Compete Caribbean: Private Sector Development Strategies for the OECS Grenada

Transcription

1 Compete Caribbean: Private Sector Development Strategies for the OECS Grenada National Consultation Presentation 27 th March 2013 Flamboyant Hotel and Villas

2 SIDS Challenge Structure of Presentation OECS Main Findings: Biggest Obstacles Critical Issues Identified for Grenada Other Regional Initiatives Way Forward

3 SIDS Challenge How can we overcome the challenges faced by SIDS and support private sector development?

4 SIDS Challenge Small Market Size

5 SIDS Challenge Concentrated Product and Export Markets

6 SIDS Challenge Natural Disasters

7 SIDS Challenge Cost of Administration

8 SIDS Challenge Government Debt

9 % of Firms OECS Main Findings: Biggest Obstacles Latin America and the Caribbean OECS Average Grenada

10 % Financing Issues Latin America and the Caribbean OECS Average Grenada

11 Infrastructure Issues Latin America and the Caribbean OECS Average Grenada 0 Proportion of Firms Owning or Sharing a Generator (%) Days to Obtain an Electrical Connection Percent of Firms Identifying Transportion as a Major Constraint

12 Infrastructure Issues Latin America and the Caribbean OECS Average Grenada 0 Number of Electrical Outages Duration of a Typical Electrical Outage (hours)

13 Days to Obtains an Operating License Days to Obtain a Construction-Related Permit Percent of Firms Identifying Tax Rates as a Major Constraint Tax Issues Latin America and the Caribbean OECS Grenada

14 Tax Issues Latin America and the Caribbean OECS Grenada 0 Number of Visits with Tax Officials Days to Obtain and Import License

15 Grenada: Country Context Real economic output contracted by 6% between 2009 and Projected growth of less than 2% over the short- to medium-term ( ). Exports have fallen by a cumulative 50% since 2008.

16 Main Issues: Grenada Main Issues from Enterprise Survey: Access to Finance Inadequately Trained Labour Force Electricity Costs Tax Rates Lowest Ranks from Doing Business Survey: Resolving Insolvency (Rank 185/185) Registering Property (Rank 151/185) Getting Credit (Rank 104/185)

17 Grenada: Access to Finance and Getting Credit Collateral: 220% of Loan Value Loans Requiring Collateral: 66% Investments: Internally Financed: 60% Bank Financed: 28% Supplier Credit: 4% Equity/Stock Sales: 4% Strength of Legal Rights Protection (8/10) Depth of Credit Information (0/6) No Public Registry Coverage No Private Registry Coverage

18 Country Grenada: Registering Property Rank (out of 185) Number of Procedures Time (days) Cost (% of property value) St. Lucia % Dominica % Antigua and Barbuda % St. Vincent and the Grenadines % Grenada % St. Kitts and Nevis %

19 Grenada: Labour Force Issues Percent of Firms Offering Formal Training Percent of Firms Identifying Labour Regulations as a Major Constraint Percent of Firms Identifying an Inadequately Educated Workforce as a Major Constraint Grenada Latin America and the Caribbean

20 Grenada: Electricity Costs and Tax Rates Average Duration of a Typical Electrical Outage Days to Obtain Electricaal Connection Percent of Firms Owning or Sharing a Generator Latin America and the Caribbean Days to Obtain an Import License Days to Obtain a Constructio n-related Days to Obtain an Operating License Grenada OECS Latin America and the Caribbean

21 Critical Issues Identified Critical Issues from Enterprise/Doing Business Surveys High collateral requirements Concentration on debt financing Absence of Credit Bureau Inadequately trained labour force Cost of crime/cost of security

22 Critical Issues Identified Critical Issues from Interviews Regulator needs to adapt to the concept of microenterprise financing Training for members of cooperatives, particularly smaller entities Training in credit analysis for financial institutions High port charges Stamp duty is a disincentive to doing business

23 Critical Issues Identified Critical Issues from Interviews Debt issues limit tourism investment High cost of financing tourism investment Energy costs Agriculture (finance, record keeping, praedial larceny, irrigation and wages)

24 Caribbean Growth Forum Investment climate Enact investment promotion legislation Small business development Act Reduce port and real estate transaction costs Logistics and connectivity Greater use of renewable energy in electricity generation Export strategy Reduce processing time for applications/permits Skills and Productivity Training program for tourism and hospitality Training in technical skills in agriculture Accreditation Act

25 Responses Required Ranking of issues identified: Are these the most critical? Priorities: Are priorities identified in keeping with industry needs? Action Plan: Views on recommended action plan.

26 END

27 Critical Issues Identified Critical Issues from Enterprise/Doing Business Surveys High collateral requirements Concentration on debt financing Absence of Credit Bureau Inadequately trained labour force Cost of crime/cost of security

28 Critical Issues Identified Critical Issues from Interviews Regulator needs to adapt to the concept of microenterprise financing Training for members of cooperatives, particularly smaller Training in credit analysis for financial institutions High port charges Stamp duty is a disincentive to doing business

29 Critical Issues Identified Critical Issues from Interviews Debt issues limit tourism investment High cost of financing tourism investment Energy costs Agriculture (finance, record keeping, praedial larceny, irrigation and wages)

30 Priorities Cost of finance Workforce skills Most Binding Constraints Energy costs Port charges and taxes (stamp duty charge)

31 Action Plan Development: Recommendations Action 1: mainstream PSD in country and regional strategic plans Action 2: Rationalisation and streamlining of public sector s business support framework through Private- Public Dialogue to ensure a revised system that addresses both the needs of the private sector as well as wider obligations of Government. Action 3: Reduce the cost of finance through the reduction of risk and risk-averseness through the establishment of a credit bureau and greater competition in the financial sector.

32 Action Plan Development: Recommendations Action 4: Exploitation of renewable/alternative energy both as a cost-reduction tool as well as an opportunity for enterprise development in the renewable/alternative energy sector. Action 5: establish a high level steering (governmentemployer-labour) committee to guide and oversee PSD strategies Action 6: Education and training curriculum reform that addresses the long term strategic direction of Government as well as the more immediate needs of the private sector. The long term strategic direction of Government should be constructed on the basis of dialogue with the private sector.