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Document of
The World Bank
Report No: ICR00001886
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IDA-42640 TF-92145)
ON A
CREDIT
IN THE AMOUNT OF SDR 1.00 MILLION
(US$ 1.45 MILLION EQUIVALENT)
TO THE
COMMONWEALTH OF DOMINICA
FOR A
GROWTH AND SOCIAL PROTECTION TECHNICAL ASSITANCE CREDIT
June 28, 2011
Poverty Reduction and Economic Management Department (LCSPR)
Caribbean Country Management Unit (LCC3C)
Latin America and Caribbean Region (LCR)
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CURRENCY EQUIVALENTS
(Exchange Rate Effective March, 2011)
Currency Unit = Eastern Caribbean Dollar
ECD 1.00 = US$ 0.37
US$ 1.00 = ECD 2.70
FISCAL YEAR
July 1 - June 30
ABBREVIATIONS AND ACRONYMS
ASYCU
DA
Automated System for Customs
Documentation and Administration
CARTA
C
Caribbean Regional Technical
Assistance Center
CDB Caribbean Development Bank
CFAA Country Financial Accountability
Assessment
CPA
CPAR
Country Poverty Assessment
Country Procurement Assessment
Report
CG Central Government
DEXIA Dominica Export and Import Agency
DFID
DHTA
Department for International
Development
Dominica Hotel and Tourist
Association
DSS Dominica Social Security
EC Eastern Caribbean
ECCB Eastern Caribbean Central Bank
ECCU
ECSE
Eastern Caribbean Currency Union
Eastern Caribbean Securities Exchange
EU European Union
FAA
FDI
Finance (Administration) Act
Foreign Direct Investment
GDP Gross domestic product
GSPS Growth and Social Protection Strategy
ILO International Labor Organization
IMF
IPA
International Monetary Fund
Investment Promotion Agency
MDGs Millennium Development Goals
MIS Management information system
MoF Ministry of Finance
NDC National Development Corporation
NGO Nongovernmental organization
OECS Organization of Eastern Caribbean
States
PAC Public Accounts Committee
PRGF
PRS
Poverty Reduction and Growth Facility
Poverty Reduction Strategy
PRSP Poverty Reduction Strategy Paper
PSIP
TM
USAID
Public Sector Investment Program
Task Manager
United States Agency for International
Development
Vice President: Pamela Cox
Country Director: Francoise Clottes
Sector Manager: Veronica E. Zavala
Project Team Leader: Kathy Lalazarian
ICR Team Leader Kathy Lalazarian
ICR Main Author David E. Yuravlivker
DOMINICA
GROWTH AND SOCIAL PROTECTION TECHNICAL ASSITANCE CREDIT
CONTENTS
DATA SHEET .............................................................................................................................................. I
B. KEY DATES .................................................................................................................................................. I C. RATINGS SUMMARY...................................................................................................................................... I D. SECTOR AND THEME CODES ........................................................................................................................... II E. BANK STAFF ................................................................................................................................................ II F. RESULTS FRAMEWORK ANALYSIS ..................................................................................................................... II G. RATINGS OF PROJECT PERFORMANCE IN ISRS ................................................................................................... XI H. RESTRUCTURING (IF ANY) ............................................................................................................................. XI I. DISBURSEMENT PROFILE .............................................................................................................................. XII
1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN ............................................................. 1
2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES ............................................................ 8
3. ASSESSMENT OF OUTCOMES .............................................................................................................. 11
4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME ......................................................................... 18
5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE .................................................................. 18
6. LESSONS LEARNED .............................................................................................................................. 20
7. COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS .................... 21
ANNEX 1. PROJECT COSTS AND FINANCING ........................................................................................... 23
ANNEX 2. OUTPUTS BY COMPONENT ..................................................................................................... 24
ANNEX 3. DOMINICA CUSTOMS REPORT PROJECT – HIGH LEVEL ACTION PLAN: PROGRESS AS OF JANUARY 2011 ........................................................................................................................ 28
ANNEX 4. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES ....................... 39
ANNEX 5. SUMMARY OF BORROWER'S ICR AND/OR COMMENTS ON DRAFT ICR .................................. 40
ANNEX 6. COMMENTS OF COFINANCIERS AND OTHER PARTNERS/STAKEHOLDERS ............................... 51
ANNEX 7. LIST OF SUPPORTING DOCUMENTS ........................................................................................ 53
ANNEX 8 – MAP (IBRD MAP 33397) ........................................................................................................ 54
i
DATA SHEET
A. Basic Information
Country: Dominica Project Name:
Growth and Social
Protection Technical
Assistance Credit
Project ID: P094869 L/C/TF Number(s): IDA-42640,TF-92145
ICR Date: 06/28/2011 ICR Type: Core ICR
Lending Instrument: TAL Borrower:
THE
COMMONWEALTH
OF DOMINICA
Original Total
Commitment: XDR 1.0M Disbursed Amount: XDR 1.0M
Revised Amount: XDR 1.0M
Environmental Category: C
Implementing Agencies:
Commonwealth of Dominica
Cofinanciers and Other External Partners:
B. Key Dates
Process Date Process Original Date Revised / Actual
Date(s)
Concept Review: 02/13/2006 Effectiveness: 04/02/2007 04/02/2007
Appraisal: 10/06/2006 Restructuring(s): 04/30/2009
Approval: 02/27/2007 Mid-term Review: 06/30/2008 12/01/2008
Closing: 06/01/2010 12/31/2010
C. Ratings Summary
C.1 Performance Rating by ICR
Outcomes: Moderately Satisfactory
Risk to Development Outcome: Moderate
Bank Performance: Moderately Satisfactory
Borrower Performance: Moderately Satisfactory
C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Borrower Ratings
Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory
Quality of Supervision: Moderately Satisfactory Implementing
Agency/Agencies: Moderately Satisfactory
ii
Overall Bank
Performance: Moderately Satisfactory
Overall Borrower
Performance: Moderately Satisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation
Performance Indicators
QAG Assessments
(if any) Rating
Potential Problem Project
at any time (Yes/No): No
Quality at Entry
(QEA): None
Problem Project at any
time (Yes/No): No
Quality of
Supervision (QSA): None
DO rating before
Closing/Inactive status: Satisfactory
D. Sector and Theme Codes
Original Actual
Sector Code (as % of total Bank financing)
Central government administration 100 100
Theme Code (as % of total Bank financing)
Administrative and civil service reform 22 22
Public expenditure, financial management and
procurement 11 11
Regulation and competition policy 22 22
Social safety nets 22 22
Trade facilitation and market access 23 23
E. Bank Staff
Positions At ICR At Approval
Vice President: Pamela Cox Pamela Cox
Country Director: Alan G. Carroll Caroline D. Anstey
Sector Manager: Veronica E. Zavala Lombardi Jaime Saavedra Chanduvi
Project Team Leader: Kathy Lalazarian Errol George Graham
ICR Team Leader: Kathy Lalazarian
ICR Primary Author: David E. Yuravlivker
F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The GSPTAP's development objective is to enhance the Government's effectiveness to
deliver public goods and services by strengthening the institutional capacity of key
iii
agencies to facilitate Dominica's private sector competitiveness and productivity and to
provide targeted social assistance to reduce poverty.
Revised Project Development Objectives (as approved by original approving authority)
n/a
(a) PDO Indicator(s)
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target
Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 :
Completed human resource audit of ministries and departments of the public
service
Value
quantitative or
Qualitative)
Pace of public sector
reform slowed by limited
capacity in the Reform
Management Unit
Manpower
assessment
completed in the
public service
Audit completed
following wide
consultation.
Staffing plans need
to be approved by
Cabinet.
Date achieved 10/31/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 2 : Reduction in time needed to register property from 40 days to 20 days.
Value
quantitative or
Qualitative)
Property registration time
is about 40 days.
Property
registration time is
20 days.
Registration of land
First title - down to
60-90 days.
Direct transfer -
down to 30 days.
Part of land - down
to 35 days.
Companies have a
separate registry,
which takes 1-2
days.
Date achieved 10/31/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 3 : One stop shop for tourism investors funded, staffed, developed, fully operational
website, and used by investors.
Value
quantitative or
Qualitative)
No one stop shop in
place.
One stop shop for
tourism investors
fully operational.
Website developed
and used by
investors.
Achieved. Service
provided by Invest
Dominica
Authority.
iv
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target
Values
Actual Value
Achieved at
Completion or
Target Years
Date achieved 10/31/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 4 : Regulatory commission established, funded, staffed and fully functional.
Value
quantitative or
Qualitative)
No regulatory
commission for electricity
in place.
Regulatory
commission
established and
operational.
Regulatory
commission
established and
operational.
Date achieved 10/31/2006 12/31/2010 11/03/2009
Comments
(incl. %
achievement)
New Electricity Act passed. IRC operational and ED selected.
Indicator 5 :
Objective and transparent Beneficiary Identification System (BIS) for selection
of beneficiaries for Public Assistance (PA) and Education Trust Fund (ETF)
developed.
Value
quantitative or
Qualitative)
No systematic criteria for
beneficiary selection.
Beneficiary
Identification
System for
selection of
beneficiaries for
Public Assistance
(PA) and
Education Trust
Fund (ETF)
developed and
fully implemented.
Partially achieved.
Proxy means test
and the BIS were
approved by
Cabinet in January
2011. At this
writing their use
has just started, as
data is being
inputted into the
system.
Date achieved 06/30/2006 12/31/2010 01/01/2011
Comments
(incl. %
achievement)
Indicator 6 : Central beneficiary registry developed, funded, staffed and fully functional.
Value
quantitative or
Qualitative)
No consistent record of
beneficiary.
100% of public
assistance and
Education Trust
Fund beneficiaries
registered in
central registry.
100% achieved.
Date achieved 06/30/2006 12/31/2010 11/03/2009
Comments
(incl. %
achievement)
v
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target
Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 7 :
Development, dissemination, approval and launch of a time bound, fully-costed
human resource development and succession plans for ministries and
departments within the public service.
Value
quantitative or
Qualitative)
Plans not in existence. Plans developed
and costed.
Partially completed.
Reform
Management Unit
has developed a
methodology for
preparing a
succession plan,
and has identified
key positions where
those plans would
be applied. Cabinet
has to approve the
recommendations.
Date achieved 10/30/2009 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 8 : Improved policy framework and environment for private sector development and
improved social protection
Value
quantitative or
Qualitative)
No policy framework
exists.
Better targeting,
planning and
administration of
social assistance.
Achieved. Invest
Dominica Authority
established in July
2007. Strategy
approved by
Cabinet in
December 2010,
and Action Plan
being implemented.
Date achieved 10/31/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
(b) Intermediate Outcome Indicator(s)
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 1 : Customs IT upgraded from ASYCUDA 2.7 to ASYCUDA World
Value Customs using ASYCUDA World Achieved. The new
vi
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
(quantitative
or Qualitative)
ASYCUDA 2.7 implemented system is fully
operational and is
seen as a major
improvement by
private users.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 2 :
Technology for paperless transactions installed in first year, 30% reduction in use
of paper for import declarations by end of second year, and 80% by end of
project.
Value
(quantitative
or Qualitative)
Use of paper and forms Paperless
transactions
Achieved. Customs
declarations need
just one paper copy
instead of four,
while cargo
manifests are now
an electronic
document rather
than a paper one.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 3 : Reduction in the average time for customs clearance, average reduction is 3-4
days in first year, 2 days in second year, and 1 day in third year.
Value
(quantitative
or Qualitative)
Customs clearance takes
seven days.
Customs clearance
takes one day.
Achieved. Since the
new system was
implemented in
July 2010, this time
has been reduced to
one day.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 4 : Installed and functioning audit management systems
Value
(quantitative
or Qualitative)
Need to update audit
management system
Audit management
system
functioning.
Partially achieved.
Auditor general
office received
IDEA software in
early 2010 but staff
not able to
complete training.
vii
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
SMART stream is
operational for
budget process, but
not for audit.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 5 :
During first year, Cabinet sets new procurement threshold and 50% of contracts
awarded through competitive bids, which increases to 7% by the second year,
and 100% in the third year.
Value
(quantitative
or Qualitative)
Need to modernize
procurement regulations
in the public sector.
100% of contracts
awarded through
competitive bids.
Partially achieved.
Currently the
majority of
contracts above
EC$1 million are
awarded by
competitive
bidding. The new
Procurement Act
would make that
compulsory for all
contracts.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 6 : Analysis and planning for National Investment Strategy, strategy completed,
adopted and implemented by Invest Dominica Authority for GOCD.
Value
(quantitative
or Qualitative)
No national investment
strategy
Analysis and
planning for
national
investment
strategy done,
strategy
completed,
adopted and
implemented by
Invest Dominica
Authority by
GOCD.
Strategy approved
by Cabinet in
December 2010,
and Action Plan
being implemented.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
viii
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 7 : Number of days to process investment reduced to 30 days in the first year, to 25
days in the second year, and to 20 days by the end of the project.
Value
(quantitative
or Qualitative)
Number of days to
process investment is
more than 30 days.
Number of days to
process investment
reduced to 20 days
by the end of the
project.
Achieved.
Proposals of up to
EC$2 million are
reviewed by a sub-
committee of
cabinet within two
weeks, and
proposals above
that amount are
reviewed by the full
cabinet within three
weeks.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 8 : Draft alternative energy legislation developed, stakeholder discussion conducted,
and submitted to Parliament for approval.
Value
(quantitative
or Qualitative)
Lack of alternative energy
legislation.
Draft alternative
energy legislation
developed,
stakeholder
discussion
conducted, and
submitted to
Parliament for
approval.
Partially achieved.
Draft has
undergone various
revisions, currently
draft is being
reviewed at the
Attorney General's
Chambers for
onward submission
to Parliament.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 9 : Methods in place for dealing with unexpected tariff and other regulatory issues.
Value
(quantitative
or Qualitative)
Lack of methodology for
dealing with unexpected
tarriff and other
regulatory issues.
Methods in place
for dealing with
unexpected tariff
and other
unexpected
regulatory issues.
Achieved. The
policies
implemented by the
IRC include those
methods and are
posted in the web.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
ix
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 10 : BIS system being used to select beneficiaries for Public Assistance Program
(PA) and Education Trust Fund (ETF) Program.
Value
(quantitative
or Qualitative)
No BIS system is being
used to select
beneficiaries for PA and
ETF.
BIS system being
used to select
beneficiaries for
PA and for ETF
program
Partially achieved.
Proxy means test
and the BIS were
approved by
Cabinet in January
2011. Their use has
just started as data
is being input into
the system.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 11 : Policies and procedures related to PA and ETF documented and relevant staff
trained.
Value
(quantitative
or Qualitative)
Lack of policies and
procedures related to PA
and ETF documented and
relevant staff trained.
Adapt new
policies and
procedures.
Monitoring plan
implemented.
Policies and
procedures
established and
documented in
operational manuals
for PA, ETF, and
SFP and staff was
trained.
Date achieved 06/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 12 : Reform management unit planning, designing and implementation plans.
Value
(quantitative
or Qualitative)
Pace of public reform
slowed by limited
capacity in Public Sector
Reform Unit (PSRU)
Begin
implementation of
modernization
plans
RMU has
developed a
methodology for
preparing the
succession plans,
and has identified
key positions where
those plans will be
applied. They have
not been fully
costed.
Date achieved 06/30/2010 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
x
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
Indicator 13 : Establishment of a semi-autonomous Registry
Value
(quantitative
or Qualitative)
40 days for registration of
property.
Registration of
property reduced
to 20 days.
Registration of
land:
First title - down to
60-90 days.
Direct transfer -
down to 30 days.
Part of land - down
to 35 days.
Companies have a
separate registry,
which takes 1-2
days.
Date achieved 11/11/2010 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 14 : Public contracts above threshold advertised and awarded through transparent and
competitive bids
Value
(quantitative
or Qualitative)
Out-dated regulations
Procurement
procedural manual
developed, and
100% of contracts
above threshold
advertised/awarde
d through
competitive bids.
Partially achieved.
The majority of
contracts above
EC$1 million are
awarded by
competitive
bidding. The new
Procurement Act
would make that
compulsory for all
contracts.
Date achieved 11/11/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 15 : Public information campaign to inform the public about new approaches to the
delivery of social safety net programs implemented.
Value
(quantitative
or Qualitative)
No systematic public
information.
Implementation of
campaign
continued.
Partially achieved.
The material for the
information
campaign has been
prepared, and some
aspects successfully
undertaken. More
PR to be
undertaken when
xi
Indicator Baseline Value
Original Target
Values (from
approval
documents)
Formally
Revised
Target Values
Actual Value
Achieved at
Completion or
Target Years
the system is fully
utilized.
Date achieved 10/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
Indicator 16 : A program database to track beneficiaries and expenditures for the PA, ETF and
the School Feeding Program in the Ministry of Education is in use.
Value
(quantitative
or Qualitative)
No database for ETF, SFP
and PA.
Program databases
in place.
Partially achieved.
MIS for ETF, PA
and SFP was
launched.
Date achieved 10/30/2006 12/31/2010 12/31/2010
Comments
(incl. %
achievement)
G. Ratings of Project Performance in ISRs
No. Date ISR
Archived DO IP
Actual
Disbursements
(USD millions)
1 07/04/2007 Satisfactory Satisfactory 0.00
2 01/19/2008 Satisfactory Satisfactory 0.00
3 06/27/2008 Satisfactory Satisfactory 0.15
4 12/18/2008 Satisfactory Satisfactory 0.52
5 06/28/2009 Satisfactory Satisfactory 0.65
6 11/06/2009 Satisfactory Satisfactory 1.00
7 06/24/2010 Satisfactory Satisfactory 1.44
H. Restructuring (if any)
Restructuring
Date(s)
Board
Approved
PDO Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD
millions
Reason for Restructuring &
Key Changes Made DO IP
04/30/2009 N S S 0.65
A Third Order Restructuring
was conducted to improve the
original outcome indicators that
were somewhat vaguely
delineated in the Supplemental
xii
Restructuring
Date(s)
Board
Approved
PDO Change
ISR Ratings at
Restructuring
Amount
Disbursed at
Restructuring
in USD
millions
Reason for Restructuring &
Key Changes Made DO IP
Letter of the Credit Agreement
and the PAD.
I. Disbursement Profile
1
1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN
1.1 Context at Appraisal
Dominica went through an economic crisis in 2001-2002, when output contracted by
about 10 percent and poverty levels rose sharply. The Country Poverty Assessment
(CPA) conducted in 2002 found that 39 percent of the population was poor, while 15
percent were indigent, among the highest percentages in the Caribbean.
In mid-2003, the government adopted a two-stage adjustment strategy to foster
growth and ensure debt sustainability. The first stage focused on achieving
macroeconomic stability through fiscal adjustment and collaborative debt restructuring.
This effort was supported by an IMF Poverty Reduction and Growth Facility (PRGF) and
the Bank’s Economic Recovery Support Operation (ERSO) in 2004. The program was
largely successful, as the overall central government balance was reduced from nearly 11
percent of GDP in 2000/01 to 0.9 percent of GDP in 2004, and public sector debt fell
from a peak of 130.8 percent of GDP in 2003 to 116.1 percent of GDP in 2004, following
a restructuring of Dominica’s official debt under the Paris Club framework.
The second stage of the adjustment strategy focused on key structural reforms to
establish the basis for private sector-led sustainable growth and poverty reduction.
This stage was part of the Government’s Medium-term Growth and Social Protection
Strategy (GSPS) for 2005/06-2009/10. The GSPS had four pillars: (i) Fiscal policy and
administrative reforms; (ii) Enhancing the investment climate for private enterprise
development; (iii) Sectoral strategies for growth; and (iv) poverty reduction and social
protection
The GSPS focused on invigorating private sector led growth and improving key
social services, including health and education to build human capital. It gave
special attention to vulnerable groups such as youth, which had unemployment rates of
about 40 percent. Thus, employment generation was essential for poverty reduction. That
called for increasing international competitiveness, improving export performance and
enhancing the attractiveness of the economy to investors. The latter required reducing
firms’ costs, improving the reliability of transportation, lowering the cost of energy and
increasing the productivity of the labor force. The Bank’s analytical work1 and work by
other donors helped to fine tune the Government’s strategy and action plans.
The GSPS proposed a number of strategic policy actions to facilitate private sector
development and improve the environment for private enterprise, including (i)
accelerating implementation of its comprehensive Public Sector Reform Strategy (PSRS)
aimed at improving effectiveness of service delivery, enhancing accountability, and
1 “Towards a New Agenda for Growth”, April 2005; Dominica: OECS Fiscal Issues “Policies to Achieve
Fiscal Sustainability and Improve Efficiency and Equity of Public Expenditures. June 2005.
2
streamlining regulations and procedures that may hinder private sector activities; (ii)
improving the judicial and land administration systems; (iii) implementing
recommendations emanating from a comprehensive analysis of Dominica’s investment
climate; and (iv) implementing policy and regulatory measures aimed at lowering costs of
transport, electricity, water and telecommunication.
Consequently, the Growth and Social Protection Technical Assistance Project
(GSPTAP) focused on reforms in four strategic areas: (i) making the public sector
more efficient and effective; (ii) improving the investment climate; (iii) reforming the
regulatory framework for the energy sector; and (iv) improving social protection.
The GSPS had also become the focal point for donors’ support to Dominica. In
particular, the European Union (EU) allocated approximately US$12 million in grants for
budgetary support to Dominica, and decided to align and harmonize its tranche
disbursement conditions for this budgetary support with the Results Framework agreed
between the Government and the Bank for the GSPTAP. In addition, the EU provided
another US$580,000 in a grant for parallel co-financing of the technical assistance
operation (through a Bank administered Trust Fund).
1.2 Original Project Development Objectives (PDO) and Key Indicators.
The Project Development Objective (PDO) of the GSPTAP was to enhance the
Government's effectiveness to deliver public goods and services by strengthening the
institutional capacity of key agencies to facilitate Dominica's private sector
competitiveness and productivity and to provide targeted social assistance to reduce
poverty.
The Project Outcome Indicators listed in the Project Appraisal Document (PAD) were:
(i) Increased capacity of the public sector to implement reforms; (ii) Better regulatory framework governing the electricity sector; (iii) Greater transparency and efficiency in public procurement;
(iv) Reduction in the processing time at customs; and (v) Better targeting, planning and administration of social assistance programs.
1.3 Revised PDO (as approved by original approving authority) and Key Indicators,
and reasons/justification
The PDO and Key Indicators were not formally revised. However, a Third Ordering
Restructuring designed to clarify the PDO and sharpen the indicators was approved by
Management and agreed with Government in May 2009. Both original and revised
indicators are described in Annex 2.
3
1.4 Main Beneficiaries
The PAD states that “the project will benefit Dominicans through: (i) enhanced
private sector competitiveness and productivity and improvement in employment
prospects resulting from private sector-led growth; (ii) improvement in the quality of
public goods and services offered by a more efficient public sector; (iii) more competitive
pricing of electricity as a result of a better regulated electricity sector; and (iv) better
targeting and efficient delivery of social protection programs. In particular, two groups
that were expected to benefit from the project were brokers and importers, and then
existing and potential beneficiaries of social protection programs.
1.5 Original Components
The project was comprised of the following components:
Component 1: Making the public sector more efficient and effective (48% of total
project costs - US$1,240,000)
This component provided technical assistance to the Government to implement key
elements of its public sector modernization strategy focused on streamlining the public
sector to increase the efficiency of service delivery while lowering costs. It aimed to
assist in strengthening control over public finances and increasing the transparency and
efficiency of public procurement. The sub-components included:
1.1 Strengthening of the Reform Management Unit (RMU). The RMU planned and
implemented the public sector reform program. The activities that were financed included
manpower needs assessments in targeted Ministries and Departments and mapping of the
change management process to guide their re-organization/restructuring. This sub-
component also supported the improvement of the technological capability of the unit.
1.2 Strengthening of Customs. Activities supported included: (i) implementation of a
detailed action plan for the Customs Modernization Program including training of
Custom’s staff; (ii) implementation of a risk management system for customs
inspections; and (iii) modernization and automation of ports and customs information and
payments systems, including the upgrade of ASYCUDA - the customs automated data
system.
1.3 Modernization of Registry. This sub-component financed the modernization of the
Registry through the full-scale computerization of Companies and Trade Marks section
of the Registry to allow for on-line business registrations and searches. The improvement
of the computer technology within the land titles section of the Registry was also
expected to reduce the turn-around time for registering properties.
4
1.4 Strengthening of Fiduciary Capacity, including: (i) strengthening financial
management capacity within the Accountant General’s and Auditor General’s
departments with the introduction of various software programs, Cognos and Smart
Stream being utilized to account for GoCD expenditures and provide the necessary
reporting mechanisms in that regard; (ii) implementation of a Procurement Action Plan to
modernize the public sector procurement system; and (iii) taking measures to integrate,
where possible, into the pooled procurement initiative being piloted between Grenada and
St. Vincent and the Grenadines under the ongoing Grenada Public Sector Modernization
project.
Component 2: Improving the investment climate (10 percent of total project cost -
US$252,000)
This component aimed at strengthening the institutional and regulatory environment for
attracting investment to Dominica. Specifically, the activities under this component
sought to address deficiencies in the system of investment promotion as carried out by the
Dominica National Development Corporation (NDC), and prepare a National Investment
Strategy and an Action Plan to build a well-functioning investment promotion agency.
2.1 Development of a National Investment Strategy, to focus the limited public resources
in areas which support private sector development and where attracting foreign direct
investment (FDI) could contribute to the national objective of increasing private sector
led growth for poverty reduction.
2.2 Development and Implementation of a National Action Plan, including the
restructuring of the NDC charged with the mandate to implement the National Investment
Strategy. The restructuring of the NDC involved a split into two separate agencies; (i) an
investment promotion agency; and (ii) a Tourism Authority. To support implementation
of the Action Plan, this sub-component financed training of staff in relevant activities
(market intelligence, direct contacts with investors, services to investors, and after-care of
investors) as well as upgrading office and technical equipment, publication of
promotional material, development of an interactive website which will serve to promote
Dominica’s products and services to the wider regional and international frontiers and a
special software for access to foreign investors’ databases as well as subscription to
relevant international business information databases and services.
Component 3: Reforming the regulatory framework for the energy sector (27 percent to
total project cost - US$695,000).
The objective of this component was to regulate the energy sector, including the
production and distribution of electricity to improve competitiveness. The specific sub-
components were:
3.1 Establishment of National Regulatory Commission. This support was to follow
passage of the Electricity Act, which would provide the legal basis for the establishment
and operations of an independent regulatory commission for the electricity sector. This
5
sub-component financed the activities of the regulatory commission for the first 12
months covering office operational costs, staffing, training and technical assistance. The
expectation was that after the first year, the operations of the regulatory commission
would be fully financed from license fees, other fees and levies.
This component also involved the employment of a number of persons within the IRC
who provided important support throughout the implementation process.
An interactive website was also developed and launched for the IRC. This website
assisted in promoting to the public IRC products and services and also various policies
and guidelines under which the Institution operates.
It also envisaged that in the medium-to-longer term Dominica will benefit from the
regional electricity regulatory initiative, possibly resulting in further reduction of the
national cost of regulation.
3.2 Drafting of Alternative Energy Legislation, to provide the legal and regulatory
framework for the development of alternative energy technologies, including hydropower,
wind and geothermal energy.
Component 4: Improving social protection (9 percent of total project costs -
US$232,000)
The objective of this component was to strengthen the Government’s capacity to better
target, plan and administer social assistance programs for poor and vulnerable persons.
There were three sub-components as follows:
4.1 Beneficiary Selection System Modernization, including: (i) design and
implementation of a transparent and objective targeting mechanism for selection of
beneficiaries; (ii) development of a central beneficiary registry; and (iii) application of
information from recently developed poverty maps to better target community based,
school-feeding and short-term employment programs.
4.2 Institution Strengthening. Improving the administrative capacity to deliver social
assistance through: (i) development of program databases to track beneficiaries and
expenditures for the Education Trust Fund (ETF) and the School Feeding Program (SFP)
in the Ministry of Education and further work on database development for the Public
Assistance Program (PA) at the Ministry of Community Development; (ii) documentation
of policies and procedures for the PA and ETF; and (iii) establishing linkages and access
to the different databases to assist in policy decision making at the sector level.
4.3 Public Information Campaign. Design and implementation of a public information
campaign to inform the public about new approaches to the delivery of social safety net
programs (including the new approaches to targeting and registration of beneficiaries)
and about other social protection reforms.
6
Component 5: Project Management (7 percent of total project costs - US$181,000).
This component financed the operation of the small Project Coordinating Unit (PCU)
integrated within the Establishment, Personnel and Training Department and employing
permanent government staff and where necessary contract staff. More specifically, this
component financed the project coordinator, the cost of the annual project audits,
computers for the PCU as well as the costs of staff assigned to the project.
1.6 Revised Components
Components were not revised during the life of the project.
1.7 Other significant changes
The Outcome Indicators of the project were modified following the Mid-term
Review in December 2008. As described in the Request for Approval of the
Restructuring, dated May 1, 2009, “the purpose of this modification was to improve the
original outcome indicators that were somewhat vaguely delineated in the Supplemental
Letter of the Credit Agreement and the PAD”. This modification, however, was largely
a reorganization of what was originally in the PAD (see Implementation of M&E below).
Since neither the development objectives or outcome targets, nor the number and content
of components/sub-components nor the component costs, financing plan or the allocation
of credit proceeds were changed, it was deemed to be a Third Order Restructuring 2, not
requiring approval by the Board of Directors and thereby not a formal restructuring.
In May 2010, upon request by the Government dated January 29, 2010, the closing
date of the project was extended from June 1, 2010, to December 31, 2010. Shortly
thereafter, the closing date of the EU Co-financing Trust Fund and Grant for the
GSPTAP (TF092145) was extended retroactively and for a second time to August 31,
20103, and the Administrative Agreement was extended from June 20, 2010 to December
31, 2010.
The funding allocations among disbursement categories were modified several times. In September 2008, the percentages of expenditures to be financed in categories 1, 2 and
3 were increased from 69%, 40% and 59% respectively to 100% to allow full usage of
the existing IDA allocation for all three categories (the percentages in categories 4 and 5
were originally 100%, so all categories became 100% financed).
At the same time, proceeds across categories were reallocated, in response to the
Government’s request dated August 8, 2008. The reasons for that reallocation were: (i)
2 As per the guidelines governing the restructuring of investment projects at that time, which were
approved by the Board of Directors on July 1, 2006.
3 The first extension from December 31, 2009 to February 28, 2010, was granted in December 2009.
7
changes in the procurement plan to use one consulting firm, the United Nations
Conference on Trade and Development (UNCTAD) to implement all activities related to
customs reform; and (ii) additional resources had been obtained from other sources such
as the EU budget support contribution. As a result, Categories (1) Goods and (3)
Training were reduced to allow an increase in Category (2) Consultant Services (Table 1).
In May 2010, the proceeds across disbursement categories were reallocated again (Table 1), to reflect what was happening on the ground. This reallocation allowed to pay
for the MIS consultancy which was above the budget allocated for this component, the
software which was developed for Private lands, the LAN for the Customs department,
and the drafting of legislation for alternative energy. The de-facto final allocation was
somewhat different, since the cost of various components exceeded their allocation for
reasons described below. Those extra costs were financed with savings in other
components and exchange rate gains.
Table 1: Amount of IDA Financing Allocated (in SDR)
Category Original
Allocation
September
2008
May 2010 Actual
Expenditures
(preliminary)
(1) Goods for the Project
with the exception of Parts
2.2.2, 3.1 and 5(c) of the
Project
197,000
78,000
18,000
26,580
(2) Consultant services
for the Project with the
exception of Parts 2.2.2,
3.1 and 5(c) of the Project
230,000
414,000
621,680
603,545
(3) Training for the Project
with the exception of Parts
2.2.2, 3.1 and 5 of the
Project
103,000
38,000
20,000
19,055
(4) Goods, consultant
services and training for
Part 2.2.2 of the Project
120,000
120,000
73,000
68,879
(5) Goods, consultant
services and training for
Part 3.1 of the Project
350,000
350,000
267,320
267,154
TOTAL AMOUNT 1,000,000 1,000,000 1,000,000 985,213
8
2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES
2.1 Project Preparation, Design and Quality at Entry
The Project Development Objective (PDO) as well as the 5 original Project Outcome
Indicators covered most aspects of the operation, but they were general in nature.
Further, this operation could only partly be held accountable for meeting the PDO, since
other donors were actively pursuing the same general objective. Nevertheless, the PDO
and Project components addressed key priorities of the Government’s Growth and Social
Protection Strategy and the Poverty Reduction Strategy. The Project supported the
Government’s efforts to carry out reforms prescribed by those Strategies.
The scope of the GSPTAP, while responsive to the client demands, was overly broad
thus complicating the management and supervision of the project. That may be
difficult to avoid when working with a small country and preparing the one and only
operation in several years. For example, Component 2 – improving the investment
climate, achieved substantial results, but this area was also being supported by other
donors. In that respect, however, it should be recognized that at early stages of
preparation, interventions in labor market reform as well as involvement in the
agricultural sector were deliberately excluded from the operation, in spite of the fact that
the latter was an area which the authorities wanted included in the operation, reflecting
that a degree of selectivity was exercised by the team while attempting to remain
responsive to client demand. (Minutes of the Concept Note Review Meeting, March 3,
2006).
The GSPTAP furthered the two pillars of the FY06-09 Country Assistance Strategy
(CAS) for the OECS sub-region, approved by the Executive Board in September 2005:
(i) stimulating growth and improving competitiveness; and (ii) reducing vulnerability by
promoting greater social inclusion. Elements of the GSPTAP, however, could be
perceived as contradictory to a guiding principle of the CAS as the Project supported
establishment of a national regulatory commission (IRC) for electricity in Dominica,
while the CAS called for regional integration and coordination efforts in that area. It
should be noted, however, that the Government requested the inclusion of this component
within the framework of its agreement with the IMF, and that establishment of the IRC
was seen as a precursor to a regional regulatory authority.
The PAD points out that design of the GSPTAP drew from lessons learned from
previous operations in Dominica and elsewhere in the Caribbean. In particular,
implementation was managed by the Project Coordinating Unit who worked in close
collaboration with the Reform Management Unit which fell under the auspices of the
Personnel Services and Training Department, thereby building institutional capacity and
improving the likelihood of sustainability beyond the life of the Project. Also, the
management and monitoring of implementation by a high level Steering Committee and
the appointment of champions to head working groups for each component drew from
lessons from past experience. In practice, the effectiveness of those arrangements varied
across components. At the same time, the stated intention of addressing customs reform
9
and restructuring of the Registry to show early visible results to build ownership of the
Program was not met because the time needed to implement those reforms was
underestimated. That suggests that the design of the project did not take fully into
account the tight capacity constraints in the country.
Risk assessment in the PAD was appropriate. The overall risk was rated as moderate,
ranging from high for exogenous shocks and delay in support from donor partners, to low
for the loss of political support. Most aspects were covered, and the mitigation measures
were straightforward. In addition, by engaging the EU in parallel financing (which
increased the size of the project by almost 40%), the Project leveraged available donor
grant financing, which was one of the mechanisms proposed in the CAS.
2.2 Implementation
The Project was off to a slow start. It took some time to identify and recruit the project
coordinator in Dominica, and there was a change of Task Manager (TM) at Headquarters
at an early stage of implementation and then again after restructuring. The Trust Fund
agreement with the EU was signed over one year after the Credit became effective, and it
required supplemental coordination efforts by both the Government and the Bank. For
example, the EU monitored progress based on Bank supervision missions, but late in the
life of the Project, the EU requested a different verification method relating to the private
land registry indicator.
The Project spread over a wide set of issues, while implementation capacity within
government was fairly limited. Thus, several elements of the program which appear
not to have been a top priority for the government, such as drafting alternative energy
legislation, were pushed back and were not completed by the closing date. Others, such
as procurement legislation, underwent various rounds of lengthy consultations, which
were not completed either. Implementation took longer than planned also because of the
length of time required for Cabinet and/or Parliamentary approval.
In addition, there were delays in procurement and contracting of consultants for
various components of the Project. In some cases, because of the small size of the
local market, it was not possible to obtain the minimum number of quotes required by
Bank procedures. Also, apparent misunderstandings among all involved led to protracted
negotiations with UNCTAD which delayed customs reform. On the other hand, once it
was launched, the reform of customs expanded and became a comprehensive institutional
change which could have far reaching benefits for international trade and economic
activity as a whole (see 3.2 below). Also, government officials pointed out that Bank
staff were responsive to their concerns and requests, and tried to address them
expeditiously.
As mentioned above, at the Mid-term Review in late 2008, the Outcome Indicators
were reorganized and rephrased in order to facilitate monitoring and supervision.
Also, as Table 1 shows, the allocation of proceeds among disbursement categories
changed dramatically over the life of the project. The latter resulted in part from
10
increases in costs, due to the long time period between their estimation and the actual
spending, and to the introduction of the new 15% VAT in 2006.
Disbursement lags led to questions in internal discussions and memoranda on
whether the Satisfactory rating of the project was justified. Eventually,
disbursements picked up, but initial delays led to the extension of the closing date of the
project by 6 months to finalize activities. Nevertheless, several outcome indicators were
only partially achieved or not achieved by the revised date (Annex 2).
All in all, the 370 document entries in IRIS testify to the huge costs to the Bank of
preparing and supervising the GSPTAP. Government officials told the ICR mission
that it also required a huge effort on their side, and that in the future they would hesitate
to engage in a new project if it is for less than US$5 million. Since IDA allocations to
small countries are relatively small, the challenge for the Bank is to prepare fewer, larger
operations that are relatively simple and straightforward in design, which address a
reduced number of key priorities and leverage resources from other donors. Hopefully,
this will reduce the cost of management and supervision.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization
M&E design. The design of the Results Framework was cumbersome. The PDO
was one long general sentence that covered everything. The Outcome Indicators were
general and non-measurable (e.g., “increased capacity of the public sector to implement
reforms” or “greater transparency and efficiency in public procurement”). Several
Intermediate Outcome indicators were also very general (e.g., “Reform Management Unit
planning, designing and implementing modernization plans”, or “Reduction in the used
of paper based customs declarations”). Only at the level of Arrangements for Results
Monitoring, which specified target values for years 1, 2 and 3 of the Project life, there
were numerical values that could be monitored. Then, however, the final target values
for the component of Social Protection asked for 100% compliance in three social
protection indicators, which was not realistic.
Implementation. In order to address the problems embedded in the Results
Framework, the team clarified the PDO and made the Outcome Indicators more
specific at the Mid-term Review. In fact, however, that was largely done by bringing
forward what was originally spelled out in the Arrangements for Results Monitoring into
the Results Framework. For example, “Reduction in the processing time at customs” was
replaced by “Reduction in the average time for customs clearance from seven days to one
day”, but the latter was already defined in the table of Intermediate Outcome Indicators
attached to the original Supplemental Letter and the PAD. As part of the restructuring,
the Outcome Indicator requiring the establishment of a “self-financed semi-autonomous”
agency for registry was taken out, after the authorities argued that it was not agreed with
them nor included in the Credit Agreement.
Utilization. Restructuring of the Results Framework helped in monitoring progress
of several outcome indicators. Although it did not eliminate all problems (such as the
11
requirement for 100% compliance in social protection indicators), it was incorporated
into the Implementation Status and Results Reports (ISRs). However, since the new
Results Framework drew from the table of Intermediate Indicators, several duplications
emerged. Moreover, the original Results Framework still needed to be monitored. As a
result, supervision missions and the ICR had a hard time identifying which outcome
indicators needed to be monitored to assess progress in the Program.
2.4 Safeguard and Fiduciary Compliance
The Project triggered none of the Bank’s Environmental and Social Safeguard Policies.
In late 2009, financial management and procurement were downgraded to
Marginally Satisfactory due to delays in procurement processes and submission of the
audit report. Those problems were resolved shortly thereafter.
A procurement supervision mission visited Dominica three months after the closing
date, and found no major issue regarding procurement. The mission concluded that
procurement under the project had been carried out, in general, in compliance with
arrangements agreed in the project financing agreement. This was explained by the fact
that about 70% of contracts awarded were subject to Bank prior review. In addition to a
close follow-up, training in the area of Bank procurement procedures was provided to the
project team and to technical implementing agencies’ staff at a very early stage.
However, there were a number of delays that were attributed to: (i) the small size of the
economy limiting the number of bidders; (ii) the fact that coordination and procurement
functions were the responsibility of one person; and (iii) the departure of the first Project
Coordinator who attended the Bank procurement training. In addition, the project would
have benefitted from an early preparation and adoption of the operations manual and
procurement plan, as well as clear Terms of Reference for implementation.
2.5 Post-completion Operation/Next Phase
The integration of the PCU in the Reform Management Unit at the Ministry of
Finance is expected to help in completing the reforms which had not been finalized by
the closing date. Longer term sustainability, however, depends on continuous support by
the political level.
No follow up operation is considered at the moment.
3. ASSESSMENT OF OUTCOMES
3.1 Relevance of Objectives, Design and Implementation
The objectives of the GSPTAP were and remain relevant for Dominica’s social and
economic development. If anything, the relevance of these objectives is accentuated by
the global financial crisis, which makes even more compelling for the country to achieve
higher levels of efficiency and international competitiveness.
12
As it closed, the relevance of the Design and Implementation of the GSPTAP is
mixed. In retrospect, the choice of a Technical Assistance operation over a DPL was
warranted, both because of the small size of the operation as well as the need for capacity
building in Government and public agencies. However, trying to be responsive to the
Government’s priorities, the Project scope was too wide, taxing implementation capacity
in the country. For example, given support by other donors for improving the investment
climate for the private sector, it’s hard to assess what was the specific impact of the
GSPTAP in this area. Also, while the creation of the Independent Regulatory
Commission (IRC) was envisioned as a precursor to a regional regulatory authority which
is more cost efficient, its success in improving the regulatory environment in the
electricity sector reduced interest within Dominica towards the regional approach to
energy regulation, which was highlighted in the CAS and is now being pursued by a new
Bank operation.
3.2 Achievement of Project Development Objectives
Despite delays and challenges faced during implementation, the operation made a
substantial contribution to improving the environment for private sector activity in
Dominica and set the basis for a more efficient system of social protection.
Commitment by the authorities and a close follow up by the Bank helped overcome the
slow start, delays in contracting of consultants, limited capacity of implementation, and
protracted approval processes by Cabinet and Parliament.
The project had four components: (i) Making the public sector more efficient and
effective; (ii) Improving the investment climate; (iii) Reforming the regulatory
framework for the energy sector; and (iv) Improving social protection. An assessment of
each of the components follows below:
Component 1- Making the public sector more efficient and effective: Moderately
Satisfactory. This component provided technical assistance to the Government to
implement key elements of its public sector modernization strategy focused on
streamlining the public sector to increase the efficiency of service delivery while
lowering costs. More specifically, it supported activities to improve human resources
management, improve and increase the transparency of auditing, modernize procurement,
restructure the Registry, and reform customs.
After wide consultation, a Human Resources Audit of Ministries and Departments
of the Public Service was completed. The audit included a satisfaction survey and a
review of personnel files of all established positions, followed by consultations with the
unions. On the succession plans for Ministries and Departments, the Reform
Management Unit (RMU)/Establishment, Personnel and Training Department took an
alternative approach in that rather than developing and launching time bound, fully
costed succession action plans, it developed a methodology (Tool Kit) for preparing
succession plans when required, and it identified key positions where those plans would
be applied. Due to the Parliamentary elections at end 2009, this activity was put on hold
13
until after the new authorities took office. The final report was completed in October
2010, and Cabinet gave approval of the recommendations and action plan in April, 2011.
At the Auditor General office, the new auditing management systems were not fully
operational by the closing date. The office got the IDEA software in early 2010, but
staff was not able to complete training. The SMART Stream system was used for the
budget process, but it was not operational yet for auditing. Regarding the new
procurement legislation, consultations with key stakeholders initially scheduled to be
completed by March 2010 were still ongoing one year later, and the new legislation
prepared under the project was not timely finalized as agreed in the TORs discussed with
the Bank. This was due to the extended consultation process which was required and
corresponding delays in the drafting process. However, the procurement legislation is on
the agenda for the next sitting of Parliament scheduled for June 29, 2011. Among other
things, the new legislation would ensure that all contracts above EC$1 million are
awarded by competitive bidding. As of March 2011, most but not all contracts were
subject to competitive bidding, as per the matrix of Outcome Indicators.
Reform of the Registry is well under way, but not as spelled out in the original
Results Framework. As mentioned above, when the Framework was restructured after
the Mid-term Review, the notion of the Registry being “semi-autonomous” was taken
out. The Registry is part of the Government financial system and as such, it cannot be
“self financing” either, as all its revenues go to the Treasury and it is financed by the
budget. As it turns out, however, its revenues are substantial and could finance its
operations easily. The land registry is fully computerized, and the time it takes to register
property was reduced: at the time of the ICR mission, First Title registration was taking
60-90 days, compared to several years before the reform; Part of Land registration was
taking about 35 days, down from 3-6 months; and Direct Transfer was taking about 30
days, compared to 3 months before the reform. There is now a separate Registry for
companies, which also deals with patents and intellectual property. Companies can be
registered in one day. While newborn children are registered at the hospital, the Registry
in the Birth and Death section is not fully computerized. A business proposal for a
Secured Civil Registry and Certificate Issuing System has been approved by Cabinet in
June, 2011.
The reform of Customs had a slow start, but it achieved the targets of the Project,
and is already showing tangible results on the ground.4 Firstly, the upgrade from
ASYCUDA 2.7 to ASYCUDA World (AW) was completed and is fully operational.
That reform was fully endorsed by the President of the private brokers association, who
told the ICR mission that transactions costs of dealing with customs have been reduced
significantly, and thus doing business in the country became more profitable and
predictable. Further, the AW is user friendly and web based, and thus available 24/7.
Secondly, the process of achieving a paperless environment for customs transactions was
4 The slow start was due to delays on contracting with UNCTAD as well as in the procurement of
equipment. In addition, the new Customs Act No. 20-2010 became effective only on December 1, 2010.
14
well under way. Under the new system, the cargo manifest is an electronic document
fully integrated into the commercial declaration, which Customs receives electronically
even before cargo arrives to port. Hence, the electronic manifest has replaced completely
the outdated paper-based manifest (100 percent of reduction). In the case of paper
declarations, users need only one copy instead of four (75 percent of reduction). Thirdly,
the last target was virtually achieved, as the time for the clearance of goods was reduced
from 8.65 days in July 2010 when the new system was launched, to just over one day
(1.42 days on average in the last quarter of 2010, and 1.29 days on average in the first
quarter of 2011).5
Component 2 - Improving the Investment Climate: Satisfactory. This component
aimed at strengthening the institutional and regulatory environment for attracting
investment into Dominica. Specifically, the activities under this component sought to
address deficiencies in the existing system of investment promotion as carried out by the
Invest Dominica Authority (IDA) and prepare a National Investment Strategy and an
Action Plan to build a well-functioning investment promotion agency.
The objectives of this component were achieved, although not necessarily as a direct
outcome of the GSPTA. Other donors were active in this areas as well. In particular,
the Invest Dominica Authority was established in July 2007 under another project, and
analytical work on improving the environment for private investment was financed by
several donors. Preparation of the National Investment Strategy, however, was supported
by the GSPTAP, and the Strategy was approved by Cabinet in November 2010. The
Invest Dominica Authority started to implement the Action Plan shortly thereafter.
The Invest Dominica Authority has two units: (i) investment promotion; and (ii)
facilitation of services to investors. The second unit operates the one-stop-shop for
investors, which is now operational. In addition, the number of days to process
investment applications has been gradually reduced: proposals of up to EC$2 million are
reviewed by a sub-committee of Cabinet within 2 weeks, while proposals above that
amount are reviewed by Cabinet within 3 weeks.
Component 3 - Reforming the regulatory framework for the energy sector:
Moderately Satisfactory. The objective of this component was to regulate the energy
sector including the production and distribution of electricity to improve competitiveness.
In particular, it supported establishment of a national Regulatory Commission, which
should be funded, staffed and fully functional; and drafting alternative energy legislation
and submitting it to Parliament for approval. The rationale behind this component was
that electricity tariffs in Dominica were among the highest in the Caribbean6 and they
undermined competitiveness. During preparation, there was discussion on the
5 The CATT report for Dominica of December 2010, indicator 114, shows that more than 50% of the
declarations took more than 24 hours to be released because it refers to the whole year 2010.
6 Electricity tariffs are high largely because a small population is spread over a relatively large and rugged
terrain, coverage is 97 percent, and due to high fuel costs.
15
establishment of a regional regulatory commission, which was viewed as more cost
effective. The Government, however, insisted on a national commission, as per its
Growth and Social Protection Strategy Paper (April 2006).
The Independent Regulatory Commission (IRC) was established in late 2007 and
started to operate in July 2008 when its Executive Director was hired. The GSPTAP
financed its activities in the first year (several consultants were extended for another 3
months), but now it is being funded by Government. The guidelines of IRC policies are
in the web, and those include methods for dealing with unexpected tariff and other
regulatory issues. Authorities in Dominica are satisfied with the way in which the IRC
operates, and they intend to maintain it as the national regulatory agency notwithstanding
the Bank’s current initiative to promote regulation at the regional level, which should be
more cost effective. Apparently, the success of the IRC as a national regulatory
commission is also drawing attention in several neighboring islands.
A draft of alternative energy legislation has been circulated and it underwent several
revisions, but there was no final version when the ICR mission visited Dominica in
March 2011.7 The final revision is currently being undertaken at the Chambers of the
Attorney General for onward transmission to Parliament. Cabinet has to approve the
final draft before it is submitted to Parliament.
Component 4 - Improving social protection: Moderately Unsatisfactory. The
objective of this component was to strengthen the Government’s capacity to better target,
plan and administer social assistance programs for poor and vulnerable persons. In
particular, the Project supported: (i) modernization and streamlining the systems for
beneficiary selection and registration: (ii) activities to strengthen the administrative
capacity to deliver social assistance; and (iii) design and implementation of a public
information campaign to inform citizens about new approaches to the delivery of safety
net programs.
While the rating of this component reflects the fact that most targets were not
achieved by the closing date, substantial progress was made in key elements of the
program (see below). Further, it should be recognized that: (a) this component had a
late start, as key consultancies started only in 2009; and (b) targets requiring 100%
identification of beneficiaries, 100% registration, and 100% of ETF, SFP and PA
beneficiaries and expenditures captured in the data base, were not realistic. In addition,
there were technical problems in developing the new information system, coordination
among relevant ministries was initially not smooth, and the process slowed down prior to
the elections at the end of that year.
7 Several studies indicate that Dominica has potential for geothermal generation, which could supply all its
domestic demand and exports of about 15 MW to neighboring islands.
16
Notwithstanding these difficulties, the welfare system of Dominica is undergoing a
substantial change, both in terms of policy as well as implementation. At the policy
level, in January 2011, Cabinet approved means-testing as the target mechanism to be
used to identify beneficiaries, thereby increasing transparency and removing subjectivity
from this process, and the National Beneficiaries Information System (NBIS) was
launched shortly thereafter. Further, the new set-up establishes linkages between the
core programs in the safety net. In terms of implementation, social workers were trained
in the new targeting mechanism and potential beneficiaries completed application forms;
operations manuals for the ETF, PA and SFP were approved; and key monitoring
indicators were identified and a monitoring plan for the three programs was designed.
Incidentally, the Ministry of Education will not have a separate data base but it will rather
have access to the NBIS in areas that are relevant for its work. Finally, the public
information campaign has been prepared and a number of public relations activities have
already taken place.
3.3 Efficiency
The nature of this Technical Assistance Project did not allow for the calculation of
net present value or other financial variables. The US$2.6 million project was
expected to have only a minimal direct economic impact in the short term, and that seems
indeed to be the case. However, in the medium and longer term, the outcomes of the
Project are expected to contribute to Dominica’s economic and social development.
Better control and deployment of human resources within the civil service and lower
costs of operating the Registry are likely to save fiscal resources. Also, improvement in
quality and timing of audits as well as more transparent and efficient public procurement
would result in better value for money. Further, an improved environment for private
investment and better regulation of electricity are likely to contribute to economic growth.
In the longer term, development of geothermal generation capacity would lower domestic
energy costs and improve the balance of payments by reducing fuel imports and
exporting electricity to neighboring islands. In addition, the comprehensive reform in
customs could be a point of before and after in international trade and have a direct
impact on competitiveness and economic activity. In the social protection area, the new
beneficiary information system was still being put in place, but once it becomes
operational it would save administrative costs and enhance both the coverage and
efficiency of the social safety net.
3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory
The PDO and key associated outcome targets of the GSPTAP were largely achieved,
or are likely to be achieved relatively soon, notwithstanding a slow start and delays
during implementation. The reform process of the civil service was advanced by the
Program. The Registry of land and companies is working much better, and the upgrade
to ASYCUDA World has already had a major impact on efficiency at customs. The
Invest Dominica Authority is providing information and services to investors, and the
recently established IRC is perceived by both the authorities and the public as fulfilling a
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positive function in the electricity area. Delays were longer in the social protection
component, and targets were not achieved by the closing date. However, the technical
work on the new National Beneficiaries Information System (NBIS) has been completed,
Cabinet has approved means-testing as the targeting mechanism, and the system will
become operational shortly. The NBIS would help improving both targeting and coverage
of social protection programs, even if their coverage does not reach 100% as specified in
the Outcome Indicators.
3.5 Overarching Themes, Other Outcomes and Impacts
(a) Poverty Impacts, Gender Aspects, and Social Development
Insofar as the improved environment for private sector development succeeds in
attracting more investment, the resulting generation of new jobs would contribute to
reducing poverty. In addition, the new National Beneficiaries Information System
would improve coverage and efficiency of social protection programs. As of March 2011,
information of about 75% of current beneficiaries was entered into the new system, and
95% of those were confirmed. Better targeting of beneficiaries is expected to result in a
more efficient allocation of social expenditures. Improved coordination of the delivery of
social assistance would save administrative costs. Authorities, however, are concerned
that some people who were rejected by the new system because of size of household or
age may still need help, and they are looking for mechanisms to address that problem.
(b) Institutional Change/Strengthening
The human resources audit of established position in Ministries and Departments,
which was completed under the Project, would improve management in the public
sector. The Auditor General office was strengthened with new hardware and software,
the Registry was restructured and is now performing its duties within shorter periods of
time, and customs administration was taken to a higher level by the upgrade to
ASYCUDA World. The establishment of the IRC, with transparent methods of operation,
was a major institutional change in the energy area. When the new procurement law is
approved by Parliament, it would also be an institutional improvement. Finally, when
fully operational, the new NBIS will improve the effectiveness and efficiency of
institutions managing key social protection programs.
(c) Other Unintended Outcomes and Impacts (positive or negative)
The reform at customs, which was one of four sub-components within the first
component of the Program, acquired increased importance over time and became a
major outcome of the GSPTAP. A comprehensive and detailed M&E matrix was
developed during implementation, containing specific steps in eight focus areas: (i) legal
framework; (ii) organization and management; (iii) human resources management and
training; (iv) information and communication technology; (v) control systems and
processes; (vi) external cooperation; (vii) enforcement and compliance; and (viii)
integrity (Annex 3). This matrix spells out the tasks in each area as well as who was
responsible for execution and the expected time frame of completion. This sub-
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component took a long time to take off, but import brokers see those reforms as a major
improvement in the system, which greatly facilitates international trade.
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops
N/A
4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME Rating: Moderate
The risk that development outcomes would not be maintained varies somewhat
across the components of the Project. The risk to outcomes of component 1 is low to
moderate, as it strengthens institutions in the public sector and improves its operational
efficiency, thereby creating stakeholder groups who benefit from those reforms and
would oppose back tracking. An example of that is the reform at customs, which
facilitates and reduces costs of international trade. Likewise, for the improved operations
of the Registry, and for the services provided by the Invest Dominica Authority
(component 2). The risk could be significant, however, with regard to the new
procurement legislation, which has been bouncing back and forth for a long time.
Approval of this law is required to ensure that all public contracts above threshold are
advertised and awarded through transparent and competitive bidding.
The risk to the liberalization and current regulation of production and distribution
of electricity is moderate. While the new IRC is perceived as doing a good job and
protecting consumers, the cost of maintaining a national regulator is high. If this cost
becomes unbearable, the government may decide that it is advantageous to participate in
the regional regulatory authority, the development of which is being supported by the
Bank.
The risk to the sustainability of the new National Beneficiaries Information System,
once it’s operational, is low. Again, its higher efficiency is likely to save administrative
costs and draw support from beneficiaries.
5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry
Rating: Moderately Satisfactory
The areas included in the GSPTAP were all of strategic relevance for Dominica. In
fact, they were also part of the Growth and Social Protection Medium Term strategy of
the government. However, the value added of the second component – Improving the
Investment Climate, is not so clear since there were other donors providing support in
this area. The Results Framework was general and with Outcome Indicators difficult to
measure. A subsequent Table of Arrangements for Results Monitoring in the PAD
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presented interim and final target values for several OIs, but some called for 100%
compliance, which was not very realistic. The implementation arrangements were good,
with the PCU collaborating with the Ministry of Finance and the creation of a Steering
Committee and working groups for each component. However, the slow start of the
Project suggests that assessment of readiness for implementation was lacking. Finally, the
Risk Assessment included in the PAD was appropriate, covering most aspects of risk and
describing mitigating measures for each one of them.
(b) Quality of Supervision
Rating: Moderately Satisfactory
The project lost its Task Manager (TM) almost right after Board approval, and
there was another TM change in the last year of implementation. While that is not
uncommon in the Bank, the two transition periods between TMs appear to have resulted
in delays in receiving responses to no-objection requests. Also, it took some time for
n