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Cooperation Between the European Union and the Commonwealth of Dominica

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Cooperation Between the European Union and the Commonwealth of Dominica DELEGATION OF THE EUROPEAN COMMISSION IN BARBADOS AND THE EASTERN CARIBBEAN OFFICE OF THE NATIONAL AUTHORISING OFFICER IN DOMINICA COOPERATION BETWEEN THE EUROPEAN UNION AND THE COMMONWEALTH OF DOMINICA JOINT ANNUAL REPORT 2007 In conformity with Article 81 of The Cotonou Agreement 1/51 TABLE OF CONTENTS 1. UPDATE ON THE POLITICAL, ECONOMIC AND SOCIAL SITUATION ............................................. 4 1.1 UPDATE ON THE POLITICAL SITUATION...................................................................................................... 4 1.2 UPDATE OF THE ECONOMIC SITUATION...................................................................................................... 4 1.3 UPDATE OF THE POVERTY AND SOCIAL SITUATION.................................................................................... 9 2. OVERVIEW OF PAST AND ONGOING EC CO-OPERATION.................................................................. 9 2.1 FOCAL SECTORS, INCLUDING MACROECONOMIC SUPPORT................................................... 10 2.2 PROJECTS AND PROGRAMMES OUTSIDE FOCAL SECTORS ...................................................... 11 2.3 UTILISATION OF “B” ENVELOPE......................................................................................................... 11 2.4 OTHER INSTRUMENTS............................................................................................................................ 11 3.0 POLICY COHERENCE FOR DEVELOPMENT (PDC)......................................................................... 14 4. JOINT EU-CARIBBEAN STRATEGY .......................................................................................................... 15 5. DONOR COORDINATION AND HARMONISATION ............................................................................... 15 6. DIALOGUE IN COUNTRY WITH THE NSAS, LOCAL AUTHORITIES AND THE NATIONAL PARLIAMENTS ......................................................................................................................................................... 15 7. CONCLUSIONS ..................................................................................................................................................... 16 A) GENERAL ANNEXES "COUNTRY AT A GLANCE" – TABLE................................................................... 40 B) ANNEXES WITH A RETROSPECTIVE CHARACTER................................................................................. 45 ANNEX B2) ON-GOING CARIBBEAN REGIONAL PROJECTS (SITUATION ON DECEMBER 31ST, 2007) ............................................................................................................................................................................. 49 ANNEX B3) EIB PROJECTS IN DOMINICA .................................................................................................. 52 ANNEX B4) USE OF BUDGET SUPPORT....................................................................................................... 53 ANNEX B5) BUDGET LINES............................................................................................................................ 55 D) ANNEXES ON AID EFFECTIVNESS ................................................................................................................ 66 ANNEX C OF EAMR: QUESTIONS ON THE EU AID EFFECTIVENESS TARGETS................................... 66 DEFINITIONS FROM "DEFINITIONS AND GUIDANCE" OECD/DAC ......................................................... 69 OTHER AID EFFECTIVENESS RELATED INFORMATION............................................................................ 78 D2) DONOR MATRIX ON CURRENT AND FUTURE DONOR ROLES .......................................................... 80 2/51 1. Update on the political, economic and social situation 1.1 Update on the political situation Elections in Dominica are constitutionally due every five years. The last election took place in May 2005, and the Dominica Labour Party (DLP) retained office, winning 12 of the 21 elected seats in the Parliament. The United Workers Party (UWP) obtained eight seats and one seat went to a candidate who ran as an independent. DLP leader Roosevelt Skerrit was again sworn in as prime minister. In October 2007, the Prime Minister reshuffled his Cabinet, a move which he said was ‘‘vitally necessary to invigorate new energy and dynamism in the advancement of [the Government’s] social and economic agenda.’’. In that re-shuffle, the Prime Minister kept the portfolio of finance and assumed responsibility for foreign affairs and social security. The Dominican leader is CARICOM’s lead head of government with respect to free movement of labour, an important component of the implementation of the CARICOM Single Market and Economy (CSME). Currently, there are only five female parliamentarians, but this does not fully reflect how active women are in the governance of the country. Most senior civil servants—for example, in the offices of Permanent Secretary—are women. The legal system is based on English common law as exercised by the Eastern Caribbean Supreme Court (located in Saint Lucia). One of the six judges resides in Dominica and presides over the Court of Summary Jurisdiction. Provision is made for appeal to the East Caribbean Appeals Court with final appeal to the Privy Council. A declaration of individual rights and freedoms is entrenched in the Constitution of Dominica. In general, the country, which is a signatory to the Convention on the Elimination of All Forms of Discrimination against Women and the Convention on the Rights of the Child, is not considered to have major problems with human rights or the protection of civil liberties, although it has not yet signed the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (CAT). The death penalty remains on the country’s statutes, but it has not been carried out in more than twenty five years. Internal security concerns are mainly related to trans-shipment of narcotics bound for the US and Europe; and minor production of cannabis. Since Prime Minister Skerrit assumed the leadership of the country in 2004, Dominica has taken a more pro-active approach to the conduct of its foreign policy guided by its development needs. In April 2004, Dominica severed relations with the Republic of China (Taiwan) and switched to the People's Republic of China, which has pledged to provide a reported US$100 million in aid. Relations between Dominica and Venezuela, which have existed since independence, have strengthened particularly in the area of development cooperation. Dominica is set to benefit from the Petrocaribe initiative which involves the purchase of petroleum fuel products on concessional terms from Venezuela and the construction of a storage and distribution terminal for such fuel through a joint venture between the two governments. The development objective is to develop the country’s physical and institutional capacities to fortify its energy security. Further, the Venezuelan government has given Dominica a US$ 10.1 million grant for the expansion of the Melville Hall Airport and US$10.92 million (EC$29.49 m) for low income housing and has forgiven the island nation’s US$ 1.1 million debt owed to Venezuela. In addition, the Government of Dominica is considering a proposal by Venezuela to build a US$ 80 million oil refinery on the island. In January 2008, Dominica joined the Bolivarian Alternative for the Americas initiative, which is based upon the idea of social, political, and economic integration between the countries of Latin America and the Caribbean. 3/51 1.2 Update of the economic situation1 Dominica is a very small lower-mid-income economy with an area of 750 sq km; a population of 72,000 (2005 estimate); a population density of 96 inhabitants per sq km (the lowest in the Eastern Caribbean); a GDP of US$ 316.3 M (EUR 210.87 M); and GDP per capita of US$4,393 (EUR 2 929) (projected 2007 current market prices). The 2007 IMF country report, which was based on data up to May 2007, concluded that the near- term outlook for the economy is positive.2 Economic growth has resumed with output performance in 2006 exceeding the historical average growth rate of 2%.3 Output growth was recorded at 4 percent in real terms in that year. The overall economic performance reflects in part a general improvement in the country’s macroeconomic policy environment, particularly with respect to Government’s fiscal framework. The target for the primary surplus in FY 2005/2006 (3 percent of GDP) was exceeded by a wide margin (4.3 percent of GDP) as a result of a strong revenue outturn and a firm control on spending. The primary surplus was some 10 percentage points of GDP higher than in 2000/2001. Central Government’s overall balance has moved from a deficit that was equivalent to 5.4 percent of GDP in FY 2002/2003 to a surplus position estimated at 1.2 percent of GDP in 2005/2006. The primary fiscal surplus before grants was projected at 6 percent of GDP for 2006/2007. The greater macroeconomic stability has led to general improvement in consumer confidence and a concomitant expansion in domestic credit, which grew by 11.2 % in 2006, the highest in 15 years. The credit expansion, largely concentrated in the household sector, was funded in part by increases in public savings and deposits. Although remaining high, public sector debt has declined from 131 percent of GDP in 2002 to 103 percent at the end of 2006, owing in part to the restructure of a large part of Central
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