Caribbean Open Trade Support (COTS) Quarterly Report: October – December 2006

The Caribbean Open Trade Support (COTS) program was a component of the Caribbean Regional Program of USAID/Jamaica, designed to facilitate the transition of the region – in particular, Antigua, Barbuda and Dominica – to open trade, and to enable the countries to compete more successfully and sustainably in the global economy. Among other business enabling activities, the program supported the streamlining of land registration and administration procedures and capacity strengthening of land administration staff.

Caribbean Open Trade Support (COTS) met or exceeded all of its targets for this first quarter of the new program year. COTS’ Doing Business component surpassed all of its targets in Antigua and Barbuda and Dominica for its demand driven growth initiatives. COTS surveyed close to thirty businesses during the quarter, and signed Memoranda of Understanding with 7 firms based on adjusted sales potential return on investment. COTS achieved 516% of its quarterly sales targets in Antigua and Barbuda, and in Dominica achieved 147% of its quarterly targets. COTS expects that the new interventions alone will result in more than US $1 million in sales over the life of the project.

COTS is finalizing its technical assistance to provide policy analysts to each of the new business alliances in Antigua and Barbuda and Dominica. Beginning early in the new year, the analysts will work with each of the alliances to establish a prioritized economic and trade policy agenda, coming out of which will be policy papers to inform a dialogue between the alliances and their respective public sector counterparts. This approach is a major step forward for the private sectors in both Antigua and Barbuda and Dominica to work together in their respective countries on policy issues that are of mutual concern to the wide range of private sector organizations that exist. This step is also welcomed by public sector colleagues, who often comment that they get little or no informed response or input from the private sector on important economic and trade policy issues.

COTS largely completed its work on legislative drafting to support the countries’ compliance with regional and international treaties and trade agreements. In Dominica, some legislative items were substituted for new items in order to move beyond delays resulting from policy decisions not yet taken by senior law makers. In spite of this substitution, COTS achieved 117% of its target in Dominica, and 300% of its legislative drafting target in Antigua and Barbuda. Important items completed during the quarter include revised draft bills to replace the existing National Development Corporation in Dominica with the new investment promotion agency, InvestDominica and new tourism agency, DiscoverDominica. In Antigua and Barbuda COTS completed important legislative drafting work on draft patent regulations. COTS expects that both governments will likely require some limited additional assistance to complete several outstanding legislative items in the next quarter, particularly in the area of standards.

Responding to a request from the Government of Antigua and Barbuda, COTS prepared a National Trade Policy Framework for Antigua and Barbuda. The framework provides the government with alternatives to establish a more effective public sector mechanism to support trade policy development and implementation, along with an assessment of sectors that offer more potential for economic growth in line with Antigua and Barbuda’s competitive advantages. The Minister of Finance and the Economy is expected to implement the recommendations as early as January 2007.

Working with the World Bank and the OECS Secretariat, COTS spearheaded the regional launch of the first Doing Business report for the OECS region. More than one hundred people, including representatives from all 6 OECS independent states, attended this landmark event in St. Lucia. The report provided the first opportunity for all 6 OECS countries to be benchmarked using this important and internationally recognized tool that assesses the ease of doing business in various countries. With Antigua and Barbuda’s overall ranking at 33, and Dominica’s overall ranking at 72, COTS is working with both countries to improve administrative processes such that each country’s ranking is expected to improve in the coming year. Also resulting from this work is a request from St. Kitts and Nevis that COTS support administrative reform efforts early in the next quarter to improve its ranking in the next Doing Business report.

During this quarter COTS provided important technical assistance to establish the Antigua and Barbuda Investment Authority (ABIA). COTS prepared a corporate plan for the new agency, which proposes an organization structure, personnel functions, and marketing strategy, among other important recommendations. This is a major step forward to attract investment, ease business start-up, and improve transparency and timeliness in obtaining investment incentives. The government plans to open the new agency very early in the next quarter, and COTS anticipates providing additional technical assistance to ensure that the ABIA functions smoothly. In conjunction with this work, early in the next quarter COTS will also assist the Company Registrar in Antigua and Barbuda to improve the company registration process.

COTS completed the first phase of its technical assistance to support customs reform in Dominica by completing the human resource capacity assessment of Dominica’s Customs Agency. Resulting from this work, COTS expects that it will support Dominica to establish an Intelligence Unit, an important administrative reform initiative that should substantially speed up the customs clearance process, thereby reducing the time and cost to the importer and exporter. The time and cost to clear goods through customs is an important measure on the World Bank Doing Business report, and one in which Dominica has room to substantially improve its position.

Another important administrative reform component that COTS completed during the quarter is its support to Dominica’s Land Reform Task Force to reform the land management and administration process. Based on COTS’ work, the Task Force will meet in January in order to put forward its approach to implement the recommendations provided that will reduce the number of agencies and the number of processes and length of time required to complete a land transaction. This work also supports COTS’ Reducing Risk work, as the new integrated process will support improved decision making regarding land development in accord with exposure to natural hazards.

Working with the OECS Secretariat and the national disaster offices in Antigua and Barbuda and Dominica, local stakeholders completed their first national level assessment using the Disaster Risk Management Benchmarking Tool (BTool). The OECS secretariat expects to prepare submissions to each Cabinet in January that will analyze the BTool results, and highlight areas for each country to focus on in order to reduce national level vulnerability. COTS will use the results to identify additional areas of program intervention in Antigua and Barbuda and Dominica. The outcome of the assistance will be to improve each country’s score on the next annual BTool assessment. The OECS Ministers of Environment overwhelmingly endorsed the use of the BTool at their annual meeting, and CDERA has indicated that it wants to work with COTS and the OECS Secretariat to ensure that countries throughout the Caribbean utilize the BTool. COTS will work with the OECS Secretariat and CDERA early in the next quarter to begin this roll out.

COTS completed its technical assistance to the Environment and Sustainable Development Unit (ESDU) of the OECS Secretariat to develop an e-library system in order to make available the large number of documents that ESDU has in the area of disaster preparedness and environmental resources. COTS enabled ESDU to implement a software program that is being used throughout the wider Caribbean region. This program will make it possible for OECS member states to access this information via the on-line system, and it will be operational early in the new year.

COTS worked with private and public sector counterparts in Antigua and Barbuda to prepare disaster business plans, and sector preparedness and recovery plans in Dominica. Resulting from this work, COTS revamped the training materials to address the needs of smaller businesses that require preparedness and recovery plans. COTS will host additional sessions in the next quarter to work with smaller businesses to implement preparedness and recovery plans using the revised training materials. The Dominica Hotel and Tourism Association has also appointed a task force to oversee the completion of the Tourism Sector Disaster Plan by March.

During the quarter, COTS completed its baseline survey work of the private sector, public sector and media workers in Antigua and Barbuda and Dominica to evaluate their level of understanding of business opportunities available via regional integration and international trade mechanisms, such as the CARICOM Single Market and Economy. The survey results generally indicate that although there is some support for the CARICOM Single Market and Economy, there is still little understanding of the benefits to the OECS sub-region and there is still little confidence in their countries’ ability to benefit from the CSME. COTS is sharing the survey results with public and private sector colleagues at the national and regional levels to support new and revised programming to address issues raised by the survey.

In response to this, COTS is presently working with the Caribbean Regional Negotiating Machinery (CRNM) to finalize private sector trade briefings in Antigua and Barbuda and Dominica that will take place early in the next quarter to focus specifically on businesses that have succeeded by taking advantage of new opportunities under the CSME. To further support improved information dissemination, COTS completed its consultations with the CSME Unit to define the CSME website upgrading requirements that COTS will support in the next quarter. And, to ensure that media workers are better trained to accurately report on regional and international trade and economic policy issues, COTS will be contracting with CARIMAC to implement a certificate level training program for representatives of the media and public sector public relations officers in Antigua and Barbuda and Dominica.

Chemonics International submitted a technical and financial modification to USAID in response to USAID’s notification of an expected 31% reduction in life of project funding, and the need to fulfill requirements in accord with biodiversity within the scope of the task order. Chemonics’ submission proposed that a new long term position be established to develop and implement a biodiversity component that is fully compliant with these earmark requirements. The first phase of this activity would include preparation of this component’s work plan in line with the threats assessment that USAID completed in 2006. Chemonics anticipates that USAID will complete its review of Chemonics’ response early in the next quarter, and will advise of any outstanding issues prior to completing the modification.

COTS is working closely with USAID to implement the new operational plan process that USAID is undertaking on a world wide basis. COTS is developing new indicators and targets in accord with the standardized program areas and indicators that USAID has developed to manage all of its programs.

COTS’ Administrative Reform Specialist, Mr. Swinburne Lestrade, departed at the end of the quarter in response to Dominica’s Prime Minister requesting his support to implement a number of important initiatives that are delayed. COTS’ new Administrative Reform Specialist, Mrs. Deborah Hackshaw, began work during the quarter, ensuring a smooth transition in this important program area.

COTS has also identified a qualified candidate to become the COTS Doing Business team leader. Chemonics will submit this approval request to USAID early in the next quarter.

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