Nelson A. King
WASHINGTON D.C., United States, Thursday April 25, 2013 –The World Bank says Grenada has advanced towards fiscal governance and investment promotion and that it is also seeking to modernise several areas of its operations as part of a project to enhance fiscal governance and promote investment.
The Washington-based financial institution said the new Keith Mitchell administration developed capacity in the conformity assessment for exported goods, noting that customs procedures have became automated and cargo clearance time has “significantly reduced from days to hours”.
The bank said conformity certificates are now being issued for Grenadian export goods.
It noted that, by 2008, Grenada’s growth was being challenged by the disastrous impact of two hurricanes, 2004-2005, which destroyed much infrastructure and devastated agricultural exporters, and a reduced flow of international credits under the onslaught of the global financial crisis.
The World Bank said Grenada urgently needed to create the conditions to ensure the recovery of the domestic private sector, sustain economic growth, and support the generation of fiscal revenues to finance Government programs and control the level of public debt.
To that end, it said Grenada needed a strategy to promote investments, develop effective systems, and speed up the processing of investment proposals.
It said Grenada also needed the equipment and skills to conduct product conformity assessments for exports.
The World Bank said the project supported development along two distinct avenues: strengthening the revenue capacity of Government institutions and) improving the environment for private sector investments and trade.
It said the key recipients of support were the Customs Department, the Inland Revenue Department, the Grenada Investment Development Corporation, and the Bureau of Standards.
The bank said the project focused on building strong institutions “with forward looking management, strong information systems, transparency and broad access to information, and effective procedures within the Government that would reduce the administrative burden on the private sector actors”.
It said the project aimed at creating an “effective interface between the business community in Grenada, represented by the Chamber of Commerce, and Government institutions, led by the Ministry of Finance, so as to help minimize administrative barriers to entrepreneurship and support economic activity in Grenada and international trade with the goal of generating much needed revenues”.
After the implementation of the Automated System for Customs Data-World (ASYCUDA-World), the World Bank said the online management of customs procedures “significantly improved conditions for cross-border trade”.
It said that within weeks after it became operational, the system helped to reduce the rate of physical inspections of commercial cargo from 60 per cent to 18 per cent, adding that cargo clearance times declined from four days in early 2011 to less than a day-and-a-half in June 2012.
The World Bank said the new information system improved client satisfaction with the Customs Service.
It said since June 2012, clients have been able to submit their manifests electronically and follow the customs procedures online.
It also noted that the Inland Revenue Department has introduced an automated audit module in their information system that, following the data cleanup, helps target non-payers of taxes more efficiently.
In addition, the World Bank said the Grenada Industrial Development Corporation approved its investment promotion strategy, initiated baseline studies in the priority development sectors, and developed improved access to information and better, faster services to investors.
The Bureau of Standards also created capacity for conformity assessment, with plans to expand its services to domestic traders.
“Newly acquired measurement equipment and technical skills, developed through training, enabled Grenada to issue quality conformity certificates to both exported produce and internally traded local produce and goods,” the World Bank said.
It said that it provided credit to the tune of US$1.9 million to the project, with the European Union strongly supporting it with 0.5 million grant-based co-financing and ongoing support of developments in the information management area after the project’s closure.
The World Bank said the project created demand for continued reforms, adding that further support of strategic governance and the information systems in tax administration will be provided by its Strengthening Economic Management in the Caribbean Countries Regional Programme (SEMCAR).