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Finance INSIDE


A Publication of the Ministry of Finance, Planning, Economy, Energy, Foreign Trade & Cooperatives

Volume 5, Issue 3, May - June 2009

The implementation of the Value Added Tax (VAT) in Grenada is planned for February 1st, 2010. This tax will replace the General Consumption Tax, Airline Ticket Tax and Motor Vehicle Purchase Tax and will be administered by the Inland Revenue Department and the Customs and Excise Department. As part of the public education programme for VAT Implementation, the Ministry of Finance prepared a VAT White Paper, which contains the policies and proposals by which VAT will be implemented and administered.

VAT IS COMING February 1st 2010


In keeping with the Government's commitment to consult with stakeholders on major policy issues, the Ministry of Finance organized an official launch for the VAT White Paper on Thursday May 14th 2009. At that launch, the Ministry also formally opened the VAT Office which is located at the W.E. Julien Building on Young Street. This Office will facilitate all matters relating to VAT. The VAT Unit has been holding education sessions with stakeholders, informing them of their obligations under the VAT Act and listening to their concerns and suggestions. The VAT education sessions form part of the public education programme of the VAT Unit. “... the engine room of the Public Service...�

quality of yourself. A classic example is David Beckham – he may be past his best now, but even when he was at his peak, he was one of the few players at Manchester United and Real Madrid who used to go back in the afternoon for extra practice at free-kicks. That's what has made him the richest footballer in the world today. He had to be good at football in the first place to become a fashion icon. If that's what it takes to be the best that what it takes. Here are some practical ways of bringing more excellence into your life. 1. Always give more than is expected of you, regardless of what's in it for you. Exceeding expectations and going that extra mile will set you apart from others. Learn to look at every situation in terms of the value you can add to that situation. Do things faster, better, and even more cheerfully for everyone in your life – customers, employer, family, and for yourself.

E or's

R rks

2. Have a passion for whatever you do for a living. Half-hearted attempts will ultimately show up as mediocrity. Make what you do part of your daily life, part of who you are. Seek out those things you can get passionate about and use them to create excellence in your life. Also, be totally committed to what you do, as excellence is only possible only with commitment. Either find a way to become fully committed to what you're doing, or find something else to do.

Strive for excellence… just begin! While researching the topic of 'excellence' to write the “Editor's Note” for this edition of the newsletter, I came across this 'blog' and found it to be very inspiring. As a result, I decided to reproduce and share it. I hope that you too would find it inspiring. It was taken from: “Make it Happen for yourself and for the world.” Do you wait for perfection before getting started; do you strive for excellence; or do you get by with doing just enough? Striving for excellence does not mean that you must be perfect. It means that you use your talents, abilities, and skills in the best way possible and get ahead of others by giving that little extra. Simply do your best in everything you do at work, home and play. Accomplishing tasks in an excellent fashion gives you great pride and self-esteem, since the quality of your work is a measure of the

2 Finance INSIDE

Once totally committed, you will be able to work around obstacle; you will find ways of learning quickly what needs to be done. Don't be afraid to ask for help. Finding the right people to help is always beneficial. 3. Believe that what you do matters, and that it will make a difference. A life of excellence comes from continually making a contribution. You can't save the whole world single-handedly, and we can't all be a Gandhi or a Mandela, but you can certainly make a difference one person at a time. So look for ways to contribute. Ask yourself what special skill or knowledge do you have, that can solve a problem or make the best of a situation? 4. Challenge yourself to excel all the time – and build your confidence and competence. The person you become in the pursuit of your dream is worth far more than the achievement of that dream. Aim high and push to be your absolute best, and then go even beyond that – you are capable of far more than you think. At the same time, be realistic – don't set your

“... the engine room of the Public Service...”

sights so high that you have no way of reaching your goal. 5. Expect the best of everyone around you – generally you will get the best from them. Most important of all, expect the best from yourself. Talk to yourself in positive terms. Eliminate all negative selftalk. 6. Always follow through and follow up. Many times a job remains unfinished as the initial excitement about starting the job wanes, but just a little more effort to finish it will bring big results. Conversely, start only what you know you can finish. Also, do it right the first time and save yourself a lot of time in not having to go back and fix it later. 7. Focus on one thing at a time. Plan your time so that you can give each task its due undivided attention. Block out any distractions such as TV, mobile phones, emails, visitors and so on. Ask yourself – what is important, your goal or the distraction? 8. Take extreme self care. Only by being in top physical and mental state can you have the energy, drive and vitality to excel. Take regular breaks – work diligently whilst you are at it, but after that put it aside. Have regular vacations and use that time to reflect on bringing even more excellence into your life. 9. Learn from every experience, and learn from others. Every situation has a learning opportunity - see problems and obstacles as opportunities to grow and excel. Look around and appreciate excellence whenever you come across it, and learn what you can from it. Ask questions of others. There is no shame in not knowing something – there are no stupid questions. See any criticism as a gift of feedback. 10. Use all available tools such as computers, internet, accountancy packages, and operational manuals. Remember that a tool is anything that helps you excel – don't get hung up on what it is, and focus on what it can do for you. Living a life of excellence is not difficult – simply decide right now to give it your best shot – and you will be amazed with what life gives you back. I hope you would try to implement at least one of the above as you go about your life!

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The level of discussion and sharing which I am sure will take place this week is important and very timely. Ladies and gentlemen, the last 2 decades have witnessed a frenzy of activity in the financial markets around the world. This activity has been characterized by:

supervisory infrastructure so as to maximize the possible benefits without jeopardizing the safety, soundness and effectiveness of the financial system. Recent developments in the international system demonstrate beyond dispute that domestic measures are necessary but not sufficient to reduce systemic risks and enhance the prospects for economic gain.

a massive increase in the volume of cross border capital flows;

a marked increase in the volume of international issues of securities;

an increasing erosion of the traditional distinctions between banks and non banking activities;

Hon. V. Nazim Burke MINISTER'S NOTE

Minister's Address to CAIR/CARTAC/ WORLDBANK Conference for Caribbean Insurance Supervisors

a continuing penetration of domestic markets by foreign financial institutions, an acceleration in the development and use by financial institutions of new financial instruments and techniques; and

The recent and ongoing experiences with CLICO and British American have brought home, this most painful reality to many of us.

the rise in many hitherto underdeveloped countries of major financial centres.

Ladies and gentlemen, it has become extremely necessary for regulators in the region to talk to each other more regularly.

In a word, financial services have become globalized.

It appears that up until these developments, cross border issues were never thoroughly discussed and regulators in one island knew little of what their counterparts in other islands were doing.

I know this has already been done but I would like to start by welcoming you all to Grenada, to the Isle of Spice, for this Caribbean Association of Insurance Regulators (CAIR) / CARTAC / World Bank Conference hosted by GARFIN. This is the first time that Grenada is hosting a Conference of Caribbean Insurance Regulators of this magnitude and I am pleased to learn that there are some twenty countries represented here today. I want to thank CAIR for bringing the meeting to Grenada and GARFIN for hosting it. Grenada, like most of the islands here, is a tourist destination and even though you are here on business, I hope you will have the time to enjoy our country – the beach, the food, the people and I hope you will return when you are less busy for a vacation. I am advised that your activities this week included a Workshop which ended yesterday, in addition and today's Conference and your annual general meeting.

The process of globalization has drastically changed the behaviour of financial intermediaries, investors, borrowers and corporations. Market options are worldwide in scope and financial decisions are based on global considerations. Companies seeking funds for expansion no longer automatically look to domestic sources of capital. Similarly, the preferences and demands of consumers of financial services are no longer constrained by geographic or institutional barriers. It is now beyond doubt that globalization brings with it distinct benefits. At the same time, it is also self evident that globalization carries severe risks. The opportunities and benefits and risks created by the globalization of financial services coupled with the associated systemic risks pose daunting challenges for intermediaries, regulators and supervisors. Specifically, it falls upon them to establish the necessary managerial, regulatory and

“... the engine room of the Public Service...”

The interconnectedness of financial markets and institutions means that the failure of one institution in one country can have dire consequences on the financial systems of all other countries who were doing business with or through the failed institution.

Many entities now operate in several jurisdictions as regional or multinational companies and regulators know little or nothing of what companies licensed in their jurisdiction are doing elsewhere. Communication and dialogue is therefore essential in today's global economic village. Recognizing the need for better communication among regulators the Caricom Heads of Government, at their recent meeting in Belize, mandated the Secretariat to convene a meeting of all financial sector regulators or a College of Regulators. It is unfortunate that this meeting has not yet taken place and regulators should ensure that they make themselves available to participate when it is next convened. Continues on pg. 4

Finance 3 INSIDE

Continued from pg. 3

The OECS countries have been meeting regularly, even before the CLICO/British American situation. They must be commended for this. The OECS regulators will shortly be formalizing a Memorandum of Understanding for signature to guide their relationship and this is something that the wider grouping of insurance regulators, through CAIR, should probably give some consideration to. Ladies and gentlemen, you would all be aware of the many challenges being faced by regulators today. When a financial company fails, whether it be a bank, an insurance company or a credit union, investors tend to look for someone to blame and this is only natural. While directors and management are the first targets, regulators are coming more and more under scrutiny. Regulation was cited as one of the five key areas necessary for improvement to avoid future failures in the U.S. emanating from the original credit crunch. It is this credit crunch which ultimately led to the economic crisis presently being experienced worldwide today. We have seen so many financial institutions fail worldwide including in our own region. From the big investment banks and credit institutions in the U.S., to the illegal investment clubs and currency trading schemes in Jamaica to the Stanford Bank in Antigua and to our own Capital Bank and SGL Holdings in Grenada. And now CLICO/British American. The financial sector has been rocked to its core and investors are wary about the safety of their investments. Financial regulation must be improved and strengthened if failures are to be prevented. A strong and effective regulatory framework is therefore essential to avoid such failures. One of the key pillars of such a framework is effective legislation. Ineffective legislation, in some jurisdictions, has hindered action on the CLICO/British American matter. In some of our islands current insurance legislation is over thirty five years old. Much would have obviously taken place since then in the industry particularly in terms of best practices and regulatory standards.

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Those countries which are in the process of enacting new legislation would do well to speed up its progress in order to give the regulator the necessary tools to carry out his duties effectively in today's turbulent financial world. Here in Grenada, Parliament is expected to consider the new uniform OECS Insurance Act next month. This new Act will strengthen the capacity of regulators to carry out their duties of ensuring that investors, and in the case of insurance companies, policyholders, funds are protected. Having legislation in place is essential but ensuring compliance by the industry is just as important. Insurance companies and intermediaries must comply with the Insurance Acts and all other relevant legislation. Regulators must ensure that this is done. Lack of compliance with certain requirements can pose great risks not only to a company's ability to survive but to the system as a whole. In the OECS region, there are several other positive developments towards improving the overall regulatory framework. The creation of the Single Regulatory Units or SRUs to supervise the non-bank financial sector is one such example. These SRUs are expected to bring an enhanced level of supervision to the sector as well as a greater level of consistency. Grenada's SRU, GARFIN, is being used as the model for the other single regulatory units being established. Similar legislation is now being enacted in several islands to bring these units into being. These units will take the responsibility for supervision out of central Government and allow a certain level of independence and flexibility essential for an effective framework. The new uniform OECS Insurance Act has been finalized and it is hoped that it will be passed in all islands by the end of the year thus allowing for uniformity throughout. New quarterly reporting forms are being developed for use in all jurisdictions. This will greatly facilitate enhanced financial assessment and offsite supervision.

“... the engine room of the Public Service...�

Grenada will shortly be commencing onsite supervision which is not being done in the OECS now apart from St. Lucia and Anguilla. All OECS countries are expected to institute onsite supervision once the new legislation is enacted. As the framework is developed for better supervision so too must the human resource capacity. Workshops and Conferences such as these are important. I am aware that CARTAC has funded several courses for insurance supervisors over the last few years. For this they must be commended. Continuous education is also important given the changing financial landscape such as new legislation and products and services. Your participation here today indicates recognition of this fact. Ladies and gentlemen, the economies of the region are all facing significant economic downturns. All Governments are making strenuous efforts to manage their finances better. All Governments are making efforts to encourage and promote economic development. The last thing any Government would want now is the collapse of yet another financial institution whether domestically or in the region. One of the objectives of financial sector regulation is to ensure the protection of investors as well as to maintain the integrity of the financial system. Your challenge is to make this happen and make it happen effectively. As regulators, consumers in the region will demand of you that you aim for the highest standards. You must therefore implement standards of international best practices and ensure that you operate with the highest level of professionalism. Yours is a critical role in the economy. I wish you a successful Conference today and general meeting tomorrow. I wish you every success in the challenging task of supervising the insurance sector in the region. I thank you.

IMF Board Approves an Additional EC$16.2 M for Grenada The International Monetary Fund (IMF) Executive Board met on June 3rd 2009 and approved the completion of Grenada's 3rd review under the Poverty Reduction and Growth Facility (PRGF) arrangement. As a consequence, the IMF has released an additional EC$16.2 M for Grenada. These funds will be used to support the implementation of the 2009 Budget. In a news release the IMF stated: “Grenada has resolutely implemented its PRGFsupported economic program in the face of economic difficulties arising from the global economic downturn. Since the second half of 2008, tourism earnings, foreign direct investment, and remittances have declined, which has led to a marked fall in economic growth and a projected shortfall in government revenue in 2009. The authorities have strengthened policies in response—in particular, they have tightened fiscal policy since the second half of 2008. The IMF is providing additional financing to support the government's adjustment efforts.”

Commenting on the recent decision by the IMF's Board, Minister of Finance, Hon. V. Nazim Burke said: “The Government welcomes the successful completion of the 3rd review and views this decision as an important validation of its commitment to stronger economic management. As indicated in the 2009 Budget, the Government, since assuming office, has placed a high priority on stronger economic management since this is the key to Grenada's long term growth and prosperity.” Grenada's PRGF arrangement with the IMF was approved on April 17, 2006. The keys benefits of the arrangement are: • European Union (EU) grants of approximately EC$50 million; • Soft loans of approximately EC$62.0 million; • Paris Club debt relief (rescheduling of EC$43 million); and • Most importantly, enhanced creditability and confidence in Grenada's economy and economic management thereby boosting the investment climate and the prospects for job creation.

Members of the IMF Review team with Minister and other staff of The Ministry of Finance

“... the engine room of the Public Service...”

Finance 5 INSIDE

PRICES FELL SLIGHTLY IN JUNE 2009 The inflation rate in Grenada for the month of June 2009 fell by 0.6%. This was the result of a 2% reduction in the price of food.

Government is committed to do all in its power to combat the cost of living, especially as it relates to food prices.

Overall, compared to June 2008, the inflation rate has fallen by 1.2% largely because of a fall in the price of fuel and light.

The following table illustrates the changes in the major CPI groupings:



Jun-09/ May - 09



May- 09

Jun- 09

June- 08

Jun-09/ Jun-08

















































































Understand the Time Value of Money The most basic law in finance! The time value of money states that a dollar today is worth more than a dollar at some time in the future. Okay, it's not that simple to understand at first glance so let me delve into this advice a little with some financial examples: If I invest $1,000 in a 5% savings account today, it will be worth $1,050 in one year. Therefore, if I can have $1,000 today or choose to have $1,000 one year from now, it is always better to have the money now. By saving and investing today, you make the time value of money work for you. Let's look at the reverse of this, to see how the time value of money can work against you. Suppose instead of receiving $1,000 that you spent $1,000 by purchasing merchandise on your credit card. Remember that a dollar today is worth more than a dollar tomorrow, so in this case, you will have lost money because you will need to pay off your credit card account with money from the future (which is worth less than money today). In addition to having to pay with future money, you will also have to pay interest expense. So, in this case, if you paid off the credit card in one year (assuming 15% interest), you'd have to pay $1,150. You should think about the time value of money before making any decisions. Another, maybe even more important concept related to the time value of money is the compounding effect of money.

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“... the engine room of the Public Service...”

Memorandum of

Understanding (MOU)

Signing ceremony of the Memorandum of Understanding

The Government of Grenada and the Grenada Hotel and Tourism Association (GHTA) will tomorrow, Wednesday June 10th 2009, sign a Memorandum of Understand (MOU) to preserve jobs in the hotel and tourism sector. The signing will take place at the Ministry of Finance Conference Room at 11:00 a.m. This development is necessitated by the urgent need to provide emergency support to the tourism industry due to lower arrivals on account of global economic crisis. The MOU will provide a framework for additional tax relief and marketing support on condition that the hotels and guest houses avoid further lay offs. This initiative is consistent with and forms part of the Social Protocol which is now being completed. The Protocol is an arrangement between all social partners to navigate this difficult period in Grenada. The Government of Grenada and Grenada Hotel and Tourism Association now agree to the following emergency support measures in exchange for an expressed undertaking by the Grenada Hotel and Tourism Association and all participating hotels and guest houses that there will be no hotel and guest house closures and that they will guarantee at least three days work per week for all permanent staff and use the services of temporary staff as often as practicable: THE OBJECTIVES 1. To preserve existing jobs in the tourism industry especially in the hotels and guest houses; 2. To keep the hotels and guest houses as going concerns during this economic crisis; and 3. To preserve the direct airline services negotiated by the Airlift Committee. THE MEASURES 1. 50% waiver of General Consumption Tax to allow hoteliers to remit 50% to Government and retain 50%. This relief is for the months of May and June 2009, in the first instance, and is subject to the following conditions: - The filing of outstanding financial statements and corporation tax returns by hotels and guest houses. Everyone is required to file whether a tax holiday exist or not. Moreover, in some instances, tax holidays have expired but companies have not filed and paid corporate income tax. - The payment of outstanding GCT up to April 30, 2009 by June 30, 2009. Some companies are delinquent, notwithstanding the current provision to pay up to 60 days after the tax is collected. - The disclosure of salaries of shareholders and directors. - A statement on the number of jobs provided by the industry broken down by hotel, names of employees and job categories. - Disclosure on plans to attract visitors to Grenada during the off season. - Prompt provision of monthly statistics to the Grenada Board of Tourism (GBT) copied to the Ministry of Finance (MOF) on occupancy levels.

Further relief for the period July to September 2009 and possibly October to December 15, 2009 will be considered in the context of the Social Protocol and will be subject to periodic review (end of June and September 2009). 2. Concessions on Consumables Government will provide tax relief on selected consumables save and except on food which can be purchased locally. The details will be finalized in the context of the Social Protocol. 3. Concessions on Fuel for Dive and Water Sport Operators Government will consider in the context of the Social Protocol. Likely conditions will include registration of companies with the Inland Revenue Department, filing of returns and being current with payments for General Consumption Tax (GCT). 4. Additional Funds for Airlift and Marketing Given the decline in Government revenue (at least 25% in Customs collections for the first 4 months) and the proposed partial waiver on hotel occupancy tax (an estimated loss of an additional $3.5 million), Government is not in a position to provide an additional $10 million for airlift and marketing. Consequently, the Airlift Committee and GHTA agree to aggressively encourage corporate Grenada and private citizens to take advantage of Government's special incentive of a 125% tax incentive for corporate and private citizens who make financial contributions to the Airlift Committee. Government commits to match these contributions. Government including the Ministry of Finance, the Ministry of Tourism and the Grenada Board of Tourism will meet with the Airlift Committee and the GHTA to review this request and consider creative ways to maintain and increase airlift with the requisite destination marketing. Further, consideration will be given to broadening of the Airlift Committee to include representation from the Ministry of Finance in the negotiations of further airline services. 5. Support for Training Government will provide training opportunities under the Skills for Inclusive Growth Project financed by the World Bank. The GHTA and Government including the Grenada Board of Tourism will further discuss areas for collaboration in the upcoming months. ELIGIBILITY The provisions of this MOU are open and available to all hotels and guest houses whether they are member of GHTA or not. However, all conditions of participation must apply and each participating property must sign an individual agreement with Government committing to these commitments and undertakings in exchange of these emergency relief measures.

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Finance 7 INSIDE

Presentation on ECCB 2008/2009 Annual Report by Sir K. Dwight Venner, Governor 29 June 2009


that of $303.2m (2.5 per cent of GDP) in 2007; while their total outstanding debt rose by 2.4 per cent to $9.3 billion (73.2 per cent of GDP).

We are living in the best of times and the worst of times.

The real GDP in the ECCU is projected to decline in 2009 and 2010. The projected decline in tourism and construction is over 14 per cent in 2009 and a little less in 2010. Governments' current revenue is projected to fall by approximately 12.9 per cent in 2009.

present to you in keeping with the transparency and accountability requirements of the Eastern Caribbean Central Bank Agreement Act 1983, a report on the Bank's performance for the financial year 2008/2009 and an assessment of the economy as we look forward to 2009/2010.

There have been very significant improvements in economic and social welfare over the last three decades. However, the global economy of which we are a part, has been beset by one of the deepest recessions since the Great Depression of 1929 to 1933. This has affected all of the nations of the international community to a greater or lesser degree, but the small and vulnerable countries, such as ours could be the most severely affected. This situation could however present the opportunity for restructuring and transforming our economies which are experiencing continuous decreases in output and productivity. The current economic environment presents major challenges for the Currency Union. The global crisis has resulted in an estimated loss of value in investment assets of $30 trillion in international stock exchanges. Major banks in the United States, United Kingdom and Europe have had to be rescued by their governments. Credit has literally dried up in some developed countries and the authorities have had to pump billions of dollars into stimulus packages. Initial jobless claims, a measure of increases in unemployment, have risen significantly, and in the first months of this year showed a four-week average of approximately 600,000 in the United States. These developments in the international economy have eroded conditions in the ECCU, as inflows of travel receipts and foreign direct investment (FDI) have contracted. Travel receipts fell by 2.5 per cent ($80.3m) in 2008, in contrast to a 3.0 per cent increase in 2007. Foreign direct investment decreased by 29.1 per cent to $2.3 billion, consistent with the slow-down in direct investment-related construction activity in some member countries. By contrast an increase of 14.6 per cent was recorded in FDI inflows for 2007. These inflows have accounted for, on average 27.5 per cent and 22.5 per cent of Gross Domestic Product (GDP) respectively from 2005 through 2008. This had a negative impact on central governments' finances and debt. In particular, the central governments realised a current account surplus of $77.5m (0.6 per cent of GDP), substantially below

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One can summarise by simply stating the fact, these are difficult and challenging times! The member states of the ECCU have not been idle in their responses. However, one has to understand that responding to crises, particularly one such as this, takes place by trial and error and is experimental as one is grappling with extreme uncertainty and a large number of unknown factors. This is very evident from the events unfolding in the United States of America and Europe; even though these two continents possess vast resources and years of experience in the use of a wide range of policy instruments. The OECS/ECCU countries, starting with a Joint Meeting of the OECS Authority and the Monetary Council on 15 and 16 January 2009, have sought to establish an action plan at the broadest level, to which has now been added a specific Eight Point Programme to address this economic crisis.The action plan identified three sectors - tourism, construction and fishing which were to be given specific attention for resuscitating the economies. The ECCU Eight Point Stabilisation and Growth Programme consists of the following elements: 1. Suitably adapted Financial Programmes for each country 2. Fiscal Reform Programmes 3. Debt Management Programmes 4. Public Sector Investment Programmes 5. Social Safety Net Programmes 6. Financial Safety Net Programmes 7. Amalgamation of the Indigenous Commercial Banks 8. Rationalisation, Development and Regulation of the Insurance Sector The ECCU Eight Point Stabilisation and Growth Programme addresses the following: 1. Financial Programming to address the funding gaps in each country. These programmes have already been prepared and discussions are now ongoing with the International

“... the engine room of the Public Service...�

Continued from pg 8

Monetary Fund (IMF) with a view to accessing the maximum funding with the most appropriate conditions to stabilise the economies.

been completed to identify these groups and donor agencies will now be approached for funding. 3.



Fiscal Reform which involves improving the efficiency of the revenue systems of member governments and rationalising and increasing the added value from government expenditure. This programme is expected to receive funding from the Caribbean Development Bank (CDB) through Policy Based Loans (PBLs), the World Bank through Development Policy Loans (DPLs) and from the European Union Budgetary Assistance programme. Debt Management Systems to facilitate a structured approach to effective debt management, which is being supported by a grant from the Canadian Government to the Eastern Caribbean countries and technical assistance from the IMF and the World Bank.

These first three programmes will spearhead the response to the crisis. The second three are of critical importance to facilitate the successful execution of the first three. 1.

Public Sector Investment Programmes will provide the stimulus for economic activity through quick disbursing projects, which put people to work on public infrastructure projects.


Social Safety Net Programmes will provide resources for vulnerable groups in the society. A situational analysis has





Financial Sector Safety Nets have become critical since the recent events related to Colonial Life Insurance Company (CLICO), British American Insurance Company Limited (BAICO) and the Bank of Antigua Limited, all of which require significant levels of liquidity support.

Point seven addresses the proposal for the amalgamation of indigenous banks to form a stronger entity which can be more effective in the new environment. Point eight speaks to the rationalisation of the insurance sector in the ECCU which is now extremely fragmented. In conclusion, one can only believe that, in these times of great uncertainty, the challenges faced will bring out the best in our people. We need stability, fortitude, unity and a strong sense of purpose to see us through these difficulties. The OECS Treaty and the ECCB Agreement have proved their worth in response to the insurance and banking crises. They have given the stimulus for proceeding speedily to the formation of an Economic Union and the deepening of the integration arrangements in the OECS. We will also, having consolidated our domestic and regional policy arrangements, be in a much better position to engage the IMF, the World Bank and other external institutions in a constructive and meaningful way to ensure our survival and progress.

What is Insurance?

Insurance in its basic form is defined as “ A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."

paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event. For example if a person buys a Life Insurance Policy by paying a premium to the Insurance company, the family members of insured person receive a fixed compensation in case of any unfortunate event like death.

In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. By entering into contract the Insurance company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums.

Take some time to read more about insurance and its benefits.

Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. By

Source: profit.

There are different kinds of Insurance Products available such as Life Insurance , Vehicle Insurance, Home Insurance, Travel Insurance, and Health Insurance.

“... the engine room of the Public Service...�

Finance 9 INSIDE

NOTES ON GRENADA INVESTMENT PROMOTION ACT, 2009 The Grenada Investment Promotion Bill 2009, is a promotional piece of legislation which underscores the Government's commitment and support to facilitating investment in Grenada. This Bill goes on to elucidate the role of the Grenada Industrial Development Corporation (GIDC) in relation to the promotion of investment and lists the benefits accorded to all investors (foreign and local) who propose to make an investment in Grenada. The Draft Bill, by virtue of its long title states that it seeks “to promote and facilitate investment in Grenada by assisting investors in obtaining all the pre-requisites and incentives and according them the security and protection necessary for them to invest in Grenada and to give paramount status to the Statement of Investment Policies of the Government and provide for other related matters”. Part I of the Bill contains clauses 1-3 and provides for the preliminary provisions. In particular, Clause 3 provide for the objects of the Bill, which are to: (a)

provide an efficient and transparent system for the granting of investment incentives and registering investors;


enhance and modernize the legal framework for investment; and


promote the development of international best practices regarding investments.

Part II of the Bill contains Clauses 4-13 and provides for the provisions relating to the promotion of investment. For example, Clause 4 places a duty on all relevant public officers and public authorities to perform their roles and functions in a timely and diligent manner giving due regard at all times to the Statement of Investment Policies outlined in Schedule I of the Bill, in order to facilitate and expedite issues relating to investment in the State. Similarly, Clause 5 establishes the role and function of GIDC. These include: (a) to initiate and support measures that will enhance the investment climate for investors in Grenada; (b) to collect, collate analyze and disseminate information regarding investment opportunities and sources of investment capital; and (c) to provide

10 Finance INSIDE

facilitation services to investors and issue investment certificates upon registration in accordance with the provisions of the Act. Part III of the Bill contain clauses 14-18 which provides for the investment guarantees accorded to an investor registered in accordance with the provisions of the Act. These include: (a)

investment incentives as specified in the Schedules;


100% transfer of capital profits;


guarantees against acquisition; and


dispute settlement guarantees.

Part IV contain clauses 19-24 which provides for offences, disciplinary action, service of documents, making of regulations, the amendment of Schedules to the Act and the repeal and transitional provisions. By virtue of Clause 24 licenses under the repealed Acts prior to the commencement of the Act remain in force and are deemed valid until the expiration of the term under which the holder was entitled to enjoy such incentives or up to five years from the date of commencement of the Act if upon the coming into operation of the Act, the holder did not utilized such incentives. Further a person enjoying incentives under any of the repealed Acts would not be entitled to incentives under this Act until after the period specified in clause 24 (2). In addition, any pending application before GIDC upon the coming into operation of this Act shall be deemed to be pending prior to the commencement of the Act. Schedule I provides for the Government's Statement of Investment Policies; Schedules II and III provides for the categories of investments entitled to incentives, Schedule IV provides the format, for the registration form, Schedule V provides the format of the investment certificate issued under the Act and Schedule VI provides for the format which a report is prepared in accordance with clause 7 (5).

“... the engine room of the Public Service...”

Facts Fun &

Did U Know? •

That under the Income Tax, there are Appeal Commissioners (5) available so that if the taxpayer is not satisfied with the Comptroller's ruling, on his/her tax assessment, he or she can submit an appeal to the Appeal Commissioners and have his/her case determined?

That VAT will be introduced in Grenada in February 2010?

A social protocol is being developed between the Government of Grenada and the various social partners?

Quotes “Always laugh when you can. It is cheaper than medicine…” “Alter your attitude and you can alter your life.”

Have a laugh...

Joke 1 Bored during a long flight, an eminent scholar leaned over and woke up the sleeping man next to him to ask if he would like to play a game. “I'll ask you a question,” the scholar explained, “and if you don't know the answer, you pay me $5. Then you ask me a question, and if I don't know the answer, I'll pay you $50.” When the man agreed to play, the scholar asked, “What's the distance from the earth to the moon?” Flummoxed, the man handed him $5. “Ha!” said the scholar. “It's 238,857 miles. Now it's your turn.” The man was silent for a few moments. Then he asked, “What goes up a hill with three legs and comes down with four?” Puzzled, the scholar racked his brains for an hour–but to no avail. Finally he took out his wallet and handed over$50. “Okay, okay, what is the answer?” the scholar asked. The man said, “I don't know,” pulled out a $5 bill, handed it to the scholar, and went back to sleep. Joke 2 Little Johnny looked so sad his teacher had to inquire what was wrong. “What's the problem?” she asked. “I hope it's not about your homework again.” “Well, uh, yes it is,” Little Johnny says. “I accidentally made my homework paper into a paper airplane.” “That wasn't the smartest thing to do,” said the teacher, “But, just this once, I'll let you just unfold the paper and hand it in.” “Sorry, but that won't work,” Little Johnny replied, looking even sadder. “You see, the plane was hijacked!”

“Experience is simply the name we give our mistakes.”

Fun Facts

Authors: Unknown •

The term "whole 9 yards" came from WWII fighter pilots in the South Pacific. When arming their airplanes on the ground, the .50 caliber machine gun ammo belts measured exactly 27 feet. If the pilots fired all their ammo at a target, it got the "whole 9 yards."

Months that begin on a Sunday will always have a "Friday the 13th."

If you toss a penny 10000 times, it will not be heads 5000 times, but more like 4950. The heads picture weighs more, so it ends up on the bottom.

Riddle Why is the letter T like an island? Ans: Because it is in the middle of water. Ten copycats were sitting on a bridge. One jumped off, how many were left? Ans: None. They were copycats so they all jumped!

Minister's Visit to Energy Department

Minister's Visit to Project Co-ordinating Unit

Key Findings of Poverty Assessment Survey for Grenada The Country Poverty Assessment Survey was officially launched in February 2007, with the actual field work conducted between September 2007 and June 2008. The overall objective of the CPA was to assess the conditions affecting the welfare of people, and use these findings to identify policies and projects that would sustainably reduce the extent and severity of poverty and improve the overall quality of life in Grenada. The survey was conducted by the Government of Grenada in collaboration with the Caribbean Development Bank and involved an institutional analysis, a national survey of living conditions and household budget, and a participatory poverty assessment. The Table below compares the key findings above with that of the 1998/99 Country Poverty Assessment. Indicator Indigent rate Poor but not indigent Poverty rate

1998/99 12.9% 19.2% 32.1%

2007/08 2.4% 35.3% 37.7%

Vulnerability rate Unemployed rate Cost of daily food basket Annualized indigence line Annualized poverty line Vulnerability

N/a1 N/a $3.92 $1,430.80 $3,262 N/a

14.6% 24.9% $6.65 $2,394 $5,842 14.6%


N/A = not available.

The key findings are: • The Poverty Line is EC$ 5,842 per annum or EC$487 per month. • 37.7 percent of the population is poor, as defined by the Poverty Line. • The Indigent Line is EC$2,394 per annum or approximately EC$200 per month. • 2.4 percent of the population are indigent or extremely poor. Indigent refers to persons without basic food. • 35.3 percent of the population has been deemed to be poor but not indigent. • The Vulnerability Line is EC$ 7,302 per annum, 1.25 times the Poverty Line. • 14.6 percent of the population is vulnerable. • 24.9 percent of the population is unemployed. • The cost of the daily food basket for an adult, based on 2400 kilo calories, is EC$6.66. Our Government expects to receive the final report of the Poverty Assessment Survey in June of this year. In light of the current global economic crisis, it is quite possible that the situation has further deteriorated. Government is, however, committed to working closely with local and international development partners to ensure that adequate safety nets are put in place for the poor and vulnerable in Grenada. Indeed, this is a major consideration of the Social Protocol which is now being worked on by the Social Partners.

Remember The Hurricane season is here... be prepared... Have a family disaster plan in place.

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A Taste of Economics PRICE ELASTICITY Source: Robert Schenk (PhD, University of Wisconsin-Madison, 1977) -

Businesses know that they face demand curves, but rarely do they know what these curves look like. Yet sometimes a business needs to have a good idea of what part of a demand curve looks like if it is to make good decisions. If Rick's Pizza raises its prices by ten percent, what will happen to its revenues? The answer depends on how consumers will respond. Will they cut back purchases a little or a lot? This question of how responsive consumers are to price changes involves the economic concept of elasticity. Elasticity is a measure of responsiveness. Two words are important here. The word "measure" means that elasticity results are reported as numbers, or elasticity coefficients. The word "responsiveness" means that there is a stimulusreaction involved. Some change or stimulus causes people to react by changing their behavior, and elasticity measures the extent to which people react. The most common elasticity measurement is that of price elasticity of demand. It measures how much consumers respond in their buying decisions to a change in price. The basic formula used to determine price elasticity is e= (percentage change in quantity) / (percentage change in price). (Read that as elasticity is the percentage change in quantity divided by the percentage change in price.) If price increases by 10% and consumers respond by decreasing purchases by 20%, the equation computes the elasticity coefficient as -2. The result is negative because an increase in price (a positive number) leads to a decrease in purchases (a

negative number). Because the law of demand says it will always be negative, many economists ignore the negative sign, as we will in the following discussion. An elasticity coefficient of 2 shows that consumers respond a great deal to a change in price. If, on the other hand, a 10% change in price causes only a 5% change in sales, the elasticity coefficient will be only 1/2. Economists would say in this case that demand is inelastic. Demand is inelastic whenever the elasticity coefficient is less than one. When it is greater than one, economists say that demand is elastic. Products that have few good substitutes generally have a lower elasticity of demand than products with many substitutes. As a result, more broadly defined products have a lower elasticity than narrowly defined products. The price elasticity of demand for meat will be lower than the price elasticity of pork, and the price elasticity for soft drinks will be less elastic than the price elasticity for colas, which in turn will be less elastic than the price elasticity for Pepsi. Time plays an important role in determining both consumer and producer responsiveness for many items. The longer people have to make adjustments, the more adjustments they will make. When the price of gasoline rose rapidly in the late 1970s as a result of the OPEC cartel, the only adjustment consumers could initially make was to drive less. With time, they could also move closer to work or find jobs closer to home, and switch to more fuel-efficient cars. The generic formula for elasticity, which may help make sense of the whole notion, is: (% change in response) divided by (% change in stimulus). Notice how all the specific elasticities that are discussed in these pages are instances of this general formula.

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FINDINGS OF GRENADA'S MUTUAL EVALUATION REVIEW The report on the findings from Grenada's Mutual Evaluation Review that was held in October 2008, was presented to the Caribbean Financial Action Task Force (CFATF) 29th Plenary in Trinidad on May 8th 2009.

money laundering. Grenada is one of the few countries that have secured a conviction in this area, in addition to having three pending cases. Consequently, the Plenary felt that Grenada's FIU is a model for the other countries.

The findings generally revealed that, although Grenada has implemented legislation to combat money laundering (ML) and the financing of Terrorism (FT) subsequent to being 'black listed” in 2000 to be compliant with the Financial Action Task Force (FATF) forty plus nine recommendations, the effectiveness of its AML/CFT (Anti Money Laundering/Combating Financing Terrorism) program must be strengthened. As a result Grenada has received an average rating of Partially Compliant.

Grenada was also commended for having established the Grenada Authority for the Regulation of Financial Institutions (GARFIN).

Among other things, Grenada needs to: • Strengthen its ML legislation by applying penalties or sanctions for non-compliance. In addition, ML legislation must be used more frequently and effectively in the Courts; •

Bring the guidelines issued by the Supervisory Authority into enforceable law or regulations and ensure that it is understood by the Financial and nonfinancial institutions operating in the country; and Ensure that the Supervisory Authority conduct regular inspections of ALL Financial Institutions including Designated Non-Financial Business Professions (DNFBPs) in accordance with the Anti Money Laundering (AML) laws. In addition, the Authority must conduct on-going public education among all Financial Institutions.

Notwithstanding, Grenada's Financial Intelligence Unit (FIU) received high praise for its work in the fight against


As a result of the rating, Grenada is now placed on an enhanced reporting status which means that Grenada must present a follow-up report to the next CFATF Plenary scheduled for October 2009. Grenada's team was lead by the Attorney General, Mr. James Bristol and included: • Mrs. Patricia Antoine-Clyne, Chairman of the Supervisory Authority; • Mr. Christopher Nelson, Director of Public Prosecution; • Mr. Tafawa Pierre, Former Officer in Charge of the Financial Intelligence Unit (FIU); and • Mr. Angus Smith, Executive Director of GARFIN th



Recommendations, coming out of the meeting, will be made to the Cabinet as to the way forward in bringing Grenada closer to full compliance with the FATF forty plus nine recommendations for its AML/ Combating Financing Terrorism (CFT) program.

he Minister of Finance, Planning, Economy, Energy, Foreign Trade & Cooperatives, Minister of State, Permanent Secretary, Management and Staff extend condolences to the family and friends of all those who have lost their loved ones recently. “Good men must die, but death cannot kill their names” God's Peace Be With Their Souls.

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The CFATF 29 Plenary, which ran from May 5 to 8 2009, followed the meeting of the Heads of Financial Intelligence Units (FIUs), from over thirty countries around the world, on th May 4 2009. The meetings were also attended by representatives from the World Bank, the International Monetary Fund (IMF), and the United Kingdom Financial Action Task Force.

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FFinance inance Staff Development INSIDE

and Training

Hon. Minister Nazim Burke, Mrs. Sally Anne Bagwhan Logie and Ms. Allyson Francis, attended the Inter-American Development Bank/World Trade Organisation (IDB/WTO) sponsored Latin American and Caribbean Regional Review on Aid-for-Trade and the CARICOM Coordination Meeting Preparatory to the 2nd Regional Review on Aid for Trade, in Jamaica from May 4 – 8, 2009.The meeting provided the opportunity for CARICOM Member States to identify country, regional and sectoral priorities as they seek to mainstream trade in their development agendas and to share them with international development partners. Ms. Shanta Cox attended the Caribbean Export International Trade Management (ITM) Export Marketing Programme in Barbados from May 4 – 8, 2009. The programme covered various topics including marketing strategy and research, opportunities to the European market, step-in exporting and how to prepare a business plan for the European market, and

Mr. Halim Brizan (1st L 3rd row from back) Mr. Kendall Alexander (2nd row middle)

within government institutions. The workshop was hosted by the United Nations Development Programme (UNDP). Ms. SallyAnne Bagwhan Logie attended the National Export Strategy Learning Workshop in London from May 25 – 29, 2009. The workshop was organissed by the Commonwealth Secretariat and was used as a forum for the participants to build and enhance a shared understanding of what works and does not work in the formulating National Export Strategy and Trade and Development projects. Based on the Experience of Grenada, Ms. Logie, Grenada's National Export Strategy Coordinator,

Ms. Shanta Cox

training of export coaches. Ms. Cox, also attended the 10th annual Trade and Investment Convention in Trinidad and Tobago from June 23 – 27, 2009. The forum provided the opportunity for Grenada to exhibit its products and services to the rest of the world. Mr. Halim Brizan and Mr. Kendall Alexander attetnded the Millennium Development Strategic Thinking Workshop – Tailored Solutions for Monitoring Poverty and Sustainable Development, in Barbados from May 4 – 6, 2009. The purpose of the workshop was to share with and learn from development practitioners, in government and non-government organizations, the skills and tools that enable the strengthening of capacity for the establishment or enhancement of poverty and Millennium Development Goals (MDGs) monitoring systems

Ms. SallyAnne Bagwhan Logie

made a presentation on Capacity Buliding Through the National Export Strategy Process: The Experience of a Small Island State: A Case Study of Grenada.” Mr. Peter Alexander Roberts and Mr. Anslem Joseph attended the Biannual Meeting Accountants General, Budget Directors and Directors of Audit at the ECCB Headquarters in St. Kitt's from May 7 – 8, 2009. Discussions were held on the fiscal implications of the Global Economic and Financial Continues on pg. 18

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Continued from pg. 17

Operations, weathering the crises through cash and liquidity management; country case study and other fiscal implications of the global economic and financial crises. The main purpose of the workshop was to review the findings and recommendations of the OECS Report on the Observance of Standards and Codes (ROSC) and agree on practical steps to achieve sustainable performance results. Hon. Minister Michael Church and Ms. Allyson Francis, Trade Counsel, attended the Twenty-seventh Meeting of the Council for Trade and Economic Development (COTED) in Guyana from May 11 – 15, 2009. The agenda included the implementation of the CSME and CET; matters relating to transportation including the recommendation with respect to the establishment of a single air space; matters relating to agriculture including the removal of constraints to agriculture production and trade; negotiations of the CARICOM-Canada Trade and Development Agreement; and the implementation of the CARIFORUM_EC Economic Partnership Agreement. COTED is made up of Ministers designated by the member states and is responsible for the promotion of trade and economic development of the Caribbean Community.

Her Excellency Ambassador Dessima Williams, Mr. Leon Charles and Ms. Jocelyn Paul attended the United Nations Climate Change Talks 2009 in Bonn, Germany from June 1 – 12, 2009. The objective of the forum was to further the work completed at the Bonn session during March 29 to April 8, 2009 and to continue the work of the Subsidiary Body for Scientific and Technological A d v i s e ( S B S TA ) a n d t h e Subsidiary Body for Information (SB). Discussions included, emission trading and the projectbased mechanisms; land-use Ambassador Dessima Williams change and forestry; and enhanced action on adaptation.

Mr. Rickie Morain participated in Module 3 of the CDB and Bradford Centre Project Cycle Management Course in Trinidad and Tobago from June 1 – 12, 2009. Module 3 concentrated on Monitoring and Evaluating Projects. The overall aim of the course is to improve the project administration capacity in

Session at Bonn Meeting

Ms. Patricia Antoine-Clyne attended the Association of Government Accountant's (AGA's) Annual Professional Development Conference and Exposition (PDC) in the United States from June 21 – 24, 2009. The AGA Conference is the premier education and networking event for Government Financial Management and Accountability Professionals since it provides unparalleled opportunities to exchange ideas and network with financial managers at all levels of government within the region, throughout the nation and internationally. AGA is known for its quality training and professional development events, and is involved in exciting research projects that identify emerging issues critical in government financial management.

Mr. Rickie Morain

borrowing member countries. The emphasis in the programme is on the quality of the project design and the efficiency of its execution. Hon. Minister Michael Church and Deputy Permanent Secretary Mike Sylvester, attended a Special Meeting of the Council for Finance and Planning (COFAP) in Trinidad and Tobago on June 16, 2009. The meeting addresses the following issues: •

A report from the CARICOM Task Force to develop regional strategies for mitigating the effects of the global financial and economic crisis; and

Adoption of the CARICOM Investment Code and CARICOM Financial Services Agreement.

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Ms. Patricia Antoine Clyne

“... the engine room of the Public Service...”

What’s Been

FFinance inance INSIDE


MINISTER OF FINANCE STAFF OUTREACH CONTINUES Staying true to his commitment to interact with staff on a 'oneon-one' basis, the Minister of Finance, Hon. V. Nazim Burke, visited the Energy Unit and the Project Coordinating Unit (PCU) on Friday May 15th and Friday May 22nd 2009, respectively. He was accompanied by the Permanent Secretary and other senior members of staff.

Customs Training Sessions

Government of Grenada, Ministry of Finance, Planning, Energy, Foreign Trade and Co-operatives.

Minister and Staff at Energy Unit

At the Energy Unit, the Minister, after being updated on the various projects of the Unit, was high in praise of the work of the Unit and the various tasks they have undertaken thus far. He was also very impressed with the lay out of the Unit and the quality of information generated for dissemination to schools and other researchers. The Minister was presented with a special 'energy – related' gift by the staff of the Unit. Customs Training Sessions

At the Project Coordinating Unit, Minister Burke was updated on the status of the various projects managed by the Unit which include, the Post Hurricane Ivan Schools Rehabilitation Project; the HIV/Aids Prevention and Control Project; the Education Development Project; and the Rehabilitation of the T.A. Marryshow Community College. Minister Burke promised the two Units to work with the Management Team to address the issues that were raised at both locations. He complimented the Units on their work programmes and dedication. He encouraged them to continue their hard work. (See pictures on centre page) 2ND TRANCHE OF TRAINING FOR CUSTOMS OFFICERS A 2nd tranche of Customs Officers attended a National Workshop on the Control and Monitoring of Ozone Depleting Substances and Dependent Technologies for Customs Officers, on Wednesday May 6th, 2009. The workshop was organized by the United Nations Environment Programme, Regional Office for Latin America and the Caribbean (UNEP/ROLAC) in collaboration with the

Customs Training Sessions

GRENADA'S CLIMATE CHANGE LEADERSHIP PRAISED BY COP 15 PRESIDENT Mr. Thomas Becker, Deputy Permanent Secretary of the Ministry of Climate and Energy in Denmark, visited Grenada on Monday May 18, 2009 to discuss Denmark's hopes for the

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upcoming 15th Conference of the Parties of the United Nations Framework on the Convention on Climate Change (UNFCC) – COP 15 – in Copenhagen, in December 2009. Denmark will be the president COP 15.

Hendy, Attorney-at-Law and Director of the International Business Division in Barbados, and Ms. Michelle Hustler, Small Executive Director of the Barbados Coalition on Services, which was established in 2003.

While in Grenada, Mr. Becker had a courtesy visit with the Minister of Foreign Affairs, Hon. Peter David and held a meeting with Mr. Timothy Antoine, Permanent Secretary of the Ministry of Finance, under whose portfolio climate change falls. He also met with the members of Grenada's negotiating team.

Presentations were made on “The role of Government in facilitating the establishment of the Barbados Coalition on Service Industries” and the “Benefits to be derived from a Coalition on Service Industries in Grenada” by Ms. Hendy and Ms. Hustler respectively. Discussions were then held by the participants on the way forward for a formation of a coalition in Grenada.

At the meeting, Mr. Becker stated that a successful outcome of COP 15 would mean mandatory cuts in carbon emissions by developed countries over the next eight (8) years; significant movement in respect of the reduction of carbon emissions by large developed countries; the adoption of low carbon strategies by middle income countries, such as Grenada; and the provision of financing for adaptation in Small States such as Grenada. He expressed pleasure in the strong role being played by the Alliance of Small Island States, (AOSIS), which consists of 43 Small Island States, and of which Grenada is currently the Chair through Ambassador Dessima Williams, noting as he put it, “AOSIS is a strong moral voice in the climate change debate and its role is critical to a favourable outcome in Copenhagen.” He applauded the quality of Grenada's negotiators, led by Mr. Leon Charles. In response, Mr. Antoine conveyed Grenada's position, stating that given Grenada's vulnerability, climate change remains a top priority for the country and indeed all members of the AOSIS. Mr. Antoine emphasized the need for funding and for adaptation, and thanked the Denmark Government for its support for the work of the AOSIS.

Participants for the seminar came from the Local Export and Export Services Sectors as well as affiliates of the sectors. Minister for Finance, Hon. V. Nazim Burke, gave remarks at the function and congratulated the OAS and Trade and Export Division for undertaking this very important initiative. WORKSHOP ON TRAINING TRANSFER OF ENERGY INFORMATION TO TEACHERS OF ENERGY IN CXC/CAPE EXAMINATIONS AND COMMUNITY COLLEGES The Energy Unit of the Ministry of Finance hosted a Workshop to Transfer Energy Information to Teachers of Energy in the CXC and CAPE Examinations as well as Lecturers in Training Colleges from May 28 – 29, 2009, at the Grenada National Stadium Media Centre (Level 2).

G-REP STAKEHOLDERS FORUM The Grenada Rural Enterprise Project (G-REP) held a Stakeholders Forum, on Thursday 4th June, 2009 at the Hospitality Lounge of the Grenada National Stadium. The forum was held under the theme “Building more sustainable organizations and partnerships for future rural development projects”. The main objective of the forum was to provide an opportunity for stakeholders to satisfactorily express their views, identify gaps and make recommendations for improvement in G-REP's implementation and its impact. Deliberations from this forum wil be taken into consideration in the design and implementation strategies being developed to be utilized in future Rural Development Projects. SUCCESSFUL BREAKFAST SEMINAR As part of the Export Competency Development Project, which is funded by the Organisation of American States (OAS), the Trade and Export Division of the Ministry of Finance, hosted a very successful Breakfast Seminar, on Thursday May 14, 2009, at the Coyaba Beach Resort. The main theme of the seminar was “The Benefits of a Services Coalition.” The seminar was facilitated by Ms. Francoise

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Energy Training Session

The Workshop was conducted in collaboration with the Caribbean Energy Information System (CEIS)/ the Caribbean Renewable Energy Development /GTZ Programme (German

Energy Training Session

Technical Assistance Programme), and forms part of a regional initiative which is underway in selected countries, (Guyana, Barbados, Trinidad and Tobago and St. Kitts & Nevis, St. Vincent & the Grenadines, Antigua).

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Continued from pg. 20

The objectives of the Workshop were: •

March 16, 2007, following the failure of the then Government to service the loans.

To educate teachers of Energy and energy related subjects in schools and Training Colleges on matters relating to the high cost of energy and the socio-economic impacts; To provide teachers of Energy and energy-related subjects with the basic information, knowledge and skills required, to effectively institute and strengthen energy conservation and efficiency, as part of the curriculums; To, in turn, have trained teachers mount further training sessions in their schools and for their students, and also to sensitize their colleagues as part of a “Train the Trainer” Programme using the CD-ROM tool which will be left with those persons attending the workshop .

The training team was led by Mrs. Mona Whyte, Team Leader, CEIS, of the Scientific Research Council of Jamaica. Over forty (40) teachers are expected to participate in the training. The Workshop looked at the global, regional and local perspectives as they relate to energy as well as technical presentations on energy efficiency and energy conservation, alternative sources of Energy and Environmental issues linked to energy.

Government is considering all its options as it seeks to resolve this matter. As a first step, Government will need to retain new legal consul in New York where the judgment was rendered to ensure Grenada's interest is adequately represented. The Government severed diplomatic ties with Taiwan in January 2005 and re-established diplomatic relations with the People's Republic of China. MINISTER HOLDS MEETING WITH BANKING ASSOCIATION On Tuesday May 12th 2009, the Minister of Finance, Hon. V. Nazim Burke, and other senior officials of the Ministry, met with the local Bankers' Association. At the meeting, the Minister took the opportunity to thank the Bankers for their cooperation and support in providing the EC$20million Consortium Loan to the Government. The Bankers were then apprised of the findings of Grenada's Mutual Evaluation Review which was presented at the 29th

Similar Workshops have already been conducted in Barbados, Guyana, Jamaica, St. Kitts & Nevis, St. Vincent and the Grenadines and Trinidad and Tobago. The Caribbean Energy Information System (CEIS) is headquartered in Kingston, Jamaica at the Scientific Research Council (SRC). Its membership comprises eighteen (18) Caribbean Countries of which Grenada is one. Its role is to facilitate the exchange of energy information among Caribbean Countries. GTZ/CREDP is the German component of the Caribbean Renewable Energy Development Programme (CREDP) – a joint funded regional project headquartered at the CARICOM Secretariat in Guyana with the GTZ component offices in St. Lucia.

Minister and Staff at meeting with bankers

Plenary of the Caribbean Financial Action Task Force (CFATF) in Trinidad on May 8th 2009. They were also given an update on the economy, which showed that the economy is expected to contract by 0.5% in 2009.

TAIWANESE BANK DEMANDS FULL REPAYMENT OF LOANS TO GRENADA The Export/Import Bank of the Republic of China on Taiwan (ROC) has issued a formal demand notice to the Government of Grenada for the immediate re-payment of approximately US$25 million (EC$67.9M), borrowed by previous administrations by way of four (4) separate loans. These loans were contracted by the Government in July 1990 (US$10 million); April 1997 (US$2 million); October 1997 (US$6 million); and January 2001 (US$10 million). In a strongly worded letter to the Minister for Finance, the bank indicated that it intends to proceed vigorously to enforce the judgment against Grenada within the United States and throughout the world to recover the judgment obtained on Minister and Staff at meeting with bankers Continues on pg. 22

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Discussions were also held on: • The financial meltdown/economic recession and its effects on the local banking sector; • The current status of processing applications for Alien Landholding licenses; • Government tax credit for airlift support; • Public education on financial matters; and • The development of the Social Protocol. The Minister reiterated that with respect to the Social Protocol, the main focus is how to preserve jobs and stimulate the economy during the downturn. He assured them that discussions between the partners are progressing favourably and encouraged the bankers to propose ways in which the banking sector can contribute. The Ministry of Finance will continue to hold regular meetings with the banking sector to discuss financial and economic issues and decide on the ways to cooperate. MINISTER BURKE AT 39th ANNUAL BOARD OF GOVERNORS MEETING Minister of Finance, Hon. V. Nazim Burke, attended the 39th Annual Meeting of the Board of Governor's of the Caribbean Development Bank (CDB) on May 27th and 28th, 2009 in the Turks and Caicos Islands. The 39th meeting was preceded by a meeting of the Procedures Committee of the Board of Governors on Tuesday May 26th, 2009; the Twenty-Sixth Annual Meeting of the Contributors to the Special Development Fund (SDF); and a discussion session on the topic “Climate Change and Caribbean Economies: Implications, Adaptations, and Risk Management.” Grenada's participation at these meetings help to guarantee its involvement in key decision making with regard to the policies and strategic priorities of the Eastern Caribbean Central Bank (ECCB), as well as its specific areas of emphasis in investment and programming.

projects in Grenada, including the joint venture for the petroleum ‘tank farm’. TWO-DAY NATIONAL WORKSHOP ON LEGISLATIVE DRAFTING FOR PARLIAMENTARY COUNSELS AND SENIOR TRADE OFFICERS OF GRENADA The Trade Division of the Ministry of Finance in conjunction with the Organisation of Eastern Caribbean States (OECS) Secretariat held a Two-Day National Workshop on Legislative Drafting for Parliamentary Counsels and Senior Trade Officials at the Coyaba Beach Resort in Grand Anse from June 8th – 9th, 2009. The Workshop was part of a series of Workshops organized by the Secretariat for the Member States and will focus on matters relating to trade commitments and to provide information and guidance on the legislation which is required to implement these commitments. The Workshop, as with those conducted in the other Member States, was funded by the European Union (EU) under the Legislative Drafting Services for Trade Negotiations and Policy Formulation Project. THE GRENADA AUTHORITY FOR THE REGULATION OF FINANCIAL INSTITUTIONS (GARFIN) HOSTS WORKSHOP & CONFERENCE The Caribbean Association of Insurance Regulators (CAIR) in conjunction with the Caribbean Regional Technical Assistance Center (CARTAC) and the World Bank held a workshop and conference for Caribbean Insurance Supervisors in Grenada from June 15th – 19th 2009. The workshop and conference, which was hosted by the Grenada Authority for the Regulation of Financial Institutions (GARFIN) was held at the Grenada Grand Beach Resort.

Accompanying the Minister were Mr. Timothy Antoine, Permanent Secretary of the Ministry of Finance, and Mr. Mervin Haynes, Director of Economic Development and Technical Cooperation at the Ministry of Finance. MINISTER BURKE ATTENDS PETROCARIBE SUMMIT Hon. V. Nazim Burke, Minister responsible for Energy, attended the Sixth (VI) Summit of PetroCaribe on June 12, 2009. This was the Minister's first appearance at these meetings. The Minister was accompanied by: • Mr. Jerome Joseph, Chairman of Petrocaribe Grenada; • Mr. Rodney George, Deputy Chairman of Petrocaribe Grenada; and • Mr. John Auguste, Senior Energy Officer at the Ministry of Finance. While abroad, Minister Burke also met with 'PDVSA' (Petróleos de Venezuela South America) to discuss proposed

Minister at Conference

Insurance Supervisors from nineteen Caribbean Countries stretching from Haiti in the north to Suriname in the south, participated in the workshop and conference. The workshop which ran from Monday 15th to Wednesday 17th covered three of the International Association of Insurance Supervisors (IAIS) Core Principles of Supervision namely: Insurance Core Principle (ICP) 6 - Licensing Continues on pg. 23

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Insurance Core Principle (ICP) 13 - Onsite Examination Insurance Core Principle (ICP) 16 - Winding up and exit from the market

Sports, on “The Business of Carnival: A Grenada Perspective”; and by The Grenada Board of Tourism on “Grenada - The Spice of the Caribbean”.

The conference which included senior regulators, covered technical subjects including asset/liability management, pension supervision and risk based capital among others.

MEETING OF CARICOM OFFICIALS ON NEGOTIATING CARICOM INVESTMENT AGREEMENTS The Caribbean Regional Negotiating Machinery (CRNM), in conjunction with the Organization of American States (OAS) and the Government of Grenada, hosted a meeting of CARICOM trade, investment and legal officials on “Negotiating CARICOM Investment Agreements” at the Rex Grenadian Hotel, from Monday June 22nd – Thursday June 25th, 2009.

On Friday June 19th CAIR held its 2009 Annual General Meeting as well as a discussion on insurance issues affecting the region as a whole. GARFIN is the local regulatory authority for insurance companies and staff from GARFIN also participated in both the workshop and the conference. GRENADA PARTICIPATES IN THE TRINIDAD & TOBAGO TRADE & INVESTMENT CONVENTION Grenada participated, for the 3rd consecutive year, in the Trinidad and Tobago Trade & Investment Convention (TIC) from June 24th to 27th, 2009. TIC is the Caribbean's biggest business-to-business networking convention in the Caribbean, providing opportunities for manufacturers and buyers, investors and financiers, suppliers, service providers, regulatory agencies, consultants and media operators to network, share ideas, and develop business partnerships. Grenada's delegation included the Hon. V. Nazim Burke, Grenada's Minister for Finance, Planning, Economic Development, Energy and Foreign Trade and Cooperatives, Senator Arley Gill, Minister for Culture in the Ministry of Youth Empowerment, Culture and Sports, and representatives of the Grenada Industrial Development Corporation, the Grenada Board of Tourism, the Ministry of Finance - Trade Division, the Grenada Hotel and Tourism Association and other private sector representatives. Grenada's participation at TIC included a booth featuring products from various manufacturers including Caribbean Naturals, Belzeb Aromatherapy, Michelle's Confectionery, De La Grenada Industries and Toussaint Traditions. Flyers and brochures were also handed out as a means of promoting Grenada as an investment and tourism destination. Hundreds of local, regional and international buyers and distributors attend TIC annually. As a result, Grenada used the opportunity to interact with global decision-makers in discovering business partnership prospects and opportunities while securing trade and tourism potential by promoting linkages between Grenada and other Caribbean countries. A key aspect of Grenada's participation at TIC was the hosting of a seminar on “Doing Business in Grenada” on Thursday June 25th, 2009. The seminar was held at the Trinidad Trade and Investment Convention, Ken Galt Hall, Centre of Excellence, Mocaya, Trinidad. The Hon. V. Nazim Burke Minister for Finance delivered the feature presentation. The objectives of the seminar were to present Grenada's current business operating environment and the investment opportunities that are currently available. Presentations were also made by Senator Arley Gill, Minister for Culture in the Ministry of Youth Empowerment, Culture and

The objectives of the meeting were two-fold: first, to increase the understanding of CARICOM officials of the scope and structure of investment agreements and second, to arrive at a strategic approach to negotiating CARICOM investment agreements with external partners, consistent with regional integration initiatives. Accordingly, the meeting consisted of an investment seminar over two days during which officials had the opportunity to review various issues related to investment agreements. This was followed by a workshop format over two days during which officials examined CARICOM's approach to investment agreements and developed recommendations for CARICOM's orientation in future investment agreements, and trade agreements with investment provisions. Hon. V. Nazim Burke delivered the feature address at the opening session. MINISTER BURKE ATTENDS 4th ANNUAL PRIVATE SECTOR MEETING WITH MINISTERS OF TRADE AND FINANCE Hon. V. Nazim Burke, Minister of Finance, attended the 4th Annual Private Sector Meeting with CARICOM Ministers of Trade and Ministers of Finance in Jamaica on June 13, 2009. The meeting was organized and hosted by the Caribbean Association of Industry and Commerce Inc. (CAIC). The agenda for the meeting included discussions on: • The Regional Financial Markets vis-á-vis; the Global Financial Market, • The Caribbean Single Market and Economy, • Crime and the Cost of doing Business in the Caribbean, • The Slowdown in the Remittance Market, and • Expected Labour Changes and Pro-active Transitions. ACCOUNTANT GENERAL VISIT GRENADA MISSIONS IN THE UNITED STATES Mrs. Patricia Antoine-Clyne, Accountant General, visited the New York and Washington Missions from June 21st – July 2nd, 2009 to conduct internal audit reviews of systems and controls and discuss accounting procedures with the new Ambassadors. The Accountant General provided guidance with respect to the Management of Financial transactions reporting and operational matters in accordance with the Public Finance Management Act, Accounting Procedures and Regulations. Clarifications were provided to the Ambassadors with regards to unresolved questions which were not attended to whilst in Grenada during the Heads of Missions Conference.

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Ministry of Finance, Planning, Economy, Energy, Foreign Trade & Cooperatives Financial Complex, Carenage, St. George’s Tel.: 440-2731-34, 435-0057; Fax: 440-4115; Website:; Email: Contact: Petra Joseph, Editor-in-Chief, 440-2731, ext.: 1108/435-0057

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Inside Finance - Volume 5, Issue 3, May - June 2009  

Ministry of Finance - Newsletter

Inside Finance - Volume 5, Issue 3, May - June 2009  

Ministry of Finance - Newsletter