document of the world bank€¦ · proxy means test and the bis were approved by cabinet in january...

Document of

The World Bank

Report No: ICR00001886

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-42640 TF-92145)

ON A

CREDIT

IN THE AMOUNT OF SDR 1.00 MILLION

(US$ 1.45 MILLION EQUIVALENT)

TO THE

COMMONWEALTH OF DOMINICA

FOR A

GROWTH AND SOCIAL PROTECTION TECHNICAL ASSITANCE CREDIT

June 28, 2011

Poverty Reduction and Economic Management Department (LCSPR)

Caribbean Country Management Unit (LCC3C)

Latin America and Caribbean Region (LCR)

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CURRENCY EQUIVALENTS

(Exchange Rate Effective March, 2011)

Currency Unit = Eastern Caribbean Dollar

ECD 1.00 = US$ 0.37

US$ 1.00 = ECD 2.70

FISCAL YEAR

July 1 - June 30

ABBREVIATIONS AND ACRONYMS

ASYCU

DA

Automated System for Customs

Documentation and Administration

CARTA

C

Caribbean Regional Technical

Assistance Center

CDB Caribbean Development Bank

CFAA Country Financial Accountability

Assessment

CPA

CPAR

Country Poverty Assessment

Country Procurement Assessment

Report

CG Central Government

DEXIA Dominica Export and Import Agency

DFID

DHTA

Department for International

Development

Dominica Hotel and Tourist

Association

DSS Dominica Social Security

EC Eastern Caribbean

ECCB Eastern Caribbean Central Bank

ECCU

ECSE

Eastern Caribbean Currency Union

Eastern Caribbean Securities Exchange

EU European Union

FAA

FDI

Finance (Administration) Act

Foreign Direct Investment

GDP Gross domestic product

GSPS Growth and Social Protection Strategy

ILO International Labor Organization

IMF

IPA

International Monetary Fund

Investment Promotion Agency

MDGs Millennium Development Goals

MIS Management information system

MoF Ministry of Finance

NDC National Development Corporation

NGO Nongovernmental organization

OECS Organization of Eastern Caribbean

States

PAC Public Accounts Committee

PRGF

PRS

Poverty Reduction and Growth Facility

Poverty Reduction Strategy

PRSP Poverty Reduction Strategy Paper

PSIP

TM

USAID

Public Sector Investment Program

Task Manager

United States Agency for International

Development

Vice President: Pamela Cox

Country Director: Francoise Clottes

Sector Manager: Veronica E. Zavala

Project Team Leader: Kathy Lalazarian

ICR Team Leader Kathy Lalazarian

ICR Main Author David E. Yuravlivker

DOMINICA

GROWTH AND SOCIAL PROTECTION TECHNICAL ASSITANCE CREDIT

CONTENTS

DATA SHEET .............................................................................................................................................. I

B. KEY DATES .................................................................................................................................................. I C. RATINGS SUMMARY...................................................................................................................................... I D. SECTOR AND THEME CODES ........................................................................................................................... II E. BANK STAFF ................................................................................................................................................ II F. RESULTS FRAMEWORK ANALYSIS ..................................................................................................................... II G. RATINGS OF PROJECT PERFORMANCE IN ISRS ................................................................................................... XI H. RESTRUCTURING (IF ANY) ............................................................................................................................. XI I. DISBURSEMENT PROFILE .............................................................................................................................. XII

1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN ............................................................. 1

2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES ............................................................ 8

3. ASSESSMENT OF OUTCOMES .............................................................................................................. 11

4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME ......................................................................... 18

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE .................................................................. 18

6. LESSONS LEARNED .............................................................................................................................. 20

7. COMMENTS ON ISSUES RAISED BY BORROWER/IMPLEMENTING AGENCIES/PARTNERS .................... 21

ANNEX 1. PROJECT COSTS AND FINANCING ........................................................................................... 23

ANNEX 2. OUTPUTS BY COMPONENT ..................................................................................................... 24

ANNEX 3. DOMINICA CUSTOMS REPORT PROJECT – HIGH LEVEL ACTION PLAN: PROGRESS AS OF JANUARY 2011 ........................................................................................................................ 28

ANNEX 4. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION PROCESSES ....................... 39

ANNEX 5. SUMMARY OF BORROWER'S ICR AND/OR COMMENTS ON DRAFT ICR .................................. 40

ANNEX 6. COMMENTS OF COFINANCIERS AND OTHER PARTNERS/STAKEHOLDERS ............................... 51

ANNEX 7. LIST OF SUPPORTING DOCUMENTS ........................................................................................ 53

ANNEX 8 – MAP (IBRD MAP 33397) ........................................................................................................ 54

i

DATA SHEET

A. Basic Information

Country: Dominica Project Name:

Growth and Social

Protection Technical

Assistance Credit

Project ID: P094869 L/C/TF Number(s): IDA-42640,TF-92145

ICR Date: 06/28/2011 ICR Type: Core ICR

Lending Instrument: TAL Borrower:

THE

COMMONWEALTH

OF DOMINICA

Original Total

Commitment: XDR 1.0M Disbursed Amount: XDR 1.0M

Revised Amount: XDR 1.0M

Environmental Category: C

Implementing Agencies:

Commonwealth of Dominica

Cofinanciers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 02/13/2006 Effectiveness: 04/02/2007 04/02/2007

Appraisal: 10/06/2006 Restructuring(s): 04/30/2009

Approval: 02/27/2007 Mid-term Review: 06/30/2008 12/01/2008

Closing: 06/01/2010 12/31/2010

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing

Agency/Agencies: Moderately Satisfactory

ii

Overall Bank

Performance: Moderately Satisfactory

Overall Borrower

Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): No

Quality at Entry

(QEA): None

Problem Project at any

time (Yes/No): No

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 100 100

Theme Code (as % of total Bank financing)

Administrative and civil service reform 22 22

Public expenditure, financial management and

procurement 11 11

Regulation and competition policy 22 22

Social safety nets 22 22

Trade facilitation and market access 23 23

E. Bank Staff

Positions At ICR At Approval

Vice President: Pamela Cox Pamela Cox

Country Director: Alan G. Carroll Caroline D. Anstey

Sector Manager: Veronica E. Zavala Lombardi Jaime Saavedra Chanduvi

Project Team Leader: Kathy Lalazarian Errol George Graham

ICR Team Leader: Kathy Lalazarian

ICR Primary Author: David E. Yuravlivker

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The GSPTAP's development objective is to enhance the Government's effectiveness to

deliver public goods and services by strengthening the institutional capacity of key

iii

agencies to facilitate Dominica's private sector competitiveness and productivity and to

provide targeted social assistance to reduce poverty.

Revised Project Development Objectives (as approved by original approving authority)

n/a

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 :

Completed human resource audit of ministries and departments of the public

service

Value

quantitative or

Qualitative)

Pace of public sector

reform slowed by limited

capacity in the Reform

Management Unit

Manpower

assessment

completed in the

public service

Audit completed

following wide

consultation.

Staffing plans need

to be approved by

Cabinet.

Date achieved 10/31/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 2 : Reduction in time needed to register property from 40 days to 20 days.

Value

quantitative or

Qualitative)

Property registration time

is about 40 days.

Property

registration time is

20 days.

Registration of land

First title - down to

60-90 days.

Direct transfer -

down to 30 days.

Part of land - down

to 35 days.

Companies have a

separate registry,

which takes 1-2

days.

Date achieved 10/31/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 3 : One stop shop for tourism investors funded, staffed, developed, fully operational

website, and used by investors.

Value

quantitative or

Qualitative)

No one stop shop in

place.

One stop shop for

tourism investors

fully operational.

Website developed

and used by

investors.

Achieved. Service

provided by Invest

Dominica

Authority.

iv


Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Date achieved 10/31/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 4 : Regulatory commission established, funded, staffed and fully functional.

Value

quantitative or

Qualitative)

No regulatory

commission for electricity

in place.

Regulatory

commission

established and

operational.

Regulatory

commission

established and

operational.

Date achieved 10/31/2006 12/31/2010 11/03/2009

Comments

(incl. %

achievement)

New Electricity Act passed. IRC operational and ED selected.

Indicator 5 :

Objective and transparent Beneficiary Identification System (BIS) for selection

of beneficiaries for Public Assistance (PA) and Education Trust Fund (ETF)

developed.

Value

quantitative or

Qualitative)

No systematic criteria for

beneficiary selection.

Beneficiary

Identification

System for

selection of

beneficiaries for

Public Assistance

(PA) and

Education Trust

Fund (ETF)

developed and

fully implemented.

Partially achieved.

Proxy means test

and the BIS were

approved by

Cabinet in January

2011. At this

writing their use

has just started, as

data is being

inputted into the

system.

Date achieved 06/30/2006 12/31/2010 01/01/2011

Comments

(incl. %

achievement)

Indicator 6 : Central beneficiary registry developed, funded, staffed and fully functional.

Value

quantitative or

Qualitative)

No consistent record of

beneficiary.

100% of public

assistance and

Education Trust

Fund beneficiaries

registered in

central registry.

100% achieved.

Date achieved 06/30/2006 12/31/2010 11/03/2009

Comments

(incl. %

achievement)

v


Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 7 :

Development, dissemination, approval and launch of a time bound, fully-costed

human resource development and succession plans for ministries and

departments within the public service.

Value

quantitative or

Qualitative)

Plans not in existence. Plans developed

and costed.

Partially completed.

Reform

Management Unit

has developed a

methodology for

preparing a

succession plan,

and has identified

key positions where

those plans would

be applied. Cabinet

has to approve the

recommendations.

Date achieved 10/30/2009 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 8 : Improved policy framework and environment for private sector development and

improved social protection

Value

quantitative or

Qualitative)

No policy framework

exists.

Better targeting,

planning and

administration of

social assistance.

Achieved. Invest

Dominica Authority

established in July

2007. Strategy

approved by

Cabinet in

December 2010,

and Action Plan

being implemented.

Date achieved 10/31/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

(b) Intermediate Outcome Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Customs IT upgraded from ASYCUDA 2.7 to ASYCUDA World

Value Customs using ASYCUDA World Achieved. The new

vi


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

(quantitative

or Qualitative)

ASYCUDA 2.7 implemented system is fully

operational and is

seen as a major

improvement by

private users.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 2 :

Technology for paperless transactions installed in first year, 30% reduction in use

of paper for import declarations by end of second year, and 80% by end of

project.

Value

(quantitative

or Qualitative)

Use of paper and forms Paperless

transactions

Achieved. Customs

declarations need

just one paper copy

instead of four,

while cargo

manifests are now

an electronic

document rather

than a paper one.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 3 : Reduction in the average time for customs clearance, average reduction is 3-4

days in first year, 2 days in second year, and 1 day in third year.

Value

(quantitative

or Qualitative)

Customs clearance takes

seven days.

Customs clearance

takes one day.

Achieved. Since the

new system was

implemented in

July 2010, this time

has been reduced to

one day.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 4 : Installed and functioning audit management systems

Value

(quantitative

or Qualitative)

Need to update audit

management system

Audit management

system

functioning.

Partially achieved.

Auditor general

office received

IDEA software in

early 2010 but staff

not able to

complete training.

vii


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

SMART stream is

operational for

budget process, but

not for audit.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 5 :

During first year, Cabinet sets new procurement threshold and 50% of contracts

awarded through competitive bids, which increases to 7% by the second year,

and 100% in the third year.

Value

(quantitative

or Qualitative)

Need to modernize

procurement regulations

in the public sector.

100% of contracts

awarded through

competitive bids.

Partially achieved.

Currently the

majority of

contracts above

EC$1 million are

awarded by

competitive

bidding. The new

Procurement Act

would make that

compulsory for all

contracts.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 6 : Analysis and planning for National Investment Strategy, strategy completed,

adopted and implemented by Invest Dominica Authority for GOCD.

Value

(quantitative

or Qualitative)

No national investment

strategy

Analysis and

planning for

national

investment

strategy done,

strategy

completed,

adopted and

implemented by

Invest Dominica

Authority by

GOCD.

Strategy approved

by Cabinet in

December 2010,

and Action Plan

being implemented.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

viii


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 7 : Number of days to process investment reduced to 30 days in the first year, to 25

days in the second year, and to 20 days by the end of the project.

Value

(quantitative

or Qualitative)

Number of days to

process investment is

more than 30 days.

Number of days to

process investment

reduced to 20 days

by the end of the

project.

Achieved.

Proposals of up to

EC$2 million are

reviewed by a sub-

committee of

cabinet within two

weeks, and

proposals above

that amount are

reviewed by the full

cabinet within three

weeks.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 8 : Draft alternative energy legislation developed, stakeholder discussion conducted,

and submitted to Parliament for approval.

Value

(quantitative

or Qualitative)

Lack of alternative energy

legislation.

Draft alternative

energy legislation

developed,

stakeholder

discussion

conducted, and

submitted to

Parliament for

approval.

Partially achieved.

Draft has

undergone various

revisions, currently

draft is being

reviewed at the

Attorney General's

Chambers for

onward submission

to Parliament.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 9 : Methods in place for dealing with unexpected tariff and other regulatory issues.

Value

(quantitative

or Qualitative)

Lack of methodology for

dealing with unexpected

tarriff and other

regulatory issues.

Methods in place

for dealing with

unexpected tariff

and other

unexpected

regulatory issues.

Achieved. The

policies

implemented by the

IRC include those

methods and are

posted in the web.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

ix


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 10 : BIS system being used to select beneficiaries for Public Assistance Program

(PA) and Education Trust Fund (ETF) Program.

Value

(quantitative

or Qualitative)

No BIS system is being

used to select

beneficiaries for PA and

ETF.

BIS system being

used to select

beneficiaries for

PA and for ETF

program

Partially achieved.

Proxy means test

and the BIS were

approved by

Cabinet in January

2011. Their use has

just started as data

is being input into

the system.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 11 : Policies and procedures related to PA and ETF documented and relevant staff

trained.

Value

(quantitative

or Qualitative)

Lack of policies and

procedures related to PA

and ETF documented and

relevant staff trained.

Adapt new

policies and

procedures.

Monitoring plan

implemented.

Policies and

procedures

established and

documented in

operational manuals

for PA, ETF, and

SFP and staff was

trained.

Date achieved 06/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 12 : Reform management unit planning, designing and implementation plans.

Value

(quantitative

or Qualitative)

Pace of public reform

slowed by limited

capacity in Public Sector

Reform Unit (PSRU)

Begin

implementation of

modernization

plans

RMU has

developed a

methodology for

preparing the

succession plans,

and has identified

key positions where

those plans will be

applied. They have

not been fully

costed.

Date achieved 06/30/2010 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

x


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 13 : Establishment of a semi-autonomous Registry

Value

(quantitative

or Qualitative)

40 days for registration of

property.

Registration of

property reduced

to 20 days.

Registration of

land:

First title - down to

60-90 days.

Direct transfer -

down to 30 days.

Part of land - down

to 35 days.

Companies have a

separate registry,

which takes 1-2

days.

Date achieved 11/11/2010 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 14 : Public contracts above threshold advertised and awarded through transparent and

competitive bids

Value

(quantitative

or Qualitative)

Out-dated regulations

Procurement

procedural manual

developed, and

100% of contracts

above threshold

advertised/awarde

d through

competitive bids.

Partially achieved.

The majority of

contracts above

EC$1 million are

awarded by

competitive

bidding. The new

Procurement Act

would make that

compulsory for all

contracts.

Date achieved 11/11/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 15 : Public information campaign to inform the public about new approaches to the

delivery of social safety net programs implemented.

Value

(quantitative

or Qualitative)

No systematic public

information.

Implementation of

campaign

continued.

Partially achieved.

The material for the

information

campaign has been

prepared, and some

aspects successfully

undertaken. More

PR to be

undertaken when

xi


Original Target

Values (from

approval

documents)

Formally

Revised

Target Values

Actual Value

Achieved at

Completion or

Target Years

the system is fully

utilized.

Date achieved 10/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

Indicator 16 : A program database to track beneficiaries and expenditures for the PA, ETF and

the School Feeding Program in the Ministry of Education is in use.

Value

(quantitative

or Qualitative)

No database for ETF, SFP

and PA.

Program databases

in place.

Partially achieved.

MIS for ETF, PA

and SFP was

launched.

Date achieved 10/30/2006 12/31/2010 12/31/2010

Comments

(incl. %

achievement)

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 07/04/2007 Satisfactory Satisfactory 0.00







H. Restructuring (if any)

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

04/30/2009 N S S 0.65

A Third Order Restructuring

was conducted to improve the

original outcome indicators that

were somewhat vaguely

delineated in the Supplemental

xii

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

Letter of the Credit Agreement

and the PAD.

I. Disbursement Profile

1

1. PROJECT CONTEXT, DEVELOPMENT OBJECTIVES AND DESIGN

1.1 Context at Appraisal

Dominica went through an economic crisis in 2001-2002, when output contracted by

about 10 percent and poverty levels rose sharply. The Country Poverty Assessment

(CPA) conducted in 2002 found that 39 percent of the population was poor, while 15

percent were indigent, among the highest percentages in the Caribbean.

In mid-2003, the government adopted a two-stage adjustment strategy to foster

growth and ensure debt sustainability. The first stage focused on achieving

macroeconomic stability through fiscal adjustment and collaborative debt restructuring.

This effort was supported by an IMF Poverty Reduction and Growth Facility (PRGF) and

the Bank’s Economic Recovery Support Operation (ERSO) in 2004. The program was

largely successful, as the overall central government balance was reduced from nearly 11

percent of GDP in 2000/01 to 0.9 percent of GDP in 2004, and public sector debt fell

from a peak of 130.8 percent of GDP in 2003 to 116.1 percent of GDP in 2004, following

a restructuring of Dominica’s official debt under the Paris Club framework.

The second stage of the adjustment strategy focused on key structural reforms to

establish the basis for private sector-led sustainable growth and poverty reduction.

This stage was part of the Government’s Medium-term Growth and Social Protection

Strategy (GSPS) for 2005/06-2009/10. The GSPS had four pillars: (i) Fiscal policy and

administrative reforms; (ii) Enhancing the investment climate for private enterprise

development; (iii) Sectoral strategies for growth; and (iv) poverty reduction and social

protection

The GSPS focused on invigorating private sector led growth and improving key

social services, including health and education to build human capital. It gave

special attention to vulnerable groups such as youth, which had unemployment rates of

about 40 percent. Thus, employment generation was essential for poverty reduction. That

called for increasing international competitiveness, improving export performance and

enhancing the attractiveness of the economy to investors. The latter required reducing

firms’ costs, improving the reliability of transportation, lowering the cost of energy and

increasing the productivity of the labor force. The Bank’s analytical work1 and work by

other donors helped to fine tune the Government’s strategy and action plans.

The GSPS proposed a number of strategic policy actions to facilitate private sector

development and improve the environment for private enterprise, including (i)

accelerating implementation of its comprehensive Public Sector Reform Strategy (PSRS)

aimed at improving effectiveness of service delivery, enhancing accountability, and

1 “Towards a New Agenda for Growth”, April 2005; Dominica: OECS Fiscal Issues “Policies to Achieve

Fiscal Sustainability and Improve Efficiency and Equity of Public Expenditures. June 2005.

2

streamlining regulations and procedures that may hinder private sector activities; (ii)

improving the judicial and land administration systems; (iii) implementing

recommendations emanating from a comprehensive analysis of Dominica’s investment

climate; and (iv) implementing policy and regulatory measures aimed at lowering costs of

transport, electricity, water and telecommunication.

Consequently, the Growth and Social Protection Technical Assistance Project

(GSPTAP) focused on reforms in four strategic areas: (i) making the public sector

more efficient and effective; (ii) improving the investment climate; (iii) reforming the

regulatory framework for the energy sector; and (iv) improving social protection.

The GSPS had also become the focal point for donors’ support to Dominica. In

particular, the European Union (EU) allocated approximately US$12 million in grants for

budgetary support to Dominica, and decided to align and harmonize its tranche

disbursement conditions for this budgetary support with the Results Framework agreed

between the Government and the Bank for the GSPTAP. In addition, the EU provided

another US$580,000 in a grant for parallel co-financing of the technical assistance

operation (through a Bank administered Trust Fund).

1.2 Original Project Development Objectives (PDO) and Key Indicators.

The Project Development Objective (PDO) of the GSPTAP was to enhance the

Government's effectiveness to deliver public goods and services by strengthening the

institutional capacity of key agencies to facilitate Dominica's private sector

competitiveness and productivity and to provide targeted social assistance to reduce

poverty.

The Project Outcome Indicators listed in the Project Appraisal Document (PAD) were:

(i) Increased capacity of the public sector to implement reforms; (ii) Better regulatory framework governing the electricity sector; (iii) Greater transparency and efficiency in public procurement;

(iv) Reduction in the processing time at customs; and (v) Better targeting, planning and administration of social assistance programs.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators,

and reasons/justification

The PDO and Key Indicators were not formally revised. However, a Third Ordering

Restructuring designed to clarify the PDO and sharpen the indicators was approved by

Management and agreed with Government in May 2009. Both original and revised

indicators are described in Annex 2.

3

1.4 Main Beneficiaries

The PAD states that “the project will benefit Dominicans through: (i) enhanced

private sector competitiveness and productivity and improvement in employment

prospects resulting from private sector-led growth; (ii) improvement in the quality of

public goods and services offered by a more efficient public sector; (iii) more competitive

pricing of electricity as a result of a better regulated electricity sector; and (iv) better

targeting and efficient delivery of social protection programs. In particular, two groups

that were expected to benefit from the project were brokers and importers, and then

existing and potential beneficiaries of social protection programs.

1.5 Original Components

The project was comprised of the following components:

Component 1: Making the public sector more efficient and effective (48% of total

project costs - US$1,240,000)

This component provided technical assistance to the Government to implement key

elements of its public sector modernization strategy focused on streamlining the public

sector to increase the efficiency of service delivery while lowering costs. It aimed to

assist in strengthening control over public finances and increasing the transparency and

efficiency of public procurement. The sub-components included:

1.1 Strengthening of the Reform Management Unit (RMU). The RMU planned and

implemented the public sector reform program. The activities that were financed included

manpower needs assessments in targeted Ministries and Departments and mapping of the

change management process to guide their re-organization/restructuring. This sub-

component also supported the improvement of the technological capability of the unit.

1.2 Strengthening of Customs. Activities supported included: (i) implementation of a

detailed action plan for the Customs Modernization Program including training of

Custom’s staff; (ii) implementation of a risk management system for customs

inspections; and (iii) modernization and automation of ports and customs information and

payments systems, including the upgrade of ASYCUDA - the customs automated data

system.

1.3 Modernization of Registry. This sub-component financed the modernization of the

Registry through the full-scale computerization of Companies and Trade Marks section

of the Registry to allow for on-line business registrations and searches. The improvement

of the computer technology within the land titles section of the Registry was also

expected to reduce the turn-around time for registering properties.

4

1.4 Strengthening of Fiduciary Capacity, including: (i) strengthening financial

management capacity within the Accountant General’s and Auditor General’s

departments with the introduction of various software programs, Cognos and Smart

Stream being utilized to account for GoCD expenditures and provide the necessary

reporting mechanisms in that regard; (ii) implementation of a Procurement Action Plan to

modernize the public sector procurement system; and (iii) taking measures to integrate,

where possible, into the pooled procurement initiative being piloted between Grenada and

St. Vincent and the Grenadines under the ongoing Grenada Public Sector Modernization

project.

Component 2: Improving the investment climate (10 percent of total project cost -

US$252,000)

This component aimed at strengthening the institutional and regulatory environment for

attracting investment to Dominica. Specifically, the activities under this component

sought to address deficiencies in the system of investment promotion as carried out by the

Dominica National Development Corporation (NDC), and prepare a National Investment

Strategy and an Action Plan to build a well-functioning investment promotion agency.

2.1 Development of a National Investment Strategy, to focus the limited public resources

in areas which support private sector development and where attracting foreign direct

investment (FDI) could contribute to the national objective of increasing private sector

led growth for poverty reduction.

2.2 Development and Implementation of a National Action Plan, including the

restructuring of the NDC charged with the mandate to implement the National Investment

Strategy. The restructuring of the NDC involved a split into two separate agencies; (i) an

investment promotion agency; and (ii) a Tourism Authority. To support implementation

of the Action Plan, this sub-component financed training of staff in relevant activities

(market intelligence, direct contacts with investors, services to investors, and after-care of

investors) as well as upgrading office and technical equipment, publication of

promotional material, development of an interactive website which will serve to promote

Dominica’s products and services to the wider regional and international frontiers and a

special software for access to foreign investors’ databases as well as subscription to

relevant international business information databases and services.

Component 3: Reforming the regulatory framework for the energy sector (27 percent to

total project cost - US$695,000).

The objective of this component was to regulate the energy sector, including the

production and distribution of electricity to improve competitiveness. The specific sub-

components were:

3.1 Establishment of National Regulatory Commission. This support was to follow

passage of the Electricity Act, which would provide the legal basis for the establishment

and operations of an independent regulatory commission for the electricity sector. This

5

sub-component financed the activities of the regulatory commission for the first 12

months covering office operational costs, staffing, training and technical assistance. The

expectation was that after the first year, the operations of the regulatory commission

would be fully financed from license fees, other fees and levies.

This component also involved the employment of a number of persons within the IRC

who provided important support throughout the implementation process.

An interactive website was also developed and launched for the IRC. This website

assisted in promoting to the public IRC products and services and also various policies

and guidelines under which the Institution operates.

It also envisaged that in the medium-to-longer term Dominica will benefit from the

regional electricity regulatory initiative, possibly resulting in further reduction of the

national cost of regulation.

3.2 Drafting of Alternative Energy Legislation, to provide the legal and regulatory

framework for the development of alternative energy technologies, including hydropower,

wind and geothermal energy.

Component 4: Improving social protection (9 percent of total project costs -

US$232,000)

The objective of this component was to strengthen the Government’s capacity to better

target, plan and administer social assistance programs for poor and vulnerable persons.

There were three sub-components as follows:

4.1 Beneficiary Selection System Modernization, including: (i) design and

implementation of a transparent and objective targeting mechanism for selection of

beneficiaries; (ii) development of a central beneficiary registry; and (iii) application of

information from recently developed poverty maps to better target community based,

school-feeding and short-term employment programs.

4.2 Institution Strengthening. Improving the administrative capacity to deliver social

assistance through: (i) development of program databases to track beneficiaries and

expenditures for the Education Trust Fund (ETF) and the School Feeding Program (SFP)

in the Ministry of Education and further work on database development for the Public

Assistance Program (PA) at the Ministry of Community Development; (ii) documentation

of policies and procedures for the PA and ETF; and (iii) establishing linkages and access

to the different databases to assist in policy decision making at the sector level.

4.3 Public Information Campaign. Design and implementation of a public information

campaign to inform the public about new approaches to the delivery of social safety net

programs (including the new approaches to targeting and registration of beneficiaries)

and about other social protection reforms.

6

Component 5: Project Management (7 percent of total project costs - US$181,000).

This component financed the operation of the small Project Coordinating Unit (PCU)

integrated within the Establishment, Personnel and Training Department and employing

permanent government staff and where necessary contract staff. More specifically, this

component financed the project coordinator, the cost of the annual project audits,

computers for the PCU as well as the costs of staff assigned to the project.

1.6 Revised Components

Components were not revised during the life of the project.

1.7 Other significant changes

The Outcome Indicators of the project were modified following the Mid-term

Review in December 2008. As described in the Request for Approval of the

Restructuring, dated May 1, 2009, “the purpose of this modification was to improve the

original outcome indicators that were somewhat vaguely delineated in the Supplemental

Letter of the Credit Agreement and the PAD”. This modification, however, was largely

a reorganization of what was originally in the PAD (see Implementation of M&E below).

Since neither the development objectives or outcome targets, nor the number and content

of components/sub-components nor the component costs, financing plan or the allocation

of credit proceeds were changed, it was deemed to be a Third Order Restructuring 2, not

requiring approval by the Board of Directors and thereby not a formal restructuring.

In May 2010, upon request by the Government dated January 29, 2010, the closing

date of the project was extended from June 1, 2010, to December 31, 2010. Shortly

thereafter, the closing date of the EU Co-financing Trust Fund and Grant for the

GSPTAP (TF092145) was extended retroactively and for a second time to August 31,

20103, and the Administrative Agreement was extended from June 20, 2010 to December

31, 2010.

The funding allocations among disbursement categories were modified several times. In September 2008, the percentages of expenditures to be financed in categories 1, 2 and

3 were increased from 69%, 40% and 59% respectively to 100% to allow full usage of

the existing IDA allocation for all three categories (the percentages in categories 4 and 5

were originally 100%, so all categories became 100% financed).

At the same time, proceeds across categories were reallocated, in response to the

Government’s request dated August 8, 2008. The reasons for that reallocation were: (i)

2 As per the guidelines governing the restructuring of investment projects at that time, which were

approved by the Board of Directors on July 1, 2006.

3 The first extension from December 31, 2009 to February 28, 2010, was granted in December 2009.

7

changes in the procurement plan to use one consulting firm, the United Nations

Conference on Trade and Development (UNCTAD) to implement all activities related to

customs reform; and (ii) additional resources had been obtained from other sources such

as the EU budget support contribution. As a result, Categories (1) Goods and (3)

Training were reduced to allow an increase in Category (2) Consultant Services (Table 1).

In May 2010, the proceeds across disbursement categories were reallocated again (Table 1), to reflect what was happening on the ground. This reallocation allowed to pay

for the MIS consultancy which was above the budget allocated for this component, the

software which was developed for Private lands, the LAN for the Customs department,

and the drafting of legislation for alternative energy. The de-facto final allocation was

somewhat different, since the cost of various components exceeded their allocation for

reasons described below. Those extra costs were financed with savings in other

components and exchange rate gains.

Table 1: Amount of IDA Financing Allocated (in SDR)

Category Original

Allocation

September

2008

May 2010 Actual

Expenditures

(preliminary)

(1) Goods for the Project

with the exception of Parts

2.2.2, 3.1 and 5(c) of the

Project

197,000

78,000

18,000

26,580

(2) Consultant services

for the Project with the

exception of Parts 2.2.2,

3.1 and 5(c) of the Project

230,000

414,000

621,680

603,545

(3) Training for the Project

with the exception of Parts

2.2.2, 3.1 and 5 of the

Project

103,000

38,000

20,000

19,055

(4) Goods, consultant

services and training for

Part 2.2.2 of the Project

120,000

120,000

73,000

68,879

(5) Goods, consultant

services and training for

Part 3.1 of the Project

350,000

350,000

267,320

267,154

TOTAL AMOUNT 1,000,000 1,000,000 1,000,000 985,213

8

2. KEY FACTORS AFFECTING IMPLEMENTATION AND OUTCOMES

2.1 Project Preparation, Design and Quality at Entry

The Project Development Objective (PDO) as well as the 5 original Project Outcome

Indicators covered most aspects of the operation, but they were general in nature.

Further, this operation could only partly be held accountable for meeting the PDO, since

other donors were actively pursuing the same general objective. Nevertheless, the PDO

and Project components addressed key priorities of the Government’s Growth and Social

Protection Strategy and the Poverty Reduction Strategy. The Project supported the

Government’s efforts to carry out reforms prescribed by those Strategies.

The scope of the GSPTAP, while responsive to the client demands, was overly broad

thus complicating the management and supervision of the project. That may be

difficult to avoid when working with a small country and preparing the one and only

operation in several years. For example, Component 2 – improving the investment

climate, achieved substantial results, but this area was also being supported by other

donors. In that respect, however, it should be recognized that at early stages of

preparation, interventions in labor market reform as well as involvement in the

agricultural sector were deliberately excluded from the operation, in spite of the fact that

the latter was an area which the authorities wanted included in the operation, reflecting

that a degree of selectivity was exercised by the team while attempting to remain

responsive to client demand. (Minutes of the Concept Note Review Meeting, March 3,

2006).

The GSPTAP furthered the two pillars of the FY06-09 Country Assistance Strategy

(CAS) for the OECS sub-region, approved by the Executive Board in September 2005:

(i) stimulating growth and improving competitiveness; and (ii) reducing vulnerability by

promoting greater social inclusion. Elements of the GSPTAP, however, could be

perceived as contradictory to a guiding principle of the CAS as the Project supported

establishment of a national regulatory commission (IRC) for electricity in Dominica,

while the CAS called for regional integration and coordination efforts in that area. It

should be noted, however, that the Government requested the inclusion of this component

within the framework of its agreement with the IMF, and that establishment of the IRC

was seen as a precursor to a regional regulatory authority.

The PAD points out that design of the GSPTAP drew from lessons learned from

previous operations in Dominica and elsewhere in the Caribbean. In particular,

implementation was managed by the Project Coordinating Unit who worked in close

collaboration with the Reform Management Unit which fell under the auspices of the

Personnel Services and Training Department, thereby building institutional capacity and

improving the likelihood of sustainability beyond the life of the Project. Also, the

management and monitoring of implementation by a high level Steering Committee and

the appointment of champions to head working groups for each component drew from

lessons from past experience. In practice, the effectiveness of those arrangements varied

across components. At the same time, the stated intention of addressing customs reform

9

and restructuring of the Registry to show early visible results to build ownership of the

Program was not met because the time needed to implement those reforms was

underestimated. That suggests that the design of the project did not take fully into

account the tight capacity constraints in the country.

Risk assessment in the PAD was appropriate. The overall risk was rated as moderate,

ranging from high for exogenous shocks and delay in support from donor partners, to low

for the loss of political support. Most aspects were covered, and the mitigation measures

were straightforward. In addition, by engaging the EU in parallel financing (which

increased the size of the project by almost 40%), the Project leveraged available donor

grant financing, which was one of the mechanisms proposed in the CAS.

2.2 Implementation

The Project was off to a slow start. It took some time to identify and recruit the project

coordinator in Dominica, and there was a change of Task Manager (TM) at Headquarters

at an early stage of implementation and then again after restructuring. The Trust Fund

agreement with the EU was signed over one year after the Credit became effective, and it

required supplemental coordination efforts by both the Government and the Bank. For

example, the EU monitored progress based on Bank supervision missions, but late in the

life of the Project, the EU requested a different verification method relating to the private

land registry indicator.

The Project spread over a wide set of issues, while implementation capacity within

government was fairly limited. Thus, several elements of the program which appear

not to have been a top priority for the government, such as drafting alternative energy

legislation, were pushed back and were not completed by the closing date. Others, such

as procurement legislation, underwent various rounds of lengthy consultations, which

were not completed either. Implementation took longer than planned also because of the

length of time required for Cabinet and/or Parliamentary approval.

In addition, there were delays in procurement and contracting of consultants for

various components of the Project. In some cases, because of the small size of the

local market, it was not possible to obtain the minimum number of quotes required by

Bank procedures. Also, apparent misunderstandings among all involved led to protracted

negotiations with UNCTAD which delayed customs reform. On the other hand, once it

was launched, the reform of customs expanded and became a comprehensive institutional

change which could have far reaching benefits for international trade and economic

activity as a whole (see 3.2 below). Also, government officials pointed out that Bank

staff were responsive to their concerns and requests, and tried to address them

expeditiously.

As mentioned above, at the Mid-term Review in late 2008, the Outcome Indicators

were reorganized and rephrased in order to facilitate monitoring and supervision.

Also, as Table 1 shows, the allocation of proceeds among disbursement categories

changed dramatically over the life of the project. The latter resulted in part from

10

increases in costs, due to the long time period between their estimation and the actual

spending, and to the introduction of the new 15% VAT in 2006.

Disbursement lags led to questions in internal discussions and memoranda on

whether the Satisfactory rating of the project was justified. Eventually,

disbursements picked up, but initial delays led to the extension of the closing date of the

project by 6 months to finalize activities. Nevertheless, several outcome indicators were

only partially achieved or not achieved by the revised date (Annex 2).

All in all, the 370 document entries in IRIS testify to the huge costs to the Bank of

preparing and supervising the GSPTAP. Government officials told the ICR mission

that it also required a huge effort on their side, and that in the future they would hesitate

to engage in a new project if it is for less than US$5 million. Since IDA allocations to

small countries are relatively small, the challenge for the Bank is to prepare fewer, larger

operations that are relatively simple and straightforward in design, which address a

reduced number of key priorities and leverage resources from other donors. Hopefully,

this will reduce the cost of management and supervision.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

M&E design. The design of the Results Framework was cumbersome. The PDO

was one long general sentence that covered everything. The Outcome Indicators were

general and non-measurable (e.g., “increased capacity of the public sector to implement

reforms” or “greater transparency and efficiency in public procurement”). Several

Intermediate Outcome indicators were also very general (e.g., “Reform Management Unit

planning, designing and implementing modernization plans”, or “Reduction in the used

of paper based customs declarations”). Only at the level of Arrangements for Results

Monitoring, which specified target values for years 1, 2 and 3 of the Project life, there

were numerical values that could be monitored. Then, however, the final target values

for the component of Social Protection asked for 100% compliance in three social

protection indicators, which was not realistic.

Implementation. In order to address the problems embedded in the Results

Framework, the team clarified the PDO and made the Outcome Indicators more

specific at the Mid-term Review. In fact, however, that was largely done by bringing

forward what was originally spelled out in the Arrangements for Results Monitoring into

the Results Framework. For example, “Reduction in the processing time at customs” was

replaced by “Reduction in the average time for customs clearance from seven days to one

day”, but the latter was already defined in the table of Intermediate Outcome Indicators

attached to the original Supplemental Letter and the PAD. As part of the restructuring,

the Outcome Indicator requiring the establishment of a “self-financed semi-autonomous”

agency for registry was taken out, after the authorities argued that it was not agreed with

them nor included in the Credit Agreement.

Utilization. Restructuring of the Results Framework helped in monitoring progress

of several outcome indicators. Although it did not eliminate all problems (such as the

11

requirement for 100% compliance in social protection indicators), it was incorporated

into the Implementation Status and Results Reports (ISRs). However, since the new

Results Framework drew from the table of Intermediate Indicators, several duplications

emerged. Moreover, the original Results Framework still needed to be monitored. As a

result, supervision missions and the ICR had a hard time identifying which outcome

indicators needed to be monitored to assess progress in the Program.

2.4 Safeguard and Fiduciary Compliance

The Project triggered none of the Bank’s Environmental and Social Safeguard Policies.

In late 2009, financial management and procurement were downgraded to

Marginally Satisfactory due to delays in procurement processes and submission of the

audit report. Those problems were resolved shortly thereafter.

A procurement supervision mission visited Dominica three months after the closing

date, and found no major issue regarding procurement. The mission concluded that

procurement under the project had been carried out, in general, in compliance with

arrangements agreed in the project financing agreement. This was explained by the fact

that about 70% of contracts awarded were subject to Bank prior review. In addition to a

close follow-up, training in the area of Bank procurement procedures was provided to the

project team and to technical implementing agencies’ staff at a very early stage.

However, there were a number of delays that were attributed to: (i) the small size of the

economy limiting the number of bidders; (ii) the fact that coordination and procurement

functions were the responsibility of one person; and (iii) the departure of the first Project

Coordinator who attended the Bank procurement training. In addition, the project would

have benefitted from an early preparation and adoption of the operations manual and

procurement plan, as well as clear Terms of Reference for implementation.

2.5 Post-completion Operation/Next Phase

The integration of the PCU in the Reform Management Unit at the Ministry of

Finance is expected to help in completing the reforms which had not been finalized by

the closing date. Longer term sustainability, however, depends on continuous support by

the political level.

No follow up operation is considered at the moment.

3. ASSESSMENT OF OUTCOMES

3.1 Relevance of Objectives, Design and Implementation

The objectives of the GSPTAP were and remain relevant for Dominica’s social and

economic development. If anything, the relevance of these objectives is accentuated by

the global financial crisis, which makes even more compelling for the country to achieve

higher levels of efficiency and international competitiveness.

12

As it closed, the relevance of the Design and Implementation of the GSPTAP is

mixed. In retrospect, the choice of a Technical Assistance operation over a DPL was

warranted, both because of the small size of the operation as well as the need for capacity

building in Government and public agencies. However, trying to be responsive to the

Government’s priorities, the Project scope was too wide, taxing implementation capacity

in the country. For example, given support by other donors for improving the investment

climate for the private sector, it’s hard to assess what was the specific impact of the

GSPTAP in this area. Also, while the creation of the Independent Regulatory

Commission (IRC) was envisioned as a precursor to a regional regulatory authority which

is more cost efficient, its success in improving the regulatory environment in the

electricity sector reduced interest within Dominica towards the regional approach to

energy regulation, which was highlighted in the CAS and is now being pursued by a new

Bank operation.

3.2 Achievement of Project Development Objectives

Despite delays and challenges faced during implementation, the operation made a

substantial contribution to improving the environment for private sector activity in

Dominica and set the basis for a more efficient system of social protection.

Commitment by the authorities and a close follow up by the Bank helped overcome the

slow start, delays in contracting of consultants, limited capacity of implementation, and

protracted approval processes by Cabinet and Parliament.

The project had four components: (i) Making the public sector more efficient and

effective; (ii) Improving the investment climate; (iii) Reforming the regulatory

framework for the energy sector; and (iv) Improving social protection. An assessment of

each of the components follows below:

Component 1- Making the public sector more efficient and effective: Moderately

Satisfactory. This component provided technical assistance to the Government to

implement key elements of its public sector modernization strategy focused on

streamlining the public sector to increase the efficiency of service delivery while

lowering costs. More specifically, it supported activities to improve human resources

management, improve and increase the transparency of auditing, modernize procurement,

restructure the Registry, and reform customs.

After wide consultation, a Human Resources Audit of Ministries and Departments

of the Public Service was completed. The audit included a satisfaction survey and a

review of personnel files of all established positions, followed by consultations with the

unions. On the succession plans for Ministries and Departments, the Reform

Management Unit (RMU)/Establishment, Personnel and Training Department took an

alternative approach in that rather than developing and launching time bound, fully

costed succession action plans, it developed a methodology (Tool Kit) for preparing

succession plans when required, and it identified key positions where those plans would

be applied. Due to the Parliamentary elections at end 2009, this activity was put on hold

13

until after the new authorities took office. The final report was completed in October

2010, and Cabinet gave approval of the recommendations and action plan in April, 2011.

At the Auditor General office, the new auditing management systems were not fully

operational by the closing date. The office got the IDEA software in early 2010, but

staff was not able to complete training. The SMART Stream system was used for the

budget process, but it was not operational yet for auditing. Regarding the new

procurement legislation, consultations with key stakeholders initially scheduled to be

completed by March 2010 were still ongoing one year later, and the new legislation

prepared under the project was not timely finalized as agreed in the TORs discussed with

the Bank. This was due to the extended consultation process which was required and

corresponding delays in the drafting process. However, the procurement legislation is on

the agenda for the next sitting of Parliament scheduled for June 29, 2011. Among other

things, the new legislation would ensure that all contracts above EC$1 million are

awarded by competitive bidding. As of March 2011, most but not all contracts were

subject to competitive bidding, as per the matrix of Outcome Indicators.

Reform of the Registry is well under way, but not as spelled out in the original

Results Framework. As mentioned above, when the Framework was restructured after

the Mid-term Review, the notion of the Registry being “semi-autonomous” was taken

out. The Registry is part of the Government financial system and as such, it cannot be

“self financing” either, as all its revenues go to the Treasury and it is financed by the

budget. As it turns out, however, its revenues are substantial and could finance its

operations easily. The land registry is fully computerized, and the time it takes to register

property was reduced: at the time of the ICR mission, First Title registration was taking

60-90 days, compared to several years before the reform; Part of Land registration was

taking about 35 days, down from 3-6 months; and Direct Transfer was taking about 30

days, compared to 3 months before the reform. There is now a separate Registry for

companies, which also deals with patents and intellectual property. Companies can be

registered in one day. While newborn children are registered at the hospital, the Registry

in the Birth and Death section is not fully computerized. A business proposal for a

Secured Civil Registry and Certificate Issuing System has been approved by Cabinet in

June, 2011.

The reform of Customs had a slow start, but it achieved the targets of the Project,

and is already showing tangible results on the ground.4 Firstly, the upgrade from

ASYCUDA 2.7 to ASYCUDA World (AW) was completed and is fully operational.

That reform was fully endorsed by the President of the private brokers association, who

told the ICR mission that transactions costs of dealing with customs have been reduced

significantly, and thus doing business in the country became more profitable and

predictable. Further, the AW is user friendly and web based, and thus available 24/7.

Secondly, the process of achieving a paperless environment for customs transactions was

4 The slow start was due to delays on contracting with UNCTAD as well as in the procurement of

equipment. In addition, the new Customs Act No. 20-2010 became effective only on December 1, 2010.

14

well under way. Under the new system, the cargo manifest is an electronic document

fully integrated into the commercial declaration, which Customs receives electronically

even before cargo arrives to port. Hence, the electronic manifest has replaced completely

the outdated paper-based manifest (100 percent of reduction). In the case of paper

declarations, users need only one copy instead of four (75 percent of reduction). Thirdly,

the last target was virtually achieved, as the time for the clearance of goods was reduced

from 8.65 days in July 2010 when the new system was launched, to just over one day

(1.42 days on average in the last quarter of 2010, and 1.29 days on average in the first

quarter of 2011).5

Component 2 - Improving the Investment Climate: Satisfactory. This component

aimed at strengthening the institutional and regulatory environment for attracting

investment into Dominica. Specifically, the activities under this component sought to

address deficiencies in the existing system of investment promotion as carried out by the

Invest Dominica Authority (IDA) and prepare a National Investment Strategy and an

Action Plan to build a well-functioning investment promotion agency.

The objectives of this component were achieved, although not necessarily as a direct

outcome of the GSPTA. Other donors were active in this areas as well. In particular,

the Invest Dominica Authority was established in July 2007 under another project, and

analytical work on improving the environment for private investment was financed by

several donors. Preparation of the National Investment Strategy, however, was supported

by the GSPTAP, and the Strategy was approved by Cabinet in November 2010. The

Invest Dominica Authority started to implement the Action Plan shortly thereafter.

The Invest Dominica Authority has two units: (i) investment promotion; and (ii)

facilitation of services to investors. The second unit operates the one-stop-shop for

investors, which is now operational. In addition, the number of days to process

investment applications has been gradually reduced: proposals of up to EC$2 million are

reviewed by a sub-committee of Cabinet within 2 weeks, while proposals above that

amount are reviewed by Cabinet within 3 weeks.

Component 3 - Reforming the regulatory framework for the energy sector:

Moderately Satisfactory. The objective of this component was to regulate the energy

sector including the production and distribution of electricity to improve competitiveness.

In particular, it supported establishment of a national Regulatory Commission, which

should be funded, staffed and fully functional; and drafting alternative energy legislation

and submitting it to Parliament for approval. The rationale behind this component was

that electricity tariffs in Dominica were among the highest in the Caribbean6 and they

undermined competitiveness. During preparation, there was discussion on the

5 The CATT report for Dominica of December 2010, indicator 114, shows that more than 50% of the

declarations took more than 24 hours to be released because it refers to the whole year 2010.

6 Electricity tariffs are high largely because a small population is spread over a relatively large and rugged

terrain, coverage is 97 percent, and due to high fuel costs.

15

establishment of a regional regulatory commission, which was viewed as more cost

effective. The Government, however, insisted on a national commission, as per its

Growth and Social Protection Strategy Paper (April 2006).

The Independent Regulatory Commission (IRC) was established in late 2007 and

started to operate in July 2008 when its Executive Director was hired. The GSPTAP

financed its activities in the first year (several consultants were extended for another 3

months), but now it is being funded by Government. The guidelines of IRC policies are

in the web, and those include methods for dealing with unexpected tariff and other

regulatory issues. Authorities in Dominica are satisfied with the way in which the IRC

operates, and they intend to maintain it as the national regulatory agency notwithstanding

the Bank’s current initiative to promote regulation at the regional level, which should be

more cost effective. Apparently, the success of the IRC as a national regulatory

commission is also drawing attention in several neighboring islands.

A draft of alternative energy legislation has been circulated and it underwent several

revisions, but there was no final version when the ICR mission visited Dominica in

March 2011.7 The final revision is currently being undertaken at the Chambers of the

Attorney General for onward transmission to Parliament. Cabinet has to approve the

final draft before it is submitted to Parliament.

Component 4 - Improving social protection: Moderately Unsatisfactory. The

objective of this component was to strengthen the Government’s capacity to better target,

plan and administer social assistance programs for poor and vulnerable persons. In

particular, the Project supported: (i) modernization and streamlining the systems for

beneficiary selection and registration: (ii) activities to strengthen the administrative

capacity to deliver social assistance; and (iii) design and implementation of a public

information campaign to inform citizens about new approaches to the delivery of safety

net programs.

While the rating of this component reflects the fact that most targets were not

achieved by the closing date, substantial progress was made in key elements of the

program (see below). Further, it should be recognized that: (a) this component had a

late start, as key consultancies started only in 2009; and (b) targets requiring 100%

identification of beneficiaries, 100% registration, and 100% of ETF, SFP and PA

beneficiaries and expenditures captured in the data base, were not realistic. In addition,

there were technical problems in developing the new information system, coordination

among relevant ministries was initially not smooth, and the process slowed down prior to

the elections at the end of that year.

7 Several studies indicate that Dominica has potential for geothermal generation, which could supply all its

domestic demand and exports of about 15 MW to neighboring islands.

16

Notwithstanding these difficulties, the welfare system of Dominica is undergoing a

substantial change, both in terms of policy as well as implementation. At the policy

level, in January 2011, Cabinet approved means-testing as the target mechanism to be

used to identify beneficiaries, thereby increasing transparency and removing subjectivity

from this process, and the National Beneficiaries Information System (NBIS) was

launched shortly thereafter. Further, the new set-up establishes linkages between the

core programs in the safety net. In terms of implementation, social workers were trained

in the new targeting mechanism and potential beneficiaries completed application forms;

operations manuals for the ETF, PA and SFP were approved; and key monitoring

indicators were identified and a monitoring plan for the three programs was designed.

Incidentally, the Ministry of Education will not have a separate data base but it will rather

have access to the NBIS in areas that are relevant for its work. Finally, the public

information campaign has been prepared and a number of public relations activities have

already taken place.

3.3 Efficiency

The nature of this Technical Assistance Project did not allow for the calculation of

net present value or other financial variables. The US$2.6 million project was

expected to have only a minimal direct economic impact in the short term, and that seems

indeed to be the case. However, in the medium and longer term, the outcomes of the

Project are expected to contribute to Dominica’s economic and social development.

Better control and deployment of human resources within the civil service and lower

costs of operating the Registry are likely to save fiscal resources. Also, improvement in

quality and timing of audits as well as more transparent and efficient public procurement

would result in better value for money. Further, an improved environment for private

investment and better regulation of electricity are likely to contribute to economic growth.

In the longer term, development of geothermal generation capacity would lower domestic

energy costs and improve the balance of payments by reducing fuel imports and

exporting electricity to neighboring islands. In addition, the comprehensive reform in

customs could be a point of before and after in international trade and have a direct

impact on competitiveness and economic activity. In the social protection area, the new

beneficiary information system was still being put in place, but once it becomes

operational it would save administrative costs and enhance both the coverage and

efficiency of the social safety net.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory

The PDO and key associated outcome targets of the GSPTAP were largely achieved,

or are likely to be achieved relatively soon, notwithstanding a slow start and delays

during implementation. The reform process of the civil service was advanced by the

Program. The Registry of land and companies is working much better, and the upgrade

to ASYCUDA World has already had a major impact on efficiency at customs. The

Invest Dominica Authority is providing information and services to investors, and the

recently established IRC is perceived by both the authorities and the public as fulfilling a

17

positive function in the electricity area. Delays were longer in the social protection

component, and targets were not achieved by the closing date. However, the technical

work on the new National Beneficiaries Information System (NBIS) has been completed,

Cabinet has approved means-testing as the targeting mechanism, and the system will

become operational shortly. The NBIS would help improving both targeting and coverage

of social protection programs, even if their coverage does not reach 100% as specified in

the Outcome Indicators.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

Insofar as the improved environment for private sector development succeeds in

attracting more investment, the resulting generation of new jobs would contribute to

reducing poverty. In addition, the new National Beneficiaries Information System

would improve coverage and efficiency of social protection programs. As of March 2011,

information of about 75% of current beneficiaries was entered into the new system, and

95% of those were confirmed. Better targeting of beneficiaries is expected to result in a

more efficient allocation of social expenditures. Improved coordination of the delivery of

social assistance would save administrative costs. Authorities, however, are concerned

that some people who were rejected by the new system because of size of household or

age may still need help, and they are looking for mechanisms to address that problem.

(b) Institutional Change/Strengthening

The human resources audit of established position in Ministries and Departments,

which was completed under the Project, would improve management in the public

sector. The Auditor General office was strengthened with new hardware and software,

the Registry was restructured and is now performing its duties within shorter periods of

time, and customs administration was taken to a higher level by the upgrade to

ASYCUDA World. The establishment of the IRC, with transparent methods of operation,

was a major institutional change in the energy area. When the new procurement law is

approved by Parliament, it would also be an institutional improvement. Finally, when

fully operational, the new NBIS will improve the effectiveness and efficiency of

institutions managing key social protection programs.

(c) Other Unintended Outcomes and Impacts (positive or negative)

The reform at customs, which was one of four sub-components within the first

component of the Program, acquired increased importance over time and became a

major outcome of the GSPTAP. A comprehensive and detailed M&E matrix was

developed during implementation, containing specific steps in eight focus areas: (i) legal

framework; (ii) organization and management; (iii) human resources management and

training; (iv) information and communication technology; (v) control systems and

processes; (vi) external cooperation; (vii) enforcement and compliance; and (viii)

integrity (Annex 3). This matrix spells out the tasks in each area as well as who was

responsible for execution and the expected time frame of completion. This sub-

18

component took a long time to take off, but import brokers see those reforms as a major

improvement in the system, which greatly facilitates international trade.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

N/A

4. ASSESSMENT OF RISK TO DEVELOPMENT OUTCOME Rating: Moderate

The risk that development outcomes would not be maintained varies somewhat

across the components of the Project. The risk to outcomes of component 1 is low to

moderate, as it strengthens institutions in the public sector and improves its operational

efficiency, thereby creating stakeholder groups who benefit from those reforms and

would oppose back tracking. An example of that is the reform at customs, which

facilitates and reduces costs of international trade. Likewise, for the improved operations

of the Registry, and for the services provided by the Invest Dominica Authority

(component 2). The risk could be significant, however, with regard to the new

procurement legislation, which has been bouncing back and forth for a long time.

Approval of this law is required to ensure that all public contracts above threshold are

advertised and awarded through transparent and competitive bidding.

The risk to the liberalization and current regulation of production and distribution

of electricity is moderate. While the new IRC is perceived as doing a good job and

protecting consumers, the cost of maintaining a national regulator is high. If this cost

becomes unbearable, the government may decide that it is advantageous to participate in

the regional regulatory authority, the development of which is being supported by the

Bank.

The risk to the sustainability of the new National Beneficiaries Information System,

once it’s operational, is low. Again, its higher efficiency is likely to save administrative

costs and draw support from beneficiaries.

5. ASSESSMENT OF BANK AND BORROWER PERFORMANCE

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

The areas included in the GSPTAP were all of strategic relevance for Dominica. In

fact, they were also part of the Growth and Social Protection Medium Term strategy of

the government. However, the value added of the second component – Improving the

Investment Climate, is not so clear since there were other donors providing support in

this area. The Results Framework was general and with Outcome Indicators difficult to

measure. A subsequent Table of Arrangements for Results Monitoring in the PAD

19

presented interim and final target values for several OIs, but some called for 100%

compliance, which was not very realistic. The implementation arrangements were good,

with the PCU collaborating with the Ministry of Finance and the creation of a Steering

Committee and working groups for each component. However, the slow start of the

Project suggests that assessment of readiness for implementation was lacking. Finally, the

Risk Assessment included in the PAD was appropriate, covering most aspects of risk and

describing mitigating measures for each one of them.

(b) Quality of Supervision

Rating: Moderately Satisfactory

The project lost its Task Manager (TM) almost right after Board approval, and

there was another TM change in the last year of implementation. While that is not

uncommon in the Bank, the two transition periods between TMs appear to have resulted

in delays in receiving responses to no-objection requests. Also, it took some time for

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