Overview

  • The Organisation of Eastern Caribbean States (OECS) comprises a diverse set of small and open island countries that are highly prone to natural disasters, including: Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. Because of limited economies of scale due to their small size, they also tend to specialize in a few products and services, and are not very diversified. These economies rely extensively on tourism and to a lesser extent agriculture, and are dependent on external markets for food and fuel imports. The countries also receive high worker remittances inflows. As a result, they are subject to excessive terms of trade volatility. Despite high human development indices, OECS have not succeeded in reducing poverty to levels compatible with their level of per capita income. Unemployment, especially among women and youth, remains high, which also contributes to high emigration rates.

    The impact of the 2008 global financial crisis was severe and led to a deep and extended recession in the region, as tourism, remittances, and financial activity decreased sharply, labor market conditions deteriorated, and debt and fiscal imbalances increased to high levels with heavy public borrowing to support growth and to respond to natural disasters that they also faced. The subsequent economic recovery which began to take hold in 2013 in the region was supported by strengthened tourism and construction activity, as well as a recovery in foreign direct investment flows, and to a lesser extent the region’s flagship citizenship by investment programs (CBI). Real GDP growth in the Eastern Caribbean is estimated to have eased to 2.4 percent in 2016, partly due to lower returns in the tourism and construction sectors. Tourist arrivals to the OECS reduced slightly, reflecting a contraction in cruise ship and airport arrivals from the United Kingdom and Canada. This was tempered by increased airport arrivals from the United States. Construction activity has also slowed down partly due to reduced citizenship by investment inflows in most countries.

    At country level, we observe divergent growth performance: Grenada experienced a deep contraction in agricultural production due to a severe drought, reaching a 3.9 percent growth; Saint Lucia and Antigua and Barbuda posted a less pronounced deceleration in growth, given tepid tourism activity. In contrast, Dominica experienced a 3.3 percentage point recovery to 1.5 percent growth in 2016, mainly driven by reconstruction activities following the devastation of Tropical storm Erika. St Vincent and the Grenadines also experiencing a rebound with the construction of the newly completed international airport, GDP growth expanded to 1.8 percent.

    Economic growth for the OECS region is expected to firm slightly to an average of 2.5 percent during 2017-2019. In particular, this reflects a projected rebound in growth in St. Vincent and the Grenadines, and Dominica, as they continue to recover from severe disasters, and in Antigua and Barbuda, assuming it pursues its fiscal reforms.

    Last Updated: Apr 10, 2017

  • The OECS Regional Partnership Strategy (RPS) for the period FY15-19 focuses on laying the foundations for sustainable inclusive growth.

    In line with the OECS national and regional development strategies and in coordination with bilateral and multilateral partners, the three main areas of engagement are:

    • Enhancing productivity, competitiveness and employment: To improve the investment climate and attract foreign direct investment, the WBG will support activities to promote more predictable and lower energy prices; increased access to regional broadband networks and development of ICT services; promote innovation and entrepreneurship through privately funded incubators and training; strengthen linkages between the tourism and agribusiness sector; as well as support the development and implementation of a comprehensive strategy to support the financial system.
    • Modernizing the public sector: OECS governments are committed to implement fiscal consolidation measures to reduce fiscal deficits and promote sound and prudent debt management. In this effort, the WBG will support more effective and transparent public administrations, more robust institutional capacity and stronger frameworks for partnership with the private sector to meet the region’s growing infrastructure needs.
    • Building social and climate resilience: OECS countries have universal education coverage, however, learning achievement remains low and lack of adequate skills is cited as a top constraint by firms. The Bank will support vocational training for over 2,600 young people and help consolidate and improve the targeting of existing social protection systems. In addition, the Bank will continue to assist governments in strengthening their capacity to respond to natural hazards and adapt to climate change and rising sea levels.

    Constrained in general by the small size of investments in the OECS, the IFC and MIGA will contribute to the RPS objectives through selective investment support, depending on opportunities.

    The IFC will focus on crisis response; job creation and inclusive growth; innovation, competitiveness, and integration; and climate change. MIGA faces limited opportunities for engagement because of the small market size of the OECS countries.

    The RPS is anchored on the Comprehensive Debt Framework, developed by the Bank in 2010 at the request of the Heads of Government of CARICOM countries.

    The indicative IBRD lending program for the six OECS countries is of around US$120 million, or up to a maximum of US$20 million for each OECS country for the period of the RPS (FY15-19). In addition, four OECS countries (Dominica, Grenada, St. Lucia, and St. Vincent and the Grenadines) can also count on an International Development Association (IDA) national allocation. The IDA17 (FY15-17) allocation for the OECS is equal to SDR60.2 million (roughly USD 85 million).

    Last Updated: Apr 10, 2017

  • Important results have been achieved during the past several years in Government projects financed by the World Bank.  These include:

    Social services:

    • Over 2,000 unemployed youth in St. Lucia and Grenada received training and regional and internationally recognized certification in competency-based skills that would enable them to secure employment beyond individual countries.
    • A regional occupational standards framework to improve the quality and relevance of technical and vocational education was established in Saint Lucia and Grenada who are now authorized by the Caribbean Association of National Training Agencies (CANTA) to issue regional certifications.
    • Nine OECS Member States developed and endorsed a results-based regional education strategy “Every Leaner Succeeds”, which provides a framework for a regional approach to achieving quality education for all in the OECS.
    • The first regional education statistical digest for nine OECS countries was published, and constitutes the baseline for monitoring the implementation of the regional education strategy.

    Building resilience:

    In recent years, disaster risk management (DRM) and climate change adaptation activities have come to represent a growing portion of the overall World Bank portfolio in the Caribbean.

    • Within a few weeks of the recent Tropical storm Erika in Dominica (August 2015) and the December 2013 flash floods in Saint Lucia and Saint Vincent and the Grenadines (SVG), the World Bank had a team on the ground assisting with the damage and loss assessments and was able to mobilize some resources to support the governments’ recovery effort including debris removal, construction of temporary road infrastructure and cover other emergency operation costs.
    • Saint Lucia’s success in addressing landslide hazards in urban communities is a result of an innovative community-based and scientific approach, the Management of Slope Stability in Communities (MoSSaiC).
    • In Grenada, 1,500 farmers received technical assistance and financial support to buy seeds, fertilizer, pesticides and tools, and protect themselves from climate and economic shocks after two consecutive hurricanes.
    • In Grenada, IDA funding supported critical investments to the Grenada Maurice Bishop International Airport required by the International Civil Aviation Organization (ICAO) standards to enhance its disaster risk management capacity and avoid downgrading of airport certification. 
    • In St. Vincent and the Grenadines, Government officials and engineers have been trained in Geographic Information Systems (GIS), disaster risk management and climate adaptation and all public buildings and primary road networks have been mapped with the support of IDA. In addition, three schools and three community centers to be used as emergency shelters during extreme weather events have been rehabilitated.
    • Through the OECS-Catastrophe Insurance Project, all OECS countries have been able to join the Caribbean Catastrophe Risk Insurance Facility, which is the first multi-country catastrophe risk pooling mechanism able to mobilize emergency funds within the first two weeks of the disaster.
    • In St Lucia, an island-wide assessment of residential buildings was conducted to help identify and prioritize specific home improvements for resilience-building, which would be eligible for financing from the Climate Adaptation Finance Facility. In addition, more than 35,000 people benefited from the rehabilitation of two bridges, 11 schools and four health facilities that had been damaged by Hurricane Tomas in 2010.

    Competitiveness

    • The number of subscribers of fixed Broadband Services went from 8 percent in 2008 to 15 percent in 2014, while the number of Internet users increased from 34 to 56 percent in the same period. Broadband performance (in terms of downloading speed) more than doubled in Grenada, Dominica and St. Lucia, and increased by more than 50 percent in St. Kitts and Nevis during the 2008-2011 period. The quality of service improved as well. The Telecommunications and ICT Development Projects also increased the use of information and communication technologies among rural underserved communities, persons with special needs, and contributed to improve communications, collaboration, e-learning and research for students.
    • Policy reforms in the energy sector helped Grenada increase the share of installed power generation papacy from renewable energy technologies to 2 percent of total generation capacity in 2015 from 1 percent in 2013.
    • In addition, regulatory reforms helped Grenada increase tourism revenue by nearly 35 percent from 2013 to 2014.

    Last Updated: Apr 10, 2017

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LENDING

Organization of Eastern Caribbean States: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


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Country Office Contacts

USA
1818 H Street NW, Washington, DC 20433
+1 202-458-2656
cchapoy@worldbank.org
DOMINICAN REPUBLIC
Ave. Lope de Vega No. 29
Torre Novo-Centro, Piso 10,
Ensanche Naco, Santo Domingo
+809 872 7300
adelapaz@worldbank.org