World Bank Document...Document of The World Bank Report No: ICR00004551 IMPLEMENTATION COMPLETION...

Document of

The World Bank

Report No: ICR00004551

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-55230, IDA-57340, IDA-59340, IBRD-85460)

FOR A

SERIES OF IDA CREDITS

IN THE AMOUNT OF SDR 9.7 MILLION, SDR 7.2 MILLION AND SDR 6.8 MILLION

(US$15 MILLION, US$10 MILLION AND US$9.34 MILLION EQUIVALENT)

AND AN IBRD LOAN

IN THE AMOUNT OF US$5 MILLION

TO

GRENADA

FOR THE

FIRST, SECOND AND THIRD PROGRAMMATIC RESILIENCE-BUILDING DEVELOPMENT POLICY FINANCING

December 21, 2018

Macroeconomics, Trade and Investment Global Practice Caribbean Countries Management Unit

Latin America and the Caribbean Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective as of December 21, 2018)

Currency Unit = Eastern Caribbean Dollars (XCD)

US$1.00 = XCD 2.70

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

ASYCUDA Automated System for Customs Data

AMC Asset Management Company

BMIS Beneficiary Management Information System

CARCIP Caribbean Regional Communications Infrastructure Program

CDB Caribbean Development Bank

CDF Comprehensive Debt Framework

COS Central Office of Statistics

CPI Consumer Price Index

DeMPA Debt Management and Performance Assessment

DfID Department for International Development

DMU Debt Management Unit

DPA Department of Public Administration

DPC Development Policy Credit

DPF Development Policy Financing

DPC-1 First Programmatic Development Policy Credit

DPF-2 Second Programmatic Development Policy Financing

DPC-3 Third Programmatic Development Policy Credit

DSA Debt Sustainability Analysis

ECCB Eastern Caribbean Central Bank

ECCU Eastern Caribbean Currency Union

ECERA Eastern Caribbean Energy Regulatory Authority

ECF Extended Credit Facility

EMIS Education Management Information System

FDI Foreign Direct Investment

FRA Fiscal Responsibility Act

GDP Gross Domestic Product

GFDRR Global Facility for Disaster Reduction and Recovery

GIPE Grenada Institute of Professional Engineers

GLCI Grenadian Living Conditions Indicator

GPRS Growth and Poverty Reduction Strategy

GTA Grenada Tourism Authority

HR Human Resources

ICRR Implementation Completion and Results Report

IDA International Development Association

IDB Inter-American Development Bank

IDF Institutional Development Fund

IMF International Monetary Fund

IRD Inland Revenue Department

LAC Latin American and the Caribbean

MNIB Marketing and National Importing Board

MoAFF Ministry of Agriculture, Forestry and Fisheries

MoE Ministry of Education

MoFE Ministry of Finance and Energy

MoSD Ministry of Social Development

MoTCACC Ministry of Tourism, Civil Aviation, Culture and Cooperatives

MTDS Medium-Term Debt Management Strategy

NEP New Economy Plan

NPL Nonperforming Loan

OECS Organization of Eastern Caribbean States

PDO Program Development Objective

PPP

PRBDP

Public-Private Partnership

Programmatic Resilience-Building Development Policy Program

PURC Public Utilities Regulatory Commission

RGSM Regional Government Securities Market

RPS Regional Partnership Strategy

SDR Special Drawing Rights

SEED Support for Education, Empowerment, and Development

SME Small and Medium Enterprise

SOE State-owned enterprise

SORT Systematic Operations Risk-Rating Tool

SSNA Social Safety Nets Assessment

WBG World Bank Group

Vice President: Jorge Familiar Country Director: Tahseen Sayed Sector Manager: Jorge Araujo

Project Team Leader: Annette De Kleine Feige ICR Team Leader: Tamoya Christie ICR Main Author: Suzana N. de Campos Abbott

The World Bank (P151821)

GRENADA Programmatic Resilience Building I-III Development Policy Program

TABLE OF CONTENTS

DATA SHEET

A. Basic Information…………………………………………………………………………………………………………………………………………………i

B. Key Dates………………………………………………………………………………………………………………………………………………………….…ii

C. Ratings Summary………………………………………………………………………………………………………………………………………………..ii

D. Sector and Theme Codes……………………………………………………….……………………………………………………………………………iii

E. Bank Staff…………………………………………………………………………………………………………………………………………………………..vi

F. Results Framework Analysis………………………………………………………………………………………………………………………………vii

G. Ratings of Project Performance in ISRs………………………………………………………………………………………………………………xii

H. Restructuring…………………………………………………………………………………………………………………………………………………….xii

1. PROGRAM CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN…………………………………………………………………………1

2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES…………………………………………………………………………..6

3. ASSESSMENT OF OUTCOMES…………………………………………………………………………………………………………………………….10

4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME………………………………………………………………………………………..25

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE…………………………………………………………………………………26

6. LESSONS LEARNED…………………………………………………………………………………………………………………………………………….28

7. COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS…………………………………..29

ANNEX 1: POLICY MATRIX AND THE RESULTS FRAMEWORK……………………………………………………………………………………..30

ANNEX 2: MODIFICATIONS TO KEY OUTCOME INDICATORSDURING PROGRAM IMPLEMENTATION………………………..34

ANNEX 3: PRIOR ACTIONS UNDER DPC-1, DPC-2 AND DPC-3……………………………………………………………………………………39

ANNEX 4: ANALYTICAL WORK SUPPORTING PRBDP 1-3……………………………………………………………………………………………41

ANNEX 5: WBG INVESTMENT OPERATIONSSUPPORTING DESIGN/IMPLEMENTATION OF PRBDP 1-3………………………42

ANNEX 6: ISSUES WITH KEY INDIATORS IN PRBDP3………………………………………………………………………………………………….44

ANNEX 7: BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES…………………………………………46

ANNEX 8: SUMMARY OF BORROWER’S COMMENTS ON DRAFT ICR………………………………………………………………………..47

ANNEX 9: LIST OF SUPPORTING DOCUMENTS………………………………………………………………………………………………………….48

MAP………………………………………………………………………………………………………………………………………………………………………..49


i

A. BASIC INFORMATION

Program 1

Country Grenada Program Name: Grenada First Programmatic

Resilience Building DPC

Program ID: P147152 L/C/TF Number(s) IDA-55230

ICR Date: 12/21/2018 ICR Type: Core ICR

Financing Instrument: DPL Borrower MINISTRY OF FINANCE

Original Total Commitment USD 15.00M Disbursed Amount USD 14.99M

Implementing Agencies: Ministry of Finance

Cofinanciers and Other External Partners:

Program 2

Country Grenada Program Name:

Second Programmatic

Resilience Building

Development Policy Credit

Program ID: P151821 L/C/TF Number(s) IBRD-85460,IDA-55230,IDA-

57340


Financing Instrument: DPL Borrower MINISTRY OF FINANCE




Program 3

Country Grenada Program Name:

Third Programmatic

Resilience Building

Development Policy Credit

Program ID: P156761 L/C/TF Number(s) IDA-55230,IDA-59340


Financing Instrument: DPL Borrower GRENADA



I N S E R T

D A T A S H E E T

H E R E

AFTER APPROVAL BY SENIOR GLOBAL PRACTICE DIRECTOR

AN UPDATED DATA SHEET SHOULD BE INSERTED

MANUALLY IN HARD COPY

BEFORE SENDING A FINAL ICR TO THE PRINT SHOP.

NOTE: The Data Sheet is generated by the system

using the information entered in the Operations Portal


ii


B. KEY DATES

Grenada First Programmatic Resilience Building DPC P147152

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 03/12/2014 Effectiveness:

Appraisal: 05/06/2014 Restructuring(s):

Approval: 06/30/2014 Mid-term Review:

Closing: 06/29/2015 06/29/2015

Second Programmatic Resilience Building Development Policy Credit P151821


Concept Review: 12/04/2014 Effectiveness: 11/30/2016



Closing: 11/30/2016 11/30/2016

Third Programmatic Resilience Building Development Policy Credit P156761


Concept Review: 06/15/2016 Effectiveness: 11/30/2017



Closing: 11/30/2017 11/30/2017

C. RATINGS SUMMARY

C.1 Performance Rating by ICR

Overall Program Rating

Outcomes Moderately Satisfactory

Risk to Development Outcome Moderate

Bank Performance Moderately Satisfactory

Borrower Performance Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Overall Program Rating

Bank Ratings Borrower Ratings

Quality at Entry Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing

Agency/Agencies: Satisfactory

each time you use “Send Draft”, “Print” or “Submit Final” functions


iii

Overall Bank Performance Moderately Satisfactory Overall Borrower

Performance Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators


Implementation

Performance Indicators QAG Assessments (if any) Rating

Potential Problem Program

at any time (Yes/No):

No Quality at Entry (QEA) None

Problem Program at any

time (Yes/No):

No Quality of Supervision

(QSA) None

DO rating before

Closing/Inactive status


Implementation






time (Yes/No):


(QSA) None

DO rating before


Satisfactory


Implementation






time (Yes/No):


(QSA) None

DO rating before


D. SECTOR AND THEME CODES

Grenada First Programmatic Resilience Building DPC P147152 Original Actual

Major Sector

Public Administration

Other Public Administration 14 14


iv

Social Protection

Social Protection 14 14

Transportation

Other Transportation 7 7

Industry, Trade and Services

Other Industry, Trade and Services 50 50

Agricultural markets, commercialization and agri-

business

15 15

Major Theme/Theme/Sub Theme

Economic Policy 14 14

Trade 14 14

Trade Facilitation 14 14

Environment and Natural Resource Management 29 29

Climate change 29 29

Adaptation 29 29

Finance 7 7

Finance for Development 7 7

Disaster Risk Finance 7 7

Private Sector Development 129 129

Business Enabling Environment 29 29

Investment and Business Climate 29 29

Jobs 100 100

Public Sector Management 14 14

Public Administration 14 14

Administrative and Civil Service Reform 14 14

Social Development and Protection 14 14


Social protection delivery systems 14 14

Urban and Rural Development 21 21

Disaster Risk Management 21 21

Disaster Preparedness 7 7

Disaster Response and Recovery 7 7

Disaster Risk Reduction 7 7

Second Programmatic Resilience Building Development Policy Credit P151821 Original Actual

Major Sector


Central Government (Central Agencies) 29 29

Financial Sector

Banking Institutions 14 14


v

Social Protection



Other Industry, Trade and Services 22 22


business

21 21


Economic Policy 14 14

Trade 14 14

Trade Facilitation 14 14




Regulation and Competition Policy 14 14

Jobs 100 100


Public Administration 14 14

Transparency, Accountability and Good Governance 7 7

Public Finance Management 20 20

Public Expenditure Management 10 10



Social Safety Nets 10 10

Third Programmatic Resilience Building Development Policy Credit P156761 Original Actual

Major Sector


Central Government (Central Agencies) 30 30

Education

Other Education 10 10

Financial Sector

Capital Markets 10 10

Energy and Extractives

Renewable Energy Wind 3 3

Renewable Energy Solar 3 3

Renewable Energy Geothermal 3 3

Social Protection



Trade 10 10


vi


business

21 21


Environment and Natural Resource Management 29 29

Climate change 29 29

Mitigation 10 10

Energy 10 10

Energy Policies&Reform 10 10

Human Development and Gender 10 10

Education 10 10

Education Governance, School-Based Management 10 10




Public Private Partnerships 10 10


Public Finance Management 20 20

Debt Management 10 10

Public Expenditure Management 10 10

Rule of Law 10 10

Legal Institutions for a Market Economy 10 10



Social Safety Nets 10 10

Urban and Rural Development 21 21

Disaster Risk Management 21 21

Disaster Preparedness 7 7

E. BANK STAFF


Positions At ICR At Approval

Vice President: Jorge Familiar Calderon Jorge Familiar Calderon

Country Director: Tahseen Sayed Sophie Sirtaine

Practice Manager/Manager: Jorge A. de Thompson R. Araujo Auguste Tano Kouame

Task Team Leader: Annette I. De Kleine Feige Rei Odawara

ICR Team Leader: Tamoya Annika Lois Christie

ICR Primary Author: Suzana Nagele de Campos Abbott


vii




Country Director: Tahseen Sayed Sophie Sirtaine

Practice Manager/Manager: Jorge A. de Thompson R. Araujo Miria A. Pigato

Task Team Leader: Annette I. De Kleine Feige Rei Odawara






Country Director: Tahseen Sayed Sabine Hader

Practice Manager/Manager: Jorge A. de Thompson R. Araujo Miria A. Pigato

Task Team Leader: Annette I. De Kleine Feige Annette I. De Kleine Feige



F. RESULTS FRAMEWORK ANALYSIS Program Development Objectives (from Program Document)

The Program Development Objective is to support Grenada in implementing a program of policy and institutional

reforms to: (i) improve the investment climate and competitiveness; (ii) improve public resource management; and

(iii) enhance resilience against natural disasters.

Revised Program Development Objectives (as approved by original approving authority)

Indicator(s)


Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years



Original Target

Values (from

approval

documents)

Formally Revised

Target Values




viii



Original Target

Values (from

approval

documents)

Formally Revised

Target Values



Indicator 1: Tourist Receipts

Value quantitative or Qualitative

EC$307 million

EC$332 million (8

percent increase)

EC$447.9 million

Date achieved 12/31/2013 06/30/2018 12/31/2017

Comments (incl. % achievement)

Exceeded (35 percent over original target). The actual value achieved represents an

annual average growth rate of almost 9 percent in nominal tourist receipts.

Indicator 2: Leasing out of Government-owned agricultural estates to private entities.


None

At least 3

Government-

owned estates

leased

2 Government-owned

estates leased

Date achieved 12/31/2013 06/30/2018 06/30/2018


Partially Achieved. Two out of four potential Government-owned estates have been

leased to private entities.

Indicator 3: Area cultivated at leased Government-owned agricultural estates.


Zero acres (out of

a total of 379

cultivatable acres

of Government-

owned land

selected for public-

private

partnerships

(PPPs)

186 acres 205 acres

Date achieved 12/31/2013 06/30/2018 06/30/2018


Exceeded (10 percent above target). This represents approximately 54 percent of

cultivable Government-owned land selected for PPPs.

Indicator 4: Number of farmers served by MNIB


1,623

At least 2,500 2,000

Date achieved 12/31/2013 06/30/2018 06/30/2018


ix


Partially Achieved (20 percent below target). With 2000 farmers, the MNIB serves about

30 percent of farmers registered in 2017. However, the MNIB faces competition from

competing non-profit organizations offering similar services.

Indicator 5: Percentage of licensed food premises and street food premises in Grenada that have been

inspected by the Food Safety Authority under the Food Safety Act.


Zero

75 percent (share

of food premises

and street food

premises licensed

by the Food

Safety Authority)

80 percent

Date achieved 12/31/2013 06/30/2018 06/30/2018


Exceeded (5 percentage points above target).

Indicator 6: The number of border control agencies processing trade transactions through ASYCUDA

World.


2 agencies

At least 6

agencies

2 agencies

Date achieved 12/31/2013 06/30/2018 06/30/2018


Not Yet Achieved. The update to ASYCUDA World was delayed, occurring only in

September 2018. The revised timeline to achieve the target is for three agencies in the

Ministry of Agriculture by December 2018 and the additional agencies in the Ministry of

Health and the Police Force by June 2019.

Indicator 7: Number of agencies sharing trade and taxation related information through ASYCUDA

World.


Zero

At least 2 2 agencies

Date achieved 12/31/2013 06/30/2018 06/30/2018


Achieved. Data sharing by the Inland Revenue Department and the Central Office of

Statistics is currently in place.

Indicator 8: Share of PPP projects under development that conform to the processes and

requirements defined in the PPP policy.


Zero

100 percent 100 percent of projects

under development

Date achieved 12/31/2013 06/30/2018 09/30/2018


x


Achieved. A PPP project was approved in September 2018 between the Government and

Digicel, an ICT company, under the Caribbean Regional Communication Infrastructure

Program.

Indicator 9: Share of renewable energy in total installed power-generation capacity.


1 percent

3 percent 6.3 percent

Date achieved 12/31/2013 06/30/2018 06/30/2018


Exceeded. Presently 6.3 percent of Grenada’s energy capacity is accounted for by

renewable sources, mostly solar.

Indicator 10: The PURC is fully operational, with evidence from the Government that the PURC has (i)

issued a three-year business plan; (ii) a dedicated place of work; (iii) hired staff, and (iv) an

operating budget.


No

Yes Partially operational

Date achieved 12/31/2013 06/30/2018 10/31/2018


Partially Achieved. Three out of four requirements have been fulfilled. Constraints in

recruiting high caliber staff has delayed the fulfillment of requirement (iii). The PURC is

expected to be fully operational by January 2019.

Indicator 11: Development of job descriptions.


None

The Ministry of

Education has

formally

established job

descriptions with

clearly defined

competencies

and

responsibilities

for the key task

areas of public

administration,

including

planning,

monitoring

results, and

strategic

personnel

management

All 27 job descriptions

developed and approved


xi

Date achieved 12/31/2013 06/30/2018 06/30/2018


Achieved. This indicator was scaled back to apply only to the Ministry of Education instead

of all five pilot ministries first considered.

Indicator 12: Publication of contract awards.


Zero

All contract

awards are

published, in

conformity with

the new

procurement law.

Zero. Expected for January

2019

Date achieved 12/31/2013 06/30/2018 06/30/2018


Not Yet Achieved. The Government procurement website is operational with the

publication of contract awards expected for January 2019. Currently, information on

disposal of assets is available on the website.

Indicator 13: Share of SEED program beneficiary households identified in the PO Plan as ineligible and

non-vulnerable that have been transitioned out of the program.


Zero

95 percent 100 percent

Date achieved 12/31/2013 06/30/2018 06/30/2018


Achieved. In accordance with the Phase Out plan, 100 percent of households in the non-

vulnerable category have been removed from the beneficiaries list.

Indicator 14: Share of public and publicly guaranteed debt with a maturity of less than 90 days.


17 percent

10 percent 4.2 percent

Date achieved 12/31/2013 06/30/2018 06/30/2018


Exceeded. The Government performed better than targeted as it was able to extend

maturities of short-term debt on the Regional Government Securities Market (RGSM).

Indicator 15: Share of membership of the Grenada Institute of Professional Engineers (GIPE) registered

in accordance with the 2015 Engineering Act.


Zero

40 percent Zero

Date achieved 12/31/2013 06/30/2018 06/30/2018


Not Yet Achieved. Timeline for the establishment of the Registration Board, in accordance

with the Enginering Act, has been set for the first quarter of 2019.


xii

Indicator 16: Establishment of the Building Inspection Unit at the Ministry of Communication, Works,

Physical Development, Public Utilities, ICT and Community Development.


None

Unit established Planned

Date achieved 12/31/2013 06/30/2018 06/30/2018


Not Yet Achieved. The Government is exploring options as to how this unit should be

structured.

Indicator 17: Provisions for loan losses to nonperforming loans (NPLs) for the banking sector.


30 percent of NPLs

60 percent of

NPLs

71.7 percent

Date achieved 12/31/2013 06/30/2018 06/30/2018


Exceeded. The provisions as a percentage of NPLs were 71.7 percent, surpassing the

Program target of 60 percent.

G. RATINGS OF PROJECT PERFORMANCE IN ISRs


No. Date ISR

Archived DO IP

Actual Disbursements

(USD millions)

1 10/27/2015 Satisfactory Satisfactory 14.99


No. Date ISR

Archived DO IP

Actual Disbursements

(USD millions)

1 11/04/2016 Satisfactory Satisfactory 14.98

H. RESTRUCTURING (IF ANY)

Not applicable.


1

1. PROGRAM CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN

1 The Programmatic Resilience-Building Development Policy Program (the Program, PRBDP) was designed as a

programmatic series of three Development Policy Operations. The first operation, PRBDP1, was approved on June 30,

2014 and became effective on July 9, 2014; the second operation, PRBDP2, was approved on October 28, 2015 and

became effective on November 19, 2015. The third operation, PRBDP3, was approved on December 16, 2016, became

effective on December 23, 2016. The final operation in the series closed on November 30, 2017. The Program supported

selected reforms of the Government of Grenada’s (the Government) broader plans under the New Economy initiative

built around strategies for economic growth, fiscal sustainability, social development and debt management. The

measures supported by the Program address four key policy areas consistent with the 2010 Comprehensive Debt

Framework (CDF) developed by the World Bank at the request of the Heads of Government of the Caribbean Community

(CARICOM) countries to address the challenge of high debt levels facing many small states. The CDF was structured

around four pillars to address the structural interdependent causes of high debt and low growth in small island states:

(Pillar 1) creating conditions for private investment in a sustainable manner; (Pillar 2) supporting improved public-sector

management and better targeting of social safety net programs; (Pillar 3) enhancing resilience to natural disasters, and

(Pillar 4) facilitating debt portfolio restructuring and improved debt management.

1.1 Context at Appraisal

2 PRBDP was prepared in 2014, as Grenada, a small, open and highly indebted middle-income island state, faced

significant systemic vulnerabilities and structural challenges. Due to a combination of high exposure to natural disasters,

its small size and limited diversification, Grenada is very vulnerable to external shocks. Continued low growth, combined

with high budget rigidities and persistently large fiscal deficits, had contributed to high debt levels. Further, there had

been an overreliance on public expenditure to respond to shocks and stimulate growth, and the fiscal management

framework had not emphasized fiscal discipline and expenditure efficiency. The resulting lack of fiscal space and weak

institutional capacity had limited the Government’s ability to mitigate the social impact of crises and to protect the poor

and vulnerable.

3 Grenada’s social indicators were strong, but poverty appeared to be worsening despite improvements in some

social areas. The latest available poverty data (2008) at the time of appraisal estimated that around 38 percent of the

population was considered poor, 2.4 percent of which were indigent or extremely poor.1 Compared with earlier data

from 1999, this data revealed that poverty had increased by around 17 percent, while the indigence level fell by more

than 80 percent over the 1999 to 2008 period. With a cumulative 5.7 percent decline in GDP from 2008 until 2014, it was

unlikely that the incidence of poverty would have improved since 2008. Still, Grenada had made progress in social

indicators: the share of the population that was malnourished, the under-5 mortality rates and adolescent fertility rates

(highly associated with social vulnerability) had decreased and net enrollment rates in primary and secondary education

remained high resulting in an increased literacy rate.

1 Estimates are national official poverty and extreme poverty rates based on the Cost of Basic Needs method. Internationally comparable consumption-based poverty rates are slightly lower than the official rates at 30.4 percent (US$5.50 a day 2011 PPP) and 0.5 percent (US$1.90 a day 2011 PPP), respectively.


2

4 Although Grenada’s economy had started to recover, between 2009 and 2012 the country suffered one of the

worst recessions in decades. Tourism revenues and foreign direct investment (FDI) flows had collapsed in the aftermath

of the global financial crisis, and GDP contracted by a cumulative 8.2 percent during the period. The economy’s hotel and

restaurants sector (a proxy for tourism), transportation and communications and wholesale and retail sectors all

contracted. The current account deficit remained large at 21.1 percent of GDP in 2012 and with the drying up of FDI,

financing relied more heavily on debt-related flows, including increases in bank’s foreign liabilities. The fiscal deficit

worsened, reaching 5.9 percent of GDP in 2012 (Table 1).

5 The economy began to recover in 2013, with GDP increasing by 2.4 percent led by the construction sector, but

the fiscal position continued to worsen. Tourism declined a further 4.0 percent in 2013 and external imbalances persisted,

with the current account deficit further deteriorating to 23.2 percent of GDP reflecting an increase in imports and a

decrease in current transfers. The overall public-sector deficit increased to 7.3 percent of GDP in 2013, as the Government

extended temporary tax breaks to the business sector. The primary deficit (including grants) reached 2.5 percent of GDP

in 2012 and widened to 3.9 percent of GDP in 2013. With negative net external transfers and shortfalls in revenues, the

Government issued significant amounts of short-term government paper to meet its financing needs. Domestic unpaid

claims increased, and the Government accumulated some arrears vis-à-vis external creditors.

6 Grenada’s public debt increased sharply during the global financial crisis and continued to worsen in 2013,

culminating in the announcement of a public debt restructuring in March 2013 by a newly elected administration. By

2013, the public debt-to-GDP ratio had increased to 107.6 percent, with domestic debt rising to 37.2 percent of GDP

increasing the exposure of domestic banks, and external debt growing to 70.4 percent of GDP. External debt service

increased significantly, especially to commercial creditors, putting upward pressure on interest rates. The unsustainability

of the public debt and a solvency crisis led the Government to announce a “comprehensive and collaborative

restructuring of its public debt”, and to default on coupon payments due on its US and EC dollar bonds maturing in 2025.

Initial discussions with creditors were put on hold until after discussions with the International Monetary Fund (IMF) on

the Extended Credit Facility (ECF) were concluded. Subsequently, the agreement reached on the debt restructuring

exercise included a 50 percent principal haircut on both domestic and external debt to private and bilateral official

creditors, which helped Grenada bring the debt-to-GDP ratio down to 70.8 percent by end 2017.

Table 1. Selected Economic Indicators 2009-2017

2009 2010 2011 2012 2013 2014 2015 2016 2017

Annual percentage change

Real GDP growth -6.6 -0.5 0.8 -1.2 2.4 7.3 6.4 3.7 5.1

Inflation (CPI) -2.3 4.2 3.5 1.8 -1.2 -1.0 -0.5 1.6 0.9

Percent of GDP

Current Account Balance

-22.2 -23.7 -23.6 -21.1 -23.2 -16.5 -16.5 -14.5p -15.3p

Fiscal Balance -5.2 -3.6 -5.2 -5.9 -7.3 -4.7 -1.5 2.3 3.0

Debt 91.1 96.9 100.7 103.3 107.6 101.8 90.1 82.0 70.8

Primary Balance -3.0 -1.5 -2.7 -2.5 -3.9 -1.2 1.9 5.2 5.7 Source: World Bank. P – Projections as at November 2016. The methodology for the BOP, including the current account balance was updated in

2016, causing a break in the series. Estimates for the current account balance in 2016 and 2017 under the new methodology are -3.2 and -6.7

percent, respectively.


3

7 Grenada’s financial and banking sector remained fragile, following the collapse of systemic insurers in 2009.

Grenada’s single domestic bank (there are also four foreign banks), whose assets represented 28.3 percent of GDP as of

end-2012, faced increasing non-performing loans (NPSs), insufficient provisioning, declining earnings and capital. It was

also exposed to Grenada’s sovereign debt with holdings representing about 22 percent of its reported capital. With the

economic downturn in 2009 and 2010, NPLs in the banking sector increased overall, and most banks experienced losses.

Faced with weak economic conditions and increased NPLs, credit institutions had become wary about lending, thereby

tightening access to credit for small and medium enterprises (SMEs).

8 The PRBDP series was part of a multi-donor effort to support key reforms in Grenada. The PRBDP was

contemplated in the Progress Report of the Regional Partnership Strategy for the OECS presented to the World Bank’s

Board in April 2012, especially insofar as that strategy aimed to provide Grenada with flexible, demand-driven and

focused support for fostering economic growth with the help of more transparent, effective and efficient institutions.

The PRBDP complemented a then proposed 36-month Extended Credit Facility (ECF) by the IMF that focused on short-

term fiscal consolidation, while the Program supported the longer-term policies to build resilience against systemic

vulnerabilities. A programmatic lending program by the Caribbean Development Bank (CDB), closely aligned with the

PRBDP was expected to be approved in July 2014. The Government agreement with the IMF on the ECF arrangement was

approved by the IMF Board in June 2014. The ECF arrangement focused on improving medium-term growth prospects,

restoring fiscal sustainability and strengthening the financial sector.

9 The foundation for the Government’s program, the New Economy Plan (NEP), outlined in its 2013 budget

presentation, responded to the challenges Grenada had faced over the past several years. The NEP, a long-term

development strategy, was based on strategies for economic growth, fiscal sustainability, social development and debt

management. The key issues that were to be addressed were fiscal and debt sustainability, public sector management,

vocational training, sustainable development and the private sector as the key driver of growth. The strategy for growth

emphasized tourism, agriculture and fisheries, energy development (including renewable energy), and a dynamic export

sector as drivers of future economic growth. The strategy for social development and empowering the population was

built around the formation of human capital through improved training and employment opportunities for youth, better

access and quality of education, improved health care services and facilities, and provision of affordable housing to low

income families. It also addressed greater social inclusion through a further strengthening of the flagship safety net

program “Support for Education, Empowerment and Development” (SEED) envisaged to ensure that its benefits reached

the neediest.

10 Grenada’s macroeconomic policy framework was deemed adequate when PRBDP1 was approved. Growth was

expected to pick up in the medium term fueled by a stronger performance in tourism and larger FDI inflows, and inflation

was projected to remain subdued in the face of weak domestic demand and moderate commodity inflation. The medium-

term fiscal and debt outlook was predicated on adopting the needed fiscal consolidation measures agreed under the IMF

ECF. After deteriorating slightly due to retroactive payments, the fiscal situation was expected to reverse to a primary

surplus in 2015 and beyond. Debt levels were expected to decline but remain high. The Government’s policies were

calibrated to accommodate a gradual but sustained recovery of the real sector coupled with a strong fiscal consolidation

adjustment supported by the IMF program.


4

11 The PRBDP was consistent with the Progress Report of the Regional Partnership Strategy (RPS) for the OECS (Report No. 66577-LAC), presented to the Board in April 2012. The PRBDP was expected to influence RPS outcomes in all of the priority assistance categories, as follows: (i) improving fiscal and debt sustainability; (ii) protecting and improving human capital; (iii) strengthening climate resilience; (iv) strengthening the domestic financial sector, and (v) improving access to quality services for a more competitive environment. All of these areas were addressed under the series’ four pillars.

1.2 Original Program Development Objectives (PDO) and Key Indicators

12 The Program Development Objective of the PRBDP series, as defined in PRBDP1, was to support the Government

of Grenada to implement a program of policy and institutional reforms. These reforms would aim to: (i) create conditions

for private investment in a sustainable manner; (ii) support improved public sector management and better targeting of

social safety net programs; (iii) enhance resilience against natural disasters, and (iv) facilitate debt portfolio restructuring

and enhance debt management. This original PDO was modified slightly in the following two operations (Section 1.3).

The original and revised Key Outcome Indicators and targets are presented in Annex 2.

1.3 Revised PDO and Key Indicators, and Reasons/justification

13 In the Program Document (PD) for PRBDP2, the PDO was reworded slightly to read: the PDO of the proposed

DPC/DPL series is to support Grenada in implementing a program of policy and institutional reforms to: (i) create

conditions for private investment in a sustainable manner; (ii) support improved public resource management; and (iii)

enhance resilience against natural disasters and key elements of resilience in the banking sector. The PD for PRBDP3

reworded the PDO further to read: the PDO of the DPC-3 operation is to support Grenada in implementing a program of

policy and institutional reforms to: (i) improve the investment climate and competitiveness; (ii) improve public resource

management; and (iii) enhance resilience against natural disasters. This ICR evaluates achievement of the Program’s

objectives according to the objectives of PRBDP3, and the final Key Indicators for each of the objectives supported by the

series of operations.

14 The PDs for PRBDP2 and PRBDP3 do not mention specifically why the PDO was reworded in each of these

operations. The PRBDP2 PD mentions that the DPC/DPL2 “focuses on fewer strategic policy measures to strengthen the

selectivity of the operation”, and that “some measures, such as those related to trade logistics, the energy sector reform,

and the physical planning regulatory system to reduce the risks associated with natural disasters, have been postponed

to the DPC3 to allow the Government to achieve stronger results in these critical areas, while a measure related to

strengthening the tourism and agribusiness linkages, has been advanced due to faster progress”. Similarly, the PRBDP3

PD mentions only that “some of the indicative triggers that had been originally envisioned proposed in earlier operations

on policy measures that are related to tourism and the financial sector have been dropped to reflect changes in the

Government’s strategy. Other originally envisioned measures, notably those related to trade logistics, PPPs and social

safety nets have been modified to reflect the evolution and current status of the reform process. The results indicators

for the proposed operation have been updated to reflect changes in the program’s prior actions”. Throughout the series,

the PDs referred to areas where Prior Actions were dropped to increase the selectivity of the respective operations.

15 Revisions to the PDO and selected triggers were the culmination of extensive discussions between the Bank team

and the Grenadian authorities. The changes, mutually agreed by both parties, were undertaken to better reflect the pace

of progress in program areas, as well as meet emerging priorities. The revisions to Prior Actions and Key Outcome

Indicators are presented in Annex 2.


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1.4 Original Policy Areas Supported by the Program

16 The objective of the PRBDP series was to be achieved through supporting reforms carried out by the Government

in four pillars of policy areas under three consequent operations: (i) Pillar 1 - creating conditions for private investment;

(ii) Pillar 2 - supporting fiscal consolidation through reducing fiscal, financial and social vulnerability; (iii) Pillar 3 -

enhancing resilience against natural disasters, and (iv) Pillar 4 - facilitating debt portfolio restructuring and improved debt

management. The Program was consistent with the Government’s development strategy, the GPRS 2014-2018, and

supported the Government’s objectives of accelerating economic growth, restoring fiscal and debt sustainability, and

improving social development indicators. The objectives of specific reforms under each of the four pillars is presented

below:

Pillar 1: Creating conditions for private investment

• Objective 1.1: Strengthening the Institutional Governance Framework for the Tourism Sector;

• Objective 1.2: Improving the Productivity and Competitiveness of the Agribusiness Sector;

• Objective 1.3: Strengthening the Business Environment through Improved Trade Logistics;

• Objective 1.4: Promoting New Investments under a Public-Private Partnership (PPP) Policy and Institutional

Framework, and

• Objective 1.5: Strengthening the Policy and Regulatory Environment for the Energy Sector.

Pillar 2: Supporting fiscal consolidation through reducing fiscal, financial and social vulnerability

• Objective 2.1: Promoting the Effectiveness and Efficiency of the Public Sector through Public Service

Modernization;

• Objective 2.2: Strengthening Public Procurement Systems;

• Objective 2.3: Improving Financial Sector Stability through Improved Regulation and Supervision, and

• Objective 2.4: Strengthening Social Safety Nets.

Pillar 3: Enhancing resilience against natural disasters

• Objective 3.1: Reducing the Risk to External Natural Hazard Shocks through a Strengthened Physical Planning

Regulatory System.

Pillar 4: Facilitating debt portfolio restructuring and improved debt management

• Objective 4.1: Strengthening the Institutional Debt Management Capacity and Facilitating Debt Portfolio

Restructuring.

1.5 Revised Policy Areas

17 The Policy Areas were not revised, per se, but Pillars were renamed, and Pillar 4 (and its Objective 4.1) was

incorporated within Pillar 2, with the result that PRBDP2 and PRBDP3 had only three Pillars.

1.6 Other significant changes

18 Not applicable.


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2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES

2.1 Program Performance

19 PRBDP was designed as a programmatic series of three operations to be delivered in single tranches. PRBDP1

was financed by an IDA Credit in the amount of SDR 9.7 million (US$15 million equivalent) approved on June 30, 2014.

PRBDP2 was financed by an IDA Credit in the amount of SDR 7.2 million (US$10 million equivalent) and a World Bank loan

in the amount of US$5 million, both approved on October 28, 2015. PRBDP3 was financed by an IDA Credit in the amount

of SDR 6.8 million (US$9.34 million equivalent) approved on December 16, 2016. The World Bank released proceeds upon

effectiveness (Table 2).

Table 2: DPL Series Disbursement

Operation # Amount Expected Release Date Actual Release Date Release

DPC-1 US$15 million July 14, 2014 July 14, 2014 Regular

DPF-2 US$15 million December 09, 2015 December 09, 2015 Regular

DPF-3 US$9.1 million January 03, 2017 January 03, 2017 Regular

20 The PRBDP1 PD outlined seven Prior Actions and 12 Indicative Triggers for PRBDP2, and nine Indicative Triggers

for PRBDP3. The PRBDP2 Program Document outlined 7 Prior Actions and 12 Indicative Triggers for PRBDP3. Revision to

Prior Actions and Triggers, including minor changes in wording of Prior Actions and Triggers are summarized in Annex 2.

21 A summary of the PRBDP’s Prior Actions, Indicative Triggers and Key Indicators by pillar, as described in the

Program Document of each of the operations is provided in Annex 1. A summary of the 24 Prior Actions completed over

the PRBDP series is provided in Annex 3.

2.2 Major Factors Affecting Implementation

22 The PRBDP was implemented in a difficult environment in which Grenada’s public debt had become

unsustainable. The consequent solvency crisis had led the then recently elected Government to announce a

“comprehensive and collaborative restructuring of its public debt”, to define a plan of substantive reforms in tax and

public administration. The new Government reached out to the International Financial Institutions (IFIs) to jointly help

develop and support those reforms. Sound underpinnings, based on the extensive analytical work by the World Bank, as

well as coordinated donor support and the social compact between the Government and civil society were important to

ground the Program’s design and implementation. Overall, implementation presented a mixed picture where despite

continued Government commitment towards adopting important legislative and institutional reforms supported by the

PRBDP series, actual results were impacted by factors such as weak institutional and technical capacity, the short period

for actually implementing the reforms, and exogenous factors. The main factors that affected its implementation are

described below.

23 The Government’s commitment to its ambitious fiscal consolidation and reform agenda and the PRBDP series

was strong throughout preparation and implementation, and consistency in the administration impacted outcomes

positively. Strong Government ownership of the Program and the never wavering commitment to see the Program


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through were paramount for the level of success achieved. Continuity in the Government administration, orientation,

and policy priorities throughout implementation of the PRBDP series, ensured that the commitment to the Program

remained strong. Furthermore, the social partnership arrangement with key stakeholders in civil society was instrumental

in monitoring the Government’s performance under the adjustment program.

24 The PRBDP’s design was grounded in and supported by a strong program of analytical work and complemented

by World Bank investment lending operations in key areas supported by the Program. The analytical work and the World

Bank’s technical and advisory support was carried out before the Program’s approval and, then, throughout the

implementation of each of its three phases. The World Bank’s extensive program of analytical work supported the

PRBDP’s key policy areas (Annex 4). Policy reforms carried out within the framework of the PRBDP were also supported

by World Bank investment lending in most areas of the Policy Matrix (Annex 5).

25 The design and implementation of the PRBDP counted on the Government’s collaboration and strong

coordination with Grenada’s donors. The World Bank and the IMF collaborated closely in the preparation of the PRBDP

series and throughout its implementation. The Program’s Prior Actions were designed to complement the IMF’s ECF

arrangement approved in June 2014. The Caribbean Development Bank (CDB) also supported the Government’s New

Economy Program under a US$10 million three-phase programmatic instrument that was closely aligned with the

objectives, Prior Actions and Key Indicators of the PRBDP series. Grenada also counted upon assistance from several

bilateral and multilateral agencies, including the European Union (EU), the Canadian International Development Agency

(CIDA), the UK Department for International Development (DFID), the US Agency for International Development (USAID),

the Pan-American Health Organization (PAHO) and the CDB (which in addition to its own funds lends funds from the

Interamerican Development Bank). These agencies were all active participants in the Eastern Caribbean Donor Group,

and the World Bank together with the Government of Grenada worked to promote donor coordination and exploit

synergies. In addition to the World Bank’s technical advisory support, the PRBDP counted on strong technical advice from

the IMF in the areas of public financial management, tax reform and the reform of state-owned enterprises. The UK DFID

and Canada’s Department of Foreign Affairs, Trade and Development provided US$7 million to the World Bank to support

its regional strategy, including for financial sector reforms. Finally, the CDB supported the development of a regional

center of excellence in public procurement financed by a US$320,000 IDF grant. Coordination with the ECCB and other

regional institutions also facilitated successful implementation of the Program.

26 Despite all of the World Bank’s technical advisory support and complementary investment lending operations,

and the coordinated advisory and financial support of Grenada’s donors, there were several policy areas where more

hands-on assistance would have been required given capacity constraints. These include, for example, the areas of trade

logistics, public employment management, and physical planning regulation. In the area of trade logistics, the PD for

PRBDP3 reported that software, budgetary and professional-skills constraints slowed the full implementation of the full

range of the reform, despite the Government’s full commitment. It further mentions that “linking the trade transactions

of all border control agencies that process trade transactions through ASYCUDA World required extensive coordination

and negotiation, major inter-agency agreements, and sufficient funds to finance the necessary technical assistance”. In

the area of public employment management, the PD for PRBDP2 reported that “improving public employment

management will require an incremental approach that reflected capacity limitations”, and that “relatively low staffing

levels and hiring restrictions also place a considerable burden on the permanent secretaries tasked with institutional

modernization”. For physical planning, while legislation and subsequent regulations were successfully passed in

Parliament, the implementation of the laws and establishment of supporting units never materialized, compromising the

achievement of program objectives.


8

27 Also, despite extensive consultations with interested stakeholders, some policy areas proved politically difficult

to fully implement during the Program period and had to be carried out over an extended timeframe and on a phased

basis. These included public employment management and full implementation of the SEED Phase-Out Plan. These, and

other reforms that would impact employment and income proved difficult to implement over the short term, without

phasing, despite commitment to the broad objectives and notable progress. In a small country, reducing public sector

employment proved difficult as employment possibilities in the private sector are limited in the absence of sustained

growth. As a result, the Government opted for a mixture of attrition and phased implementation, and the Prior Actions

and Key Indicators were adjusted over the series.

28 Exogenous factors also impacted performance over the PRBSP series, both positively and negatively. Grenada’s macroeconomic performance improved considerably over the implementation period, supported mostly by short-term stabilization measures (para. 8). The extent to which this also impacted the urgency of carrying through with reform measures that would promote growth over the medium term is difficult to ascertain. Nevertheless, an improvement in the international economic environment undoubtedly aided tourism performance, as reflected in increases in receipts, arrivals and employment in the sector. On the negative side, despite having in place the appropriate policy and regulatory framework, difficulties in identifying suitable private investors for the commercialization of government-owned agricultural estates and other potential PPPs, as well as unexpected changes in the financing sources of one leased government estate, moderated the expected impact on private investment.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

(a) Design

29 The Program and the Policy Matrix were prepared in close cooperation with the IMF and the CDB as a coordinated

effort to help close the financing gap and support the implementation of structural reforms. The Policy Matrix provided

a coherent framework to monitor progress and Key Indicators were associated directly to the Program’s PDOs. The

indicators were clear, many quantitative, and easy to monitor. As a program focusing on institutional reforms that would

produce results with a lag, many of the Key Indicators reflected institutional achievements as opposed to final outcomes

that would result from those achievements. The Results Framework and timing of reforms across the series was well

designed, with those expected to generate early impact front-loaded (e.g., tourism). All original indicators had baselines

at approval of PRBDP1 (for the year 2013), as did all new indicators introduced throughout the Program’s subsequent

operations (PRBDP2 and PRBDP3). Nevertheless, the original and revised Key Indicators presented several issues,

including those of difficulties in attribution (e.g., tourism), over-ambitiousness (e.g., public sector modernization), overlap

(e.g., agricultural estates), and lack of clarity (e.g., PPPs). These issues are presented in a table in Annex 6.

(b) Implementation

30 The MoFE was responsible for monitoring and reporting progress under the PRBDP series and coordinating

actions among other agencies involved in implementing the reform program, including the Ministry of Social

Development (MoSD), the Ministry of Agriculture, Forestry and Fisheries (MoAFF), the Ministry of Tourism, Civil Aviation,

Culture and Cooperatives (MoTCACC), the Department of Public Administration (DPA) and the Ministry of Works (MoW).

Together with the MoFE, these institutions were responsible for collecting the necessary data to assess implementation

progress and results, and providing these data to the World Bank. The World Bank also monitored actions and reviewed

progress according to the expected program outcomes outlined in the Policy Matrix and the Results Framework (Annex

1). Monitoring was carried out through ongoing dialogue with the Government, and was supported by complementary

investment projects, hands-on technical assistance and analytical activities (Annex 4 and 5).


9

(c) Utilization

31 As a programmatic operation, throughout implementation, monitoring and evaluation was utilized to adjust the policy matrix, including Prior Actions and Key Indicators to reflect the pace of implementation and to focus selectively on only some key indicators—several original indicative triggers were excluded to focus on key priority areas (Annex 2). Further, as mentioned in Section 1.5, the policy areas were streamlined with Pillar 4 (and its Objective 4.1) being incorporated into Pillar 2, with the result that PRBDP2 and PRBDP3 had only 3 pillars. 2.4 Expected Next Phase/Follow-up Operation

32 As a three-phase programmatic operation, a next phase is not contemplated. However, the SDR 20.9 million

(US$30 million equivalent) First Fiscal Resilience and Blue Growth Development Policy Credit, a programmatic series of

two Development Policy Credits, was approved by the World Bank’s Board on June 22, 2018. The operation takes a

comprehensive approach to strengthen macroeconomic, fiscal and environmental sustainability, and resilience to shocks.

It does so by supporting the implementation of fiscal reforms that keep public debt on a downward trajectory and support

fiscal consolidation. Additionally, it takes a more balanced and sustainable growth approach that safeguards natural

resources and measures to better deal with climate change and natural disaster shocks. The program’s first pillar supports

Prior Actions covering key fiscal reforms that support implementation of the 2015 Fiscal Responsibility Act (FRA), a new

rules-based fiscal framework, customs reforms and strengthened monitoring and oversight of state-owned enterprises.

The program’s second pillar includes measures to strengthen marine and coastal management, and to strengthen climate

change resilience.

33 The FRA has facilitated Grenada’s return to a sustainable fiscal position, and this new operation supports

continued efforts in this direction through: (i) institutionalizing a Fiscal Responsibility Oversight Committee responsible

for monitoring of the fiscal rules and preparing and presenting to Parliament an Annual Report on the status of

implementation of the FRA; (ii) operationalizing a contingency fund to strengthen the response to emergencies and

natural disasters, and (iii) enacting and operationalizing a new compensation management policy framework aimed at

improving public sector productivity within fiscally sustainable paraments, in line with the FRA. It also supports further

reforms aimed at streamlining and strengthening customs administration, including the establishment of an Appeals

Commission to improve trader services and enhance compliance, improving processes through the adoption of electronic

declarations and other automatic processes, decreasing clearance time and strengthening post clearance audits and

enforcement capabilities and presenting an assessment of contingency risks in the Annual Fiscal Risk Report.

34 The new program also supports a continuation of efforts under the PRBDP towards strengthening climate change

resilience and disaster mitigation. Specifically, under the program, the Government has modified its building codes to

improve the resilience of housing infrastructure and adopted a policy on sustainable public procurement and

implemented standards, specifications and contractual conditions which enforce sustainability requirements in publicly-

funded contracts.

35 This follow-up operation is closely aligned with two new strategy products for the OECS region, and by extension

Grenada. The Performance and Learning Review (PLR) of the Regional Partnership Strategy (RPS) for the OECS, approved

in May 2018, revised the RPS, adding a strong focus on macroeconomic and fiscal policies, with an emphasis on the use

of budget support operations to boost policy reforms in these areas. The PLR also suggested a one-year extension of the

RPS, now effective though FY20. Among the lessons highlighted in the PLR was the need for greater consolidation, more


10

selectivity and less complexity in Bank-supported interventions, given capacity constraints in small-island states. The

second strategy product, the Systematic Regional Diagnostic (SRD) for the OECS was approved in June 2018 and

presented substantial evidence on the main constraints to inclusive growth and poverty reduction in the OECS. The SRD

identified five priority areas for revamping inclusive and sustainable growth: (i) building resilience to external shocks from

a 360° perspective, (ii) embedding growth in the blue economy, (iii) strengthening and harnessing human capital, (iv)

embracing new technologies to transform productivity, and (v) promoting regional integration and connectivity.

3. ASSESSMENT OF OUTCOMES

3.1 Relevance of Objectives, Design and Implementation

Rating: High

36 The ICR team assesses the overall relevance of objectives and design implementation as High, due to appropriate

identification of objectives despite minor shortcomings in Program ambitiousness, given capacity limitations in small

states, and the initial design of the Results Framework (that was adjusted during implementation).

37 Both during preparation and today, the relevance of the Program’s objectives is High. The Program’s objectives

are fully consistent with the Regional Partnership Strategy (RPS) for the Organization of Eastern Caribbean States (OECS,

of which Grenada is a member) for the period FY15-19.2 The RPS notes that for years, the OECS had been trapped in a

spiral of low growth, high debt, limited fiscal space and growing social problems, exacerbated by a number of external

shocks, including the effects of the global economic and financial crisis and natural disasters. To address these, the RPS

prioritized three areas of engagement; all ranked as high priorities by governments and stakeholders: competitiveness,

public sector modernization, and resilience. The PRBDP program addressed six of the RPS’s nine objectives within these

three areas of engagement: (i) improved investment climate; (ii) increased tourism benefits with stronger linkages to

agribusiness; (iii) improved budget management and transparency; (iv) strengthened capacity to manage PPP; (v)

improved targeting and reduced fragmentation of social protection system, and (vi) increased capacity to manage natural

hazards. The Program’s objectives were consistent and coordinated with those of the IMF’s ECF.

38 The relevance of the PRBDP program’s design and implementation is rated Substantial. Its design reflected

proper diagnostics carried out either before or in the course of preparation, as reflected in the vast amount of AAA and

TA (Annex 4), considered lessons learnt from the performance of previous World Bank-financed programs, and was

complementary to other ongoing World Bank-financed investment operations in Grenada (Annex 5). The Program’s

design, with four objectives and four pillars matching each of the objectives, was structured to match exactly the four

pillars of the World Bank’s Comprehensive Debt Framework 2010 (CDF), that was designed to address debt sustainability

in the Caribbean.3 Specifically, its design incorporated lessons that highlighted that a programmatic approach, supporting

2 World Bank, Regional Partnership Strategy for the Organization of Eastern Caribbean States (OECS) for the Period FY15-19, Report No. 85156-LAC dated October 17, 2014. 3 In 2010, facing among the highest public debt indicators in the world, the Heads of Government of CARICOM countries requested the World Bank to develop a Comprehensive Debt Framework to address the challenge of high debt levels facing many small states, especially the Caribbean countries. The CDF acknowledges that growth could not be achieved without fiscal prudence and vice versa and the challenges that the region was facing were severe and could not be solved by fiscal adjustments and debt restructuring alone


11

a multi-stage program with a longer-term horizon, would have a stronger development impact than a stand-alone one-

year program, and that, given limited implementation capacity in small states, the policy matrix should be concise with

few clearly defined measures and indicators. The Prior Actions and other policy reforms supported by the PRBDP series

were strongly linked to the Program’s objectives. Nevertheless, the Key Indicators selected monitor progress towards its

PDO presented some issues (Annex 6) and PRBDP1 underestimated the time required to implement several of the policy

reforms supported, even considering its programmatic approach. Further, while the PRBDP documents highlighted the

series’ selectivity, in reality, the sheer number of objectives, while supporting the broader objective of fiscal sustainability

and growth, required implementation by numerous institutions that were responsible for a large number of different

initiatives. The Program maintained its relevance throughout implementation through the consistent updating of the

triggers, Prior Actions, and Key Indicators.

3.2 Achievement of Program Development Objectives

Overall Achievement of Objectives

39 This ICR evaluates PRBDP based on the final policy matrix for the third operation, which has three pillars with

three overarching objectives. The Program Development Objective of the PRBDP series, as defined in PRBDP3, was to

support the Government of Grenada to implement a program of policy and institutional reforms to: (i) improve the

investment climate and competitiveness; (ii) improve public resource management, and (iii) enhance resilience against

natural disasters. Each pillar has multiple sub-objectives that are measured with several result indicators. Out of 17 Key

Indicators in PRBDP3, six indicators exceeded targets, four indicators met targets, three indicators partially met targets,

and four did not meet targets, despite significant progress in legislative and institutional reforms. Overall, achievement

of the objectives of Pillar 1 was deemed moderately satisfactory, those of Pillar 2 as satisfactory, and those of Pillar 3 as

moderately unsatisfactory.

Overall Rating: Moderately Satisfactory

40 The specific achievements of the Program are more broadly reflected in the adequacy of the macroeconomic

policy framework and the strong macroeconomic performance since implementation. Sound macroeconomic policy in

Grenada is underpinned by a rules-based fiscal framework and fiscal responsibility legislation that cap expenditure

growth and the public wage bill; a medium-term debt strategy that targets a public debt to GDP ratio of 55 percent by

2020; and a pegged exchange rate system. Macroeconomic performance, in turn, has shown consistent economic growth

and declining public debt levels. Real GDP growth rebounded strongly in 2014-2015, to over 6 percent, on the back of

stronger tourism, investment and agricultural sector growth (Table 1). Growth moderated to 3.7 percent in 2016 due to

drought that affected agricultural output, but rebounded quickly to 5.1 percent in 2017, and is expected to reach 5.2

percent for 2018. Adherence to the fiscal rules and tax reforms have strengthened Grenada’s fiscal stance. The fiscal

balance shifted into surplus of 2.3 percent of GDP in 2016—the first in a decade, with a 3.0 percent surplus for 2017.

Meanwhile, a primary surplus of 5.7 percent of GDP was achieved in 2017, by far exceeding the target of 3.5 percent set

by the Fiscal Responsibility Act. Debt restructuring which began in 2013, has resulted in the successful renegotiation of

debt obligations with the insertion of hurricane clauses and lengthening of maturities.4 This has significantly improved

but required structural reforms. These reforms were needed to create conditions for economic growth so that debt reduction was not achieved at the expense of economic growth but rather led to a virtuous cycle of lower debt and faster economic growth. The framework was structured around four pillars, exactly the same as those in the Program’s PDOs. 4 The hurricane clause provides for automatic liquidity relief from debt servicing in the event of a qualifying disaster.


12

the post-restructuring redemption profile of Grenada’s debt and lowered interest costs. The public debt-to-GDP ratio

declined to an estimated 70.8 percent in 2017 and is on track to fall below 55 percent by 2020. FDI inflows have been

consistently above 8 percent of GDP since 2015 as conditions for private investment have improved. International

reserves are adequate, covering 3.5 months of imports in 2017. Inflation is low and stable, and the banking sector remains

sound. Having undergone significant balance sheet shore up, banks are profitable and adequately capitalized. At the close

of the IMF ECF arrangement in May 2017, it was concluded that Grenada had achieved the core objectives of the ECF-

supported macroeconomic program of restoring fiscal sustainability, strengthening the financial sector and creating

conditions for sustainable growth.

Pillar 1: Improved Investment Climate and Competitiveness

41 The achievement of the first objective of improved investment climate and competitiveness is Moderately

Satisfactory. Major progress towards investment climate reforms in tourism, agribusiness, trade logistics, PPPs and the

energy sector, as measured by Key Development indicators and other outcomes support this rating.

Objective 1.1: Strengthening the Institutional Governance Framework for the Tourism Sector

Key Indicator:

• Status: Exceeded. Tourist Receipts (Baseline 2013=EC$307 million; Target 2018=EC$332 million; Actual 2017=

EC$447.9 million).

42 The Government’s Tourism Strategic Plan for 2011-2014 aimed to increase tourist arrivals, length of stay,

receipts and employment in Grenada’s tourism sector. Its total contribution to GDP and employment are 23 percent and

21 percent respectively and it is responsible for bringing an increase in private capital flows for tourism-related

construction projects. When PRBDP1 was being formulated, the lack of a governance mechanism for the tourism sector

impeded the development of a shared and holistic vision and common implementation strategy. Efforts to modernize

sector governance gained momentum with the enactment of the Grenada Tourism Authority (GTA) Act in January 2014,

supported as a Prior Action under PRBDP1. The act established the GTA as a statutory body, tasked with overseeing the

tourism sector, as well as designing and implementing sector policies. PRBDP2 instituted a new regulatory framework for

the tourism sector in accordance with the GTA Act. Recognizing the importance of publicity and promotion for the growth

of tourism, the GTA began by formulating a Strategic Marketing and Product Development Policy through a consultative

process with private sector participation. The policy called for: (i) the creation of an internationally recognized “Pure

Grenada” brand; (ii) the development of cultural tourism as a discrete subsector; (iii) the prioritization of the yachting

and eco-tourism subsectors, and (iv) the launching of joint marketing initiatives with airlines in key source markets. At

the time of approval of PRBDP2 and responding to four regulations to the GTA Act that had been approved in 2015, the

team had proposed to include a trigger for PRBDP3 related to the establishment of an Airlift Committee with a broad

mandate to renegotiate airlift agreements with international carriers, to improve tourism receipts and reduce public

expenditures related to subsidy payments, or minimum revenue guarantees for international carriers. This trigger was

dropped however due to the change in the Government’s strategy and its expected timeline.

43 The PRBDP series achieved Objective 1.1, as measured by the Key Indicator defined to measure progress. Tourist

Receipts increased from EC$307 million in 2013 to EC$447.9 million in 2017 and EC$406.9 million from January to June

2018. Some caution is warranted with this indicator, however. While the Government’s institutional reforms to improve

the implementation of sector strategies no doubt helped achieve these results, there are exogenous factors such as an

improving international environment and the absence of hurricanes and other disasters that undoubtedly helped to


13

facilitate this target. Nevertheless, between 2013 and 2017 growth of tourism in Grenada has well exceeded that in the

rest of the OECS countries.5

Objective 1.2: Improving the Productivity and Competitiveness of the Agribusiness Sector

Key Indicators:

• Status: Partially Achieved. Leasing out of Government-owned agricultural estates to private entities (Baseline

2013=none; Target 2018=at least 3 Government-owned estates leased; Actual 2018=2);

• Status: Exceeded. Area cultivated at leased Government-owned agricultural estates (Baseline 2013=zero acres

out of a total of 379 cultivatable acres of Government-owned land selected for PPPs; Target 2018=186 acres;

Actual 2018=205 acres);

• Status: Partially Achieved. Number of farmers served by MNIB (Baseline 2013=1,623; Target 2018=at least 2,500;

Actual 2018=2,000); and

• Status: Exceeded. Percentage of licensed food premises and street food premises in Grenada that have been

inspected by the Food Safety Authority under the Food Safety Act (Baseline 2013=zero; Target 2018=75 percent

share of food premises licensed; Actual 2018=80 percent).

44 The PRBDP series supported the Government’s efforts to improve the productivity and competitiveness of the

agribusiness sector, increasing value added in the sector by boosting its technological sophistication and strengthening

linkages between agriculture and tourism. Specifically, it aimed to boost the productivity and export competitiveness of

agricultural products such as nutmeg and cocoa that alone represented about 50 percent of merchandise exports. It

aimed to do so by: (i) commercializing loss-making Government-owned estates, attracting private investment and

encouraging the use of improved technologies in those estates; (ii) strengthening agricultural extension and marketing

services by modernizing the role of the Marketing and National Importing Board (MNIB) into a voluntary, demand-driven

provider of extension and marketing services, and (iii) establishing an appropriate food-safety and product-quality

regulatory framework adopting international standards to facilitate exports and improve linkages to the tourism sector.

45 The PRBDP series substantially achieved this objective, as measured by the Key Indicators defined to measure

progress. The Government had early success in the commercialization of two out of four state-owned agricultural estates.

As Prior Actions under PRBDP1 and PRBDP2, the Government appointed a committee which outlined the criteria for the

commercialization of its estates. By the time PRBDP3 was approved, the Government had, as a Prior Action, signed two

commercial agribusiness lease agreements with separate private entities. These agreements have been effective since

June 2015, with appropriate safeguards in place, but the experience to date has been mixed.6 Even as the Government

5 From 2013 to 2017, total receipts, as the main result indicator of the DPC, reached EC$447.9 in 2017 and well exceeded the target of EC$332. It increased 18.5 percent cumulatively in Grenada between 2013 and 2017, while only 10.5 percent in the rest the OECS countries. The number of jobs in tourism increased 25.7 percent cumulatively from 2013 to 2017 in Grenada; while the rest of OECS experienced a more modest expansion of 14.4 percent. Growth in total arrivals in Grenada also exceeded regional counterparts at 43.3 percent versus 26.7 percent in the OECS during the same period. 6 The first estate, Belle Vue, is performing well, with increased cocoa and nutmeg production. The second estate, Grand Bras, has not progressed as expected because the private investors have not been able to mobilize the resources required to commercialize the estate. A third estate, Mt. Reuil, has been earmarked for commercialization but the Government has not been able to finalize any leasing arrangements due to concerns that the property does not lend itself well to mechanization. A fourth potential estate, Lim Blair, has been identified, and a potential investor has expressed interest.


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remains committed to the leasing of additional estates, terms and conditions in lease agreements that mandate

production of cocoa and nutmeg may be proving restrictive to investors who seek to commercialize other products on a

larger scale. In addition, the requirement for private investors to contribute to severance packages of existing workers

may also serve as a deterrent to potential investors. Nevertheless, with only two estates commercialized, the area

cultivated at leased Government-owned agricultural estates totaled 205 acres in 2018, surpassing the 50 percent target

of 186 acres set out in the Program.

46 It had been estimated that only 58 percent of tourism expenditures filtered into local economies in the OECS and

reforms to the MNIB, launched in its strategic plan, were expected to better facilitate economic linkages between tourism

and agribusiness sectors. It would do so by enabling the sale of local agricultural products to hotels, restaurants and

resorts upon their meeting the hospitality industry’s demands in terms of volume, quality consistency and safety

verification. As a Prior Action under PRBDP2, the Government had by December 2014 restructured MNIB, expanding its

role to include the provision of information on markets, product quality and standards, as well as marketing services,

available on a voluntary, demand-driven basis. The number of farmers served by MNIB increased from 1,623 in 2013 to

2,000 by 2018, reflecting less than half of the targeted increase set for this result indicator. However, this indicator, that

was expected to serve as a proxy for linkages between tourism and agribusiness, does not adequately capture the total

extent of extension services provided to farmers. That is because MNIB is only one extension service provider that faces

competition from other agencies, including Non-Governmental Organizations that provide similar services. 7 The

establishment of an internationally harmonized regulatory framework on quality and safety standards for agricultural

products was required to expand access to export markets and enable producers to meet the hospitality industry’s quality

and safety requirements. This framework was established by Parliament’s enactment of the Food Safety Act (a Prior

Action for PRBDP3). Since its approval in 2015, 80 percent of licensed food premises and street food premises in Grenada

have been inspected by the newly-established Food Safety Authority, exceeding the Program target.

Objective 1.3: Strengthening the Business Environment through Improved Trade Logistics

Key Indicators:

• Status: Not Yet Achieved. The number of border control agencies processing trade transactions through

ASYCUDSA World (Baseline 2013=2 agencies; Target 2018=at least 6 agencies; Actual 2018=2); and

• Status: Achieved. Number of agencies sharing trade and taxation related information through ASYCUDA World

(Baseline 2013=zero; Target 2018=at least 2; Actual 2018=2).

47 The PRBDP supported reforms to trade logistics and the administration of cross-border trade, an important

aspect of the Government’s economy-wide investment climate reforms. A new Customs Bill that aligns Grenada’s

legislation with international good practice and enables the establishment of a modern customs administration through

modern risk management, electronic processing, record keeping, and audit powers, self-assessment and clear

accountability and delegation of authority was approved by Parliament in 2014, supported as a Prior Action under

PRBDP1. Also, to facilitate and reduce average clearance time for border-control procedures, the Government aimed to

process at least 80 percent of all trade transactions through the Automated System for Customs Data (ASYCUDA) World

by the end of the PRBDP series. ASYCUDA World allows traders to submit declarations through a web-enabled processing

system, reducing the need to physically visit customs facilities. Together with the establishment of a single payment

7 Actual purchases of local agricultural produce from commercial buyers, including hotels and supermarket chains, increased by 25 percent each year between 2013 and 2015.


15

point, the use of ASYCUDA World was expected to reduce by half the average clearance time for border-control

procedures. Implementation of this system and the establishment of a single-payment point took longer than expected

due to software, budgetary and professional-skills constraints, as well as the extensive coordination and negotiation

required among multiple agencies. In view of slower than expected implementation of this system, a related Prior Action

for PRBDP2 was modified to a trigger for PRBDP3. By the time PRBDP3 was prepared, these difficulties persisted, and the

Prior Action for PRBDP3 was limited to the progress that had been made. i.e., connecting the Bureau of Standards (of the

MoFE) to ASYCUDA World, and to improve interagency coordination by providing the Inland Revenue Department and

the Central Office of Statistics, both under MoFE, access to statistical data from ASYCUDA for improved tax compliance

and trade monitoring. As a Prior Action under the new First Fiscal Resilience and Blue Growth Development Policy Credit,

the Government has signed a contract for the upgrade of the ASYCUDA which includes the expansion of the ASYCUDA

World Licenses and Permits module to: (i) incorporate three additional trade-related government agencies into the

automated electronic clearance processing of import and export consignments; (ii) implement an exemption module to

assist in the processing of conditional duty relief, exemptions, concessions and waivers, and (iii) implement a system of

e-payment services with financial institutions. These changes have brought benefits, defined clearer processes, provided

more chance for interaction with the public and greatly improved transparency. Significant progress has been made

recently following the upgrade of ASYCUDA in September 2018, and the remaining agencies are scheduled to approve

their license in the application on a phased basis. Specifically, integration of border-control agencies in the Ministry of

Health, the Royal Grenada Police Force and three units in the Ministry of Agriculture is scheduled by June 2019.8 Currently

all trade-related transactions in the Customs Division are processed through ASYCUDA. In addition, a single payment

point for trade duties and taxes was established for all ports in March 2018. Data sharing by IRD and the Central Office

of Statistics continues, but there is no immediate intention to integrate other agencies. The PRBDP series substantially

achieved Objective 1.3, as measured by the Key Indicators defined to measure progress.

Objective 1.4: Promoting New Investments under a Public-Private Partnership Policy and Institutional Framework

Key Indicator:

• Status: Achieved. Share of PPP projects under development that conform to the processes and requirements

defined in the PPP Policy (Baseline 2013=zero percent; Target 2018=100 percent; Actual 2018= 100 percent of

projects under development);

48 The Government is committed to increasing both domestic and foreign investment. The PRBDP series supported

its efforts to expand the use of Public-Private Partnerships (PPPs) to mobilize private investment in infrastructure

and public services under a well-defined policy and institutional framework. The Government’s PPP policy,

approved in February 2015, outlined principles and processes for identifying and managing PPPs. It included a

strategy for developing a PPP pipeline and defined institutional responsibilities for implementing PPP projects (a

Prior Action for PRBDP2). As a Prior Action under PRBDP3, the Government, by Cabinet Resolution, established the

necessary institutional arrangements within the MoFE to ensure that PPPs are prepared and managed according

to the approved guidelines. A PPP Policy Steering Committee was established under the MoFE and received

assistance from the Caribbean Regional Technical Assistance Centre and the World Bank’s regional PPP support

program. It meets whenever a potential PPP project is to be discussed. A PPP unit to support the work of the

8 The units in the Ministry of Agriculture are scheduled for the first phase, to be completed by December 2018.


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Steering Committee was also slated to be established in the Macroeconomic Policy Unit of the MOFE. However,

the Government has delayed staffing the unit, citing the lack of a steady stream of projects in the pipeline.9 The

Government’s low appetite for risk and strong emphasis on finding the right fit are factors in the slow progress in

establishing suitable PPPs. In this context, while still supporting its PPP Policy, the Government is reconsidering its

plan to establish a separate PPP unit. It feels that the added expense is not justified given the absence of a pipeline

of PPP projects and believes staff in other units can handle preparation and management of any future

partnerships. With the finalization in September 2018 of the PPP between the Government and Digicel, an ICT

company, under the World Bank-supported Caribbean Regional Communications Infrastructure Program (CARCIP),

the key indicator for Objective 1.4 is met.

Objective 1.5: Strengthening the Policy and Regulatory Environment for the Energy Sector

Key Indicators:

• Status: Exceeded. Share of renewable energy in total installed power-generation capacity (Baseline 2013=1

percent; Target 2018=3 percent; Actual 2018=6.3 percent);

• Status: Partially Achieved. The Public Utilities Commission is fully operational (Baseline 2013=no; Target

2018=yes, with evidence from the Government that PURC has (i) issued a three-year business plan; (ii) a

dedicated place of work; (iii) hired staff, and (iv) an operating budget; Actual 2018=PURC has (i) issued a

three-year business plan; (ii) been provided with a dedicated place of work; (iii) hired a Chief Executive Officer,

a Regulatory Economist and a high-level Administrator, and is short-listing for Engineers, and (iv) been

provided an operating budget.

49 The high and volatile costs of electricity in Grenada reduce the competitiveness of enterprises and increase the

burden on the poor, and the country’s dependence on imported diesel exposes Grenada to oil price volatility and

contributes to climate change. The Government aimed to strengthen the policy and regulatory environment for the

energy sector to: (i) reduce electricity tariffs; (ii) incentivize investment in renewable energy, and (iii) progress toward a

low carbon economy. The Government’s National Energy Policy: A low carbon development strategy for Grenada,

Carriacou, and Petite Martinique, adopted in 2011 outlined a twenty-year vision for the energy sector to be achieved

within a competitive and liberalized commercial and legislative framework that attracts independent power producers.

The Government was participating in setting up a regional regulator (the Eastern Caribbean Energy Regulatory Authority,

ECERA), supported by an IDA Credit, that was assisting OECS countries in establishing independent energy regulatory

bodies and enhanced regulatory procedures. In Grenada, ECERA has assisted the Government to establish the legislative

framework for a new Public Utilities Regulatory Commission (PURC), approved and published in the Government Gazette

on July 15, 2016. As a Prior Action supported by PRBDP3, the Government enacted the Public Utilities Regulatory

Commission Act establishing a national independent energy regulator and endorsed the MoFE’s participation in the

ECERA. This legislation formally established the PURC and facilitates its engagement with ECERA. Progress towards the

Key Outcome Indicator is advancing steadily, despite minor setbacks in recruiting staff of the required caliber and

expertise. To date, the following requirements to fully operationalize the PURC have been met: (i) a draft business plan

was published in November 2015,; (ii) a dedicated place of work has been provided at the Petro Caribe building and all

9 Although several potential PPP projects had been identified when the Program was initially formulated (Geothermal Energy, the Grenada Postal Corporation, the Fort George Tourist Facility and the Waste-to-Energy program) only one project has been approved, and this, in a regional context.


17

office equipment and supplies have been procured; (iii) a Chief Executive Officer, a Regulatory Economist and a high-level

Administrator have all been hired and are in place, and PURC is presently short-listing for Engineers, and (iv) funding for

the PURC’s operation has been budgeted. The PURC is expected to be fully operational by January 2019. In parallel, the

Government pursued renewable energy initiatives with the national electric utility and other stakeholders, including

assessing the potential for geothermal energy, building a wind farm, and facilitating the installation of additional

distributed photovoltaic systems on public, commercial and residential buildings. Progress towards the Key Indicator

relating to the share of renewable energy in total installed power generation capacity was exceeded, as presently 6.3

percent of Grenada’s energy capacity is accounted for by renewable sources, mostly solar. A total of 9.6 percent of peak

demand is met through renewable energy sources. The PRBDP series Achieved this objective, as measured by the Key

Indicators defined to measure progress.

Pillar 2: Improved public resource management

50 The achievement of the second objective to support improved public sector management and better targeting

of social safety net programs is Satisfactory. Major progress towards policy and institutional reforms in public service

modernization, public procurement, financial sector regulation and supervision, debt management and administration

of social safety nets, as measured by Key Development indicators and other outcomes support this rating.

Objective 2.1: Promoting the Effectiveness and Efficiency of the Public Sector through Public Service Modernization

Key Indicator:

• Status: Achieved. Development of job descriptions (Baseline 2013=none; Target 2018=The Ministry of

Education, Human Resource Development and the Environment has formally established job descriptions

with clearly defined competencies and responsibilities for the key task areas of public administration,

including planning, monitoring results, and strategic personnel management; Actual 2018= All 27 job

descriptions developed and approved).

51 The PRBDP series supported efforts to promote the effectiveness and efficiency of the public sector through two

dimensions of public sector modernization: (i) improving management of public employment, and (ii) introducing formal

accountability for results in the public administration. Supported by a Prior Action under PRBDP1, the Government

developed its Public Sector Modernization Strategy that established inter alia procedures for: (i) strategically realigning

public employment; (ii) strengthening management of selected agencies, and (iii) developing a results focus in planning

and budgeting. These measures were expected to reduce the public sector wage bill as a share of GDP, thereby supporting

the Government’s fiscal consolidation efforts as agreed under the ECF. This would be achieved by adjustments in staffing

and relative wages and stricter controls on new hiring, as well as monitoring the process of staff reallocation from low to

high demand activities and support development of adequate skills among public employees. This was to build upon the

results of human resource audits carried out in 2012-2013 for three ministries and one department (supported by a

World Bank IDF Grant), with the objective to align public sector positions and employee skills with the functions and

programs for which those organizations are responsible.10 The PRBDP series originally envisioned that human resource

10 With assistance from the World Bank IDF Grant (TF#95433) which closed in 2012, the Government conducted human resource audits in pilot ministries and departments, including the Ministries of Health, Agriculture, and Legal Affairs, and the Supreme Court Registry. Audit recommendations included strengthening strategic planning, human resources and performance-management systems.


18

audit recommendations would be followed by action plans developed and implemented under PRBDP2. Nevertheless,

institutional weaknesses and insufficient financing for technical assistance hampered the implementation of the action

plans. As the Department of Public Administration (DPA) was reviewing staff allocations and job descriptions in the

Ministry of Education (MoE, which has the largest number of public employees), the trigger for PRBDP2 was dropped and

the trigger for PRBDP3 was modified to support the establishment of the MoE’s computerized personnel records for

teachers and ministry personnel to increase the efficiency of human resource management. The launch of the MoE’s

Education Management Information System (EMIS) to manage human resources data in September 2016 was a Prior

Action for PRBDP3. Solid progress has been made with computerizing personnel records for teachers and ministry

employees, as well as for student enrollment. The system is expected to facilitate workforce planning in the public sector

by enabling the MoE to readily access reliable data on public employees to optimize the total number and allocation of

teachers and ministry personnel, both regionally and by school. Efforts to improve public sector productivity within

fiscally sustainable parameters are being continued under the First Fiscal Resilience and Blue Growth Development Policy

Credit. As a Prior Action under that operation, the Government approved a Compensation Management Policy

Framework for the public sector in line with the parameters of the Fiscal Responsibility Act. Compensation reform will

involve setting parameters for public service compensation within a sustainable and affordable wage bill and rationalizing

and standardizing disparities in compensation and strengthen the alignment of pay to performance.

52 The PRBDP also supported the Government’s efforts to improve strategic planning capacity and strengthen

accountability. The Government piloted strategic planning techniques—including the development of a three-year

corporate plan and an annual action plan—in three ministries and the Department of Public Administration (DPA), then

scaled them up to include all ministries and departments. Combined with the recommendations from the human

resource audits, the action plans support results-base management according to the objectives and expected results set

for each ministry. The Government also introduced mechanisms to hold public agencies accountable for results. The 2014

Public Financial Management Act mandated that all ministries, departments, and statutory bodies submit quarterly and

annual performance reports to the Cabinet Office; the first quarterly reports were prepared in 2015 and the first annual

performance report was presented to Parliament in 2016. These steps are critical to assert the oversight of the Cabinet

Office. Finally, the DPA has developed generic job descriptions for key areas of public administration, such as planning

and results monitoring, organizational management, and human resources. These generic descriptions are being adopted

by line ministries and departments, and the MoE was the first public entity to adopt the new job descriptions, with the

expectation of strategically reorienting employees as needed in order to enhance administrative efficiency and

institutional performance. The MoE had developed all 27 job descriptions by June 2017. In May 2018, they were approved

by the technical review team with signoff by the Permanent Secretary of Education. Final approval of the job descriptions

was issued by the Permanent Secretary of the DPA. All of the job descriptions have been adopted by the MoE, and the

Government is proceeding systematically to conduct functional reviews across all ministries on a phased basis, by

performing horizontal and vertical reviews in five core areas: (i) planning; (ii) human resource management; (iii) registry;

(iv) finance, and (v) procurement. The PRBDP series Achieved this objective, as measured by the Key Indicators defined

to measure progress.


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Objective 2.2: Strengthening Public Procurement Systems

Key Indicator:

• Status: Not Yet Achieved. Publication of contract awards (Baseline 2013=zero; Target 2018=All contract

awards are published, in conformity with the new Procurement Law; Actual 2018=Expected for January

2019).

53 Significant progress was made in strengthening Grenada’s public procurement system, including the institutional

reforms necessary for making the system more transparent and efficient, but the ultimate implementation of the

procurement website is still awaiting completion of final activities. Public procurement in Grenada operated under the

framework of an outdated and not completely implemented 2007 Public Procurement and Contract Administration Act.

Reforms to increase transparency, strengthen the private sector’s confidence and make systems less bureaucratic and

more oriented towards results and value-for-money was a priority for the success of Grenada’s strict fiscal adjustment

program. A new Public Procurement Law, consistent with international best practices, was approved by Parliament in

August 2014 (a Prior Action for PRBDP2) to increase efficiency by centralizing procurement in select government

agencies, leveraging economies of scale, reducing transaction costs and alleviating capacity constraints at the

decentralized level. The law provides for electronic and regional procurement, and includes provisions related to conflict

of interest debarment, whistle-blower protection and due process for bidders. A Public Procurement Board is responsible

for policy advice and operational oversight, and an independent Review Commission is tasked with addressing bidder

complaints. In June 2015, the Cabinet approved regulations governing: (i) public procurement and the disposal of public

property, including setting monetary thresholds for the application of various procurement methods and providing

detailed procedural rule for the operations of institutions set up under the law; (ii) the activities of the Review

Commission, including the procedural rules for the submission and handling of appeals by bidders, and (iii) the activities

of the Disposal Committee and procedures for disposing of state-owned assets. Subsequently, as a Prior Action under

PRBDP3, the Government through the MoFE: (i) appointed the Chief Procurement Officer in the MoFE, and (ii) fully

staffed and operationalized (a) the Public Procurement Board; (b) the Public Procurement Review Commission, and (c)

the Public Procurement Disposal Committee. A website for the publication of procurement information, including the

award of contracts was launched in May 2018 (www.procurement.gd). Tenders for disposal of public assets have been

published on the website and information of contract awards is available upon request. Nevertheless, members of the

three procurement agencies are on a voluntary basis so the performance of their responsibilities is compromised. For

example, quarterly meetings cannot be guaranteed in the Public Procurement Disposal Committee and decisions often

fall to the discretion of the Committee Chair, in conjunction with the Chief Procurement Officer. Also, the communication

gap between the Chief Procurement Officer and the Public Procurement Board has caused a delay in the publishing of

contract awards. Recognizing the importance of public procurement, the Government is working to amend related

regulations and expects to publish all contract awards in conformity with the new Procurement Law by the end of January

2019. The PRBDP series has not yet achieved this objective, as measured by the Key Indicators defined to measure

progress.


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Objective 2.3: Improving Financial Sector Stability through improved Regulation and Supervision

Key Indicator:

• Status: Exceeded. Provision for loan losses to nonperforming loans (NPL) for the banking sector (Baseline

2013=30 percent of NPLs; Target 2018=60 percent of NPLs; Actual 2018=71.7 percent).

54 The PRBDP series helped improve the stability of Grenada’s financial sector through improved regulation and

supervision. The global financial crisis had severely affected the banking sector in many Caribbean countries, and the

PRBDP series supported Grenada’s participation in regional efforts to strengthen banking regulation and supervision to

bolster the Eastern Caribbean Central Bank’s (ECCB) resolution powers and reinforce the loan classification and

provisioning requirements (since banking regulation and supervision and the framework for bank resolution are regional

results hinged mostly on the implementation of regional reforms). In February 2014, the Eastern Caribbean Currency

Union (ECCU) Monetary Council approved a regional strategy to strengthen the banking sector that included: (i) a

comprehensive diagnostic; (ii) legal and institutional reforms with a new banking and asset management company (AMC)

legislation and the establishment of a regional AMC; and (iii) restructuring strategies for weak banks. The Government

completed the diagnostic and valuation of the assets of Grenada’s weak banks in the first half of 2015. A new legal

framework consisting of the uniform Banking Act and amendment to the ECCB Agreement Act was approved by

Parliament in April 2015 (a Prior Action under PRBDP2). It significantly strengthens prudential regulation, supervision and

problem bank resolution. Based on the comprehensive diagnostic and approval of the legal framework, the ECCB and the

Government began discussing how to incorporate the results of the analysis into restructuring plans. The PRBDP series

achieved this objective, as measured by the Key Indicator defined to measure progress: by June 2018, the provisions as

a percentage of NPLs were 71.7 percent, surpassing the Program target of 60 percent. (The provisions at the end of March

2018 as a percentage of NPLs was 64.8 percent.)

Objective 2.4: Strengthening Social Safety Nets

Key Indicator:

• Status: Achieved. Share of SEED program beneficiary households identified in the Phase Out Plan as

ineligible and non-vulnerable that have been transitioned out of the program (Baseline 2013=zero;

Target 2018=95 percent; Actual 2018=100 percent).

55 The PRBDP series was very successful in strengthening the system of social protection through safety nets and

has made good progress in phasing out ineligible household beneficiaries from the main safety net program. The

Government’s NEP aimed to strengthen its social safety nets, ensuring not only that they reached the poorest and

neediest households but also to improve public resource management through better-targeted social spending. Based

upon recommendation from the 2009 Social Safety Net Assessment (SSNA), the Government had created the conditional

cash transfer program ‘Support for Education Empowerment and Development’ (SEED) that consolidated the top three

of Grenada’s over 30 social protection programs and was working to develop a robust targeting mechanism, the

Grenadian Living Conditions Indicator (GLCI), to re-certify existing beneficiary households and identify new ones. As a

Prior Action under PBDRP1, the Government adopted a policy framework for the strengthening of the design and

programming of its social safety nets, that included: (i) strengthening the systematic production and use of evidence on

poverty and vulnerability for better policy design and programming (research, monitoring and evaluation); (ii) increasing

the poverty reduction focus through social safety net policy design and programming; (iii) carrying out social and legal

reforms to improve access to services for the poor and vulnerable; (iv) helping families achieve economic independence,


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and (v) ensuring an efficient, effective, transparent, participative and accountable social protection service delivery

(modernizing systems and building capacity).

56 Starting in 2014, the Ministry of Social Development and Housing (MoSDH) began working to develop the GLCI

and pilot the targeting instrument. By 2015, the Beneficiary Management Information System was operational, and the

GLCI began being applied to existing SEED households beginning in end-2015. Given strong progress, the indicative trigger

for PRBDP2, that required the Government to include the establishment and implementation of eligibility criteria for the

application of the targeting instrument and started its implementation was modified into a Prior Action that also included

a requirement that the Government prepare a Phase-Out Plan to remove ineligible households. A phased approach was

considered essential given the political and financial implications of applying a targeting instrument. The Phase-Out Plan

was approved by the Government in August 2015, providing an action plan for managing the phase out process for

ineligible households and setting a road map for complementary enrollment of new households that had not previously

been receiving SEED transfers but were now eligible based on new targeting criteria. As a Prior Action for PRBDP3, the

Government institutionalized the implementation of the Phase-Out Plan for the SEED program, notifying all ineligible

beneficiary households of their status and completing the transitioning out of the program for the first two of three

groups (at least 70 percent) of beneficiary households identified in the Phase-Out Plan as ineligible and non-vulnerable.11

All the households falling in the ‘Non-vulnerable’ category, totaling 434, were notified and phased-out; only 34 have

appealed the decision. The Program has therefore exceeded the 95 percent target for the share of ineligible SEED

Program beneficiary households identified in the Phase-Out Plan that were transitioned out of the program.

57 The removal of ineligible beneficiaries has allowed the Government to increase the coverage of the poorest

households in the SEED Program, a complementary aspect to the objective of strengthening social safety nets. Though

not explicitly monitored in the Program, social safety net coverage has also improved. One of the result indicators under

the recently closed Social Safety Net Project showed that the percentage of poor households receiving the SEED cash

transfer increased from 69 percent in 2016 to 82 percent by the close of the project in September 2018, surpassing the

target of 80 percent. In addition, the Government has been using the new targeting tool exclusively for new enrollments

in SEED since 2016 and plans to apply the tool for all of its social programs. It has also recently completed installation of

the new Beneficiary Management Information System and sees it as a critical element in the development of a central

beneficiary registry.

Objective 4.1: Strengthening the Institutional Debt Management Capacity and Facilitating Debt Portfolio Restructuring12

Key Indicator:

• Status: Exceeded. Share of public and publicly guaranteed debt with a maturity of less than 90 days

(Baseline 2013=17 percent; Target 2018=10 percent; Actual June 2018=4.2 percent).

11 The GLCI targeting tool grouped households into 5 categories, based on need. It was determined that SEED eligibility would be defined as households falling within the ‘Most Deprived’ and ‘Mid Deprived” categories. However, considering the challenges faced by existing SEED households and the need to ensure a smooth transition, the MoSDH decided that existing Beneficiary Households falling in the ‘Least Deprived’ and ‘Vulnerable’ categories would be given a grace period to remain on SEED for two years unt il mandatory recertification. Thus, only ineligible households falling in the ‘Non-vulnerable’ category were included on the Phase-Out list to be transitioned out of the program, on a staggered basis, over 9 months. 12 This objective was a separate Pillar 4, Facilitate debt portfolio restructuring and enhance debt management, under PRBDP1. It was later included under Pillar 2 for each of PRBDP2 and PRBDP3.


22

58 The measures under the PRBDP series improved the composition of Grenada’s debt portfolio and contributed to

the country’s long-term debt sustainability. The Government has made steady progress in improving its debt profile, and

the share of public and publicly guaranteed debt with a maturity of less than 90 days fell from 17 percent in 2013 to 7.9

percent in 2017. As of June 2018, it had declined to 4.2 percent, as the Government extended maturities of short-term

debt on the Regional Government Securities Market (RGSM) in February 2018.

59 At 100 percent of GDP at end 2013, Grenada’s debt to GDP ratio was among the highest in the world. The

Government’s cash flows had come under pressure, and discussions with creditors on a comprehensive debt

restructuring were underway. To complement the measures taken by the Government on debt restructuring, the PRBDP

series aimed to strengthen the Government’s capacity to ensure medium-term debt sustainability by building upon

efforts supported by the ECCB’s Debt Management Advisory Services to bolster institutional capacity on debt

management. The series would also help develop an in-house detailed Medium-Term Debt Management Strategy

(MTDS), aligned with budget discussion to give a clear signal to markets and creditors of the country’s medium-term

commitment to its debt strategy. Consistent with the 2015 Public Debt Management Act, the MoFE’s Debt Management

Unit (DMU) developed an MTDS, which was submitted to the Cabinet in October 2015. The DMU subsequently prepared

a revised MTDS to include progress achieved in the debt restructuring process as of end-2015. The MTDS is expected to

allow the Government to analyze how debt composition affects relative costs and risks by using scenario analysis to

achieve a desired composition that captures the Government’s tradeoff preferences.

60 By the time PRBDP3 was approved, the DMU was implementing the recommendations of the joint World Bank-

ECCB technical assistance mission that developed the Debt Management and Performance Assessment (DeMPA) in July

2015.13 It developed a statistical bulletin for publication as part of the debt-management framework and incorporated it

into the Debt Sustainability Analysis (DSA), the MTDS and the debt portfolio review. An annual borrowing plan, consistent

with the MTDS was completed in 2016. The DMU adopted its Procedures Manual that was developed with assistance

from the ECCB. And finally, as a Prior Action under PRBDP3, the Government approved the MTDS for the 2016-2018

period. A second DeMPA was carried out in 2018 and found improvements in several areas, including enactment and

implementation of key debt management legislation, development and reporting results of the DSA, development and

approval of the MTDS, as well as publication of a quarterly debt statistical bulletin. The report noted that consolidation

of debt management functions, as well as several other areas required further enhancement.

Pillar 3: Enhanced resilience against natural disasters

61 The achievement of the third objective to enhance resilience against natural disasters is rated Moderately

Unsatisfactory, as targets for Key Indicators were not met. However, as described below, the legislative and institutional

reforms approved within the context of the PRBDP series have laid the regulatory basis for improving physical planning

and the Bank is providing further support to the Government under the follow-on Fiscal Resilience and Blue Growth

Development Policy series.

13 The DeMPA methodology is used to assess the strengths of debt management policies and operations and identifies areas requiring further improvement. Five debt management areas are included in the DeMPA evaluation, including governance and legal framework, coordination of debt with monetary and fiscal policies, borrowing and related financing activities, coordination with cash management and operational risk management of central government debt including allocation of roles and responsibilities.


23

Objective 3.1: Reducing the Risk to External Natural Hazard Shocks through a Strengthened Physical Planning Regulatory

System

Key Indicators:

• Status: Not Yet Achieved. Share of membership of the Grenada Institute of Professional Engineers (GIPE)

registered in accordance with the 2015 Engineering Act (Baseline 2013=zero percent; Target 2018=40

percent; Actual 2018=0); and

• Status: Not Yet Achieved. Establishment of the Building Inspection Unit at the Ministry of Communication,

Works, Physical Development, Public Utilities, ICT and Community Development (Baseline 2013=none; Target

2018=unit established; Actual 2018=planned).

62 The measures under the PRBDP series are expected to significantly improve the quality of new construction and

reduce the risks associated with natural disasters. Grenada’s high exposure to natural hazards required a series of

initiatives to reduce the risks of shocks arising from these events. The PRBDP series supported short- and medium-term

policy measures to strengthen the physical planning regulatory system. PRBDP1 supported improved building standards,

better zoning processes and planning, and the professionalization of engineers and architects. Specifically, Prior Actions

included: (i) approval of the Grenada Building Code and the Grenada Building Guidelines by the Cabinet; (ii) approval of

the Physical Planning and Development Control Bill, 2014, for submission to Parliament; and (iii) submission to Parliament

of the Architects (Registration) Bill and the Engineers Registration Bill, establishing procedures for the professional

practice of both. PRBDP3 supported enactment of the Building Code Act in 2016 (and Guidelines that were promulgated

by the Executive) and the revised Physical Planning and Development Control Bill as amended in 2017 to introduce

additional regulations to make infrastructure design, including for housing, more resilient to extreme weather events.

The new building codes apply to new as well as existing buildings. In addition to strengthening the resilience of roads,

bridges, and overall built environment to torrential rains, tropical storms and hurricanes, the codes will also contribute

to greenhouse gas emission reductions through energy efficiency improvements.

63 Implementation of the new laws called for the establishment of a Building Inspection Unit at the Ministry of

Communication, Works, Physical Development, Public Utilities, ICT and Community Development to ensure that new

public, commercial and residential buildings were constructed only in safe and regulated areas and in compliance with

the new building codes. The Building Inspection Unit would have complemented the work of the Physical Planning Unit,

which has responsibility for approving building permit applications and conducting quality control but is presently

understaffed and unable to carry out all its quality assurance functions. The Building Inspection Unit, a key result

indicator, has not been established. One reason cited for the delay is the decision to take a regional approach to

harmonizing building codes through an OECS initiative. Another reason, is a lack of high caliber staff, both locally and

regionally, with the requisite technical expertise to carry out quality assurance. In addition, the Physical Planning Unit

has been relocated to the MoFE, amid plans to transition it out of Central Government to an autonomous body. In short,

while during the permit application phase, only plans conforming to the new building codes are approved, there is limited

due diligence during the construction phase to ensure compliance. In 2017, 602 new building applications were approved,

all in accordance with the new codes. Of buildings that went on to be constructed, about 65 percent were inspected for

development control, but only about 2 percent were inspected for quality assurance. These constituted a few large-scale

commercial constructions tagged as pilot cases to test operations for the planned Building Inspection Unit. For the full

operationalization of the unit, more staff with the requisite technical expertise, as well as geographical data for zoning

requirements are needed.


24

64 The Program also supported measures to strengthen the physical planning regulatory system through the

professionalization of engineers and architects. The 2015 Engineering Act provided the framework for the registering of

professional engineers through the formation of an Engineering Registration Board, but this has yet to be established. In

the interim, membership in the Grenada Institute of Public Engineers (GIPE), a professional association, is used

unofficially by the Physical Planning Unit and Ministry of Infrastructure and Works to determine certification of engineers

to approve construction plans.14 The GIPE has no legal authority, however, to determine a person’s right to practice as

an engineer. It was intended that by the end of the Program, the share of membership of the GIPE registered in

accordance with the 2015 Engineering Act would have increased from zero percent in 2013 to 40 percent in 2018, but

targets were not achieved for this indicator. 15

3.3 Justification of Overall Outcome Rating

65 The PRBDP series partially achieved its PDO as per the results under each of the individual objectives as described

above, and Outcome is rated Moderately Satisfactory. As can be expected under any operation this complex, progress

among the various objectives has varied, with results under some objectives exceeding those of others. Nevertheless,

despite its complexity, with multiple objectives and activities across many sectors and areas, the PRBDP series provided

a relevant instrument to complement similar assistance by the CDB and the IMF’s ECF-supported program aimed at

restoring short-term fiscal sustainability. Despite issues with the ambitiousness of the first operation as prepared,

subsequent operations were adjusted and adapted to reflect progress and implementation capacity. Together, in a short

six-year period, these three complementary programs have helped restore Grenada’s macroeconomic balances,

including fiscal and external debt profiles, and, through important institutional and policy reforms, helped put in place

the legislative and institutional framework to put the country on a sustainable growth path, with adequate social

protection for vulnerable populations and promising, albeit not yet implemented, arrangements to avoid adverse impacts

from natural disasters (and the economic consequences that any such event would precipitate). These arrangements are

now being supported by the follow-on First Fiscal Resilience and Blue Growth Development Policy Credit (para. 32).

3.4 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

66 The PRBDP’s main poverty impact was through the reforms to social safety net policies. Specifically,

implementation of the new Social Safety Net Policy Framework has resulted in an improved approach to the delivery of

social safety nets, with a unified and more focused mechanism to target benefits to the poor and vulnerable.

(b) Institutional Change/Strengthening

67 By supporting measures to improve fiscal accounts over the medium term, to improve the business environment,

promote private sector participation in the environment, streamline public sector employment and processes, protect

the poor, and improve disaster resilience, the PRBDP series was designed to address fundamental medium-term reforms,

14 The GIPE does due diligence for engineers seeking to join the organization by verifying their level of education and accreditation of institution, and requiring proof of work experience (four years for corporate membership). 15 Communication failure between the Ministry of Infrastructure and Works and the GIPE seems to be at the heart of this matter. The Engineering Act authorizes the GIPE to nominate members to the Registration Board. However, for the Ministry of Infrastructure and Works to consider these nominations, it requires documentation certifying the association has been properly constituted and that the leaders acting on behalf of the association are duly authorized to do so. Inquiry by World Bank staff has brought attention to the issue with a new timeline for the establishment of the Registration Board now set for the first quarter of 2019.


25

mostly institutional, that responded to the country’s longer-term development needs. Institutional reform was at the

very center of the PRBDP’s objectives, and achievements are described in detail in Section 3.2. Implementation of

important institutional change and strengthening under the PRBDP counted upon significant analytical and technical

advisory assistance, both by the World Bank and other donors, including assistance provided under investment loans that

complemented the policy areas (Annex 5).

(c) Other Unintended Outcomes and Impacts

68 Not applicable.

3.5 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

69 Not applicable.

4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME

Ratings: Moderate

70 The Risk to Development Outcome is rated Moderate considering the risks of policy reversals, of not maintaining

outcomes, or of not continuing to pursue further strengthening and enforcement of reforms supported by the PRBDP.

71 The overall risk for PRBDP1 was considered Substantial. The main risks included macroeconomic risks related to

uncertain global development, especially in the euro zone and the United States, to which Grenada is highly exposed. A

weaker than anticipated global recovery would suppress a revival in tourism, remittances, GDP growth and FDI,

exacerbating the acute financing gap and making fiscal adjustment more difficult. Another overarching risk that was seen

as potentially affecting the outcomes of the PRBDP was Grenada’s exposure to natural disasters, especially since if a

disaster materialized, it could impact the productive sector, hamper reforms and add pressures to an already difficult

fiscal situation. Governance and political risks were considered, given the ambitiousness of the program that would

require steady political commitment over the reform period. Finally, implementation capacity risks were also highlighted,

especially in view of the limited number of technical staff in several core ministries. By and large, these risks were

highlighted in each of the succeeding phases of the PRBDP. The overall risk for PRBDP2 was considered High. The increase

in rating may have been due to the still uncertain economic environment, coupled with the fact that several triggers from

the first operation had to be reformulated, dropped or delayed to the third operation. By the time PRBDP3 was prepared,

the overall risk for achievement of the operation’s objectives had fallen to Moderate, mostly reflecting reduced

macroeconomic risk, given notable improvements in Grenada’s macroeconomic situation (rated Moderate), and a

dropping of the governance and political risk, presumably a reflection of sustained political commitment to the reforms

over the two earlier phases. The only risk that PRBDP3 identified as Substantial was the risk related to implementation

capacity risks, and in fact, this was the only risk that materialized over the PRBDP’s implementation period.

72 Prospects for future sustainability of reforms supported under the Program are High, and the risk of policy

reversal or of not sustaining outcomes are Negligible given the results that have been witnessed to date and the vastly

improved macroeconomic situation. Most of the reforms supported by PRBDP are grounded in legislation and require

only continued commitment and continued technical support for the full benefits to be sustained. The risk of not pursuing

further strengthening of reforms is also considered negligible, especially since the Government remains committed to

the PRBDP’s objectives and has continued to pursue further reforms with World Bank support under the First Fiscal

Resilience and Blue Growth Development Policy Credit. The main risk to sustainability continues to revolve around


26

institutional capacity. These, however, will likely be mitigated by continuing World Bank and donor technical support in

key reform areas.

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Ratings: Moderately Satisfactory

73 The World Bank’s performance in Ensuring Quality at Entry is rated Moderately Satisfactory. As a programmatic

operation, preparation is considered preparation of the first operation; preparation of the subsequent operations, and

follow-up thereafter are discussed under Quality of Supervision below. On the positive side, this is supported by: (i)

responding to the Government’s financial and reform priorities in a timely manner; (ii) designing the PRBDP around

critical reform issues that responded to the Government’s program and identified priorities; (iii) grounding the PRBDP’s

design in issues identified in earlier and then ongoing analytical work, and other complementary World Bank-financed

operations; (iv) preparing the PRBDP in close coordination with Grenada’s donors, especially the IMF and the CDB; and

(v) incorporating lessons of previous experience with development policy lending in Grenada, including the need for

simplicity and selectivity in program design, together with a programmatic approach supporting a multi-stage program

with a longer-term horizon for stronger development impact. Shortcomings included: (i) the ambitiousness of the

Program, with multiple pillars and diverse policy areas, and initially very ambitious targets; (ii) underestimating the impact

of weak institutional capacity on implementation, and on the Program’s design, and (iii) issues with the design of the

Results Framework (para. 29).

(b) Quality of Supervision


74 The World Bank’s performance in Quality of Supervision is rated Moderately Satisfactory. On the positive side,

this is supported by: (i) timeliness in the preparation of the second and third phases of the Program; (ii) flexibility and

pragmatism in adjusting the Program to align with what could be more reasonably achieved in the given timeframe, and

(iii) continued coordination with Grenada’s donors, especially the IMF and the CDB. Shortcomings included: (i) continued

issues with the Program’s Results Framework over time; (ii) lack of proactivity in terms of mobilizing technical assistance

in critical areas, (iii) discontinuity in the World Bank’s Task Team, especially after approval of the second phase of the

Program, and (iv) an apparent lack of implementation supervision in the final phase of the Program due to staff absence

because of illness.

(c) Justification of Rating for Overall Bank Performance


75 Overall Bank Performance is rated Moderately Satisfactory. Despite issues with Supervision, the flexibility

demonstrated in gradually adjusting the Program to reflect actual implementation and priorities was instrumental in

achieving a Moderately Satisfactory Outcome rating.


27

5.2 Borrower Performance

(a) Government Performance

Ratings: Satisfactory

76 The Borrower Performance is rated Satisfactory. This is supported by: (i) continuity in Administration, in

commitment to its fiscal consolidation and growth reform objectives over the implementation period; (ii) commitment

to passage of key legislation that lays the institutional framework for supporting its reform objectives, and (iii) its

pragmatism in terms of adjusting the implementation of its reform Program to what was achievable and to what made

sense, but to nonetheless remain committed to continuing pursuing its objectives in the future. The Borrower questioned

for example whether it made sense for the Program to support the establishment of several new units in Government

when one of the Program’s objectives was to streamline public sector employment, and opted to “house” the functions

of certain units together with similar units that were already existing (e.g., a new PPP Unit when no proposals have been

put forth). Shortcomings included: (i) the lack of technical capacity to pursue difficult reforms in certain areas and (ii)

difficulties in recruiting qualified staff to fill positions in the local market.

(b) Implementing Agency or Agencies Performance


77 Implementing Agency Performance is rated Satisfactory. As the Program had a strong institutional building focus,

the PRBDPL series contemplated implementation by several agencies, under the overall coordination of the Ministry of

Finance (MoFE). The implementing agencies included: (i) Ministry of Tourism; (ii) Grenada Tourism Authority; (iii) Ministry

of Agriculture and Lands; (iv) Marketing and National Importing Board (MNIB); (v) Food Safety Authority (vi) Customs and

Excise Division, Ministry of Trade; (vii) PPP Policy Steering Committee; (viii) Ministry of Infrastructure and Works; (ix)

Department of Public Administration; (x) Chief Procurement Officer in the MoFE; (xi) Ministry of Social Development and

Housing (MoSDH); (xii) Support for Education Empowerment and Development (SEED); and (xiii) Physical Planning Unit.

The MoFE’s commitment and leadership were strong throughout implementation. As mentioned earlier, institutional

capacity was weak in several already established institutions, with higher levels of management in the institutions

stretched in various directions to implement their respective reforms and activities. Other implementing agencies were

created under the PRBDPL series, based on approved legislation, and their performance was mostly strong. The one

exception was the performance of the Physical Planning Unit. The Unit’s weak performance was partly a management

issue, and the Unit was subsequently transferred to the MoFE to be more directly under the leadership of the Minister

of Finance who is also the Prime Minister. The Unit was also affected by efforts to adhere to the timeline of regional

harmonization initiatives, and lack of technical expertise.

(c) Justification of Rating for Overall Borrower Performance


78 Overall Borrower Performance is rated Satisfactory, based on similar ratings for Government and Implementing

Agency performance.


28

6. LESSONS LEARNED

79 The use of a programmatic instrument is appropriate when supporting a multi-stage program with a

longer-term horizon, but even this approach requires realism in what is achievable over the implementation of

three operations. The Program Document for the first phase of the PRBDPL highlighted that one of the lessons

learned and incorporated was that a programmatic approach could have a stronger development impact than

a stand-alone one-year program. That lesson holds, and the use of a programmatic approach made sense for

the PRBDPL. Nevertheless, even a programmatic instrument to support a reform to be carried out over an

extended period needs to be realistic in what can be reasonably accomplished during its implementation period.

Under the PRBDPL, several of the initial triggers were overly optimistic and were subsequently adjusted to

equate them with the realities of implementation. As an example, the original indicative trigger for the

management of public employment under PRBDPL2 was that “public employment structure in three ministries

and one government department have been aligned with the functions and tasks of government entities in line

with the recommendations of the HR audit conducted in 2010-2013”. By the time PRBDPL2 was prepared, it

was clear that improving public employment management would require an incremental approach that

reflected capacity limitations.

80 Related to the above, public employment management (and downsizing) requires time. While HR Audits,

strategic staffing plans and job descriptions can be prepared, the actual downsizing cannot take place over

night, especially in a small economy with fewer options for alternative employment. While the reforms

supported by the PRBDPL series have been continuously advancing, and the Government has made progress

in reducing the public sector wage bill, it has done this mostly through a process of attrition.

81 Small countries have different dynamics that need to be considered when developing reform programs

and selecting indicators and targets. The PRBDPL series supported a series of institutional reforms aimed at

promoting private sector involvement, and others at establishing government agencies charged with improving

the physical planning regulatory system, for example. While the Government approved the required legislation

in both areas and established the planned institutional frameworks, there were difficulties in fully achieving

Program objectives. In the case of PPPs, for example, only one partnership was ultimately approved, and this

within the context of a World Bank-supported regional program. Similarly, only three investors have expressed

serious interest in the Government’s agricultural estates, and of these, only two leasing agreements have been

signed, just one of which is operating profitably. Finally, plans for the operationalization of the Building

Inspections Unit and the Public Utilities Regulation Commission have experienced delays due, in part, to lack

of qualified experts in the respective fields. One lesson from the successful establishment of the PPP between

the Government and Digicel, in the context of Grenada’s component in the regional project, implies that a

regional approach should be prioritized for some types of reforms, considering the limitations of small states.

82 While appraisal of reform programs normally identifies sources of analytical and technical work that

helped define the priorities together with sources of ongoing assistance in the respective fields, the analysis

needs to consider carefully those areas in which hands-on, just-in-time technical support will be required to

compensate for weak institutional capacity. There were several areas supported by the PRBDPL series where

more hands-on assistance would have been required by the Government, including but not limited to public


29

employment management, energy sector reform and the physical planning regulatory system. The

programmatic development policy finance instrument is not the most appropriate vehicle for providing this

type of technical assistance, especially in environments with capacity limitations. Supervision of these

instruments is normally carried out in the context of preparation of a subsequent phase, and supervision after

approval of the last phase tends to be compromised. The World Bank could have strategically leveraged its IDA

investment lending portfolio to also support complementary activities aimed at capacity-building. Finally, while

continuity in Task Management cannot be expected given staff rotation, as a minimum, a solid hand-over is

desirable to ensure sustained technical support throughout implementation and especially in the final phases

through completion.

83 Policy operations that support fiscal consolidation and a reduction of the public sector should be

cautious of requiring the establishment of separate new units or agencies to implement policies. The PRBDPL

series required the establishment of numerous new units to manage the legislative initiatives it supported.

While the Government has progressed in the establishment of these units, it has now concluded that the

establishment of new, separate units is not always required, and that it might suffice to assign responsibility

for implementation of these initiatives to dedicated staff in existing units. This is the case, for example, of the

PPP Unit, which is now being reconsidered, especially since only few proposals have been put forward.

7. COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS

(a) Borrower/Implementing agencies

84 No issues were raised by the Borrower.

(b) Cofinanciers

85 Not applicable.

(c) Other partners and stakeholders

86 Not applicable.


30

ANNEX 1: POLICY MATRIX AND THE RESULTS FRAMEWORK

Prior Actions under DPC-1 Prior Actions for DPF-2 Prior Actions for DPC-3 Results

(June 2018)

Pillar 1: Improved investment climate and competitiveness

Prior action #1: Parliament

has enacted the Grenada

Tourism Authority Act,

establishing the institutional

framework for governance of

the tourism sector.

Prior action #1: The Grenada

Tourism Authority (GTA) has

instituted a new regulatory

framework for the tourism

sector in accordance with the

2013 Tourism Authority Act.

Indicator: Tourist receipts.

Baseline 2013 = EC$307

million; Target 2018 = EC$332

million (8 percent increase)

Prior action #2: The

Government has (i)

appointed a committee for

the commercialization of

selected Government-owned

estates and (ii) approved the

criteria for the

commercialization of such

estates.


Government has commenced

commercialization of selected

Government-owned estates

by entering into two

commercial agreements with

private entities for

commercial use in the

agribusiness sector.


Government has advanced

the commercialization of

selected state-owned estates

by signing two agribusiness

lease agreements with

separate private entities for a

duration of at least 20 years.

Indicator: Leasing out of

Government owned

agricultural estates to private

entities. Baseline 2013 =

none; Target 2018 = at least 3

Government-owned estates

leased

Indicator: Area cultivated at

leased Government-owned

agricultural estates. Baseline

2013 = zero acres (out of a

total of 379 cultivatable acres

of Government-owned land

selected for public-private

partnerships (PPPs); Target

2018 = 186 acres

[no prior action] Prior action #3: The

Government has approved a

strategic plan to strengthen

tourism and agribusiness

linkages by transforming the

Marketing and National

Importing Board (MNIB) into

a service provider of

information on markets,

product quality, and

standards.


Government has, through the

Parliament, enacted the Food

Safety Act, which establishes

standards for food quality

and prevention of food safety

risks.

Indicator: Number of farmers

served by MNIB. Baseline

2013 = 1,623; Target 2018 =

at least 2,500.

Indicator: Percentage of

licensed food premises and

street food premises in

Grenada that have been

inspected by the Food Safety

Authority under the Food

Safety Act. 2013 Baseline =


31

zero; 2018 Target 2018 = 75

percent (share of food

premises and street food

premises licensed by the Food

Safety Authority)


Government’s Customs Bill

has been submitted to

Parliament on May 9, 2014,

establishing (i) procedures for

electronic processing of trade

transactions, (ii) procedures

for record keeping and audit

powers by the Customs and

Excise Division of the Ministry

of Finance and Energy, and

(iii) accountability procedures

and delegation of authority in

decision-making.



Ministry of Finance and

Energy (MoFE), connected

the Bureau of Standards

(MoFE) to ASYCUDA World to

process trade transactions;

and provided the Inland

Revenue Department (MoFE)

and the Central Office of

Statistics (MoFE) with

statistical data access to

ASYCUDA World.

Indicator: The number of

border control agencies

processing trade transactions

through ASYCUDA World.

Baseline 2013 = 2 agencies;

Target 2018 = at least 6

agencies

Indicator: Number of

agencies sharing trade and

taxation related information

through ASYCUDA World.

Baseline 2013 = zero; Target

2018 = at least 2



policy framework with clear

guiding principles and

processes for identifying

PPPs, and set out institutional

responsibilities for

developing a PPP pipeline and

implementing PPP projects.


Government has established

a PPP Unit in the Ministry of

Finance and Energy, as

evidenced by a Cabinet

conclusion.

Indicator: Share of PPP

projects under development

that conform to the

processes and requirements

defined in the PPP policy.

Baseline 2013 = zero percent;

Target 2018 = 100 percent


Government has enacted the

Public Utilities Regulatory

Commission Act to establish a

national independent energy

regulator; and has endorsed

the Ministry of Finance and

Energy’s participation in the

regional energy advisory

body, the Eastern Caribbean

Energy Regulatory Agency

(ECERA).

Indicator: Share of renewable

energy in total installed

power-generation capacity.

Baseline 2013 = 1 percent;

Target 2018 = 3 percent

Indicator: The Public Utilities

Regulatory Commission is

fully operational. 2013

Baseline = no; 2018 target =

yes, with evidence from the

Government that PURC has (i)

issued a three-year business

plan, (ii) a dedicated place of


32

work, (iii) hired staff, and (iv)

an operating budget

Pillar 2: Supporting Improved Public Resource Management


Government has endorsed a

public sector modernization

policy, establishing

procedures for: (i)

strategically realigning public

employment; (ii)

strengthening management

of selected agencies; and (iii)

developing a results focus in

planning and budgeting.



Ministry of Education, Human

Resource Development and

the Environment, established

computerized personnel

records for teachers and

ministry personnel, and has

produced a report of

personnel records to increase

monitoring, reporting and

analysis of human resource

management, as evidenced

by a letter from the Ministry

of Finance and Energy.

Indicator: Development of

job descriptions. Baseline

2013 = none; Target 2018 =

The Ministry of Education,

Human Resource

Development and the

Environment has formally

established job descriptions

with clearly defined

competencies and

responsibilities for the key

task areas of public

administration, including

planning, monitoring results,

and strategic personnel

management

[no prior action] Prior action #5: Parliament

has approved a new public

procurement law, the Public

Procurement and Disposal of

Public Property Act of 2014,

consistent with international

best practices.


Government, through the

Ministry of Finance and

Energy, has: (i) appointed the

Chief Procurement Officer,

and (ii) fully staffed and

operationalized (a) the Public

Procurement Board, (b) the

Public Procurement Review

Commission, and (c the Public

Procurement Disposal

Committee, as evidenced by

the Cabinet Conclusion No.

734 dated May 23, 2016, the

MoFE Letter of Appointment

for the Disposal Committee

dated July 18, 2016, and the

MoFE Letter of Appointment

for the Chief Procurement

Officer dated 20 June, 2016.

Indicator: Publication of

contract awards. Baseline

2013 = zero; Target 2018 = All

contract awards are

published, in conformity with

the new procurement law


Government has adopted a

policy framework for

strengthening the design and



phase-out plan to improve

the targeting of beneficiaries

of the Support for Education,

Empowerment, and



Ministry of Social

Development (MoSD),

institutionalized the

implementation of the Phase

Indicator: Share of SEED

program beneficiary

households identified in the

PO Plan as ineligible and non-

vulnerable that have been

transitioned out of the


33

programming of its social

safety nets.

Development (SEED)

program.

Out (PO) Plan for the SEED

program by notifying all

ineligible beneficiary

households of their status,

and completing the

transitioning out of the

program for the first two of

three groups (at least 70%) of

beneficiary households

identified in the PO Plan as

ineligible and nonvulnerable.

program. Baseline 2013 =

zero; Target 2018 = 95

percent


Government has approved

the MTDS for the 2016-2018

period, as evidenced by

Cabinet Conclusion No. 935

dated June 27, 2016.

Indicator: Share of public and

publicly guaranteed debt with

a maturity of less than 90

days. Baseline 2013 = 17

percent; Target 2018 = 10

percent

Pillar 3: Enhancing resilience against natural disasters


Government has approved (i)

the Grenada Building Code


Government’s Architects

(Registration) Bill and the

Engineers Registration Bill,

establishing procedures for

the professional practice of

architects and engineers in

the Government’s territory

have been submitted to

Parliament.



Parliament, (i) enacted the

Physical Planning and

Development Control Bill and

(ii) approved the Grenada

Building Code and Guidelines.

Indicator: Share of

membership of the Grenada

Institute of Professional

Engineers (GIPE) registered in

accordance with the 2015

Engineering Act. Baseline

2015 = zero percent; Target

2018 = 40 percent

Indicator: Establishment of

the Building Inspection Unit

at the Ministry of

Communication, Works,

Physical Development, Public

Utilities, ICT and Community

Development. Baseline 2013

= none; Target 2018 = unit

established

[no prior action] Prior action #7: Parliament

has approved a new Banking

Act to strengthen bank

regulation, supervision, and

resolution.

Indicator: Provisions for loan

losses to nonperforming

loans (NPLs) for the banking

sector. Baseline 2013 = 30

percent of NPLs; Target 2018

= 60 percent of NPLs


34

ANNEX 2: MODIFICATIONS TO KEY OUTCOME INDICATORS DURING PROGRAM IMPLEMENTATION

Grenada Resilience Building Development Policy Credit and Loan Key Indicators

Objectives DPC1 DPC/DPL2 DPC3

Pillar 1: Creating Conditions for Private Investment

Tourism Development Tourist receipts. Baseline 2013 = EC$307 million; Target 2016 = EC$332 million (8 percent increase).

Tourist receipts. Baseline 2013 = EC$307 million; Target 2017 = EC$332 million (8 percent increase).

Tourist receipts. Baseline 2013 = EC$307 million; Target 2018 = EC$332 million (8 percent increase).

Renegotiation of airlift agreements by the Airlift Committee. Baseline 2013 = zero; Target 2017 = at least 2 agreements renegotiated.

Agribusiness Development

Increase in total output of commercialized agricultural estates. Baseline 2013 = 350 tons; Target 2016 = 100 percent increase.

Total output of commercialized agricultural estates. Baseline 2013 = 350 tons; Target 2017 = at least 500 tons.

Commercialization of Government-owned agricultural estates. Baseline 2013 = 0; Target 2018 = at least 3 Government-owned estates commercialized.

Leasing out of Government-owned agricultural estates to private entities. Baseline 2013 = none; Target 2018 = at least 3 Government-owned estates leased.

Number of farmers served by MNIB. Baseline 2013 = 1,623; Target 2016 = 3,000.

Number of farmers served by MNIB. Baseline 2013 = 1,623; Target 2017 = at least 2,500.

Number of farmers served by MNIB. Baseline 2013 = 1,623; Target 2018 = at least 2,500.

Area cultivated at leased Government-owned agricultural estates. Baseline 2013 = zero acres (out of a total of 379 cultivatable acres of Government-owned land selected for public-private partnerships (PPPs); Target 2018 = 186 acres

Percentage of licensed food premises and street food premises in Grenada that have been inspected by the Food Safety Authority under the Food Safety Act. Baseline 2013 = zero; 2018 Target 2018 = 75 percent (share of food premises and street food premises licensed by the Food Safety Authority).


35

Trade Logistics Reduction of the clearance time of border control procedures by half. Baseline 2013 = approximately six working days; Target 2016 = approximately three working days.

Average clearing time for border control procedures. Baseline 2013 = approximately six working days; Target 2017 = approximately three working days.

The number of border control agencies processing trade transactions through ASYCUDA World. Baseline 2013 = 2 agencies; Target 2018 = at least 6 agencies.

Number of agencies sharing trade and taxation related information through ASYCUDA World. Baseline 2013 = zero; Target 2018 =at least 2.

Public Private Partnerships (PPP)

Increase in the share of PPP projects under development that are proceeding according to the processes and requirements defined in the PPP policy. Baseline 2013 = zero percent; Target 2016 = 100 percent.

Share of public-private partnership (PPP) projects under development that conform to the processes and requirement defined in the PPP policy. Baseline 2013 = zero percent; Target 2017 = 100 percent

Share of PPP projects under development that conform to the processes and requirements defined in the PPP policy. Baseline 2013 = zero percent; Target 2018 = 100 percent.

The Energy Sector Implementation of a new mechanism for electricity tariff setting. Baseline 2013 = There is no existing electricity tariff setting mechanism; Target 2016 = New electricity tariff setting mechanism is implemented.

Share of installed power generation capacity from renewable energy technologies. Baseline 2013 = 1 percent; Target 2018 = 3 percent.

Share of renewable energy in total installed power-generation capacity. Baseline 2013 = 1 percent; Target 2018 = 3 percent.

The Public Utilities Regulatory Commission is fully operational. Baseline 2013 = no; 2018 Target = yes, with evidence from the Government that PURC has (i) issued a three-year business plan, (ii) a dedicated place of work, (iii) hired staff, and (iv) an operating budget.

Pillar 2: Supporting Fiscal Consolidation through Reducing Fiscal, Financial and Social Vulnerabilities


36

Public Employment Management

Better alignment of the government employment structure with the recommendations of the HR audits. Baseline 2013 = Functions and tasks in government entities are not aligned with the recommendations of the HR audits; Target 2016 = Functions and tasks in government entities that employ at least 70 percent of the total government workforce as well as HR and payroll information are aligned with the recommendations of the HR audits.

Establishment of the government employment structure based on the recommendations of recent human resource audits. Baseline 2013 = 0; Target 2017 = At least 4 ministries and 1 department have established official job descriptions with clearly defined responsibilities, including the Ministry of Agriculture, Ministry of Labor, Ministry of Legal Affairs, Ministry of Education and Department of Public Administration.

Development of job descriptions. Baseline 2013 = none; Target 2018 = The Ministry of Education, Human Resource Development and the Environment has formally established job descriptions with clearly defined competencies and responsibilities for the key task areas of public administration, including planning, monitoring results, and strategic personnel management.

Accountability for Results in the Public Administration

Increase in the number of public entities that publish annual performance reports. Baseline 2013 = No public entity publishes annual performance reports; Target 2016 = At least three ministries publish annual performance reports.

Procurement Increased transparency of public procurement and confidence of the private sector in the system. Baseline 2013 = Contract awards are not published; Target 2016 = Contract awards consistent with the new procurement law are published.

Publication of contract awards. Baseline 2013 = zero; Target 2017 = All contract awards are published, in conformity with the new procurement law.

Publication of contract awards. Baseline 2013 = zero; Target 2018 = All contract awards are published, in conformity with the new procurement law.


37

Financial Sector Development/ The Banking Sector

Reduction of the share of NPLs in the total loan portfolio of banks. Baseline 2013 = 9 percent; Target 2016 = 5 percent.

Provisions for loan losses to NPLs for the banking sector. Baseline 2013 = 30 percent of NPLs; Target 2017 = 60 percent of NPLs.

Provisions for loan losses to nonperforming loans (NPLs) for the banking sector. Baseline 2013 = 30 percent of NPLs; Target 2018 = 60 percent of NPLs.

Social Safety Nets Increase in the number of social programs using the targeting tool to identify beneficiaries. Baseline 2013 = 0; Target 2016 = 3 programs.

Share of SEED program beneficiaries that are identified by using a targeting tool. Baseline 2013 = zero; Target 2018 = 80 percent.

Share of SEED program beneficiary households identified in the Phase Out Plan as ineligible and non-vulnerable that have been transitioned out of the program. Baseline 2013 = zero; Target 2018 = 95 percent

Pillar 3: Enhancing Resilience Against Natural Disasters

Natural Disasters Increase in the proportion of new public/commercial buildings and private housing built in safe regulated areas, in accordance with regulatory acts. Baseline 2015 = 0 percent; Target 2016 = 50 percent.

Share of new public/commercial building and private housing built in safe and regulated areas in accordance with regulatory acts. Baseline 2015 = 0 percent; Target 2016 = 40 percent.

Increase in the percentage of engineers registered. Baseline 2013 = 0 percent; Target 2016 = 40 percent.

Share of engineers registered. Baseline 2013 = 0 percent; Target 2017 = 40 percent.

Share of membership of the Grenada Institute of Professional Engineers (GIPE) registered in accordance with the 2015 Engineering Act. Baseline 2015 = zero percent; Target 2018 = 40 percent.


38

Establishment of the Building Inspection Unit at the Ministry of Communication, Works, Physical Development, Public Utilities, ICT and Community Development. Baseline 2013 = none; Target 2018 = unit established.

Pillar 4: Facilitating Debt Portfolio Restructuring and Improved Debt Management

Debt Management Decrease of the share of debt with a maturity of less than 90 days. Baseline 2013 = 17 percent; Target 2016 = 10 percent.

Share of debt (public and publicly guaranteed) with a maturity of less than 90 days. Baseline 2013 = 17 percent; Target 2017 = 10 percent.

Share of public and publicly guaranteed debt with a maturity of less than 90 days. Baseline 2013 = 17 percent; Target 2018 = 10 percent.


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ANNEX 3: PRIOR ACTIONS UNDER DPC -1, DPC -2 AND DPC -3

Prior Actions DPC-1


The Recipient’s Parliament has enacted the Grenada Tourism Authority Act, establishing the institutional framework for the governance of the tourism sector. (No. 1)

Completed

The Recipient has (a) appointed a committee for the commercialization of selected estates of the Recipient, and (b) approved the criteria for the commercialization of such estates. (No. 2)

Completed

The Recipient’s Customs Bill establishing inter alia: (a) procedures for electronic processing of trade transactions; (b) procedures for record keeping and audit powers by the Customs and Excise Division of the Ministry of Finance, and (c) accountability procedures and delegation of authority in decision making has been submitted to Parliament. (No. 3)

Completed


The Recipient has endorsed a public sector modernization policy establishing inter alia procedures for (a) strategically realigning public employment; (b) strengthening management of selected agencies, and (c) developing a results focus in planning and budgeting. (No. 4)

Completed

The Recipient has adopted a policy framework for the strengthening of the design and programming of the Recipient’s social safety nets. (No. 5)

Completed


The Recipient’s Cabinet has approved: (a) the Grenada Building Code and the Grenada Building Guidelines, and (b) the Physical Planning and Development Control Bill, 2014, for submission to Parliament. (No. 6)

Completed

The Recipient’s Architects (Registration) Bill and the Engineers Registration Bill establishing respectively procedures for the professional practice of architects and engineers in the Recipient’s territory, have been submitted to Parliament. (No. 7)

Completed

Prior Actions DPC/DPL-2


The Grenada Tourism Authority has instituted a new regulatory framework for the tourism sector in accordance with the 2013 Tourism Authority Act. (No.1)

Completed

The Government has commenced commercialization of selected government-owned estates by entering into two commercial agreements with private entities for commercial use in the agribusiness sector. (No. 2)

Completed

The Government has approved a strategic plan to strengthen tourism and agribusiness linkages by transforming the Marketing and National Importing Board (MNIB) into a service provider of information on markets, product quality and standards. (No. 3)

Completed

The Government has approved a policy framework with clear guiding principles and processes for identifying PPPs and set out institutional responsibilities for developing a PPP pipeline and implementing PPP projects. (No. 4)

Completed


Parliament has approved a new public procurement law consistent with international best practices. (No. 5) Completed

Parliament has approved a new Banking Act to strengthen bank regulation, supervision and resolution. (No. 7) Completed

The Government has approved a phase out plan to improve the targeting of beneficiaries of the Support for Education, Empowerment and Development (SEED) program. (No. 6)

Completed

Prior Actions DPC-3


The Government has advanced the commercialization of selected Government-owned estates by signing two agribusiness lease agreements with separate private entities for a duration of at least 20 years. (No. 1)

Completed


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The Government has, through the Parliament, enacted the Food Safety Act, which establishes standards for food quality and prevention of food safety risks. No. 2)

Completed

The Government has, through the Ministry of Finance and Energy (MoFE) connect the Bureau of Standards (MoFE) to ASYCUDA World to process trade transactions and provided the Inland Revenue Department (MoFE) and the Central Office of Statistics with statistical data access to ASYCUDA World. (No. 3)

Completed

The Government has established a PPP Unit in the Ministry of Finance and Energy, as evidenced by a Cabinet conclusion. (No.4)

Completed

The Government has enacted the Public Utilities Regulatory Commission Act to establish a national independent energy regulator; and has endorsed the Ministry of Finance and Energy’s participation in the regional energy advisory body the Easter Caribbean Energy Regulatory Agency (ECERA). (No. 5)

Completed


The Government has, through the Ministry of Education, Human Resource Development and the Environment, established computerized personnel records for teachers and ministry personnel, and has produced a report of personnel records to increase monitoring reporting and analysis of human resource management, as evidenced by a letter from the Ministry of Finance and Energy. (No. 6)

Completed

The Government, through the Ministry of Finance and Energy, has: (a) appointed the Chief Procurement Officer and (b) fully staffed and 0eprationalized (i) the Public Procurement Board; (ii) the Public Procurement Review Commission and (iii) the Public Procurement Disposal Committee, as evidenced by the Cabinet Conclusion No. 734 dated May 23, 2016, the MoFE Letter of Appointment for the Disposal Committee dated July 18, 2016 and the MoFE Letter of Appointment for the Chief Procurement Officer dated June 20, 2016. (No. 7)

Completed

The Government has, through the Ministry of Social Development (MoSD), institutionalized the implementation of the Phase Out (PO) Pan for the SEED program by notifying al ineligible beneficiary households of their status and completing the transitioning out of the program for the first two of three groups (at least 70%) of beneficiary households identified in the PO Plan as ineligible and non-vulnerable. (No. 8)

Completed


The Government has, through the Parliament: (a) enacted the Physical Planning and Development Control Bill, and (b) approved the Grenade Building Code and Guidelines. (No. 10)

Completed

Pillar 4: Facilitating Debt Portfolio Restructuring and Improved Debt Management

The Government has approved the MTDS for the 2016-2018 period, as evidenced by Cabinet Conclusion No. 935 dated June 27, 2016. (No. 9)

Completed


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ANNEX 4: ANALYTICAL WORK SUPPORTING PRBDP 1-3

PRBDP Pillar Underpinning Analytical Work


• World Bank, “Logistics Connectivity in the Caribbean; Current Challenges and Future Prospects” (2012)

• OECS-World Bank, “Improving the Organization of Eastern Caribbean States’ Regional Competitiveness through Tourism: the importance of a regional approach and the means to implement it”, Caribbean Growth Forum (August 2014)

• World Bank, Report No. 44060-LAC, OECS, Increasing Linkages of Tourism with Agriculture, Manufacturing and Service Sectors (2008)

• World Bank, “Food Safety Standards, Economic and Market Impacts in Developing Countries”, Viewpoint Note 341 (July 2014)

• World Bank, Report No. 31863-LAC, OECS, Towards a New Agenda for Growth (2005)

• World Bank, Report No. 31725-LAC, A Time to Choose: Caribbean Development in the 21st Century (2005)

• Caribbean Growth Forum, Grenada Chapter, Investment Climate Working Group (March, 2013)

• World Bank, Report No. ACS7995-LAC, Caribbean Infrastructure PPP Roadmap (2014)

• Draft PPP Policy for Grenada, prepared under a technical mission to Grenada under DPC1


• HR audits, World Bank staff analyses, and agreements reached between the Department of Public Administration and World Bank staff

• World Bank, Report No. 31863-LAC, OECS, Towards a New Agenda for Growth (2005)

• World Bank, Country Procurement Report on OECS (2003)

• World Bank, Policy Note on Fiduciary Management in OECS (2007)

• World Bank, Social Safety Net Assessment (2009)

• World Bank, Tailoring Social Protection to Small Island Developing States, Lessons Learned from the Caribbean (2013)


• CDKN Guide: Tackling Exposure, Placing Disaster Risk Management the hand of National Economic and Fiscal Policy (2012)

• WPS5429 – Financial protection of the state against natural disasters (Ghesquierre and Mahul, 2010)

• Global Facility for Disaster Reduction and Recovery (GFDRR), Grenada Country Note (2010)

• WPS5232 - Assessing the Financial Vulnerability to Climate-Related Natural Hazards (Mechler et al 2010)

• IMF, WP/09/159, Macroeconomic Fluctuations in the Caribbean: the Role of Climatic and External Shocks (Sosa and Cashin, 2009)

• WPS5956 – Fiscal Implications of Climate Change (Bones et al, 2012)

• GFDRR, Building Regulation for Resilience - Managing


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ANNEX 5: WBG INVESTMENT OPERATIONS SUPPORTING DESIGN/IMPLEMENTATION OF PRBDP1-3

Project Name Project ID Project Cost

US$ m

Approval

Date Objectives


OECS Regional Tourism

Competitiveness

P152117 26.00 04/06/17 To: (i) facilitate the movement of tourists

within the participating countries using

ferries; (ii improve selected tourism sites, and

(iii) strengthen implementation capacity for

regional tourism market development

OECS Regional Agriculture

Competitiveness Project

P158958 9.66 05/25/17 To enhance access to markets and sales for

competitively selected farmers and fishers, as

well as their allied aggregators and agro-

processors.

Caribbean Regional

Communications Infrastructure

Program

P114963 25.00 05/22/12 To increase access to regional broadband

networks and advance the development of

Information and Communication Technologies

enable services industry. (The project included

a component to support the enabling

environment that would ensure PPPs in the

ownership, management and competitive

access to the infrastructure).


IDF Grant-Strengthening

Personnel Expenditure

Management

P117873 To support improvements in the

Government’s capacity to manage personnel

expenditures; (The IDF supported HR audits

and expenditure reviews, prepared

recommendation on improving staffing in

pilot ministries and departments and helped

agencies develop job descriptions;

strengthened the Cabinet Office’s capacity to

coordinate the government planning process.

Eastern Caribbean Energy

Regulatory Authority (ECERA)

P101414 To: (i) establish ECERA, and (ii) to

operationalize ECERS for the first three years;

(Support was provided to establishing and

implementing appropriate regulations for

each country, developing new licensing

recommendations, setting cost-reflective and

performance-based tariffs and promoting


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renewable energy as a key sector

component).

Caribbean Energy Statistics

Capacity Enhancement

P155034 0.50 09/21/17 To enhance energy statistics and planning

capacity within five Caribbean countries

IDF Grant-Development of

Accountability Mechanisms for

Capital Projects

0.40 To support audit, accountability and public

procurement of selected OECS countries—

Grenada was a pilot country for procurement

system reforms.

Safety Net Advancement Project P123128 5.00 07/05/11 To: (i) strengthen the basic architecture of the

consolidated conditional cash transfer

program and the capacity of the Ministry of

Social Development to implement it; (ii)

improve coverage of poor households

receiving cash transfers, and (iii improve

education outcomes of poor children and

health monitoring of vulnerable households.

Support to Implementation of

the Regional Education Strategy

P158836 2.00 07/05/16 To: (i) use quality learning standards to

support evidence-based teaching and learning

at the primary level; (ii) improve teacher

practices at the primary level; (iii) strengthen

primary school leadership and accountability,

and (iv) initiate the strengthening of sector

monitoring and evaluation capacity in support

of evidence-based strategic management and

decision-making.

First Fiscal Resilience and Blue

Growth DPC

P164289 30.00 06/22/18 To: (i) support fiscal measures and compliance

with the Fiscal Responsibility Law, and (ii)

support Grenada’s transition to a Blue

Economy by strengthening marine and coastal

management, marine ecosystem health and

climate resilience.


Regional Disaster Vulnerability

Reduction Project and AF

P117871

P149259

10.00 + 8.8 AF 06/23/11

06/08/15

(AF)

To measurably reduce vulnerability to natural

hazards and climate change impacts (through

institutional capacity improvements).

First Fiscal Resilience and Blue

Growth DPC

P164289 30.00 06/22/18 To: (i) support fiscal measures and compliance

with the Fiscal Responsibility Law, and (ii)

support Grenada’s transition to a Blue

Economy by strengthening marine and coastal

management, marine ecosystem health and

climate resilience.


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ANNEX 6: ISSUES WITH KEY INDICATORS IN PRBDP3

Indicator Issues with Indicator

Alternative Indicator to

Measure Achievement of

Objective

1. Tourist receipts.

Baseline 2013 = EC$307 million; Target

2018 = EC$332 million (8 percent

increase).

• Attribution • Increase in tourist receipts in

neighboring countries—

baseline and completion

• Increase in visitor arrivals

2. Leasing out of Government-owned

agricultural estates to private

entities.

Baseline 2013 = none;

Target 2018 = at least 3 Government-

owned estates leased.

• Difference between this indicator and

Indicator 4 below.

• Indicator reflects inputs rather than

outputs or outcomes.

• Increase in production at

leased government-owned

estates.

3. Number of farmers served by

MNIB.

Baseline 2013 = 1,623;

Target 2018 = at least 2,500.

• Does not entirely reflect expanding access to export markets and expanding supply to hospitality industry.

• Does not take into account competing cooperatives offering similar services.

• Increase in sales of

agricultural products to

tourism industry

4. Area cultivated at leased

Government-owned agricultural

estates.

Baseline 2013 = zero acres (out

of a total of 379 cultivatable acres of

Government-owned land selected for

public-private partnerships (PPPs);

Target 2018 = 186 acres

• See Indicator 2 above.

6. The number of border

control agencies processing trade

transactions through ASYCUDA World.

Baseline 2013 = 2 agencies;

Target 2018 = at least 6 agencies.

• Number of transactions

processed through ASYCUDA

World

• Total number of trade

transactions processed

• Value of transactions

processed through ASYCUDA

World

• Total value of trade

transactions processed

• Average clearance time for

border control procedures


45

(before and after ASYCUDA

World)

9. Share of renewable energy in total

installed power-generation capacity.

Baseline 2013 = 1 percent;

Target 2018 = 3 percent.

• What increase in installed power-

generation capacity could be expected in a

short three-year period?

• What in increase in renewable energy

installed capacity would be required to

increase its percentage in total capacity?

• Does this really measure “strengthening

the policy and regulatory environment”?

• This indicator measures much more than

simply the above objective, and depends

on exogenous factors, including prices of

different alternatives (i.e., the price of oil)

• Renewable energy projects

under consideration by new

PPP Policy Steering

Committee

• Increase in total installed

power-generation capacity

during implementation

period and of what type?

10. The Public Utilities

Regulatory Commission is fully

operational.

Baseline 2013 = no; 2018

Target = yes, with evidence from the

Government that PURC has (i) issued a

three-year business plan, (ii) a dedicated

place of work, (iii) hired staff, and (iv) an

operating budget

11.Development of job descriptions.

Baseline 2013 = none;

Target 2018 = The Ministry of

Education, Human Resource

Development and the Environment has

formally established

job descriptions with clearly defined

competencies and responsibilities for

the key task areas of public

administration, including planning,

monitoring results, and strategic

personnel management.

• This indicator measures a subset, albeit the

largest, of public sector employment

• Change in public sector wage

bill-baseline and completion

• Change public sector

employment-baseline and

completion

• Number of job descriptions

developed for the Ministry of

Education (and other

ministries, if applicable)


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ANNEX 7: BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES

(a) Task Team members P147152

Names Title Unit Responsibility/

Specialty

Lending

Rei Odawara Senior Economist GMTMD Task Team Leader

Plamen Stoyanov Kirov Senior Procurement Specialist

(ADM Responsible)

GGOPZ Team Member

David I Sr Financial Management

Specialist

GGOLF Team Member

Jose C. Janeiro Senior Finance Officer WFACS Team Member

Ruth Jo Goorman Finance Analyst WFAST Team Member

Valerie Asfour Financial Officer WFAAS Team Member

John Oliver Moss Lead Procurement Specialist GGOPL Team Member

Supervision

Rei Odawara Senior Economist GMTMD Task Team Leader

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending

P147152 – PRBDP1 35.9 224,283.75

P151821 – PRBDP2 63.2 324,580.12

P156761 – PRBDP3 41.8 295,152.86

Total: 140.9 844,016.73

Supervision/ICR

Total:


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ANNEX 8: SUMMARY OF BORROWER’S COMMENTS ON DRAFT ICR

The Borrower provided comments on the draft ICR in the areas summarized below:

• Enhancing Section 1.3 by providing details of the extensive discussions that occurred between World Bank staff

and Government authorities regarding the reformulation of pillars and triggers (prior actions) to emphasize that

decisions were mutually agreed and to demonstrate Government ownership of the program design.

• Highlighting the key role of the Social Partnership in contributing to the implementation success of the DPC series.

• Elaborating on the approval of the PPP with Digicel, under the Caribbean Regional Communication Infrastructure

Program.

• Elaborating on the difficulties with the commercialization of government estates.


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ANNEX 9: LIST OF SUPPORTING DOCUMENTS

1. World Bank, Program Document for the First Programmatic Resilience Building Development Policy Credit,

Report No. 87023-GD, June 11, 2014.

2. World Bank, Program Document for the Second Programmatic Resilience Building Development Policy

Credit and Loan, Report No. 92951-GD, September 29, 2015.

3. World Bank, Program Document for the Third Programmatic Resilience Building Development Policy Credit,

Report No. 87023-GD, November 15, 2016.

4. World Bank, Program Document for the First Fiscal Resilience and Blue Growth Development Policy Credit,

Report No. 123987-GD, May 23, 2018.

5. World Bank Group, Performance and Learning Review of the Regional Partnership Strategy for the

Organization of Eastern Caribbean States (OECS) for the Period FY15-FY19, Report No. 118511-LAC, May 1,

2018.

6. World Bank Group, Organization of Eastern Caribbean States (OECS) Systematic Regional Diagnostic, Report

No. 127046-LAC, June 27, 2018.

7. World Bank Group, Debt Management Performance Assessment (DeMPA): Grenada, June 2018.


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