SINGLE PROGRAMMING DOCUMENT FOR THE 9TH EDF OF THE NETHERLANDS ANTILLES 2004-2007 The Government of the Netherlands Antilles and the European Commission hereby agree as follows: The Government of the Netherlands Antilles, here represented by Mr Ralph James, Territorial Authorising Officer, and the European Commission, here represented by Mr Per Eklund, Head of Delegation of the European Commission in Guyana, hereinafter referred to as the Parties, held discussions with a view to determining the general orientations for co-operation for the period 2004 – 2007. In the course of these discussions, the Single Programming Document (SPD) including an Indicative Programme of Community Aid in favour of the Netherlands Antilles were drawn up in accordance with the provisions of the EU/OCT Association, as mentioned in the Treaty establishing the European Community and in particular Article 182, as well as in both the Council “Overseas Association Decision” 2001/822/EC of 27 November 2001 and in the Commission Regulation No 2304/2002 of 20 December 2002. These discussions complete the programming process relating to the Ninth European Development Fund in the Netherlands Antilles. Signatures For the Government of the Netherlands Antilles For the European Commission ------------------------------------------ ------------------------------------------ Mr. Ralph L. JAMES Mr. Per EKLUND Place : Place : Date : Date : MAP, Netherlands Antilles Summary data, Netherlands Antilles Surface 802km2 Geographic region Caribbean Population, total (2001) 175,653 Membership of regional/international organizations CARICOM (observer), ACS (associate member), W.T.O., CHA Population growth (average % past five years) -2.9 Life expectancy at birth (years), male and female 71.8 and 77.7 Fertility rate (births per woman) 2.1 Mortality of under 5 years (per 1000 children) n.a. Illiteracy total (% age 15 –24 year olds) 1.1 Illiteracy female (% age 15 –24 year olds) 1.0 Primary enrolment (% of relevant age group), 2001 99.6 Secondary enrolment (% of relevant age group), 2001 92.6 Secondary enrolment, female (% of age group), 2001 93,9 Unemployment rate (% of labour force), 2001 14.6 Unemployment rate, females (% of female labour 16.8 force), 2001 Poverty rate (percentage population below poverty 22 line), 2001 HIV incidence (per 1000 population) 7.6 Main natural resources (items) Deep harbours, Inflation rate (% average past three years) 2.1 GDP per capita, 2001 €12,441 (US$ 15,800) GDP growth (average % past five years) 0.4 Value added in agriculture (% of GDP), 1999 0.8 Value added in industry (% of GDP), 1999 12.3 Value added in services (% of GDP), 1999 86.9 Exports of goods and services (% of GDP), 1999 72 Imports of goods and services (% of GDP), 1999 77 Number of tourists, average over past three years About 1 million (stay-over visitors) Total debt (percentage of GDP), 2003 80 Foreign direct investment, flow (€ million, 2002) €10.9 Overall government budget balance (% of GDP), 2003 -7.8 Fixed lines and mobile phones (per 1000 people) 233 (fixed), 194 (mobile) Personal computers (per 1000 people) 107 Internet users 67 Note: The average exchange rate for November 2004 (€1= US$1.27) has been used to convert US$ values into Euro. Table of Contents Executive summary 1 1 The EC co-operation objectives 2 2 Policy agenda of the Netherlands Antilles 2 3 Description and assessment of the political, economic and social situation 4 3.1 Constitutional and political situation 4 3.2 Economic situation 5 3.2.1 Main features of the economy 5 3.2.2 Recent economic developments 6 3.2.3 Public finance 7 3.2.4 Trade and regional integration 8 3.3 Social situation 8 3.4 Medium-term challenges and prospects 12 4 Assessment of past and ongoing EC co-operation 13 4.1 EC Support under previous EDF Cycles 13 4.1.1 The Territorial Indicative Programmes 13 4.1.2 Regional cooperation 15 4.2 Programmes of the Dutch Government 15 5 Response strategy 16 5.1 The rationale for the response strategy 16 5.2 The EC response strategy 17 5.3 Funds available 17 5.4 Priority areas 18 5.5 Consistency with Government policy and donor interventions 19 5.6 Coherence with EU Policy 20 6 Indicative programme 20 6.1 Introduction 20 6.2 Financing envelope 21 6.2.1 9th EDF allocation: EUR 23.2 million 21 6.2.2 9th EDF OCT regional funds 21 6.2.3 Other sources of financing 21 6.3 Focal sector 21 6.3.1 Overall objective 21 6.3.2 Intervention objectives 22 6.3.3 Expected results 22 6.4 Monitoring and indicators 23 Annexes Annex 1 Assistance framework Annex 2 Chronogram of Activities Annex 3 Indicative Commitments Timetable Annex 4 Indicative Disbursements Timetable Annex 5 Main Ongoing Projects Financed by EU Annex 6 Priority Areas for NGOs Annex 7 Donor Matrix ACRONYMS ACP - Africa Caribbean Pacific ACS - Association of Caribbean States AMFO - Antilliaans Mede-financierings Organisatie CARICOM - Caribbean Community CDE - Centre for the Development of Enterprise CHA - Caribbean Hotel Association CITES - Convention International Trade Endangered Species CTO - Caribbean Tourism Organization CXC - Caribbean Examination Council EC - European Commission EDF - European Development Fund EIB - European Investment Bank EU - European Union ERNA - General Regulations of the Island Territories (Eilanden Regeling NEA) FTAA - Free Trade Area of the Americas GDP - Gross Domestic Product IMF - International Monetary Fund ANG - Netherlands Antilles Guilder NEA - Netherlands Antilles NGO - Non-Governmental Organization OCT - Overseas Community Territories SESNA - Small Enterprises Stimulation Programme in the Netherlands Antilles SME - Small and Medium Enterprises SNAYDP - The Support to the Netherlands Antilles Youth Development Programme SONA Stichting Ontwikkelingsfonds Nederlandse Antillen SPD - Single Programming Document SSSB - Sewerage and Sanitation System Bonaire TAO - Territorial Authorizing Officer TCF - Technical Cooperation Facility TGS - Training Grant Scheme UNDP - United Nations Development Program VAT - Value Added Tax WTO - World Trade Organization W.T.O. - World Tourism Organization PART A CO-OPERATION STRATEGY Executive summary In July of this year a new Central Government took office. All islands are duly represented in this Government. The coalition parties which support the current Central Government have endorsed an Emergency Accord (May 2004) and an Emergency Program (July 2004) which will be used as the guiding policy and political documents for the remaining period of office 2004 – 2006. According to the policy agenda of the present Central Government, Social development and poverty reduction are the highest priority objectives, together with stimulating GDP growth. After a period of economic stagnation, there have recently been encouraging signals of economic recovery. The country has in principle a strong development potential, based on a developed tourism sector and a diversified economic base, including transit port activities, oil refining, telecommunications and financial services on the largest island, Curacao. However, substantial macro-economic imbalances, increased poverty and the continuation of structural weaknesses are important obstacles to achieving sustainable economic growth. The high and increasing national debt is of particular concern. An important social problem is the high and increasing number of poor households living on a monthly income of less than ANG 1,000 (€440 at the exchange rate of November 2004). The incidence of poverty is highest on the larger islands of Curaçao and St. Maarten, but it is also growing on the smaller islands of Bonaire, Saba and St. Eustatius. Increased poverty is reflected by the growth of urban slum areas which have low-quality social infrastructure (e.g. water and low-income housing) or no social infrastructure at all. In addition, poor social infrastructure is contributing to low levels of community and labour participation. It is clear that there is a strong need for investments in urban infrastructure in these and community development on all islands in order to combat poverty. Based on the development needs of the Netherlands Antilles, supported by the EU co-operation objectives for the OCTs, which concentrate on the promotion of economic and social development, the Netherlands Antilles and the Commission have agreed to focus the EC financial assistance under the 9th EDF on poverty alleviation through social development. In consultation with the relevant state and non-state actors it was agreed that within the social sector assistance would be targeted at one focal sector: urban infrastructure for socially deprived areas. The following actions were identified: • Improving the living conditions of existing neighbourhoods: infrastructure improvement of utilities, support for institutions with a view to better urban governance. • Creating the conditions for new housing areas to be developed (site and service schemes): including infrastructure (water supply, drainage, roads, electricity) and promotion of innovative house-building technologies. The establishment of a Programme Management Unit will assist the Territorial Authorizing Officer to manage the implementation of these actions. The programme will be implemented in the form of projects. 1 The EC co-operation objectives In accordance with Article 182 of the Treaty Establishing the European Community (EC), the purpose of the association between the European Community and the Overseas Countries and Territories shall be “to promote the economic and social development of the countries and