Grenada National Export Strategy Review and Strategic Options for Export Development Project

STRATEGIC OPTIONS PAPER FOR EXPORT DEVELOPMENT

June 2015

Prepared by

in partnership with

Contents Executive Summary ...... 4 I. Introduction ...... 6 II. Situational Analysis ...... 6 Building Economic Resilience and Competitiveness in Small States ...... 6 Grenada’s Trade Profile ...... 8 Balance of payments ...... 11 Public debt ...... 11 Exchange rate ...... 12 Ease of Doing Business ...... 13 III. Priority options for further intervention in Export Development: Assessment of Lead Sectors ...... 17 Qualitative Rationale for Lead Sectors Selection ...... 17 Methodology: Quantitative Diagnostic and identification process ...... 19 Tourism Services ...... 21 Creative industries...... 26 THE Ocean Economy ...... 33 Agricultural products ...... 37 Transport ...... 42 IV. Export Supply Capacity Assessment ...... 47 V. SWOT Analysis ...... 49 VI. Action Plan Priorities for Firm Level Export Development ...... 51 VII. Government Objectives and Planned Donor Assistance ...... 52 VIII. Conclusions and Recommendations: Options for Export Development ...... 53 REFERENCES ...... 56 ANNEX 1- MATRIX OF SELECT MEDIUM TERM GoG PRIORITY PROJECTS BY DONOR COMMITMENT SOURCE ...... 58

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List of Figures

Figure1: Economic Vulnerability and Export Instability, 2012……………………….……….8 Figure 2: Grenada Export of Services (2009 and 2012)……………………………………..….10 Figure 3: Benchmarking Grenada’s Export Performance…………………………………..….10 Figure 4: Export performance of main sectors as a % of GDP, 2013…………………....11 Figure 5: Public debt (2013, percent of GDP, 175 countries………………………………...12 Figure 6: Real effective exchange rates (based on CPI, index, 2005…………………….12 Figure 7: World Bank's Ease of doing Business ranking, 2015……………………………..13 Figure 8: Grenada Rankings on Doing Business Issues………………………………………..14 Figure 9: Enterprise Survey - Top 10 Business Environment Constraints……………..15 Figure 10: Female participation in business in the Caribbean region…………………..15 Figure 11: Percentage of firms with female top managers in the Caribbean……….16 Figure 12: Example of tourism cluster for Cairns……………………………………………….....17 Figure 13: Selection of Key Economic Sectors to Drive Export Strategy……………….18 Figure 14: National Export Portfolio by Products, 2009-2013……………………………….20 Figure 2 : World versus Grenada export growth in services, 2009-2012……………..21 Figure 3: Tourism in Grenada………………………………………………………………………………22 Figure 17: Creative Industries Sub-sectors…………………………………………………………….26 Figure 4: Income streams from the creative industry…………………………………………..26 Figure 5: Growth in demand for Fish, crustaceans, molluscs, aquatic invertebrates (HS 03) from Grenada in 2014……………………………………………………..………………………………………………….. 33 Figure 20: List of importers for Fish, crustaceans, molluscs, aquatic invertebrates (HS 03) – Imported value in 2013 and annual growth in value between 2009 and 2013………………………………………………………………..34 Figure 21: World imports of nutmeg, mace and cardamoms and top five exporters (2011)………………………………………………………………………37 Figure 22: World import of Cocoa and cocoa preparations, in value……………………...38 Figure 23: List of importers for Cocoa and cocoa preparations (HS 18) – Imported value in 2013 and annual growth in value between 2009 and 2013……………………………………………………………………………………………………..38 Figure 24: Ease of trading across borders in the Caribbean region...... 42

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EXECUTIVE SUMMARY

This document provides a Strategic Options Paper for Export Development in Grenada. The economy of Grenada remains largely anchored on traditional exports of agriculture (primarily nutmegs) and tourism, and there are limited incentives for the economy to develop a competitive dynamism built on other non-traditional sectors. These two pillars of the economy are showing signs of weakening, highlighting the long-standing competitiveness challenges that Grenada is facing. According to the IMF, Grenada’s share in the Caribbean tourism market has declined since 2007, as the recovery after the 2004-05 hurricanes was thwarted by the global financial crisis only reaching 66 percent of its pre-hurricane shares in 2014. Competiveness in Grenada’s tourism is mainly affected by the country’s real exchange rate, measured against its tourist origin markets. This exchange rate appreciated significantly following the global financial crisis and has since remained 13% more appreciated relative to the pre-crisis period1. For the nutmeg industry, despite a recent but fragile recovery, the country’s market share plunged from about 20% of world nutmeg trade in 2001 to about 3% after the hurricanes destroyed almost all of the crops.

Grenada’s poor level of competitiveness is in part due to the poor performance of the country’s business environment, as well as the low labour productivity. Structural impediments have also contributed to weak competitiveness, including difficulties faced by Grenada’s agricultural products with regard to distribution channels, and weak performance of public services. New economic developments should be built on competitive advantage, entrepreneurship and the ability to adapt to changing economic conditions. The current medium term development priorities of the GoG are encapsulated in Grenada’s Growth and Poverty Reduction Strategy (GPRS), 2014 - 2018, completed in November 2014. The GPRS was developed through an extremely inclusive process of consultations, involving key stakeholders from the private and public sector as well as the civil society. The final document provides a detailed policy statement and plan of activities linked to a number of objectives under the key pillars of pro- poor growth, poverty reduction and development of the new economy. The export sector is seen as critical to growth and development, based on the potential for foreign exchange earnings and other exports driven developments. Inclusive growth in the lead sectors of agriculture and tourism is desirable, particularly in rural communities.

In addition to the situational analysis of the macro-conditions and the business environment, this report presents a bottom-up approach to analysing the sectoral performances and the causes of weak development, with a view to identifying opportunities for growth in Grenada. By analysing the determinants of growth from micro-foundations, we are able to better identify the key drivers of growth, the sectors with the greatest potential and the policy mix best suited to promoting the sectors. The identified priority sectors are:

 Tourism Services  Creative Industries

1 IMF (2014). IMF Country Report No. 14/196 - Grenada

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 The Ocean Economy  Agricultural products  Transport The rationale for selection of these sectors is further elaborated in this report. On May 29, 2015, a Validation workshop was held in Grenada to present a first draft of the Strategic Options Paper for Export Development. In general, stakeholders present endorsed the selection of sectors as the right choices to move the export economy forward. Substantial discussion was generated among stakeholders on lead sectors and potential niches within these sectors, where Grenada is well positioned to develop sustainable options in future export development. Required firm level actions to support export competitiveness were also agreed through discussion. The information on developing sustainable strategic niche options and firm level support actions are also included in this report. These niches should be subject to further value chain analysis and feasibility studies to guide the necessary investments which will transform these options into a blueprint for export development.

In the final section, a matrix of determinants based on the 6M analysis of industrial sectors is used to further review the drivers of competitiveness in the industry and determine the national performance of Grenada in this regard. If Grenada is to achieve the potential for export development which may be derived from these sectors, it is important that the gaps identified (in the 6M areas of manpower, means, methods, machines, measurable and marketing) be addressed in a structured and strategic manner, in order to realise the potential gains to the economy.

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I. INTRODUCTION

The Government of Grenada (GoG) through the Ministry of Economic Development, Planning, Trade and Cooperatives (MEDPTC) has received the support of the Commonwealth Secretariat to undertake a review of the National Export Strategy (NES) 2006-2011 and identify strategic options for export development. This intervention is intended to assist exporters or export- ready firms from strategic sectors to increase exports in regional and international markets.

The consultancy assignment is being undertaken by a consortium comprising ProTradeConsult, a private company registered in Jamaica and International Economics Consulting Ltd, an independent management consultancy firm registered in Mauritius. The objectives of the assignment are (a) To undertake a review of the National Export Strategy (2006-2011) and (b) Develop the Strategic Options Paper for Export Development. A separate report has been submitted to review the National Export Strategy (2006-2011).

This document provides the Strategic Option Paper for Export Development, as required by the Terms of Reference. The aims of the Strategic Options Paper are to: • Capture the Government of Grenada (GoG) medium term objectives and donor activity in areas of strategic importance • Undertake an export competitiveness environment assessment • Assess the productive capacity of key firms/producers in the identified sectors, identifying constraints • Prioritise Gender Issues in Export • Recommended strategic focus for export development for the next 3-5 years taking into account GoG priorities for the export sector, existing capacities and donor activity.

II. SITUATIONAL ANALYSIS

Building Economic Resilience and Competitiveness in Small States

Small states tend to be highly exposed to external economic shocks because of their inherent characteristics associated with trade openness, and other factors that generally pose significant disadvantages. These include high levels of export concentration and dependence on strategic imports, including food and fuel; vulnerability to natural disasters that often generate severe shocks to the economy; high unit production costs in view of limited ability to reap the benefits of economies of scale and relatively high international transport costs and uncertainties relating to the delivery of industrial supplies, as well as competition from mass production. Despite these inherent vulnerabilities, small states can still perform well, by building a flexible and dynamic business environment based on macroeconomic stability, competitiveness, social development and cohesion and good environmental management. This should be done by assigning priority to programmes and projects intended to put in place institutional setups for resilience building and competitiveness enhancement (Briguglio, 2015).

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Grenada’s Economy

A challenge facing Grenada is the lack of fiscal policy space, owing to a large debt overhang which limits is capacity to access international capacity markets, or to issue bonds with low yields. This lack of fiscal space makes it difficult to invest in the hard and soft infrastructure needed to build such long-term resilience.

The economy of Grenada remains largely anchored on traditional exports of agriculture (primarily nutmegs and cocoa) and tourism, and there are limited incentives for the economy to develop a competitive dynamism built on other non-traditional sectors. These two pillars of the economy are showing signs of weakening, highlighting the long-standing competitiveness challenges that Grenada is facing. According to the IMF Country Report published in July 2014, Grenada’s share in the Caribbean tourism market has declined since 2007, as the recovery after the 2004-05 hurricanes was thwarted by the global financial crisis reaching 66 percent of its pre-hurricane shares in 2014. Competiveness in Grenada’s tourism is affected by the country’s real exchange rate, measured against its tourist origin markets. This exchange rate appreciated significantly following the global financial crisis and has since remained 13 % higher relative to the pre-crisis period2. On the goods side, and despite a recent but fragile recovery, the country’s market share of nutmeg, the main agriculture export, plunged from about 20% of world nutmeg trade in 2001 to about 3% after the hurricanes destroyed almost all of the crops in 2004-05.

Other factors explaining Grenada’s poor level of competitiveness include the poor performance of the country’s business environment, as detailed further in this report in Section III, Key macro-level and Business Environment issues, as well as the low labour productivity. Structural impediments have also contributed to weak competitiveness, including difficulties faced by Grenada’s agricultural products with regard to distribution channels, transportation costs and weak performance of public services. New economic developments should built on competitive advantage, entrepreneurship and the ability to adapt to changing economic conditions.

Complementary to the competitiveness assessment of the country is the analysis of the economic vulnerability. The comparison of economic vulnerability of Grenada against other developing countries is shown in Figure 6. Each country is plotted (Grenada in yellow) according to the level of its vulnerability and according to the instability of its exports. Economic vulnerability is defined as the relative risk posed to a country’s development by exogenous shocks (e.g. climatic risk, economic risk, migratory risk, remoteness, etc.), which depends on the characteristics of the country concerned (e.g. export concentration, growth trends of exports of goods and services, agricultural production trends, share of population in vulnerable regions, etc.) the magnitude and frequency of exogenous shocks, and the country’s resilience to adapt to such shocks (e.g. population size, victims of natural disasters)3. Export

2 IMF (2014). IMF Country Report No. 14/196 - Grenada 3 UN Development Policy Analysis Division, Methodological Notes.

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Instability is defined as volatility (measured by standard deviations) of export earnings from a long term trend, using regression analysis. In analysing the degree of vulnerability and export instability for Grenada, we note that the country’s EVI is relatively high, which can be explained by the high exposure of the country to natural disasters, namely hurricanes, as well as the high vulnerability to external shocks of its economy due to its trade openness and the small size of the domestic market.

Figure 6: Economic Vulnerability and Export Instability, 2012

Source: Author based on data from UN Development Policy Analysis Division

Grenada’s Trade Profile

The top 10 exports from Grenada in 2014 are shown in Table 1. Fish and fish products are the most important export, followed by spices, commodities, boats/ floating structures and cocoa and its preparations. Table 2 shows the top 10 imports. Meat and meat products, dairy products, eggs, honey, edible animal product and cereals are among the top ten imported product groups.

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Table 1: List of top 10 products at 2 digits level exported by Grenada in 2014 (Mirror) Exported value 2014 Code Product label (USD thousand) TOTAL All products 28,249 '03 Fish, crustaceans, molluscs, aquatic invertebrates nes 7,663 '09 Coffee, tea, mate and spices 6,417 '99 Commodities not elsewhere specified 2,349 '89 Ships, boats and other floating structures 2,199 '18 Cocoa and cocoa preparations 1,587 Paper and paperboard, articles of pulp, paper and '48 board 1,142 '23 Residues, wastes of food industry, animal fodder 1,130 '11 Milling products, malt, starches, inulin, wheat gluten 849 '72 Iron and steel 750 '08 Edible fruit, nuts, peel of citrus fruit, melons 607

Table 2: List of top 10 products at 2 digits level imported by Grenada in 2014 (Mirror) Imported value 2014 Code Product label (USD thousand) TOTAL All products 190,880 '85 Electrical, electronic equipment 14,329 '99 Commodities not elsewhere specified 14,108 '02 Meat and edible meat offal 13,422 '84 Machinery, nuclear reactors, boilers, etc 13,260 '87 Vehicles other than railway, tramway 11,693 '38 Miscellaneous chemical products 9,806 '89 Ships, boats and other floating structures 9,130 '27 Mineral fuels, oils, distillation products, etc 7,182 Dairy products, eggs, honey, edible animal '04 product nes 7,182 '10 Cereals 6,656

Figure 2 below shows a comparison of Grenada’s export of services between 2007 and 2012. As indicated in the figure, Grenada’s exports of commercial services consist primarily of travel, (representing 72.6 % of the country’s exports in services in 2013) and, to a lesser extent, business services (including accounting, legal and advisory services) and transportation. Travel accounts for all the diverse services consumed by the tourists visiting the country, excluding international carriage expenses. Traditional services such as travel and business services are

9 more significant that modern services such as royalty based services and communication services.

A more detailed analysis of the competitiveness of Grenada’s exports of goods and services follows in Section III of this report, in connection with the assessment of lead sectors proposed for export development.

Figure 2: Grenada Export of Services (2009 and 2012)

Source: Authors based on UN COMTRADE statistics

Export Performance

Figure 3 below shows export performance benchmarked against world exports and exports from selected countries over two reference periods of 2006 and 2011; coinciding with the commencement and the end of the previous National Export Strategy. The data shows a relative decline in the value of exports from Grenada from a high of 45% of GDP in 2000, to 25% of GDP in 2012 or US$35 million.

Figure 3: Benchmarking Grenada’s Export Performance

Source: Authors based on UN COMTRADE statistics

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Figure 4 below shows export performance of lead sectors for the year 2013. In this year, total exports of goods and services were valued at US$188 million. Merchandise exports valued at US$38 million4 accounted for approximately 20% of Grenada’s total exports and were dominated by agricultural exports (US$22.3 million or 58.6% of all merchandise trade) and light manufacturing (US$15.6 million or 41.1% of total merchandise trade). Commercial services exports were valued at US$150 million and were dominated by Travel, accounting for US$108.9 million or 72.6 % of services exports.

Figure 4: Export performance of main sectors as a % of GDP, 2013

Balance of payments

For small and open economies like Grenada, it is expected that more would be imported than exported due to the small size of the economy, which doesn’t provide the necessary economies of scale for major diversification. Accordingly, to observe current account deficits near 10% of GDP is not unusual. In Grenada, the current account deficit shortfall far exceeds this mark, at an estimated deficit of 19.2% of GDP in 2012, or US$153.9 million (IMF data), fueled by a large trade deficit (reaching US$149.9 million in 2012). This was significantly impacted by US$77.8 million worth of mineral fuel imports for that year. The current account deficit was largely financed by debt-related inflows and the accumulation of external arrears in the public sector, as well as FDI inflows from one-of, large investments, in sectors such as travel and tourism. According to the IMF, the external current account deficit is expected to improve gradually with the fiscal consolidation and a recovery in exports. Exports are projected to rebound steadily, as nutmeg production recovers and as global tourism demand improves.

Public debt

4 Free on board (fob) values

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Grenada is facing a large debt overhang, with public debt reaching 109.8 % of GDP in 2013, among the highest debt ratios in the world, as illustrated in Figure 5. This reflects attempts to run countercyclical fiscal policies since the outset of the global crisis. The Government in place since March 2013 admitted that it was unable to meet its financial obligations and announced that it would seek a comprehensive and collaborative debt restructuring. Gross financing needs totaled 33.8 percent of GDP in 2013, which the government was unable to meet in full5. Figure 5: Public debt (2013, percent of GDP, 175 countries)

Source: IMF (2014). IMF Country Report No. 14/196 – Grenada

Exchange rate

Competiveness in Grenada is also affected by the country’s real exchange rate, measured against its tourist origin markets. The exchange rate appreciated significantly following the global financial crisis and has since remained 13% higher relative to the pre-crisis period6.

Figure 6: Real effective exchange rates (based on CPI, index, 2005=100)

Source: IMF (2014). IMF Country Report No. 14/196 – Grenada

As shown in Figure 6, since mid-2013, the real effective exchange rate has depreciated slightly, reflecting low inflation and the depreciation of the U.S. dollar against major currencies. It

5 IMF (2014). IMF Country Report No. 14/196 - Grenada 6 IMF (2014). IMF Country Report No. 14/196 - Grenada

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Ease of Doing Business

The country ranks 126th out of 189 countries in the World Bank's Ease of Doing Business index for 2015; reflecting a relatively unsupportive business environment. As indicated in Figure below, with the exception of Haiti, Grenada compares negatively with all peer small Caribbean states.

Figure 7: World Bank's Ease of doing Business ranking, 2015

Source: World Bank Doing Business 2015

Getting credit, paying taxes and protecting investors are major obstacles for businesses in Grenada, thereby negatively impacting the overall export performance of the country. Overall, indications of the Doing Business surveys are that the situation of the business environment in Grenada has worsened since 2007, with the country losing 53 places in the ranking between 2007 and 2015. However, in the trading across borders indicator, Grenada has made significant improvements, its ranking jumping 33 places, from 84 to 51. Data from the 2007 and 2015 indices is shown in Table 3 below.

The economy’s rankings on the indicators included in the ease of doing business index provide another perspective and allow for a better understanding of the major constraints faced by the private sector.

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Table 3: Ease of Doing Business in Grenada Comparison of changes for 2007 and 2015 DB2015 rank DB2007 rank Change (1-189) (1-175) EASE OF DOING BUSINESS 126 73 -53 Starting a business 80 50 -30 Registration of property 128 145 +17 Procedures (number) 8 8 Time (days) 32 77 Costs (% of property value) 7.4 7.6 Resolving Insolvency 189 189 0 Getting credit 131 83 -48 Paying taxes 106 45 -61 Payments (number per year) 30 30 Time (hours per year) 140 140 Total tax rate (% of profit) 45.3 42.8 Trading across borders 51 84 +33 Documents to export (number) 4 6 Time to export (days) 9 19 Cost to export (US$ per container) 1,300 858 Documents to import 6 6 Time to import (days) 9 20 Cost to import (US$ per container) 2,170 984 Enforcing contracts 144 143 +1 Procedures (number) 46 50 Time (days) 688 583 Costs (% of property value) 32.6 22.1 Source: World Bank Doing Business (2007 & 2015)

Figure illustrates the ranking of Grenada out of 189 countries on specific issues. The rankings reveal that policy makers should take urgent measures to improve the ease of registering a property, enforcement of contracts, the protection of investors and facilitation of access to credit in order to improve Grenada’s rankings. Figure 8: Grenada Rankings on Doing Business Issues

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Source: World Bank Doing Business 2015 The World Bank’s Enterprise Survey conducted in Grenada in 2010 confirms some of the difficulties faced by investors at the firm level. Companies are particularly impacted by high tax rates, unskilled workforce, and, to a lesser extent, access to finance as indicated in Figure 9.

Figure 9: Enterprise Survey - Top 10 Business Environment Constraints

Source: World Bank Enterprise survey, Grenada (2010)

Gender Issues

The Compete Caribbean Private Sector Assessment Report supported by multiple development partners and published in 2013 by the IDB7 references the World Bank's Enterprise Surveys for 2010 in relation to indicators of female participation in firms in terms of ownership and permanent full-time jobs. It concludes that almost 57% of firms surveyed in Grenada had a female participation in ownership, one of the highest ratios in the group of comparator countries, as shown in Error! Reference source not found..

7 IDB (2013), Compete Caribbean : Private Sector Assessment of Grenada

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Figure 10: Female participation in business in the Caribbean region

Source: Compete Caribbean Private Sector Assessment of Grenada

Grenada also scored highly in terms of the proportion of firms with female top managers, with one in every four firms having women in top management positions, as shown in Error! Reference source not found.. Almost one half (46%) of permanent full-time workers are female.

Figure 11: Percentage of firms with female top managers in the Caribbean

Source: Compete Caribbean Private Sector Assessment of Grenada

Despite these positive factors, the report notes that in 2008, the Caribbean Development Bank reported that poverty among females had risen to 36%, from 31.5% in 1998. While these rates of poverty are lower than those reported for males, if these women are also heads of a significant proportion of households this could put such households at risk. Moreover, the unemployment rate for females, at 31.7%, was more than 13 percentage points higher than that among males of 17.9%.

All factors considered, Grenada must strive to continue to address the issue of gender balancing and maintain a focus on the Millennium Development Goals within future export policies.

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III. PRIORITY OPTIONS FOR FURTHER INTERVENTION IN EXPORT DEVELOPMENT: ASSESSMENT OF LEAD SECTORS

A number of parameters, both qualitative and quantitative, were considered to drive the recommendations for lead sectors selection that follow in this report.

Qualitative Rationale for Lead Sectors Selection

The qualitative parameters used to review the sectors and brief explanations are listed below.

• Macro-economic contribution: current or future potential to be transformative in developing the economy • Export potential: potential to generate foreign currency earnings and attract markets in the context of current global realities as well as global growth prospects including relatively buoyant demand in world markets • Export readiness: evidence of export experience or strong potential among firms and /or other institutions • Socio-Economic Impact: existing or potential impact on employment and rural development • Potential linkages to existing sectors that can drive the creation of additional value • International Marketing Potential likely reality of attracting international customers and potential of Grenadian firms to compete at a global level and obtain competitive advantage as well as the potential to attract domestic or foreign investment. • Environmental Impact likely to be low and manageable • Current resources available and investments made to date in the economy, especially in the areas of infrastructure and domestic supply conditions. • Cluster Potential: evidence or potential to reap the benefits of critical mass through clustering and collaboration. Industrial development through a clusters approach has been widely documented. The underlying principle is that by building on a group of products (or services) which already enjoy a comparative advantage by moving into industries closely linked to those products (or services) synergies may be derived that drive productivity and innovation. Firms within a cluster can lower transaction costs, share technologies and knowledge and access “public goods” such as pools of specialized skilled employees, specialized infrastructure, technological knowledge, among other advantages. By way of example, a tourism cluster could include a host of other services and products, ranging from travel agencies, restaurants and hotels at the core to local suppliers, local retailers and banks at the periphery as shown in Error! Reference source not found.. Public institutions and infrastructure can then be focused on creating the enabling environment for these industries to flourish.

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Figure 12: Example of tourism cluster for Cairns

Source: Porter, M. E. (2009) The Competitive Advantage of Nations, States and Regions, Advanced Management Program, mimeo, April 15

Appropriate mix of sectors: Figure 13 below illustrates an ITC model for the selection of key economic sectors to drive export strategy. In prescribing the recommendation on the mix of lead sectors which Grenada should pursue in aiming for growth-oriented export development, consideration was given to these features of various sectors and the need for an even spreading of risk with finite resources. Sectors which do not appear in the prescribed mix should be supported as linkage sectors to the export economy.

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Figure 13: Selection of Key Economic Sectors to Drive Export Strategy

Source: ITC Typology of Priority Sectors The priority sectors proposed as strategic options for further review in the report are Tourism Services, Creative Industries, The Ocean Economy, Agricultural Products and Transport. These sectors can be segmented into five types depending on their current state of maturity.

I. Sectors currently facing a declining growth phase such as tourism (in terms of the number of visitors) where players must reinvent themselves to survive II. This is also true for sectors with a high degree of maturity such as agriculture (specifically nutmeg) which have experienced high growth in the past which is now plateauing. III. Growing sectors such as fisheries must capitalize on opportunities and integrate higher up in the global value chains; IV. Sectors in the infant (emerging) stage such as the creative industries, require concerted effort in the form of institutional support, sector development and market intelligence to be able to reach a relatively high degree of maturity and sophistication. V. Sectors that are still in the concept stage such as ocean economy must be supported to achieve a gradual build-up of capacity and maturity over a medium term timeframe.

Methodology: Quantitative Diagnostic and identification process

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A bottom-up approach to analysing the sectoral performances and the causes of weak development, with a view to identifying opportunities for growth in Grenada is the focus of a quantitative diagnosis of possible lead sectors. By analysing the determinants of growth from micro-foundations, we are able to better identify the key drivers of potential sectoral growth; thereby identifying the sectors with the greatest potential and the policy mix best suited to promoting the sectors.

The methodology builds on an approach adopted by the International Trade Centre in formulating national export strategies8. In this methodology, product groups are examined against a range of benchmarks to determine whether they should be the focus of a country’s effort in export promotion. After due consideration is taken of the various macro plans and sectoral objectives established by a country, the criteria include:

 Export potential measured by current and past export performance, namely current export performance, world market performance and domestic supply conditions. Products are subsequently ranked as having low, medium and high potential and ranged as being of low, medium and high importance  Export readiness which takes into account the number of exporting companies, their modes of export (active or passive), product quality and price competitiveness, and their level of market intelligence and marketing skills  Socio-Economic Impact which is based on the potential for job creation. Sectors are classified according to current employment figures and projected job creation over a defined future period. Examining the performance of the national export portfolio, as illustrated in the ITC TradeMap shown in Error! Reference source not found.14, an indication of those sectors which are the most dynamic in the world market and where Grenada would have already some export readiness can be derived. Recent industrial development research into the determinants of the level of sophistication of a country’s exports indicates that the process of structural transformation favours nearby products (those with similar inputs)9. This means that the particular set of infrastructure, institutions, and human capital specific to one particular kind of industry is not easily transferable to another industry without substantial investment and incentives. This implies that for a country to perform well in promoting or developing a new industry or service sector, it would need to build on its current assets and institutions for similar goods and services from which existing productive capabilities can be easily adapted.

8 ITC (2012) National Export Strategy: Bhutan, DTIS Volume II, 15 February

9 Hausmann, R. & Klinger, B. (2006) Structural Transformation and Patterns of Comparative Advantage in the Product Space.‖ Working Paper, 128, Center for International Development, Harvard University; Hausmann, R. & Klinger, B. (2007) The Structure of the Product Space and the Evolution of Comparative Advantage, in Working Paper, 146, Center for International Development, Harvard University; and Higaldo, C. et al (ibid).

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Figure 14: National Export Portfolio by Products, 2009-2013

Source: ITC (2015) Trade Map

Wherever statistical data is available, these have been used to back up the interpretations and add greater objectivity to the analysis. The results obtained from various World Bank’s Doing Business reports have also been used to benchmark industry in Grenada against competing nations. In summary, the methodology approaches the sectors based on a variety of micro- foundations which takes into account a number of factors which are assumed to lead to growth and sustainability. The combination of these criteria are considered to be the underlying basis for identifying those sectors which show the greatest growth potential and long term sustainable outlook. The criteria are further refined to capture more precisely the different elements which are considered important in defining the importance of the sector and in order to achieve long term growth.

TOURISM SERVICES

The Services sector is a significant growth engine in most global economies and in the past decade has become the leading contributor to GDP in most Caribbean economies. Grenada is also moving towards services, which offer better prospects for economic development. Furthermore, the buoyancy of service sectors provides significant opportunities for Grenada to raise economic growth prospects.

Despite the potential, Grenada’s performance has been particularly poor as benchmarked against the rest of the world‘s performance in the same services sectors. World exports for commercial services grew by an average 10.2% per annum between 2003 and 2013. In

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Grenada, commercial services grew by 1.2% per annum over the same period. The same analysis can done for the travel sector with world exports growing at an average of 7.9% per annum between 2003 and 2013, well ahead of Grenada’s performance of 0.5% per annum for the same period (ITC Trade Map (2015)). More generally, Grenada has lost market share in most services sectors over the past decade. Indeed, with the exception of air transport, world exports in every sector of business services have grown at a substantially higher rate than Grenada over the last decade. The loss of market shares in world exports is particularly acute for sea transport, communications and insurance services.

Without exception, world exports have grown in every sector of commercial services over the last decade. The buoyancy of service sectors should provide significant opportunities for Grenada to raise economic growth prospects. However, between 2009 and 2012, as highlighted in Figure 7, the country has underperformed in royalties and business services and has reported negative export growth rates for sea transport, communications, insurance services, and, most importantly for Grenada, travel. For those sectors which are underperforming, a new strategy is required. The figure also indicates that even though no data is recorded for exports from Grenada of cultural and computer services, these sectors offer prospects for economic development.

Figure 7 : World versus Grenada export growth in services, 2009-2012

Note: Grenada currently shows no recorded export of cultural, construction and computer services, such that only the World growth rates are meaningful in the figure

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Tourism is seen as a main driver of activities in the Grenadian service sector, with cruise ship passengers representing the bulk of the visitors. The traditional tourism sector is very important to the Grenada economy because of its direct contribution to GDP and employment as well as its indirect contribution to the performance of other sectors which are highly linked with it. As in most OECS countries, the travel industry is the major activity in terms of foreign exchange, accounting for nearly three quarter of the country’s services exports. However, in recent years the Grenadian industry has lost growth momentum with a sharp decrease in tourism arrivals, partly due to the weakness of the global economic environment. As shown in Figure 16, the total number of visitors, mainly originated from the US, UK and the rest of the Caribbean, stood at 315,000 in 2013, a contraction of 26% compared to 2006. A recent sharp decline in the number of cruise ship passengers, who represent the bulk of the visitors, is in part explained by the global economic crisis. Despite the decline in arrivals, Grenada has observed an upward trend in tourism receipts over the period. The number of stay over visitors has remained relatively stable over time

Figure 8: Tourism in Grenada

Source: Grenada Tourist Board (August 2014)

Growth prospects and potential of the tourism sector

At present, growth prospects for the global tourism industry are encouraging since, after achieving an historic milestone of one billion people traveling the world in 2012, international tourism continued its momentum with a 5% growth in 2013, bringing up the world total to a record 1,087 million arrivals and generating $1.4 trillion of revenue in export earnings (UNWTO). The organisation is forecasting a growth of 4% and 4.5% in 2014. The number of international tourist arrivals in the Caribbean stood at 21.1 million in 2013, representing 2% of the total market share and showing a modest average annual growth of 1.5% for the period 2005-13. However, the Caribbean region is expected to welcome 30 million international tourists by 2030 with an expected annual average growth of 1.7% between 2020 and 2030 (UNWTO), an opportunity for the tourism industry in Grenada.

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In Grenada, the World Travel & Tourism Council (WTTC) reported that the direct contribution of Travel & Tourism to GDP was limited to 5.8% of total GDP in 2013, and was forecast to rise by 3.9% in 2014. In addition to being a major driver of the economy, tourism contributes to job creation, tax revenues, and foreign exchange earnings. Taking into account indirect effects and spending by employees, the estimated total contribution of the sector was 20.3% of GDP in 2013. Similarly, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 18.8% of total employment, or 8,500 jobs, compared to 2,500 only taking into consideration the direct contribution of the sector. Table 4 summarises the growth potential of the Tourism Services Sector.

Table 4: Summary of Growth Potential - Tourism Services Criteria Rating Justification

Macroeconomic Very High The Sector contributes in a significant way to foreign exchange earnings, contribution GDP, GDP growth and fiscal revenues and has the potential to continue doing so. Export readiness Medium- Grenada has several hotels that are export ready in that they offer a High product of international quality. However, the country faces an international market that is very competitive in terms of price, variety and quality. Better targeting of specific niches such as heritage tourism, health & wellness tourism, festival tourism etc., is possible. Cluster potential High The nature of the industry, its inter-relatedness with other industries gives it strong cluster potential, which will contribute to growth. Linkages with Very High The sector is highly connected with other sectors such as transportation, other sectors retail, agriculture, and financial services. As a result there are numerous secondary benefits. International Medium Given the natural growth of the international travel industry, the increase marketing in domestic accommodation offers, the growth prospects from potential international marketing are quite good. Targets marketing campaigns will be required to compete in capturing the potential. Environmental Medium Despite the increased awareness of the sector in terms of the impact environment, hotels typically use high levels of electricity generated by fossil fuels. To the extent that their activities result in water pollution this may also contribute to the destruction of the environment. Given their location, many hotels and attractions are vulnerable to climate change and rising sea levels. It is estimated that a sea-level rise of 1 meter would place 73% of Grenada’s major tourism resorts at risk (GPRS 2014-2018) Socioeconomic High The sector significantly contributes, directly and indirectly, to job creation impact and income generation. Tourism also contributes to the reduction of gender imbalance in the work force as a significant number of employees are female and can act as a driver for community and youth development.

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Developing Segment Options with high global market value

Reversal in the decline in visitor arrivals and long term the sustainability of the tourism industry will require focus on targeting of segment options with relatively high global market value. The 2014 WTO Trade Policy Review, identifies the marine and yachting segment of the tourism industry as one such segment. Regulated by the Grenada Yachting Act, 2000, the endorsement of its export-readiness is linked to the infrastructure and regulations in place to support the development of a competitive sector.

Tourism based on sun, sand, and sea is the largest, fastest growing, and most lucrative sector of the tourism industry globally with 12 of the 15 top international destinations globally including Mexico, France and the United States being countries with coastlines. Grenada, with some of the most beautiful beaches in the Caribbean is well positioned to participate in this segment.

Fifty percent of global cruise tourism takes place in the Caribbean, where it competes directly with land-based tourism. Land-based, stay-over tourists spend 13 times more than cruise passengers ($994 vs. $77). The CTO estimated that the total number of cruise passenger arrivals in the region was 23.9 million in 2014, an increase of 8% when compared to 2013. (CTO, 2015)

EcoTourism refers to responsible travel to fragile, pristine, and usually protected areas that strives to be low-impact and (often) small-scale. A study of ecotourists in Costa Rica revealed that on average, they stay longer, (12 nights in 2012 compared with 9 nights for those staying in coastal resorts) and spend more US$1300 compared with US$107910. Grenada’s topography includes rainforest and rural areas, making Ecotourism a potential option.

Geotourism refers to a relatively new, more holistic approach to “tourism that sustains or enhances the geographical character of a place; its environment, culture, aesthetics, heritage, and the wellbeing of its residents” (National Geographic and the Travel Industry Association of America). It is designed to maximize tourism benefits for a destination community, minimize negative impacts, and build a responsible tourism strategy that celebrates and builds on sense of place.

Other lucrative segment niches include Conference tourism; Medical tourism; Sport Tourism, Spa, Health and Wellness; Dive; Festival/ Events; Cultural and Heritage and Educational Tourism. Key market requirements on the part of customers across all segments include: • Value for money (relative) • Infrastructure: accommodation, attractions and visitor sites, tours, technology • Linkages to other sectors: agriculture, transport, culture and heritage • Standards and Certification programmes • Targeted marketing and promotion to each segment • Integrated sales of products and experiences according to the brand promise • Community engagement

10 Source: http://destinationcenter.org/2014/06/beach-and-cruise-tourism-volume-vsvalue/#sthash.LJRYcR4E.dpuf

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• Training of operators and agents • Environmental management for sustainability

Conclusions

The Tourism sector is very important to the economy of Grenada in terms of contribution to GDP, foreign exchange earnings, employment creation, and fiscal revenues. The industry is a critical pillar of the economy but recent performances have been disappointing, highlighting the need for a new strategy for the industry. The strategy needs to make choices among several high value niches which are available to Grenada. The tourism sector is very important in that it is highly connected to other sectors some of which are highly dependent on its success. In terms of environmental impact, continued efforts are required to make the sector less dependent on fossil fuels; reduce the sectors negative impact on natural resources such as the coral reefs; and to render it less vulnerable to climate change.

CREATIVE INDUSTRIES

In an increasingly creative, digital and knowledge-based global economy, Cultural and Creative industries can provide a powerful engine of economic growth and wealth creation with which to foster income generation, job creation, export earnings as well as social cohesion, preservation of cultural heritage, cultural diversity and human development. The Creative Industries regroup a wide array of industries which essentially reflect downstream activities supporting the packaging of various art forms influenced by culture for consumer markets. These encompass artisanal products, visual arts, performing arts, film and audio-visual, multimedia, literature and publishing.

In 2014, the ITC found that the creative industry sector accounts for 7% of the world’s GDP, and that this industry is growing by 8.7% annually. Figure 17 shows the breakdown of the creative industry in its various sub-sectors. Estimating the contribution of creative industries to an economy is difficult owing to a host of difficulties in capturing and measuring the exact value of cultural industries and the need to have a statistical framework in place which gathers information on the contribution to GDP according to specific comparable manner. Various layers of information are required, particularly if second round and indirect contribution effects are to be measured. Moreover, often such activities, like other invisible earnings, go unrecorded and are sometimes undeclared. Figure 18 shows the different stream of revenue which can be derived from creative industries in the form of visible (goods) earnings and invisible (services) earnings. An increasing degree of technological innovation that embodies creative industries, has the effect of increasing the level of invisible (services) earnings increases.

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Figure 17: Creative Industries Sub-sectors

Source: International Trade Centre

Figure 9: Income streams from the creative industry

Source: Nurse, K. et al (2007) The Cultural Industries in CARICOM: Trade and Development Challenges, CRNM Report

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Developing Segment Options with high global market value

Creative content with cultural and creative industries at the core is driving the development of new technologies and the sales of computers, internet, iPods and cell phones. Some of the key sub-sectors with prospects for high global market value are described below.

Music and Performing Arts

The Caribbean enjoys a competitive capability in musical production. The region’s contribution to the global cultural economy, in particular popular music, has been very significant. The rapid growth of an intellectual property and copyright economy, also suggests that there is a window of opportunity in the realm of music industries for Caribbean economies. A modern legislative framework to support intellectual property rights is therefore an important conditionality for further development of music industries11. The level of penetration of the global market by the Caribbean music industry has been small and sporadic and as such its economic potential remains under-developed.12 There is no officially available data for the sale of music produced in Grenada.

Music is generating far greater value from the online and mobile market than any other Creative Industries sector, with the exception of electronic games. Digital Music distribution represents 29% of the overall market share for recorded music revenues, up from 25 % in 2009. The value of this segment was estimated at US$4.6 billion in 2010, up 6% in 2009 (UNCTAD/UNDP, 2010). The digital music market grew more than 1000% between 2004 and 2011. Consumers can now access more than 13 million tracks licensed by record companies to more than 400 licensed digital music services worldwide. Digital sales growth in 2010 was strong in traditional Caribbean markets: Europe (nearly 20%), UK (29%), France (43%), US (13%) (IFPI, 2011). Major users of Caribbean music content include: radio and television broadcast stations, telecommunications providers, internet broadcasters, festivals, carnivals, live performance events, recording and publishing companies and retailers.

Performing arts represent considerable income potential for the Caribbean region, given its cultural dynamism. However, performing arts disciplines very often require subsidies, at least in the initial phases of development, to survive. Festivals, including Carnivals, are an effective means to bolster cultural audience and regional integration, and often represent considerable income generation potential which can provide useful synergies with other sectors of the economy.

Brazil’s carnival reportedly generates an estimated annual turnover of US$600 million, while providing job opportunities for nearly half a million people. Trinidad earnings from the carnival industry accounted for about 5% of GDP. In 2007 it generated approximately TT$1 billion, of

11 Grenada joined the World Intellectual Property Organization (WIPO) in 1998. As part of its accession, it has signed up to the Berne Convention, Paris Convention, Patent Cooperation Treaty and WIPO Convention. In 2012, it signed the Beijing Treaty on Audiovisual performances. Despite being a signatory to the treaties, their enforcement and regulation remain weak in Grenada. 12 (Nurse et al, 2006). The Cultural Industries in CARICOM: Trade and Development Challenges, Caribbean Regional Negotiating Machinery, November 2006 (revised December 2007)

28 which the music sector plays a significant part. The government estimates that it spent TT$120 million to stage the festival in this year (Nurse et al, 2006).

They are effective for destination branding and cultural industry development. Caribbean festivals have traditionally made a significant impact on the regional tourism sector in terms of creating a new tourism seasons filling the void in the tourism calendar by boosting airlifts and improving hotel occupancy levels. However, the value chain for earnings and the necessary management and production skills often reside and continue to develop outside of the region. In this regard, the incorporation of the Spice Mas Corporation as a special purpose public- private partnership to develop and manage Grenada’s Spice Mas Carnival is a step in the right direction. Barbados and St. Lucia have developed festival strategies and Grenada is one of the few islands without a calendar music festival.

Audio-visual

The audio visual sector comprises feature film and documentaries, animation, video, radio and television. In the Caribbean, major opportunities currently comprise music videos, corporate documentaries, advertisements and live television shows including news, talk shows, sports, carnivals and other national cultural festivals. Relatively few quality independent productions have emerged internationally and few national productions are viewed regionally. Several Caribbean countries including Jamaica, Barbados and Trinidad have targeted the development of location filming investments with significant incentive support. These have resulted in some incremental employment. However, international distribution partnerships are critical to the financial success of a production since films can make up to 85% of their revenues outside of their country (Nurse et al, 2006). Content quotas have also been applied by countries such as Canada, France and Barbados to support the development of the audio-visual sector. By way of example, the state owned Caribbean Broadcasting Corporation (CBC) in Barbados is mandated to show 80% of local or regional content during prime time viewing hours.

International trade in audio-visuals was estimated at $27.2 billion in 2008 and projected to continue growing by 9% annually. Leading exporters in 2008 included US (>$13.6 billion), India, UK, France, Canada, Hungary (UNCTAD, 2008).

Publishing

Publishing is the second largest creative industry in the world, after television; and is currently valued more than music publishing; video games and entertainment software; and audio- visuals industries (both DVDs and downloads) combined. The global publishing industry has experienced positive growth over the last five years and is expected to reach an estimated US $348 billion in 2017 with a compound annual growth rate of 2.3% over the next five years. Internet publishing, foreign investment and the elimination of regulatory restrictions are expected to boost the publishing industry in future.13 A major limitation for the Caribbean publishing industry as a whole is that it is small, underdeveloped, undercapitalized and shallow in terms of the availability of skilled and experienced human resources. On-line publishing

13 Global Publishing Industry 2012-2017: Trend, Profit and Forecast Analysis

29 would overcome some of the scale economy limitations that Grenada can face. This would require integration into the large global on-line services.

Visual Arts

The global visual arts market is weighted heavily in favour of the developed and metropolitan markets of Europe, North America, and the emerging economies of East Asia in terms of determining value. In 2008, high value global markets for visual arts included paintings (US$15 billion), sculpture (US$9 billion) and photography (US$2.5 billion). The average annual growth rate was estimated at 12.8 %. In this year, visual arts accounted for 5% of total exports of creative goods. Exports from SIDS were valued at about US$6 million in 2008. Official data are considered to be underestimated given the failure to capture informal sales (UNCTAD, 2008).

The visual arts sector in the Caribbean is relatively small and is generally neglected in the industrial and trade policy arena. It has largely developed on the basis of individual artistic initiative with minimal intervention of governmental authority. Grenada, however, has a vibrant tradition in the visual arts, in particular painting, which could be the foundation for a more export oriented industry, provided the stakeholders are willing to organize themselves and participate in meeting the often unconventional demands of various art market audiences. It is also home to a world famous underwater sculpture and this could be the basis for further marketing and development of the reputation of the visual arts.

Craft

Artisan products can be classified in several categories, the six main ones being basket/wicker/vegetable fibre works; leather; metal; pottery; textiles; and wood. For developing countries, art crafts constitute the most important group of creative products, accounting for 65% of their share in the world market for creative goods. Statistical data on the craft sector is notoriously difficult to capture, since craft objects are not confined to a single heading within international trade statistics. Significant amounts of craft production occur in the informal economy and this poses challenges to data collection and measurement of the contribution of the sector to economies. In 2008, UNCTAD valued the international trade in “art crafts” at US$32 billion (2008; with US$11.4 billion exported from developed economies. World exports increased 8.7%, during the period 2002 to 2008 and appeared to be expanding. Asia and Europe are the main exporting Regions for art craft.

There is no data available of exports for Grenada, nor the contribution of the craft sector to national income. In 2007, as one component of the National Export Strategy process, the Ministry of Trade elaborated a detailed strategy for craft industry development. The strategy notes that overall competitiveness of this sector is hampered in great part by an absence of value chain segments, given that Grenada’s crafts trade, as in many countries is largely informal with most of the craft products sold domestically to local buyers and visitors with minimal direct export. The sector could nevertheless contribute to the economic development of the country, through employment generation, development of underutilised human resource; encourage regional linkages among craft producers, and local linkages between sectors (particularly agriculture and tourism) and foster environmental protection through the responsible use of natural fibres, renewable and discarded materials. There is also good

30 infrastructure established through the Grenada Craft Centre, for the marketing and promotion of crafts. In order to capture the value of the sector, the Strategy should be revisited and implemented.

Evaluation of the Cultural Industries Sector in terms of potential for growth

To date, apart from a few events, notably sailing festivals and regattas and Grenada’s Spicemas Festival, it does not appear that the organisation of Grenada’s creative industries is strongly outward oriented and as export ready as other Caribbean islands. There is strong competition within the region and flights to Grenada remain limited in comparison to other destinations such as Barbados or Trinidad and Tobago. Despite these constraints, the richness of the historical and cultural landscape and abundance of artistic and cultural traditions are evident. Table 5 below indicates that the strengths of the cultural industry are particularly skewed towards the potential positive impact on socio-economic indicators, capturing additional value from tourism and developing human capital with few environmental effects.

Table 5: Summary of Growth Potential - Creative industries Criteria Rating Justification

Macroeconomic Medium Owing to the non-existence of data on employment, income and contribution international trade in this sector, it is difficult to measure the macroeconomic contribution of the industry. Indirect contribution could nevertheless be significant in the medium term through the development of cultural tourism. Export readiness Low The creative sector is largely underdeveloped and does not appear strongly outward oriented. There appear to be few viable creative firms. Cluster potential Medium By working together as clusters in cultural and creative sector, additional business can be derived that will lead to job creation and by extension to economic growth. Linkages with High There are strong potential linkages with other industries in Grenada, such other sectors as the cruise industry, transport, restaurants and hotels, and financial industry. The development of cultural tourism is notably an attractive and profitable market segment. International Low The international marketing potential of the industry is limited in the short marketing term due to the lack of development and support from public institutions. potential Environmental High The creative industry has limited or no impact on the environment and impact initiatives could even contribute to its protection. Socioeconomic High Through job creation, there are important social impacts expected from impact supporting the creative industries, not least amongst more disadvantaged households.

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Growth Drivers

With an intention to develop competitive cultural and creative industries, several growth drivers become significant and should be developed by countries. These include: • Digital infrastructure • Content production and content rules • Investment and Financing • Fiscal and non-fiscal incentives • Costing and pricing • Packaging and presentation • Appropriate business models and business support • Cluster formation and support • Commercialisation of innovation • Talent management • IP management • Marketing and distribution • Creative partnerships.

Conclusions

While there is a lack of data to support a performance of analysis of the sector, it is appears clear from stakeholder consultations and the best practices of other Caribbean islands, that building on its historical and cultural environment, cultural industries could be more actively promoted to tourists but also given a greater window internationally, through innovative virtual channels. There are also significant indirect effects and strong potential linkages with other industries in Grenada, such as the cruise industry, transport, restaurants and hotels, and financial industry. The development of cultural tourism is notably an attractive and profitable market segment. Key drivers for cultural tourism are cultural attractions, museums, historical architecture, landscapes, music and the art scene. There are important social impacts expected from supporting the creative industries.

In terms of sustainability, there may be good opportunities in the cultural sector that Grenada could capitalize on, but the industry remains largely underdeveloped and synergies with the tourism industry need to be initiated and developed. One of the principal difficulties for the development of the creative industry seems linked to the institutional framework for supporting cultural industries. In 2006, a Draft National Cultural Policy was circulated for consultation which commits the government to provide active support to the development of cultural industries which relate to traditional and contemporary forms of cultural manifestations. It recognizes the need to foster and promote entrepreneurship and to be systematic in facilitating high levels of exportation and self-sustenance/ self-reliance through the empowerment of the Grenadian people. It is not clear to what extent the policy has been implemented.

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THE OCEAN ECONOMY

The Ocean Economy (also referred to as the Blue Economy) is a relatively new concept that has its origins in the Green Economy concept endorsed at the United Nations Conference on Sustainable Development, held in Rio de Janeiro in 2012. It shares the same desired outcome: the improvement of human wellbeing and social equity, while significantly reducing environmental risks and ecological scarcities14. The visionary sector, currently in the conceptual stages of development is an aggregate of a host of promising sectors that are to be developed in the coming decades. These sectors will contribute to both the economic growth and the environmental goals set by the government, by leveraging the significant coastal, marine and oceanic resources at Grenada’s disposal. The ocean economy can be considered as an umbrella for several sub-sectors that together simultaneously promote economic growth, environmental sustainability, social inclusion and the strengthening of oceans ecosystems.

As most Small Island Developing States (SIDS), Grenada is facing social, economic and environmental challenges. These include small populations, high dependency on development assistance and international trade, susceptibility to external shocks, high transportation costs and low connectivity, susceptibility to natural disasters and high vulnerability to the impacts of climate change. For Grenada, oceans and seas constitute a much larger geographic area than its inland territory. Therefore, the sustainable harvesting of marine resources presents a significant opportunity for environmentally sound, socially inclusive economic growth and development. The sector has strong governmental support as suggested by the Government’s commitment to establish a Blue Economy and Oceans Governance Institute to oversee the management of the country’s ocean resources. This initiative was envisaged in the Memoranda of Understanding (MOUs) on sustainable development signed in April 2014 with the Dutch Government. The Institute will help Grenada to grow its economy through the development of an ocean-based economy that builds on fisheries and tourism15.

At the Regional level, the member States of the OECS in 2013 approved the Eastern Caribbean Regional Ocean Policy (ECROP). This regional policy architecture provides a framework that guides planning and development of marine activities in a rational and sustainable manner within the region, including a three year Strategic Action Plan which supports the implementation of the ECROP. This overarching policy intends to promote sustainable ocean governance within the OECS community both at the regional and national levels. Seven priority areas with accompanying goals form the basis of the ECROP, namely (i) maritime boundary delimitation; (ii) preserve and protect the marine environment; (iii) promote sustainable economic development; (iv) reform ocean governance; (v) awareness raising and participation; (vi) building resilience and managing uncertainty; and, (vii) support research and capacity building.

14 UNCTAD (2014). The Oceans Economy: Opportunities and Challenges for Small Island Developing States 15 ‘’Grenada Netherlands 10 million Sustainable Growth Cooperation’’, retrieved from http://www.gov.gd/egov/news/2014/apr14/24_04_14/item_2/grenada_netherlands_10_million_sustainable_growth _cooperation.html 33

Identification of key markets and market issues

As mentioned above, the ocean economy can be considered as an umbrella for several sub- sectors and its exportability is therefore difficult to measure. One of the key sub-sectors of particular interest for Grenada is the fisheries industry. The country is a net exporter of fish products and the sector has recently reported encouraging signs of development with average annual growth of 7.7% for the period 2005-2013, reaching US$ 7.3 million worth of fish products exported in 2013. Over the period 2009-2013, however, the growth of the sector in Grenada has been significantly lower than the growth of the world’s imports resulting in the country losing market share as illustrated in Figure 19. Exports from Grenada are very concentrated on a few key markets, namely, the US (85% of its exports), France (8%), Canada (5%) and Barbados (>2%).

Figure 10: Growth in demand for Fish, crustaceans, molluscs, aquatic invertebrates (HS 03) from Grenada in 2014

Key markets worldwide for fish products include the United states of America and Japan, followed by China and European Union Member States, namely France Germany, Italy and Sweden. There is also emergence of new markets for these products with a booming demand reported in Vietnam and, to a lesser extent, in Hong Kong as shown in Figure 20. The very low level of concentration of supplying countries for these top importers indicates that opportunities exist for Grenadian products to penetrate these markets.

The main difficulties for fisheries product export are related to the sanitary and phytosanitary standards required by developed countries for fresh products. Given the extreme perishability, the lack of refrigerated facilities necessary to facilitate trade in fresh produce, the frequency of

34 cargo availability and the speed of supply side trade facilitation pose major risks to the sustained development of the sector. Sustainable harvesting of fisheries and the impact of climate change are also critical concerns.

Figure 20: List of importers for Fish, crustaceans, molluscs, aquatic invertebrates (HS 03) – Imported value in 2013 and annual growth in value between 2009 and 2013

Source: ITC calculations based on UN COMTRADE statistics.

Growth prospects and potential of the Ocean Economy

In addition to tourism and fisheries, it is expected that in the medium to long term, a variety of segments such as high-end aquaculture, seaweed and algal culture, algae-based cosmetics and pharmaceuticals, agrochemicals, thalassotherapy, amongst others, will emerge through this sector.

Developing the marine renewable energy would also help the country meeting its energy needs and decrease its dependence on petroleum fuels and increase energy efficiency. For energy development as a growth sector in the ‘ocean economy’, attention will be accorded to energy conservation, enhancing the efficiency of energy utilization, reducing the cost of energy, and developing alternative sources of energy such as hydro power energy. Research and development (R&D) Services, including services related to marine conservation, impact of Climate Change on Fisheries and sustainable marine harvesting are also prospects for Grenada.

The sector is also expected to have strong linkages with existing sectors such as professional services, finance and the marine and yachting transportation and tourism sectors.

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Table below provides a more rigorous framework of analysis which examines its growth potential in terms of various criteria.

Table 6: Summary of Growth Potential - Ocean Economy Criteria Rating Justification

Macroeconomic Very high Sustainable fishing and aquaculture, renewable marine energy, marine contribution bio-prospecting, marine transport and coastal tourism, amongst others, are major opportunities for economic growth, export diversification and new investments. Export readiness Low Despite the Government’s recent commitments towards the development of an ocean economy, initiatives remain timid and the sector, as defined by the United Nations, is virtually non-existent. Significant investments are needed to initiate the development of this industry including R&D. Cluster potential High The Ocean economy is an aggregate of a host of promising sectors linked to marine resources. The cluster therefore offers a very high potential for clusters, all the more so since new economic and trade sectors are likely to emerge, the sector being currently in the concept stages of development. Linkages with High The ocean economy being broad in scope, important linkages exists with other sectors other sectors, starting with the tourism industry and fisheries. The energy sector is also concerned by the development of renewable marine energy as well as the maritime transport sector where greater sustainability and resilience should be achieved. International Medium To date the marketing potential is non-existent since the industry in marketing High Grenada is, at best, nascent. This being said, the concept of blue economy potential being at an early stage of development, the country could become a pioneer in developing this sector. Environmental Very high Optimisation of the use of natural oceanic resources that are directly traded impact or serve as inputs to industrial and services activities must extend beyond economic considerations by incorporating environmental and social factors and risks into the equation to ensure long-term sustainability.16 Socioeconomic Medium Given its linkages with other sectors and the opportunities for economic impact growth that it offers, the ocean economy has the potential to significantly impact the socio economic environment of the country.

Conclusions

Developing the Ocean Economy in Grenada represents significant opportunities for development of exports and, more generally, for sustainable economic growth in Grenada. Trade in marine products can create opportunities for economic growth, export diversification and new investments. Moreover, as technology evolves and marine resources become more accessible and their use more feasible, new economic and trade sectors are also likely to emerge, potentially generating new job opportunities.

16 UNCTAD (2014). The Oceans Economy: Opportunities and Challenges for Small Island Developing States

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The sector is however still at a nascent state of development in Grenada and significant efforts will have to be made if the country was to follow this route. Targeted investments, notably in R&D, are notably required as well as qualified labour, IP protection policies, and business support services, investments in the quality infrastructure to maintain phytosanitary compliance testing as well as long term strategies and plans for the sector.

AGRICULTURAL PRODUCTS

Agriculture’s contribution to GDP fell to 4% in 2013, from around 25% in the 1980’s. The sector has not fully recovered from the devastation left by hurricanes Ivan and Emily in 2004 and 2005, which caused the destruction of the vast majority of the country's nutmeg trees, the country’s major and emblematic agriculture product. The nutmeg fruit, recognised as a symbol of Grenada, plays an important part in the culture of the island and was the major contributor to GDP, foreign exchange earnings and employment. The Nutmeg Industry was once the main source of livelihood for the rural population and brought significant economic benefit to the country. Grenada’s market share of nutmeg consequently plunged from about 25% of world nutmeg trade in early 2000’s to about 3 % after 2005. During the period 2002 - 2008, the volume of nutmegs exported from Grenada decreased significantly from approximately 2,300 to 344 tons in 2008. Continued recovery in nutmeg production has however been observed in recent years and the quantities exported have followed the same trend, reaching 664 tons in 2010 and approximately 800 tons in 201317. However, these numbers are still far from pre- 2004 performances and there is still potential for further recovery of the sector.

Growth prospects and potential of Agriculture

Agriculture in Grenada is characterized by a significant number of small farms occupying less than 5 acres each. Approximately 8% of the island's labour force is employed in agriculture, meaning that further growth in the industry could contribute usefully to overall job creation (IDB, 2013).

The global demand for nutmeg and mace has significantly increased over the past decade, from approximately 22,000 tons imported in 2003 to approximately 26,000 tons in 2013. As shown in Figure 21, Indonesia dominates production and exports, with a world market share of 37% in 201318, or approximately US$ 90 million worth of nutmeg exported. The international demand for nutmeg is also booming with an annual growth of world’s imports of 23% in value between 2009 and 2013. There is an upward trend in nutmeg prices on the world market, reaching approximately USD 18,000 per ton (ITC, 2013/14). However, industry specialists agree that it might not be sustainable due to a potential increase in supply from other origins, namely Indonesia and, to a lesser extent, India.

The Grenada Nutmeg Strategy developed by the International Trade Centre (ITC) in 2010, states that the value of nutmeg to Grenada is not limited to agriculture, but its impact is felt

17 Sources: ITC calculations based on UN COMTRADE statistics. 18 Authors calculations based on ITC TradeMap data 37 at all levels of society. Nutmeg is part of the Grenadian culture and has contributed to the income and lifestyle of the population for decades.

Figure 21: World imports of nutmeg, mace and cardamoms and top five exporters (2011)

Source: FAO (2014)

Identification of key markets and market issues

In addition to nutmegs, other commodities should also be considered. This includes the cocoa sector, which has shown potential for good primary commodity marketing as well as value added diversification. Unlike cocoa which generates income once or twice per year, nutmeg gives farmers a continuous income throughout the year. However, based on the shorter recovery period coupled with the relatively short production cycle as compared to nutmeg, cocoa production is now almost back to its pre-hurricanes levels. The industry has the capacity to grow in the coming years.

The cocoa sector benefits from a booming international demand, as indicated in Figure below. Main importers include European Union Member States (Germany, Netherlands and France) and the United States of America, with positive growth rate of imports of approximately 3% in value between 2009 and 2013. The low concentration of supplying countries for the top importers is also a positive indicator for cocoa exports from Grenada, provided that the products exports meet the required quality, and sanitary, standards. Grenada’s cocoa is negligible in relation to world market production, but is highly sought after in the “fine flavour” market category.

Packaging or processing of agricultural products also offer prospects for Grenada to participate in higher value added global niches. Stakeholder consultations reveal that the development of the honey sector and apiculture could hold important prospects for Grenadian agriculture. Grenadian soursop has shown evidence as a medicinal remedy and stakeholders indicate that theirs is the only country that can ship fresh soursop to the United States. Some products and the key global market issues related to export are summarised in Table 7 below.

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Figure 22: World import of Cocoa and cocoa preparations, in value

Source: Authors based on UN COMTRADE statistics

Figure 23: List of importers for Cocoa and cocoa preparations (HS 18) – Imported value in 2013 and annual growth in value between 2009 and 2013

Source: ITC calculations based on UN COMTRADE statistics.

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Table 7: High value global niches Product Group Market size and growth Opportunities and Issues Cocoa and Since 1991, growth in international huge potential for expansion; chocolate demand for chocolates has been Caribbean regional varieties are value-added linked to surge in prices; global recognised as fine flavours; value products market estimated at US$114 billion added products with medicinal and annually (Caribbean Export); nutraceutical value; geographic Caribbean production- only 5% of indications protection; premium dark global production of fine and and specialty chocolate flavoured cocoa; worth US$4 billion annually Essential oils Very broad range of products, used Oleoresins are a product of spice and oleoresins primarily as flavours and fragrances, extraction (solvent extraction of the medicines and as food supplements; dried spice) and are primarily used in the market for aromatherapy is very the food processing industry as their fragmented, made up of large composition (flavour profile and numbers of small operators. strength) can be standardized. Organic certification is a major driver in accessing demand in this market.

Floriculture developing countries global exports consumption on the rise but reached almost USD 4 billion in consumers more demanding; transport 2012, a 24% growth against 2010; costs and proximity to markets are key high degree of concentration by issues product and sources; developed countries in Europe, America, and Asia account for more than 90% of demand; global exports over the last few years have grown exponentially Medicinal Markets are dominated by large Key issues: regulation, consumer plants & scale producers: Albania, India, health and safety, ethical harvesting of natural China, Morocco; main destination bio-diversity, standards and ingredients markets (2014): the United States of certification, legal framework for America and some Member States marketing and distribution of the European Union Seasonings, global market for seasonings, spices • Pepper • Ginger • Nutmeg • Chillies • spices and and herbs is likely to exceed US$6.5 Cinnamon • Cardamom • Vanilla • herbs billion per year; growing demand in Cloves • Culinary Dried Herbs • food service, home cooking; Sustainable Pepper Spice and Herb upward trend in volumes and Mixture • Sustainable Spices and values Herbs Crushed and • Ground Single Spices and Herbs • Consumer Packed Spices and Herbs Tropical Fruit Dried Fruit and Vegetables • Frozen and Vegetables Fruit and Vegetables • Fruit Juices, pulps and purees • Jams & Jellies • Mango Puree • Pineapple Juice

Source: Authors Compilation from ITC and CBI

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Access to global markets for agriculture and agro-processed products is conditional on meeting a number of market requirements. These include: traceability, food safety certification, pesticide management, irradiation treatment (herbs and spices), product packaging and labelling, global Good Agricultural Practices (GAP) certification, effective branding, market research and intelligence and market entry support. For floriculture and fresh exotic products, the management of phytosanitary and plant health issues, management of IP rights (geographic indications and protection of species), conformance to the CITES convention, ethical production practices, refrigerated cargo and expedited pre-shipment inspection and trade facilitation. A summary of the growth potential prospects for agricultural products in Grenada is shown in Table 8.

Table 8: Summary of Growth Potential - Agricultural products Criteria Rating Justification Macroeconomic High Before the hurricane, nutmeg and mace were the major contributor to GDP contribution and foreign exchange earnings and employment. While the sector’s recovery is not completed as yet, it remains a pillar of the Grenadian economy. Other agricultural products such as cocoa could also contribute to economic growth and job creation. Agriculture’s contribution to GDP represented 4% in 2013. Export readiness Medium The nutmeg industry alone accounted for 32.7% of the merchandise exports - High in 2013. The industry is remains export oriented. Other sub sectors are however facing difficulties exporting their products, such as the cocoa, exotic fruit and bananas. Product diversification is needed in the agricultural sector and development strategies must be put in place to guarantee consistent quality and volume of supply. Cluster potential High By nature, the industry has high cluster potential. Linkages with Medium On the domestic market, nutmeg and mace are used in agro-processing and other sectors manufacturing and in the tourism industry. International High The superior quality of the nutmeg made in Grenada is a considerable asset. marketing Improving intelligence and analysis to guarantee better marketing strategies potential is however needed. Developing a branding and promotion strategy to position Grenada’s Nutmeg also appears to be a priority.19 Environmental Medium The nature and location of the operations have an impact on the impact environment. An efficient and environmentally sustainable production has to be promoted, particularly when it comes to nutmeg tree rehabilitation and replanting. Socioeconomic Very As mentioned above, nutmeg is part of the Grenadian culture and has impact high contributed to the income and lifestyle of the population for decades. According to the Grenada Nutmeg Strategy (ITC; 2010), the sector impacts approximately 33,000 people, or more than 30% of the total population, including 7,000 registered farmers and their families, individuals employed and other indirect actors.

19 ITC (2010). Grenada Nutmeg Strategy

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Conclusions

Grenada, which is fondly referred to as the “Spice Island of the Caribbean”, has a well-deserved reputation historically, as an agricultural producer. After the devastation faced by the sector when Hurricanes Ivan and Emily struck the island in 2004 and 2005, the nutmeg industry is now showing promising signs of recovery. While the sector’s performance is still far from its pre-Ivan levels, nutmeg remains a pillar of the Grenadian economy, representing one third of the country’s merchandise exports in 2013. The socio economic impact of the sector is also significant as 30% of the population is said to be directly or indirectly impacted by the nutmeg industry. Nutmeg is also an important element of the Grenadian society and culture.

The lack of diversification in the Grenadian export patterns and the declining role of the country’s export presence internationally, suggest the need for urgent redress. Improving intelligence and analysis to guarantee better marketing strategies is notably needed to better position Grenada’s Nutmeg. Following the learning from developing the nutmeg sector, other agricultural products such as cocoa and chocolate products could also contribute to economic growth and job creation. In the medium to long term, the development of strong and sustainable supply chains in agriculture could lead to the development of increased value added through the processing of herbs and spices, sauces, condiments and beverages for organic, gourmet and specialty food markets. Here, HACCP certification, packaging and branding and market promotion as well as long term market development strategies will be critical success factors. However, in the immediate term, there should be greater focus on sustainable practices, volume, and quality and supply chain integration for agricultural products.

TRANSPORT

The transport sector contributes to a buoyant international trade environment by facilitating the movement of goods, material and people between the regional and global economies. The advent of trade liberalisation has made the sector into the most strategically important one globally, in terms of efficient and effective delivery of service and products. Trade transportation policies will be needed to support the growing importance of ports and trade corridors. Land, sea and airports will need to be recognized as gateways that are at the origin and destination of trade corridors.

The transport sector in Grenada is an important input in the export performance of the country. Grenada has one international airport (Maurice Bishop International), a smaller airport on Carriacou Island (Lauriston Airport) and two main seaports in St George’s. Ocean transportation is usually lower in cost. The Airport Management Company is in current discussions with potential investors in an ongoing manner related to standards, technology and volume; also looking at non-aeronautical development of lands around the airport to provide services, including quick service restaurants and shopping to service the passenger traffic, which is expanding, In 2012 the company received approximately 298,000 passengers,

42 which was expected to grow about 310,000 by the end of 201420 including through new lines such as Condor and Jet Blue as well as private jet services. The company foresees the future potential need for shared public-private investment in an “air-land-sea” border management system according to the European model. In anticipation of the need for human capacity, the company has signed a Letter of Intent to establish the Grenada Aviation Academy based on a partnership between the UWI and Vaughn Aeronautical College in New York. This is expected to provide aircraft maintenance skills, technicians, and other critical skills for Grenada and the region.

In the recent World Bank Doing Business survey, Grenada stands at 51 in the ranking of 189 economies on the ease of trading across borders. The rankings for comparator economies and the regional average ranking suggest that Grenada outperformed its Caribbean neighbours in trading across borders (Figure 4).

Figure 24: Ease of trading across borders in the Caribbean region

Source: World Bank. 2014. Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank Group

The report shows that Grenada has made trading across borders easier in recent years by introducing tools and reforms to reduce the time and number of procedures for trading across borders21. However, terminal handling charges and other port fees for Grenada are amongst the highest in the Caribbean at an estimated $745 per container for a total cost of US$1,300 (Doing Business, 2015). The cost to import a container also appears to be very costly, at

20 Source: Stakeholder discussions November 2014 21 Grenada Customs has implemented a One Stop Service (OSS) for clearance of cargo at the Port of St. Georges. This single service facility, located on the premises of the Grenada Port Authority, has two ASYCUDA computer stations and service windows for all relevant government agencies, which allows exporters to process multiple transactions (documentation processing, inspection, release approval, payment of taxes, duties and other fees), thereby reducing procedural steps in the processing and clearance of goods (IFC, 2011).

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US$2,170. Various studies and stakeholder discussions concur that port charges in Grenada are high in comparison with other regional ports to the extent that even when market access is not a problem, transport providers in the region cite the port charges in Grenada as an impediment to offering transport service to manufacturers.

The alternative form of transport that is offered is air transport where costs are generally much higher than the cost of ocean transportation. However, for agricultural products with short shelf lives, air shipments are often used due to fast in-transit time.

In addition to the costs directly related to transportation, the lack of warehousing capabilities also represents a major constraint for the development of export activities, as clearly identified by the companies consulted under the frame of this project. This element is critical for the success of the transport sector as it plays a great role in quality management of the products. Currently, the International Airport has limited warehouse space at the airport and the cargo has to be moved to the airlines bonded warehouse outside of the premises. The warehousing industry is a key component of the supply and transport chain and efficient and effective warehousing capabilities are now urgently needed in Grenada.

In addition, the lack of refrigerated facilities necessary to facilitate trade in fresh produce seriously hampers the development of emerging non-traditional exports such as fresh fruits and vegetables and fish. This results in loss of revenue as products are downgraded if there are delays in flights at the airports. Added to this, the airline routes are demand driven by the tourism sector and do not in most cases coincide with the needs of exporters (agriculture and agro processors), .

Looking at the tourism industry, there is a lack of convenient travel access for stay-over visitors with a serious insufficiency of direct flights from the USA, Europe and Canada. In total there are only four direct flights to Grenada from those territories and two out of the four flights are seasonal. More and greater frequency of flights to be incorporated into the flight schedule of Grenada, would result in an increase in passenger arrivals and ultimately boost the tourism industry.

Also related to the tourism industry, provision for adequate jetty facilities for dispatch of sea tours is needed. There is also a lack of larger passenger capacity pales to Carriacou, resulting in arrivals into the island being drastically slowed down.

Identification of key markets and market issues World exports for transport services rose continuously between 2003 and 2013, at an average 8.3% per annum. In 2013 exports of transport services reached an historic high of US $ 881 billion. Significant efforts will be necessary to develop the industry in Grenada. Between 2003 and 2013, exports of transportation services grew at a modest average of 3% per annum, only reaching US$ 12 million in 2013, while the country imported US$ 49.5 million worth of transportation services that year.

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Growth prospects and potential of Transport

Grenada’s geographic positioning may offer opportunities for an air hub, small vessel hub and/ or a logistics centre for trade between the Caribbean and the rest of the world which would offer packaging and freight forwarding services for goods. The example of the Netherlands is instructive. The strategic location of the country on the North Sea and the Rhine has provided an important heritage in trade and distribution, which are ingrained into Dutch culture and economy. The Port of Rotterdam is the third largest sea port in the world. Amsterdam, the country's largest city and its capital, is the financial and cultural center, and home to the second largest port in Holland and to Schiphol International Airport. With unparalleled ease of access to London, Paris, Brussels and major cities in Germany, the geographic location of the Netherlands and its function as an international business hub in Europe, confers a major advantage. The ports of Rotterdam and Amsterdam have outstanding infrastructure and logistics services. Based on this level of facilitation, the Netherlands Foreign Investment Agency (http://www.nfia.com/) has been able to establish the Netherlands as the European Hub for 2100 North American investing firms.

Overall, infrastructure and logistics in Grenada are characterized by limitations of connectivity, geography and scale, leading to high logistics costs. Present product handling facilities and practices, including open-air storage and container stuffing at the port, increase the risk of product contamination and may present difficulties for future expansion into new export markets22. With regard to manufactured products, inadequate shipping and airfreight remain significant impediments to market diversification and continues to be a significant factor in reaching regional and international markets.

An ambitious concept document for the development of a Freeport on the island of Carriacou has been prepared by private investors and circulated online. The development anticipates the establishments of the following.  A Duty Free Zone on the island of Carriacou, Grenada  New Port Facilities to serve Handy Size Bulk Carriers and Cruise Ships  The most accessible Free Port in the Caribbean basin, with easy access between Caribbean and South American markets  Free Port facilities for storage, showcasing and assembly of products of Brazilian and other origins, for shipping worldwide  Cruise Ship docking and terminal facilities on the Island of Carriacou  Tourism, resort and entertainment facilities, with access to a Duty Free Shopping Mall, for visitors  A new economy for the Island of Carriacou via job creation and secondary development  A network of services and amenities for employees of the Free Port.

A further analysis of the growth potential for the transport sector is shown in Table 9 below.

22 World Bank (2014)

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Table 9: Summary of Growth Potential - Transport Criteria Rating Justification Macroeconomic Medium The sector makes a large contribution to the national economy, contribution High employment and foreign exchange. It is a major contribution to improving the balance of payments, contributing to economic output and fiscal revenues. Export readiness Low- Existing structures do not seem to be supporting the economic Medium activity and transport is a major obstacle to export development in Grenada. Flights connections are insufficient, warehousing capabilities are lacking and transportation costs remain at a very high level. Cluster potential Medium The nature of the industry, its inter-relatedness with other industries and its support from the regulatory authorities gives it strong cluster potential, which will certainly contribute to growth. Linkages with Very High The transport industry has many indirect linkages to other other sectors sectors of the economy and its proper functioning enables Grenada to become better integrated in the world economy. International Medium The international and regional outlook is positive. Past growth marketing for air transportation exports are significant, at above 15% per potential annum. The expected global economic upturn in years to come will also facilitate growth in transportation. Environmental Low The environmental impact is relatively high for the sector impact considering the air and water pollution it generates. This impact, if judiciously planned, can be attenuated by improved technologies. Socioeconomic High The sector is a creator of jobs and of youth employment. impact

Conclusion

The sector is considered as key, not only at the macro-level, but also because of the enormous impact it would have on other sectors, from tourism to logistics, to e-zones and to the basic price of imports for the average consumer. The sector also benefits from a number of plans which seem relatively well endorsed by stakeholders and which tackle the essential tasks to deal with, namely the upgrading of facilities and improvement in equipment, ways to attract investment, channels to recuperate business lost to other ports, and tapping into new market opportunities.

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IV. EXPORT SUPPLY CAPACITY ASSESSMENT

As one component of this project, an enterprise level survey was conducted to assess the productive capacity of key firms/producers in the identified sectors, identifying constraints (primary inputs, skills gaps, technology, equipment, finance) to increasing production. The survey output is intended to assist with the identification of export sector capabilities, challenges and opportunities and the suggestion of practical recommendations on how these constraints may be cost-effectively addressed, as an input to this document23.

Fieldwork for the survey was conducted in Grenada in February 2015, with analysis following. The Registrar of Corporate Affairs and Intellectual Property in Grenada reports that as of January 2015, there are 4972 registered domestic companies and 114 registered external companies in Grenada; totalling 5086 enterprises forming the register. Based on the constraints of available time and budget, a statistically relevant survey was not feasible within the project parameters. A limited pilot survey was therefore conducted in partnership with the Ministry of Economic Development, Planning Trade and Cooperatives. Twenty (20) exporters and potential exporters were selected with the support of the Ministry to participate. The survey results indicate significant gaps in the export supply capacity among Grenadian firms. The nature of these gaps and recommendations for improvement are summarised below.

1. Greater participation by the Services sector: With the exception of one company, Services operations did not actively participate in the survey exercise. There is a need to understand the constraints faced by service firms, since these firms will likely represent a significant number of players in the future Grenadian economy. It is recommended that the Chamber of Commerce or Coalition of Service Industries engage in similar types of surveys to understand the needs of their members in the Services sector. 2. Gender balancing: The survey suggests that women are disproportionately represented in exporting companies. Out of the 20 firms surveyed, 6 organizations (30% of total) employed a greater proportion of female than male staff. The number of female managers in exporting companies also appears to be limited, at an average of 2.2, with only four organizations surveyed employing more than 2 female managers24. There is scope for improvement in gender balancing of employment among exporters and potential exporters, in order to widen perspectives resulting from employee participation, while achieving a greater societal impact from the export economy.

3. Export Constraints: Access to finance is the major constraint proposed by firms in developing the export activities. This means that appropriate financing, suitable to

23 It should be noted that the survey results are not indicative of the characteristics of the entire industry. The survey size was small owing to low response rates and the deliberate selection of export ready or currently exporting companies. It there represents the characteristics of a subset of (randomly selected) exporting companies. 24 Companies which were wholly or majority owned by women did seem to disproportionately be affected by difficulties in accessing finance, even if all companies did express varying levels of difficulty in accessing finance.

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meet the needs of exporters, is required to grow the export economy. Transport, customs and trade regulations and costs of electricity also negatively affect their capacity to export. Cost of exporting is also a concern. The World Bank Doing Business Report 2015, indicates that significant improvements have been made in recent years by local authorities to reduce the time necessary to trade across borders. However, exporting products from Grenada remains costly for the industry with an average of US Dollar 1,300 per container. By way of comparison, shipping the same container would cost US Dollar 990 for a firm based in Dominica, US Dollar 843 for a firm based in Trinidad and Tobago, and US Dollar 805 for a firm based St Kitts and Nevis. Focused attention on reducing these costs will be required, in order to grow the export economy.

4. Product and Market Diversification with value chain and supply chain development: To reduce the impact of competition, in a sustainable manner, exporters and potential exporters must increase the availability of products that are demanded by consumers in both domestic and export markets. In the domestic market, given the small population size, better linkages with tourism are essential and producers will have to undertake business upgrading to achieve reliable and consistent production volumes, attractive branding and packaging propositions and focused marketing and distribution to get the products and services into the hands of visitors at the price that they want to pay. For greater export impact, markets should be diversified based on careful research on the market entry possibilities based on market requirements, in tandem with the identification of strategic alliances and partnerships. Specialty food markets hold particular promise for Grenada’s agriculture and agro-processing sector. Voluntary standards, such as organic, Fair Trade standards and environmental standards will have increasing relevance in all future export markets.

5. Institutional support to trade development and trade facilitation: More resources in the form of institutional hand holding geared specifically to export demands and consistent export related programming are required to engage existing and potential exporters to undertake the necessary business upgrading that will result in the development of new products and exploration of new markets. The availability of labour and human capital to support the upgrading process needs to be expanded. Support is also required to navigate the requirements for sustaining home grown global brands in foreign markets and implementation of a programme that will allow access to relevant standards and certification as entry points to global supply chains. Packaging and labelling requirements, technical regulations and other potential non- tariff barriers to trade need to be understood in the context of specific markets and focused and consistent support provided to overcome these potential obstacles. One- stop trade facilitation, through the development of export complexes and export trading companies may support improvements to trade facilitation in goods. Development of services exports is increasingly dependent on a modern telecommunications and transportation framework. Some aspects, such as E- Commerce may require legislative changes, for example to offer secure electronic

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transactions. There are also prospects to grow the export economy through licensing and franchising models, once the supply of consistent quality products and services can be assured.

V. SWOT ANALYSIS

Based on the survey results, and other secondary information, the following narrative summarises the SWOT Analysis for Grenada’s Export Sector Competitive Positioning.

Strengths

• Good collaborative interface between public and private sector • Some training on national, regional and international standards already done • Country is regarded as a safe, pleasant location for business and leisure • A positive market image around the ‘Isle of Spice’ and ‘Pure Grenada’ brands • Established as a world leader for premium nutmegs, good reputation in spices and fine flavourings • Some experience in niche goods exports, including perishable Yellow Fin tuna and other fish • Regional leader in education service exports • Established marina infrastructure for yachting • Good social cohesion • Established strategies for Poverty Reduction, Nutmeg and Craft Industries, Transport, Investment Promotion and Facilitation

Weaknesses • Limited institutional capacity to support export development • Constraints in access to appropriate finance • Low customer knowledge and knowledge of market requirements • Weak or non-functioning private sector associations • Low levels of interest in collaboration between producers • Low levels of integration with regional and global supply chains • Relatively low levels of export orientation • Generally there is greater focus on short -term market promotion as opposed to longer term relationship building and strategic market development • Relatively low levels of skills in the service sector, labour supply issues in manufacturing and agriculture • Low production capacities and potential for economies of scale • High costs of inputs • Relatively high energy costs • Relatively high production and transaction costs • Weak focus on quality by exporters i.e. standards, packaging and labelling • Inadequate and unreliable transport infrastructure (air and sea) • Lack of and/or poor branding of products and services • Low levels of creativity and innovation and limited research and development • Low levels of entrepreneurship

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• Low productivity and inadequate knowledge of manufacturing and farming practice, technical know-how and branding practices • Lack of diversification in the export patterns • Limited added value of the goods produced • Difficulties in complying with international standards

Opportunities • Improved branding and packaging of products and services • Use of branding strategies (shared or collective brands) • Better supply chain management • Improved export and trade facilitation, including export complexes and export trading companies • Development of intermediary services (brokerage, agents, etc.) to increase exports • Pursuit of strategic market opportunities within the OECS and CSME, French Caribbean, OCTs and EU • Leverage market access conditions already agreed in trade agreements • Improved focus on increasing value added in products and services • Increased linkages with tourism/ using linkages between agriculture and tourism to boost local production of goods and services towards organized supply chains, organization of tours, etc. • Improvement in packaging of visitor tours and experiences to reflect unique facets of culture • Greening the economy and use of green standards and certification to tap into new markets, development of eco-friendly product lines • Pursuit of Fair Trade and voluntary standards to create new market entry opportunities • Use of strategic partnerships and alliances, including export expansion through licensing and franchising. • Specialty food markets • Organic food markets • Heritage tourism, Community-based tourism, eco- tourism, Health and Wellness tourism • Waste reduction/ Recycling and reclamation industries • Natural fibre industries such as bio-composites, derived from use of agricultural waste. • Ecommerce, E-marketing and strategic use of social media for promotion.

Threats • Intense competition from regional and global imports • High costs and limited availability of transportation to destination markets • Tendency towards a protectionist stance being lobbied for, which may threaten the competitiveness of industries longer-term • Vulnerability to natural disasters • Vulnerability to exogenous economic shocks • Potential hazards related to climate change, especially in the tourism, agriculture and fisheries sectors.

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VI. ACTION PLAN PRIORITIES FOR FIRM LEVEL EXPORT DEVELOPMENT

On May 28, 2015, stakeholders in attendance at a validation meeting in Grenada, agreed the following Action Plan priorities for supporting the development of firm level competitiveness in Grenada

• Review of policies and legislative framework to support export needs to be reviewed closely • The culture of information sharing needs improvement. A Trade facilitation and Information desk building on the EU Helpdesk model in EU countries is required to provide targeted information services and hand-holding support to exporters. The focal point should also provide information sharing of opportunities for export of services. • Value chain development activities are required. While availability of raw materials it is taken for granted very often there are challenges in obtaining sufficient production quantities and sufficient supplies at a consistent quality level. The technological aspect is also missing, with very rudimentary tools being used. Better technology could produce better quality goods • Access to finance is still a problem – companies may find niche markets and new products which they wish to supply but when they seek to develop these further they cannot access the finance to develop the ideas • Mutual recognition agreements are of interest to Services exporters; to enable the transfer of skills across borders • Culture of export is lacking. Producers are not export oriented and are not focused on in terms of the changing needs/wants of the consumer. They are not market driven. • Research should be done on consumption patterns on the island and how this dovetails into the sectors we are pushing e.g. cassava production • Packaging is a weakness in comparison to its nearest competition E.g., Trinidad mango/ Latin American plantain chips • Clustering – how can forming of cooperatives be a plus to build the sectors? • High electricity costs can be challenging • Low labour productivity is a concern • Low collaboration between farmers and businesses. Use of the cooperative model is a good approach to dealing with this problem. • Prediael larceny is a disincentive to production and building business. • Transportation is a major constraint. There is a need to consolidate shipping in the region. Ideally, there is need for a central body that helps to consolidate ship movements/when and where as quickly as possible to the end user/buyer. An Inter-island ferry service may help to alleviate that problem

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VII. GOVERNMENT OBJECTIVES AND PLANNED DONOR ASSISTANCE

The current medium term development priorities of the GoG are encapsulated in Grenada’s Growth and Poverty Reduction Strategy (GPRS), 2014-2018, completed in November 2014. The GPRS was developed through an extremely inclusive process of consultations, involving key stakeholders from the private and public sector as well as the NGO community. The consultation process extending over 3 years was lengthier than originally envisioned, in order to facilitate the attainment of consensus. The final document provides a detailed policy statement and plan of activities linked to a number of objectives under the key pillars of pro- poor growth, poverty reduction and development of the new economy. The export sector is seen as critical to growth and development, based on the potential for foreign exchange earnings and other developments driven by export. Inclusive growth in the lead sectors of agriculture and tourism is desirable, particularly in rural communities. It is anticipated that substantial support for the development priorities identified within the GPRS will be obtained from the IMF, World Bank and the CDB. A selection of project priorities with implications for export development, extracted from the current GoG budget, is shown in Annex 1. Error! Reference source not found. below summarizes the priority areas for budget and donor interventions related to the export sector. Given the immediate fiscal constraints faced by the GoG, this is perhaps indicative of the best prospects for identifying low hanging fruit for project initiatives to support the export sector.

Table 10: Priority Areas for Donor Intervention related to the Export Sector General Economic Area linked to Number of High Medium Low export Projects Agriculture 40  Capacity Building 21  Culture & Entertainment 13  Energy 3  Environment 11  Fisheries 7  Food Security 3  Logistics & Transport 3  Poverty Alleviation & MDGs 16  Private Sector Development 5  Tourism 3  Trade & Export 19 

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VIII. CONCLUSIONS AND RECOMMENDATIONS: OPTIONS FOR EXPORT DEVELOPMENT

This report has presented analyses related to Grenada’s current strategic priorities for export development based on the potential for competitiveness. These priority sectors are:

 Tourism Services  Creative Industries  The Ocean Economy  Agricultural products  Transport

In this final section, a matrix of determinants based on the 6M analysis of industrial sectors is used to further review the drivers of competitiveness in the industry and determine the national performance of Grenada in this regard.

The 6M analysis is inward looking and takes a critical view of the drivers of competitiveness in the industry, determining the national performance in this regard. It combines SWOT type of analysis with a scoring system developed by the team to add the degree of prioritisation given to each sector and is based on the 5Ms methodology with a sixth M devoted to marketing. The matrix of determinants which has been used in this study to identify the sectors and services for growth25 is presented in the methodological note below. This provides a more rigorous framework of analysis which examines its growth potential in terms of Sector capacity, Macroeconomic contribution, Export readiness, Cluster potential, Linkages with other sectors, International marketing potential, Environmental impact, and Socioeconomic impact.

Methodological note

The approach used to identify lead sectors capacity relies on the following elements of the 6M analysis: - MANPOWER: Qualified labour, Management systems in place, supply conditions in labour market, flexibility of labour market and tax; etc. - MEANS: Resources, investment made, supportive financial institutions, etc. - METHODS: Management in place, rivalry and competition, supply chains, support services, etc. - MACHINES: Technology endowments, R&D requirements, IP protection, etc. - MEASURABLES: Past performance, outlook, surveys and other data, etc. - MARKETING: International demand, strategies and plans For each sector, the six elements were assessed using two criteria: - “Significance”: how important is that element for the development of the sector’s export (A) - “Efforts”: the level of effort required for the development of the sector’s export (B)

25 Pande, P., Neuman, R., & R. Cavanagh (2000) The Six Sigma Way: How GE, Motorola and Other Top Companies are Honing their Performance, McGraw-Hill: New York, NY

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For each criterion, scores were calculated with values ranging from 0 to 10, with the highest significance for a particular element given a score of 10 (and 0 if not significant) and with the highest level of efforts required given a score of 0 (and the lowest level of efforts received 0). The obtained scores were then weighed according to the importance given to each one of them, as below: - A, or “significance”, weight of 2/3 - B, or “efforts”, weight of 1/3 A sector’s overall capacity for each of the 6M elements is then calculated by averaging the individual weighed coefficients, using the following formula: 2 1 퐿푒푎푑 푠푒푐푡표푟푠 푐푎푝푎푐푖푡푦 푖푛푑푒푥 = A × + 퐵 × 3 3 The obtained scores were then translated into levels of capacity according to the following scale.

Level of Score capacity 6.6 - 10 High (H) 4.5 - 6.5 Medium (M) 0 - 4.4 Low (L)

Table 11Error! Reference source not found. shows the outcome of this analysis for the lead sectors identified in this report. If Grenada is to achieve the potential for export development which may be derived from these sectors, it is important that the gaps identified (in the areas of manpower, means, methods, machines, measurable and marketing) be addressed in a structured and strategic manner, in order to realise the potential gains to the economy.

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Table 11: Identified lead sectors capacity using the 6Ms Model MANPOWER MEANS METHODS MACHINES MEASURABLES MARKETING

Score Score Score Score Score Score

Efforts Efforts Efforts Efforts Efforts Efforts

Significance Significance Significance Significance Significance Significance Tourism Services 7.5 5 H 7.5 5 H 7.5 2.5 M 5 5 M 7.5 5 H 7.5 5 H Creative Industries 7.5 5 H 5 5 M 5 2.5 L 5 2.5 L 5 5 M 5 5 M Ocean Economy 5 2.5 L 7.5 2.5 M 7.5 2.5 M 7.5 2.5 M 7.5 5 H 5 2.5 L Agri. products 5 7.5 M 5 5 M 7.5 5 H 5 5 M 5 7.5 M 7.5 2.5 M

Transport 5 5 M 7.5 2.5 M 7.5 2.5 M 7.5 5 H 5 5 M 5 5 M

REFERENCES

Briguglio (2015), ’Small States and the Resilience/ Competitiveness Nexus’’, University of Malta

Carriacou Freeport Master Plan, retrieved from http://www.gov.gd/egov/docs/other/carriacou_freeport_master_plan.pdf

CTO (2015), “Beach and Cruise Tourism: Volume vs. Value”, retrieved from http://destinationcenter.org/2014/06/beach-and-cruise-tourism-volume- vsvalue/#sthash.LJRYcR4E.dpuf

Global Publishing Industry 2012-2017: Trend, Profit and Forecast Analysis

“Grenada and Netherlands in EC$10 million Sustainable Growth Cooperation” http://www.gov.gd/egov/news/2014/apr14/24_04_14/item_2/grenada_netherlands_1 0_million_sustainable_growth_cooperation.html

Harvard University; Hausmann, R. & Klinger, B. (2007) The Structure of the Product Space and the Evolution of Comparative Advantage, in Working Paper, 146, Centre for International Development, Harvard University; and Higaldo, C. et al (ibid).

Hausmann, R. & Klinger, B. (2006) Structural Transformation and Patterns of Comparative Advantage in the Product Space.‖ Working Paper, 128, Center for International Development,

Inter-American Development Bank (IDB) (2013), Compete Caribbean: Private Sector Assessment of Grenada

International Monetary Fund (IMF) (2014). IMF Country Report No. 14/196 - Grenada

International Trade Centre (ITC) (2010). Grenada Nutmeg Strategy

Pande, P., Neuman, R., & R. Cavanagh (2000) The Six Sigma Way: How GE, Motorola and Other Top Companies are Honing their Performance, McGraw-Hill: New York, NY

Porter, M. E. (2009), The Competitive Advantage of Nations, States and Regions, Advanced Management Program, mimeo, April 15

Nurse et al. (2006), The Cultural Industries in CARICOM: Trade and Development Challenges, Caribbean Regional Negotiating Machinery, November 2006 (revised December 2007)

UNCTAD (2008), Creative Economy Report 2008: The challenge of assessing the creative economy towards informed policy-making, retrieved from http://unctad.org/en/pages/PublicationArchive.aspx?publicationid=945

UNCTAD (2014). The Oceans Economy: Opportunities and Challenges for Small Island Developing States

World Bank (2014), Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank Group

World Bank Enterprise survey, Grenada (2010)

Harvard University; Hausmann, R. & Klinger, B. (2007), The Structure of the Product Space and the Evolution of Comparative Advantage, in Working Paper, 146, Center for International Development, Harvard University; and Higaldo, C. et al (ibid).

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ANNEX 1- MATRIX OF SELECT MEDIUM TERM GoG PRIORITY PROJECTS BY DONOR COMMITMENT SOURCE

Source of Finance Author’s Classification Project BMU/GIZ/ GEF/WB/TNC /Aus-Aid Reef Guardian Stewardship Prog Fisheries Marine Protected Areas Programme CABI Agriculture Support to CABI Plant Health Clinic Prog Caribbean Export Culture & Entertainment Nutmeg & Spice Festival CART Fund Poverty alleviation/ MDGs Alleviation. of Poverty (Nutmeg value-added Prod.) Trade & Export Implementation of EPA/CARIFORUM CDB/IFAD Private Sector Development Market Access & Enterprise Dev. Prog. CARICOM Development Fund (CDF) Private Sector Development Support for SME Development (CDF) Trade & Export Custom's Capacity Development Trade & Export Export Development Energy PPP-GHTA Energy Project Trade & Export Institutional Support to the G/da Bureau of Standards Capacity Building TA-Online Data Base Capacity Building TA-Capacity Building (GDB/GIDC) Commonwealth Fund for Technical Co- operation (CFTC) Trade & Export Review of National Export Strategy Canadian International Development Agency (CIDA) Capacity Building National HR Audit/Policy/database European Union (EU) Energy Wind Energy (Carriacou) Capacity Building EDF Support Services Unit Capacity Building Technical Co-operation Facility & NSA Food Security Food Security for the Hungry Agriculture Implementation of National Poultry Standards Food & Agriculture Organization (FAO) Agriculture Grenada Agriculture Census 2012 Food Security Rapid Response to Food Safety Events Agriculture Reduction Post Harvest Losses in Food Chain in CARICOM Food Security Zero Hunger Programme Global Environmental Fund (GEF) Environment GEF Ridge to Reef Project

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German Agency for International Cooperation (GIZ) Environment Integrated Adaption Strategy GIZ/United Nations Development Program (UNDP) Environment Climate Change Adaptation Project Government of Grenada (GOG) Environment Forestry Management Programme Capacity Building National Training Agency Agriculture Propagation Programme Agriculture Strengthening of Extension Services Culture & Entertainment Spicemas Incorporation Agriculture Agricultural Division Micro Projects Capacity Building Institutional Strengthening Culture & Entertainment Festivals Programme* Fisheries Fisheries Development Programme Culture & Entertainment Sports & Culture Support Programme Agriculture Banana Pest Control (Black Sigatoka etc.) Culture & Entertainment Development of the Arts Capacity Building Skills Training & General Education Projects Culture & Entertainment Grenada Cultural Foundation Trade & Export Contribution to SEDU Environment Climate Change Mitigation & Sustainable Livelihoods Proj. Capacity Building Government Information Technology Project Agriculture Spice Research and Farming Systems Project Capacity Building Science & Technology Programme Capacity Building Caribbean Knowledge Learning Network (CKLN) Agriculture Fruit Fly Project Agriculture Root Crop Programme Agriculture Food Security Programme Agriculture Support to Irrigation & Drainage Culture & Entertainment National Folk Festival Agriculture Fisheries Communication Network Agriculture Livestock Development Programme Trade & Export Support to the G'da Coalition of Services Industries

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Agriculture Farm Labour Support Agriculture Laura Livestock Development Project Poverty alleviation/ MDGs Youth Development Agenda Agriculture Fruit Development Programme Agriculture Livestock Epidemic Prevention Poverty alleviation/ MDGs Support to Sustainable Development Council/1 Poverty alleviation/ MDGs Rural Credit Scheme Poverty alleviation/ MDGs Gender Policy Programme Agriculture Support to Crop Pest Management & Control Agriculture Land Management Project Agriculture Support to Apiculture Industry Agriculture Agricultural Research Agriculture Refurb. of Propagation Stations Poverty alleviation/ MDGs Growth and Competitiveness Council Trade & Export Made in Grenada/Buy Local Programme Culture & Entertainment Spice Word Festival Culture & Entertainment Simon Cultural Centre (preparatory works) Agriculture Support to Poultry Association Agriculture Refurbishing of Forestry Building Fisheries Sandy Island Oyster Bed Marine Park (Phase II) Environment Monitor, Enhance, and Protect Eco System Trade & Export Implementation of National Export Strategy Culture & Entertainment National Performing Company Trade & Export Support to Small Manufacturers Trade & Export Support to CAIPO Agriculture Support to Farmers Market Tourism Trail Development Poverty alleviation/ MDGs Community Development Projects Agriculture Carriacou Farmers Support Fund Trade & Export Implementation of Quality Assurance Strategy Agriculture Carriacou Livestock Enhancement project Agriculture Wildlife Game Species Survey

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Tourism Community Tourism Trade & Export Implementation of New Customs' Tariff & Customs Laws Agriculture Nursery Improvement/Botanical Gardens Trade & Export Implementation of Multilateral Trade Agreements Environment Development of Coastal Zone Management Plan (YEOSU) Culture & Entertainment Music Labs Project Trade & Export Export Promotion/1 Agriculture Crop Insurance for Farmers Agriculture Purchase of Livestock Capacity Building Support for Technical Assistance Poverty alleviation/ MDGs National Strategy for the Dev. of Stat. Trade & Export Commercialisation of Gov't Estates Agriculture Agricultural Inputs Support Programme Agriculture Seamoss Cultivation Project Trade & Export IP Audit and Awareness Trade & Export ASYCUDA Maintenance Poverty alleviation/ MDGs National Economic Council Capacity Building Centre of Excellence & Innovation Project Capacity Building Skills Training Projects Poverty alleviation/ MDGs Enabling Rural Poverty Development Environment Impli.. of the Climate Change Policy & Action Plan Poverty alleviation/ MDGs Support for MDGs Private Sector Development GDA Rural Enterprise Development Project (GREP) Logistics & Transport Passenger Terminal (PM, Hillsborough) Capacity Building Grenada Technical Assistance Project /1 Fisheries Hillsborough Fish Market Jetty Fisheries Construction of Water Tank-Fish Market Poverty alleviation/ MDGs Poverty Reduction Strategy Poverty alleviation/ MDGs Poverty Reduction & Capacity Building among Women Culture & Entertainment Development of Cultural Policy IFC Logistics & Transport Trade Logistics Project Government of Japan Fisheries Improvement of Fisheries Equipment

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JICA Fisheries Fisher Folk Training & Development Kuwait Fund/OFID Logistics & Transport Farm Roads Project/Agricultural Feeder Roads Phase II MNIB/GoG Trade & Export Export Development Programme Government of Morocco Agriculture Mapping Soil Fertility for Durable Agriculture National Transformation Fund (NTF) Tourism Grenada Tourism Authority (GTA)** Private Sector Development Small Business Development Fund Capacity Building Institutional Strenghtening / HR Development Agriculture Support to Agro Processing Agriculture Institutional Strengthening of NADMA Agriculture Support for High Demand Crops NTF/Private Sector Private Sector Development New IMANI Programme PetroCaribe Capacity Building Human Resources Development Programme Poverty alleviation/ MDGs Small Economic Programmes Poverty alleviation/ MDGs Young Entrepreneurs Development Fund PetroCaribe/NTF Poverty alleviation/ MDGs Special Projects UAE / Sundry Capacity Building Technical Assistance Fund UNDP Environment SIDS Climate Change Adaptation UNESCO Culture & Entertainment UNESCO Micro Projects USAID Environment GCCA/OECS Climate Change Adaptation UWI-T&T Capacity Building Implementing National Biosafety Frameworks WB/GEF Environment Sustainable Financing OECS Protected Areas Win Fresh/NTF Agriculture Banana / Plantain Programme World Bank Capacity Building Caribbean Regional Communications Project Energy Eastern Carib. Energy Reg. Authority (ECERA) World Bank/CIF Capacity Building Disaster Risk Reduction Project

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