World Bank Approves US$3 Million For Dominica’s Economic Recovery

To find more information on this project, please visit: http://web.worldbank.org/external/projects/main?pagePK=104231&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P077680

Washington, January 29, 2004 – The World Bank today approved an IDA credit of US$3 million to support a resumption of economic growth and the restoration of fiscal balance  in the Commonwealth of Dominica.

The Economic Recovery Support Operation (ERSO) supports improvements in public expenditure, financial and debt management, and implementation of a recently articulated Medium Term Public Sector Reform Strategy, that are necessary to improve government finances, as well as key reforms in the financial, maritime transport, petroleum and electricity sectors in order to strengthen the climate for private investment.  At the same time, the ERSO provides resources needed to protect essential social spending during the period of fiscal adjustment.

Dominica recently suffered an unprecedented decline in output, mainly due to a severe worsening of its external environment, and rapid increases in its public sector debt.  The Government has embarked on an ambitious program of fiscal adjustment, debt restructuring and structural reform that aims to reverse this economic decline.  In addition, the Government has recently outlined a strategy to reverse recent increases in poverty in an Interim Poverty Reduction Strategy Paper that focuses, among other things, on improving the targeting of social safety nets.

“The Government of Dominica has made good progress in confronting a very difficult situation and laying the framework for renewed growth and private investment which are essential to reducing poverty,” said Caroline Anstey, World Bank Director for the Caribbean.    “The Government’s continued engagement with civil society and the private sector has been a critical factor in building public ownership of the reform agenda.”

The US $3 million credit from the International Development Association is repayable over 35 years, including 10 years of grace, with the standard commitment fee of 0.5% and service charge of 0.75%.

For more information on the World Bank’s work in Latin America and the Caribbean,  please visit:  http://www.worldbank.org/lac   

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