Inside Finance - Volume 5, Issue 6, November - December 2009

FinanceINSIDE

GRENADA

A Publication of the Ministry of Finance, Planning, Economy, Energy & Cooperatives

- Reconvening of the Tax Tribunal who met, in April 2009, for the first time in many years. The commissioners of the tribunal are: Ms. Deborah St. Bernard – Attorney (Chairman)Mr. Cecil Edwards – former Comptroller of Inland RevenueMr. Fitzroy O'Neale – former BankerMr. Joseph Bain – former Accountant GeneralMr. Argar Alexander – former Cabinet Secretary

1. Strengthening Economic Management The Secretary is Ms. Rhona Andrews- A total eleven (11) meetings were held for the year.

disbursements of EC$33.6 million and strong commendation - More systematic and timely reporting by the Statutory Bodies, on from the IMF for good economic management their financial performance

- Tax Amnesty Programme which yielded EC$16.9 million - Establishment of Waste Reduction Hotline (440-5883) in May 2009. - Improved credit rating with Standard & Poors and Institutional Received an average of five (5) reports a day, on abuse of

Investor Magazine Government resources, over a six-month period - Preparation for implementation of VAT on February 1, 2010 - Establishment of Procurement Unit

is on schedule - Establishment of Debt Management Unit in January 2009. The Unit undertook a Debt Management Assessment Programme with the World Bank in June 2009

- Passage of Money Services Business Act

2. Improving the Business Climate- Enacted the Investment Promotion Act which gives investors a clear

and predictable track on which to run - Establishment of the Small Entrepreneurs Development Fund, in

conjunction with the Ministry of Youth Development- Appointed a separate Registrar for Corporate and Intellectual

Property

3. Fostering Genuine Multipartite Partnership- Formulation of draft Social Protocol, in collaboration with the

private sector organizations, the non-governmental organizations, the hoteliers and the trade unions

4. Pursuing Energy Potential and Energy Efficiency- Completed a new Energy Policy- Implementation of Automatic Fuel Pricing Mechanism- Boundary delimitation, spearheaded by the Ministry of Foreign

Affairs

5. Tackling Cost of Living- Repealed the National Reconstruction Levy (NRL) in January 2009- Provided relief to 7,172 households through the Duty Free Barrels

Programme- Completion of the Poverty Assessment Report- Passed on lower fuel prices to consumers with the monthly

adjustments thereby avoiding large fluctuations in prices- Monthly release of Consumer Price Index which assisted

businesses/the private sector in their planning process

6. Resource Mobilisation- Unlocked a total of EC$28.3 million in grants from the European

Union- Comprehensive Project Management training for staff

Two successful reviews under the PRGF, resulting in

Achievements for 2009

“... the engine room of the Public Service...”

Volume 5, Issue 6, November - December 2009

“... the engine room of the Public Service...”2 INSIDE FinanceFinancePetra

Being part of a discussion So why is this important?with a number of persons If you listen carefully to many of the discussions that are

one day, it dawned on me taking place around us, on a twenty-four hour cycle (both how eas i ly a s imple locally and abroad) and pay attention to the facts or

discussion can become a huge 'substance' of the discussions, you would realize that many of a r g u m e n t , b e c a u s e o f them are not necessary and that is because they lack

differences in opinion and actual objectivity. I am not saying that healthy discussions are not content. I say this because the good, because they are good stimulants for the brain, and are

discussion deteriorated into a huge sometimes intended to be the precursor to other discussions argument, and that was simply because two individuals both or outcomes of a particular objectivity. What I am saying is thought they had the “facts” and that they were both right, that some of the discussions (and here I mean those that are when in fact neither had the “facts” straight and they were turning out to be perpetual/ongoing arguments) are so 'far merely expressing what turned out to be their beliefs fetched' and 'tired' that they are becoming annoying. And (opinions) and personal take on the matter. when what is being said is dissected in an objective manner,

you would realize that the persons or presenters of these This brings me to an interesting quotation I found some time arguments or discussions are not speaking the facts but are ago, which goes like: presenting their opinions and agendas; the realization or “The fewer the facts the stronger the opinions,” determination could also be made that sometimes they know (anonymous) or have the facts but choose to ignore it on purpose and

instead present their opinions as fact. What could be What this quote is saying is that statements become highly dangerous with this situation is that there could be and often opinionated when the facts are not known or in other words times are those who listen to these persons and believe what objectivity is lost when personal opinions overrule they say and go out repeating these opinions as if it is the statements of truths or facts. gospel. Then when the facts or statements of truths are

presented, it makes it look like a story is being fabricated to Objectivity - What is it? do damage control. So as you can see in this example, that the According to an internet source, objectivity can refer to lack of objectivity can cause chaos indeed. fairness, factuality, and nonpartisanship, but most often encompasses all of these qualities. Another source cites Don't get me wrong though; I am not saying that opinions are objectivity as judgment based on observable phenomena and not good or necessary, because they too have their place. uninfluenced by emotions or personal prejudices. And yet However, persons have to learn when objectivity should play another source describes objectivity as an impersonal the leading role in a discussion, especially when the facts are presentation of events and characters. available.

In addressing an issue from an objective viewpoint, it As you reflect, you may be asking yourself, “What is the suggests you should be looking at it as an outsider or third better approach I should adopt the next time I participate in a person; like a "fly on the wall", you should attempt to observe discussion or argument?” Should I do my research and come carefully all of the details pertaining to the issue and if prepared with all my facts as compared to relying on my required to, then simply report on your findings or what you biases or opinions?”observed.

In actual fact, neither objectivity nor subjectivity is "better". Objectivity is a quality in writing or presenting that is Both are useful in their own rights, but they must be used characterized by the absence of the author's opinion or selectively. To become MORE RESPONSIBLE feeling about the subject matter. In presenting things INDIVIDUALS, one needs to know when to leave personal objectively, a person must remove himself or herself from opinions at the door and when it is necessary 'to bring them any personal or subjective involvement and present the facts inside'. If not, then he or she must be prepared to stand the as is, however limited the facts may be. Objectivity is not consequences of the decision made.fiction nor is it hearsay; it is the 'real deal.'

Objectivity

Hon. V. Nazim Burke

3INSIDE FinanceFinance“... the engine room of the Public Service...”

Continues on pg. 4

Let me also thank our guests. We have with us a team from the Caribbean Development Bank (Mr. Elbert Ellis, Operations Officer and focal point – CPA, Christine Dawson, Country Economist, Grenada).

In addition to many other areas, the Caribbean Development Bank has been supporting Borrowing Member Countries (BMCs) across the region in the conduct of CPAs as part of the Bank's effort to target more benefit from its development interventions to the poor. For this reason, I would like to record my appreciation to the CDB for the tremendous support that they have given over the years.

I would also like to express my sincere gratitude to Dr. Henry, Lead Consultant – Kairi Consultants and his team for the tremendous amount of work that they have put into this process up to this stage.

Let me also thank the independent reviewers of the Report who are here with us today – our own Dr. Wayne Sandiford and Mr. Colin Williams of Jamaica, who is the regional reviewer. I am sure you would find their reviews quite useful in your own knowledge and understanding of the results.

I wish to also recognize the members of the National Assessment Team for their involvement in this important process.

Ladies and gentlemen, reducing poverty levels and creating a better life for our citizens are front and centre of Government's social and economic agenda. We are very clear that our people are our most important resource and that our ability to overcome challenges hinges on the way in which we address the major issues facing them.

A high and rising poverty level is one such major challenge. It is no secret that the results of the survey are very disturbing to us as policymakers. The survey revealed that while the indigence rate (critically poor) has declined from 12.9% to 2.4% between 1998 and 2008, the poverty rate has increased by 5.6% to 37.7%. Although not a strict measure of comparison, the survey showed that the poverty rate in Grenada was only second to Dominica within the ECCU.

The parishes of St. Mark, St. Patrick and St. Andrew had poverty rates of 54.46%, 56.67% and 44.86 %, respectively, rates which fall way above the national average of 37.7%.

Equally of concern, is the fact that another 14.6% of the population was considered vulnerable or in danger of becoming poor. That being said, much of the details of the Report will be revealed during the course of today.

It is important to note however, that over 12 months have past since the major survey work was conducted. Today, we are in the midst of one of the most severe global economic slowdown not seen since the global depression of the 1930s. As we have indicated earlier, with the onset of the global economic crisis, the poverty situation is estimated to have deteriorated.

In small economies like ours, with debt levels in excess of 100 percent of our Gross Domestic Product (GDP) and declining revenues and grants, the challenges that we face in reducing poverty and unemployment is huge.

Address at The National Consultation on The Draft Final Report of

December 03, 2009 Hon. V. Nazim Burke

Minister For Finance, Planning, Economy, Energy and Cooperatives

The Country Poverty Assessment (CPA) For Grenada

I am pleased to address you at this critical juncture in what we consider a very important process.

Not too long ago, we received the Draft Report on the 2008 Country Poverty Assessment for Grenada (CPA), an initiative which started in early 2007.

Today, we are at the stage where an in-country review of the Report is being conducted leading up to its finalization and adoption by all stakeholders.

This National Consultation is the culmination of four (4) days of activities which included a presentation to Cabinet Ministers, a media briefing on the results and two days of community consultations, including on Carriacou.

We are very pleased that you are able to be with us today to partake in this important exercise and we would like to thank you for coming.

4 INSIDE FinanceFinance “... the engine room of the Public Service...”

Continued from pg. 3

Notwithstanding the difficulties that we faced throughout this Grenada. Without sound reliable statistics, policy makers would year, Government has made some critical interventions that will not be able to do so.better position us to tackle the issues of poverty and unemployment. What then are the next steps? With grant assistance from the

CDB, we intend to elaborate a Poverty Reduction Strategy and Earlier this year, the Cabinet took a decision to reprioritize our Action Plan (PRSAP) by the middle of 2010 utilizing the results capital spending, focusing on those projects that would provide of these studies. The PRSAP, prepared through a participatory the greatest economic stimulation. This created over 650 jobs in process, will among other objectives, devise an appropriate, road maintenance and another 300 in the agriculture sector. coherent and comprehensive strategy for reducing poverty in

Grenada.At the same time significant steps were taken to satisfy the increase demand for safety nets as a direct result of the crisis. In this regard, we wish to challenge Kairi to complete the Report

in the next couple of weeks to allow the PRSAP to commence On June 10, 2009, the Government signed a MOU with the early in the New Year. Grenada Hotel and Tourism Association (GHTA) on the basis on job preservation. I want to also challenge each and every one of you to support

this process as well as the work that will be required to complete We believe that compared to other Caribbean Countries the PRSAP. Grenada, can boast of experiencing one of the lowest job loss rates during this crisis. Let us work together to build this country – to lift those of our

citizens living in poverty out of poverty deprivation.We are very proud of this because to the extent, we can preserve current jobs; persons will be in a position to meet their daily We owe them this pledge. In the end, it will redound to the commitments like sending their children to school and meeting benefit of us all.the mortgage payments.

Let me say in closing that I again want to thank you for being Additionally, with the support of the United Nations here. I thank the Caribbean Development Bank (CDB) for their Development Fund for Women, the United Nations Children support and involvement in this process.Fund and the World Bank, a detailed assessment of Grenada social safety nets was conducted with a view to ensuring that the In addition, I want to thank Kairi Consultants who have again system is responsive and effective. The report was presented to shown themselves as capable partners in the conduct of CPAs. the authorities in September, 2009 and proved very instructive and informative. Last but not least, I want to thank the National Assessment

Team, comprising the National Co-ordinator, representatives The report revealed that Grenada had a plethora of safety nets from government institutions and Ministries and other civil programmes, including the highest level of safety net as a % of society groups who worked alongside the Consultants with the GDP in the region. aim of building local capacity to undertake future assessments.

The report made some useful recommendations, including the Thank you again, everyone, and let me assure you that your time articulation of a Social Protection Strategy and the and effort here today will be greatly appreciated. establishment of a Central Beneficiary Registry, to facilitate better targeting.

With the CPA almost complete and the findings of the Social Safety Net Assessment available, we are now in a better position to answer critical questions such as:

1. What has happened to our nation's poor over the last decade?

2. Has the characteristics, extent geographic concentration, severity and root causes of poverty changed during that time?

3. What structures are needed to ensure that our safety net programmes are better targeted?

4. Have the responses by Government, NGOs, CBOs and other institutions effective?

Only then can we meaningfully deal with poverty. Only then can we identify the interventions that will increase the productivity of vulnerable groups and individuals so that they can lift themselves out of poverty and contribute to the building of Cross section of persons at presentation of Interim CPA Report


The Draft Final Report of the 2007/08 Country Poverty Assessment • A Briefing at the Boogles Community Centre for the (CPA) for Grenada was presented to Cabinet on Monday November people of Carriacou on Wednesday December 2nd, 2009; 30, 2009 by Kairi Consultants, Trinidad & Tobago. and

This presentation to Cabinet formed part of an “in-country review” • A National Consultation at the Grenada Trade Centre on of the CPA leading up to its finalisation. Thursday December 3rd, 2009. This Consultation was

attended by representatives of Ministries, non-A delegation from the Caribbean Development Bank (CDB), headed governmental organisations, community groups, and the by Mr. Desmond Brunton, Vice President of Operations, was also general public. present at the Cabinet briefing since the CPA was jointly funded by the Government of Grenada and the CDB. At the end of the “in country review” the Consultants were asked to make

revisions to the report, based on feedback obtained from their The other activities of the “in-country review” included: Consultations, so that the document can be finalised.

• A Media Seminar on the results of the survey The overall objective of the CPA was to assess the conditions affecting the Monday 30th November 2009 at the Ministry of welfare of people, and use these findings to identify policies and projects Works Conference Room; that would sustainably reduce the extent and severity of poverty and

improve the overall quality of life in Grenada. • Briefings with the communities of Telescope, St.

Andrew's and Gouyave, St. John's at the Telescope The results of the report will be used by Government to prepare a Poverty Primary School and the Gouyave Pastoral Centre Reduction and Growth Action Plan for Grenada in 2010.respectively, on Tuesday December 1st , 2009;

The following tables represent some of the figures presented in the report:

CPA IN FINAL STAGES

COUNTRY POVERTY ASSESSMENTGrenada, Carriacou and Petite Martinique 2007/08

TABLE 1: COMPARISON OF 1998 AND 2008 POVERTY RATES

Poverty Indicators (1995 and 2007/08 Compared) % Individuals 1998 % Individuals 2008

Indigence Rate 12.9 2.4

Poverty Headcount Index (Poverty Rate) 32.1 37.7

Vulnerability Rate (Vulnerable but not Poor) n/a 14.6

Grenada

COUNTRY POVERTY ASSESSMENTGrenada, Carriacou and Petite Martinique 2007/08

TABLE 5.5: HEADCOUNT, POVERTY GAP AND POVERTY SEVERITY BY PARISH 2008

St. George 35.10 10.03 4.23

St. George Town 15.00 3.40 1.59

St. John 36.67 8.77 3.05

St. Mark 54.46 18.29 9.23

St. Patrick 56.67 15.96 6.80

St. Andrew 44.86 10.56 3.53

St. David 29.49 8.68 3.64

Carriacou 6.57 2.40 0.90

Total 37.70 10.13 4.03

Parish

PovertyHeadcount

PovertyGap

PovertySeverity

“... the engine room of the Public Service...”6 INSIDE FinanceFinance

Summary Indicators of Living conditions in Grenada (2007/08)

• The annual Indigence Line was estimated at E$2,394 per annum per adult.

• The annual Poverty Line was estimated at EC$5,842 per annum per adult in 2008.

• The Vulnerability Line (set at 25 percent above the Poverty Line) was EC$7,302 per adult per annum.

• 37.7 percent of the population was deemed to be poor in 2008, and 2.4 percent was deemed to be indigent.

• The highest incidence of poverty was found in St. Patrick - 56.67 percent of residents in this parish were deemed to be poor. The lowest incidence of poverty was found in Carriacou - 6.57 percent of resident poor.

• The Poverty gap index for the country was 10.13 and the Poverty Severity Index was 4.03 (2008).

• The Gini coefficient of inequality was estimated to be 0.37 in 2008.

• The richest 10 percent of the population accounted for 29.76 percent of total consumption expenditure, while the poorest 10 percent accounted for a mere 2.88 percent of total consumption.

• 40.2 percent of household heads rated their social and economic circumstances as being worse now compared to one year ago; 16 percent felt that their economic situation had "remained the same".

• According to the perception of those deemed to be among the poorest only 37 percent of household heads in the lowest quintile rated themselves as poor.

• Males are more at risk of being poor than females - 39.5 percent of all males were deemed "poor" compared to 36.2 percent of all females, although the unemployment rate is drastically higher among women (31.8%) than men (17.9%).

• The average size of households in the poorest quintile was 5 persons, compared to an average of 2 persons per household in the quintile V.

• The proportion of households using pit latrines fell from 54 percent in 1998 to 36.3 percent in 2008. However, among the poorest households the percentage using pit latrines grew from 66.7 in 1998 to 72.3 in 2008, the majority of poor households 66.6% used pit latrines.

• 90 percent of all households used electricity for lighting, with the poorest up from 75.9 in 1998 to 79.1 in 2008.

• The National Unemployment Rate was 24.9 percent, but the unemployment rate among the poor was 34.9 percent.

• The Services Industry employed the largest proportion of persons (34.3%), followed by the construction which employed 19.0 percent of the labour force.

• 63.7 percent of the poorest workers were paid employees with private employers. 59.5 percent of Grenadians work a 35-40 hours a week.

• Primary level education was most likely to be the highest level of education attained (65.2%) among heads of households in 2008.

• Diabetes and High Blood Pressure were the two most prevalent lifestyle diseases overall (30.5% and 61.4% respectively of persons suffering chronic diseases).

• 40.3 percent of females had their first child between the ages of 15-19 years.


The following is a breakdown of the data on the Duty-free Barrel Initiative (DBI) for the period October 1st to December 31st 2009 with a comparison for the previous period October 2008 to January 2009.

Total for the Period October 1st – December 31st 2009

Month No. of Persons/ Households

CIF Value Duties and taxes foregone

October 746 $162,555. $89,405. November 1271 $299,155. $164,535.

December 5155 $1,174,940. $646,217. Total 7172 $1,636,650 $900,158.

Total for the period October 1st 2008 – January 31st, 2009

Month No. of Persons/ Households

CIF Value Duties and taxes foregone

October 946 $212,240. $116,733. November 1262 $304,532. $167,492.

December 6427 $1,329,455. $731,200. January 546 $117,150. $64,433. Total 9181 $1,963,377. $1,079,858.

The DBI was initiated as part of Government's commitment to do all it can to ease the burden on all households, especially the poor and vulnerable, forgoing much needed revenues in the process.

UPDATE ON THE 2009 DUTY FREE BARRELS INITIATIVE

Often, it is almost impossible to turn down a bargain. Your favourite shop is on sale, and everything is 50% off! So what do you do? Take out your calendar and see whose birthday is coming up. Buy something keeping that person in mind don't just buy randomly, thinking you will give it to someone. Buy it, bring it home, and put it in a bag with the person's name on it, so you know you have to give it to that person. Avoid buying something for yourself unless it is on the list. If you must get something, buy one item not two just because it's half-price. It's not on your list, remember!

If you shop wisely, you will be able to save up for things you really want, and will have a better-planned wardrobe, and a more beautiful home. So think about that the next time you see a huge 'sale' sign posted on your favourite shop, and, hard as it may be, walk past.

FINANCIAL TipAvoid Sales


The above table shows the Consumer Price Index for the month of November 2009 with changes from the previous month October 2009 and the corresponding month of last year November 2008. The overall index moved from 126.68 index points in October 2009 to 126.75 index points in November 2009 representing a marginal increase of 0.06%.

The major group “Food including Non-Alcoholic Drinks” which has the highest weight in the Consumer Basket, showed a slight increase of 0.01%, representing a price increase in the following subgroups: “Breakfast Foods” 0.83%, “Poultry” 1.06%, “Fresh Fruits” 0.89%, “Preserved Fruits” 2.69%, “Vegetables” 1.52%, “Hot Beverages” 6.01% and “Partially Prepared Foods”1.71%. The following items contributed to these increases:- cream of wheat 4.76%, weetabix 1.45%, chicken 0.66%, grapefruit 6.50%, ripe bananas 7.52%, pawpaw 13.42%, avocado 25.75%, dried fruits 2.53%, tomatoes 17.40%, pumpkin 8.32%, callaloo 5.48%, green pigeon peas 5.26%, cabbage 6.26%, sweet pepper 7.87%, green bananas 8.83%, plantains 5.68%, cocoa powder 7.23%, chicken noodles 2.77% and peanuts 2.66%. Despite these increases there were noticeable decreases within the major groups namely:- biscuit 0.47%, rice 3.53%, flour 1.02%, macaroni 2.01%, pig feet 1.87%, luncheon meat 2.12%, salted fish 1.28%, milk 1.56%, eggs 3.91%, oranges 5.79%, manderine 6.51%, limes 14.00%, lettuce 1.40%, beets 3.62%, onions 3.76%, chive and celery 4.31%, split peas 3.60%, irish potatoes 5.10%, yeast 2.32% and mayonnaise 2.29%.

“Alcoholic Drink and Tobacco” showed an increase of 0.29% due to an increase in the price of imported beer by 0.42% and local rum 1.59%. “Fuel and Light” increased by 0.96%, which was mainly influenced by an increase in the price of electricity by 2.38%. “Other Expenses” increased by 0.22% due an increase in the price of toilet soap 2.44%, and sanitary pads 0.53%. The other groups showed marginal changes.

Relative to the corresponding month of last year, the Consumer Price Index moved from 130.93 index points in November 2008 to 126.75 index points in November 2009 representing a decrease of negative 3.19%. The following major groups contributed to these decreases:- “Food including Non Alcoholic Drinks” (5.00%), “Fuel and Light” (16.88%) and “Transportation and Communication” (2.62%). The following items contributed to these decreases:- rice (14.62%), flour (8.28%), jacks (11.1%), powdered full cream milk (36.11%), cheddar cheese (26.08%), pawpaw (10.18%), limes (13.82%), tomatoes (17.28%) onions (10.55%), split peas (15.61%), dasheen (16.92%) irish potatoes (10.70%), green bananas (10.94%), plantains (10.86%) and vinegar (10.45%), electricity (18.17%), kerosene (31.49%) cooking gas (12.12%) and gasoline (27.16%). However there was a noticeable increase in “Personal Services” by (5.27%), due to an increase in the price of hairdresser fee by (12.00%). The prices of Petroleum Products with the exception of electricity remain flat for the month of November, despite increases on the international market. This was due to government intervention. Accordingly the inflation rate for the period November 2009 is negative 3.19%. This rate can be compared to an increase of 7.07% for the same period 2008. ........................................... Director of Statistics

Coco

CONSUMER PRICE INDEX (2001) = 100)

November

2009

INDEX POINTS %

CHANGE

CPI GROUPINGS

Weight Nov- 09 Nov- 08 Nov-07 Oct-09 Nov-09/ Nov-08

Nov- 08/ Nov–07

Nov 09/ Oct-09

FOOD INCLUDING NON-ALCOHOLIC DRINKS 36.75 137.81 145.06 129.27 137.80 -5.00 12.21 0.01

ALCOHOLIC, DRINK & TOBACCO 0.86 118.97 116.94 112.50 118.63 1.74 3.95 0.29

CLOTHING, FOOTWEAR & ACCESSORIES 9.77 97.41 99.08 99.19 97.41 -1.69 -0.11 0.00

ACCOMMODATION 10.20 125.81 125.12 122.68 125.86 0.55 1.99 -0.04

FUEL AND LIGHT 5.50 132.92 159.91 138.96 131.66 -16.88 15.08 0.96

HOUSEHOLD FURNITURE & FURNISHING 9.53 110.74 109.01 106.73 110.71 1.59 2.14 0.03

MEDICAL CARE & HEALTH EXPENSES 4.65 126.32 126.83 125.90 126.33 -0.40 0.74 -0.01

TRANSPORTATION & COMMUNICATIONS 15.65 130.80 134.32 127.47 130.80 -2.62 5.37 0.00

EDUCATION 3.74 125.06 124.25 119.01 125.06 0.65 4.40 0.00

PERSONAL SERVICES 1.60 114.74 109.00 101.99 114.74 5.27 6.87 0.00

OTHER EXPENSES 1.75 115.21 111.90 109.93 114.96 2.96 1.79 0.22

TOTAL 100.0 126.75 130.93 122.28 126.68 -3.19 7.07 0.06

CONSUMER PRICE INDEX (2001) = 100)NOVEMBER 2009

,


The Customs and Excise Department performed well in the areas of focus highlighted in the 2009 Budget Speech delivered by Hon. V. Nazim Burke in 2008. The following table summarizes the achievements.

Areas of Focus in Budget Speech 2009

Status

VAT Preparation The department is up to date in terms of the activities in Customs & Excise VAT Implementation Plan

Completion of Fraud Control Strategy and Plan

The strategy and plan has been completed as Phase I. Phase II will be the implementation of the recommendations agreed to by the Project Steering Committee.

Implementation of ASYCUDA World

As component of the Grenada Technical Assistance Credit Project which was launched in October 2009, a reasonable amount of progress has been made since. The next major activity will be the signing of the agreement between UNCTAD and Government. UNCTAD is prepared to commence phase I (the pilot on the St. George’s Port) approximately one month after the signing of the agreement.

Preparation of New Customs Laws

Both the new Customs Act and the supporting Regulations have been completed. Parliament’s approval is expected by March 2010.

Revision of the Customs Tariff. The New CARICOM Common External Tariff, based on the Harmonized Commodity Description and Coding System version 2007 (HS2007) was prepared and passed by Parliament in December 2009. The document is currently being published in the Gazette. The implementation date is February 1, 2010.

Training of Staff Approximately 90 percent of the training plan has been achieved.

Create Website The address is www.grenadacustoms.com.

The Department has also made improvements in the level of staffing at the Department; both in terms of the filling of the long outstanding vacancies and promotions. This has had a positive impact on staff morale and customer service.

Highlights of the Achievements of the Customs & Excise Department for 2009

Mr. Carlyle FelixComptroller of Customs

Minister's Visit to Project Co-ordinating Unit

Health: 21. No one is in charge of your happiness except you.

1. Drink plenty of water. 22. Realize that life is a school and you are here to learn. Problems are simply part of the curriculum that appear and 2. Eat breakfast like a king, lunch like a prince and dinner fade away like algebra class but the lessons you learn will like a beggar. last a lifetime. 3. Eat more foods that grow on trees and plants and eat

23. Smile and laugh more. less food that is manufactured in plants.24. You don't have to win every argument. Agree to disagree.4. Live with the 3 E's - Energy, Enthusiasm and Empathy.

5. Make time to pray. Society: 6. Play more games. 25. Call your family often. 7. Read more books than you did in 2009. 26. Each day give something good to others. 8. Sit in silence for at least 10 minutes each day. 27. Forgive everyone for everything. 9. Sleep for 7 hours. 28. Spend time with people over the age of 70 & under the age 10. Take a 10-30 minutes walk daily.

of 6. And while you walk - smile. 29. Try to make at least three people smile each day.

30. What other people think of you is none of your business. Personality: 31. Your job won't take care of you when you are sick. Your 11. Don't compare your life to others. You have no idea

friends will. Stay in touch. what their journey is all about.

12. Don't have negative thoughts or things you cannot Life: control. Instead invest your energy in the positive

present moment. 32. Do the right thing!

13. Don't overdo. Keep your limits. 33. Get rid of anything that isn't useful, beautiful or joyful.

14. Don't take yourself so seriously. No one else does. 34. GOD heals everything.

15. Don't waste your precious energy on gossip. 35. However good or bad a situation is, it will change.

16. Dream more while you are awake. 36. No matter how you feel, get up, dress up and show up.

17. Envy is a waste of time. You already have all you need. 37. The best is yet to come.

18. Forget issues of the past. Don't remind your partner 38. When you awake alive in the morning, thank GOD for it. with his/her mistakes of the past. That will ruin your 39. Your innermost is always happy. So, be happy. present happiness.

19. Life is too short to waste time hating anyone. Don't Last but not the least: hate others. 40. Share this with everyone you care about.

20. Make peace with your past so it won't spoil the present.

A Must Read HANDBOOK 2010 - Origin unknown


he Minister of Finance, Planning, Economy, Energy& Cooperatives, Permanent Secretary,

Management and Staff extend condolences to who have lost their

loved ones recently.the family and friends of all those

“Good men must die, but death cannot kill their names”God's Peace Be With Their Souls.

T

Riddle

&

Have a laugh...

FunFacts Did U Know?

Fun Facts

Something to tryQuotations

- The cruise liner Queen Elizabeth II, moves only six inches for each gallon of fuel that it burns.

- Ketchup was sold in the 1830s as medicine.

- What letter is next in this sequence?O, T, T, F, F, S, S, E, __Answer: N for nine

How can you use the letters in NEW DOOR to make one word?Answer: One Word

What in an automobile engine serves no purpose but without it the engine does not work?Answer: Noise

- That the number for the “Hotline” to report the misuse and abuse of Government resources is 440-5883?

- That the number for the “VAT Hotline” is 435-9085?

1) Lift your right foot of the floor.

2) Move your ankle in a clockwise motion.

3) while doing this, make the #6 in the air with your right hand.

Your foot changes direction doesn't it.

All Is Fair In Business

A shopkeeper was dismayed when a brand new business much like his own opened up next door and erected a huge sign which read 'BEST DEALS.'

He was horrified when another competitor opened up on his right, and announced its arrival with an even larger sign, reading 'LOWEST PRICES.'

The shopkeeper panicked, until he got an idea. He put the biggest sign of all over his own shop. It read: 'MAIN ENTRANCE!'

Perception

A man was sitting on a bus chewing gum and staring vacantly into space. Suddenly the old woman sitting opposite him said, "It's no good you talking to me young man, I'm stone deaf."

- Fools live to regret their words, wise men live to regret their silence.

- Every man has a right to be wrong in his opinions; but no man has a right to be wrong in his facts.

- It is impossible to defeat an ignorant man in an argument.


INSIDE FinanceFinance “... the engine room of the Public Service...”14

study. In 1986 he returned to the St. Dominic's R. C. School this time as a teacher until he joined the Customs Staff in 1993 until the time of his passing.

During his time at the Customs Division, he journeyed to various destinations to attend Seminars and Workshops; he embraced these opportunities as he always believed in self improvement. He also worked in several sections within Customs where he left his trademark of neatness and fairness behind. At the time of his passing he was attached to the Entry Processing Unit.

If there were three words that would Wayne Francis attended the St. Dominic's adequately describe Wayne they would R. C. School as a young boy and then be quiet, trustworthy and meticulous,

saying, “still waters run deep.” May his moved onto the Grenada Boys' Secondary because that's what he was, truly

soul rest in peace. School where he excelled in all areas of meticulous! He truly brought to life the

(read by Donan Victor - Deputy Comptroller of Customs)

Tribute to Wayne Francis - Customs Officer

Excerpts from the Eulogy

FinanceFinanceFFiinnaanncceeINSIDE What’s Been What’s Been HappeningHappening


Continues on pg. 16

GREEN CUSTOMS INITIATIVE which starts with raising the awareness of Mr. Donan Victor, Deputy Comptroller customs officers on their role in and Ms. Lauren Brizan, of the Customs implementing environmental protection. and Excise Department, attended Green

Customs officers' training is also to be an important element of the national implementation of the Rotterdam Convention on the Prior Informed Consent (PIC) Procedure for Certain Hazardous Chemicals in International Trade, and, to a different extent, the Stockholm Convention on Persistent Organic Pollutants.

and results in revenue loss for governments.

Another serious effect of illegal trade in environmentally sensitive commodities is that it also seriously undermines the

Customs Initiative (GCI) workshop in the e f f e c t i v e n e s s o f m u l t i l a t e r a l

Dominican Republic from November environmental agreements (MEAs) by

24th - 26th 2009.circumventing rules and procedures agreed in international treaties. MEAs are The main objectives of the Workshop legally-binding global accords that were to: address global environmental issues.o Capacitate the Senior National

Trainers from representing countries M o s t e n v i r o n m e n t a l p r o b l e m s and regional institutes;

However, customs agencies operating in encountered in the world today have a o Agree on a Feedback reporting isolation are not sufficient to monitor the trans-boundary nature and a global mechanism for follow-up training to trade of environmentally-sensitive impact, and they can only be addressed be done by the trained trainers; commodities. Customs co-operate with effectively through the kind of o Create awareness-rais ing, in multiple government agencies which have international co-operation and shared conformity with the objectives of the an interest in the movement of goods, responsibility made possible through Green Customs Initiative; andincluding environment agencies but also MEAs. Several MEAs regulate the cross-o Agree on a Draft National Green health and safety and enforcement. At the border movement of items, substances Customs Training Module to be national level, Customs is but one element and products, mainly in the form of adapted at National Customs Training of a “compliance and enforcement chain” imports, exports and re-exports. This Schools.that includes:gives the front-line Customs and border-

protection officers responsible for Background on Initiativea) Monitoring, detection, and controlling trade across borders a very Illegal international trade in “environ-

seizure of illegal shipments by important role in protecting the national mentally-sensitive” commodities such as customs agencies;and global environment.ozone depleting substances (ODSs), toxic

b) Prosecution of criminal cases chemicals, hazardous wastes and involving such shipments by Building the capacity of enforcement endangered species is an international prosecuting attorneys; andofficers like Customs, who are at the problem with serious consequences: it

c) Appropriate sentencing by the forefront of every country's efforts to directly threatens human health and the judiciary. combat illegal trade, is vital. Training is a environment, contributes to species loss,

key component of capacity building

Management of the Ozone Unit and Customs Officers at Hand Over Ceremony

Mr. Donan Victor receiving documents

Ms. Lauren Brizan receiving documents



Continues on pg. 17

The World Customs Organization (WCO) CHINA AND GRENADA SIGN These instruments were banking offers extensive training to customs MEMORANDUM OF agreements on accounting procedures officers with the objective of ensuring the UNDERSTANDING (MOU) between the Ministry of Finance of

The Government of Grenada and the implementation and uniform application Grenada and China Development Bank People's Republic of China on Friday, of the customs conventions that it for implementing the Economic and

rdadministers. December 3 2009, signed three (3) Technical Cooperation Agreements instruments pursuant to the Memorandum

The purpose of the Green Customs of Understanding (MOU) signed on Initiative is to raise the capacity of January 20, 2005 between the two customs officers on several multilateral Countries. The MOU in 2005 addressed environmental agreements at the same the normalization of relations as well the time, which can complement separate, specific training on each individual ag reement . This par tnership of international organizations aims at enhancing customs' capacity to detect and act on illegal trade in environmentally-sensitive items covered by the related agreements. In the same manner it looks for assisting customs in the facilitation of legal

between the Government of Grenada and trade in these items. This is achieved the People's Republic of China signed on through awareness-raising on all related December 30, 2008 and June 17, 2009, MEAs and agreements, to make customs respectively. The two agreements officers aware of these issues by combined provide for gratuitous aid of developing common tools and programmes RMB100.0M (approx. US$14.6M) to be across partners to this initiative. implementation of Economic and used for projects to be agreed upon

Technical Cooperation Agreements between the two Governments, including The expected outcome of the Workshop signed on subsequent dates. affordable housing for Grenadians.was that it will contribute to enhanced capacity of the participants so that they The first instrument of December 3rd In thanking the Government of the will be able to: 2009 – a Certificate of Acceptance in People's Republic of China (PRC),

respect of a grant of US$1.0M for 2009 – Minister Burke expressed pleasure at the • Create awareness amongst regional was signed by the Hon. V. Nazim Burke, signing saying: “The imminent release of agencies on each of the specific Minister of Finance for and on behalf of these funds is timely as Government MEAs and their role in assisting the Government of Grenada and H. E. completes a very challenging fiscal year.” countries in compliance man- Zhang Wanhai, Ambassador of China for agement; and on behalf of the Government of the He assured Ambassador Wanhai of • Develop and Agree on a Draft People's Republic of China. Grenada's commitment to strong National Green Customs Training

economic management and reaffirmed the Module based on the Green Customs value Grenada places on its strong and Guide to be adapted as a national progressive relations with PRC. customs training schools;

• Create awareness among customs The signing ceremony was witnessed by officers on their role in enforcing the Officials of the Ministry of Finance MEAs;and the Embassy of the People's Republic • Present the trade aspects of each of of China in Grenada.these MEAs and the impact on

customs officers;• Have knowledge of sources of

information on MEA imple-mentation, enabling them to stay aware of the latest developments;

hirty persons, including fifteen Customs • Highlight inter-linkages and possible The remaining two (2) instruments were Officials and representatives from key synergies in enforcement of the signed by Mr. Mike J. Sylvester, Deputy institutions, are participated in a Valuation various MEAs; and Permanent Secretary, Ministry of Finance Training Workshop on the General • Encourage networking amongst and Mr. Zhang Peng, First Secretary, Agreements on Tariff and Trade (GAAT) participating countries and regional Economic and Commercial Office, at the Grenada National Stadium. agencies. Chinese Embassy in Grenada.

WTO/WCO GATT VALUATION TRAINING WORKSHOP FOR CUSTOMS OFFICIALS & KEY STAKEHOLDERST

Minister Burke and Chinese Ambassador signing Memorandum

Minister Burke and Chinese Ambassador exchanging pleasantries

Deputy P.S. Mike Sylvester and Chinese Representative signing Memorandum



The Workshop was hosted by the PUBLIC SIGNING OF e. Economic diversification and Department of Customs and Excise of MANAGEMENT CONTRACT FOR poverty alleviation; and

f. Demand stimulation and growth the Ministry of Finance, Planning, SMALL DEVELOPMENT FUNDOn Friday December 18, 2009, the facilitation.Economy, Energy and Cooperatives, and Government of Grenada held a public the Trade Unit of the Ministry of signing of the Management Contract for Environment, Foreign Trade and the Small Development Fund, with the Cooperatives. Grenada Cooperative Bank Ltd. and the

According to the local coordinator of the River Sallee Cooperative Credit Union. Workshop, Ms. Lyndonna Hillaire- The signing took place at the Ministry of Marshall, Deputy Comptroller of Finance Conference Room.Customs, “The aim of the workshop was to familiarise participants with Customs Valuation in the GATT system, while highlighting the different methodologies that can be used to determine the customs value of imports.”

What can the Fund be used for?She further stated that, “the World Trade • Purchase of equipmentOrganisation (WTO) in collaboration • Purchase of raw material / packaging

with the World Customs Organisation material

(WCO) consented to provide technical • Buffer the effects of short term

assistance to Grenada through the receivables

sponsoring of the GAAT Valuation Training Workshop.” Who can access the Fund?The Small Business Development Fund,

• Lower income persons who have which was launched on July 7, 2009, aims Mr. Terdsak Suvarnamani, a Valuation great business ideas but few or no to facilitate the creation of viable small Expert (with twenty years experience in avenues to access affordable business enterprises through the provision of that field), attached to the Trade and creditcapital, skills training, and advisory Tariff Directorate, WCO as a Technical • Unemployed or under employed services to the small business sector. Advisor, was the facilitator of the persons

Workshop. • Small businesses with limited access to commercial credit.

The key components of the Workshop, w e r e t h e p r e p a r a t i o n f o r t h e Loan Size and Interest Rate:implementation GATT Valuation, • A minimum of $500 and a maximum identifying the necessary tools and of $20,000instruments to assist with Customs • Interest rate between five percent Control in the new valuation system. (5%) and seven percent (7%) of the

borrowed amount“This is critical since Grenada is serious about meeting most of its obligations Repayment Period:with the WTO so that the country can be • Maximum of five (5) yearspositioned to draw down on the assistance that can be made available to Collateral Required:It is expected that the facility will be of help with the development of the • Property or fixed assetparticular benefit to young entrepreneurs country,” Ms. Marshall said. • Bill of sale on equipmentgiven the nature of its establishment

• Crop lienwhich is detailed hereunder:The Customs Department therefore • Letter of Guarantorregarded this and other training as very Objectives of Fund:

How can the Fund be accessed?important for the Department as it strives The objectives of the Fund are:• Register, enroll and complete the to improve on its means to facilitate trade.

Business Development Centre's a. Development of entrepreneurs and Entrepreneurial Skills Development The Workshop was held from Monday entrepreneurship skills;Training ProgrammeDecember 7, 2009 to Thursday b. Creation of employment oppor-

• Prepare Business Plan for submission December 10, 2009 with a short closing tunities;to the chosen financial institution s e s s i o n w h e r e C e r t i f i c a t e s o f c. Institutional strengthening;along with other supporting Participation were issued. d. Improving the image of the small documents.business sector;

Head table at signing of Management Contract

Signing of Management Contract

Guests at signing of Management Contract

Continues on pg. 18



The context of this Fund is the consuming for both themselves and the development in the Caribbean region, commitment made by the Minister for Customs Division. develop an understanding of the

th Caribbean Regional e-Government Finance in his budget speech on 12 The discussion was held at the Grenada strategy, and harmonize the national December 2008, in which he stated Board of Tourism Conference Room and public administration needs of Grenada, government's intention to give special was facilitated by Mr. David De Coteau - St. Lucia and St. Vincent with their support to young business entrepreneurs Customs Representative on the VAT potential for e-Government development. under the Young Entrepreneurs implementation Team. Other Customs The training also allowed for the sharing Development Fund. He indicated that officials present were Mr. Solomon of the views of CARICAD and the United Government will cap its exposure at Granger – Supervisor of the General Nations on these matters.$1million, with carefully worked out Office, Mr. Adrian Cadore – Duty Free conditions. This commitment was restated Desk Officer, and Ms. Rosemin Stanislaus The training was held at the Flamboyant by the Prime Minister when he announced – Public Relations Officer. Hotel. It brought together approximately the Economic Stimulus Package on April

thirty participants from Grenada, St. 1st, 2009.Lucia and St. Vincent and the Grenadines, including senior policy makers, CUSTOMS MEET WITH CUSTOMS practitioners and government officials, as BROKERS & DUTY FREE SHOP well as representatives from CARICAD OWNERS

On Friday December 11, 2009 the and UNDESA.Customs Division engaged the operators

EVENT PLANNING AND of Duty Free Shops and their Customs PROTOCOL WORKSHOPBrokers in an information session with the Mrs. Gail Marshall-Muriel and Mrs. Petra aim being to inform them about the Charles-Joseph, represented the Ministry adjustments in procedures which would of Finance in an Event Management and Protocol Workshop which was organised This session formed part of a series of b y t h e D e p a r t m e n t o f P u b l i c sessions conducted by the Customs Administration as part of their in-service Division throughout the months of training programme. September – December where various

s takeholders (Customs Brokers , The Workshop was held at the National

Importers, Exporters) were briefed on Stadium and ran from November 2 - 3, and

topics such as What is VAT? The Design November 11, 2009.

of VAT, What is Excise Tax and reasons for its implementation, VAT and Exports? The main objective of the Workshop was However, participants were given a more to upgrade the skills of public officers as it in-depth look at how VAT and Excise Tax relates to event planning, including are calculated, the new codes and duty/tax become necessary when the Value Added protocol matters. The facilitators or the bases to be used, the new CARISAD form Tax is implemented on February 1, 2010. along with the New Tariff and Transitional There was healthy discussion around the measures. subject, especially the areas of the time of

accounting for VAT and the availability of Similar sessions were held in Grenville adequate Customs staff to accommodate and Carriacou.the various operators at any given time.

More experienced operators took the CAPACITY BUILDING IN opportunity to share with newer operators KNOWLEDGE MANAGEMENT AND E-GOVERNMENTMr. Mike Sylvester, Mrs. Abiola Streete, Mr. Dorran Stranch, Mr. Winston Cruickshank and Mrs. Petra Charles-Joseph attended a Capacity Building in Workshop were Mrs. Hazel Bierzynski Knowledge Management and E- and Mrs. Alice Thomas-Roberts.Government training Workshop on December 9, 2009.

The aims of the Workshop were to explore the types of software and hardware which the current issues and challenges of they can acquire to make inventory electronic and mobile government control more efficient and less time

Participants at meeting



Gail Muriel and Petra Joseph with Mrs. Bierzynski

TO ALL NEW MEMBERS OF STAFF

Welcome

FinanceINSIDE

1. Implementation of the Extended Credit Facility (ECF) with the IMF

2. Implementation of Value Added Tax, February 1, 20103. Signing of Tax Information Exchange Agreements

(TIEA)4. Preparation of the Poverty Reduction Strategic Action

Plan5. Implementation of the ECCU 8 Point Stabilization and

Growth Action Plan (PRSAP)6. Submission of Energy Development and Efficiency Bill

to Parliament7. Submission of Cooperatives Societies Bill to

Parliament9. Enactment of new Public Procurement Legislation and

establishment of new Public Procurement Department10.Expansion of Technical Cooperation with Bilateral and

Multilateral Organisations especially in respect of Environment Management

11.Implementation of Energy Relief Programme12.Government support/facilitation for private sector

investment projects.

MINISTRY OF FINANCE, PLANNING, ECONOMY, ENERGY & COOPERATIVES

PRIORITIES FOR 2010

Designed and printed by Government Printery

Ministry of Finance, Planning, Economy, Energy & CooperativesFinancial Complex, Carenage, St. George’s

Tel.: 440-2731-34, 435-0057; Fax: 440-4115; Website: www.gov.gd; Email: [email protected], [email protected]: Petra Joseph, Editor-in-Chief, 440-2731, ext.: 1108/435-0057

Documents

Inside Finance - Volume 5, Issue 6, November - December 2009