAL A TO!6NAL ?INAICINC DURATICM STATUS COUgIENTS POWLCT-RIEATED COST iANDURT SOUICE STARTA 2 CILETIOW"3 DURATIOI am OTIU ECEmUWic Si?ICES Agriculture. Porestry. Fisheries Coordinator Ikhab & Divers. Project* U D? 1985 1987 2 years Not yet initiated UNDP programme support Project-related AnMiss ealCh Training 23 23 CFIC Sep 1983 1985 2 years On time - Ocher Vaterinatin 245 245 CFTC KIar 1982 1986 4 years On time - Other Agricultwre Marketing USAID 198I5 196 1 year Not yet initiated One &g. economist ProJect-related (a) Data Processing. Statistics USAID 1985 1987 Not yet initiated On ag. statistician Project-related(a) Policy & P1 nning Assistance USAID 1985 1987 2 years Not yet tnitiated One as. economist Project-related(a) Soll Lab arzablishwent FAO 1985 1986 1 year Not yet initiated Training; equipment Project-related Soil Los Advisor llCA Aug 1983 1987 4 years On time Pest A disease control Other Lauceos Abutrop Developmnt 40 40 OAS 1984 1985 2 years Ikhind schedule 1985 allocatien project-related Lend Ue * liWter Resource Development Venexuela ttar 1905 1986 2 man-years On time Soil surveyor; Cartographer Other lasgesent Advisor VIF 1985 1987 2 man-months Not yet Initiated Person not yet identified Project-related(b) Refrigerstor Expert VIF IN85 1985 6 - 8 man-weeks Not yet initiated Person not yet identified Project-related(b) Marketing Specialist. VIF 1985 1985 6 - 8 mn-weeks Yot yet initiated Person not yet identified Project-related(b) Master Fisheraan VIF 1985 1985 6 - 8 Dan-'eeks Sot yet initiated Person not yet identified Projtce-related(b) Coopetrtives Expert VIF 1985 1985 6 - 8 san-weeks Sot yet initiated Person not yet identified Project-relatndC(b) echanic VI 1985 1985 6 - 8 n2n-weeks Not yet tnitiated Person not yet identified Project-relat-o(b) Frrestry Developr.ent 123 123 CMC Aug 1983 1986 3 years On time Extensiton of assignrent Other Agriculture Deselopent 3.762 3,762 INDP. AO 1976 1985 10 years On time - Other Agriculture Developoent tR) 121 121 IND7, CA ICOC 1982 1985 3 years On time CARDATS Project Other !ilnsfacturing Industrial Deeelepnent Expert 351 35! CD7 Dec 1985 Dec 1988 3 years Not yet lnitlated - Project-related(c) Cartibbea Inv. Proartiou Services (R) 21 27 uN'DP. U1NDO 1914 1986 2 years - Other Mining t Qtsrrving Mining & Quarrying Study 523 523 CDB 1985 1985 6 man-sonths _ Project-related Conications Dev, of Internrtionl Transport System 62 62 OAS 19" 1985 behind schedule 1985 allocation Project-related Pwr Swplv Loss ltedmtlo Study CDW(TEU), CARICCON Apr 1985 Jul 1985 * months Hot yet Initiated - Prrject-related tariff Stdy 62 b2 EC Jul 1985 1985 11 man-wt.eki Not yet initiated 2 rirnr,. tariff experts Project-related Diesel Cesr-tien Development Study E. £18 1985 1985 Sh.rt ter - Project-related Hrequls iver Hydrelogical Study It FIt 185 1985 Shorlets .f Pr-ject-related bergy Dvelopent (8) 21 27 UNMr? lIlICID 1984 1985 _ Other Resource Aesesant b Development 232 232 UNIPD, lICth 1965 1988 24 man-months Not yet Iniltited a eng ieers Otber 2 of 5 kmumie Smyee (Miae.Ileusem) Carriacou bewelopment Plans Uw 8 man-months Not yet Initiated I engineer Project-related Trade Promotion * Export Developwent 908 670 05 Jan 1984 Dec 1985 2 years Behind schedule Training; OPAS Othwr Trade lnfornstion System 145 145 cnc Apr 1983 Apr 1985 2 years On time Extensiou requested Other SOCU0L SOVICES Fducat ion Student Loans 300 270 Cm3 Aug 1984 Dec 198U 4 yrs. 6 mos Behind schedule - Oter Education Planning 208 61 OAS 1984 Dec 1985 2 years Behind schedule - Other Curricula Development 81 el OAS 1984 Dec 1985 2 years Behind schedule - Othe r Technlcal 4 Vocational Training 254 119 OAS 1984 Dec 1985 2 years Behind schedule - Otber School of Arts 219 78 OA" 198' Dec 1985 2 years _ Otor Adult Education 119 65 OAS 1984 Dec 1985 2 years Behind schedule - Other Technical & Vocational Education (R) 286 286 =PD?. UIESCO, ILO 1983 1985 - Other Learning for Earning 86 86 GAS 1984 1985 2 years Behind schedule 1985 allocation Other Science Education 46 46 OAS 1984 1985 2 years Behind schedule 1985 allocation Other tnstrusent Technician Training 25 25 OAS 1984 1985 2 years Behind schedule 1985 sllocatlin Othor Health 4 Sewerage PA4O Project 1983 - 1985 1284 1284 PMOAlOH Apr 1983 1985 2 years On time - Other Project FOPE 3600 3600 USA1D Feb 1984 1987 3 years Other Fmily Planning Services 4 Education IUIFPA. PARO 1985 1988 3 years Other GRENAIDA 3 of 5 LIST OF TECHNICAL C(OPEIArTON PROGRAME 1985 - 198 (Ec$ 000) C tAS S I FI CAT 1ON TOTAL ETERNAL FINANCINC DURATIONjy~l PROJECT-RELATED COS A7ON SORC 2)( STATUS COMMIENTS OR OTHER COST=AMOUNT SOURCE START ' COMPLETION TDUATU ION GENERAL PUBLIC SERVICES Administration and PlaominL Constltution Reviesk DNDP 1985 1985 6 months Not yet initiated I lawyer Proiect-related National Project Develcpment System 901 848 0UK Jan i984 Dec 1985 2 years - Other Upgrading Statistics D.partt-nt (R) 40 40 UltDP 1985 1986 1 year O- ther !-egal Advisor 733 733 UNDP, CNDTCD 1976 1986 10 years - Other uantity Survevor' 54 54 IT`? 19!5 1986 9 aa-rrrr s No vet izni.ated - Ocher Qantity Surveyor 123 123 CFTC J.] 1983 J,; 1905 2 'irs On time E::tension reques:cd ;thser Arc}it,ct 123 123 CiN May 1983 May 19895 2 years Os, time Replaeremnt re4,,e,ted Other I National Infnr-a i"n i .-' 62 62 AS ;9R; Dcc 1 - 2 'ears Other integrated Cultur-l 2' zyeoor 82 82 r: 1 t1- 1O-5 ve3 . BehAI ooVeCi - Orher OC Wo.en's Rescurce C-1er- 74 5. vr2l :985 1986 1 year Cn timre OtihCe Wosen's Motor Mec5.rrc Schese 210 210 VUDS 1985 1987 2 years On time - Otner I Reorganization NSTC 29 29 OAS 1984 198E Behind schedule 1985 allocation Project-related holiday Recreation Progrcie 12 12 OAS 1984 19S* Behind schedule 1985 allocation Project-rela-ed (1) Projects formally approved by donor agency and/or by Cabinet (2) Estimated initial disbursement date, actual project implementation (3) Estimted terminal disbursement date (4) Ahead/Not yer initiated/On time/Behind schedu.o/S.spended/Discontin,ed/Completed. OPAS Operational Assistance Not available - None IY.A. Not applicable (R) Parr of regLonal progra-mm a Part of UNDR ECS1.283.966 Progr.amme Support Project (a) Part of Ag. Sector Prorect (b) P.art of Artisanal lrsb,eries Project (c) rart of Esdtsliral Est.tes. roj1ct 4 of 5 CGtRADA LIST Of PROFOSD Tr UNIICAL COOPERATION PROCRAKES 11S5 - 1987 (ECS 000) CLASSIFICAUtlO TITLE/SUUJECT TOTAL tlESUNAL FINANCING _XECUTING ACEIC? DURTION PROJUCT-RiLATED COST AIMUNT SOUCE OTe£ ECONOMIC SERVICES Agricultur-. Forestry, Fisheries Cocoa Industry-Wtde Asseesmst Ciu Min. of Agriculture 14 sen-months Project-related Livestock Development Prograee Covt. France. CIDA. EC Min. of Agriculture Project-related Other (Livestock Dev. Subproject) Stud Centre France has been approached Min. of Agricultuert Project-related (Livestock Dev. Subproject) Quarantine Services CIDA to be approached hin, of Agriculture 3 months each Other (Livestock Dev. Subprojec3 Feed Analysis To be identified ein, of Agriculture 3 mn-montFs Project-related (Livestock Dev. Subprojec DPirylseef Form eC to be approached Min, of Agriculture Short-term Project-related X- Peanut Production Project To be identified Min. of Agricultute Sho-t-term Project-related Lobster & Fresh Water Fisb farming China has been approached Min, of Agricuatur.: 2 years Project-related 6 Othbr Rodent Control FAO to be approached Min, of Agriculture 3 m.n-sp3nths Pro ecL-related Inter-island Agric. Trade S4ed Facilities F(O to be approachcd itn, of Agriculture 3 wn-emntrbs Project-related Extension Services Jamica bes been approached kin, of Agriculture I year Other iizabeau Agricultural Training School J maica has been approached ilin of Agriculture I year Project-related Upgrading of Land/Water Resource Unit CHI bas been approahebd Land/lWter Resource Unit I year Other Soil & Water Conservation To be identified Land/Water lesource Unit I year Other Land Registration CFTC to be approached Land4Water Resourre Unit 3 years other Forestry Pes. Programme il; UE(VSO) Min, of Agriculture Project-related 4 Other (Forsxtry Dev. Frog. Subproje4 Ch ias Saw Operation IN. i to be approached Min, of Agriculture S mea-months Other (Forestry D aidpa worker 129 - 22 - 6 41 3 - 1 27 27 17 273 Has Own Busuiess/Fann lbtal 2,991 9 557 17 123 1,089 358 4 30 47 324 383 5,932 With paid telp 714 2 97 5 39 248 140 3 9 15 145 16 1,433 Witut paid help 2,223 6 446 8 58 818 198 - 12 22 145 56 3,992 other 54 1 14 4 26 23 20 1 9 10 34 311 507 Souwrc: Statistical Otfice - Population O!nsus 1981. - 55 - Table 2.1: GRENADA - GDP by Industrial Origin, 1980-19841/ (millions of 1980 EC$) Est. 1980 1981 1982 1983 1984 Agriculture 35.6 39.5 34.5 38.9 37.9 Crops 30.0 36.5 30.7 34.9 33.9 Livestock, forestry and fishing 5.6 3.0 3.8 4.0 4.0 Quarrying 1.6 1.9 2.3 1.8 1.8 Manufacturing 4.8 5.0 5.7 4.7 4.7 Utilities 3.7 3.6 3.7 3.6 3.7 Construction 8.8 15.8 23.2 18.5 13.6 Transport and Comunications 12.5 12.6 13.8 13.1 13.1 Hotels and Restaurants 7.4 7.4 7.1 7.4 7.8 Retail and Wholesale Trade 30.6 30.0 31.9 30.7 31.6 Finance and Housing 10.7 10.9 11.9 11.9 11.9 Government Services 35.4 35.8 36.1 36.1 37.7 other Services 9.6 10.3 10.7 10.5 10.5 GDP at mp 160.7 172.8 180.9 177.2 178.3 1/ Numbers reflect recent revisions; estimates should be viewed as preliminary. Source: Statistics Office and Mission estimates. - 56 - Table 2.2: GRENADA - GDP by Expenditure, 1980-19841/ (millions of EC$) Est. 1980 1981 1982 1983 1984 Consumption Expenditures 176.3 195.8 216.2 227.8 241.6 Public 46.8 50.8 51.4 55.0 62.2 Private 129.5 145.0 164.8 172.8 179.4 Gross Domestic Investment 55.9 96.0 110.0 92.5 79.7 Public 37.1 76.6 95.7 84.4 70.0 Private 15.6 14.5 11.5 10.1 10.0 Changes in Stock 3.2 4.9 2.8 -2.0 -.3 Net Exports of GNFS -56.7 -78.9 -107.2 -96.2 -86.7 Exports 106.9 106.1 102.3 104.2 105.8 Imports 163.6 185.0 209.5 200.4 192.5 Gross Domestic Product at Market Prices 175.5 212.9 219.0 224.1 234.6 1/ Numbers reflect recent revisions; estimates should be viewed as preliminary. Sources: Statistics Office and Mission estimates - 57 - Table 2.3: GRENADA - GDP by Expenditure, 1980-841/ (millions of 1980 EC$) 1980 1981 1982 1983 1984 Consumption Expenditure 176.3 174.0 184.2 185.4 187.8 Public 46.8 47.1 47.1 46n8 50.2 Private 129.5 126.9 137.1 138.6 137.6 Gross Domestic Investment 55.9 86.8 101.1 85.7 73.7 public 37.1 69.3 88.9 79.6 65.2 Private 15.6 13.5 10.6 9.4 9.0 Changes in Stock 3.2 4.0 1.6 -3.3 -.5 Net Exports of GNFS -56.7 -72.9 -101.7 -98.1 -83.2 Exports 106.9 106.1 103.7 105.5 106.7 Imports 163.6 179.0 205.4 203.6 189.9 Statistical Discrepancy (between expenditure and industrial origin) 14.8 15.2 2.7 -4.2 - Gross Domestic Product at Market Prices 160.7 172.8 180.9 177.2 178.3 1i Numbers reflect recent revisions; estimates should be viewed as preliminary. Source: Statistics Office and Mission estimates - 58 - Table 2.4: GRENADA - Actual and Projected Savings and Investment, 1980-1990 (in millions of EC$) 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Investments] 55.9 96.0 110.0 92.5 79.7 124.3 126.7 113.3 134.8 130.4 131.5 Financed By: National Savings 20.0 32.9 19.0 14.2 25.7 37.1 33.8 32.6 29.0 38.3 49.1 Public 2/ -0.6 -1.6 4.6 6.8 4.5 -1.2 4.3 7.9 14.2 20.6 24.1 Private 20.6 34.5 14.4 7.4 21.2 38.3 29.5 24.7 14.8 17.7 25.0 Current Account Balance 35.9 63.1 91.0 78.3 54.0 87.2 92.9 80.7 105.8 92.1 82.4 As a x of GDP Investment 31.9 45.1 50.2 41.3 34.0 47.6 43.1 34.0 35.7 30.7 27.9 Financed By: National Savings 11.4 15.4 8.7 6.3 11.0 14.2 11.5 9.8 7.7 9.1 10.4 Public -.3 -.8 2.1 3.0 1.9 -.5 1.5 2.4 3.8 4.9 5.1 Private 11.7 16.2 6.6 3.3 9.1 14.7 10.0 7.4 3.9 4.2 5.3 Current Account Balance 20.5 29.7 41.5 35.0 23.0 33.4 31.6 24.2 28.0 21.6 17.5 1/ Figures for 1980-83 reflect recent revisions; estimates should be viewed as preliminary. 2/ For 1980-1983 current balance of the consolidated public sector; for 1984 and projections is current balance of central government and the National Insurance Scheme. Source: Department of Statistics, Ministry of Finance, IMF Staff and nmssion estimates. - 59 - Table 2.5 GRENADA - Actual and Projected Sources and Uses of Resources, 1983-1990 (in millions of 1980 EC$) Prel. - Projected- 19831/ 1984 1985 1986 1987 1988 1989 1990 Gross Domestic Product 177.2 178.3 183.6 190.0 197.6 205.5 214.7 224.6 Imports (including NFS) 203.6 194.0 217.9 223.6 208.4 217.9 223.3 230.9 Exports (including NFS) 105.5 110.3 106.0 123.5 129.0 134.1 151.1 163.6 Consumption 185.4 188.3 191.6 192.9 196.5 201.5 207.9 216.7 Public 46.8 50.2 53.5 53.0 53.7 54.3 54.9 57.5 Private 138.6 138.1 138.1 139.9 142.8 147.2 153.0 159.2 Investment 85.7 73.7 103.9 97.2 80.5 87.8 79.0 75.2 Public 79.6 65.5 90.9 61.4 32.7 41.1 38.6 33.7 Private 9.4 9.0 13.0 35.8 47.8 46.7 40.4 41.5 Stock Changes -3.3 -.5 Statistical Discrepancy -4.2 - As a % of GDP Gross Domestic Product 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Resource Balance 55.4 46.9 61.0 52.6 40.1 40.8 33.6 30.0 Imports (including NFS) 114.9 108.8 118.7 117.6 105.4 106.1 104.0 102.8 Exports (including NFS) 59.5 61.9 57.7 65.0 65.3 65.3 70.4 72.8 Consumption 104.6 105.6 104.4 101.5 99.4 98.1 96.8 96.5 Public 26.4 28.2 29.2 27.9 27.2 26.4 25.6 25.6 Private 78.2 77.4 75.2 73.6 72.3 71.7 71.2 70.9 Investment 48.4 41.3 56.6 51.1 40.7 42.7 36.8 33.5 Public 44.9 36.6 49.5 32.3 16.5 20.0 18.0 15.0 Private 5.3 5.0 7.1 18.8 24.2 22.7 18.8 18.5 Stock Changes -1.8 -.3 Statistical Discrepancy -2.4 Source: Mission estimates J Numbers reflect recent revisions; estimates should be viewed as preliminary. - 60 - Table 3.1: GRENADA - Balance of Payments, 1980-84 (in million of US$) Est. 1980 1981 1982 1983 1984 Current Account -13.3 -23.4 -33.7 -29.0 -20.0 Exports of Goods & NFS 39.6 39.3 38.2 39.0 42.2 Of which: tourism 20.1 17.3 17.3 14.7 17.3 Imports 60.3 68.2 77.6 74.3 71.3 Of which: airport related (3.9) (6.4) (8.6) (8.5) (5.0) Factor Services (net) -2.2 -4.9 -5.3 -4.5 -2.6 Of which: interest payments -0.5 -0.6 -0.9 -1.2 -2.2 Current transfers (net) 9.6 10.4 11.0 10.8 11.7 Capital Account 12.9 15.4 34.0 26.7 20.7 Official Grants 12.7 12.9 16.7 12.8 25.2 Public Borrowings (net) 1.3 7.5 9.5 14.7 5.2 Disbursements 1.8 8.2 10.1 15.3 7.3 Amortization 0.5 0.7 0.6 0.6 2.1 Other 1/ -1.1 -5.0 7.8 -0.8 -9.7 SDR Allocation 0.5 0.4 - - - Overall Balance 0.1 -7.6 0.3 -2.3 0.7 Financing -0.1 7.6 -0.3 2.3 -0.7 IMF - 5.8 -0.9 1.2 -1.2 ECCB 0.3 0.8 0.8 -0.5 - Change in Foreign Assets (increase -) -0.4 1.0 -0.2 -0.1 -0.4 Arrears - - - 1.7 .9 1/ Includes errors and omissions. Sources: Ministry of Finance, Statistical Office; and IMF staff estimates. - 61 - Table 3.2: GRENADA - Value, Volume, and Unit Value of blajor Exports (Value in millions of U.S. dollars, volume in millions of pounds, and unit values in U.S. dollars per pound) 1979 1980 1981 1982 1983 1984 Total exports 21.41 17.39 19.02 18.57 18.92 17.12 Re-exports 0.78 0.54 0.40 0.75 0.49 .60 Domestic exports 20.63 16.85 18.62 17.82 18.43 16.52 Banana Value 3.74 4.11 3.71 3.39 3.24 3.04 Volume 31.03 27.46 22.41 21.17 19.53 19.72 Unit value 0.12 0.15 0.17 0.16 0.17 0.15 Cocoa Value 10.03 6.76 7.06 4.62 4.06 4.50 Volume 5.34 4.11 5.90 4.62 4.92 4.77 Unit value 1.88 1.64 1.20 1.00 0.83 0.94 Nutmeg Value 4.60 3.16 3.02 3.02 3.25 2.12 Volume 5.07 3.35 3.79 4.50 5.34 4.08 Unit value 0.91 0.94 0.80 0.67 0.61 0.52 Mace Value 0.89 0.68 0.63 0.93 0.76 0.45 Volume 0.74 0.55 0.46 0.72 0.75 .21 Unit value 1.20 1.24 1.37 1.29 1.02 2.14 Fresh fruits Value 0.36 0.28 0.49 1.67 4.14 5.08 Volume 1.43 0.85 1.73 5.69 15.17 18.29 Unit value 0.25 0.33 0.28 0.29 0.27 .28 Clothing Value 0.37 0.88 2.17 2.43 1.77 .53 Other Value 0.64 0.98 1.54 1.76 1.21 0.8 Sources: Statistical Office, Commodity Boards. - 62 - Table 3.3: GRENADA - Merchandise Imports by SITC Sections 1979 1980 1981 1982 1983 1984 (In millions of U.S. dollars) Total imports I/ 47.3 54.1 60.7 65.1 64.6 57.1 Recorded imports 43.7 50.2 54.3 56.5 56.1 57.1 Food 13.4 14.5 15.3 15.5 13.6 Beverage and tobacco 1.3 1.8 1.5 1.5 1.2 Crude materials 1.4 2.0 2.2 3.0 2.8 Fuel 4.4 6.4 7.7 7.5 6.2 Animal and vegetable 0.2 0.2 0.3 0.1 0.1 oils and fats Chemicals 4.4 5.5 5.6 5.7 4.7 Manufactured goods 7.5 7.7 7.7 9.5 8.5 Machinery and transport 7.6 7.0 9.2 8.4 12.6 equipment Miscellaneous manufactured 3.5 5.1 4.7 5.5 6.3 articles (In percent) Recorded importfs 100.0 100.0 100.0 100.0 100.0 Food 30.6 28.9 28.2 27.5 24.2 Beverage and tobacco 3.0 3.5 2.8 2.6 2.1 Crude materials 3.3 3.9 4.1 5.2 5.0 Fuel 10.0 12.8 14.2 13.3 11.1 Oils and fats 0.4 0.5 0.2 0.2 0.2 Chemicals 10.1 11.0 10.3 10.0 8.4 Manufactured goods 17.3 15.4 14.2 16.7 15.2 Machinery and transport 17.2 14.0 17.0 14.8 22.5 equipment Miscellaneous manufactured 8.1 10.1 8.7 9.7 11.2 articles Sources: Statistical Office; and IMF staff estimates. 1/ Total imports from 1979-83 were derived by adding estimated unrecorded imports for the airport project to recorded imports from customs data. - 63 - Table 3.4: GRENADA - Direction of Trade (In percent) 1979 1980 1981 1982 1983 1984 1/ Domestic exports, f.o.b. 100.0 100.0 100.0 100.0 100.0 100.0 United Kingdom 38.6 43.9 35.6 32.2 25.7 34.7 Canada 2.9 3.2 2.9 2.4 1.9 2.2 United States 1.6 3.1 1.5 2.4 2.1 6.4 Cuba -- 0.5 0.4 0.2 0.9 -- Soviet Union -- -- -- 3.6 5.1 -- West Indies 6.1 10.8 20.6 32.2 38.7 34.3 Barbados (1.0) (1.6) (2.8) (2.2) (1-5) (.5) Guyana (0.4) (0.1) (0.1) (0.1) (0.1) - Jamaica (0.1) (0.4) (0.1) (1.6) (0.2) -- Trinidad and Tbbago (4.5) (7.7) (15.0) (26.0) (34-3) (32.7) Other (0.1) (1.0) (2.6) (2.3) (2.6) (1.1) West Germany 16.4 8.1 9.0 10.3 11.1 9.4 France -- 0.2 1.2 0.1 0.1 -- Netherlands 11.5 10.4 15.8 10.1 11.1 5.7 Belgium and Luxembourg 16.0 14.4 9.5 3.7 0.7 1.3 Other Western Europe 1.6 1.6 1.6 1.2 0.4 .6 Rest of world 5.3 3.8 1.9 1.6 2.2 5.4 Total imports, c.i.f. 2/ 100.0 100.0 100.0 100.0 100.0 United Kingdom 22.8 17.9 16.6 15.1 19.5 Canada 6.9 5.7 5.5 5.4 4.6 United States 14.0 19.4 18.6 20.2 17.4 Cuba 1.2 2.0 1.9 4.4 2.6 Soviet Union 0.1 0.2 2.8 2.0 0.1 East Germatny -- -- -- -- 10.2 West Indies 29.9 32.8 31.7 30.2 25.0 Barbados (3.8) (3.8) (3.7) (3.6) (3-4) Guyana (2.5) (2.5) (3.2) (1-3) (0.5) Jamaica (2.5) (2.2) (2.1) (2.1) (1.6) Trinidad and Tobago (17.6) (19.9) (19.2) (19.9) (17.0) Other (3.5) (4.4) (3.5) (3.3) (2.5) West Germany 2.5 1.0 1.3 1.2 0.9 France 0.6 0.6 0.5 1.2 0.7 Netherlands 2.0 1.4 1.6 2.4 1.9 Belgium and Luxembourg 0.1 0.2 1.0 1.0 0.4 Other Western Europe 3.7 2.7 2.9 3.3 2.5 Japan 4.2 5.3 3.5 4.6 4.0 Hong Kong 1.0 2.0 1.7 1.5 1.0 Taiwan 0.6 0.7 O.8 1.0 1.6 Rest of world 10.4 8.1 9.6 6.5 7.6 Source: Statistical office. 1/ Based on partial data. 2/ Refers only to recorded imports. - 64 - Table 3.5: GRENADA - Actual and Projected Balance of Payments (in US$ millions) Est. Projected 1983 1984 1985 1986 1987 1988 1989 1990 Current Account -29.0 -20.0 -32.3 -34.4 -29.9 -39.2 -34.1 -30.5 Exports of Goods & NFS 39.0 42.2 42.5 50.7 61.8 68.8 83.8 96.0 of which: Tourism 14.7 17.3 17.7 21.3 27.9 31.1 39.2 45.1 Imports 74.3 71.3 80.8 83.2 98.9 112.2 124.1 134.8 Factor Services (net) -4.5 -2.6 -2.4 -2.1 -2.5 -2.9 -3.4 -4.4 of which: Interest Payments -1.2 -2.2 -2.4 -2.2 -2.2 -2.2 -2.3 -2.4 Current Transfers (net) 10.8 11.7 12.5 13.0 13.5 14.0 14.5 15.0 Capital Account Private Investment - - 3.1 9.6 15.0 20.9 16.2 14.9 Official Grants 12.8 25.2 40.1 25.3 12.1 11.9 10.8 7.8 Public Borrowings (net) 14.7 5.2 -0.2 3.4 3.2. 5.0 3.5 2.9 Disbursements 15.3 7.3 5.4 8.2 8.6 10.3 7.9 7.0 Amortization 0.6 2.1 5.6 4.8 5.4 5.3 4.4 3.8 Other 1/ -0.8 -9.7 -8.2 -2.4 .4 2.0 4.0 5.3 Overall Balance -2.3 0.7 2.5 1.5 0.8 0.6 0.4 0.4 Financing 2.3 -0.7 -2.5 -1.5 -0.8 -0.6 -0.4 -0.4 IlF 1.2 -1.2 -2.5 -1.5 -0.7 -0.6 -0.4 -0.4 ECCB -0.5 - Change in Foreign Assets -0.1 -0.4 -0.1 Arrears 1.7 .9 1/ Includes errors and omissions. Source: Mission estimates - 65 - Table 4.1: GRENADA - Summary of External Public Debt Operations 1/ (in thousands of US dollars) 1980 1981 1982 1983 1984 Total outstanding debt at end of period 14,381 26,242 33,744 48,350 48,175 Outstanding debt due to IMF (end of period) 2,824 8,264 6,924 7,667 6,077 Purchases 666 (5,907) (-) (1,203) (-) Repurchases (-) (-680) (-146) (-908) (-84) (-1,200) Valuation Adjustment (-951) (-321) (-432) (-376) (-390) Outstanding Debt Excluding IMF (end of Period) 11,557 17,978 26,820 40,683 42,098 Drawings (1,758) (8,139) (10,124) (15,235) (7,245) Amortization (-) (-476) (-686) (-597) (-570) (-2,117) Valuation Adjustment ( -8) (-1,032) (-685) (-800) (-3,713) Debt Service Payments 1,627 1,467 2,409 1,865 5,534 Amortization 1,156 832 1,505 654 3,317 IMF (680) (146) (908) (84) (1,200) Other (476) (686) (975) (570) (2,117) Interest 471 635 904 1,211 2,217 IMF (111) (250) (485) (431) (500) Other (360) (385) (419) (780) (1,717) Overdue obligations - - - 775 1,872 Amortization - - 550 1,743 Interest - - 225 129 (In Percent) Total debt Outstanding/GDP 22.1 33.3 41.6 58.3 55.4 Debt Outstanding/GDP 2/ 17.8 22.8 33.1 49.0 48.4 Net Drawings/GDP 2.1 17.6 11.2 20.2 4.5 Debt Service/GDP 2.6 2.0 3.1 2.4 6.4 Debt Service Obligations/ Receipts of Goods and Nonfactor Services 4.1 3.7 6.3 4.8 13.0 1/ Includes IMF and government guaranteed debt, but excluded ECCB debt. T/ Excluding IMF. Source: Ministry of Finance and IMF Staff estimates. - 66 - Table 4.2: GRENADA - Projected External Debt Service Obligations (in millions of US$) 1984 1985 1986 1987 1988 1989 1990 Total External Public Debt Service 5.5 10.5 8.5 8.3 8.1 7.1 6.9 Amortization 3.3 8.1 6 6.1 5.9 4.8 4.5 Interest 2.2 2.4 2.2 2.2 2.2 2.3 2.4 IMF 1.7 2.9 1.8 0.9 0.8 0.5 0.5 Amortization 1.2 2.5 1.5 0.7 0.6 0.4 0.4 Interest 0.5 0.4 0.3 0.2 0.2 0.1 0.1 Loans Outstanding 1/ 3.8 7.6 3/ 6.5 6.9 6.5 5.4 4.6 Amortization 2.1 5.6 4.8 5.4 5.3 4.4 3.8 Interest 1.7 2.0 1.7 1.5 1.2 1.0 0.8 Additional Loans 2/ .2 .5 .8 1.2 1.8 Amortzzation .3 Interest .2 .5 .8 1.2 1.5 Memorandum Items Debt Service Ratio 4/ 13.0 28.9 19.4 13.4 12.9 9.3 7.8 Outstanding and Disbursed Debt at end of period 4/ 48.2 45.5 47.4 49.9 54.3 57.4 59.9 :as a X of GDP 55.4 47.1 43.5 40.4 38.8 36.5 34.3 1/ Based on debt outstanding as of June 30, 1984. 2/ Statistical Appendix Table 3.5; assumes CDB terms for all but projected IDA disbursements. 3/ Includes US$1.8 million in payment of arrears. 4/ Includes debt due to the IMF. Source: IMF and mission estimates. - 67 - Table 5.1: GRENADA - Central Government Expenditure by Economic Classification 1/, 1980-1984 (In million of Eastern Caribbean dollars) Est. 1980 1981 1982 1983 1984 Total Expenditure 97.1 139.2 175.2 166.6 164.1 Current Expenditure 59.6 64.4 71.6 74.4 86.7 Personal emoluments 32.6 36.0 34.3 38.9 47.0 Wages and Salaries (.) (32.5) (30.6) (35.2) (44.1) Travel and other (.) (3.5) (3.7) (3.7) (2.9) Purchases of Goods and Services 14.2 14.8 17.1 16.1 16.0 Interest Payments 3.3 3.2 7.4 7.4 10.8 External (1.2) (1.8) (2.4) (3.2) (6.0) Domestic (2.1) (1.4) (5.0) (4.2) (4.8) Domestic Transfers 8.4 9.2 10.6 10.5 9.5 Pensions (2.4) (3.1) (3.6) (4.0) (4.0) Contributions to NIS (--) (--) (--) (0.4) (1.9) Other (6.0) (6.1) (7.0) (6.1) (3.6) Transfers Abroad 1.1 1.2 2.2 1.5 3.4 Capital Expenditure 37.5 74.8 103.6 92.2 77.4 Fixed Capital Formation 2/ 35.9 73.5 90.9 81.1 71.2 Acquisition of Land and Shares 3/ (--) 1.3 9.4 5.0 .7 Other Transfers and Net Lending 1.6 -- 3.3 6.1 5.5 I/ Data are on a cash basis; there was an arrears buildup of EC$12 million in 1983 and arrears payment of EC$3.0 million in 1984. 2/ Includes transfers to grower 's associations and the consolidated public sector for capital expenditures. 3/ Includes purchases of NCB shares in 1982 and GBC shares in 1983. Sources: Ministry of Finance; and IMF staff estimates. - 68 - Table 5.2: GRENADA - Central Government Revenue, 1980-84 (in millions of Eastern Caribbean dollars) Est. 1980 1981 1982 1983 1984 Total Revenue 57.7 63.0 74.4 81.3 87.4 Current Revenue 57.5 62.7 74.4 81.3 85.3 Tax Revenue 51.6 54.3 65.8 70.4 77.2 Taxes on income 14.5 16.6 20.5 20.0 22.2 Companies (8.2) (7.8) (9.6) (8.3) (6.8) Individuals (6.3) (8.1) (9.8) (10.7) (14.3) Other 1/ C--) (0.7) (1.1) t1.0) (1.1) Taxes on Property 0.8 0.8 0.7 0.9 0.9 Taxes on Domestic Transactions 4.2 3.6 3.6 3.3 4.7 Motor Vehicles (1.7) (1.0) (1-3) (1.3) (2-3) Services (1.4) (1.4) (1.0) (0.8) (1.1) Business and Other Licenses (1.0) (1.1) (1.2) (1.1) (1.2) Excise (0.1) (0.1) (0.1) (0.1) (0.1) Taxes on Imports 21.9 22.9 31.6 37.5 41.0 Import Duties (12.1) (11.0) (11.8) (10.4) (12.2) Stamp Duty (7.3) (8.1) (12.0) (16.8) (15-5) Consumption Duty (2.5) (3.6) (5.7) (5.9) (6.7) International Airport Levy (--) (--) (1.8) (4.0) (6.2) Package Tax (--) (0.2) (0.3) (0.4) (0.4) Taxes on Exports 4.8 5.2 4.0 3.7 3.2 Foreign Exchange Tax 5.4 5.2 5.4 5.0 5.2 Nontax Revenue 5.9 8.4 8.6 10.9 8.1 Interest and Rents 0.4 0.7 1.0 0.8 0.1 ECCB profits 1.9 2.2 3.0 3.6 2.5 Post office 2.1 2.4 2.2 3.0 3.2 Airport Fees 0.6 0.5 0.3 0.6 0.3 Government Departments 0.4 1.4 1.6 1.5 1.4 Other 2/ 0.5 1.2 0.5 1.4 0.6 Capital Revenue from Sale of Existing Assets 0.2 0.3 -- -- 22.1 1/ Includes withholding tax and tax on interests paid by banks (in force up to December 1983). 2/ Includes reimbursements and miscellaneous. Sources: Ministry of Finance; and IMF staff estimates. - 69 - Table 5.3: GRENADA - Central Government Operations, 1980-1984 (in millions of East Caribbean dollars) 1980 1981 1982 1983 1984 Total Revenue 57.7 63.0 74.4 81.3 87.4 Of which: Tax Revenue 51.6 54.3 65.8 70.4 77.2 Current Expenditure 59.6 64.4 71.6 74.4 86.7 Current Account Balance -1.9 -1.4 2.8 6.9 0.7 Capital Expenditure 37.5 74.8 103.6 92.2 71.9 Overall Deficit -39.4 -76.2 -100.8 -85.3 -71.2 Current External Grants 1.4 0.9 2.6 3.2 28.6 Overall Deficit after Current Grants -38.0 -75.3 -98.2 -82.1 -42.6 Financing External Capital Grants 33.0 34.0 42.4 31.4 39.4 Net External Borrowing 3.5 19.9 24.9 38.6 14.0 Disbursements 4.5 21.7 26.3 40.0 19.7 Amortization -1.0 -1.8 -1.4 -1.4 -5.7 Other External Financing 0.9 21.6 -0.7 1.7 -4.4 Net IMF purchases - 15.6 -2.4 3.2 -3.3 Net ECCB Position 0.9 2.2 2.2 -1.3 - Change in Foreign Assets -1.1 2.7 -0.5 -0.2 -1.1 SDR Allocation 1.1 1.1 - Net Domestic Borrowing -3.0 2.2 31.6 10.6 -6.4 Commercial Banks (net) -4.6 1.2 29.0 3.8 -12.5 National Insurance Scheme 3.1 3.8 Other Borrowing 1.6 1.0 2.6 3.7 2.3 Unidentified Financing 3.6 -2.4 -0.2 - As a Percent of GDP Tax revenue 29.4 25.5 30.0 31.4 32.9 Current Expenditure 34.0 30.2 32.7 33.2 37.0 Current Account Balance -1.1 -.7 1.3 3.1 .3 Capital Expenditures 21.4 35.1 47.3 41.1 30.6 Overall Deficit before Current Grants -22.5 -35.8 -46.0 -38.1 -30.4 Sources: Ministry of Finance and IMF staff estimates. Table 5.4: GEWMA - RULlC UTILMES (1aRATD( SLATD S AND EERLaKW INDICAMRS, 1982-1984 (EC D1llas Diusaxis) 1984 1982 1983 _ (SLx hz98) i;orts: Ports Mths) (Mm Mantbs) P8rt Te~ Water Ele-tricity Authority pter ELectricity Aithority I-lep*one Wter ELectricity bolty ale 3412 2315 10,20 1154 3608 2414 9800 1536 1600 2618 7900 1363 Goat of Coods vold 1647 2237 10,OOD 561 2684 2187 9500! 916 1560 2459 71(10 992 1 MAdiistration 1710 862 956 384 1811 350 1126 654 134 604 596 753 s Interest 252 4 2(10 - 221 8 10X - 90 60 200 x 0 Depreciatan 547 36 1 177 625 42 500 261 310 136 300 239 tit Profit/is 83s 78 320 593 924 227 300 620 40 159 8)0 371 Perfornmme lrAicators Current Ratio -2.4 1.4 1.5 2.7 -2.1 1.3 1.4 71.5 -4.7 - 1.3 na ICE 18.6 0.8 6.2 11.9 17.0 2.2 10.3 10.0 1.1 - - 5.9 Net hne X i Sales 24.6 3.4 2.0 51.4 25.6 9.4 3.1 40.4 2.5 6.5 10.1 21.2 liquidity 0.3 1.0 1.1 2.6 - 1.0 0.9 66.3 - - - - Scmre: Financial Statefits ao the itilities - 71 - Table 5.5: GRENADA - Actual and Projected Central Government Finances (million of EC$) Prel. Projected- -- 1983 1984 1985 1986 1987 1988 1989 1990 Total Revenue 81.3 87.4 95.0 103.1 117.0 130.7 146.4 162.4 of which: Tax Revenue 70.4 77.2 77.3 91.5 103.8 115.8 129.7 143.8 Other 10.9 10.2 17.7 11.6 13.2 14.9 16.7 18.6 Current Expenditures 74.4 86.7 100.2 103.0 113.5 121.1 130.6 143.3 of which: Personal Emoluments 38.9 47.0 56.0 59.9 64.1 68.6 74.5 82.7 Purchases of Goods and Services 16.1 16.0 15.6 17.5 21.3 25.4 27.6 30.6 Interest payments 7.4 10.8 6.8 10.3 11.0 11.0 11.2 11.5 Other 12.0 12.9 21.8 15.3 17.1 19.9 22.7 25.5 Current Account Balance 6.9 0.7 -5.2 .1 3.5 9.6 15.8 19.1 Capital Expenditure 92.2 77.4 107.6 80.4 51.8 61.7 62.3 57.7 Overall Deficit -85.3 -76.7 -112.8 -80.3 -48.3 -52.1 -46.5 -38.6 Current External Grants 3.2 28.6 32.4 18.6 8.2 - - - Overall Deficit (after grants) -82.1 -48.1 -80.4 -61.7 -40.1 -52.1 -46.5 -38.6 Financing External Capital Grants 34.1 39.4 76.0 49.6 24.4 32.2 29.2 21.0 Net External Borrowing 38.6 14.0 -0.5 9.1 8.4 13.5 9.4 7.9 Disbursements 40.0 19.7 14.6 22.1 23.0 27.8 21.3 19.0 Amortization -1.4 -5.7 -15.1 -13.0 -14.6 -14.3 -11.9 -11.1 Other Externial Financing 1.7 -4.4 -6.8 -4.1 -1.9 -1.6 -1.1 -1.1 of whiich: Net IMF purchases 3.2 -3.3 -6.8 -4.1 -1.9 -1.6 -1.1 -1.1 Net Domestic Borrowing 7.7 -0.9 11.7 7.1 9.2 8.0 9.0 10.8 of which: National Insurance Scheme 3.1 3.8 4.0 4.2 4.4 4.6 4.8 5.0 As a Percent of GDP Tax Revenue 31.4 32.9 29.6 31.1 31.1 30.6 30.5 30.5 Current Expenditure 33.2 37.0 38.4 35.0 34.0 32.0 30.8 30.4 Current Account Balance 3.1 .3 -2.0 - 1.0 2.5 3.7 4.1 Capital Expenditures 41.1 33.0 41.2 27.3 15.5 16.3 14.7 12.3 Overall Deficit (before grants) -38.1 -32.7 -43.2 -27.3 -14,5 -13.8 -10.9 -8.2 Source: Mission estimates. - 72 - Table 5.6: GRENADA - Actual and Projected Financing of Public Sector Investment, 1983-87 (in millions of East Caribbean dollars) Est. Projected 1983 1984 1985 1986 1987 Public Sector Investment Program 92.2 77.4 107.6 80.4 51.8 Financing Public Sector Savings!/ 6.9 0.7 -5.2 .1 3.5 Net Domestic Borrowing 7.7 -0.9 11.7 7.1 9.2 of which: National Insurance Scheme (3.1) (3.8) (4.0) (4.2) (4.4) Net External Financing2/ 75.9 82.0 97.1 51.6 0.7 Current Grants 3.2 28.6 21.6 10.8 - Capital Grants 34.1 39.4 76.0 41.8 11.0 Loans 40.0 19.7 14.6 12.0 4.3 Amortization -1.4 -5.7 -15.1 -13.0 -14.6 Other External Financing 1.7 -4.4 -6.8 -4.1 -1.9 of which: Net IMF purchase 3.2 -3.3 -6.8 -4.1 -1.9 Additional Financing Required - - 10.8 25.7 40.3 1/ Includes only central government. 2/ Includes only committed financing or financing for which negotiations are well advanced. Source: Statistical Appendix Tables 5.5 and 5.7 Table 5.7: GRENADA - PUBLIC SECTOR INVESThENT PR0GRAIIIE, 1994-1987 Page 1 of 7 (ECS '000) 1984 1995 1986 1997 TOTAL LOCALI() EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTEMII TOTAL LOCAL EXTERNAL --_-_-__--__----_-_-___-____--__--_-__----___-_____-__--_-.-.-__----_.___-____-___- - _ _ , - _ -------__- -_-______________________________________ ON60IN6 PROJECTS 72343 13558 58785 98.506 13,538 84,968 ' 22,457 3355 19.102 4499 1496 3003 ___-- _ ________ ------------ - - - - ---------. --.---------------.---------- Fixed Investents 71204 12800 58404 98.316 13,348 84.968 22,457 3355 19,102 4499 1496 3003 … _ - __ __ __ --___-___-_ . - . ----- - _ _ -_-____-_-_____-__- _ _ _ _ _ _ _ _ _ _ ____________-_-__ 1. Econosic Services 69893 1168 57204 84,126 11,863 72,263 20.017 3155 16, 2 4419 1416 3003 A. Agric.,Forestry,Fisheries 8055 2176 5079 13130 2787 10343 5330 1470 3960' 4419 1416 3003 Agric. Dev.,lardi 6ras 41 0 41 0 0 0 0 0 0 0 0 0 hirabeau Training School 0 0 0 880 230 650 0 0 0 0 0 0 Carriacou Sheep Development 72 0 72 110 50 60 0 0 0 0 0 0 Reafforestation 0 0 0 210 35 175 306 30 276 0 0 0 Extension Services 0 0 0 36 0 36 0 0 0 0 0 0 Artificial Ilsesination Kit 0 0 0 6 0 6 0 0 0 0 0 0 6renada Fares Rehab 856 421 435 0 0 0 0 0 0 0 0 0 Banana Reg. Input 0 0 0 226 23 203 452 46 406 226 23 203 Banana Development 119 0 119 571 90 481 0 0 0 0 0 0 Cocoa Rehabilitation 2275 1175 1100 2100 1100 1000 3738 1238 2500 4193 1393 2800 Artisanal Fisheries 1766 580 1196 2457 376 2081 0 0 0 0 0 0 Grenville Market Rehab. 127 0 127 292 30 262 0 0 0 0 0 0 Forestry Developeent 1 120 0 120 0 0 0 0 0 0 0 0 0 Banana Rehabilitation 500 0 500 0 0 0 0 0 0 0 0 0 Nuteeg Rehabilitation 500 0 500 0 0 0 0 0 0 0 0 0 Agric. Sector Revitalization 1115 0 1115 4313 803 3510 834 156 678 0 0 0 Cocoa Industry Support 0 0 0 500 0 500 0 0 0 0 0 0 Moko Eradication 314 0 314 200 0 200 0 0 0 0 0 0 Nuteg Station Repairs 50 0 50 0 0 0 0 0 0 0 0 0 Caribbean Agric. Ext. Programme 200 0 200 0 0 0 0 0 0 0 0 0 Carriacou Soil and Water 0 0 0 239 50 189 0 0 0 0 0 0 State Farms Health Programe 0 0 0 150 0 150 0 0 0 0 0 0 Harketing Centre - Carriacou 0 0 0 1o0 0 100 0 0 0 0 0 0 Grenada and Carriacou Coops 0 0 0 270 0 270 0 0 0 0 0 0 Seedling Centres 0 0 0 110 0 110 0 0 0 0 0 0 Agric. Coop and Marketing Depots 0 0 0 360 0 360 0 0 0 0 0 0 Po" 2 of 7 1994 1985 1996 l"7 TOTAL LOCALII) EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNIAL TOTAL LOCAL EXTERIIAL B. Manufacture, Mining & Quarrying 343 343 0 2748 1053 1695 1984 339 3645 0 0 0 Industrial Estates 0 0 0 480 75 405 3984 339 3645 0 0 0 Factory Sheils Refurbishing 0 0 i 451 54 397 0 0 0 0 A 0 Quarrying I Stone Crusher 95 95 0 1294 844 450 0 0 0 0 0 0 Ouarry Dev. Feasibility Studv 0 0 0 523 80 443 0 0 0 0 0 0 EIulsion Plant 248 248 0 0 0 0 0 0 0 0 0 C. Tauris 0 1189 159 1030 0 0 0 0 0 0 Tourist Attractions 0 0 0 969 159 910 0 0 0 0 0 0 Huan Resources Dev. 0 0 0 220 0 220 0 0 0 0 0 0 D. Couunications 2217 57 2160 1023 0 1023 0 0 0 0 0 0 Post Office Mail Van 53 53 0 0 0 0 0 0 0 0 0 0 Westerhali Telephone 0 0 0 1023 0 1023 0 0 0 0 0 0 Radio 6renada 2164 4 2160 0 0 0 0 0 0 0 0 0 E. lransportation 44733 6565 38169 53922 5979 47943 9153 546 8607 0 0 0 Air Transport 34151 3031 31121 39625 2325 36300 0 0 0 0 0 0 Akradio- auriston 16 16 0 0 0 0 0 0 0 0 0 0 Pt. Salines Airport 33770 2783 30967 38600 2300 36300 0 0 0 0 0 0 Pearls Airport 17 17 0 10 10 0 0 0 0 0 0 0 Lauristo t Airport 348 214 134 15 15 0 0 0 0 0 0 0 Sea Transport 4007 850 3157 617 352 265 0 0 0 0 0 0 Petit Martinique Jetty 130 0 130 174 54 120 0 0 0 0 0 0 Carriacou Jetty 1034 216 B18 120 120 0 0 0 0 0 0 0 Port Developeent 2843 634 2209 222 178 44 0 0 0 0 0 0 Pt. Salines Nav. Aids 0 0 0 101 0 101 0 0 0 0 0 0 Roads 6575 2685 3890 1468t! 3302 11378 9153 546 9607 0 0 0 Feeder Roads I i 1008 101 907 2104 110 1933 o 0 0 0 0 0 Farm Roads 6bIB 558 60Q 120C0 730 470 0 0 0 0 0 0 Eastern Matn Road Q'S; 2'01'5 2010 2560 1560 1000 0 v 0 9 0 0 Pop. 3 of I 1984 1105 1986 lY7 TOTAL LOCAL1I0 EXTERNAL TOTAL LOCAL EXTERIIL TOTAL LOCAL EITERILW TOTAL ICIL EIllM Roads (Cont.) Richand Hill Bypass 11 11 0 0 0 0 0 0 0 0 0 0 Emergency Road Repair 815 0 815 535 0 535 0 0 0 0 0 O lnfr. Revit. - Rd. Works 98 0 98 6477 537 5940 30 146 332 0 0 0 Western Rlain Road I 0 0 0 1865 365 1500 5645 400 5245 0 0 0 F. Power 6673 1564 5109 38d1 836 2965 0 0 0 0 0 O Stream Gaqing 0 0 0 295 25 270 0 0 0 0 0 0 6renlec Exparsion 1 519 519 0 0 0 0 0 0 0 0 0 0 Grenlec 95 Eng.- Spare Parts 551 0 551 291 0 291 0 0 0 0 0 0 Brenlec P7 Generator u 0 0 1722 Q 1722 0 0 0 0 0 0 lnfr. Revit. - Electricity Q 0 0 597 213 384 0 0 0 0 0 0 6renlec Expansion 11 - EIB 5603 1045 4558 895 596 2Y9 0 0 0 0 0 0 6. Water 2021 37t 1645 4381 263 4118 b68 0 688 0 0 0 lasa Cannes 1830 250 1580 1456 0 1496 0 0 0 0 0 0 Annandale 0 0 0 594 0 594 0 0 0 0 0 0 Les Avocats Filtration U 0 0 181 0 181 0 0 0 0 0 0 ioodlands gore Holes 0 0 0 149 0 149 0 0 0 0 0 0 Leak Detection 0 0 1) 84 0 B4 0 0 0 0 0 0 Bulk etering 0 0 Q 1o? 0 167 0 0 0 0 0 0 Rural Water Systees 1 0 0 7 708 158 550 688 0 688 0 0 0 6rand Anse - beleont Lines t' 0 0 300 0 300 0 0 0 0 0 0 St. Georges Water Tank 51 51 0 ; 0 0 0 0 0 0 0 0 ClA Spre Parts 65 0 oS 535 0 535 0 0 0 0 0 0 Carriacou Water Cistern Q 0 0 67 5 62 U 0 0 0 0 0 Carib. 6asin Water hgqt. i 7 ? 75 h0 100 0 0 0 0 0 0 H. Other 293Q 23 2598 3i; -ah 3146 8t2 900 62 0 0 0 Central Garage Un:t0 80 23. 598 3766 8O 30Q0 80u 8Q0 0 0 0 0 Wloeer s hotor lech. Apprentice * 40 14 o2 0 62 0 0 0 Pap 4 of 7 1994 1S85 1986 1967 TOTAL LOCAL M1) EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EITEIIM. 11 Social Services 615 225 390 10746 1243 9503 2440 200 2240 90 s0 0 A Education 437 47 390 3485 295 3190 940 50 990 0 0 0 School Rehabilitation 332 2 330 1707 95 1612 0 0 0 0 0 0 6reen Street Day Care Centre 45 45 0 0 0 0 0 0 0 0 0 0 Bellevue Cos unity Center 60 0 60 120 70 50 0 0 0 0 0 0 integrated Cult.Dev. 0 0 0 1o 0 10 0 0 0 0 0 0 UNICEF Pre-school Repair 0 0 0 150 0 150 0 0 0 0 0 0 Nutrition Educational Prograsse 0 0 0 53 0 53 0 0 0 0 0 0 IFE Expansion 0 0 0 300 0 300 650 50 600 0 0 0 Ubrary Renovation 0 0 0 290 0 290 290 0 290 0 0 0 School Rehab. - BHN 0 0 765 130 635 0 0 0 0 0 0 St. John's School Repair O 0 0 60 0 60 0 0 0 0 0 0 fouth Developeent Prograsse 0 0 0 30 0 30 0 0 0 0 0 0 B. Health and Sanitation 70 70 0 5551 387 5164 1425 75 1350 0 0 0 Princess Royal Hosp. Repairs 62 62 0 31 0 31 0 0 0 0 0 0 Health Centres I 0 0 0 315 50 265 0 0 0 0 0 0 Reconstr. Visiting Stations a 8 00 0 0 0 0 0 0 0 0 Infr. Revit. - Health 0 0 0 971 93 B78 0 0 0 0 0 0 Community Sanitation 0 0 0 86 10 76 0 0 0 0 0 0 Health Centres 11 0 0 0 1425 75 1350 1425 75 1350 0 0 0 Princess Alice Hosp. 0 0 0 454 50 404 0 0 0 0 0 0 New lental Hosp. 0 0 0 2269 109 2160 0 0 0 0 0 0 C. Housing 108 108 U 1710 501 1149 75 75 0 80 g0 0 Housing Repairs iO9 108 0 72 72 0 75 75 0 s0 80 0 6rand Anse Housing 0 0 0 314 0 314 0 0 C 0 0 0 Pre-fat Housirg 0 0 r 1324 489 835 0 0 0 0 0 0 Page 5 of 7 1984 1995 1986 1987 TOTAL LOCAL 11) EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL I11.6eneral Public Services 196 886 810 3444 242 3202 0 0 0 0 0 0 A. Public Safety 598 38 560 3177 25 3152 0 0 0 0 0 0 Police Stations and Equipment 548 0 548 330 25 305 0 0 0 0 0 0 Prisons 3B 38 0 0 0 0 0 0 0 0 0 0 Fire Station Extension 12 0 12 225 0 225 0 0 0 0, 0 0 Coast Guard Complex 0 0 0 2622 0 2622 0 0 0 0 0 0 D. Other 1099 649 250. 267 217 50 0 0 0 0 0 0 Assets Acquisition 655 655 0 0 0 0 0 0 0 0 0 0 Purchase of Estates 655 b55 0 0 0 0 0 0 0 0 0 Financial Investients 4B0 99 361 19(i 190 0 0 0 0 0 0 0 __________ __ __ ____---- ----- ------- -- -- -----_--- ------------ ---------- - ---------- --- -----------_--------- -- - ------- --- -- A. Lines of Credit 381 0 381 0 0 '3 0 0 0 0 0 0 __ _ _____ __ __----------- ------------- ------------ - ------------_---- -------- ----- ------ --_-------- ---- ----- -------- Agric. & Ind. Credit lOSFR be 0 68 0 0 0 0 0 0 0 0 0 Agric. & Ind. Credit 15ISFR 243 0 243 0 0 0 0 0 0 0 0 0 Student Loans 2 70 0 70 0 0 0 0 0 0 0 0 0 D. Equity Investeent 4 4 0 0 0 0 0 0 0 0 0 0 Sugar Factory Shares 4 4 0 0 0 0 0 0 0 0 0 0 C. Capital Transfers 95 95 0 190 190! 0 0 0 0 0 0 0 CcB Subscription 95 95 0 190 190 o0 0 0 0 0 0 (! Local financing includes funds provided for balance oTf payments support or economic stabilization. A breakdown by pro3ect of the use use of these funds was not avaiiable at the tise of tne preparation oi the PSIP. Page 6 of 7 1994 1985 1986 1987 TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL NEW PROJECTS 0 0 o 9046 576 8470 57957 1650 56307 47289 1750 45539 Fixed Investsents 0 0 0 9046 576 8470 55257 1650 53607 44589 1750 42839 . Econoeic Services O 0 0 7052 576 6476 53i77 1650 51527 44464 1750 42714 A. Agric.,Forestry,Fisheries 0 0 2657 91 2566 10833 230 10603 9014 250 8764 Agric. Rehab. L Crop Div. f v 0 15BI 91 1490 355B 205 3353 4349 250 4099 Forestry Developeent 11 0 0 0 180 0 180 270 0 270 0 0 0 Land Resource Eva;. - Equipment Q 0 0 68 0 68 0 0 0 0 0 0 Saveill Development 0 0 0 0 0 0 375 25 350 0 0 0 Refurb. Carriacou Ext. Bldgs. 0 ) Q 0 0 0 51 0 51 0 0 0 hoko Eradicatior 11 0 0 00 0 486 0 486 0 0 0 Banana Dev. It 0 0 0 135 0 135 150 0 150 165 0 165 Farmer Training Centres Q 0 0 188 0 188 0 0 0 0 0 0 Relocation of 6enetic Centres 0 0 0 505 0 505 0 0 0 0 0 0 Stud Centre Developeent 0 0 0 0 0 0 113 0 113 0 0 0 Model Farm Development 0 0 O 0 O 0 4100 0 4100 4500 0 4500 National Survey Unit 0 0 0 0 0 0 1730 0 1730 0 0 0 B. Communications 0 O 0 0 0 0 10000 0 10000 5000 0 5000 Telephone Dig. Plan 0 0 0 0 0 O 10000 0 10000 5000 0 5000 C. Transportation O 0 0 3045 485 2560 16615 1120 15495 16250 1350 14900 Road Rehab. -- 0 0 0 0 0 100, 0 1000 1000 0 1000 West Coast Roads 0 u 0 1865 b65 1500 5645 400 5245 0 0 0 Feeder Roads ll 0 0 0 I1180 120 1060 5450 450 5000 4350 450 3900 Northeastern Mair, Road O 0 0 0 1650 150 1500 4400 400 4000 Farm Roads II d 0 0 0 0 2870 120 2750 1000 0 1000 West Coast Roads 11 ' O C, 0 0 0 0 5500 500 5000 D Power 0 I 0 0 0 0 1329 15O 1179 0 0 0 Rural Electrification 1 O O0 0 0 874 75 759 0 0 0 Rural Electrification 11 0 0 0 0 0 0 495 75 420 0 0 0 E. Water 0 0 920 0 920 14400 150 i4250 14200 150 14050 Rural Water Systess 111 0 0 0 0 0 0 7250 0 7250 7250 0 7250 Concorde Water Development O 0 aoo 0 800 7150 150 7000 5150 150 5000 Water leatment Plants - Equin 1 0 12il 0 0 0 0 Wiburn 4es5voir ! 0 0 1800 0 1800 Page 7 of 7 1984 1985 1986 1987 TOT AL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL TOTAL LOCAL EXTERNAL F. Other 0. 43-10 0 430i 0 0 0 0 0 0 Z'entral bar. - Equip. Spares 0 0 43 0 430 0 0 0 0 0 0 11. Social Services 0 0 0 1634 0 16314 375 0 375 125 0 125 A. Education 0 500 0 500 375 0 375 0 0 0 Hiilsborouqh School 0 v 0 500 0 500 0 0 0 0 0 0 STVI Expansion 0 0 0 0 0 375 0 75 B. Health 0 0 0 1 134 0, 1134 0 0 0 125 0 125 Solid Waste Disp. v C. 0 1134 0 11134 0 0 0 0 0 0 Comaunity Dev. 0 0 0 0 0 0 0 0 125 0 125 111.6eneral Public Services 0 0I 0 360) 0 360 1705 0 1705 0 0 0 Police Station.s and Equip. 0 0 0 0 0 330i 0 330 00 0 Prison Officers Dtrs. 0 0 0t 360i I -360 0 0 0 0 0 0 High Court and Registry 0 0 0 0 375 C. 375 0 0 0 Sovt. Printerv 0 ' i Li 0 0 1000i 0 1000 0 0 0 Financial Investments 0 0 0 0 0 2700 0 2700 2700 0 2700 Lonsoliae ieofCei 0 0 0 2,700 0. 2700 2700) 0 2700 T04hL PSIP 723"43 13558 58785 107,552 14, 114 8041 005 75,409 51,788 31246 48542" Source: Ministry of Finance and IARMA. - 80 - Table 6.1: GRENADA - COMMERCIAL BANK OPERATIONS 1/ (In millions of Eastern Caribbean dollars) December 31 June 30 1979 1980 1981 1982 1983 1984 Net foreign assets 10.4 7.5 10.0 -15.6 -9.6 14.5 Assets 40.4 37.4 43.7 20.7 19.2 43.4 Foreign currency holdings (2.0) (2.6) (1.6) (1.6) (2.2) (0.9) Claims on ECCB (11.1) (10.0) (16.2) (5.4) (6.6) (28.0) Of which: currency holdings /4.9/ /5.6/ /5.6/ /4.6/ /5.8/ /3.8/ Claims on ECCB area banks (16.8) (10.3) (7.6) (5.9) (2.5) (3.0) Claims on banks abroad (10.5) (14.5) (10.9) (7.8) (5.9) (9.4) Other (--) (--) (7.4) (--) (2.0) (2.1) Liabilities 30.1 29.9 33.7 36.3 28.8 28.8 Balance due to ECCB (--) (--) (--) (2.5) (3.1) (--) Balance due to ECCB area banks (4.2) (4.3) (4.0) (7.4) (--) (--) Balance due to banks abroad (9.8) (7.0) (8.3) (4.9) (2.7) (1.4) Nonresident deposits (16.0) (18.6) (21.4) (21.5) (23.0) (27.4) Demand /1.5/ /2.6/ /2.6/ /2.9/ /3.4/ /3.7/ Savings /11.2/ /13.2/ /15.6/ /15.4/ /15.9/ /16.0/ Time /3.3/ /2.8/ /3.2/ /3.2/ /3.7/ /7.7/ Net domestic assets 90.3 96.5 99.3 129.1 121.0 102.6 Net credit to Central Government 19.6 15.0 16.2 45.2 48.9 34.4 Treasury bills (2.9) (2.8) (2.8) (5.7) (6.7) (6.5) Debentures (2.7) (2.8) (2.6) (7.5) (10.6) (9.4) Loans and advances (1.5) (0.5) (1.9) (8.8) (8.6) (7.7) Overdraft (3.7) (3.8) (4.1) (4.6) (3.7) (3.0) Special deposit requirement (10.4) (10.5) (11.3) (22.4) (23.2) (19.4) Government deposits (-) (-1.6) (-5.4) (-6.5) (-3.8) (-3.9) (-11.6) Of which: deposits in foreign currency /0.9/ /4.2/ /5.0/ /2.3/ /1.4/ /1.3/ National Insurance Board deposits -- -- -- -- -1.2 -1.7 Net credit to other public sector -1.0 -0.8 1.7 3.6 5.9 2.9 Credit (0.8) (2.0) (3.3) (5.8) (8.3) (7.6) Deposits (-1.8) (-2.8) (-1.6) (-2.2) (-2.4) (-4.7) Net credit to nonbank financial intermediaries -1.5 -2.0 -2.5 -4.8 -5.2 -6.4 Credit (0.2) (0.3) (0.5) (0.5) (0.5) (0.6) Deposit (-) (-1.7) (-2.3) (-3.0) (-5.3) (-5.7) (-7.0) Credit to private sector 72.3 84.4 87.3 89.7 89.0 90.3 Interbank float 2.9 4.4 4.8 7.4 5.4 7.2 Claims (14.9) (17.1) (19.0) (27.8) (22.0) (27.9) Liabilities (-12.0) (-12.7) (-14.2) (-20.4) (-16.6) (-20.7) Net unclassified assets -2.0 -4.5 -8.2 -12.0 -21.8 -24.1 Assets (12.6) (13.9) (19.0) (16.5) (14.4) (14.2) Liabilities (-14.6) (-18.4) (-27.2) (-28.5) (-36.2) (-38.3) Liabilities to private sector 2/ 100.7 104.0 109.3 113.5 111.4 117.1 Demand deposits 28.2 30.2 26.3 20.8 19.0 17.2 Savings deposits 49.6 53.4 57.3 60.4 60.3 67.1 Time deposits 22.9 20.4 25.7 32.3 32.1 32.8 Sources: Ministry of Finance; and Eastern Caribbean Central Bank. 1/ Includes the local branches of foreign banks, the National Commercial Bank, the Cooperative Bank, and the Royal Bank of Canada which was acquired by the Government of Grenada in January 1983 and renamed Grenada Bank of Commerce. 2/ Deposits of other public entities and financial institutions are excluded, but deposits of commodity boards are included in demand deposits. - 81 - Table 6.2: GRENADA - EASTERN CARIBBEAN CENTRAL BANK (In millions of Eastern Caribbean dollars) December 31 June 30 1979 1980 1981 1982 1983 1983 1984 Net international reserves 167.4 145.2 148.8 133.8 134.8 154.4 207.5 Assets 210.6 212.3 181.4 133.8 136.1 154.7 210.5 Fixed deposits and money at call 1/ (139.3) (93.9) (81.5) (15.9) (12.1) (26.1) (112.8) Regional notes in process of redemption (5.7) (6.2) (2.8) (3.2) (0.6) (2.1) (1.8) Other securities 2/ (65.6) (112.2) (97.1) (114.7) (123.4) (126.5) (95.9) Liabilities -43.2 -67.1 -32.6 -- -1.3 -0.3 -3.0 Balance due to banks abroad 3/ (-43.2) (-67.1) (-32.6) (--) (-1.3) (-0.3) (-3.0) Net position with banks in ECCB area -89.2 -61.6 -55.6 -46.3 -50.6 -58.2 -114.4 Assets 8.7 6.5 7.2 11.2 8.3 11.0 4.5 Loans to commercial banks (6.5) (4.2) (4.8) (8.6) (5.4) (8.3) (2.1) Deposits with commercial banks (2.2) (2.3) (2.4) (2.6) (2.9) (2.7) (2.4) Liabilities -97.9 -68.1 -62.8 -57.5 -58.9 -69.2 -118.9 Currency: notes and coins (-24.0) (-26.5) (-23.5) (-28.4) (-29.3) (-23.9) (-17.8) Grenada /-4.9/ /-5.6/ /-5.6/ /-4.6/ /-5.8/ /-5.8/ /-3.8/ Other /-19.1/ /-20.9/ /-17.9/ /-23.8/ /-23.5/ /-18.1/ /-14.0/ Deposits (-73.9) (-41.6) (-39.3) (-29.1) (-29.6) (-45.3) (-101.1) Demand /-7.9/ /-12.9/ /-13.1/ /-17.8/ /-22.9/ /-23.4/ /-43.7/ Fixed /-66.0/ /-28.7/ /-26.2/ /-11.3/ /-6.7/ /-21.9/ /57.4/ Net domestic assets 13.3 13.9 18.4 24.3 31.0 16.4 29.3 Central Government (net) 33.5 40.3 45.9 53.2 56.0 55.5 56.4 Grenada Treasury bills (4.3) (4.3) (5.7) (6.2) (6.8) (6.8) (6.8) Other Treasury bills (15.1) (19.0) (20.8) (28.4) (30.6) (29.1) (31.0) Grenada debentures (2.1) (3.0) (3.8) (3.8) (2.9) (2.9) (2.9) Other debentures (12.0) (14.0) (15.6) (14.8) (15.7) (16.7) (15.7) Liabilities to nonmonetary international organizations -0.4 -7.7 -2.5 -1.4 -1.2 -0.9 -1.2 Net unclassified assets -19.8 -18.7 -25.0 -27.5 -23.8 -38.2 -25.9 Assets (1.9) (4.0) (3.7) (8.5) (9.9) (6.8) (10.0) Liabilities (-21.7) (-22.7) (-28.7) (-36.0) (-33.7) (-45.0) (-35.9) Currency in circulation 91.5 97.5 111.6 111.8 115.2 112.6 122.4 In Grenada 28.3 32.2 36.8 39.5 40.8 38.3 41.3 Estimate of notes and coins issued (33.2) (37.8) (42.4) (44.1) (46.6) (44.1) (45.1) Less: commercial banks' cash holdings (-4.9) (-5.6) (-5.6) (-4.6) (-5.8) (-5.8) (-3.8) In other ECCB area countries 60.6 62.7 72.2 69.7 71.8 71.7 78.5 Estimate of notes and coins issued (79.7) (83.6) (90.1) (93.5) (95.3) (89.8) (92.5) Less: commercial banks' cash holdings (-19.1) (-20.9) (-17.9) (-23.8) (-23.5) (-18.1) (-14.0) Coins in former member countries (BCCB coins)4/ 2.6 2.6 2.6 2.6 2.6 2.6 2.6 Memorandum items Reserve requirement -- -- -- -- -- -- 75.8 Statutory required reserves (--) (--) (--) (--) () () (45.7) Statutory deposits (--) (--) (--) (--) () () (30.1) Source: Eastern Caribbean Central Bank. 1/ As of June 1984, the figure includes securities held under repurchase agreements with the Federal Reserve Bank of New York. 2/ For December 1982 and the subsequent years, the figure includes credit balance with CARICOM Multilateral Clearing Facility, and as of June 1984, excludes securities held under repurchase agree- ments with the Federal Reserve Bank of New York. 3/ Outside ECCB area. Includes debit balances with CARICOM Multilateral Clearing Facility. 4/ BCCB refers to the British Caribbean Currency Board. - 82 - Table 6.3: GRENADA - Cbmmercial Bank Credit to Private Sector 1/ 2/ 1979 1980 1981 1982 1983 1984 (In thousands of Eastern Caribbean dollars) Total 62,356 75,513 76,770 82,977 82,012 91,061 Agricultural and fisheries 2,397 2,876 5,369 4,082 3,219 3,672 Manufacturing 3,866 6,524 7,295 5,811 5,491 7,944 Distributive trades 22,547 22,115 19,821 26,257 27,493 24,03_ Tourism 4,919 6,118 6,980 8,055 6,363 9,594 Transport 4,302 5,079 7,091 5,512 6,987 9,040 Public utilities 530 1,561 1,487 4,009 723 1,395 Building and construction 3,274 4,923 6,135 5,256 9,312 5,348 Personal 18,014 18,632 17,304 20,684 16,979 24,863 Other 2,507 7,685 5,288 3,311 5,445 5,172 (In percent of total) Agriculture and fisheries 3.8 3.8 7.0 4.9 3.9 4.0 Manufacturing 6.2 8.6 9.5 7.0 6.7 8.7 Distributive trades 36.2 29.3 25.8 31.6 33.5 26.4 Tourism 7.9 8.1 9.1 9.7 7.8 10.5 Transport 6.9 6.7 9.2 6.6 8.5 9.9 Public utilities 0.8 2.1 1.9 4.8 0.9 1.5 Building and construction 5.3 6.5 8.0 6.3 11.4 5.9 Personal 28.9 24.7 22.5 24.9 20.7 27.4 Other 4.0 10.2 7.0 4.2 6.6 5.? I/ Excludes the Cooperative Bank. 2/ Includes loans and advances to public utilities. Source: Eastern Caribbean Central Bank. - 83 - Table 7.1: GRENADA - ESTIMATED AGRICULTURAL PRODUCTION, 1978-1983 1978 1979 1980 1981 1982 1983 A. Traditional Crnps Banaas 18,758 18,966 16,308 14,677 13,971 13,817 Qvna 2,808 2,770 2,129 2,023 2,492 2,599 Nutmeg 2,024 2,817 2,485 3,479 3,035 2,418 maw 258 283 293 241 228 150 Si~arcaie 15,726 14,650 9,520 9,300 8,611 7,460 Copra 393 n.a. n.a. 360 441 359 Dry oamnuts n.a. 215 349 240 178 318 Giiger n.a. 9 6 6 5 8 B. Fruits Plaitain and BlugEp 594 938 379 371 460 423 Breadfrult 1,556 1,633 1,760 1,676 1,495 935 Sapndill 173 190 237 247 185 198 9*gr Apples 191 137 114 116 105 105 SourSnp 308 267 438 473 521 555 MxWnes 1,443 1,515 1,803 1,839 1,931 1,727 Avocadns 1,243 1,234 1,354 1,422 1,493 1,571 Citrus 3,465 2,696 3,521 3,598 3,699 3,435 paw-PA 76 55 48 46 37 35 C. Ront Crnp Sweet Rtatoes 391 371 276 270 296 276 Dasheen and Eddnes 166 164 282 291 378 391 Taidias 280 271 145 148 155 140 Yams 495 505 458 481 506 455 D. Field Crops and Vegetables Peas and Beans 856 771 901 829 746 645 mawze 662 549 447 470 423 393 Tlutnes 56 42 48 45 54 49 ~plait8 - - - 43 231 Seet Peppers - - 18 18 19 17 Cabbage 57 40 32 30 33 32 carrots 42 35 29 26 27 26 tnz*iins 333 29 194 205 246 218 Hot Peppes n.a. 3 1 1 1 1 S%wce: Minlstry of Agrialcture and Natural Rsnources - Statistics Section - 84 - Table 7.2: GRENADA - Selected Industrial Production and Fuel Consumption Statistics (In thousands of indicated units) 1979 1980 1981 1982 1983 1984 Industrial production Rum (proof gallons) 78.8 72.5 77.1 78.2 72.4 Beer (bulk gallons) 368.0 306.6 270.0 272.4 246.8 100.01/ Cigarettes (cartons) 3/ 113.0 101.2 98.8 104.3 127.7 53.7 Malt (gallons) 106.8 119.7 136.1 125.3 103.0 66.4 Edible oil (gallons) 67.7 53.9 69.8 57.1 56.7 17.6 2/ Coconut meal (lbs.) 296.0 260.2 215.7 226.5 232.3 81.1 7, Laundry soap (lbs.) 59.1 50.3 190.2 136.2 57.0 35.5 7/ Sugar (tons) 4/ 524.0 494.4 282.1 507.0 -- -- Clothing (pieces) 5/ 111.0 237.0 532.0 546.0 ... ... Flour ('00 lbs.) -- 68.5 108.6 123.0 104.1 62.9 2/ poultry feed (100 lbs.) -- 12.5 27.7 32.1 35.0 21.7 7, Wheat bran ('00 lbs.) -- -- -- 43.4 29.3 15.7 Z, Coca Cola (cases) -- -- 103.3 167.5 185.6 Fuel consumption October 1984 Gasoline (gallons) 2,193.0 2,172.8 2,116.1 2,034.6 2,127.1 1,724.5 Kerosene (gallons) 371.5 273.4 288.8 409.6 229.3 221.6 Diesel (gallons) 2,041.4 2,029.9 2,837.4 2,973.2 2,633.9 1,755.6 LPG (lbs.) 6/ 2,162.6 2,268.9 2,340.3 2,485.5 2,665.8 2,337.55 Electricity (mn.kwh) 20.1 20.9 20.1 20.0 19.8 15.0 Of which: Commercial (10.3) (10.7) (9.5) (9-0) (8.8) (6.7) Domestic (8.8) (9-2) (8.9) (9-2) (9-3) (7-0) Industrial (0.8) (0.8) (1.5) (1.6) (1.5) (1.1) other (0.2) (0.2) (0.2) (0.2) (0.2) (0.2) Source: Statistical Office. 1/ January - June 2/ January - July 3/ Data on cigarettes are for January through August; 1984 (January - May). 4/ Data relate to production year which runs from January to June. 5/ Refers to exports only. 6/ Liquid propane gas. - 85 - Table 7.3: GRENADA - Visitor Arrivals, 1975-84 Stayover Cruise Year Visitors Passengers Total 1975 21,059 85,460 106,519 1976 24,551 106,882 131,433 1977 28,536 108,465 137,001 1978 32,336 116,331 148,667 1979 32,252 138,654 170,906 1980 29,418 145,594 175,012 1981 25,072 77,596 102,668 1982 23,270 62,119 85,389 1983 32,495a/ 50,217 82,676a/ 1984 39,503a/ 34,166 73,669a/ a/ New series includes 9,121 Grenadians resident abroad in 1983 and 10,685 in 1984. Source: Ministry of Tourism - 86 - Table 7.4: GRENADA - Stayover Visitor Arrivals, By Nationality, 1980-1984 Nationality 1980 1981 1982 1983 1984 USA 6,767 5,124 5,031 5,277 8,426 Canada 1,991 1,910 1,524 1,520 1,417 Europe/UK 6,774 5,618 5,166 4,095 3,910 Caribbean 7,665 8,509 9,727 10,838 13,755 Other 6,231 3,911 1,824 10,556a/ 11,995a/ TOTAL 29,418 25,027 23,270 32,459 39,563 a/ New series includes Grenadians resident abroad: 9,121 in 1983 and 10,685 in 1984. Source: Ministry of Tourism - 87 - Table 7.5: GRENADA - Number of Rooms in Commercial Accommodations, 1980-84 Year Hotels Guest Houses Cottages Apartments Total 1980 450 65 197 35 747 1981 275 81 122 38 516 1982 275 73 99 13 460 1983 275 80 99 13 467 1984 257 34 61 45 397 Sources: CTRC for 1980-83 and mission calculations for 1984 - 88 - Table 7.6: GRENADA - Gross Receipts from Visitors, 1975-84 (in EC$ Million) Stayover Cruise Year Visitors Passengers Total 1975 13.9 1.7 15.6 1976 14.5 2.1 16.6 1977 19.4 2.2 21.6 1978 33.6 5.8 39.4 1979 46.7 6.9 52.6 1980 49.2 5.1 54.3 1981 44.0 2.7 46.7 1982 44.4 2.2 46.6 1983 36.4 3.3 39.7 1984 44.3 2.3 46.6 Source: Ministry of Tourism - 89 - Table 8.1: GRENADA - Retail Price Index (January 1979 - 100) Weights 1980 1981 1982 1983 1984 I. Period Averages All items 1.000 136.2 161.8 174.4 185.1 195.5 Food and beverages 0.590 134.8 163.9 172.4 182.2 190.4 Tobacco and alcohol 0.025 125.6 149.6 168.0 181.0 189.7 Clothing and footwear 0.080 140.8 172.7 187.6 198.3 229.4 Housing 0.065 111.4 115.4 128.0 149.3 136.2 Fuel and light 0.060 170.6 186.4 186.5 182.1 186.2 Furniture and appliances 0.030 109.3 163.1 261.9 274.8 330.7 Household supplies 0.035 154.1 165.1 193.5 219.8 221.0 Transport 0.040 162.4 183.1 202.5 217.7 216.2 Other services 0.075 128.5 144.7 150.2 158.4 184.3 (Percentage changes) All iteis 21.2 18.8 7.8 6.1 5.6 Food and beverages 19.0 21.6 5.2 5.7 4.5 Tobacco and alcohol 20.7 19.1 12.3 7.7 4.8 Clothing and footwear 21.1 22.7 8.6 5.7 15.7 Housing 9.5 3.6 10.9 16.6 -6.8 Fuel and light 37.0 9.3 0.5 -2.4 2.3 Furniture and appliances 9.1 49.2 60.6 4.9 20.3 Household supplies 28.7 7.1 17.2 13.6 .5 Transport 37.0 12.7 10.6 7.5 -.7 Other services 25.5 12.6 3.8 5.5 16.4 II. End of Period All items 151.7 167.8 179.4 191.1 198.0 Food and beverages 150.7 170.8 177.2 186.5 189.7 Tobacco and alcohol 139.7 153.2 174.6 187.4 193.9 Clothing and footwear 166.2 181.2 188.7 212.0 240.1 Housing 116.4 114.1 145.7 146.1 128.0 Fuel and light 179.2 189.1 184.7 184.8 187.8 Furniture and appliances 156.4 171.3 264.2 310.2 397.8 Household supplies 161.1 169.8 211.3 225.8 216.2 Transport 170.6 195.6 205.1 216.2 215.3 Other services 140.5 146.5 151.5 172.4 190.8 (Percentage changes) All items 21.8 10.6 6.9 6.5 3.6 Food and beverages 1T7.6 13.3 3.7 5.2 1.7 Tobacco and alcohol 29.4 9.7 14.0 7.3 3.5 Clothing and footwear 33.1 9.0 4.1 12.3 13.3 Housing 10.4 -2.0 27.7 0.3 -12.4 Fuel and light 31.9 5.5 -2.3 0.1 1.6 Furniture and appliances 55.5 9.5 54.2 17.4 28.2 Household supplies 11.6 5.4 24.4 6.9 -4.3 Transport 26.9 14.7 4.9 5.4 -.4 Other services 35.2 4.3 3.4 13.8 10.7 Source: Statistical Office - 90 - Table 8.2: GRENADA - Retail Prices of petroleum Products December 31 Dec. 1979 1980 1981 1982 1983 1984 (In Eastern Caribbean dollars per imperial gallon) Gasoline 3.95 5.04 5.55 6.28 6.28 6.28 Value, c.i.f. 2.20 3.19 3.33 3.10 2.87 2.84 Taxes 1.00 1.05 1.42 2.33 2.31 2.18 Margins 0.75 0.80 0.80 0.85 1.10 1.26 Diesel 4.03 5.08 5.25 5.61 5.61 5.61 Value, c.i.f. 1.92 3.13 3.13 3.10 2.77 2.93 Taxes 0.81 1.11 1.28 1.68 2.03 1.47 Margins 1.30 0.84 0.84 0.83 0.81 1.21 Kerosene 3.95 5.34 5.34 5.10 5.10 5.10 Value, c.i.f. 2.26 3.39 3.31 3.20 2.90 2.92 Taxes 1.02 1.28 1.22 1.09 1.25 0.97 Margins 0.67 0.67 0.81 0.81 0.95 1.21 LPG 0.84 1.02 1.12 1.12 1.15 1.15 Value, c.i.f. 0.43 0.60 0.68 0.59 0.54 0.61 Taxes 0.13 0.14 0.12 0.20 0.18 0.11 Margins 0.28 0.28 0.32 0.33 0.43 0.43 (As percent of total retail price) Gasoline Value, c.i.f. 55.7 63.3 60.0 49.4 45.7 45.2 Taxes 25.3 20.8 25.6 37.1 36.8 34.7 Margins 19.0 15.9 14.4 13.5 17.5 20.1 Diesel Value, c.i.f. 47.6 61.6 59.6 55.3 49.4 52.2 Taxes 20.1 21.9 24.4 29.9 36.2 26.2 Marginsa 32.3 16.5 16.0 14.8 14.4 21.6 Kerosene Value, c.i.f. 57.2 63.5 62.0 62.7 56.9 57.3 Taxes 25.8 24.0 22.9 21.4 24.5 19.0 Margins 17.0 12.5 15.1 15.9 18.6 23.7 LPG Value, c.i.f. 51.2 58.8 60.7 52.7 46.9 53.0 Taxes 15.5 13.7 10.7 17.9 15.7 9.6 Margins 33.3 27.5 28.6 29.4 37.4 37.4 Source: Energy Unit, MinisLry of planning. IBRD 19242 6t S0#W 6t 45'W . 1:6l40)W -t'11N GRENADA 1201'N- -lEVATIQN IFeet) 2M0 oti Over .'_ 0 ' -'150 0 MWin Roads - --…~~~~ Perishl BoundaCies Rivers 0 Main Towns - R 12°tffN 120NAirport 6'Nai- T 1201VN- ' 3) ~~~~~~~~~~J 0 H;: 41 '= :~~~~~~~~~~~~~~~~~~~~~~~~~~~~S 'Davi & C. Corin CAIRIACOU efa Ant s -129StN - t S - t c i s R . f 1 25'N L 4 OW i 6t'o60'W 61048'W SEPTEMBER 1985 The World Bank Headquarters European Office Tokyo Office U 1818 H Street, N.W. 66, avenue d'Jena Kokusai Building Washington, D.C. 20433, U.S.A. 75116 Paris, France 1-1 Marunouchi 3-chome Telephone: (202) 477-1234 Telephone: (1) Chiyoda-ku, Tokyo 100, Japan Telex: WUI 64145 WORLDBANK .723-54.21 Telephone: (03) 214-5001 RCA 248423 WORLDBK Telex: 842-620628 Telex: 781-26838 Cable Address: INTBAFRAD WASHINGTONDC ISSN 0253-2123/ISBN 0-8213-0626-X