Report No. 5457-MO Economic Memorandum Montserrat April 17, 1985 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY .: : :: '. ' --: *: - : - -: f; -- . ;--:' ." : ~ - ,; ________ ( -A-L --- 0 - '--' -------- - -': LA2 4- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~1 ~ ~ ~ ~~~~ **~~~~7- - --r ~ ~ ~ ~ ~ ~~ - '-'A * :A - tife W i : .-f''..: -'' ' : I4 \if D't ; 2' Xt:.;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~': , - .. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ _,! - .43 Docuentof the World Bank' Thi docume nt has la: restncted distribution an a b sd by eaeet only in the;oe3rffa'nceo'f their ofical d'uties. Itscontlents may not otherwise be',diisdosed without-World- Banik authonizat~ion- - CURRENCY EQUIVALENTS Currency Unit East Caribbean Dollar Since its creation in 1965, the East Caribbean dollar was tied to sterling at the rate of £1 = EC$4.8. In July 1976 the link with sterling was broken and the East Caribbean dollar was aligned with the US dollar at the rate of US$1 = EC$2.70. Since July 1976: EC$1.00 = US$0.370 or US$1.00 = EC$2.70 FOR OMcIAL USE ONLY Preface and Abstract It is estimated that overall economic activity in Montserrat declined marginally in 1983 because of a drop in tourist arrivals, the drought which caused agricultural output to fall, and the depressed construction industry. The slowdown in economic activity, particularly the drop in imports, had the effect of reducing the Central Government's current account surplus to 0.9Z of GDP from a peak of 3.1% in 1981. In order to prevent further weakening in iscal performance, the authorities should examine ways to control the growth of the wages and salaries component of current expenditures. A decrease in import demand and slightly higher exports of goods and services resulted in a lowering of the external current account deficit from 30% of GDP in 1982 to 10.5% in 1983. Growth in agriculture has been hindered by severe marketing problems, poor transport facilities and an inadequate extension service. The government has drawn up an Agricultural Rehabilitation Project in its effort to stop the decline in the sector. In order to exploit fully the potential in the tourism sector, it will be necessary to increase the level of advertising and improve and expand tourist facilities. The invt.stment program accords priority to projects which support the directly productive sectors (agricultural rehabilitation, industry credit, factory building, and tourism promotion). Montserrst's past economic performance indicates that satisfactory long term economic growth can be achieved, provided the Government continues its efforts to broaden the economic base of the island and maintains prudent fiscal management. I Thi doument has a resictd distributon and may be used by eipients only in the performaneof zheir ofrical duties. its ontents may not othewise be discld without World DBank authorization. This report is based on the work of an economic mission to Montserrat during October 1984. The mission consisted of Ms. Theresa Jones (IBRD); Mr. Vincent M. Rague (IBRD); and Ms. Joan Ahern (IBRD). In addition, IMF staff assisted in preparing the fiscal accounts. The Statistics Office of the Government of Montserrat assisted greatly in updating statistical information. MONTSERRAT TABLE OF CONTENTS Page No. COU NTRY DATA SUMMARY AzND CONCLUSIONS ...................................... i-iii 1. ECONOMIC BACKGROUND ........................................ 1 A. Overview and Recent Economic Performance ....1............ B. Population and Employment ..... ... ...... ...... . ...... 2 C. Public Sector Finances .................. .... 2. 2 D. Savings and Investment ...... ..................... ....... 4 E. Money and Credit ........................................ 5 F. Prices and Wages ........................ 5 G. Balance of Payments ....... ........................ .5 IT. DEVELOPMENT POLICY ISSUES .................................. 7 A. Agriculture ......... .................................... 7 B. Industry ................................................ 9 C . Tourism ....... ......................................... 16 D. Other Sectors ........................................... 18 III. PUBLIC SECTOR INVESTMENT PROGRAM .............. ...... 22 A. Introduction .... .................................. 22 B. Progress of the Program: 1984 ................. .. ......... 22 C. The Public Sector Investment Program, 1984-87 ..... ....... 23 D. Financing the Program .................................... 23 IV. PROSPECTS .................................................... 25 GOVERNMENT'S PROJECT LISTS ....... ............................ 26 STATISTICAL APPENDIX ......................................... 55 NAP Page 1 of 2 COUNTRY DATA -MONTSERRAT AREA POPULATION DENSITY 100 m2 11,733 (Cid-1983) 117 per km42 Rate of gpwth: O.OZ (from 1972 to 1982) 584 per tom2 of arable land POPULATION CHARACERSTICS 1980 HEALTH 1980 Crude Birth Rate (per 1,000) 19.3 Population per physician 1536 Crude Death Rate (per 1,000) P.9 Population per hospital bed 225 Infant Mortality (per 1,000 live births) 4u.2 INCOME DISTRIBUTION 1975 DISTRIBUTION OF L4ND OWNERSHIP (Year) Z of national incoe, highest quintile 39.2 Z oned by top 10X of owners - lowest quintile 3.5 Z owned by smllest 1OX of owners - ACCESS TO PIP WATER 1980 ACCESS TO ELECTRICITY (Year) 2 of population - urban 82.9 % of population - urban - - rural 73.1 - rural NUTRITION EDUCATION 1980 Calorie intake as Z of requirements - Adult literacy rate % 76.3 Per capita protein intake Primary School Enrollment Z 99.0 GNP PER CAPITA IN 1983: US$2,360 a/ GROSS NATIONAL PRODUCr IN 1983 ANNUAL RAIE OF GROWrH (Z,constant prices) USS Mln. _ 1975-81 1983 GNP at Market Prices 32.4 100.0 5.3 -0.5 Gross Domestic Investment 10.3 31.8 8.8 -15.4 Gross National Saving 6.8 21.0 Current Account Balance -1.3 -4.0 Exports of Goods, NFS 8.0 24.7 5.3 -7.3 Imports of Goods, NFS 21.6 66.7 6.3 -10.3 OUTPUT 1982 Value Added USS Mln. I Agriculture 1.2 4.1 industry 5.6 19.0 Other 22.7 76.9 Total 29.5 100.0 GOVERNMENT FINANCE Central Goveronent (ECS miln.) Zof GDP 1981 1982 1983 1981 1982 1983 Current Receipts 18.3 20.1 21.0 24.9 25.7 24.0 Current Expenditure 16.0 18.2 20.2 21.2 23.3 23.1 -__...ant Surplus 2.3 1.9 8.0 3.1 2.4 0.9 Capital Expenditures 10.5 7.8 4.7 14.3 10.0 5.4 External Borrowing (net) b/ 7.1 6.4 3.7 9.7 8.2 4.2 a/ Atlas method. bi includes external grants. not applicable Page 2 of 2 COUnmY DATI - MONTERRAT MONEY, CREDIT AND PRICES 1976 1977 1978 1979 1980 1981 1982 1983 Money and Quasi Money 14.9 15.6 17.2 19.0 20.2 22.8 20.1 25.2 sank Credit to Public Sector -0.5 -1.5 -1.1 -2.3 -2.3 2.0 2.0 0.8 Bank Credit to Private Sector 11.3 11.3 11.9 9.0 12.4 19.6 22.9 23.6 (Percentages or Index Numbers) Money and Quasi Money as Z of GDP -63.4 61.2 61.4 54.0 45.3 31.1 24.8 28.8 General Price Index (1963-100) 146.1 165.1 180.6 210.0 272.2 291.5 320.1 335.1 Annual x Changes in: General Price Index - 13.0 10.9 16.3 29.8 7.1 9.8 4.7 Bank credit to Public Sector - -200.0 27.0 -109.0 0 187.0 0 -60.0 Bank credit to Private Sector - 0 5.3 -24.4 37.8 58.1 16.8 3.1 BALANCE OF PAYHENTS MERCHANDISE EXPORTS (AVERAGE 1981-1983) 1979 1980 1981 1982 1983 USS '000 Z Exports of Goods, NFS 4.5 5.1 6.9 7.5 8.0 T-Shirts, Shirts & Jeans 103.5 6.9 Imports of Goods, NFS 12.0 16.9 22.2 22.9 21.6 Electronic Components 207.0 13.7 Resource Gap Leather 41.7 2.8 (deficit - -) -7.5 -11.8 -15.3 -15.4 -13.6 Hot Peppers 12.7 0.1 Live Plants 130.6 8.7 Factor Payments (net) -0.03 -0.01 -0.01 -0.2 0.2 Polyprophelene Bags 625.5 41.5 Net Transfers 4.9 5.6 5.0 6.5 10.0 All other craD"dities 385.0 25.6 Balance -Current Accotmt -2.6 -5.9 -10.3 -9.1 -3.4 Total 1506.8 100.0 EXrENNAL DEBT, DECaIDER 31, 1983 NET MIX Borrowing 0.1 0.2 0.5 0.6 0.2 US$ mln. Disbursement 0.2 0.3 0.6 0.7 0.3 Public Debt, inc. guaranteed 2.6 A=Drtization 0.1 0.1 0.1 0.1 01. Non-guaranteed Private Debt - Total Outstanding & Disbursed - Capital Grants 1.7 2.0 2.2 2.1 1.3 Other Capital (Net) 0.7 3.8 6.9 5.0 n.a DEBT SERVICE RATIO FOR 1983 1/ Increase in Reserves (-) 0.2 -0.1 - 0.1 n.a Z Public Debt, incl. guaranteed 2.2 Non-guaranteed Private Debt - Total Outstanding & Disbursed - RATE OF EXCHANGE IBRD/IDA LENDING (December 1982) (Million USS): IBRD IDA Since - May 1976 US$1.00 - EC$2.70 1.00 - US$0.37 Outstanding inc. Undisbursed - - ,/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. SUMMARY AND CONCLUSIONS i. Performance: In 1983, Montserrat experienced a slowdown in economic activity due to the completion of the Medical School and the recession in the industrialized countries (particularly USA, Canada and U.K. which account for over 50% of the stay-over tourists to the island). GDP fell by 0.5% with estimates for 1984 indicating that there will be no real growth in the economy. With the exception of manufacturing and Government Services (which grew by 4.5% and 8.7% respectively), all other sectors registered declines in activity. As a result, unemployment rose from 5.6% in 1982 to 7% in 1983 and was still rising in 1984. ii. Fiscal Accounts and Balance of Payments: The slowdown in economic activity, particularly the drop in imports, had the effect of reducing the Central Government current account surplus to 0.9% of GDP from a peak of 3.1% in 1981. In order to prevent further weakening in fiscal performance and in view of the Government's belief that there is little scope for additional tax increases (taxes are currently 23% of GDP), the authorities should examine ways to control the growth of wages and salaries, whose share of current expenditures has increased significantly in recent years. A decrease in import demand ausd slightly higher exports of goods and services resulted in a lowering of the external current account deficit from 30% of GDP in 1982 to 10.5% in 1983. Estimates for 1984 indicate that exports will show an improvement over 1983. Slower economic activity, combined with a drop in international inflation and the appreciation of the US dollar resulted in a fall in domestic inflation from 8.4% at the end of 1982 to 7% at the end of 1983. iii. Agriculture: In 1983 agricultural production fell further by 15% partly due to the recent drought. Agriculture has been in a state of general decline over the past several years. Growth in the sector is hindered by severe marketing problems, poor export facilities, lack of adequate extension services and the absence of an effective credit system. The Government has drawn up an Agricultural Rehabilitation Project in its effort to stop the decline in the sector. The Project proposes to establish tree crops, develop livestock, expand vegetable production and increase irrigation. The Government is also assisting farmers to better match supply and domestic demand. iv. In order to meet the objective of rehabilitating agriculture, it will be necessary to increase farmer training and upgrade extension, marketing and credit services. The mission therefore, recommends that: (a) a decision be made expeditiously about the reorganization of the DFMC so that farm credit and marketing outlets can be made available to farmers;(b) the abattoir be redesigned and upgraded as soon as possible; (c) production matching be extended; and (d) the recently introduced subsidy to farmers for irrigation be treated as a temporary measure to prevent it from becoming a burden on Government finances. ii v. Manufacturing activity in Montserrat accounted for 9.5X of GDP and 11.2% of employment in 1983. Major activities are in garments, plastics and electronics assembly. A recent study by the Inter-Agency Resident Mission in Antigua suggests that there is a sufficient pool of labor for the island to evolve as a center for capital intensive manufacturing (electronics, agro-processing and marine related activity). To carry out these proposals (which the Government has accepted in principle) it would be necessary to: introduce computer literacy at the high school level and as part of vocational training; construct additional factory shells; reorganize the DFMC; and encourage local enterpreneurship by providing finance and advisory services to small businesses. In addition, the Government should continue its current review of public enterprises (such as the DFMC and those enterprises under the management of MIEL) and divest itself of those that are not viable. vi. Tourism plays a central role in the economy of Montserrat by stimulating construction and service activities. A survey by the Caribbean Tourism Research and Development Center indicates that tourism in Montserrat has growth potential and the capacity to contribute further to the economic development of the island. In 1983, stay-over tourist arrivals dropped by 4%; however, the outlook for 1984 is brighter. To exploit fully the potential, it will be necessary to increase the level of advertising and improve and expand tourist facilities once occupancy rates have risen above the current low levels. In addition, there is a need for expanded beach and entertainment facilities and restaurants. vii. Other Sectors: Montserrat has a sound basic economic infrastructure, a good telephone network and a growing aviation industry that provide a link with the outside world. There are plans to improve electricity delivery by replacing Montserrat Electricity Services' aging generators and computerizing operations. A Ten-Year master plan has been drawn up by the Water Authority to harness and improve water resources on the island. The education system is being restructured by supplementing academic subjects with technical and vocational training. Substantial financial and technical assistance will be required to effectively carry out these programs. viii. The public sector investment program expenditures of EC$7.3 million in 1984 emphasized economic and social infrastructure development (with allocations of 69% and 23%, respectively). Major projects included road resurfacing, purchase of a new aircraft, construction of the old people's home and the West Indies scholarship program. Most of the projects were financed by external grants. The weak financial position of the DFMC continues to prevent access to CDB credit lines for industry, tourism and agriculture. ix. The draft Three-Year Development Plan (1984/85 - 1987/88), prepared by the Development Unit, envisages public sector investment expenditures of EC$81 million over the plan period. The Government recognizes that the target is ambitious compared to previous levels of donor support. lii The mission estimates that about EC$30 million would be realistic over the period 1985-87 (almost 87% of the estimate has either committed or identified sources of financing). The investment program accords priority to projects for infrastructure development and support to directly productive sectors (agricultural rehabilitation, industry credit, factory building and tourism promotion). Given Hontserrat's limited resources, successful execution of the program will depend upon the availability of substantial external concessional finance and technical support and the Government's ability to appraise, monitor and execute the projects. x. Prospects. Hontserrat's economic and financial performance in the recent past indicates that satisfactory long term'economic growth can be achieved, provided the Government continues in its efforts to broaden the economic base of the island and maintains prudent fiscal management. In the medium term, 1985-87, prospects of a 2% to 3% real growth in GDP will depend on sustained growth in tourism and manufactured exports (plastic bags, garments and electronic components) plus successful implementation of the public sector investment program (estimated at ECS30 million over the three year period). According to the Government, the 2-3% growth rate is unlikely to be exceeded during this period because no major construction projects are expected to be undertaken. In its efforts to create a broad base for economic growth, the government faces several constraints: a small population of 12,000 people, limited arable agricultural land; and few natural resources. However, the island offers investors the advantages of: tourist potential, a sound, well-maintained basic infrastructure, a well educated and trainable labor force and good links with the outside world (telephone and a growing aviation industry). The medium-term growth prospects for Montserrat will, therefore, depend on the ability of the Government to tap these advantages and mobilize financing for investment. To attract increased donor support, it wil be necessary for the Government to continue to improve its capability to select, appraise and monitor investment projects. MONTSERRAT I. ECONOMIC BACKGROUND A. Overview and Recent Growth Performance Overview 1.1 Montserrat is a small British dependent territory, located aong the Leeward chain of Caribbean islands, where about 12,000 people live In an area of 39 square miles. The island has a narrow resource base: a small economy, limited arable agricultural land due to some steep gradients, and few natural resources. The Government's economic priorities are the rehabilitation of agriculture and the development of manufacturing industries, along with efforts to promote tourism, in order to reduce the vulnerability of the economy to external influences. Tourism, tourism-related construction, and manufacturing, which currently dominate economic activity in Montserrat, are in their embryonic stages of development with the full economic potential yet to be realized. Despite the constraints, Montserrat offers certain advantages for investors: a sound basic infrastructure, a well educated and tralnable work force, a good telephone system and a growing aviation industry that provides a link with the outside world. Performance 1.2 As shown in Table 1.1 below, growth of the Montserrat economy between 197b and 1983 has been very uneven. Between 1975 and 1977, real GDP fell by 1.4X per year, malnly as a result of declines in agriculture and oonstruction activity. From 1978 to 1980 the economy expanded rapidly at an average rate of 9Z annually, responding to a boom in tourism, tourismrrelated building and construction of the Medical School. After three years of high growth, the economy of Montserrat slowed to moderate growth in 1981-82 before registering a slight decline of 0.5Z in 1983. Estimates for 1984 indicate that the economy will register no real growth. The slowdown is a delayed reaction to the recession in the Industrial countries and also reflects the sensitivity of the economy to the implementation of major investment projects. With the exception of manufacturing and government services all sectors of the economy registerec' declines in 1983. -2- Table 1.1: Real Growth and Share of GDP by Sector, 1979-1983 (Z change at constant 1977 prices) Peak Share of Year Total GDP 1976 1979 1981 1982 1983 1983 z Sector Agriculture 5.5 23.5 12.1 -5.3 -15.0 3.5 Mining and Quarrying 9.3 -5.7 10.2 123.7 -47.3 1.0 Manufacturing 4.0 20.0 12.1 -1.9 4.5 9.3 Electricity and Water 1.4 4.2 0.1 -2.9 9.3 3.1 Construction -12.1 47.0 11.4 19.1 -21.7 9.5 Wholesale and Retail Trade 1.5 4.6 7.8 1.4 -1.7 17.9 Government -1.7 2.2 -1.5 0.6 8.7 18.4 Other Services 0.7 4.3 -0.4 1.8 0.3 37.3 GDP Growth at Constant Prices -1.4 11.4 2.9 4.2 -0.5 100.0 Source: Statistical Appendix Table 2.2. 3. Population and Employment 1.3 Population trends have not changed since the last Economic Report, with emigratlon still continuing though at a slower rate. The total population has stabilized at about 12,000. The slowdown In economic activity caused an increase in unemployment from 5.6% (282 persons) in 1982 to 7.OZ (357 persons) in 1983. C. Public Sector Finances 1.4 The current account of the Central Government (including the Philatelic Corp., the Post Office, Blackburne Airport, and Radic Montserrat) fell to a surplus of EC$0.8 million (equivalent to 0.9% GDP) in 1983 compared to EC$1.2 million (1.5% of GDP) the previous year. This is the second consecutive year the surplus has declined in spite of the tax Increases implemented by the Government in July 1983. The main reason for the deterioration is the impact of the recession, particularly the drop in Imports. -3- 1.5 During the period 1979-1983 current expenditures rose at an average annual rate of 15%. As a share of GDP, current expenditures (excluding amortization payments and the operations of the departmental enterprises) stood at roughly 23Z in 1982-83. The 1984 estimates indicate an increase of only 7% because of the expected slowdown in revenue growth. The share of salaries and wages in current expenditures has risen from 50X in 1981 to nearly 60% in 1984. This growth has had the effect of curtailing purchases of goods and services and, in general, strainiTg recurrent budget finances. In order to prevent further deterioration in the current account the Government should examine ways to control the increase in civil servant wage and salaries, particularly because officials do not believe there is much scope for additional tax increases. 1.6 Current revenues grew at an average annual rate of 19% between 1979 and 1983, significantly higher than the increase in current outlays. Current revenues stood at 24% of GDP in 1982-83. In 1983, 40% of current revenue was accounted for by direct taxes, of which about 60% is comprised of receipts from personal income tax. Indirect taxes make up slightly less than half of current revenue with the largest share made up of taxes on imported goods. In 1983 the Government took several measures to increase revenue growth including: administrative efforts to speed up the processing of individual and corporate tax returns; a 50% hike in consumption taxes and postal charges, and a 25% increase in the customs service tax. The base of the consumption tax was expanded to include import duties. In some cases, these measures resulted in a doubling of effective tax rates. In spite of these measures, indirect tax receipts fell in 1983 as compared to 1982 because of the recession and a tightening of financial controls on off shore banks which led to a drop in receipts from bank licenses. For 1984, import volumes are down, particularly for goods affected by the tax increases, which could cause actual receipts to fall below the budget estimates. 1.7 Capital expenditures in the public sector declined for the second year in a row to EC$4.7 million in 1983, equivalent to 5.4% of GDP (down from EC$7.9 million in 1982). However, capital expenditures are estimated to rise to about EC$7.3 million (equivalent to 8% of GDP) in 1984. A large proportion (77%) of the capital expenditure program was financed by external capital grants. Given the small surpluses in the public finances, capital expenditures will need to continue to be externally financed on concessional terms in the foreseeable future. Improvements in public finances will depend on how fast the economy recovers from the current recession and moderation in public sector wages. -4- Table 1.2: Summary Central Government Operations, 1982-1984 (EC$ million) Estimate 1982 1983 1984 Current Revenue 20.1 21.0 22.4 Current Expenditure 18.9 20.2 21.6 Current Account Balance 1.2 0.8 0-8 Capital Expenditures 7.9 4.7 7.3 Overall Deficit -6.7 -3.9 -6.5 Financing 6.7 3.9 6.5 Capital Grants 6.9 3.6 6.1 Net External Borrowing 0.2 0.1 1.2 Net Commercial Bank Financing -0.8 -0.5 - Other 0.4 0.7 -0.8 As a Z of GDP Current Revenue 24.8 24.0 Current Expenditures 23.3 23.1 Current Account Balance 1.5 .9 Capital Expenditures 9.8 5.4 Source: Statistical Appendix Tables 2.3 and 5.3 D. Savings and Investment 1.8 Gross domestic savings in Montserrat continue to be negative, averaging 12% of GDP between 1979 and 1983 because consumption exceeds total production. Gross domestic investment level declined for the second year in a row to 32% of GDP in 1983 reflecting the slump in the economy as a result of the fall in tourism, tourist-related construction and completion of the Medical School. The relative shares between public and private capital formation were 21/78 in 1982 compared to 28/72 in 1981. Montserrat still depends on foreign direct investments for a significant share of investment expenditure and will continue to do so in the forseeable future. -5- E. Money and Credit 1.9 In line with the downturn in economic activity, monetary expansion moderated slightly resulting in a 4.3Z decline in the net domestic assets of commercial banks in Montserrat in 1983. Net Central Government borrowing from the commercial banking system declined by 18% in 1983. However, credit to the private sector increased by 3.1Z over the same period, led by increases in commercial and personal loans which accounted for 80% of total commercial bank credit to the private sector. Net foreign assets improved from a negative EC$6.4 million to negative EC$1.3 million while claims on the East Caribbean Central Bank (ECCB) rose from EC$1.2 million in 1982 to EC$2.3 million in 1983. Given their liquid position there was little incentive for the banks to raise interest rates, instead funds were moved by their clients out of Montserrat to neighboring islands where rates are more competitive. Available information up to August 1984 indicates that the trend experienced in 1983 will continue to the end of the year. However, credit demand is expected to pick up slightly. F. Prices and Wages 1.10 Inflation in Montserrat tends to be directly related to major investment projects and to international inflation trends because the economy is very open. The strong inflationary pressures in 1979/80 were directly related to the rebound in the construction industry and oil price increases. In 1983, the inflation rate moderated to a 4.7% average increase over the year and 7.0% for the end of the period (compared to 8.4% at the end of 1982). In 1983 a Salary Commission was appointed to review salaries for the public sector. The Government accepted the general conclusions of the Commission, but budgetary considerations did not permit the granting of the full increase recommended for 1984. A sum equivalent to about a 5% overall growth in the wage bill was included in the budget, in addition to a provision for promotion and employment increases. In recent years, annual wage awards for the public sector have at the least kept pace with inflation, and for middle and low level workers have probably resulted in a real increase in wage levels. G. Balance of Payments 1.11 The current account deficit in the balance of payments as a share of GDP declined from 30% in 1982 to 10.5% in 1983 because of a decrease in import demand resulting from a general slowdown in the economy and a 7% increase in exports of goods and services, led by higher exports of electronic components and polyprophelene bags. Available data for January through August 1984 indicate export performance is likely to either equal or exceed that of 1983. Major exports remain electronic components and polyprophelene bags, although a strong upswing in exports of garments is expected (exports of garments for the first 8 months of 1984 exceed those for the entire previous year). The resource gap in 1983 was offset by inflows of private capital, transfers, and loans and grants to the public sector. Analysis of balance of payments in Montserrat is -6- complicated by the fact that re-export figures are overstated by the inclusion of equipment accompanying performing artists to the island and currency repatriations. Since technicallv these are not re-export articles (but account for approximately 90Z of re-exports as classified by customs), distortion to the current account should be corrected by eliminating them from the customs data on exports. 1.12 Tie external debt for Hontserrat remains moderate at 0.5Z of GDP (the same as in 1982). The debt service ratio as a percent of exports rose marginally fro-m 1.2Z in 1981 to 2.2Z in 1983. In numerical terms, the debt service payments have risen from US$79,400 in 1981 to US$177,400 in 1983. -7- II. DEVELOPMENT POLICY ISSUES A. Agriculture Production 2.1 Agricultural production (valued at constant prices) fluctuated in the 1980-82 period, but remained close to the 1979 level, which had represented a rebound from low output in 1977-78. In 1983, however, production dropped by 15%; output fell in all major crops with the exception of bananas, mangoes, and seed cotton. As a result, agriculture's share of GDP dropped to below 4%. A major factor behind the poor performance was drought but, in general, agriculture has been in a state of decline in Montserrat. Employment in the sector is down and the farmer population is very old. Agricultural growth also has been hindered by severe marketing problems; the lack of timely and efficient mechanical services; and the difficulties of implementing a workable credit system. 2.2 The cultivation side of the integrated sea island cotton project had been proceeding well. Acreage planted by the Montserrat Sea-Island Cotton Company (MSICC) increased gradually to 150 acres by the 1983/84 season, in addition to the 20-30 acres grown by small farmers. Because of the buildup of inventories of finished goods, the company has decided to reduce the area this season to only 10 acres, enough to provide planting material, but is maintaining contracts with small farmers. The drop in acreage cultivated has resulted in layoffs of workers and at least in the short term has obviated the need to appoint a full-time manager to supervise cultivation and harvesting. A discussion of the manufacturing side of the project appears in Section B. 2.3 A serious problem of excessive energy costs has arisen in the operation of the abattoir because of design changes made during construction by the builders without prior clearance. A recent study undertaken after project completion determined the necessary alterations but the cost estimate is high. However, the Government's goal of expanding livestock production and promoting the export of carcasses to neighboring islands will be difficult to achieve without a properly functioning abattoir. Government's Strategy 2.4 The Government's goals in the agricultural sector are to satisfy domestic requirements to the extent possible, to improve forestry resources, and to export agricultural products where feasible. In order to achieve these goals the Government has proposed an Agricultural Rehabilitation Project with three major components: establishment of 1,500 acres of tree crops, primarily mango and guava; development of 2,000 acres for livestock; and the expansion of vegetable production. The Government is also interested in developing agroprocessing. 2.5 In order to support agricultural rehabilitation the Government -8- has made irrigation a priority. currentlY only about 14 acres are under continuous irrigation. The goal is to provide irrigation for an additional 75 acres, primarily in the center and north of the island. Some funds already have been provided by the British Development Division (BDD) and the US Agency for International Development (USAID) Basic Needs Program, channeled through the Caribbean Development Bank (CDB), for dam construction and irrigation equipment. The Water Authority bills farmers for irrigation water at the commercial rate of EC010/1,000 gallons, but the Government provided a subsidy fund of EC18,O0O in 1984 that farmers could draw on to lower their cost to about EC$2.SO/1,O0 gallons. However, the Government's mechanism for providing the subsidy has weakened the financial performance of the Water Authority, (see Section D). Although the Ministry of Agriculture believes that the charge for irrigation water is too high, coordination with the Water Authority concerning resource use is adequate. 2.6 Marketing has long been identified as a critical obstacle to the expansion of agricultural production in Montserrat. Because of the small domestic market, production has to be carefully programmed, and exporting is difficult because of irregular shipping and high production costs. Some progress seems to have been made in better matching production and -ocal demand. The Ministry of Agriculture has been allocating contracts for certain products to about 125 commercially oriented farmers. Only farmers with contracts are able to receive a guaranteed minimum price. Supporting Services 2.7 The Ministry of Agriculture's ability to provide mechanical services to farmers should improve as the BDD is supplying several new tractors. The BDD also is providing some 4-wheel drive vehicles to upgrade the capability of the extension service. The previous Economic Memorandum recommended that a land use survey be carried out. Instead, a rougher, less expensive and time consuming resource survey is nearly complete, which includes a capability assessment by field, which should be sufficient for the Ministry's needs and the requirements of donors and investors. The Land Development Authority (LDA) continues to make only slow progress in resettling farmers because of inadequate funding and staffing. Because of the poor financial condition of the DFMC (discussed in Section B) and the lack of any significant credit from the commercial banks, only farmers involved in the project of the Caribbean Agricultural and Rural Development Advisory and Training Services (CARDATS)- about 65- have access to credit. There are about 550 farmers registered in Kontserrat, of which the Ministry estimates that about 130 are commerciallY oriented. Forestry and Fisheries 2.8 The Ministry of Agriculture recently completed a draft survey of forestry resources. Donor support for the main priority of watershed protection for this project and for training is being sought. In fisheries, the Ministry has submitted a comprehensive project for donor -9- consideration which would include gearing equipment, training, provision of infrastructure, and planning staff, with the objective to increase supplies for the domestic market. The Ministry already has carried out a survey of fish resources and domestic demand. Issues and Recommendations 2.9 In order to stop the decline in agriculture, both the expansion of irrigation and an increase in the commercial orientation of farmers are necessary. Also, with the rise in acreage under cultivation under the proposed Agricultural Rehabilitation Project, the upgrading and subsequent maintenance of timely and efficient supporting services becomes even more critical. In order for the Government to meet its goals in the sector it is recommended that: - A final decision be made on the reorganization of the DFMC, particularly the agricultural marketing function. Although the lack of agricultural credit is not viewed as a serious constraint now, access to credit will become more necessary if the plans for agricultural rehabilitation are implemented. If the marketing function remains with the DFMC, mechanisms should be established to ensure close coordination with the Ministry, particularly the extension staff. - The abattoir should be redesigned and upgraded as soon as possible. - The Ministry's program of planned production should be expanded, focusing primarily on meeting domestic requirements and supplying neighboring islands. - The irrigation subsidy fund needs to be monitored carefullv so that it does not become a drain on Government resources, particularly as the area under irrigation expands. Consideration should be given to reducing gradually the subsidy to individual farmers as their returns increase given an expanded growing season. - Consideration should be given to absorbing the operations of the Land Development Authority under the broader agricultural Rehabilitation Project as the institution does not have the financial or staff resources to fulfill its mandate. B. INDUSTRY 2.10 Industry in Montserrat is dominated by manufacturing and construction activities, which accounted for an average of 24Z of GDP and 28% of employment (See Table 2.1 below) in 1983 (a year in which its annual growth rate declined by 11%). Given the commitment of the Government to attract private industry to the island, medium and long-term development of industry will depend on the ability to tap the limited human and natural resources through selective investment promotion criteria that aim to create a balance between sectors and lead to more stability in the economy. -10- Table 2.1: MONTSERRAT-SELECTED INDUSTRIAL SECTOR DATA (% of GDP at Factor Cost) Industry 1979 1980 1981 1982 1983 niming and Quarrying 1.0 0.8 0.9 1.9 1.0 Manufacturing 8.8 8.8 9.6 9.1 9.7 Electricity and Water 3.1 3.2 3.1 2.9 3.3 Construction 11.9 10.1 10.8 12.4 9.9 Total Industry 24.8 23.0 24.4 26.3 23.9 Annual Growth Rate (X) 27.3 1.2 10.0 11.9 -11.1 Industry Employment as X of Total Employment n-a 27.9 29.0 28.4 28.1 Source: Tables 1.2 and 2.2. 2.11 The Inter-Agency Resident Mission (IARM) in Antigua has recently assisted Montserrat in the preparation of a 'Five Year Industrial Development Program". The study roughly estimates that there is available a labor force pool of about 1,250. Based upon this estimate of a literate, trainable and relatively low wage labor force, the program recommends the establishment of industries in several sectors. These industries would be of such size that no one firm or sector would have a disproportionate share of the labor force given the sensitivity of the economy to industrial fluctuations. More important, such industries would act as a base for technology transfer and a gradual upgrading of technology-related manufacturing activity in Montserrat. Among the industries recommended are: (i) hi-tech, capital intensive, 'new-wave' industries, such as, information processing, computer and peripheral assembly, and integrated circuit-manufacture employing the largest proportion of the available labor force; (ii) an agricultural product processing facility, assuming progress in rehabilitating the agricultural sector; and (iii) marine related activities. -1l- 2.12 Industrial activity in the private sector is concentrated in two areas, construction and manufacturing, which together accounted for 19% of GDP in 1963. Construction activity, which is highly dependent on the performance of the tourism sector, declined to 9.5% of GDP in 1983 from 11.9% in 1982, reflecting the market saturation of tourist-related accomodations and completion of the Medical School. However, construction still accounts for 14.6% of employment. Manufacturing activity is centered around enclave-type light assembly industry in garments, plastic bags and electronics. As shown in Table 2.2. below, manufacturing contributed 9.3% to G;IM and 11.2% to employment in 1983. Table 2.2: Montserrat - Selected Manufacturing Data 1979 1980 1981 1982 1983 Percenta-e share of GLP (F.C.) 8.8 8.8 9.6 9.1 9.7 P'ercen1tage share of TotaL Employment 9.5 10.1 11.1 10.8 9.1 'Va lie of M4anufactured Exports (USV'(JUJ) 22.7 48.7 101.2 82.7 143.0 Annual. Change in Exports -2.2 114.5 107.8 -18.3 72.9 Percentag-g gliare of Total Exports 54.2 74.7 70.3 64.8 47.2 Souirce: Statistical Appendix Tables 1.2, 2.2 and 3.4 Textile IndustEj 2.13 The garmenit industry, which is dominated by one firm, substantially increased sales due to improvements in efficiency and broadening of product lines. Such good performance in a market with strong competition from neighboring islands has led to plans for expansion and a search for markets outside CARICOM. There are good indications that one company will penetrate the USA market through 807 1/ operations, which could lead to a six-fold rise in the firm's sales by 1986, increasing employment by 100 persons. The garment firm that closed down in 1982 has reopened under a short term arrangement between the old company and a private investor. , 807 operations refer to a special provision in the U.S. tariff code on offshore assembly schemes. Under the schemes inputs are made and cut in the U.S. as finished goods. U.S duty is charged only on the value added by assembly, not on the inputs originally shipped from the U.S. -12- Plastic Bags Industry 2.14 In plastic bags, the dominant firm had a 40% increase in sales for the period August 1983 to July 1984 and expects a similar performance for 1984/85 if the documentation procedures in Trinidad and Tobago are simplified. In the past, delays in foreign exchange allocation approvals in Trinidad and Tobago (the firm's principal market) put pressure on the company's working capital which constrained their operations. The protectionist policies followed by Trinidad and Tobago and other CARICOM Governments are unlikely to be relaxed until the economies in the region show stable economic growth trends. Electronics Assembly 2.15 In electronics, the major firm was forced to lay off half its labor force due to a decline in sales (because its major customer experienced product problems) in early 1984. The firm expects a pick up in sales and an increase in its labor force back to 1983 levels once the customer has solved the product problems. Overview and Recommendations 2.16 Montserrat offers certain natural advantages for industricl development which have resulted in some success for the Government in attracting private industry to the island, mainly first generation assembly-type manufacturing activity for export to external markets. Basic infrastructure (electric power, water and a well maintained road network) is available at reasonable cost and a good telephone system connects the island with the outside world. The Government is planning for an increase of 48,000 sq. ft. (6 units of 8,000 sq.ft. each) in factory shells to cater for demand beyond 1986. The current space of 72,800 square feet is sufficient for expected demand up to the end of 1985. However, domestic development finance is not readily available to manufacturers due to the current condition of the DFMC (covered in detail below) although limited financing can be obtained through private financial institutions. 2.17 For the future, two firms, an aerated water bottling plant and a paper products company (which is relocating from St. Kitts and Nevis) have plans to locate in Montserrat. A third firm is interested in starting a beer brewery on the island. The new industries, once established, should be able to help lower the unemployment rate which had risen to 7.0% of the labor force in 1983. The Government recognizes the impact on the economy of inflation spurred by pressures on the labor market and would, if necessary, 're-phase" or postpone one or more of its labor intensive investment projects to ease pressure on the labor market. Promotional focus needs to be placed on those industries that are export-oriented while placing little strain on the labor market. As such, it is recommended that serious consideration be given to encouraging investments in hi-tech, capital intensive industries as a step-up from the current assembly type operations. This should involve a gradual upgrading of the current first generation assembly type operations in electronics to fully fledged -13- component/computer manufacturing facilities and information processing operations. To support this evolution, it will be necessary for the Government to introduce computer training in its education curriculum. At the same time local entrepreneurs, who could go into joint ventures with foreign investors, should be encouraged through the provision of finance and technical advisory services to small businesses. Development Finance and Marketing Corporation 2.18 The last Economic Memorandum described in detail the problems of the Development Finance and Marketing Corporation (DFIC) which are recognized and acknowledged by the authorities in Montserrat. The company is still faced with formidable marketing problems, a deficient equity capital position, non-performing loans on its books and companies with financial difficulties under its management. In June 1984, the Government appointed a Select Committee to examine the operations and propose measures to reorganize and restructure the DFMC. Among the options examined by the Select Committee were: (a) liquidate DFMC by transferring credit administration to commercial banks and create a separate marketing organization; (b) transfer credit administration to the Ministry of Finance and create a separate produce and marketing board under the Ministry of Agriculture; (c) reorganize and restructure the DFMC as is. This would involve enacting an official ordinance to regularize the establishment of the DFIIC and providing a legal operational basis and a set of principles (credit administration policy and committee, loan administration policy, marketing, and organization and management) by which performance can be measured and regulated. 2.19 It is not yet clear what form the restructured DFMC will take since there is still debate within the Government following the recommendations of the Select Committee. The Select Committee favors (c) above, arguing that an ordinance such as that recommended would give the company the mandate and legal status, which it lacked in the past, that are necessary to operate effectively and deliver the required services. 2.20 The recommendation comes at a time when the financial condition of the DFMC has not changed significantly, even though the net loss was down from EC$266,252 in 1982 to EC$28,273 in 1983. The smaller losses reflect the sharp decline in bad debt write-offs from EC$260,453 in 1982 to EC$42,428 in 1983 explained by the cessation of lending operations (the last disbursements to agriculture having been made in 1979 and those to industry in 1980). The bulk of its income comes from licenses, rent and marketing activities. At the same time, the viability of some of the DFMC activities, especially those under Montserrat Industrial Enterprises Limited (MIEL) management remain questionable. In 1983, some of these -14- projects (pottery and leather processing) were divested. Such a trend is positive and should be continued. The rental charges for the industrial estates are not being paid and were in rental arrears of approximately EC$250,000 in 1983. 2.21 Other issues affecting the DFMC are first, the burden of the false perception that the funds it lends are a public asset that is being redistributed, which accounts in part for the high loan default rate. Second, DFMC's triple role as source of credit, management agent and marketing (or trading) outlet, creates a conflict of interest. Failure to perform by the marketing and management divisions (as in the case of industrial estates) may compromise the ability of the lending division to collect on bad loans or rent arrears. Third, the small volume of the institution's lending operations makes it difficult for the DFMC to cover its fixed costs, which puts its financial viability into question. Fourth, DFMC's legal status is unclear (it is neither a trading company nor a development bank) with at times, overlapping objectives and responsibilities, and is answerable to more than one Ministry (legally to the Ministry of Agriculture but in practice to the Ministry of Finance). Fifth, management's financial and technical capability to carry out lending operations is not sufficient to offer the level of service required of the DFMC. Finally, for the DFMC to continue operating there would have to be a large and sustained infusion of capital over an extended period of time. The mission therefore recommends that: (a) CDB, as a major source of funds for DFMC, be kept informed, and be involved early on in the re-organization and restructuring program to ensure subsequent access to their credit lines for agriculture, industry and for the construction of factory shells; (b) given the small size of its operations, examination of the viability of DFMC's lending operations must form part of the restructuring effort. If its credit operations are found to be uneconomic, then a special "window" could be opened at the local commercial banks and the lending activities of DFMC phased-out. Commercial banks have lending operations that are in place and working well. Therefore, the addition of DFMC operations would not add substantially to their fixed costs. (c) the legal status of a reorganized DFHC be formalized through the enactment of an ordinance that clearly defines its objectives, reponsibilities and accountability. This would give the bank the mandate to lower its bad debt ratio through effective credit control. 2.22 A decision should be made quickly because the continued withholding of credit by CDB to the DFMC is curtailing finance for Montserrat's economic development. -15- (ii) Montserrat Sea-Island Cotton Company (MSICC) 2.23 In its third year of operations (1983/84), Montserrat Sea-Island Cotton Company (MISCC), an integrated cotton project, still faced severe financial and marketing problems. For the financial year 1983/84, the company incurred an operating loss of EC$374,000 on sales of EC$267,770, compared to the previous year's loss of EC$79,000 on sales of EC$182,000. Debt service rose to EC$197,000 from EC$134,000 in 1982/83, on debts of about EC$2.36 million (including an overdraft facility at a local commercial bank). 2.24 Recognizing the depth of the crisis, management has taken several measures to restore the MISCC to a viable entity. First, production has been drastically cut back while the company tries to sell-off the accumulated finished goods inventory of EC$576,000 in 1983 (1982 - EC$516,774). Second, a marketing expert, provided by BDD, has been retained for a period of between one and three months, to pro'Lde technical support for the company's efforts to market and price its products competitively both within and outside the CARICOM area. However, the period of assignment and the budget provided may prove insufficient for the successful execution of the marketing program. Third, an international design group has been hired to broaden and improve the product line, and to introduce new designs and graphics in order to expand the market. These are positive steps that deserve support. To ensure success, it is recommended that the Government urgently look into the possibility of joint venture operations with the private sector as a means of increasing the company's equity and raising more working capital to finance its marketing efforts. Conclusion 2.25 The Government of Montserrat is committed to foster the development of a strong private industriai sector and to encourage such activity by creating a favorable investment climate. Given the difficulties experienced in the operations of the MSICC, the DFMC, HIEL, and the tannery, the Government should exercise caution on further involvement in productive activities in the manufacturing sector. Further investment in existing operations also should depend on an evaluation of financial viability. Such an analysis is being done for the tannery. The Government is endeavoring to create a favorable investment climate through projects to upgrade and expand supporting economic infrastructure, such as electricity ar,d water. In addition, the Government should try to continue to ensure that Montserrat attracts investments which are viable, adequately financed, and staffed with qualified personnel. To supplement the scarce resources available in the Development Unit for project preparation, promotion, and marketing studies, short-term technical assistance and consultancy services would be sought from donor agencies. -16- C. TOUaISM 2.26 The number of stay-over tourist visitors to Montserrat dropped by 4X in 1983 to 14,341. Excursionist traffic (which includes cruise ship visitors) was down by more than half, reflecting the preference of most cruise ship operators for shorter hauls to locations closer to Florida. Because of an increase in the average expenditure by tourists, total tourism receipts rose marginally to reach EC$16.2 million (US$6 million). The outlook for 1984 is somewhat brighter. For the first 9 months of the year arrivals are about 6% above the corresponding period in 1983 and bookings were up for the upcoming winter season. 2.27 The main source of visitors to Montserrat continues to be the United States which accounts for 38% of the total, followed by the OECS countries (26%), Canada (11.5%), and the United Kingdom (9.2%). Nearly half of stayover visitors stay at the home of a relative or friend, hotels account for about a quarter, and villa/condominium accomodations are used by 16%. As would be expected, the length of stay varies according to the type of accomodation used. The average for those staying in hotels is 6 nights, whereas for those using villas/condominiums or staying in the homes of friends/relatives the average is about two and a half weeks. Just under 20% of stayover visitors remain for over one month. Capacity in the conventional hotel sector expanded slightly in 1984. A hotel (18 rooms) in Plymouth, which was virtually completed in 1983, opened for operations in June 1984. In addition, a hotel which had leased out its facilities, reopened as a tourist facility. Until hotel occupancy rates increase significantly (only 34.5% in 1983, compared to the peak of 48% in 1981) there is little likelihood of expansion. Villa construction, which has been a major source of employment on the island is still depressed because of the stagnation in tourist arrivals since 1980. 2.28 In cooperation with the Caribbean Tourism Research and Development Centre (CTRC), a visitor survey was carried out during the first quarter of 1984. In addition to updating tourist expenditures, the study provides useful information about the tourist sector in Montserrat and guidance on future development priorities. According to the survey results, nearly 60% of the visitors to Montserrat are repeat visitors with 30% having journeyed to the island 5 or more times. Although older, retired travelers are an important source of visitors to Montserrat (28% of tourists are 55 or over and 13% are retirees), a much larger share of arrivals (45%) are between the ages of 25 and 44. The most important reason why people come to Montserrat are, in descending order of preference, climate, restful atmosphere, friendly people, the fact that family and friends were there, and the scenery. When asked to give an assessment of Montserrat, the respondents ranked highest the friendliness of the people and the quality of the accomodations. The aspects which received the weakest rankings were night life, sports facilities, and restaurants. The survey results confirm the need to develop more entertainments, restaurants and sports facilities-recommendations that were first made by a consultant provided by the World Tourism Organization in 1980. -17- 2.29 The results of the survey also confirm the improvement in air connections to and from Montserrat. Up until the 1982-83 season, it had been estimated that 40X of the tourists to Montserrat were forced to make an unanticipated stopover in Antigua. According to the survey, only 20% of the respondents had difficulty obtaining same day air connections to Montserrat with about a quarter spending the night in Antigua. Air service to Montserrat should improve further with the purchase of a second aircraft which will be able to fly at night, in addition to having a somewhat longer range, and the installation of computer and telex facilities to expand the capacity for handling reservations beyond what is now available through Leeward Islands Air Transport (LIAT). Service to St. Kitts-Nevis and Guadeloupe which began in late 1983 is proving successful, although the traffic originating in the French island is less than had been hoped, primarily because of the depreciation of the franc against the USS, to which the EC$ is tied. The remaining problem regarding air connections to Montserrat is the lack of facilities for in-transit passengers at Coolidge Airport in Antigua. Montserrat Aviation Service (MAS) is testing different ways to improve the service to transit passengers continuing on to Montserrat within the constraints of the physical facilities at the airport. These attempts should continue. Government Strategy and Recommendations 2.30 The Government's strategy in the tourism sector is to emphasize the potential of the tourist industry and its capacity to concribute to the economy; to ensure that tourism secures an adequate level of investment; to provide a framework which encourages private sector activity; and to diversify the tourism market, while continuing to rely on the -up-market- segment. The main actions which need to be taken in order to meet these objectives are, first, an increase in advertising. This would include drawing up a program of visits by travel writers and press personnel and preparing an audiovisual presentation to use for promotion. Efforts to increase the participation of the private sector in marketing also would be beneficial. Second, there is a need for some improvement in the tourism plant, primarily a simple beautification program and the expansion of beach facilities. Third, the sector would benefit from more training of personnel employed in tourism, which could be included in the Government Training Center. 2.31 The main project which the Goverment is proposing for the tourism sector is the Little Bay project, which was described in some detail in the previous Economic Memorandum. Although the Government has discussed the project with several potential developers, thus far no serious, non-speculative investor with access to financing has made a firm commitment to undertake the project. The BDD has agreed to fund consulting services to be used to assist the Government in the investment search and negotiations. Work on the Little Bay access road is scheduled to start before the end of 1984. Several donors have agreed in principle to assist the Government in funding its share of the infrastructure development of the project (US$7 million) as soon as there is a commitment by a private developer. -18- D. Other Sectors Utilities Electricity 2.32 The Montserrat Electricity Services. Limited (MONLEC) has consistently improved its operating performance over the past several years. Profits rose sharply from EC$123,000 in 1982 to EC$681,000 in 1983, enabling the company to exceed the CDB required rate of return of 12% on capital employed and to finance capital expenditures from internal sources. The capital. expenditure and maintenance program which went toward replacement of aging equipment and improvement of transmissiun and distribution lines, was EC$360,000 in 1983 and is expected to be about EC$300,000 in 1984. The remarkable increase in profits resulted from a combination of an 11.6% increase in electricity consumption, a 9.2% growth in dollar sales, cost reductions of 3.3Z, tariff increases (effective April 1, 1983), and fewer power outages due to production efficiency. Radio Antilles, which accounts for 16% of MONLEC power sales, maintained a stable level of demand in 1983. The trend of growth is expected to continue into 1984/85, though at a slower rate. The overall performance of MONLEC is attributable to the presence of a strong management team, which has evolved through the direct involvement of the Commonwealth Development Corporation (CDC) as major shareholder and managing agent and the periodic review of tariff rates by the authorities. CDC is now set to withdraw from direct involvement in MONLEC by sale of its shares to the Government of Montserrat. However, to facilitate a smooth transition, CDC will be retained as management, purchasing and procurement consultant. The Government should enact an ordinance that gives MONLEC autonomous legal status, defines its objectives and responsibilities and sets forth criteria by which performance can be measured and regulated. 2.33 Montserrat has adequate electricity supply for its domestic requirements until i987, with a generating capacity of 5.0 Mw and consumption averaging 82% of the power generated over the last five years and a peak demand of 2.24 Kw. However, to meet projected demand increases beyond 1987 and to replace older equipment, MONLEC is undertaking an EC$4.0 million expansion program to be phased over two years (1985 and 1986), with financing equally split between an EIB loan and inte'nally generated funds. The EIB loan of EC$2 million, guaranteed by the British Government, has a maturity of 15 years, an interest rate of 3 percentage points below prime, and a grace period of 3 years. EC$2.0 million will be used to purchase a 1500 kilowatt generator to replace two (700 kilowatts each) generating sets that are fourteen years old. The balance will be used to improve transmission and distribution lines and computerize operations. MONLEC should seek to fully utilize the computer's capacity by examining the possibility of offering computer services to other sectors in Montserrat. -19- Water 2.34 The major problem confronting the Montserrat Water Authority is financial. In 1983, the Authority registered a loss of EC$78,000, after a profit of ECS135,000 in 1982. The losses are expected to widen in 1984, reaching EC$171,000 by the end of the year. The problem stems from the disparity between costs (which rose by 20% in 1983) and water revenues which increased by 3.4% in the same period (this includes loss of revenue from stand pipe payments owed by the Government). A share of the stand-pipe payments owed are being applied by the Government to the newly introduced subsidy for irrigation water. Given the worsening financial condition, it is recommended that the authorities review the water rate structure with the objective of increasing tariffs to a level whereby the Water Authority can cover operating costs and make a reasonable contribution to investment. At the same time efforts should be made by the Water Authority to reduce and control costs. A large proportion (81%) of the rise in production and maintenance costs was accounted for by substantial increases in salaries, wages and travelling allowances. 2.35 There is at present no water supply problem in Montserrat, although a slight shortage might occur in early 1985 due to the recent drought. To cater for future increases in demand, the Water Authority, using available technical assistance, has drawn up a Master Plan, covering the supply and use of water resources in Montserrat over the next decade. The focus is to improve spring water sources and transmission lines, to increase storage capacity, to provide cathodic protection to reservoirs and replace existing equipment. Continued technical assistance and financial support will be necessary for the effective execution of this ambitious program. Transportation The Port 2.36 The financial position of the Port Authority remains weak. Port traffic in 1983 was low, resulting from a drop in import volume. The losses for 1983 stood at ECS55,000, while those for 1984 are estimated at EC$105,000. As has been pointed out in earlier reports, the solution to the problems of the ports in the OECS requires a regional approach. Therefore, it is doubtful that a rate hike alone, as requested by the Port Authority, would be sufficient to solve the problem or improve its finances. Due to unemployment pressures in Montserrat, the Port Authority management has found it difficult to reduce the workforce. As a result labor costs as a percentage of total expenses have risen from 48% in 1982 to 60% in the first a.ine months of 1984. It is imperative that the coordinated efforts of both the Port Authority and the Government be used to arrest the escalation in labor costs2/. Repairs to the port for 2I The Government supports the efforts being made by the Port Authority to cut down on its labor costs. The Chief Minister, in his budget speech to the Legislative Council in February 1985, announced that the Port Authority would reduce its labor force to 34 longshoremen from 54 through early retirement. -20- hurricane inflicted damage are planned to start in January 1985. Work on the Roll-on Roll-off (Ro-Ro) facility which was to have been started in early 1984 and completed late in 1985 has been postponed and is now being reconsidered given the port's lower traffic volume. Aviation 2.37 Montserrat Aviation Services Limited (MASL), the only scheduled operator to the island, continued to register substantial growth in services and revenues during 1983 and 1984. The company took delivery of a second aircraft in October, 1984 and hoped to commission the plane before the end of the year. Although the loan for the plane has a Government guarantee, MASL will be responsible for paying the debt service. Profits for 1983 were EC$500,00O and further improvement is expected in 1984-85. The last Economic Report recommended that although the Government covers debt service on the Twin Otter (purchased in 1981), the depreciation, interest charges, and amortization payments associated with the aircraft should be taken into account in making an evaluation of MASL operations. In 1983, interest and amortization payments for the loan were EC$700,000 and estimates for 1984 show interest of EC$Z75,000 and amortization of EC$545,000. Based on the operating profit of EC$500,000 (before depreciation charges and interest and amortization payments) which went into the Government's Consolidated Fund, MASL covered 61% of its debt service obligations in 1983. If the current growth trends in services and revenue are maintained, the company should be able to cover a higher proportion of interest and amortization payments from its operating profit. Social Services 2.38 The Government is currently modifying the educational system at the high school level by placing emphasis on technical and vocational training as a supplement to the academic subjects. The facilities of the Technical College are being used to support the new curriculum by offering courses in business studies and industrial arts. These changes are a follow up on recommendations made by a UNESCO technical assistance mission to the island. The implementation process is benefitting from the Multi-Island Project for technical skills training sponsored by ILO, UNESCO and UNDP. However, the shortage of local technical teachers is threatening to retard progress of the program. Therefore, to alleviate the shortage and reduce the current reliance on contract teachers (usually Volunteer Service Officers from the United Kingdom), Montserrat is looking at the possibility of establishing a resource center for curriculum development. The Center, once established, would offer first year technical teacher training programs in conjunction with regional institutions. The authorities should also consider enhancing computer literacy by introducing computer courses in high school, as mentioned earlier in this report. -21- 2.39 Progress has been made toward establishing a self-help program for the provision of community services. First, a school leavers' program aimed at providing working experience to high school graduates has been instituted through cooperation between the Goverment and employers. Employers who participate in the program share equally with the Government in providing a stipend to the high school graduate. Second, over the last year two buildings have been equipped to serve as community centers through local volunteer assistance. Third, USAID has offered some assistance to a revolving loans sc&eme for small buslizess start-ups. The concept of a self-help program could make a strong contribution to development projects on the island. It is utilized elsewhere in the world to mobilize domestic resources for projects that otherwise viould not benefit from donor assistance or are not part of the Government's priority list due to a shortage of investment funds. 2.40 In housing, the Government is examining some traditional capital market instruments as new sources of long-term financing to provide shelter for Montserratians. A prospectus is being prepared for a proposed 15-year tax-free bond to finance housing. The range of income level groups which would be included in the program is still to be decided. -22- III. THE PUBLIC SECTOR INVESTMENT PROGRAM A. Introduction 3.1 The Montserrat Government's first draft of the Three-Year Public Sector Development Plan establishes investment targets and priorities for economic and social development for the period 1984/85 - 1987/88 and lays out a broad strategy and policy framework for achieving them. The Plan (which is still under review by the Executive Council) has an investment target of EC$81 million over a three year period that is ambitious compared to the last four years, (1980-83), when the Government's public sector investment program averaged EC$8 - 9 million per year. The Government recognizes the constraints, specifically the amount of donor financing, that may inhibit the realization of the Plan's goals. The priorities of the Government strategy are infrastructure development, agricultural rehabilitation, promotion of industry and tourism, and improvement of social welfare. The Government has undertaken to make substantial investments to develop support infrastructure, however, the Plan envisages that the private sector will play a central role in the productive sectors, particularly manufacturing. Although the Plan provides the economic strategy and framework for project proposals, successful implementation will depend on the ability of the Government to evaluate the proposals and monitor the projects. The Plan outlines an extensive list of potential projects for donor consideration. B. Progress of the Program - 1984 3.2 The public sector investment program expenditures for 1984 are estimated to be EC$7.3 million, almost double the EC$4.2 million in 1983, resulting from resources being committed to several major projects. Allocation of investment expenditures is 69% to economic infrastructure, 23% to social infrastructure, and 8% to agriculture. Major ongoing projects in agriculture included agricultural reconstruction and irrigation with expenditures of ECS319,000 in 1984. In economic infrastructure, the U.K. is financing major ongoing projects with expenditures in 1984 of: EC$790,000 for road improvements and construction of a bitumen storage tank (due for completion in 1985) out of a total cost of EC$2.8 million; EC$250,000 for the port protection program and EC$145,000 for water supply protection. The construction of the old people's home (on which EC$150,000 was spent in 1984) and the West Indies scholarship program (with an allocation of EC$220,000 in 1984) were the major projects undertaken in the social infrastructure sector. Most of the projects were financed by external grants and the process of their implementation was satisfactory. The lack of development finance, due to the financial difficulties of the DFMC continues to preclude access to CDB credit lines for the productive sectors and to loans for construction of factory shells. -23- C. The Public Sector Investment Program 1985-87 3.3 The total public sector investment program expenditures for 1985/87 are projected at EC$30.0 million, about 37Z of the Government's target of EC$81 million in the Development Plan. Mission estimates are derived from projects that either have identified financing or have had substantial project preparation work done and from historical levels of financing available to support the program. In general, the mission estimated PSIP reflects the same strategy and priorities as the Government's larger Development Plan, the major difference being that expenditures on the Little Bay tourism project are not included in the mission estimates (see para. 2.31). The distribution among sectors of the mission estimated public sector investment expenditures is 33% for directly productive projects, 44% for economic infrastructure development and 23% for social infrastructure projects. The table below gives a breakdown by sector of investment expenditures. Agriculture accounts for an estimated EC$5.2 million, earmarked for the development of fisheries, livestock and tree crops, reafforestation, farmer training, and farm improvement credit. Expenditures in industry are estimated at a total of EC$4.3 million for the construction of industrial estates and a small industry credit facility. Tourism will benefit from the construction of an access road to the Little Bay area. The Government expects to spend an estimated EC$13.1 millinn on economic infrastructure development projects which include a wate: supply development program (part of the ten-year Master Plan, see 2.35 above), purchase of new generating sets and a computer for MONLEC, purchase of equipment for the airport and improvements in fire fighting services (the improvements are part of the CIDA sponsored airports project). A total of EC$3.6 million is the estimated expenditure for restructuring and expanding the education system. As noted in the last economic report, the successful implementation of the investment program will depend on: first, expediting the restructuring of the Development Finance and Marketing Corporation in order to make available credit to tourism, industry and agr-iculture and second, substantial external technical and financial support from donors. D. Financing the Program, 1985-87 3.4 EC$26 million (equivalent to 87% of the mission projected public sector investment program) represents either committed or identified sources of financing. This leaves EC$4.0 million plus about ECS2 million in external amortization payments to be mobilized. Since the draft Plan states that there are no prospects for a recurrent budgetary surplus of any significant size for the next few years, public sector savings are expected to total only EC$2.2 million during the period. This assumes that the central government would aim to achieve small recurrent surpluses in order to avoid recourse to U.K. budgetary grants and that some savings would be generated by major parastatals such as MONLEC. The public sector is likely to be a net creditor to the commercial banking system over the next couple of years as it repays the aircraft loans. -24- Table 3.1: MONTSERRAT - COMPOSITION OF THE PUBLIC SECTOR INVESTMENT PROGRAM, 1984-1987 (EC$ million) Share 1984 1985 1986 1987 1985-87 of Total ONGOING PROJECTS 7.3 5.8 2.0 1.8 9.6 32.0 NEW PROJECTS - 4.5 8.3 7.6 20.4 68.0 7.3 10.3 10.3 9.4 30.0 100.0 % Projects Under Study - 0.5 2.2 2.8 5.5 - By Sector (X) Productive Sectors 8.2 9.3 46.3 47.0 33.9 Agriculture 8.2 5.9 21.0 25.3 17.3 Industry - 0.6 22.6 20.2 14.3 Tourism - 2.8 2.7 1.5 2.3 Economic Infrastructure 68.6 75.0 32.3 23.0 43.7 Transport 61.8 32.7 3.1 6.1 14.0 Water and Electricity 6.8 42.3 29.2 16.9 29.7 Social Infrastructure 23.2 15.7 21.4 30.0 22.4 Education 4.1 6.1 12.6 17.3 12.0 Housing 0.3 - - 5.3 1.7 Other 18.8 9.6 8.8 7.4 8.7 Total 100.0 100.0 100.0 100.0 100.0 Source: Planning Unit and Mission Estimates. -25- IV. PROSPECTS 4.1 Montserrat's economic and financial performance in the recent past indicates that satisfactory economic growth can be achieved, provided the Government continues its efforts to broaden the economic base of the island while maintaining a sound fiscal position. In 1984, it is estimated that the economy recorded no growth in real GDP. However, between 1985 and 1987, the annual level of real economic growth is projected to average between 2% and 3%. This level of growth is expected to be supported by a 6% increase in stay-over tourists and a rise in manufactured exports. Growth prospects also will depend on the implementation of several major projects in the Development Plan, such as agricultural rehabilitation, the ten-year water master plan and electricity upgrading and expansion. From past experience in Montserrat, implementation of additional major projects would radically raise growth prospects. The Little Bay project, if undertaken during the period 1985-87, would add about 60% to the public sector investment program. This would be in addition to an estimated EC$28 million of private sector investments in the Little Bay project. Investment levels for 1984-87 are now projected to average 31% of GDP. The public sector would account for somewhat less than 30% of total investment given the Government's stated intention to rely on the private sector as the main source of economic growth. National savings are not expected to finance a rising share of investment, primarily because public sector finances are not expected to show much improvement over the next three years. After substantial increa;es in recent years, private consumption is estimated to decline in real ter,.s in 1984 and resume a gradual rise thereafter. As a result, the growth of expenditures on imports should slow down. That, coupled with the rise in exports and tourism receipts, would result in a narrowing of the current account balance. 4.2 External public and publicly guaranteed debt at the end of 1983 was estimated at US$2.6 million (equivalent to 8% of GDP) and debt service payments represented 2.2% of exports of goods and nonfactor services. Although debt service probably will rise slightly during the period 1984-1987, payments are expected to remain manageable. The low debt service ratio reflects the high proportion of external grants and concessional lending to Montserrat. Given the vulnerability of the economy and a narrow resource base, Montserrat is expected to continue to rely on grants and concessional loans to finance a major share of its investment program. -26- MONTSERRAT GOVERNMENT'S PROJECT LIST 1. This annex contains a list of major ongoing projects, a list of projects for which external assistance will be sought during the period 1984-87 and individual project descriptions. Each list contains the name of the project, the executing agency, the lender/donor if any, the total cost, the external financing obtained or required, the counterpart contribution required, and the estimated recurrent costs during the 1984-87 period. The individual profiles contain additional information which should be of interest to potential donors or lenders, including technical assistance requirements and the present status of the project. 2. Data for these projects, which form part of the Economic Memorandum to be presented to the meeting of the Caribbean Group for Cooperation in Economic Development scheduled for June 24-28, 1985, were provided by the Government of Montserrat, assisted by the World Bank-led mission of October 1984. MONTSERRAT: MAJOR ONGOING PROJECTS (US$ O00) External Amortization Grace Total Financing Interest Period Period Counterpart Financing Cost Secured Source % (Years) (Years) Amount Z Directly Productive Projects Agricultural Reconstruction and Irrigation Schemes 646 646 UK Grant Abattoir 402 402 UK Grant - - - - Sources of Energy-Charcoal Production 203 203 CDB/USAID Grant - - - - Tannery (MIEL) 1/ 373 194 CFC/UK 10 9 1 179 25 Integrated Sea Island Cotton 858 2/ 716 CDB/CIDA 4 15 5 142 2/ 17 Economic Infrastructure New Aircraft 319 163 Royal Bank 9 8 - 156 49 Road Improvement 1037 1037 UK Grant - - - - Port Protection 926 926 UK Grant - - - - PWD Equipment, Plant and Workshops 651 651 UK Grant - - - - Water Supply Protection 574 537 CIDA Grant - - 37 6 Others Old Peoples Home 394 323 UK Grant - - 39 10 MAF Projects 340 340 CIDA Grant - - - - Programne Aid (BDD) 286 286 UK Grant - - - - USAID Projects 374 374 USAID Grant - - - - West Indies Scholarships 326 326 UK Grant - - - - 1/ Loan conditions apply to CFC portion of external financing only (amount equal to US$128,000). 2/ Counterpart is represented by existing equipment. -28- MONTSERRAT: MAJOR NEW PROJECTS AND SOURCES OF FINANCING (US$ 000) External Total Financing Cost Required Source Directly Productive Projects Fisheries Development 167 167 CIDA Farmer Staff Training and Training Center 122 122 UK Farm Improvement Credit 241 241 CDB Development of Fruit Orchards 611 611 UK Livestock Development 1,121 1,121 Unknown Industrial Estates IV 1,300 1,170 CDB Small Industry Credit 500 500 CDB Tourist Facilities 161 148 Unknown Economic Infrastructure Equipment For Airport 517 517 CIDA Improvement to Fire Services 193 193 UK Little Bay Access Road 99 99 UK Water Development 1,006 1,006 EDF Purchase of Equipment and Plant 336 336 CIDA Replacement of Generating Sets 1,481 741 EIB Other Watershed Protection 62 62 EDF/CARDI Reafforestation 285 285 CIDA Housing 741 - Reconstruction of Secondary Schools 519 519 Unknown Technical Education Program 423 423 Unknown Comu.inity/Resource Centers 94 70 UK Basic Needs II 400 400 CDB/USAID -29- MONTSERRAT - LIST OF NEkW PROJECTS UNDER STUDY Estimated Cost Probable Start-Up Status (US$'OOO) Date Ministry of Finance Building 1,111 1986 Architectural design needs revision. BDD has been approached. Facilities for Agro-Processing Industry 467 1986 Identified. Dairy Project 370 1986 CFTC produced a feasibility study in 1977. CIDA has been ap- proached. Drainage System Improvements 555 1986 Identified Port Facilities 315 1986 Feasibility study needs to be done of Roll On- Roll Off facilities. -30- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture (USS '000) I. NAME OF PROJECT: Farmer Staff Trainiag Center and Farmer Training II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands, and Housing. III. TOTAL ESTIMATED COST: 122 IV. EXTERNAL FINANCING REQUIRED: 122 V. LENDING AGENCY: VI. DESCRIPTION AND JUSTIFICATION: A. Description: 1. Construction of a training center consisting of dormitory, cooking facilities and store room. 2. Development of a 17 acre plot to be farmed by trainees. B. Justification: Resuscitation of agriculture. VII. COST COMPONENTS AIiD FINANCING: Financed by Total Local External Sources Sources Amount X Local Costs 12 12 10 Foreign Costs 110 110 90 Total Costs - Amount - 122 112 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 7 70 77 45 Total - 7 70 77 45 IX. STATUS OF PREPARATION: Project has been identified. BDD was been approached. X. PROJECT IMPLICATIONS: Operating and MaLntenance Costs: Debt Obligations: Xi. TECHNICAL ASSISTANCE REQUIRED: -31- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture (USS '000) I. NAME OF PROJECT: Farm Improvement Credit. II. EXECUTING GOVERNMENT AGENCY: DFMC III. TOTAL ESTIMATED COST: 241 IV. EXTERNAL FINANCING REQUIRED: 241 V. LENDING AGENCY: CDB VI. DESCRIPTION AND JUSTIFICATION: Continuation of farm improvement credit scheme. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs Foreign Costs 241 241 100 Total Costs - Amount - 241 241 100 VIII. DISBURSEMENTS PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources _ 37 37 74 167 Total - 37 37 74 167 IX. STATUS OF PREPARATION: CDB approached. DFMC is to be restructured X. TERMS OF FINANCING: Interest Rate: 4% Amortization Period: 15 years. XI. PROJECT IMPLICATIONS: Operating and Maintenance Costs: None. Debt Obligations: See X. XII. TECHNICAL ASSISTANCE REQUIRED: -32- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture (US$ '000) I. NAME OF PROJECT: Development of Fruit Orchards II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands, and Housing. III. TOTAL ESTIMATED COST: 611 IV. EXTERNAL FINANCING REQUIRED: 611 V. LENDING AGENCY: UK VI. DESCRIPTION AND JUSTIFICATION: A. Description: Development of 1,500 acres of Orchards over five years. B. Justification: Project would expand and diversify the agricultural base. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount X Local Costs 183 183 30 Foreign Costs 428 428 70 Total Costs - Amount - 611 611 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local sources - - - - - Foreign Costs - 122 122 244 366 Total Costs - Amount - 122 122 244 366 IX. STATUS OF PREPARATION: Project has been identified. BDD has been approached. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Debt Obligations: XI. TECHNICAL ASSISTANCE REQUIRED: -33- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture A (USS '000) I. NAME OF PROJECT: Livestock Development II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands and Housing. III. TOTAL ESTIMATED COST: 1,121 IV. EXTERNAL FINANCING REQUIRED: 1,121 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project entails the development of 1500 acres of pasture land for the rearing of livestock. B. Justification: Project will develop the potential for beef and hides production. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs - 448 448 40 Foreign Costs _ 673 673 60 Total Costs - Amount - 1,121 1,121 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 222 230 452 669 Total - 222 230 452 669 IX. STATUS OF PREPARATION Concept identified. Project needs to be developed. BDD and CIDA have been approached. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Debt Obligations: Xi. TECHNICAL ASSISTANCE REQUIRED: T.A. required for preparation of project. -34- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture (US$ '000)- I. NAME OF PROJECT: Watershed Protection and Soil Conservation. II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands, and Housing. III. TOTAL ESTIMATED COST: 62 IV. EXTERNAL FINANCING REQUIRED: 62 V. LENDING AGENCY: EDF/CARDI VI. DESCRIPTION AND JUSTIFICATION: A. Description: Watershed sites will be fortified by-means of plantings and ground cover and other methods of preservation. Soil conservation practices will be applied to areas in danger of erosion. B. Justification: Parts of the island, particularly areas where formerly cotton was grown suffer from soil erosion, watershed protection is necessary to support an expansion of irrigation. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 62 62 100 Foreign Costs - - Total Costs - Amount - 62 62 100 V-III. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources External Sources 21 21 20 62 Total 21 21 20 62 IX. STATUS OF PREPARATION: Funding has been approved. Project is part of a regional program. X. PROJECT IMPWLEMENTATION: Operating and Maintenance Costs: None Debt Obligations: None. XI. TECHNICAL ASSISTANCE REQUIRED: CARDI will provide some technical assistance. -35- MONTSERRAT 1984/87 Project List- Individual Project Description Agriculture (US$ '000) I. NAME OF PROJECT: Fisheries Development II. EXECUTING GOVERNNENT AGENCY: Ministry of Agriculture, Trade, Lands, and Housing. III. TOTAL ESTIMATED COST: 167 IV. EXTERNAL FINANCING REQUIRED: 167 V. LENDING AGENCY: CIDA VI. DESCRIPTION AND JUSTIFICATION: A. Description: 1. Establishment of fish marketing facilities (building). 2. Project includes services of a gear technologist for 3 man-years and traning of a local during that time. 3. Justification 4. Promotion of fishing industry VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount z Local Costs - - Foreign Costs - 167 167 100 Total Costs - Amount - 167 167 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources External Sources - 52 80 132 35 Total - 80 132 35 XI. STATUS OF PREPARATION: CIDA has been approached. - X. PROJECT IMPLICATIONS; Operating and Maintenance Cost: Unknown. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: Techaical assistance is a component of the project. -36- MONTSERRAT 1985/87 Project List - Individual Project Description Agriculture (US$ 1000) I. NAME OF PROJECT: Reafforestation7 II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands, and Housing III. TOTAL ESTIMATED COST: 285 IV. EXTERNAL FINANCINW REQUIRED: 285 V. LENDING AGENCY: CIDA VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project includes the following activities: (i) survey and boundary marketing of proposed reserves; (ii) fencing planting nursery and seed purchase; and (iii) staff training. B. Justification: The primary objective is watershed protection. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 171 171 60 Foreign Costs 114 114 40 Total Costs - Amount - 285 285 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources 58 91 70 219 66 Total 58 91 70 219 66 IX. STATUS OF PREPARATION: Work has commenced on surveys. CIDA has been approached. X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None Debt Obligations: None. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance will be required. -37- MONTSERRAT 1985/87 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Industrial Estates, IV II. EXECUTING GOVERNMENT AGENCY: DFMC III. TOTAL ESTIMATED COST: 1,300 IV. EXTERNAL FINANCING REQUIRED: 1,170 V. LENDING AGENCY: CDB VI. DESCRIPTION AND JUSTIFICATION: A. Description: The project consists of 48,000 square feet of factory shell space constructed when industrial tenants are identified. B. Justification: To promote the establishment of private sector industrial enterprises in Montserrat. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount % Local Costs 130 260 390 30 Foreign Costs - _910 910 70 Total Costs - Amount 130 1,170 1,300 100 VIII. DISBURSEMENT PERIOD: Post 1981 1986 1987 Total. 987 Local Sources - 130 - 130 - External Sources - 370 390 760 410 Total - 500 390 890 520 IX. STATUS OF PREPARATION: CDB approached. DFMC is to be restructured and a site identified. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: None. Debt Obligations: Inter:est: 4X; Amortization: 15 years. XI. TECHNICAL ASSISTANCE REQUIRED: None. -38- MONTSERRAT 1985/87 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Small Industry Credit. II. EXECUTING GOVERNMENT AGENCY: DFMC III. TOTAL ESTIMATED COST: US$500 IV. EXTERNAL FINANCING REQUIRED: US$500 V. LENDING AGENCY: CDB (CFC) VI. DESCRIPTION AND JUSTIFICATION: The project is a continuation of the small industry credit scheme to industry and agriculture. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs - - - - Foreign Costs - 250 250 100 Total Costs - Amount - 100 250 - - z - 100 - 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources -- - - - External Sources - 250 250 500 Total - 250 250 500 IX. STATUS OF PREPARATION: CDB has been approached. Arrangement for credit management is to be agreed upon. X. PROJECT IMPLICATIONS: XI. TECHNICAL ASSISTANCE REQUIRED: -39- MONTSERRAT 1985/87 Project List - Individual Project Description Transport (USs '000) I. NAME OF PROJECT: Equipment for Airport and Improvements to Airport II. EXECUTING GOVERNMENT AGENCY: Ministry of-Communications and Works III. TOTAL ESTIMATED COST: 517 IV. EXTERNAL FINANCING REQUIRED: 517 V. LENDING AGENCY: CIDA VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project provides for purchase of telecommunications and electronic equipment for the control tower, and a tractor and fire fighting equipment. Construction work includes a beacon shelter, extension of the fire station and improvements to the terminal building. B. Justification: To upgrade the facilities at the airport to comply with international safety standards and provide comfort for travellers. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 155 155 30 Foreign Costs - 362 362 70 Total Costs - Amount - 517 517 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - External Sources 37 119 210 366 151 Total - Amount 37 119 210 151 IX. STATUS OF PREPARATION: CIDA is expected to begin funding equipment for the airport in 1985. The improvements are scheduled to begin in 1986. This project is part of a regional Airports (OECS) program. X. PROJECT IMPLICATIONS: Operation and Maintenance Costs: XI. TECHNICAL ASSISTANCE REQUIRED: CIDA is providing techncial assistance. -40- 1985/87 Project List - Individual Project Description Transport -(U-SS '000) I. NAME OF PROJECT: Improvement to Fire Services II. EXECUTING GOVERNMENT AGENCY: Manpower and Administration III. TOTAL ESTIMATED COST: 193 IV. EXTERNAL FINANCING REQUIRED: 193 V. LENDING AGENCY: UK VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project includes refurbishing the existing fire engines and purchasing a new fire tender and two new Land Rovers with fire equipment. B. Justification: A properly organized and equipped fire service is needed. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount % Local Costs 39 39 20 Foreign Costs - 154 154 80 Total Costs - Amount - 193 193 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources 111 82 - 193 - Total - Amount 111 82 - 193 _ X. STATUS OF PREPARATION: Project has been identified. BDD has been approached. IX. PROJECT IMPLICATIONS: X. TECHNICAL ASSISTANCE REQUIRED: None. -41- MONTSERRAT 1985/87 Project List - Individual Project Description Electricity (USS '000) I. NAME OF PROJECT: Replacement of Generating Sets and Improvements to Transmission and Distribution, System. II. EXECUTING GOVERNMENT AGENCY: Montserrat Electricity Services Ltd. III. TOTAL ESTIMATED COST: 1481 IV. EXTERNAL FINANCING REQUIRED: 741 V. LENDING AGENCY: EIB VI. DESCRIPTION AND JUSTIFICATION: A. Description: Two generating sets will reach the end of their useful life in 1985/86 and their capacity must be replaced. Upgrading. and improvements to the transmission and distribution system is necessary to maintain safety standards and supply areas not yet receiving services. B. Justification: To meet increasing electricity demand and maintain (or replace) system In existence. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 444 74 518 35 Foreign Costs 296 667 963 65 Total Costs - Amount 740 741 1481 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources 148 296 296 740 - External Sources 741 - - 741 Total - Amount 889 296 296 1481 IX. STATUS OF PREPARATION: EIB has approved funding for the generating sets are expected to be purchased in 1985. The improvements to the system are an ongoing, local activity. X. PROJECT IMPLICATIONS: Operation and Maintenance Costs: To be covered by electricity charges. Debt Obligations: Interest: 6%; Amortization: 15 years; Grace: 3 year. XI. TECHNICAL ASSISTANCE REQUIRED: None. -42- MONTSERRAT 1985/87 Project List - Individual Project Description Tourism (US$ '000) 1. NAME OF PROJECT: Little Bay Access Road. II. EXECUTING GOVERNMENT AGENCY: Ministry of Commnications and Works III. TOTAL ESTIMATED COST: 99 IV. EXTERNAL FINANCING REQUIRED: 99 V. LENDING AGENCY: U.K. VI. DESCRIPTION AND JUSTIFICATION: A. Description: Construction of approximately 1900 ft. of road in Little Bay. B. Justification: The road would open up the area for possible tourism development. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 30 30 30 Foreign Costs 69 69 70 Total Costs - Amount - 99 99 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources 9 50 - 99 Total 9 50 99 IX. STATUS OF PREPARATION: Project has been approved and should begin in 1985. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: None. Debt Obligations: None. XI. TECHNICAL ASSISTANCE REQUIRED: The U.K. is providing the required technical assistance. -43- MONTSERRAT 1985/87 Project List - Individual Project Description Tourism (US$ '000) I. NAME OF PROJECT: Tourist Facilities II. EXECUTING GOVERNMENT AGENCY: Chief Minister's Office III. TOTAL ESTIMATED COST: 161 IV. EXTERNAL FINANCING REQUIRED: 148 V. LENDING AGENCY: Unknown. VI. DESCRIPTION AND JUSTIFICATION: A. Description: To improve beach facilities and introduce other tourism infrastructure such as nature trails and maps. B. Justification: To attract additional tourists to the island. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount x Local Costs 13 148 161 100 Foreign Costs Total Costs - Amount 13 148 161 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources 5 4 4 13 - External Sources 52 48 48 148 Total 57 52 52 161 IX. STATUS OF PREPARATION: The need has been identified. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Potentially self-liquidating. Debt Obligations: Unknown XI. TECHNICAL ASSISTANCE REQUIRED: None. -44- MONTSERRAT 1985/87 Project List - Individual Project Description Water (US$ '000) 1. NAME OF PROJECT: Equipment and Plant for Water Authority II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 336 IV. EXTERNAL FINANCING REQUIRED: 336 V. LENDING AGENCY: CIDA VI. DESCRIPTION AND JUSTIFICATION: A. Description: Includes duplication of all pumping sets and provision of stand-by generating power at all pumping stations plus additional vehicles and mechanical plant. B. Justification: To replace obsolete pumping sets as well as to meet increasing demand for water. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount 2 Local Costs - Foreign Costs 336 336 100 Total Costs - Amour: - 336 336 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - External Sources 67 185 84 - - Total 67 185 84 - - IX. STATUS OF PREPARATION: Project identified. CIDA has been approached. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: To be covered from water charges. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: None. -45- MONTSERRAT 1985/87 Project List - Individual Project Description Water (uss '000) 1. NAME OF PROJECT: Water Development II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 1,006 IV. EXTERNAL FINANCING REQUIRED: 1,006 V. LENDING AGENCY: EDF VI. DESCRIPTION AND JUSTIFICATION: A. Description: The project will: develop spring sources to improve the quantity and quality of yield; provide additional storage reservoirs; replace existing transmission mains. B. Justification: To meet increasing demand for water. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs Foreign Costs - 1006 1006 100 Total Costs - Amount - 1006 1006 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - External Sources 222 580 204 1006 Total 222 580 204 1006 IX. STATUS OF PREPARATION: Project has been identified. EDF has been approached. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: To be covered from water charges. Debt Obligations: None. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance will be required at all stages. -46- MONTSERRAT 1985/87 Project List - Individual Project Description Water (US$ '000) I. NAME OF PROJECT: Extension of Distribution Network. II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 267 IV. EXTERNAL FINANCING REQUIRED: 267 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Extension of distribution network on the East and West Coasts and in Little Bay. B. Justification: To meet increasing demand for water. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount x Local Costs - Foreign Costs 267 267 100 Total Costs - Amount - 267 267 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 134 133 267 - Total - 134 133 267 - IX. STATUS OF PREPARATION: Project identified. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: To be covered from water charges. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: None -47- MONTSERRAT 1985/87 Project List - Individual Project Description Water (USs '000) I. NAME OF PROJECT: Water Authority Office Building II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 370 IV. EXTERNAL FINANCING REQUIRED: 370 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Construction of new office building, workshop garages, store, and laboratory. B. Justification: Existing office space is too small for future requirements. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount % Local Costs 370 370 100 Foreign Costs - 370 370 100 Total Costs - Amount - 370 370 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1967 Total 1987 Local Sources - - - - - External Sources - - 185 185 185 Total - - 185 185 185 IX. STATUS OF PREPARATION: Concept identified. Project needs to be developed. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Unknown. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance required at all stages of project development. -48- MONTSERRAT 1985/87 Project List - Individual Project Description Watar (USS '000) I. NAME OF PROJECT: Replacement of Service Mains II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 86 IV. EXTERNAL FINANCING REQUIRED: 86 V. LENDIU AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project provides for the replacement of service mains in the following areas: Paradise to Rileys; Paradise to Windy Hill; Spring Ghaut to Trials and; Underwood to Mongo Hill. B. Justification: The main distribution system is corroding and needs to be replaced. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount X Local Costs 34 34 40 Foreign Costs - 52 52 60 Total Costs - Amount - 86 86 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 37 28 65 21 Total - Amount - 37 28 65 21 Ix. STATUS OF PREPARATION: Study needs to be undertaken, but project has been identified. X. PROJECT IMPLICATIONS: Operation and Maintenance Costs: Unknown. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: None. -49- MONTSERRAT 1985/87 Project List - Individual Project Description Water (US$ '000) I. NAMB OF PROJECT: Access Roads and Fencing of Reservoir Sites. II. EXECUTING GOVERNMENT AGENCY: Water Authority III. TOTAL ESTIMATED COST: 257 IV. EXTERNAL FINANCING REQUIRED: 257 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project provides for the construction of access roads and the fencing of reservoir sites in conjuntion with the development of springs and increase in reservoir capacity. B. Justification: Better access is needed to reservoirs for maintenance and monitoring. Fencing will increase security around reservoirs. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount Z Local Costs 154 154 60 Foreign Costs -103 103 40 Total Costs - Amount - 257 257 i&5 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - - 128 128 129 Total - Amount 129 129 129 IX. STATUS OF PREPARATION: Project has been identified. X. PROJECT INPLICATIONS: Operation and Maintenance Costs: Unknown. Debt Obligation: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: Unknown. -50- MONTSERRAT 1985/87 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: R:-construction of Secondary Schools II. EXECUTING GOVERNMENT AGENCY: Ministry of Education, Health and Community Service. III. TOTAL ESTIMATED COST: 519 IV. EXTERNAL FINANCINW REQUIRED: 519 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: The project includes the reconstruction and expansion of two junior secondary schools at Salem and Plymouth, and the Montserrat Secondary School. B. Justification: The project will enlarge the access to secondary education especially for the 15 -17 age group. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount x Local Costs 130 130 25 Foreign Costs 389 _389 75 Total Costs - Amount - 519 519 100 VIII. DISBURSEMENT PERIOD: 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 130 194 324 194 Total - 130 194 324 194 IX. STATUS OF PREPARATION: Project identifed in a UNESCO Sector Study Report. CDB approached. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Unknown. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance required for implementation. -51- MONTSERRAT 1985/87 Project List - Individual Project Description Education (US$ rOOO) I. NAME OF PROJECT: Technical Education Program II. EXECUTING GOVERNMENT AGENCY: Ministry of Education, Health and Community Service III. TOTAL ESTIMATED COST: 423 IV. EXTERNAL FINANCING REQUIRED: 423 V. LENDING AGENCY: Unknown VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project includes the expansion of the technical college. B. Justification: To offer increased opportunities for technical training geared to the employment market. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount _ Local Costs 106 106 25 Foreign Costs _ 317 317 75 Total Costs - Amount - 423 423 100 _-z VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources - 106 158 264 159 Total - 106 158 264 159 IX. STATUS OF PREPARATION: Project identified in a UNESCO Sector Study Report. X. PROJECT IMPLICATIONS: Operating and Maintenance Costs: Unknown. Debt Obligations: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance required for implementation. -52- MONTSERRAT 1985/87 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Basic Needs II II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture/Ministry of Education. III. TOTAL ESTIMATED COST: 400 IV. EXTERNAL FINANCING REQUIRED: 400 V. LENDING AGENCY: USAID (Administered through CDB) VI. DESCRIPTION AND JUSTIFICATION: A. Description: Program includes the following i) improvements to clinics and health centers; ii) irrigation development; iii) post harvest pest control; iv) vocational/technical center; v) rehabilitation of Salem Junior Secondary School. B. Justification: continuation of Basic Needs I Program. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount _ Local Costs 160 160 40 Foreign Costs _ 240 240 60 Total Costs - Amount - 400 400 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - - - - - External Sources 133 134 133 400 Total - Amount 133 134 133 400 IX. STATUS OF PREPARATION: Project has been approved and will begin in 1985 with USAID funding. X. PROJECT IMPLICATIONS: Operation and Maintenance Costs: None. Debt Obligations: None. XI. TECHNICAL ASSISTANCE REQUIRED: Technical assistance required form implementation. -53- MONTSERRAT 1985/87 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Community and Resource Centers II. EXECUTING GOVERNMENT AGENCY: Ministry of Education, Health, and Community Service. III. TOTAL ESTIMATED COST: 94 IV. EXTERNAL FINANCING REQUIRED: 70 V. LENDING AGENCY: UK VI. DESCRIPTION AND JUSTIFICATION: A. Description: Project provides for the building of community centers and resource centers on a voluntary basis. Equipment for resource centers would also be purchased. B. Justification: Schools are presently substituting for both community and resource centers, Separate facilities are needed due to scarce resources in the schools (i.e. equipment, books, etc.). VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount 2 Local Costs 10- 28 38 40 Foreign Costs 14- 43 56 60 Total Costs - Amount 24- 70 94 100 VIII. DISBURSEMENT PERIOD: Post 1985 1986 1987 Total 1987 Local Sources - 8 8 16 8 External Sources - 23 23 46 24 Total - Amount - 31 31 62 32 IX. STATUS OF PREPARATION: Project has been identified. BDD has been approached. X. PROJECT IMPLICATIONS: Operation and Maintenance Costs: Unknown. XI. TECHNICAL ASSISTANCE REQUIRED., Technical assistance is required for implementation. -54- MONTSERRAT 1985/87 Project List - Individual Project Description Housing (US$ '000) I. NAME OF PROJECT: Housing II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Trade, Lands and Housing III. TOTAL ESTIMATED COST: 741 IV. EXTERNAL FINANCING REQUIRED: - V. LENDING AGENCY: Capital Market instruments (most probably Development Bonds) issued by the Government Montserrat. VI. DESCRIPTION AND JUSTIFICATION: A. Description: The Government of Montserrat would issue capital market instruments (Development -nds) for financing at middle income housing with possibly a low income housing component. B. Justification: To satisfy the growing demand for middle/low income housing. VII. COST COMPONENTS AND FINANCING: Financed by Total Local External Sources Sources Amount _ Local Costs 445 445 60 Foreign Costs 296 296 40 Total Costs - Amount 741 741 100 VIII. STATUS OF PREPARATION: Project identified. ECCB has been approached. IX. PROJECT IMPLICATIONS: Operating and Maintenance Costs: None. Debt Obligations: Development Bonds would yield 7.5% annually and would be redeemable in 15 years. X. TECHNICAL ASSISTANCE REQUIRED: -55- STATISTICAL APPENDIX Table No. I. POPULATION AND LABOR FORCE 1.1 Population Trends, 1977-83 1.2 Employment Trends and Unemployment, 1975-83 1.3 Population by Age and Sex, 1970, 1980, 1981, 1983 II. NATIONAL ACCOUNTS 2.1 Sectoral Origin of Gross Domestic Product at Current Prices, 1975-83 2.2 Sectoral Origin of Gross Domestic Product at Constant Prices, 1975-83 2.3 Expenditure on Gross Domestic Product at Current Prices, 1975-83 2.4 Expenditure on Gross Domestic Product at Constant Prices, 1975-83 2.5 Actual and Projected Sources and Uses of Resources, 1982-1987 III. BALANCE OF PAYMENTS 3.1 Balance of Payments, 1977-83 3.2 Merchandise Imports by End Use Category, 1978-84 3.3 Selected Merchandise Exports by Major Commodities, 1977-84 3.4 Exports by End-Use Category, 1977-84 3.5 Actual and Projected Balance of Payments, 1982-87 IV. EXTERNAL PUBLIC DEBT 4.1 Summary of External Debt and Publicly Guaranteed Debt Operations, 1976-83 V. PUBLIC SECTOR FINANCES 5.1 Central Government Current Expenditures, 1978-84 5.2 Central Government Current Revenues, 1977-84 5.3 Central Government Operations, 1977-84 5.4 Financing of Public Sector Investment, 1977-83 5.5 Actual and Projected Central Government Finances, 1982-87 5.6 Actual and Projected Finp.ncing of Public Sector Investment, 1982-87 5.7 Public Sector Investment Program 1984-87 -56- VI. HONEY AND BANKING 6.1 Summary of Commercial Bank Operations, 1977-84 6.2 Distribution of Credit to Private Sector, 1977-83 6.3 Comparisons of Commercial Bank Interest Rates, 1981-83 VII. AGRICULTURE, INDUSTRY AND TOURISM 7.1 Agriculture Production, 1975-83 7.2 Industrial, Electricity and Water Production, 1977-83 7.3 Tourism Data, 1977-83 7.4 Stay-over Visitors and Excursionists by Country of Origin VIII. PRICES 8.1 Consumer Prices, 1976-83 -57- Table 1.1: IIS - POEURATIDO MUMDS, 1977-63 Prel. 1977 1978 1979 198ON 1981 1982 £983 Mid-Yew Population bstlcate 11,494 11,252 11,221 11,606 11,620 11,675 11,733 Crnd Birth Rate of Mid-Yer stimmed Population (per OU) 17.8 17.1 21.2 19.3 19.9 22.3 22.7 Crude Lbatn Rate of fld-eYer fstim.ed Poplation (per )O) 12.0 13.1 1U.3 . 10.1 9.9 0.6 oate Of Natural Increse of Mld lYear timtled Population (per OUU) 5.6 4.0 LO.9 10.4 9.8 12.4 12.1 Total Births 205 192 258 224 231 260 266 TotaL Luatns 138 147 116 L03 117 114 124 NturaL ropulation Increase 67 45 122 121 114 146 142 det Iigratiom -220 -287 -153 +264 -1L0 -91 -84 Nec Population Lncrea -153 -242 -31 +385 +14 +55 +58 Infant mZrtality Maca 34.1 46.9 4O.; 4U.2 21.6 7.7 30.1 a/ AU Population Census. Source: Statistics office. -58- Table 1.2: - 5 E I-f WED MD UNMILO', 1975-63 . _~~~~~~~~~~~~~~~~~P1 1975 198Da/ 1981 1982 1983 Agriculcuz, Forestry, Fistaries 615 476 470 470 45U hiola and Quarrying 10 9 9 10 10 Manufacturing 25U 464 520 510 533 Electricity and Water 70 d9 89 90 iou Coastruction 630 713 735 740 690 Trading, Hoteds, Mestaurants 485 605 b25 b35 626 Transport and Caoumancatioas 2uu 237 2;5 265 270 ftiaanC, ILsurance, MeaL Estace and Business Services 164 166 170 172 164 Otber Services 1,6b2 1,d12 1,796 1,861 1,900 T'JTAL &TMdVWYENT 4,046 4,574 4,b64 4,753 4,743 No. of Persons Unemployed 306 298 271 282 357 Total Labor force 4,352 4,872 4,935 5,035 5,10U Unemploymat ±tate 7.0 6.1 5.5 5.6 7.0 a/ Census figures. Source: Scatistics Office -59- Table 1.3: MONTSERRAT - Population by Age and Sex, 1970, 1980. 1981 and 1983 1970a/ 19808/ 1981b/ t983b/ Age Group Kale Female Total Kale Feumle Total Male Female Total hale Female Total Under 10 1593 1560 3153 1122 1177 2299 1131 1121 2252 1122 1106 2228 10 to 14 692 710 1402 678 675 1353 669 677 1346 650 661 1311 15 to 39 1625 1616 3241 2261 2126 4387 2314 2214 4528 2403 2347 4750 40 to 64 1034 1391 2425 901 1159 2060 877 1115 1992 888 1072 1960 654- 430 807 1237 620 887 1507 617 885 1512 601 884 1485 TOTAL 5374 6084 11458 5582 6024 11606 5608 6012 11620 5663 6070 11733 Dependency Ratio C/ 102 80 78 75 Not" : J Population Census Figures !f Estimtes Cl Population under 15 and over 65 per 100 of the working population (15-64). Source: Statlstics Offlce. -60- Table 2.1: MIrSERIIAT - SEM(T[L ORIGDN uP GE0S UI2IIIV C PWOICE AT CUtRHENT PRICES, 1975-83 t(n tbhueands of EC dollars) ActuaL fteLi.lnary 1975 1976 1977 1978 1979 1980 1981 1982 1983 Agricmlture 1.190 [.313 1.335 1.509 2,033 2,405 2.994 3,308 3,263 Miing ad Quarrylag 2Z2 26b 240 350 350 356 454 1,108 582 HMnafeCuring 1,3MW 1.430 1,787 Z,277 3,015 3,479 4,100 4,033 5,304 Electricity and Water 676 bOD 907 1,078 992 1.859 2.034 2.118 2,553 Cbnstructim 2.753 2.959 2,89 2.946 4,907 5,Z26 6.38b 6.263 6,507 Wtulaslua Mad Retail trade 3,600 4,2b9 4,956 5,s42 5.27 8.9Z1 12.651 13,468 13.640 Hotel and Hena trmat 593 778 984 966 1,330 1.751 2,404 2,b74 2,844 ramspoct and Cauiicatlan 1,469 1,641 1.980 3.135 3.60W 4.256 5,205 6,529 7,374 Bmaktn iTaur , H 1ninms s nrv1cs [.504 1,318 1,703 1,947 2.494 3,438 4.483 5,235 5,453 AlML Eltet aou O Hmerhdp of LulL1g 5.177 5,292 5.745 5,933 6.423 14,277 11.262 [1,437 13,491 FUblIc Anistration 4,610 4.441 4,734 5,372 7,148 10,687 12.052 13.427 15,421 Ottmr Service. 797 1,233 1,517 1,768 1,875 2.851 2,7S9 3.055 3.166 IUL 23.9E0 25,540 Z8,697 33.123 39,394 59.506 66,824 74,655 79,638 Imated lklzg Service orss 849 984 1,112 1,18b 1.335 1,894 2,780 3,666 3,645 * at currnt f.c. 23,131 24.,56 27.585 31,937 38,059 57.61Z 64,044 70.989 75.993 Not Indlrec Tem 2,307 2,316 2,942 3,345 5,225 7,828 9,314 10.020 11.588 (MP at current M.p. 25,438 26,872 30,527 35,282 43,284 65,440 73,358 81,009 87.5U1 Soerc: Statistlcs offle -61- Table 2.2: MONTSERRAT - SECTORAL ORIGIN OV GROSS DOMESTIC PRODUCT AT CONSTANT PRICES, 1975-83 (In thousands of 1977 EC dollars) Actual PreTiminary 1975 1976 1977 1978 1979 1980 1981 1982 1983 Agriculture 1,573 1,660 1,335 1,322 1.633 1,523 1,707 1,616 1,373 Mining and Quarrying 250 273 240 348 328 295 325 727 383 Manufacturing 1.685 1,753 1,787 2,360 2.831 3,128 3,505 3,438 3,593 Electricity and Water 837 849 907 972 1,013 1,139 1-,140 1,107 1,210 ConstructLm 3.774 3,317 2,809 2,618 3,848 3,557 3,963 4,720 3,697 Wholesale and Retail Trade 5.364 5,444 4,956 5,514 5,770 6.463 6.965 7,064 6,941 Hotels and Restaurants 965 956 984 1.009 1.029 1.291 1.138 1.090 1,047 Transport and Commications 1.906 1,829 1,980 2,498 2.590 2,770 2,883 3,108 3,191 Banking, Insurance. Business Services 1,978 2,002 1,703 1,825 2.126 2.367 2,417 2,477 2,544 Real Estate and Ownership of Dwellinqp 5,551 5,651 5,745 5,988 6.090 6,162 6.285 6,345 6,410 Public Ad-i4istration 4,519 4,441 4,734 4,790 4.893 6,617 6,516 6,552 7,119 Other Servlces 1.363 1.406 1,517 1,549 1,590 1.630 1,435 1,397 1,274 TOTAL 29,765 29,581 28,697 30,793 33,741 36,942 38,279 39,641 38,782 Imputed Backing Servlce Charges 1,398 1,377 1,112 1,194 1,389 1.583 1,610 1.636 1,610 CDP at Constaut f.c. 28.367 28,204 27,585 29,599 32.352 35,359 36.669 38.005 37,172 Net Indlrect Taxes 3,015 2,752 2,942 2.878 3,835 4.543 4,395 4,776 5,378 GDP at Conatant u.p. 31,382 30,956 30,527 32,477 36,187 39,902 41,064 42.781 42,550 Growth Rate (Z) -1.4 -1.4 6.4 11.4 10.3 2.9 4.2 -0.5 Source: Statistics Otftce -62- Table 2.3: HOIlSERRAT - EXPENITURE ON CROSS DKECS=C PRODtCT AT CURRENT Pruces. 19783 (In thousands of EC dollars) 1975 1976 1977 1978 1979 1980 1981 1982 1983 Final Coamumptilon Expenditure 27,726 30,334 32,321 38.888 48.860 74,601 80,991 90,619 96.457 Govrnmant 6.280 6,937 6,704 7.786 9,906 12,242 14.119 16,877 19,316 Private 21,446 23,397 25,617 31,102 38.954 62,359 66,872 73,742 77,141 Investment 8,710 LL.911 9,854 14,299 19,596 26,857 33,675 32.092 27.841 Fiuxd Capital Forsatinn 8,367 1O,505 9,243 11,980 18,195 21.644 29,354 30.613 25.981 Public (n.-.) (4,580) (3.383) (2.219) (3,583) (6,107) (8.112) (6,347) (n.-) Private (n.&.) (5,925) (5,860) (9,761) (14,612) (15,537) (21,242) (24,266) (n.a) Change in Stocks 343 1,416 611 2.319 1,401 5.213 4,321 1,479 1.860 Exports of Goods & Service. 7.200 7,500 9,244 11.715 11,589 13,660 18.606 20.204 21.549 Import. of Coods a Services&/ 18.198 22.883 20.892 29.620 36.761 49,678 59,914 61.906 58,266 GOP at m.p. 25.438 26,872 30,527 35.282 43.284 65,440 73.358 81.009 87.581 '/ Note: Figures differ from balance of payments due tn inclusion of estimated unrecorded imports. Source: Statisleis Office cad mission estimates. -63- Table 2.4: MONTSEIRRAT - EXPENDITURE ON GROSS DODESTIC PRODUCT AT CONSTAIT PRICES, 1975-83 (In thousands of 1977 eC dollars) 1975 1976 1977 1978 1979 1980 1,981 1982 1983 Final Coiuuption Expenditure 32,855 30,780 3Z,321 32,016 37,576 41.700 39,797 44,184 44,390 Gover ent 6,873 7,771 6,704 7,090 6,985 7,502 8,250 9,072 10,071 Private 25,982 23,009 25,617 24,926 30,591 34,198 31,547 35,112 34,319 Invee cat 12,379 14,111 9,854 12,590 15,074 18.060 20.660 18,362 15,530 Fixed Capital Formation 11,907 12,195 9.243 10,451 14,079 15.090 18,291 17,567 14,538 Public (n.a.) (5.201) (3.383) (1.953) (2.816) (4,301) (5.288) (3,641) (n.a.) Private (n.a.) (6,994) (5,860) (8,498) (11,263) (10,789) (13.003) (13,923) (n.a.) Chanpe in Stocks 472 1,916 611 2,139 995 2,970 2,369 795 992 Exports of Goods 6 Services 8,857 9,001 9.244 11,715 9,272 9,487 12,004 11,678 10,829 ITport, of Goods & Services 22,709 22.936 20,892 23.844 25.735 29,345 32,370 31,443 28,199 GDP at M.p. 31,382 30,956 30,527 32.477 36.187 39,902 41,064 42,781 42,550 Source: Statistlcs Offlce -64- Table 2.5: HOUSERRAT- ACUAL AND PRDJECrED S1RCES MID USES CF RESOURCES, 1982-87 (In milioDns oE East Caribbean dollars) Actual Prelim. Prolected a/ 1982 1983 1984 1985 1986 1987 Gross Domestic Product 81.0 87.6 87.6 89.4 92.0 94.8 Imports (iucludixg NPS) 61.9 58.3 50.1 64.3 67.8 72.2 Exports (including NFS) 20.2 21.5 23.4 26.5 31.3 34.0 Consumption 90.6 96.5 93.6 95.9 98.1 100.6 Public 16.9 19.3 19.8 20.6 21.2 21.8 Private 73.7 77.1 73.8 75.3 76.9 78.8 Inves t 32.1 27.8 20.7 31.3 30.4 32.4 Public 6.-3- 6.1 7 -:9.8 8.9 8.0 Private 25.7 21.7 13.7 21.5 21.5 24.4 Gross National SaviugB 7.5 18.6 12.6 12.9 13.9 15.7 Public 3.2 3.0 3.2 3.1 3.2 3.2 Private 4.3 15.6 9.4 9.8 10.7 12.5 Memorandum Item Inveut _ t Fiaig 32.1 27.8 20.7 31.3 30.4 32.4 National Savings 8 6 1 2.6 12.9 13.9 15.7 Current Account Balace 24.6 9.2 8.1 18.4 16.5 16.- (As of Z of GDP) Gross Doustic Product 100.0 100.0 100.0 100.0 100.0 100.0 Resource Balance 51.5 42.0 30.5 42.3 39.7 40.3 mortr-s (including 1FS) 76.4 66.5 57.2 71.9 73.7 76.2 Exports (icluding NFS) 24.9 24.5 26.7 29.6 34.0 35.9 Conumption 111.9 110.1 106.8 107.3 106.6 106.1 Public 20.9 22.0 22.6 23.0 23.0 23.0 Private 91.0 88.1 84.2 84.3 83.6 83.1 Tnvest t 39.6 31.7 23.6 35.0 33.0 34.2 Public 7.8 6.9 8.0 11.0 9.7 8.4 Private 31.8 24.8 15.6 24.0 23.3 25.8 Gross National Saings 9.3 21.2 14.4 14.4 15.1 16.6 Public 4.0 3.4 3.7 3.4 3.5 3.4 Private 5.3 17.8 10.7 11.0 11.6 13.2 randun Item rnvestt Finanng 39.6 31.7 23.6 35.0 33.0 34.2 National Savigp 9.3 20.9 14.4 14.4 15.1 16.6 Current Accout Balae 30.3 10.8 9.2 20.6 17.9 17.6 a/ At constant 1983 prices. Source: Mission estiltes. -65- Table 3.1: MONTSERRAT - BALANCE OF PAYMENTS, 1977-83 (In millions of US dollars) Prel. 1977 1978 1979 1980 1981 1982 1983 Exports of Goods and NFS 3.4 4.4 4.5 5.1 6.9 7.5 8.0 Imports of Goods and NFS 7.0 10.0 12.0 16.9 22.2 22.9 21.6 Resource Balance -3.6 -5.6 -7.5 -11.8 -15.3 -15.4 -13.6 Net Factor Service Payments -0.03 -0.03 -0.03 -0.01 -0.01 -0.2 0.2 Transfers (net)a/ 4.7 4.7 4.9 5.6 5.0 6.5 10.0 Current Account Balance 1.1 -0.9 -2.6 -6.2 -10.3 -9.1 -3.4 Private Capitalb/ -3.3 -0.2 0.7 3.8 6.9 5.0 1.9 Public Capital 3.4 1.4 1.8 2.2 2.7 3.0 1.5 Grants 3.1 1.3 1.7 2.0 2.2 2.6 1.3 Loans 0.3 0.2 0.2 0.3 0.6 0.4 0.3 Amortization - -0.1 -0.1 -0.1 -0.1 - -0.1 Change in International Reserves -1.2 -0.3 0.2 v.2 0.7 1.1 - (-increase) a/ Includes budgetary grants up through 1980. b/ Including errors, omissions and commercial banks. Source: Mission estimates. -66- Table 3.2: MONTSERRAT - MERCHANDISE IMPORTS BY END USE CATEGORY, 1978-84 (In millions of US dollars) Prel. 1978 1979 1980 1981 1982 1983 1984 a/ Total B/ 10.0 12.0 16.5 18.9 20.3 20.1 10.9 Food 2.3 2.5 3.5 3.7 3.7 3.9 2.6 Beverages and Tobacco 0.7 0.7 L.0 1.2 1.4 1.4 0.6 Crude Materials 0.2 0.6 0.5 0.6 0.6 0.5 0.2 Fuels 0.7 1.1 1.8 2.2 2.2 2.3 1.1 Oils and Fats 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Chemicals 0.6 0.7 1.3 1.4 1.6 1.3 0.6 Manufactured Goods 1.8 2.4 2.6 2.9 3.6 3.0 1.6 Machinery and Transport 2.5 2.4 4.1 3.5 4.6 4.5 2.7 Miscellaneous Manufactured Articles 1.1 1.3 1.6 3.1 2.2 2.4 1.2 Miscellaneous Transactions 0.1 0.1 0.1 0.2 0.3 0.7 0.2 a/ January through August only. b/ Totals may not add because of rounding. Source: Statistics Office. -67- Table 3.3: MONTSERRAT - SELECTED MERCHANDISE EXPORTS BY MAJOR CXMMODIrIES, 1977-84 (In thousands of US dollars) Preliminary 1977 1978 1979 1980 1981 1982 1983 1984 a/ Cattle 32.6 11.5 45.9 1.1 40.7 8.0 - - Cotton Liut 50.1 21.5 0.4 - - - - - Electronic Components -- 211.5 145.9 130.4 129.3 88.0 403.8 524.4 Hot Peppers 0.1 34.2 69.3 40.4 35.6 1.5 0.9 0.1 Live Plants -- 9.3 58.2 88.9 130.0 143.6 118.1 51.7 Pepper Paste -- - 63.4 10.4 21.9 13.9 13.2 12.0 Plastic Bags 7.8 8.4 18.1 53.1 82.2 69.9 32.0 18.7 Polyprophelene Bags 69.3 3.4 - 215.1 561.9 461.0 853.7 467.8 T-Shirts, Shirts & Jeans -- - - 55.9 121.9 118.3 70.2 123.6 Tomatoes 28.6 22.3 21.1 6.7 5.9 3.1 - 2.8 Sea Island Cotton Goods - - - - 21.1 0.4 7.2 9.8 Leather 1.1 1.1 3.3 17.8 48.9 43.9 32.3 9.3 Note: a/ January through July only. Source: Statistics Office. --68- Table 3.4: MONTSERRAT - Exports by End-Use Category, 1977-1984 (In thousands of US dollars) 1977 1978 1979 1980 1981 1982 1983 1984 1/ Domestic Exports 408 712 551 658 1,302 1,018 1,581 1,276 Food 95 103 237 78 148 32 19 40 Beverages and Tobacco 4 4 8 4 6 8 12 - Crude Materials 70 96 79 89 135 151 120 52 Fuels Animal and Vegetable Oils - - - - - - - Chemicals 4 3 - - - - - - Manufactured Goods 40 16 4 18 72 62 53 22 Machinery and Transport - 213 145 130 130 88 404 524 Miscellaneous Mfanufactured Articles 195 277 78 339 810 677 973 638 Miscellaneous Transactions - - - - 1 - - - Re-exports 2/ 201 664 223 105 182 313 122 508 Total Exports 609 1,376 774 763 1,484 1,331 1,703 1,784 Note: 1/ January through September only. 2, From 1980 to 1984, categories previously classified as re-exports, i.e. musical instruments brought in as personal items by groups recording at the Air Studio and currency notes repatriated to ECCB, have been deducted. These items have probably also been included in earlier years (1977 to 1979), but no estimates were available. Source: Statistics Office and Customs. -69- Table 3.5: MONTSERRAT - PROJECTED BALANCE OF PAYMENTS, 1982-87 (In millions of US dollars) Actual Prelim. Projected 1982 1983 1984 1985 1986 1987 Exports of Goods and NFS 7.5 8.0 9.0 10.3 12.5 13.6 Imports of Goods and NFS 22.9 21.6 19.3 25.0 27.1 28.9 Resource Balance -15.4 -13.6 -10.3 -14.7 -14.6 -15.3 Net Factor Service Payments -0.2 0.2 0.2 -0.1 - -0.3 Transfers (net) 6.5 10.0 6.8 7.2 7.6 8.1 Current Account Balance -9.1 -3.4 -3.0 -6.8 -6.1 -6.2 Private Capital a, 5.0 1.9 0.5 3.6 3.3 3.5 Public Capital 3.0 1.5 2.5 3.2 2.8 2.7 Grants and Loans 3.1 1.6 2.7 3.4 3.1 3.1 Amortization -0.1 -0.1 -0.2 -0.2 -0.3 -0.4 Change in reserves 1.1 - - - - - C-- increase) a/ Includes commercial banking system and uncommitted financing for public sector investment program. Source: Mission estimates. -7n- Table 4 1: KONTSSRRAT - SUMMARY OF ETxERJAL PUBLIC DEBT AND PUBLICLY GUARANTEED DEBT OPERATIONS. 1976-83a/ (In thousand. of US dnllars) 1976 1977 1978 1979 1980 1981 1982 1983 Outstanding and Disbursed Debt at end of Period 510.1 704.3 914.4 1.127.7 1,484.8 2,012.9!f 2,407.2 2,639.7 Outstanding and Disbursed Debt at beginning of Period 359.8 520.2 704.3 914.4 1,127.7 1.484.8 2.012.9 2,407.2 Plus: Net Disbursements 217.0 194.2 210.1 213.3 357.1 528.1 394.3 232.5 Disburuements 217.0 194.2 256.9 224.8 379.8 547.1 436.4 303.3 Amortization - - 46.8 11.5 22.7 19.0 42.1 70.8 Valuattin Adjustment -66.7 - - - - - - - Debt Service Payments 20.7 28.1 76.7 45.2 73.0 79.4 137.7 177.4 Amnrtizatlon - - 46.8 11.5 22.7 19.0 42.1 70.8 Interest 20.7 28.1 29.9 33.7 50.3 60.4 95.6 106.6 (in per cent) Disbursed Balance/CDP 5.6 7.4 8.5 7.3 8.5 10.0 8.0 8.1 Net Disburuement/GDP 2.4 2.0 2.0 1.4 2.1 2.6 1.3 0.7 Debt Service/GDP 0.2 0.3 0.6 0.3 0.3 0.3 0.5 0.5 Debt Service/Exports of Gonds and NFS 0.7 0.8 1.8 1.0 1.4 1.2 1.8 2.2 Average Interest Rateb/ 5.8 5.5 4.2 3.7 4.5 4.1 4.7 4.4 a/ Includes Central Government and Central Government guaranteed debt. 5, Rates nf interest paymente to debt at beginning of period. c/ Excludes ECS3.7 milltan of local loans from a commercial bank. Sources: Government of Montserrat, CDB. and misslon entimates. -71- Table 5.1: ClMTSER2 - ( AL GOVERISMEN tRET EIPENDnURES,/ 1978-84 (In thousands of EC dollars) Estimte 1978 1979 1980 1981 1982 1983 1984 Current Expenditures 8,897 11,737 13,773 16,042 18,878 20,159 21,637 Wage and Salarles 4,885 7,351 7,949 8,087 9,958 11,139 13,185 Pendsios and Gratuities 554 430 751 741 971 1,106 982 Purchase of Goods & Services 2,522 2,958 3,800 5,60 5,997 5,967 5,391 Interest Paymnts 54 45 57 303 370 324 318 Subsidies bl 93 80 120 135 156 130 155 Trawfers to: 789 873 1,096 1,175 1,426 1,493 1,606 Households (333) (369) (507) (423) (604) (591) (565) Abroad (367) (429) (478) (550) (515) (599) (795) Other (89) (75) (111) (202) (307) (303) (246) a/ National Accounts definition. bI To Water Authority In Xleu of rates. Source: Statistics Office, iniestry of Finance and the Treasury, Audited Annual A;uts, 1982, and Akual Accounts Ended December 31, 1983. -72- Table 5.2: MONTSERRAT - CENTRAL GOVERNMT CURRENT REVENUES,a/ 1978-84 (In thousands of East Caribbean dollars) Estimate 1978 1979 1980 1981 1982 1983 1984 Current Revenue 7,732 10,859 14,951 18,327 20,083 20,966 22,443 Tax Revenue 6,198 9,021 12,840 15,453 16,770 18,189 19,992 Direct Taxes 2760 3,716 4,892 5,646 6 757 8,263 8,505 Persomal Income Tax 1,705 2,358 2,853 3,299 5,210 5,100 Company Income Tax 314 377 919 1,163 1,427 1,710 1,900 Property Tax 600* 828 830 942 1,010 1,118 1,200 Others 141 153 290 242 280 225 305 Indirect Taxes and Fees 3 438 5 305 7 948 9 807 10 013 9 926 11 487 Import Duties ,1 0 ii7I 2 63722 Hotel Occupancy Tax 75 76 128 173 168 205 280 Foreign Currency Levy 282 391 857 847 890 1 881 1,000 Consumption Tax 1,426 1,816 2,464 2,791 2,898 3,238 3,869 Stamp duties 137 199 210 220 276 162 200 Customs Service Tax 0 761 1,498 1,644 1,762 1,986 2,700 Bank Licenses 0 30 331 1,318 885 494 250 Others 121 264 356 439 497 580 506 Nontax Revenue 1.5 1.838 2,111 2,874 3,313 2,777 2,451 Iuterest and Rent Income 239 243 243 231 238 309 319 Profits from Governmet Corp *b/ 414 830 847 1,763 1,977 1,451 1,090 o/w Share of ECCA Profit (124)* (249) (339) (568) (617) (731) (650) Sale of Goods & Services 175 333 258 310 273 259 275 Surplus of Departmental Enterprises$ 175 123 22 -358 -62 -206 -276 Current Transfers 531 309 741 928 887 964 1,043 from Households (68) (110) (485) (702) (576) (559) (633) Other (463) (199) (256) (226) (311) (405) (410) External Budgetary Grants 1,700 1,200 1,200 - - - - * Estimate Notes: a/ Nationl Accounts definition. b/ Comprised of the Philatelic Corporation and Share of ECCA Profit. cf Departmental Enterprises consist of the Post Office, Blackburne Airport, Radio Montserrat and the Harbour. Source: Statistics Office, Ministry of Finance, and the Treasury, Audited Annual Accwxnts, 1982, and Annual Accomnts Ended December 31, 1983. -73- Table 5.3: MONTSERRAT -CENTRAL GOVERNMENT OPERATIONS, 1978-84 (In millions of East Caribbean dollars) Estimate 1978 1979 1980 1981 1982 1983 1984 Current Revenue 7.7 10.9 15.0 18.3 20.1 21.0 22.4 Current Expenditure 8.9 11.7 13.8 16.0 18.9 20.2 21.6 Current Account Balance -1.2 -0.8 1.2 2.3 1.2 0.8 0.8 External Budgetary Grants 1.7 1.3 1.1 - - - -- Central Government Balance 0.5 0.5 2.3 2.3 1.2 0.8 0.8 Capital Expenditures 2.7 3.9 7.3 10.5 7.9 4.7 7.3 Overall Deficit -2.2 -3.4 -5.0 -8.2 -6.7 -3.9 -6.5 Financing 2.2 3.4 5.0 8.2 6.7 3.9 6.5 Capital Grants 1.7 2.4 5.4 5.8 6.9 3.6 6.1 Net External Borrowing 0.1 0.6 0.6 1.3 0.2 0.1 1.2 Disbursement (n.a.) (n.a.) (n.a) (n.a.) (0.3) (C.1) (1.2) Amortization (n.a.) (n.a.) (n.a.) (n.a.) (01) (--) (-) Net Commercial Bank Financing b/ -0.9 0.1 0.5 3.7 -0.8 -0.5 a/ Other C/ 1.3 0.3 -1.5 -2.6 0.4 0.7 -0.8 Note: a/ Loans (net) to the Central Government as of August 31, 1984. b/ Includes aw-cization payments to local branch of foreign bank of EC$.4 mi':ion in 1982, EC$.5 million in 1983, and EC$.5 million in 1984. c/ Includes residual. Source: Ministry of Finance and The Treasury. -74- Table 5.4: MONTSERRAT -FINANCING OF PUBLIC SECTOR INVESTMENT, 1978-83 (In millions of East Caribbean dollars) 1978 1979 1980 1981 1982 1983 Public Sector Capital Expenditure 2.7 4.3 6.9 10.5 7.8 4.2 Financing 2.7 4.3 6.9 10.5 7.8 4.2 Public Sector Savings -0.9 -0.1 1.1 2.3 0.8 External Budgetary Grants 1.7 1.2 1.2 - - - Net Domestic Borrowing 0.5 -1.3 -0.9 1.1 -0.5 0.2 (Banking System) (+0.4) (-1.2) (-) (4.0) (-) (Other) (0.1) (-0.1) (-0.9) (-2.9) (-0.5) - Net External Financing 1.4 4.5 5.5 7.1 6.4 3.2 (Grants) (1.7) (3.4) (5.1) (5.8) (5.6) (3.9) (Development Loans) (0.8) (0.6) (0.7) (1.6) (1.1) (0.4) (Amortization) '-0.3) (-0.1) (-0.1) (-0.3) (-0.3) (-0.3) (Change in Foreign Assets) (-0.8) (0.6) (-0.2) - - - Source: Ministry of Finance and the Treasury. -75- Table 5.5: MONTSERRAT - ACTUAL AND PROJECTED CENTRAL GOVERNMENT FINANCES 1982 - 1987 (In millions of East Caribbean dollars) Actual Prelim. Projected 1982 1983- 1984 1985 1986 1987 Current Revenue 20.1 21.0 22.4 22.9 23.6 24.4 Direct Taxes 6.8 8.3 8.5 8.5 8.7 9.0 Indirect Taxes 10.0 9.9 11.5 11.6 12.0 12.3 Other 3.3 2.8 2.4 2.8 2.9 3.5 Current Expenditure 18.9 20.2 21.6 22.2 23.1 23.8 Wages and Salaries 10.0 11.1 13.2 13.5 13.8 14.2 Goods and Services 6.0 6.0 5.4 5.7 6.3 6.4 Other 2.9 3.1 3.0 3.0 3.0 3.2 Current Account Surplus/Deficit 1.2 0.8 0.8 0.7 0.5 0.6 Source: Statistics Office, Ministry of Finance, Treasury, and mission estimates. -76- Table 5.6: MONTSERRAT - ACTUAL AND PROJECTED FINANCING OF PUBLIC SECTOR INVFSSTLENT, 1982-87 (In millions of East Caribbean dollars) Actual Prelim. Projected 1982 1983 1984 1985 1986 1987 Total Program 7.8 4.2 7.3 10.3 10.3 9.4 Public Sector Capital Expenditures 7.8 4.2 7.3 10.3 10.3 9.4 Credit Program (to Private Sector) - - - - 1.8 1.8 Financing 7.8 4.2 7.3 10.3 10.3 9.4 Public Sector Savings a/ 1.2 0.8 0.8 0.7 0.8 0.7 Net Domestic Borrowing -0.4 0.2 -1.3 Net External Financing 7.0 3.2 7.8 8.8 8.0 8.1 Grants b/ 6.9 3.9 6.1 6.9 5.0 5.0 Loans bT 0.4 -0.4 2.0 2.2 3.4 3.5 AmortiZation (-0.3) (-0.3) (-0.3) (-0.3) (-0.4) (-0.4) MAditional Financing Required c/ 0.8 1.5 0.6 a/ Includes Savings by major public enterprises. l5l Includes committed finaning only. 11 Includes both net domestic borrowing and additional external borrowing comnitments. Source: Mission estimates. Table 5.7: MONrSERRAT - PUBLIC SrCTOR INVEStMENT VMRAM, 1984-1987 Page 1 of 2 (In thousands of East Caribbean dollars) 1984 1985 1986 1987 Total External Local Total External Local Total Extermal local Total External Local 0OItl: PROJECTS Agriculture 592.3 592.3 393.8 393.8 _ 672.9 672.9 - 672.9 672.9 Sources of Energy-Charcoal Production 161.5 161.5 - 1i8.7 138.7 - Energy Conservation 7,4 7.4 - 1.7 1.7 - 1.7 1.7 _ 1.7 1.7 Phasing Out of Agricultural Subsidies 11,7 11.7 - - - - - - - Agricultural Reconstruction and Irrigation Services 319,3 319.3 - 253.4 253.4 - 586.2 586.2 - 586,2 586.2 Integrated Sea Island Cotton 58.0 58.0 - - - - - - - Estates Develop.ent - Richmord 7.0 7.0 - - - - - Abattoir Improvements - - - - 85.0 85.0 - 85.0 85.0 Cotton Wet Processing Equipment 21.4 27.4 - - - - - - - - - - industry - - - 60.0 60.0 - 305.0 305.0 - 160.0 160,0 Tannery (MIEL) - - - 60.0 60.0 - 305.0 305.0 - 160.0 160.0 Housing 20.1 20.1 i4rricane Resistant Housing 20.1 20.1 Transport 4543.3 3409.3 1134.0 3250.0 3250.0 - - -- Rescue Craft for Blackburne 58,8 58.8 - - - - - - - PWD Hot Mix Plant 480.0 480.0 - PWD Equipmnt 600.0 600.0 - New Aircraft (IsIander) 2322.0 1188,0 1134.0 - Road IWmrovement and Bitumen Storage Tank 790.0 790.0 - 900.0 900.0 Repair bf Emerald Star 42.5 42.5 - - - Port Protection 250.0 250.0 - 2350.0 2350.0 - - - Water 145.0 145.0 - 1160.0 1060.0 100.0 145.0 145.0 - _ - Water Supply Protection 145.0 145.0 - 1160.0 1060.0 100,0 145.0 145.0 - Electricity 300.0 - 300.0 - - - - - - Electricity Improvements 300.0 - 300.0 Education 295.0 295.0 - 270.0 270.0 _ 220.0 220.0 - 220.0 220.0 - Social Development (Smll Projects) 75.0 75.0 ,50.00 West Indies Scholarships and Training Scheme 220.0 220,0 - 220.0 220.0 - 220.0 220,0 - 220.0 220.0 Other 1373.6 1138.6 235,0 693.0 693.0 - 693.0 693.0 - 693.0 693.0 Police Radios 30 - 3- - - - X-Ray Machine 100.0 100.0 - - - - - - _ _ _ HAF ProJects 191.1 191.1 - 230.0 230.0 - 230.0 230.0 - 230.0 230.0 USAID Projects 160.9 180.9 - 270.0 270.0 - 270.0 270.0 - 270.0 270.0 Program Aid (BDD) 165.6 165.6 - 193.0 193.0 - 193.0 193.0 - 193.0 193.0 Computer 150.0 - 150.0 - - - - - - Old Peoples Home 85.0 - 85.0 Disaster Preparedness 60.0 60.0 - lmprovewent to Prison 141,0 141.0 - - - - Table 5.7: (Cont'd) Page 2 1984 1985 1986 1987 Total External Local Ttal External tocal Total External Local Total External Local NEW PROJECTS Asticulture 211.7 211.7 - 1492.7 1492.7 - 1698.6 1698.6 - Fisheries Development - - - - - - 141,0 141,0 - 215.0 215.0 - Farmer Staff Training and Training Center - - - - - - 20.0 20.0 - 190.0 190.0 - Faia loproveent Credit - - - - - 100.0 100.0 - 100.0 100.0 - Devuiopwent of Fruit Orchards - - - - 330.0 330.0 - 330.0 330.0 - liveutock Development - - - - - 600.0 600.0 - 620.0 620.0 - Wattrshed Protection - - - 55.7 55.5.- 55.7 - 55.6 55.6 - Reafiorestation - 156.0 156.0 - 246,0 246.0 - 188.0 188.0 - Industry - - - - - - 2025.0 1675.0 350.0 1725.0 1725.0 - Industrial Estates IV - - - - - - 1350.0 1000.0 350.0 1050.0 1050.0 Smll Industry Credit - - - - - - 675,0 675.0 - 675.0 675.0 - Housing - - 500.0 - 500.0 Hotuing - - - - - - - - - 500.0 - 500.0 Transport - - - 100.0 100.0 - 321.0 321.0 - 567.0 567.0 - Equipinnt for Airport - - 100.0 100.0 -3 321.0 $21.0,0 567.00 57.0 - Touriln _ - 285.0 273.0 12,0 275.0 263.0 12.0 142.0 130.0 12,0 Uittle Bay Acceaa Road - - - 133.0 133.0 - 133.0 133.0 - - - - Tourist Facilities 152.0 140,0 12.0 142.0 130.0 12.0 142.0 130.0 12.0 Water and Electricity - - - 3181.0 2781.0 400.0 2865.0 2065.0 800.0 1577,0 777.0 800.0 co Water Development - - 60. 0 600.0 - 1565.0 1565.0 - 550.0 550.0 - Purchass of Equipment and Plant - - - 181.0 181.0 - 500.0 500.0 - 227.0 227.0 - Replacement of Generating Sets - - - 2400.0 2000.0 400.0 800.0 - 800.0 800.0 - 800.0 Education - 360.0 360.0 - 1081.0 1059.0 22.0 1399.1 1377.1 22.0 Reconstruction and Exparnion of Secondary Schools - - - - - - 350.5 350.0 - 525.8 525.8 - Technical Edtcation Program - - 285.5 285.5 - 428.3 428,3 - Conmnity/Resource Centers - - - - - - 85.0 63.0 22.0 85.0 63.0 22.0 Basic Needs 11 - - - 360.0 360.0 - 360.0 360.0 - 360.0 360.0 - Other - - - 300.0 300.0 - 220.0 220.0 - - - Improvement to Fire Services - - - 300.0 300.0 - 220.0 220.0 Summary ONJOIIG PRDJECrS 7269.3 5600.3 1669.0 5826.8 5726.8 100.0 2035.9 2035.9 - 1745.9 1745.9 NBI PRJjwrs - - - 4437.7 4025.7 412.0 8279.7 7095.7 1184.0 7608.7 6274.7 1334.0 TOTAL 7269.3 5600.3 1669.0 10264.5 9752.5 512.0 10315.6 9131.6 1184.0 9354.6 8020.6 1334.0 _ _ - - - - - _- __ -79- Table 6.1: MONTSERRAT - SUMMARY OF COMMERCIAL BANK OPERATIONS, 1977-84 (In millions of East Caribbean dollars) December 31 -- August - 1977 1978 1979 1980 1981 1982 1983 1983 1984 Net Foreign Assets 0.7 0.6 4.8 5.2 -0.5 -6.4 -1.3 -0.8 -2.3 Assets 8.8 10.6 14.4 17.7 16.8 12.5 12.4 11.6 7.7 Claims on banks in territory 7.0 7.8 9.9 10.2 7.7 .9 5.9 4.6 1.4 Claims an banks abroad 1.8 2.8 4.5 7.5 9.1 8.6 6.5 7.0 6.3 Short-term liabilities -8.1 -10.0 -9.6 -12.5 -17.3 -18.9 --13.7 -12.4 -10.0 Balances dues to banks in territnry 1.1 1.1 1.5 2.1 3.2 1.6 ].5 1.4 0.5 Balances due to banks abroad 1.5 2.9 2.2 3.4 5.1 4.3 3.9 2.6 1.2 Nonresident deposits 5.5 6.0 5.9 7.0 9.0 13.0 8.3 8.4 8.3 Demand (0.4) (0.7) (0.4) (0.8) (1.1) (0.4) (1.0) (0.6) (0.9) Savings (4.4) (0.8) (5.1) (5.9) (6.8) (11.6) (6.2) (6.8) (6.5) Time (0.7) (4.5) (0.4) (0.3) (1.1) (1.0) (1.1) (1.0) (0.9) Claius on ECCA 4.4 5.6 7.7 6.0 1.7 1.2 2.3 2.9 7.7 Currency holdings 0.7 0.9 1.0 1.5 1.2 1.2 1.2 1.4 1.6 Deposits 3.7 4.7 5.7 4.5 0.5 - 1.1 1.5 6.1 Net domestic assets 10.7 11.0 6.8 9.0 21.6 25.3 24.2 23.4 24.5 Credit to Central Government (net) 0.2 -0.7 -0.6 -0.1 3.6 2.8 2.3 1.6 2.3 Loans and advances 0.2 - - - 3.6 3.2 2.8 2.2 2.3 Deposits - 0.7 0.6 0.1 - 0.4 0.5 0.6 - Credit to rest of public sector (net) -1.7 -0.4 -1.7 -2.2 -1.6 -0.8 -1.5 -1.6 -0.5 Credit DF1C 0.1 ... ... ... ... ... Credit to private sector and nonbank financial intermediaries 11.3 11.9 9.0 12.4 19.6 22.9 23.6 23.8 22.1 Set unclassified assets 0.8 0.2 - -1.1 - 0.4 -0.2 -0.4 0.6 Liabilities to DMFC 0.2 - - - - - - - Liabilities to private sector 15.6 17.2 19.0 20.2 22.8 20.1 25.2 25.5 29.9 Demand deposits 3.1 3.8 5.8 5.7 7.3 6.6 6.9 7.7 9.6 rime deposits 2.2 1.5 1.9 1.9 1.7 3.9 3.7 3.3 4.9 Savings deposits 10.3 11.9 11.3 12.6 13.8 9.6 14.6 14.5 15.4 3ource: East Caribbean Central Bank, mission estimates. -80- Table 6.2: MONTSERRAT - DISTRIBUTION OF CREDIT TO PRIVATE SECTOR 1977 - 1983 (In per cent) ----------------------…December 31 --------- 1977 1978 1979 1980 1981 1982 1983 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.00 Agriculture 3.3 1.7 1.6 1.2 2.3 0.9 1.3 Manufacturing 3.8 2.2 2.5 4.4 4.9 4.0 3.5 Tourism 9.3 8.0 10.8 4.3 6.2 6.5 5.3 Transportation 7.6 4.0 6.5 5.6 4.2 4.9 3.0 Construction 27.1 8.6 7.3 2.4 9.0 4.3 2.5 Commerce 23.7 26.8 19.8 22.4 22.0 20.6 22.8 Services 3.7 1.6 2.2 5.0 5.9 3.6 2.5 Personal 20.9 47.0 44.2 47.9 43.4 51.5 56.0 Other 0.6 0.1 5.1 6.8 2.1 3.7 3.1 Source: East Caribbean Currency Authority. -81- Table 6.3:: IN-CIQ - QIPMUISB OF Cr IMa AL Lu3K INrauZT .M L¶S-153 L.c.r 31. 1981 Dmmr 31. L911Z LUcmr 31. 1983 MIontsert ti s d St. aI / and Montserrat St. Mntserat S paU 2.5- 3.0 1.5- 3.0 3.0-7.50 Z.5-3.0 Z-S-3.U Z.5-3.0 3.0-5.U Z.5 up to 3 utb 3.0U- 4.5 5.5- 6.5 6.0- 8.U 4.0-4.5 6.0- 7.0 3.0- 4.5 6.0- LU 3.0- 4.5 3 to 6 wotnU 3.0- 5.0 6.5- 7.5 6.5- L.U 4.5-5.5 6.0- 8.5 3.0- 5.0 7.5- .5 3.0- 5.0 6 cm 12 mutus 3.5- 5.5 7.0- 6.5 7.5- 9.U 5.)4.0 6.0- I.S 3.5- 5.5 5.0-10.0 3.5- 5.5 Owvu 12 omt 4.0- 6.0 7.5- 8.S - 6.0-7U 8.5-10.0 4.0- 7.0 - 4.0- 6.0 prim Rau 8.5-10.0 9.0-11.0 .5-13.0 8.0-9.5 11.5-13.5 85-IU.0 13.0 8.5-10.0 Otl? ta"g 9.0-16.0 10.0-17.U - 12.*-14.0 9.0-18.0 9.0-16.u - 12.0-16.0 L As of Septeabar 3U, 1962 -8Z- Table 7.1: Ai griCultural Production (Volhm-1,OOU lbs. and Value-Thousands of EC$ at Current and Constant 1977 Prices) Prel. 1975 1976 1977 1978 1979 1980 1981 1982 1983 hbite Potatoes Voiom 60u 6U0 280 200 80 70 6u 60 15 Value (Crrent) 168 168 112 70 48 46 39 42 11 Valu (Corstant) 240 240 112 80 32 28 24 24 6 Sweet Potatoes Voinm 400 370 340 330 280 310 340 335 273 Value (Current) b0 74 119 116 98 124 136 151 177 Valu (Constant) 140 130 119 lb 98 109 119 117 96 Carrots Volume 120 130 L00 90 90 120 140 135 72 Value (Current) 30 33 45 50 68 90 98 101 94 Value (Constant) 54 58 45 41 41 54 63 63 32 Tomatoes volume 160 170 210 160 160 150 140 140 55 Value (Current) 45 51 74 64 88 105 112 168 83 VaLue (Constant) 56 60 74 56 56 53 49 49 19 Bananas volum 15U 140 13U 130 120 130 140 140 144 Vale (CUrreat) 23 21 20 20 18 26 28 35 72 Value (Constant) 23 21 20 2U 18 20 21 21 22 Hot Peppers Volume 50 5U 50 200 600 300 200 150 50 Value (Current) 15 15 15 120 360 225 200 150 50 Value (Constant) 15 15 15 60 180 90 60 45 15 Seed Cotton volum 120 z0 110 U 6 20 10 75 50 63 Value (Current) W8 200 143 72 30 20 261 293 379 Value (Constant) 156 60 .143 78 2b 13 98 65 82 Mangoes Volume 10U 10U 10O 100 10 100 120 120 120 Value Curreac) 10 10 10 10 10 15 18 18 24 Vale (Constant) 10 10 10 1U 10 10 12 12 12 Live Plants VOin - - - 5 30 35 45 45 30 Valuem (Oret) - - - 25 150 228 360 405 330 Value (Constat) - - - 23 135 158 203 203 135 Source: Statistics Office. -83- Table 7.2: MONTSERRAT -INDUSTRIAL, ELECTRICITY, AND WATER PRODUCTION, 1977-83 (EC$) SELECTED INDUSTRIAL PRODUCTION (EC$ Thousands) Estimate 1977 1978 1979 1980 1981 1982 1983 Soft Drinks 330 335 341 367 325 325 - Bread 303 315 384 452 497 560 500 Film Processing 353 533 629 466 775 772 650 Electronic Components - 530 650 720 750 1500 1600 Concrete Blocks 257 316 616 595 600 700 601 Sand and Gravel 390 466 603 647 825 949 1058 Polyprophylene Bags - - - 581 1517 1388 2412 Hot Pepper Paste - 26 171 28 59 31 36 Leather - - 54 142 189 180 114 ELECTRICITY AND WATER PRODUCTION Prel. 1977 1978 1979 1980 1981 1982 i982 Electricity Kilowatt Hours Generated (millions) 9.39 10.00 10.17 11.71 12.04 11.74 12.96 Kilowatt Hours Sold (millions) 7.86 8.55 8.75 9.89 9.91 9.53 10.60 Revenue (EC$ thousands) Fuel Surcharge 734 782 1235 2471 2683 2670 2613 Base Tariff 1185 1247 1428 1926 2341 2761 3342 Water Gallons Sold (millions) 118 119 133 147 147 147 151 Reveuue (EC$ thousands) 450 521 493 805 915 1349 1409 Source: Statistics Office -84- Table 7.3: MONTSERRAT - TOURISM DATA, 1977-83 Prel. 1977 1978 1979 1980 198L 1982 1983 Total visitor arrizals 12,739 15,348 16,890 20,483 21,400 24,900 18,844 Stayover visitors 10,892 11,531 13,108 15,530 15,554 14,979 14,344 Cruise visitorsal 1,847 3,817 3,782 4,953 5,846 9,921 4,503 Average expenditure for stayover visitors (EC$)b/ 697.8 694.0 724.2 749.4 920.2 1,0t2.2 1,112,0 Average expenditure for cruise visitors (EC$) n.a. n.a. u.a. u.a. 49.0 53.9 59.0 Tourist expenditure (EC$mil1ions)V 7.6 8.0 9.5 11.6 14.6 15.7 16.2 a, Includes excursionists. b/ This figure represents an average for the entire length of stay of hotel and villa visitors. While villa guests have a lower average daily expenditure than do hotel occupants, their length of stay is longer than the 8-day average for hotel guests. c/ 1981 includes expeDditures by cruise visitors. Source: Statistics Office. -85- Table 7.4: t EBRA2 - Stay-Over Visitors and Ecursio-ista by Country of Origin, 1981-83 COUtfLIY/ STAY-OCERS EXCUESIONISTS TOTAL REGIoN 1981 L982 1983 1981 1982 1983 1981 1982 1963 1. LATIN AMERICA AM MIE CARIBBEAN REGION OECS 1/ 3,595 3,506 3,684 125 91 8U 3,720 3,597 3,764 imi8s caTh coSi 890 983 1,012 16 24 21 906 1,007 1,033 TOTAL CAatCCz 4,485 4,489 4,696 141 115 101 4,626 4,604 4,797 LATIN A&I=CA 1,029 1,070 716 51 81. 39 1,080 *1,151 755 TOTAL 5,514 5,559 5,412 192 196 140 5.706 5,755 5,552 2. NQOB AIMRIC& maITE b ATAES 5,865 5,689 5,390 5,337 9,356 3,855 11,2U2 15,045 9,245 CANADA 1,748 1,604 1,655 78 73 98 1,826 1,677 1,753 TOUAL 7,613 7,2Y3 7,U45 5,415 9,429 3,953 13,028 16,722 1O,99d 3. EUROPE * UNITED KINGL 1,706 1,672 1,326 171 229 312 1,877 1,901 1,638 * t(SZ OF EURDPE 553 314 464 60 62 80 613 376 544 IOTAL 2,259 1,986 1,790 231 291 392 2,490 2,277 2,184 4. REST OF EJidOPE 168 141 94 8 5 18 176 146 112 GRAND TUTAL 15,554 14,979 14,341 5,846 9,921 4,503 21,4U0 24,9YO 18,844 11 OECS - Urpanization of East Cariobean States, i.e., Leeward Islaneb & Windward Islands. Source: Statistics Office. -S6- Table 8.1: MONTSERRAT - CONSUMER PRICES, 1976-83a/ 1976 1977 1978 1979 1980 1981 1982 1983 (March 1974 - 100) Average 146.1 165.1 180.6 210.0 272.2 291.5 320.1 335.1 Food 149.2 170.2 187.3 228.2 282.4 297.5 312.2 312.8 Alcoholic beverages and tobacco 139.5 168.3 194.4 226.2 260.7 284.8 301.3 314.7 Housing 100.0 102.9 108.7 110.6 153.9 147.3 147.3 157.4 Gas, electricity and water 178.9 247.3 260.9 290.6 443.9 488.0 590.1 609.7 Household and miscellaneous items 149.8 162.1 183.6 210.8 266.2 307.5 356.7 385.5 Clothing and ' )twear 162.2 231.1 244.4 306.8 354.2 385.2 446.4 504.3 Other 131.4 145.3 156.6 182.7 224.6 257.8 275.5 285.1 End of Period 147.8 175.5 191.5 238.8 281.2 301.1 326.5 349.4 Food 156.0 182.4 204.1 272.6 290.7 305.3 312.2 333.7 Alcoholic beverages and tobacco 140.2 184.1 200.7 252.5 266.2 299.2 306.0 335.4 Housing 100.0 108.7 108.7 112.2 147.3 147.3 147.3 167.8 Gas, electricity and water 181.7 262.5 262.6 321.1 474.3 489.2 611.3 624.1 Household and miscellaneous items 154.2 165.7 201.1 237.1 287.9 337.7 368.2 387.0 Clothing and footwear 209.5 231.9 269.9 332.6 359.6 413.4 486.8 531.4 Other 134.6 152.4 163.1 205.9 232.7 272.1 279.9 294.2 (Percentage change from preceding year) Average 13.0 10.9 16.3 29.8 7.1 9.8 4.7 Food 14.1 10.0 21.8 23.8 57 4.9 0.2 Alcoholic beverages and tobacco 21.0 15.2 16.4 15.3 9.2 5.8 4.5 Housing 2.9 5.6 1.7 39.2 -4.3 0.0 6.9 Gas, electricity and water 38.2 5.5 11.4 52.8 9.9 20.9 3.3 Household and miscelleneous items 8.2 13.3 14.8 26.3 15.5 16.0 8.1 Clothing and footwear 42.5 5.7 25.5 18.7 8.8 15.9 13.0 Other 10.6 7.7 16.7 22.9 14.8 6.9 3.5 End of Period 18.7 9.1 24.7 17.8 7.1 8.4 7.0 Food 16.9 11.9 33.6 6.6 5.0 2.3 6.9 Alcoholic beverages and tobacco 31.3 9.0 25.8 5.4 12.4 2.3 9.6 Housing 8.7 0.0 3.2 31.3 0.0 0.0 13.9 Gas, electricity and water 44.5 0.0 22.3 47.7 3.1 25.0 2.1 Household and miscellaneous items 7.4 21.4 17.9 21.4 17.3 9.0 5.1 Clothing and footwear 10.7 16.4 23.2 8.1 15.0 17.8 9.2 Other 13.2 7.0 26.2 13.0 16.9 2.9 5.1 Note: a/ A new consumer price index (September 1982-100) was Introduced. The new index contains many more consumer items and new weights tased on a 1980 survey of selected households. Source: Statistics Office. LA~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ It , < ~~~~~~~~~~~~~~~~~~~~~U T Ii Iw iI~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~E 4.~~~~~~~~o