Grenada

The purpose of this Country Support Strategy is to provide a framework for EU assistance programmes in Grenada under the 10th EDF. It outlines the current status of EU–Grenada relations, gives a detailed country diagnosis, summarises the Government’s development agenda, reviews past and present EC cooperation and the activities of other major donors, and concludes with the proposed EU response strategy and its corresponding indicative work programme.

Grenada became independent from the UK in February 1974 and enacted its Constitution in December 1975. Unlike the rest of the OECS countries, post-Independence Grenada experienced a period of political turbulence between 1979 and 1983, which was characterised by military takeovers, revolutionary movements and, finally, a US-led invasion that evicted the de-facto authorities from power in October 1983. Reconstruction from the devastation wreaked by Hurricane Ivan in September 2004 and Hurricane Emily in July 2005 is a major political issue for the present democratically-elected government. Grenada is a lower-middle income country with a small open economy. It has an area of 344 sq km; a population of 106,605 (2006 estimate); an estimated GDP of EC$1 361 700 000 (€368 910 915); and GDP per capita of EC$12 848 (€3 483) (both figures in 2005 at current market prices). At a social level, with the immediate recovery from the hurricanes and emergency relief efforts mostly addressed, the priority has turned to assisting the affected population to return to normal conditions, an endeavour critical to preventing a rise in poverty and for maintaining social stability. The economy is heavily dependent on tourism and exports of bananas and spices. In recent years, manufacturing paper products and electronic components, offshore financial services and telephone and internet-based marketing have also become increasingly important.

The Government’s strategic objectives for 2006–08 are fourfold: sustained high economic growth; restoring fiscal and debt sustainability; reducing vulnerabilities; and alleviating poverty. The Government acknowledges that these objectives need to be advanced in tandem given the inter-linkages among them. The total active EC aid portfolio for Grenada in 2005, including EDF, Stabex and SFA balances stands at EC$67 139 055 (€18 200 000). The 8th EDF focused on Water Supply, while 9th EDF funds were originally intended to target tourism development, specifically fort restoration and skills development in the tourism sector. Following the destruction caused by Hurricane Ivan in 2004, funds were reallocated from the planned tourism project to the rehabilitation of school buildings and water facilities. The hurricane created an exceptional situation reasonably handled, in part, by the Agency for Reconstruction and Development.

The EC and the Government hereby propose to allocate 80% of the "A envelope" to support Human Settlement as the only focal sector. The specific objective of the programme is to support Grenada’s Human Settlement Policy 2005-2015 aiming at “building back better” and providing low-income households with secure living accommodation. A sector-wide approach will be adopted to provide Sector Budget Support to support the implementation of the Government’s Human Settlement Policy 2005-2015 and the derived Human Settlement Programme. In addition, approximately 10% of the “A Envelope” will be allocated to the Technical Cooperation Facility, notably to Support Non-State Actors (NSAs) and possibly to provide Trade-Related Technical Assistance (TRTA). The remaining 10% of the “A Envelope” will be allocated to providing Technical Assistance to the NAO Office, in order to ensure efficient management and coordination of EC (not only EDF) funds.