Government Information Service

The Government of Dominica and the European commission on Thursday signed the tenth EDF country strategy paper for the period 2008-2013. The signing has cleared the way for Dominica to receive twenty five (25) million EC dollars as part of the National Indicative Programme.

The Head of the European Commission, Ambassador Valeriano Diaz, has said that this latest development serves to highlight the continuation of the partnership between the European Union (EU) Commission and Dominica. He pointed out that, already, the EU has invested funds in the region of thirty (30) million East Caribbean Dollars for the year here in Dominica.

“This national allocation is only one of the modes of European financial assistance to Dominica. The country is eligible to receive support in the wider tenth EDF Indicative Programme, whereby, some one hundred and sixty-five (165) million Euros has been allocated to assist mainly with regional integration and implementation of the recently signed economic partnership agreement. As of today, the European Commission has been able to disburse, in this country, funds in the region of thirty (30) million East Caribbean dollars in 2008 and there are more millions to come.”

Ambassador Diaz went on to encourage the Prime Minister to make maximum use of the two instruments as it will present huge opportunities for Dominica to benefit from.

“I encourage Prime Minister Skerrit to do his utmost best to get the maximum out of these two instruments: the regional programme and the aid pack. Both will present huge opportunities for this country. We look forward to the continuation of this partnership as we seek meaningful ways to assist the people of Dominica.”

The European Commission established the eligibility of Dominica to receive budget support in 2006 on the basis of the now completed IMF Poverty Reduction and Growth Facility Programme, joint donor assessments with the World Bank and studies carried out on the investment climate.

Budget support will be delivered in the form of a three (3) year programme and funds will be disbursed on an annual basis and linked to the implementation of macroeconomic reforms and the improvement of public finance management.
According to Prime Minister, Hon. Roosevelt Skerrit, the signing agreement represents the first of its kind since Dominica appended its signature to the European Partnership Agreement (EPA) and acknowledges that there will be challenges ahead in making the adjustments needed.

“This signing ceremony is, for us, the first of its kind to occur following Dominica’s signature of the European Partnership Agreement with the European Commission in October. Government reiterates its firm commitment to honour the provisions of the EPA. We recognise that it will be an uphill task in making the adjustments and reforms needed. However, we have commenced the process. In that regard, our introduction of the Value Added Tax (VAT) and the ongoing reforms and the modernisation of Customs are two examples that can be cited.”

This signing clears the way for Dominica to receive 5.7 million Euros as part of an indicative programme of EC aid. Another EUR 1.8 million has been set aside to be utilised in case of emergencies.

The Government of Dominica and the European Commission propose to allocate eighty percent (80%) of the indicative EUR 5.7 million to macro-economic general budget support to assist the Government with the implementation of policies and strategies aimed at achieving sustained growth and poverty reduction. Special attention will be given poverty reduction, particularly with a view to ensuring equitable access to social services.

Recently, the European commission recently presented EUR 4.38 million or 14.4 million East Caribbean Dollars to the Government of Dominica which represents the first tranche of an EU 11.8 million or EC $41.5 million grant that will be used as budget support for poverty reduction through private sector development, increased competitiveness and sustained economic growth.

The assistance is being provided under the 9th EDC programme and supports the Government in implementing its Medium-Term Growth and Social Protection Strategy (GSPS). The objective of this Sector Budget Support Programme is the improvement of the investment climate in Dominica, based on the corresponding policy measures outlined in the GSPS, notably through further development and implementation of a National Investment Strategy.

The main results are expected in the following areas:

1. Strengthening of the investment institutional environment
2. Strengthening of customs services and
3. Reforming the regulatory framework for the energy sector

It is being carried out in collaboration with the World Bank through its Technical Assistance Grant which has set performance indicators and will be monitoring the implementation of the programme.

In the meantime, Prime Minister Skerrit would like the EU to consider matters regarding the late disbursement of EU funds to Dominica and the delays in execution of contracts.

“Now that we are under the dispensation of the EPA, there are two matters, one general and the other specific that I wish to place before you for reflection and decision. The first is not new to you and relates to the timeliness of decision making at a level of the Commission and occasionally, at the Delegation in Barbados. This seemingly ingrained culture has led to embarrassing situations with contractors both big and small.

In one recent case, a small contractor had to suspend his business operation because of this lapse. Further, the delays in the execution of contracts inevitably bring about cost overruns which impose a burden on the resources of the Treasury of Dominica. I request that you put this matter on the agenda when next the heads of Delegations meet with the relevant commissioners in Brussels.

The second matter concerns the supply contract for upgrading of the equipment and spares at the Public Works Cooperation. This is an important input that is vital to the achievement of the objective of the Road Sector Programme under the 9th EDF. I am informed by the National Authorising Officer that the contract was sent to the Delegation in June for approval. Silence prevailed in spite of numerous reminders. Last week, the Delegation informed the NAO that approval could not be granted because the cut off date, September 12th, for entering into contracts and financing agreements had passed. I am sure you will agree with me, Mr. Diaz, that fairness requires that this be reviewed. Now that we have entered a season of peace and goodwill to all men, I am doubly assured that you will indeed do so.”

Notwithstanding these challenges, however, Dominica’s Prime Minister Skerrit went on to say that the European Union continues to be Dominica’s strongest ally in the country’s economic development.