Inside Finance - Volume 5, Issue 4, July - August 2009

Finance INSIDE

GRENADA

Volume 5, Issue 4, July - August 2009

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

Government of Grenada

DUTY-FREE

BARRELS Initiative 2009

VAT IS COMING February 1st 2010

It is no secret that the world economy is facing one of its most severe crisis since the 1930s.

Grenada, like the rest of the world, is being negatively affected by the crisis in several ways.

One of our main challenges is balancing the significant shortfalls in Government's revenues against the increasing need to stimulate the economy and to provide adequate protection for poor and vulnerable groups.

Whereas it can be argued that cost of living has declined somewhat, it is still a major concern to us, particularly as it relates to food inflation.

You would recall that in 2008 upon assuming office, the Government moved speedily to implement a number of programmes which were aimed at cushioning the effects of the high cost of living of Grenadians.

One such programme was the “Duty-Free Barrels Initiative.”

This programme was implemented on October 1, 2008 and was in place for a period of three (3) months.

VAT

Moving Forward On Tuesday 21st July 2009, the VAT Team officially launched the Value Added Tax (VAT) at the Ade's Dream Conference Room, Carriacou. They later journeyed to Petit Martinique where a similar session was held at the Melodies Conference Room.

Present were the Minister of Finance, Hon. V. Nazim Burke, the Minister for Carriacou and Petite Martinique Affairs, Sen. Hon. George Prime, Deputy Permanent Secretary of the Ministry of Finance, Mr. Mike Sylvester, along with the VAT Consultant, Mr. Curlan Gilchrist and other key personnel from the VAT Unit.

Both sessions were well attended and participants showed good support to the Government for the administration of VAT. Among some of the issues raised was the establishment of a structure for both islands, where Tax Inspectors and other Tax Officials would be available to address issues and give support to the business community in order to facilitate voluntary compliance. Both Ministers spoke to the government's policy with respect to the implementation and stressed the need for government to collect the revenue and redistribute the funds for targeted assistance to the general population.

From then on the VAT team has been holding sessions with all stakeholders throughout the tri–isle state. Public meetings are being held on a daily basis in all communities.

By all means, this programme was a resounding success. Over 9,000 households benefited from the “Duty-Free Barrels Initiative.” The revenues foregone by the Government amounted to some EC$1.1 million.

To date, the following has been accomplished by the VAT Team and Government:

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Editor's Remarks

WISDOM

If someone aspires to win the lottery and another aspires for wisdom, which aspiration do you think is more meaningful?

It is a popular belief, especially among the religious, that wisdom is more desirable than riches. Wisdom is also valued above power, health and beauty.

According to Wikipedia, Wisdom is knowledge of what is true or right coupled with just judgment as to action; sagacity, discernment, or insight. It is an ideal that has been celebrated since antiquity as the application of knowledge needed to live a good life. Beyond simply knowing/understanding what options are available, "Wisdom" provides the ability to differentiate between them and choose the one that is best.

So does everyone possess wisdom? The answer is yes. The issue however, is that not everyone uses it to his or her advantage. When used or practiced wisely, wisdom enables one to keep priorities straight. It helps one to see things from holistic point of view and not be judgmental.

many times you say I'm sorry, the wound is still there. A verbal wound is as bad as a physical one."

As William Arthur Ward once said, "It is wise to direct your anger towards problems - not people; to focus your energies on answers - not excuses."

Here is Afghan short story on wisdom called 'Even Friendship, Has Its Limits'.

There was once a man who was a champion wrestler. He had mastered 360 holds and tricks, and used a different one every day of the year. It so happened that he was fond of one of his students, and taught him all his tricks, except one. He kept on postponing the day when he would teach him the last trick.

The boy grew in strength and skill, and no one among his contemporaries was able to challenge him. One day, he boasted in front of the king: "My teacher is unchallenged only because he is older than me and because I respect him as my teacher.

Otherwise my strength is not less than his and my skill is quite equal to his."

The King did not appreciate this boasting and ordered a match to take place. They cleared the broad wrestling ground and gathered ministers, courtiers and sportsmen to watch.

The following is a short Featured Story of Wisdom called 'The Fence' by an Author Unknown.

The boy charged out into the ring like a mad elephant. His master knew that his pupil was stronger than him, so he used the 360th hold the he had never taught him. The boy did not know how to counter it. He was helpless. His master raised him with both hands above his head and smashed him to the ground. The crowd cheered wildly.

There once was a little boy who had a bad temper. His father gave him a bag of nails and told him that every time he lost his temper, he must hammer a nail into the back of the fence.

The King congratulated the champion and ordered a robe of honor to be given to him. He reproached the boy, saying: "You were ill-bred enough to dare to challenge your teacher and now you see how hollow your boast was!"

The first day the boy had driven 37 nails into the fence. Over the next few weeks, as he learned to control his anger, the number of nails hammered daily gradually dwindled down.

The boy answered: "O lord of the word! He did not overpower me with his strength but rather because of one trick which he never accepted to teach me. Today this one trick gave him the victory."

He discovered it was easier to hold his temper than to drive those nails into the fence.

The King retorted: "It was just for such a day that he had kept his trick! Have you not heard what the wise say? "Never give a friend such power over you that if one day he tries to be your enemy, he can defeat you."

Finally the day came when the boy didn't lose his temper at all. He told his father about it and the father suggested that the boy now pull out one nail for each day that he was able to hold his temper.

The days passed and the young boy was finally able to tell his father that all the nails were gone. The father took his son by the hand and led him to the fence.

He said, "You have done well, my son, but look at the holes in the fence. The fence will never be the same. When you say things in anger, they leave a scar just like this one. You can put a knife in a man and draw it out. It won't matter how

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The teacher betrayed by his pupil said: "There is no such thing as loyalty in this world, or at least no one today knows the meaning of loyalty. Whoever learned a trick from me, finally tried to do me down."

The two stories were reproduced in an attempt to highlight wisdom from two perspectives. It is my hope that the lessons of these stories will help all to have a better understanding of how wisdom can be used to make right decisions.

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Petra

this we shall establish a National Energy Commission, whose mandate shall be to guide the implementation of our strategic policy objectives and enhance our security of supply by supervising and effecting the increased exploration for and equitable exploitation of oil and gas resources, diversification of the energy mix with a transition to natural gas as the primary fossil fuel and the reduced dependence on fossil fuels by the promotion of renewable energy, with measurable targets set for the achievement of these objectives We shall immediately retain the services of qualified experts to assist us in relation to these objectives and seek to promptly resume negotiations with the Republic of Trinidad and Tobago and the Bolivarian Republic of Venezuela with a view to resolving our maritime boundaries once and for all”.

The fact that we are gathered here today to discuss our draft energy policy provides unimpeachable evidence of government's commitment to fulfil its commitment to the Grenadian people.

I wish to state, however, that despite our commitment we are not doing this alone. We have been able to secure one of the finest and most trusted partners anyone can ask for in this kind of initiative. For this I wish, on behalf of the Government and people of Grenada to thank the Organisation of American States, and its partners under the Caribbean Sustainable Energy Programme for making this possible.

Hon. V. Nazim Burke National Stakeholders Consultation on a National Energy Policy SPEECH BY MINISTER OF FINANCE HON. V. NAZIM BURKE JULY 28, 2009

Today marks a very important day in the economic history of our country.

I make this bold statement because for the first time in our history some of the best and brightest minds in our country are gathered to confer on the development of a sustainable energy policy for Grenada, Carriacou and Petit Martinique.

Ladies and Gentlemen, on October 13th 2007, the now Prime Minister the Hon Tillman Thomas in a major roll- out of his vision for a new Grenada outlined his vision for energy in the following terms:

I also wish to thank the staff of the Energy Division and the Flamboyant Hotel for their assistance in organising this important workshop, which comes at a critical stage in the formulation of our energy policy.

Ladies and gentlemen, access to abundant, reliable and relatively cheap sources of energy has been the key to the development of all of the major economies of the world.

Our southern neighbours, Trinidad and Tobago and Venezuela with whom we share hopefully more than maritime boundaries, are regional examples of economies that have benefited from having large quantities of fossil fuels.

The price of electricity can vary globally from 2 – 5 US cents per kilowatt hour in oil-rich states such as Trinidad and Venezuela to over 25 US cents per kilowatt hour here in Grenada and the rest of the OECS. Here in our country, the lack of energy resources operates as a major fetter on our advancement. Today, Grenada's oil import bill amounts to $68,768,000. This represents 7% of Grenada's total import bill and is 76% of Grenada's total annual export earnings.

Ladies and Gentlemen, this situation is unsustainable and must be addressed with urgency and purpose.

“There can be little doubt that the lack of energy resources, whether from fossil fuels or renewable sources constitutes one of the major constraints to economic and social development. It follows that if we are to place ourselves firmly on the road to development, we must have a well considered and clearly defined energy policy.

We need an energy policy that will reduce our dependency on expensive, imported diesel for electricity generation and diesel and gasoline for transport and will turn access to energy from being a constraint into an asset.

An NDC administration shall provide Grenada with such an energy policy. Above all, an NDC administration will ensure security and stability of supply of energy resources. To achieve

Our Government's objective is to develop a sustainable energy policy which will drive the economic development of Grenada over the next twenty years.

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Continues on pg. 4

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Statement by Minister Burke continued from pg. 3

The Division of Energy and sustainable Development, which will be strengthened, has been instructed to have the draft policy, inclusive of the comments and recommendations received from the stakeholders, ready to go to the Cabinet by the end of September.

It is our intention to have the National Energy Policy for the period 2010 to 2030 laid in Parliament before the end of 2009.

The development of a comprehensive and strategic sustainable energy policy is not a simple or trivial exercise.

It requires the dedicated brainpower and effort of persons who possess the fundamental, strategic and tactical knowledge of the energy sector.

Moreover, it requires a sound appreciation of both our local conditions and our development imperatives and priorities.

For us in Grenada a National energy policy framework must encompass: •

Oil and Gas exploration, including the resolution of the attendant prerequisites, namely, delimitation of our maritime boundaries, existing contracts and new partnerships;

•

The Petrocaribe arrangement, including the issues relating to the security of supply and the timely and adequate servicing of Grenada's financial obligations under the arrangement.

Trinidad and Tobago extend into Grenada's Exclusive Economic Zone.

We are working, with the Ministry of Foreign Affairs, to settle and delimit our maritime boundaries with our southern neighbours.

The Ministry of Finance, along with the office of the Attorney General, and other legal advisors is also working hard to arrive at more favourable arrangements in respect of the highly unfavourable oil exploration contracts entered into by the previous administration The desire is to facilitate an open and competitive bidding process and to establish the necessary legislative and institutional framework under which the exploration and exploitation of our offshore resources will be conducted.

We will also be seeking the assistance of the Government of Norway and its Oil for Development programme to ensure that our offshore hydrocarbon programme will subscribe to the United Nations' definition of sustainable energy which is “Energy produced and used in ways that support human development in all its social, economic and environmental dimensions….”

However, it is recognised that all fossil fuels are non-renewable resources. To achieve sustainability there must be efficiency in their use, while at the same time effecting a strategic and measured switch to dependence on renewable energy sources.

Accordingly, energy efficiency and a transition to renewable energy should be the thrust of our onshore energy policy.

•

Energy Conservation and Efficiency

•

Relationships with existing Oil Companies and Dealers, including the issues relating to pricing, supply and storage

Ladies and Gentlemen, Energy is a crosscutting issue that affects all sectors of the economy, including tourism, manufacturing, agriculture and transport.

•

Relationship with Grenlec, the sole supplier of electricity in our country

Climate change, which is a direct result of how we use energy, is perhaps the greatest public health threat facing mankind.

•

The development of Renewable/ alternative sources of energy, including solar, wind, geothermal natural gas and bio fuels; and

•

The development of the appropriate legal and institutional framework within which our energy policy and strategy is to be given life.

The national energy policy needs to reflect these linkages and to find and exploit the synergies. For example, conversion of waste to energy via pyrolysis of municipal solid waste and by anaerobic digestion of animal slurries will generate revenues, save landfill space, and reduce the release of pollutants including greenhouse gas emissions, which then gives us the moral authority to lobby on the international stage for the major cuts in global emissions necessary for the survival of small island states.

Needless to say, we do not and cannot pretend to have all the answers to these complex issues

I believe there are several other examples of “Win – Win” project activities that we could commence almost immediately.

At the same time please allow me to take this opportunity to present to you a few of my thoughts on how I believe this transformation can be achieved and the issues upon which I hope this workshop will focus.

Energy conservation is one of the “low hanging fruits”. In my 2009 Budget, I announced several incentives to promote energy efficiency, (for example the intention to reduce duties on compact fluorescent bulbs) and create economic incentives to promote renewable energy technologies (for example, solar dryers and bio-digesters for the agricultural sector).

As a priority, we need to aggressively explore and exploit our potential offshore hydrocarbon resources in an environmentally responsible manner and to the maximum benefit of our people.

Preliminary seismic data have indicated that the oil and natural gas-rich geological formations to the north of Venezuela and

I hope that one of the early results of the energy policy will be an Energy Efficiency Bill which will seek to regulate, amongst other things: Continues on pg 5

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Statement by Minister Burke continued from pg. 4

·

Energy efficiency in the design of buildings -both commercial and domestic;

·

Standards for appliances and mandatory labelling,

·

Efficient lighting with the phasing out of incandescent bulbs; and

·

Fuel efficiency standards for vehicles.

In the transport sector, we should be promoting the use of diesel and hybrid vehicles I urge the participants of this consultation to also consider the introduction of biofuels. I recognise that the production of biofuels may not be viable with our limited land mass. However, we should remain cognisant of advances in technology such as the use of algae to produce biodiesels, gas to liquid technologies and potential collaboration with countries in our region such as Brazil that have been using ethanol in flexi vehicles for years.

Let me turn to the electricity sector.

GRENLEC currently enjoys a monopoly in electricity generation, transmission, distribution and supply. Under the Electricity Supply Ordnance of 1960, this monopoly was granted for a period of 80 years, effective January 1st 1961.

Should this monopoly be continued or should an enabling environment be created for Independent Power Producers?

These are issues that must be resolved as we go forward.

Undoubtedly, the energy sector is vital to our national economy and national security. As such, it would be the responsibility of Government to ensure that we provision for an appropriate energy mix.

It is to be noted that GRENLEC is about to commence an Alternative Fuels Study. I wish to urge the company to consider all feasible alternatives and to be aggressive in its renewable energy program.

From a regulatory standpoint, the Public Utilities Commission needs to be revamped. The World Bank project to establish an Eastern Caribbean Energy Regulatory Authority or ECERA, along the same lines that ECTEL regulates the telecommunication industry in the OECS is noted and welcomed in principle as it may lead to more effective and efficient regulation.

In developing our policy we cannot ignore regional energy initiatives. We must address the question: To what extent, should our national energy policy be driven by national needs and priorities (bottom – up approach) or be guided by and be compatible with regional energy policy and initiatives (top down approach)?

It is to be noted that CARICOM has published a draft regional energy policy and we are pleased to have the Energy Progam Manager of the Secretariat here at this Consultation.

Ladies and Gentlemen, Grenada is a signatory to the PetroCaribe agreement, which is part of a wider initiative known as the Bolivarian Initiative for the Americas or ALBA.

The collective debt of the signatories to the PetroCaribe currently stands at around US$3 billion. President Hugo Chavez of Venezuela has recently signalled a desire to renegotiate the terms of the agreement; apparently wishing to move the initial required payment from 60 to 80%.

The Government of Grenada remains grateful to the Government of Venezuela for the concessionary terms of the agreement. However, in the medium to long term, continued dependence on PetroCaribe may delay the difficult decisions and actions required to transition this economy to one reliant primarily upon indigenous and sustainable sources of energy.

The transition to a low carbon, green economy will require the transfer of technology and funding. This is a critical area upon which I hope this Workshop will spend some time.

An energy policy can only be implemented if there is adequate funding and institutional capacity to effect the change. Capacity needs to be increased both within the government, by providing further training opportunities for the officers in the Energy and Sustainable Development Division and in the private sector by the creation of energy service companies (ESCOs).

There are a number of funding mechanisms like the Global Environment Facility and the Clean Development Mechanism, which we must become more adept at tapping into. As far as is reasonably practicable, the energy policy should strive to be self-financing, that is - the measures introduced should not result in an increased burden on the taxpayers.

In making this charge, I recognize that we are asking a lot of you at this consultation. But we have some of the best minds here from the public and private sector.

This is an opportunity for you, the invited participants, to state your issues of concern and to make your recommendations.

Participation of all stakeholders in decision making at all levels is one of the principle tenets of sustainable development.

The Government of Grenada wishes to use an inclusive and transparent approach during the formulation of this policy, which will hopefully create a wide sense of ownership and will benefit not only from the knowledge and experience of the experts but the common sense and pragmatism of those directly impacted.

To ensure that this policy does not gather dust on someone's shelf, I would like to see a National Energy Commission constituted, with both public and private sector involvement, with the mandate to monitor the implementation of the Energy Policy and to formally review its targets and indicators every 5 years.

I wish you a productive workshop and I look forward to seeing your recommendations incorporated into a national sustainable energy policy, which will guide and drive this nation's development for the next twenty years.

I thank you.

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INTERNATIONAL DAY FOR THE PRESERVATION OF THE OZONE LAYER, SEPTEMBER 16, 2009 2006 our importation has been zero, indicating that we are well ahead of the Protocol's obligation.

While the results are encouraging, there are still many challenges to be faced in protecting and preserving the fragile Ozone Layer. Among the remaining future challenges that Grenada would face are: Securing the necessary funding required to eliminate the final amounts of ozone depleting substances beyond the year 2010.

Hon. Michael Church MINISTER'S ADDRESS Following the discovery of the Antarctic ozone hole in late 1985, governments recognized the need for stronger measures to reduce the production and consumption of a number of Ozone Depleting Substances. The Montreal Protocol on Substances that Deplete the Ozone Layer was therefore adopted on September 16th, 1987.

September 16th, has therefore being declared by the United Nations General Assembly as International Day for the Preservation of the Ozone Layer and is being celebrated under the theme “Universal Participation: Ozone Protection Unifies the World” .

This year 2009, commemorates the 22nd anniversary of the Montreal Protocol and there are reasons, more than one, for national and global celebrations. The world has realized that for the last twenty two (22) years, the Protocol has made significant and positive contributions, not only to the protection of the Ozone Layer, but also in safeguarding the climate system.

The results of the effort of the Parties in controlling the use of these substances have been nothing less than impressive.

Developing countries, despite their many challenges, have achieved a reduction of over 98% of CFC's, with most of the Protocol's phase-out targets being achieved significantly ahead of the required reduction schedule. In the case of Grenada, our target was to completely phase out the importation of CFC's by the year 2010. However, since

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Maintaining a close watch to ensure that new technologies emerge that would not pose new threats to the Ozone Layer.

Provision of training and institutional strengthening for the adaptation of alternative ozone friendly technologies.

Monitoring and controlling imports to ensure that illegal trade in these substances do not occur as the final phase-out approaches.

And the phasing out of hydrofluorocarbons (HCFC's) which were a transitional replacement for CFC's but also contributes to global warming.

While many challenges remain, it is hoped that the continuing efforts to protect the Ozone Layer will move forward in the spirit of dedication, co-operation and innovation that characterized the initial efforts and that the Protocol will go on to achieve its goal of protecting the Ozone Layer for this and future generations.

The Government of Grenada, through the National Ozone Unit, has played a significant role in Grenada's effort to protect the Ozone Layer. Recognition must also be given to a number of stakeholder interest organizations that have made significant contributions to Grenada's effort to phase out the use of Ozone Depleting substances. These include: the Customs Department and Department of Trade and Statistics, importers of refrigerants and refrigeration equipment and refrigeration and air-conditioning technicians.

Since becoming a Party to the Protocol in 1993, Grenada has implemented numerous measures in line with the global community to phase out the use of Ozone Depleting Substances.

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Among the many successful measures undertaken are: The training of local air-condition and refrigeration technicians in Good Refrigeration Practices The training of customs officers and provision of equipment to monitor and control trade in Ozone Depleting Substances The establishment of a licensing system to restrict the importation of Ozone Depleting Substances.

The provision of alternative technology options to the air-condition and refrigeration industry The provision of equipment to TAMCC to train students in Good Refrigeration Practice The establishment of thirteen refrigerant Recovery and Recycling Centres nation-wide The establishment of an Association of Refrigeration and Air-condition technicians Public awareness and education initiatives and activities These efforts and the efforts of the other Parties have been the main indicators to ozone layer recovery and the world's leading atmospheric scientists have verified that atmospheric levels of Ozone Depleting Substances are reducing.

The prediction by these scientists is that the Ozone Layer should be healed or returns to its pre-1980 levels by 2050 – 2075.

While the Montreal Protocol has made gigantic strides in the global effort to protect the ozone layer, the task is far from complete and we must not become complacent. The Montreal Protocol and its mission to protect the ozone layer must still, however, be viewed as a success in the making, rather than a completed endeavor. So while we may be gratified with the progress that has been made, we must not be satisfied until the preservation of the Ozone layer is assured.

I take this opportunity to extend best wishes to all stakeholders in the process of Ozone Layer protection as we celebrate 22 years of success of the Montreal Protocol on Substances that Deplete the Ozone Layer.

Thank you.

Statement by an IMF Staff Mission to Grenada

Hon. V Nazim Burke (c) Mr. Timothy Antoine (l) & Mr. Phillip Young (IMF Team leader) (r)

Mr. Philip Young, head of an International Monetary Fund (IMF) staff team visiting Grenada, issued the following statement in St. George's on September 25, 2009: “An IMF staff team visited Grenada during September 21-25 to conduct discussions on the 2009 Article IV Consultation and the fourth review of the government's home-grown economic program that is supported by the IMF's Poverty Reduction and Growth Facility (PRGF).

The team held productive discussions with Finance Minister Nazim Burke, Permanent Secretary Timothy Antoine, other senior government officials, representatives of the Official Opposition, and representatives of the business and financial community, and trade unions. Staff from the Eastern Caribbean Central Bank (ECCB) participated.

Discussions focused on measures to cope with the global crisis, medium-term fiscal policies and debt sustainability, financial system vulnerabilities, and the outlook for growth and foreign direct investment (FDI).

“Grenada, like the rest of the ECCU and the Caribbean, has been hit hard by the global economic downturn—a

negative shock more devastating than the recent hurricanes in terms of employment and growth. Economic activity is slowing faster than expected just a few months ago, reflecting the severe drag of the global crisis on tourism receipts, FDI, and remittances. Almost all FDI-financed tourism projects remain on hold. Real GDP is expected to decline by over 6 percent in 2009. The decline in growth is expected to be less severe in 2010, but still negative or close to zero. Consumer prices are expected to decline slightly during 2009, reflecting falling world food and fuel prices.

Unemployment is estimated to be as much as 30 percent.

Some 38 percent of the population is below the poverty line.

“The authorities are to be commended for their strong economic and financial management of the Grenadian economy during these turbulent times. Policies have put particular emphasis on protecting employment opportunities and mitigating the impact of the shock on the most vulnerable members of society, while still aiming to keep the economy on a path toward debt sustainability.

“The authorities have made significant progress in implementing their economic program. Based on the information received to date, almost all quantitative targets Continues on pg 8

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IMF Statement continued from pg. 7

for end-June 2009 appear to have been met. As the economy has slowed, a substantial revenue shortfall has led to underexecution of the capital spending program.

The government has sought to address the tight financing situation through a syndicated loan from

spending on goods and services, improved targeting of transfers, and prioritization of capital spending.

“The banking sector has remained resilient, despite the drop in activity, but the collapse of the Trinidad and Tobago-

IMF Team

commercial banks and requests for budgetary support from the World Bank, the Caribbean Development Bank, and the European Union.

“Structural reforms are also proceeding, in some cases with modest delays. Preparations to introduce a VAT by February 2010—the centerpiece of the structural reform program—are on track. The government expects in the near future to complete the Country Poverty Assessment (CPA), to begin implementing a customs Fraud Control Plan, to submit an Excise Bill to Parliament, and to adopt transitional procedures for bonded warehouses. The Government of Grenada has enacted the law creating a new Public Procurement Authority (PPA) and appointed its head, although the PPA is not yet fully operational.

The Article IV Consultation discussions focused on three areas: fiscal policies and debt sustainability, financial system vulnerabilities, and the medium-term outlook for growth and FDI. “Restoring fiscal and debt sustainability will hinge upon a balanced mix of revenue and expenditure measures in the medium term. The introduction of a VAT and a market-based property tax would need to be complemented by wage restraint, greater efficiency of

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based CL Financial Group has increased financial uncertainty. The staff team supports the regional approach to this problem, and in particular the appointment of a judicial manager for the British American Insurance Company.

These developments have underscored the need to further strengthen nonbank financial sector supervision. The IMF team recognizes the efforts of the Grenada Authority for the Regulation of Financial Institutions (GARFIN) to improve the supervision of the non-bank financial sector and supports the authorities' efforts to build GARFIN's capacity.

“The outlook for the next several quarters has deteriorated given the difficult external environment. Tourism and related FDI, which were expected to be the principal drivers of economic growth, are not likely to recover to pre-crisis levels in the near term. The staff team encouraged the government to push ahead with structural reforms to improve the business environment and to boost the diversity of exports.

“The staff team thanks the Grenadian government officials for their close cooperation and looks forward to a continued constructive dialogue on the economic challenges facing Grenada. Upon the team's return to Washington, it will prepare the necessary documentation for presentation to the IMF's Executive Board to consider Grenada's request to complete the fourth review and the 2009 Article IV Consultation.”

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VAT Moving Forward Continued from pg 1 -

Enactment of the VAT Law Recruitment of staff for the VAT Office Opening the VAT Office; and very importantly Launching a broad-based public education campaign under the auspices of the Joint Education Committee

The registration process is underway. The Unit expects to have most persons registered by the end of November 2009.

It must be pointed out that when VAT commences, Grenada will join more than 130 countries that have already implemented VAT including many Caribbean countries. Once fully implemented, VAT will account for at least 50% of all Government revenue making it the most important tax in Grenada.

It is important to clear up some misinformation about VAT. First, VAT is not an additional tax, it is a replacement tax.

When VAT commences, the following taxes will be removed: General Consumption Tax, Ticket Tax and Motor Vehicle Purchase Tax. Second, the average rate of tax on goods will fall from 25% to 15%.

Third, VAT minimizes the imposition of taxes on taxes reducing the cascading effect that some other taxes present.

What are the benefits of VAT? • It is a fair tax – everyone pays.

• It is broad based tax - it covers goods and services.

• It provides opportunity to pay less tax by managing your consumption pattern.

• It enhances Government's ability to provide improved public services such as education health, and infrastructure.

• It reduces the number of taxes that consumers are required to pay.

It is also important to establish the following: 1. THERE WILL BE A VAT RATE OF ZERO ON list of medicines for chronic diseases as determined by the Ministry of Health.

2. THERE WILL BE NO VAT ON WATER FOR DOMESTIC CONSUMPTION. This is important clarification since the initial position was an exemption on the first 2900 gallons of water for domestic use.

Having consulted further on this matter, our Government has decided to provide a zero rate on water. The law will reflect this change in due course.

WHAT WE ARE DOING PUBLIC EDUCATION We are intensifying our public education campaign with visits to businesses and communities. Our Radio Drama series

began in September. We have already started to receive positive feedback on this series.

ESTABLISHMENT OF TRANSITIONAL BONDED WAREHOUSES In an effort to minimize the occurrence of double taxation on prices during the transition from the General Consumption Tax (GCT) to the Value Added Tax (VAT), and unnecessary price increases, the Customs & Excise Division is offering “Transitional Bonded Warehouse” facilities to importers. This means, Customs will suspend the payment of duties and taxes until a request is made for the release of the goods by importers who register for these facilities.

Special Features: •

No annual License Fees

•

No securities in the form of Bank Bonds

•

Adequate insurance must be in place to secure against loss

•

Premises must be a secured area approved by the Comptroller of Customs

•

Warehouses will be double-locked

•

Importers may group themselves and share a facility with the approval of the Comptroller of Customs

Interested persons should contact the Customs and Excise Division. This special offer will last run from for four (4) months, from November 01, 2009 to March 01, 2010.

This measure is intended to avoid pressure on the business community to pay taxes twice for the same goods and to minimize the possibility for price increases when VAT is implemented. Government is taking every precaution to avoid unwarranted price increases with the introduction of VAT. REDUCTION OF DUTIES ON POINT OF SALE SYSTEMS It is envisaged that most businesses will need to upgrade their point of sale systems to effectively calculate and account for all VAT paid and all VAT received. This is extremely important because since VAT is a consumption tax, Government has to rely on businesses to collect this tax on its behalf. As a consequence, Government will cut by 50% duties and taxes on new point of sales systems for persons who are registered for VAT. To be eligible, persons must be registered for VAT. Once persons/businesses are registered, Customs will be notified and they will receive the concession when the point of sale system is imported/purchased. For more information, please contact the VAT office. This offer will run until the end of December 2009.

VAT will be implemented in Grenada in February 2009.

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Conserving Energy - Vehicles Carpool or take public transportation. Try to have the right tyre pressure: if the pressure is down by 7 psi, you need 5% more petrol & you also give off more pollution. Driving with the air conditioner turned on increases petrol consumption by 30%; driving with windows open only increases consumption by 5%.

4th or 5th gear is the most economical in terms of fuel consumption. Respect the speed limit: you will save petrol, produce less exhaust fumes & of course drive more safely!

Conserving Energy – Cooking • Keep pots covered! Uncovered pots waste the heat that cooks the food.

• A properly covered pot keeps in residual heat, so you can turn off the flame and leave the residual heat to finish the cooking.

• Boil just enough water for your needs, or store hot water in a thermos.

Ozone Fact versus Fiction

What is Energy Conservation?

Energy conservation is the practice of decreasing the quantity of energy used by reduced consumption of energy services and efficient energy use. Energy conservation may result in increased personal savings, environmental value, national benefits, and human comfort.

Importance of Energy Conservation Energy conservation is important because of the limited amount of nonrenewable energy sources on earth e.g. oil & natural gas. It is important to conserve our current supply or to use renewable (green) sources so that our non-renewable resources will be available for future generations. Energy conservation is also important because consumption of nonrenewable sources impacts the environment. Specifically, our use of fossil fuels (fuel such as coal & oil) contributes to air and water pollution. For example, carbon dioxide is produced when oil, coal, & natural gas combust in power stations, heating systems, & car engines

• Try some one-pot meal ideas; they use one burner to do the job of two or three burners.

• Pressure cookers & double boilers are money savers, they also save time and energy.

• Don't turn up the flame too high! Food does not cook quicker with a higher frame.

• The pilot burns one-third (%) of the gas! Disconnect it & use matches instead.

• Match the pot size to the burner size!

• Keep your stovetop clean!

• Avoid using the oven for a single dish but at the same time, don't overcrowd it. Use it to cook as many dishes in a meal as possible.

• Use glass or ceramic baking dishes. They transfer heat more efficiently & allow you to set the temperature about 150°C (302°F) lower.

• Reduce your Cooking Time ......before you start, by defrosting frozen foods in the refrigerator before cooking. With conventional ovens, keep preheat time to a minimum; ...while you cook, by keeping oven racks clear. Don't lay foil on the racks and, if possible, alternate multiple pans to improve air flow.

Avoid peeking into the oven as you cook. When using an oven, turn off the heat just before the cooking is finished to prevent overcooking.; ..next time, by cooking double portions so all you have to do is reheat prepared food.

• Buy an energy efficient microwave: power output 600-700 W. • Microwaves use a lot of energy when operating so use them properly and sparingly to warm up meals.

It is not advisable to thaw frozen food in the microwave.

Source: Energy Unit Ministry of Finance

More tips in next edition

10 Finance INSIDE

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

th

48 Meeting of the Executive Board of the Clean Development Mechanism & Regional Workshop on Clean Development Mechanism The Government of Grenada with the support of the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) and the St. George's University (SGU), is hosted the 48th Meeting of the Executive Board of the Clean Development Mechanism at the St. George's University, Grenada, from July 13 – 21, 2009.

Hon. V. Nazim Burke at Workshop

•

A panel discussion with representatives of the Project Developer's Forum (PDF) on project conceptualisation and securing financing, the potential for CDM in the Caribbean, and what needs to be done to stimulate CDM project activity in the Caribbean from the PDF perspective;

•

An interactive panel discussion between the UNFCCC Secretariat and DNA's on the functions of the DNA before and after issuing the Letter of Approval (LoA), what DNAs can do to stimulate CDM project activity in the region, what the Secretariat and EB can do to support the DNAs in the region, and examples of South-South Cooperation – Presentation from the DNA's of Brazil and Cuba; and

•

Discussions/ Case Studies on the regional experience of the CDM.

The Board met in a retreat over the weekend of July 11 and 12, 2009. The closed session of the Executive Board meeting ran from from July 13t – 14, 2009.

On Wednesday, July 15, 2009, Prime Minister Hon. Tillman Thomas addressed the Executive Board of the CDM at the start of the Open session of the meeting, which ran from July 15 – 17, 2009.

Workshop Participants

Kyoto Protocol and CMP decisions, current global status of the CDM, project distribution by region, by sector and use of approved methodologies, and challenges faced by the EB and the Secretariat;

Following on the 'heels' of this meeting, the same grouping hosted the regional workshop on the Clean Development Mechanism (CDM) from July 20 – 21, 2009 at the same venue. The objective of the workshop was to raise awareness of the CDM in the region by bringing together the major stakeholders, including the Project Developers (PDs), the Designated Operational Entities (DOEs), the Designated National Authorities (DNAs), and representatives of the Executive Board (EB) and the UNFCCC Secretariat in an interactive setting.

The agenda included: •

A presentation from the UNFCCC Secretariat on the objectives under the

The CDM is one of the financial mechanisms established under the Kyoto Protocol (1997) and has the dual objectives of facilitating developed countries in meeting their emission reduction targets whilst promoting sustainable development in developing countries. To date, approximately 1,600 CDM projects have been registered globally. Unfortunately, the majority of these projects are in China, India and Brazil.

Only one CDM project is currently registered in the Caribbean.- a wind power project in Jamaica.

Workshop Participants

SOMETHING TO THINK ABOUT When you step onto an elevator,you expect it to safely carry you to your destination. You don'tknow the exact mechanism that moves the car. You don't check to be sure it's been inspected recently or if the mechanics who last repaired it had two months or 20 years ofexperience. You expect that there is a system in place to ensurecertain standards of safety.

Well that's exactly the case when persons go to an office to get attendance for one thing or the other.

We have to be/do our best - Be a PROFESSIONAL at all times “... the engine room of the Public Service...”

Finance 11 INSIDE

DUTY-FREE BARRELS Continued from pg 1 Given Government's commitment to do all it can to ease the burden on all households, especially the poor and vulnerable, and notwithstanding the likely impact of such an initiative on its already weak revenue position, the Government is of the view that such a programme is still relevant today as it was in 2008.

Accordingly, I am please to announce the “Duty-Free Barrel Initiative” for a second year.

The 2009 roll-out of the Programme will be informed by the following guidelines.

1. Household Limit: Each household in Grenada will be entitled to a maximum of two (2) duty-free barrels during the implementation period.

Boxes, crates and cartons of equivalent size to a regular barrel will also be eligible.

2. Definition of Household: For this initiative, a household would be a family (nuclear or extended) living together. At the time of application, the person clearing the barrel will be required to complete a form giving information about name, number of persons in his or her household and other relevant information. A piece of photo-identification will also be required.

Furthermore, persons will have to sign a declaration that the information is

correct. Persons who give false information will be subject to fine and prosecution under the Customs Act. 3. Composition of the Barrels: It is customary for Grenadians to import what Customs calls “foodstuff barrels”.

As the name suggest, these barrels primarily contain foodstuff. However, it is not unusual for them to have articles of clothing, toiletries and toys.

The Customs Department will use the same rule to process barrels under this initiative.

The exemption will not apply to appliances and electronics. If these are found in the barrels, the regular duties and taxes will be assessed.

Customs reserves the right to examine each barrel and determine if it for household or commercial use. For example, a barrel that has more clothes than food will be assessed as a clothing barrel or even a barrel for commercial purposes depending on its composition.

4. Exemption: Government will exempt all customs duties and taxes, customs service charge and stamp duty on eligible barrels. In short, all government taxes and charges will be removed.

However, Recipients of barrels will be required to pay charges assessed by

private warehouses and the Grenada Ports Authority.

5. Revenue Loss: The revenue forgone by Government will depend on the number of households which take advantage of this special offer. Based on the 2008 results, the Government stands to forego in excess of EC$1.0 million.

6. Concerns from the Public: This Government is committed to a process of ongoing consultation with the People.

For the 2009 roll out, Government invites the public to provide feedback/ suggestions for improvement of the process over the next 10 days ending September 27, 2009.

In this regard, we seek the support of the media to publish these guidelines.

Feedback from the public can be sent to e m a i l a d d r e s s : financegrenada@gmail.com or at finance@gov.gd. Persons may also call (473)-435-0057 or send a note addressed to the Corporate Communications Officer, Ministry of Finance.

7. Implementation Period: The programme will commence on October 01, 2009 and end on December 31, 2009. This means foodstuff barrels arriving in Grenada on or after October 01, 2009 and on or before December 31, 2009 will be eligible up to a maximum of two per household.

FINANCIALTip

Investing in shares

One way of investing your money is by buying company shares. Your return is a share in the profits. It is one of the most rewarding but also one of the most challenging and risky types of investing. Some safety checks and ground rules, if applied before you invest, can reduce your risks.

12 Finance INSIDE

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

Facts Fun &

Did U Know?

Did You Know?

That an EPA Unit has been established? The general public and stakeholders can contact the unit for further information on 440-2101 or 440-2731.

That the National Ozone Unit now has a Website? The address is www.nougrenada.org. .

That there are 53 members in the Commonwealth but 71 teams participate in the Commonwealth Games. The four constituent countries of the United Kingdom send separate teams, and individual teams are also sent from the British Crown dependencies and many of the British overseas territories.

Have a laugh...

Unpaid Bill

A customer sent an order to a distributor for a large amount of goods totaling a great deal of money.

The distributor noticed that the previous bill hadn't been paid. The collections manager left a voice-mail for them saying, "We can't ship your new order until you pay for the last one."

The next day the collections manager received a collect phone call, "Please cancel the order. We can't wait that long."

Murphy applied for an engineering position Murphy applied for an engineering position at an Irish firm based in Dublin. An American applied for the same job and both applicants having the same qualifications were asked to take a test by the Department manager. Upon completion of the test both men only missed one of the questions. The manager went to Murphy and said.

Manager: "Thank you for your interest, but we've decided to give the American the job" Murphy: "And why would you be doing that? We both got nine questions correct.

This being Ireland and me being Irish I should get the job!"

Manager: "We have made our decisions not on the correct answers, but on the question you missed."

Quotes

Murphy: "And just how would one incorrect answer be better than the other?"

“The future depends on what we do in the present.” Anonymous

Manager: "Simple, the American put down on question #5 "I don't know" you put down neither do I.

Fun Facts

“Happy are those who dream dreams and are ready to pay the price to make them come true.” - Anonymous “Nothing is predestined: The obstacles of your past can become the gateways that lead to new beginnings.” Anonymous

Riddle

How the Days of the Week Got Their Names The days of the week were named after Norse gods and giant objects in the sky.

These names come to us originally from the Greeks and Romans, who named the days of the week after their gods.

The Anglo-Saxons, who invaded Britain hundreds of years ago, adopted this idea but substituted their own gods. The English language has inherited and changed those names a bit, but the ones we use today resemble those names.

Here's how:

RIDDLES A chest without hinges key or lid but inside golden treasures are hid. What is the chest and what is the treasure?

·

Sunday: Sun's Day. The Sun gave people light and warmth every day. They decided to name the first (or last) day of the week after the Sun.

·

Monday: Moon's Day. The Moon was thought to be very important in the lives of people and their crops.

·

Tuesday: Tiw's Day. Tiw, or Tyr, was a Norse god known for his sense of justice.

·

Wednesday: Woden's Day. Woden, or Odin, was a Norse god who was one of the most powerful of them all.

·

Thursday: Thor's Day. Thor was a Norse god who wielded a giant hammer.

THE ANSWER: An eggshell with an egg inside What is: The beginning of eternity The end of time and space The beginning of every end And the end of every place THE ANSWER: the letter "e"

·

Friday: Frigg's Day. Frigg was a Norse god equal in power to Odin.

·

Saturday: Seater's Day or Saturn's Day. Saturn was a Roman God.

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

Finance 13 INSIDE

VAT Con.

Minister's Visit to Project Co-ordinating Unit

GRENADA HOSTS AOSIS CLIMATE CHANGE NEGOTIATORS Grenada hosted a meeting of climate change negotiators from the Alliance of Small Island States (AOSIS) at the Grenada Trade Centre run from Wednesday July 22 to Saturday July 25. Approximately eighty (80) participants from small islands and low lying coastal states in the Atlantic, Pacific and Indian Oceans and connected seas attended the meeting.

vulnerability to the adverse effects of global climate change. It functions primarily as an ad hoc lobby and negotiating voice for Small Island developing States (SIDS) within the United Nations system.

AOSIS has a membership of 43 States and observers, drawn from all oceans and regions of the world: Africa, Caribbean, Indian Ocean, Mediterranean, Pacific and South China Sea. Thirty-seven are members of the United Nations, close to 28 percent of developing countries, and 20 percent of the UN's total membership. Together, SIDS communities constitute some five percent of the global population.

Member States of AOSIS work together primarily through their New York diplomatic Missions to the United Nations. The Alliance does not have a formal charter. There is no regular budget, nor a secretariat. With the Permanent Representative of Grenada as its current chairman, AOSIS operates, as it did under previous chairmanships, out of the chairman's Mission to the United Nations. Grenada has held office since April 2007.

Dr. Linus Thomas, Ms. Jocelyn Paul & Mr. Leon Charles Climate Change Negotiators for Grenada

The meeting was a preparatory meeting for the negotiators who are engaged in the ongoing international climate change negotiating process. It was aimed at finalising AOSIS negotiating positions and strategies ahead of the next round of international negotiations scheduled to take place in Bonn, Germany from August 10 – 14, 2009.

AOSIS is a coalition of Small Island and low-lying coastal countries that share similar development challenges and concerns about the environment, especially their

Grenada's Prime Minister, the Hon. Tillman Thomas, delivered the feature address at the official opening of the meeting in his capacity as Chairman of the Alliance.

Prime Minister Thomas is rapidly emerging as one of the main voices speaking on climate change on behalf of small island states.

This speech followed high level presentations on climate change at the recently held Summit of the Americas in Trinidad and Tobago and at the Foreign Affairs University in China. The Prime Minister also addressed the World Climate Conference in Geneva in early September and the Special High Level Event on Climate Change organized by the United Nations Secretary General that took place at the United Nations on September 22nd 2009.

Ministers and Participants at Negotiation Meeting

16 Finance INSIDE

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

NEWS RELEASE

STATEMENT ON THE STATUS OF THE SOCIAL PROTOCOL TALKS Tuesday September 1st, 2009, St. George's: The Government of Grenada has taken note of recent statements in the media by Representatives of Labor concerning the status of talks between Government and Social Partners aimed at creating a protocol on Employment, Incomes, Prices, Poverty Eradication and Safety Nets and Productivity. Government notes the explanation offered for the stalled talks, that is, the Grenada Trades Union Council (GTUC) awaits a response from the Government with respect to proposals submitted by the GTUC. In the interest of ensuring that proper and accurate information is transmitted regarding this very important national exercise the Government considers it important to state the following: In response to a call made on the floor of the Senate by the representatives of the Private Sector and Labor on the occasion of Budget Debate 2008, the Multi-partite Committee commenced a series of discussions in early 2009 aimed at working out the modalities for dialogue leading to the creation of a Social Pact. This process commenced with a National Consultation on February 5th on the Impact of the Global Economic Crisis on Grenada, at which presentations were made

by Government and all the social partners.

This initiative was given greater impetus by the appeal made by the Prime Minister in his National Address in April 2009, in which he called for national unity and shared sacrifice and made a plea for all Social Partners to intensify dialogue on the Social Pact so as to conclude their work by May 01, 2009.

A sub-committee of the Multi-Partite committee consisting of representatives of Labor, the Private Sector, the NGO Community and the Government, worked on this protocol from

March to June 2009, scheduling 12 meetings, 3 of which were postponed at the request of the Labor representatives. These discussions were chaired by Finance Minister, Honourable Nazim Burke.

A Draft Protocol was prepared after several revisions. At the final meeting of the Committee on June 23rd 2009, the Labor Representatives did not attend. The Committee decided that before circulating the Draft Protocol for public scrutiny Government should meet Labor to ensure it was in full agreement with the contents of the document. Government made a request for this meeting. The GTUC responded by saying that it could not accommodate Government's request at that time.

The Government of Grenada has, in recent days, made a subsequent request for a meeting with the GTUC. The Government of Grenada wishes to register its willingness to continue dialogue with the GTUC and other Social Partners on this critical matter, as well as Government's commitment to see it through to its final conclusion, in the form of an endorsement

by Parliament, as well as a public signing.

Government wishes to emphasize that considerable progress has already been made in the drafting of the Social Pact, and indeed many of the proposals made by Labor have already been incorporated into the draft.

Government calls on all Social Partners to heed the call by the Prime Minister to engage with great urgency in the spirit of shared sacrifice for the benefit of all.

T

he Minister of Finance, Planning, Economy, Energy & Cooperatives, 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. “... the engine room of the Public Service...”

Finance 17 INSIDE

FFinance inance INSIDE

Staff Development and Training

Hon. Minister Nazim Burke and Mr. Timothy Antoine participated in the CARIFORUM Dialogue on Regional Cooperation in Antigua from July 16 -18, 2009. The

text with the aim of having an agreed text(s) for approval in Copenhagen in December 2009 that will enable the full, effective and sustained implementation of the Convention and its Koyoto Protocol cooperative action now, up to and beyond 2012.

Mr. Timothy Antoine & Hon. V. Nazim Burke

meeting was used by CARIFORUM to engage the European Commission in discussions on a proposal from the Commission on regional cooperation and integration.

Items in the agenda included discussions on: the current international developments particularly the financial and economic crisis and its effects; the regional integration process; the regional cooperation process; and aid for trade of European Union member states.

Ambassador Dessima Williams, Mr. Leon Charles and Dr. Spence Thomas attended the United Nations Climate Change Intercessional Informal Consultation and Small Island Development States Preparatory Meeting in Bonn Germany from August 6 – 14, 2009. The ultimate goal of the meeting was to advance the work on the negotiating

Dr. Dessima Williams

18 Finance INSIDE

Dr. Linus Thomas and Mr. Leon Charles

Mr. Timothy Antoine participated in the Commonwealth for Technical Cooperation (CFTC) Primary Contact Points (PCPs) meeting in London from July 22 – 24, 2009.

The meeting was organized by the Commonwealth Secretariat and followed a recent conclusion of an evaluation of the CFTC where it was recommended that there is need for more effective use of the PCP system in member countries. The meeting provided the opportunity for member countries to advise the Secretariat on Government's development priorities which will be used to inform the next Strategic Cycle of the CFTC. Ms. Shanta Cox attended the Expo 2010 Shanghai China CARICOM meeting with National Coordinators and Booth Designers in Barbados on July 10, 2009. At the meeting, countries presented their draft design concept of their booth to the Beijing Space Ideas Company (the design management company for the expo) to discuss and concretize the ideas. Grenada's booth design concept was done by an artist, Mr. Eric. Johnson.

Mr. Halim Brizan and Ms. Tamika George attended the CARICOM Wo rkshop on Social/Gender and Environmental Statistics and Indicators - Assessment of Data in Antigua and Barbuda from July 20 – 24, 2009. The workshop was organized by the CARICOM Secretariat and was funded by the World Bank Trust Fund for Continues on pg 19

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

Continued from pg 18

Statistical Capacity Building (TFSCB) for member countries of the World Bank. The workshop was aimed at enabling the compilation of harmonized and high quality statistics, by countries, in the areas of social gender and environmental statistics including Caribbean Specific Millennium Development Goals (MDGs) that were

Ms. Tamika George

approved at the 17th meeting of the Council for Human and Social Development (COHSOD) in 2008.

Mr. Halim Brizan attended the 34th Meeting of the Standing Committee of Caribbean Statisticians (SCCS), th the 17 meeting of the Regional Census Coordinating Committee (RCCC) and the 2nd Regional Statistics Seminar in St. Lucia from October 26 – 30, 2009. The meetings were planned and organized by the CARICOM Secretariat with support from the European Union under the Caribbean Integration Support Programme (CISP) Agreement, the Inter American Development Bank (IDP), the Canadian International Development Agency (CIDA), the Caribbean Development Bank (CDB), the World Bank, the United Nations System, the organisation Partnership in Statistics for Development in the 21st

Ms. Shanta Cox attended the First Joint meeting of National CSME Focal Points and National Coordinators of the Caricom Trade and Competitiveness Project (CTCP) in Barbados from July 20 – 21, 2009. The CTCP seeks to create an improved harmonized administrative system that will allow single market beneficiaries to access their rights and so promote the use of various CSME arrangements that have been established to create a single unified CARICOM region for future economic and social development of the people.

Hon. Minister Michael Church and Mr. Lennox Andrews attended a High Level Advocacy Forum on Statistics on July 30, 2009 in Port of Spain Trinidad. The theme of the forum was “The Urgency of Statistics and the Global Crisis - enabling the Development of the Caribbean Community”. The forum was organized by CARICOM in collaboration with the organisation st Partnership in Statistics for Development in the 21 Century (PARIS21). It focused on interventions that can be applied to support the development of Statistics in the Caribbean Community.

Mr. Lennox Andrews

Hon. Michael Church

Mr. Curlan Gilchrist attended a regional workshop on National Strategies for the Development of Statistics in Port of Spain Trinidad from July 27 – 29, 2009. The workshop was organized by CARICOM in collaboration with the organisation Partnership in Statistics for st Development in the 21 Century (PARIS21). It served as a

Mr. Halem Brizan

Century (PARIS21) and other development partners. The meetings were generally aimed at harmonization of statistics in the region.

Mr. Curlan Gilchrist

Continues from pg 20

Finance 19 INSIDE

Continued from pg. 19

prelude to the High Level Advocacy Forum of Ministers and other senior officials where countries presented papers on the strategies that they have adopted in the execution of their duties.

Members of staff from all departments participated in the “Don't Trash d Spice” lecture at the Ministry of Finance Conference Room on July 29, 2009. The lecture was organized by the Ministry as part of the Grenada Solid Waste Management anti litter awareness campaign.

Presentations were made to staff on the environmental

2009. The conference explored the common country issues with computer systems with a view to maximizing the benefits of their investments. Topics discussed included: System Interface issues; IT Planning; Ecommerce Use; and Joint Maintenance Sharing by Countries, among others.

Hon. Minister Nazim Burke attended a one-day meeting of the Governors representing the Borrowing Member Countries (BMCs) of the Caribbean Development Bank (CDB in Barbados on September 14, 2009. The meeting was called to discuss the future financial resource requirements of the Bank and related issues in light of estimates of demand for financial assistance by BMCs over the period 2010 to 2019.

The Bank is currently developing a new Strategic Plan to cover the period 2010-2014. The ongoing work includes the incorporation of suggestions made by Directors and Governors at their Annual Meetings held in Turks and Caicos Islands during May 25-18, 2009. During those discussions, Governors were alerted to the significant financial resources required in BMCs to effectively focus on the proposed core areas of CDB support during the new Strategic Plan period. The core areas are socio-economic infrastructure, education and training, agriculture, climate change and disaster risk management, and regional cooperation and integration, as well as assisting countries to meet the more immediate challenge posed by the global financial and economic crisis.

Presenters and Participants at forum

impact of poor waste management practices by Mr. Christopher Joseph of the Environment Protection Unit of the Ministry of the Environment and Mr. Vaughn Forsyth of the Grenada Solid Waste Management.

Mr. Junior Mahon attended the Meeting to Finalise the Proposed Pricing Mechanism for Flour, in Guyana on th September 10 2009. The meeting was convened by CARICOM to discuss and finalise the draft elements of the modalities for determining and implementing changes in the price of flour as it relates to treaty obligations in respect of duty free importation of flour from CARICOM more developed countries and extra- regional sources.

In this regard, the Bank has reviewed the adequacy of its capital for continuing to respond meaningfully to the future needs of its BMCs and to meet its mandate of assisting BMCs to reduce poverty and promote inclusive growth and development. The outcome of this review forms the basis for the current meeting.

The meeting's agenda included: •

A Presentation/Discussion on CDB's Strategic Position in the Regional Aid Architecture by the VicePresident of Finance;

•

A Presentation/Discussion on BMCs Development Challenges and CDB's Strategic Response by the Vice-President of Operations; and

•

Discussions on BMCs' resource requirements and options.

Mr. Junior Mahon

Mrs. Shirlyn De Coteau-Sayers and Mr. Rajkrishna Narine, of the I.T. Unit of the Ministry of Finance, attended a Regional Financial Management Information Systems Conference in Belize, from September 15 – 17,

20 Finance INSIDE

Hon. Minister Nazim Burke and Mr. Mike Sylvester attended Stabilization and Growth Booth Camp and Programme Sign Off Meeting with the Eastern Caribbean

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

Continues on pg 21

Continues from pg 20

Central Bank Monetary Council from September 17 - 18, 2009 at ECCB Headquarters in St. Kitt's.

Based on their response, the Council will make their decisions on the way forward.

At the 65th Meeting of the Monetary Council in July 2009, the Council decided to gather technical personnel from member countries, the Organization of Eastern Caribbean States (OECS) Secretariat, and the ECCB to pull together the work which has been going on in response to the global economic and financial crisis. The basis of the response has been the “Eight Point Stabilization and Growth Programme” which was presented to the public at a video conference by Heads of Government in July, 2009.

Mr. Timothy Antoine participated in the Inaugural Small Countries Financial Management Programme (SCFMP), held in Douglas, Isle of Man and Oxford University, UK, in September 2009.

In this regard, teams of technical persons in each country, the OECS Secretariat and the ECCB started work on the programme at a “boot camp' which ran from September 7 – 15, 2009. The exercise was financed by funds from the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM), the Caribbean Regional Technical Assistance Centre (CARTAC) and the ECCB. Technical assistance was provided by CARTAC, the International Monetary Fund (IMF) and the World Bank.

Grenada's representatives at the 'booth camp' were Ms. Natasha Sylvester, Mr. Kerry Pierre and Mr. Lennox Andrews.

The report coming out of the 'boot camp' was presented, to the Board of Directors of the ECCB, the Financial Secretaries of the region, and the Director General of the OECS who then discussed the report with International Financial Institutions (IFI's), Development Partners, and the Caribbean Development Bank (CDB). The report was then presented to the Monetary Council for discussion.

The Council is now expected to invite the IFI's and the development partners to indicate their contribution to the programme in terms of financial resources, technical assistance, and promotion to the international community.

The programme was established to help the worlds least populated countries develop a cadre of senior officials with the skills to handle key tasks in economic and financial management.

The SCFMP responds specifically to the need for enhanced capacity in government finance management or finance sector supervision.

The training programme was aimed at developing participants' technical knowledge and skills and was taught by lecturers with personal experience in senior advisory and regulatory posts. The programme also

Timothy Antoine (back centre) at workshop

covered wider questions of analysis, crisis management and policy negotiation. It encouraged participants to make the governments in which they serve more effective by thinking afresh – 'outside the box' – about how to tackle problems and negotiate solutions with other stakeholders.

Remember The Hurricane season is here... be prepared...

Have a family disaster plan in place. “... the engine room of the Public Service...”

Finance 21 INSIDE

Continued from pg 19

FFinance inance INSIDE

What’s Been Happening

NEW GOVERNMENT COMPLEX IN THE MAKING Friday July 10, 2009 saw the ground breaking of a new government complex to be constructed at the site of the old CARDATS building in Lowther's Lane, St. George's (near Blue Danube).

The main objective of the course was to improve the management of the public finances which is consistent with Government's commitment to stronger economic management.

The course explored the realm of Government's accounting structure and practices; examined the sources of government's finances and the policies to be followed in the appropriation of these funds; and highlighted the internal controls employed to safeguard Government funds and the regulations to be followed by those in public sector accounting.

The course was facilitated by Ms. Margaret Sivers, Accountant General of Barbados and Mr. Ambrose Louise-Obike, Head of Internal Audit and Verification in the Accountant General's Department of the Ministry of Finance.

Head of Financial Complex Ltd. Ms. Deborah St. Bernard (c) Deputy P.S Mr. Mike Sylvester (r) and Contractor Mr. Terrence Smith (l)

It is expected that the new complex, when completed, will house offices such as the Audit Department, Public Service Commission and the Office of the Ombudsman.

The project is being managed by the Financial Complex Limited.

GOVERNMEN ACCOUNTING COURSE The Government of Grenada, in partnership with the Caribbean Regional Technical Assistance Centre (CARTAC), held a oneweek training course in Government Accounting for thirty (30) Finance Officers and Staff Accountants/Clerks across the Public Service. The course was held at the Flamboyant Hotel in Grand Anse and ran from October 13 – 17, 2009.

22 Finance INSIDE

In speaking at the opening session of the course, Mr. Timothy Antoine, Permanent Secretary of the Ministry of Finance, emphasized the critical role of Finance Officers and the various ministries to protect the public purse. He further said that as a result of the course, he is expecting (i) improved management or stronger accountability in government finances; (ii) a network of Finance Officers who can share information and support each other in this important responsibility; and (iii) an improved quality in the Public Accounts, including faster implementation of recommendations made by the Director of Audit.

CARTAC CONDUCTS REVENUE FORECASTING COURSE The Ministry of Finance, with support from the Caribbean Regional Technical Assistance Centre (CARTAC) held a Refresher Course in Revenue Forecasting in the context of preparing a Medium Term Budget Framework for Grenada, from July 6 - 10, 2009. The course was a follow-up to one done last April.

Host participants

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

Continued on pg23

Continued from pg. 22

The Course, involved: • Preparation of a revenue forecast for 2010; and • Preparation of a revenue projection for 2011 – 2012; On opening the Course, the Permanent Secretary of the Ministry of Finance, Mr. Timothy Antoine, indicated that the course is timely, as Government will soon commence preparation on the 2010 Budget. He also said that the course is consistent with Government's commitment to stronger economic management.

Participants in the course came from the Budget, Statistical, Inland Revenue, Customs, and Technical and Economic Cooperation Divisions of the Ministry of Finance.

DIALOGUE ON REGIONAL COOPERATION AND INTEGRATION The Minister of Finance, Hon. V. Nazim Burke, attended a CARIFORUM/EC Dialogue on Regional Cooperation and Integration in Antigua, from July 17-18, 2009.

The agenda for the forum included: • A presentation by the CARIFORUM Secretariat on priorities identified by the Caribbean region; • Discussions on: • The Regional Integration Roadmap (a set of programmes for the Caribbean which is funded by the European Union); and • The global financial crisis, global climate change alliance, and the sugar and bananas protocol.

While in Antigua, the OECS countries also held a bilateral meeting with the European Commission on its 8-point stabilization and growth programme which was prepared to manage the current crisis.

GRENADA, OVERSCRIBED ON THE REGIONAL GOVERNMENT SECURITIES MARKET The Government of Grenada approached the Regional Government Securities Market on July 17, 2009 for its first Treasury bill issue for the year, a EC$35.0 million 365 day rollover issue.

The results of the treasury bill auction left Grenada's T-bills over subscribed to the tune of EC$9.37 million; total bids of EC$44.37 million; and a final rate of 6% , although the maximum bid price stated in the prospectus was 6.5%.

This issue was indicative of renewed investor confidence in Grenada's paper and reflected the strength and security of the Grenada Government paper in general on the regional government securities market.

The Government of Grenada is expected to have two more issues on the regional market for 2009 - EC$10 million 3 year Treasury note in September (6.75%) and a 365 day Treasury bill EC$15.0 million (6.0 %) in November 2009.

For further information on Grenada's upcoming auctions and to view the prospectus for these issues, visit http://www.ecseonline.com/ or www.gov.gd

MULTI-SECTOR STAKEHOLDER CONSULTATION ON A PROPOSED NATIONAL ENERGY POLICY On Tuesday July 26, 2009, the Ministry of Finance, Planning, Economic Development, Energy and Foreign Trade and the Organization of American States under the Caribbean Sustainable Energy Program (CSEP), hosted a Multi- Sector Stakeholder Consultation on a proposed National Energy Policy for Grenada on at the Flamboyant Hotel in St. George's.

This consultation was held in partnership with the Renewable Energy and Energy Efficiency Partnership (REEEP), the CARICOM Secretariat, and the Caribbean Energy Utility Services Corporation (CARILEC) and with Support from the European Commission.

As you may recall, the Minister of Finance, Hon. Nazim Burke, in his 2009 Budget presentation, announced Government's commitment to develop a sustainable energy policy. Consistent with this commitment, this consultation engaged all stakeholders for their valued input on the proposed National Energy Policy.

The Ministry is now expected to finalise the policy document and present it to the Cabinet for consideration.

It is envisaged that this Policy will act as a catalyst for the sustainable development of the State of Grenada.

LAUNCH OF SMALL BUSINESS DEVELOPMENT FUND The Ministries of Finance and Youth Development launched the Small Business Development Fund on Tuesday July 7th at the Grenada Trade Centre. The launch of the fund brings to life the commitment made by the Minister for Finance in his budget speech on 12th December 2008, in which he stated Government's intention to give special support to young business entrepreneurs under the Young Entrepreneurs Development Fund. This commitment was restated by the Prime Minister when he announced the Economic Stimulus Package on April 1st, 2009. The initiative also forms part of the overall drive to facilitate the growth of the Grenada Private Sector as the engine of growth of the economy. The Government is providing the enabling framework for the private sector to expand at its natural growth points, i.e. the small and micro enterprise. (more details in next edition).

MINISTER BURKE TO ATTEND 65TH MEETING OF MONETARY COUNCIL Minister of Finance, Hon. Nazim Burke, attended the 65th Meeting of Eastern Caribbean Central Bank's Monetary Council which took place on Dominica on Friday July 10th, 2009.

At the Meeting, the Governor presented his report on monetary and credit conditions for discussion by the Council. Coming out of these discussions, the Council provided directives and guidelines to the Bank as mandated in the ECCB Agreement of 1983.

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

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The Meeting also discussed the Financial Sector Stability Issues and the Eastern Caribbean Currency Union's (ECCU) Eight Point Stabilisation and Growth Programme which was established as a collective response to the global economic crisis.

Minister Burke was accompanied by Mr. Timothy Antoine, Permanent Secretary in the Ministry of Finance.

GOVERNMENT HOLDS BUDGET RETREAT The Government of Grenada held a Budget Retreat on Tuesday, September 01, 2009 at the National Stadium.

Grenada signed on to the Economic Partnership Agreement in October 2008.

The general public and stakeholders can contact the unit for further information on 440-2101 or 440-2731.

SOCIAL SAFETY NET CONSULTATION The Ministry of Finance in collaboration with the United Nations Development Fund for Women (UNIFEM), hosted a consultation to discuss the Social Safety Nets in Grenada on Tuesday September 22nd, 2009.

Hon. V. Nazim Burke (c) & UNIFEM Representative Permanent Secretaries & Department Heads

The Budget Retreat which was first introduced in 2008 brought together members of Cabinet, Permanent Secretaries, Heads of Non-Ministerial Departments, Policy Advisors and other government officials.

In June 2009, UNIFEM and the United Nations Children's Fund (UNICEF), in collaboration with the World Bank, undertook a

The objectives of the Retreat were: 1. To appreciate the importance of a strategic budgeting framework 2. To assess the implementation of the 2009 Budget 3. To discuss Government's strategic priorities for the 2010 Budget This event signaled the formal commencement of preparation for the 2010 Budget.

EPA UNIT ESTABLISHED As part of the Economic Partnership Agreement (EPA), an EPA Unit has been established within the Ministry of Finance.

The function of this unit is to ensure the implementation of the Agreement and sensitization of the public on policies and procedures with regards to trade and economic relations between the European Union and CARIFORUM as stated within the EPA agreement.

The Unit currently has a staff of three (3) namely: • The Coordinator of the Unit, Mr. Oliver Joseph Permanent Secretary on assignment to the Ministry of Finance; • The Senior Implementation Officer, Mr. Kahlid Lewis-Smith; and • The Implementation Officer, Mrs. Dawn Walker.

24 Finance INSIDE

Workshop Participants

study to document and assess the reach and impact of existing social assistance programmes in Grenada.

The objective of the consultation was to present the Assessment Report and to engage in a dialogue with governmental agencies and non-governmental partners with the aim of identifying needed adjustments to the existing social safety net framework that would allow for: • Increasing the general level of access to quality social safety net schemes in the region; • Strengthening the efficiency of these systems in targeting vulnerable households (including single headed households), especially in light of the current global economic crisis.

The consultation was held at the Grenada National Stadium and was attended by representatives of related Ministries and Government Departments, as well as members of the NGO Community and other non-government stakeholders.

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Continued from pg. 24

TAX APPEAL COMMISSIONERS HEARS ITS FIRST CASE The newly appointed Commissioners of the Income Tax Appeal Tribunal deliberated on its first case on Tuesday 22nd September 2009, at the Ministry of Finance Conference Room.

The CARICOM Ministerial delegation comprised of Ministers with responsibility for Trade from Antigua and Barbuda, Barbados, Grenada, Jamaica, Suriname and Trinidad and Tobago while Canada was represented by Hon. Stockwell Day, Minister of International Trade Canada.

This was the first hearing in nine (9) years and follows the reconstitution of the Income Tax Appeal Tribunal in March

Grenada's participation at this meeting offered the opportunity for Grenada to influence the agenda and ensure that matters discussed falls within the country's development interest.

Minister Church was accompanied by Ms. Allyson Francis, Trade Counsel at the Ministry of Environment, Foreign Trade and Export Development.

SOCIAL PROTOCOL NEGOTIATIONS CONTINUE The Sub- Committee of the Multipartite Consultative Committee, tasked with the preparation of the Social Protocol, will reconvene on Tuesday September 22nd, 2009.

The Committee, chaired by the Hon. V. Nazim Burke, is working assiduously to complete its work this month, after having had some unfortunate setbacks.

Appeal Commissioners

2009. The Commissioners will meet shortly to hear other outstanding appeals.

The Chairman of the Income Tax Appeal Tribunal is Ms. Deborah St. Bernard.

Members of the Public are hereby reminded that in accordance with Section 89 of the Income Tax Act No. 36 of 1994, the Tribunal has been established to receive objections and appeals from persons who are aggrieved by an assessment made by the Comptroller of Inland Revenue. In this regard, persons are encouraged to lodge their objections and appeals with the Secretary at the following address:

The Committee is focusing on the following: · Protecting jobs and creating short term employment · Controlling the cost of essential items especially food, transportation, fuel and electricity · Controlling the cost of labour to ensure businesses remain going concerns and provide jobs · Protecting homeowners from the risk of foreclosure · Providing safety nets to the most vulnerable and those negatively impacted by the current global economic crisis.

Considerable progress has already been made in the drafting of the Social Pact; and Government is prepared to do all in its power to see it through to its final conclusion, in the form of an endorsement by Parliament, as well as a public signing.

In a related matter, the Minister for Finance, Honourable Nazim Burke and Minister for Labour, Honourable Karl Hood, met with the Executive of the Grenada Trades Union Council (GTUC) on Thursday 3rd September, 2009 at the Conference Room of the Ministry of Finance, to discuss the resumption of talks around the Social Protocol. The GTUC's delegation was led by GTUC's President Mrs. Madonna Harford.

The Secretary Income Tax Appeal Tribunal C/0 Ministry of Finance Financial Complex Carenage, ST. GEORGE'S MINISTER CHURCH ATTENDS CARICOM – CANADA MINISTERIAL MEETING Hon. Minister Michael Church returned to Grenada attended a CARICOM – Canada Ministerial Meeting in Tobago from September 11 – 12, 2009.

This meeting was organized by the Council for Trade and Economic Development (COTED) as part of the preparatory process for the CARICOM – Canada Negotiations on the CARICOM - Canada Trade and Development Agreement.

COTED agreed to have this Ministerial engagement with their counterpart to finalise the scope of negotiations and arrive at a mutual understanding on treatment of development in the negotiations prior to its commencement.

The initial part of the meeting was used to clear up a possible misunderstanding between the two parties regarding the submission of certain documents and the provision of feedback.

A draft Industrial Tripartite Protocol was placed on the table by the GTUC for discussion.

The Government's delegation suggested that the key issues raised within the draft Industrial Protocol could be accommodated within the wider social protocol that had been prepared by the Drafting Committee of the Multipartite Committee earlier this year.

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Finance 25 INSIDE

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The GTUC accepted the invitation to rejoin the social protocol talks. Both parties agreed that the key issues addressed in the draft Industrial Protocol will be placed at the top of the agenda at the resumed talks.

OZONE DAY CELEBRATIONS The National Ozone Unit (NOU) of the Energy Division of the Ministry of Finance celebrated the International Day for the preservation of the Ozone Layer on Wednesday September 16, 2009.

As stated above, the talk resumed on September 22, 2009.

September 16, 2009 has been declared by the United Nations as the International Day for the preservation of the Ozone Layer.

This year marked the 22nd Anniversary of the Montreal Protocol on Substances that Deplete the Ozone Layer.

IMF ARTICLE IV CONSULTATION FOR 2009 An IMF team visited Grenada from September 22 – 25, 2009 to conduct discussions for the 2009 Article IV consultation and the fourth (4th) review of Grenada's Poverty Reduction and Growth Facility (PRGF) programme.

It is customary over the years for the NOU to undertake activities to commemorate this day and this year was no exception.

The Article IV mission is conducted on an annual basis, with all member states, to assess their economic performance for the past year, and is regarded as an “economic health check”.

The team was headed by Mr. Phil Young, Mission Chief.

While in Grenada the team held discussions with various stakeholders in the public and private sectors, including: the Minister of Finance and his team; other Government Ministers and senior public servants; the Leader of Her Majesty's Opposition; representatives from the Grenada Authority for the Regulation of Financial Institutions (GARFIN); the Banker's Association; the Grenada Chamber of Industry of Commerce (GCIC); the Labour Unions; and the like.

The mission concluded Friday September 25th, 2009 with a press conference at the Ministry of Finance's Conference Room. The statement made at the press conference can be found on page 7.

NEW COORDINATOR APPOINTED FOR EDF SUPPORT SERVICES UNIT The Government of Grenada has appointed a new Project Coordination Officer for the European Development Fund (EDF) Support Services in the person of Mrs. Abiola Streete.

Energy Officers and Presenters at Seminar

The activities planned by the NOU to celebrate International Ozone Day 2009 included: (i) A Seminar to launch the Ozone Action Education Pack for Secondary Schools; and (ii) The Launching of the National Ozone Unit Website.

These two activities were held at the Ministry of Finance's Conference Room on Wednesday September 16, 2009.

Mrs. Streete is a graduate of the University of the West Indies – Cave Hill, and the University of Wales – Cardiff. She is a former member of staff at the Eastern Caribbean Central Bank (ECCB) Mrs. Abiola Streete where she was involved in several projects aimed at developing financial markets. More recently, she managed the Trading, Information and Intermediary Services Division at the Eastern Caribbean Securities Exchange (ECSE).

The Ministry of Finance, Planning, Economy, Energy and Cooperatives takes this opportunity to welcome Mrs. Streete on board.

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

Participants at Seminar

So a country like Grenada needs to find activities that offer good incomes and rewarding career paths to its talented and educated people.

Yet in providing infrastructure, and an economic and regulatory framework for a modern economy, a tiny island state – Grenada with just 106,000 people – finds itself struggling with problems of capacity. “In a small country, you do not have enough skilled people. You cannot be too specialist; you have to master a lot of different things.”

Antoine himself exemplifies this: he is also chairman of the regulator of non-bank financial institutions and a member of the board of directors of the Eastern Caribbean Central Bank (regulator of commercial banks).

He sees regional integration as the most effective response to the shortages of capacity in small Caribbean states. The ECCB itself is probably the prime functioning example. Moreover, Antoine says that several of the Bank's board meetings are now held by video-conference, to cut down on time and travel costs.

So could there ever be a single non-bank financial regulator for the Eastern Caribbean? “I think that's where we are heading. Not immediately but in 5 or 10 years' time there probably will be,” says Antoine, who has already publicly called for a regional insurance regulator. “If we remain confined to national jurisdictions and functional areas, we are not going to be able to organise effectively to regulate and supervise a very dynamic sector.”

"The Capacity Conundrum" Interview with Mr. Timothy Antoine

Who participated in the Small Countries Inaugural Programme Source: Small Countries Financial Management Centre – Isle of Man, British Isles Sept 2009

“We have a growth challenge. The economies in the Eastern Caribbean have experienced a secular decline in growth over the past two decades due to a confluence of factors including erosion of trade preferences for bananas and sugar, declining development assistance and brain drain. Consistently high levels of economic growth (say 6% per annum) is essential to create jobs, reduce poverty and enhance government's capacity to fund public services especially education, health and infrastructure.”

Timothy Antoine, Permanent Secretary in the Ministry of Finance in Grenada pulls no punches. “Our average income is well ahead of the least developed countries but a mere 15% of average incomes in the USA, our nearest big neighbour. Our people watch American television every day so quite naturally they have high expectations.”

For a small Caribbean island society, this is an existential challenge.

Land and natural resources are limited, so the development of human capital is vital.

But, says Antoine, “We train people and then they leave; some of our best brains live abroad. I do not accept that relying on the remittances they send home solves the problem. Development is about increasing self-reliance and the capacity to handle one's own business. For that reason our countries need skilled people. The inflow of remittances though important cannot compensate for the outflow of skills”

He believes that small states have no choice but to match the regulatory standards set by the Financial Action Task Force and others, if they are to survive as credible financial centres: “The message is very clear. Get on board or get out.”

But there are also challenges in developing an economic base within each country. Antoine says “we must learn from other successful small countries such as Isle of Man and leverage our existing strengths rather than simply attempt to replicate what others have done”.

So Grenada is considering the development of an international financial services sector as part of its broader strategy of economic diversification to accelerate economic growth. But Antoine is under no illusions about the difficulty of carving out a niche in an area where other countries are already well established and where the barriers to entry are now so high.

Still he believes there are some opportunities.

Grenada is also considering other options. For example, Grenada has long been the second largest exporter of nutmegs in the world. “We need to expand nutmeg processing; we have a product called “Nut-Med” which is very good for pain relief and is approved by the US Food and Drug Administration.” We must expand this enterprise.

Furthermore, Grenada has “St George's University whose Medical School is rated as the best in the Caribbean. This University already accounts for 12 per cent of Grenada's economy and is the country's second largest employer,” Antoine points out. “We want to do more than produce doctors. We want to develop a modern teaching hospital that can provide specialist medical treatment and attract patients from abroad. A sort of medical tourism, if you will”.

It is in thinking through fresh approaches to tackling such problems that Antoine found the Small Countries Financial Management Programme particularly useful. He is now planning the creation of new working groups to analyse the issues facing Grenada and develop fresh ways of dealing with them, across a broad financial and socio-economic agenda.

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

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Ministry of Finance, Planning, Economy, Energy & Cooperatives Financial Complex, Carenage, St. George’s Tel.: 440-2731-34, 435-0057; Fax: 440-4115; Website: www.gov.gd; Email: finance@gov.gd, financegrenada@gmail.com Contact: Petra Joseph, Editor-in-Chief, 440-2731, ext.: 1108/435-0057

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