WORLD BANK APPROVES $1.9 MILLION TO IMPROVE LOCAL BUSINESS ENVIRONMENT AND MODERNIZE PUBLIC INSTITUTIONS

Washington,  March 13, 2008 — The World Bank’s Board of Directors approved on Tuesday a $1.9 million zero-interest credit to Grenada to support the Government’s efforts aimed at improving the local business environment through private-sector led growth.

The Grenada Technical Assistance project financed by this credit will support the modernization of key public sector institutions, such as Customs, and the implementation of an export strategy.

“Foreign investors are showing increasing interest in Grenada’s tourism and information technology sectors and investments have picked up recently,” said Yvonne Tsikata, the World Bank Director for the Caribbean. “By undertaking strategic reforms in key areas, including those targeted by this project, the country could attract more investments in the tourism and other sectors of the economy.”

The project seeks to improve the efficiency and effectiveness of Customs, improve tax administration, enhance the Government’s support for exports, and modernize investment promotion.  In addition, the project will finance the modernization of the Registry for property and companies, including its conversion into an executive agency.

The Government has also taken steps to fully digitize Registry records. This will simplify search, reduce the transaction costs for searching and facilitate the move toward e-government. When completed, these steps will make it easier to start a business, register property and improve enforcement of contracts in Grenada.

To improve the business environment for private sector development and attract more investment into Grenada, additional work in key strategic areas already identified in various surveys and analytical reports needs to be done.  For instance, the Doing Business survey for 2007, which included the OECS countries for the first time, showed Grenada ranking relatively well in “Employing workers” and “Getting credit” but lagging the other OECS countries on most of the other indicators, viz.: (i) Starting a business; (ii) Dealing with licenses; (iii) Registering properties; (iv) Paying taxes; (v) Trading across borders; (vi) Enforcing contracts; and (vii) Closing a business

This $1.9 million Grenada Technical Assistance Credit funded by the International Development Association (IDA) has a reimbursement period of 35 years with a 10-year grace period.