Economic and Social Development Policy Loan

closed

The objectives of the Economic and Social Development Policy Loan and Credit Program for Grenada are to: a) improve public sector governance and economic management, by supporting reforms to increase the efficiency of tax collection, improve public service delivery, enhance debt management, reduce waste in the provision of public services, and help cope with the adverse consequences of the global economic downturn; and b) improve the effectiveness and efficiency of social safety nets, by supporting efforts to develop objective beneficiary selection criteria and transparent targeting mechanisms and prioritize social spending to vulnerable groups. Economic and Social Development Policy Loan and Development Policy Credit (ES DPL/DPC) will provide timely financial support to the Government of Grenada for: (i) managing the impact of the global economic crisis; and (ii) maintaining and reinforcing the implementation of the government's long-term structural reform agenda. The Grenadian Government developed a well articulated economic program in 2006 and has been implementing this program since then with necessary extensions and modifications as required by the changing economic environment. The macroeconomic performance remained strong up to the global economic crisis when the macroeconomic environment deteriorated sharply. Given the high level of debt and limited fiscal space, Grenada is significantly constrained in adopting countercyclical policies to mitigate the impact of the global economic crisis and needs financial support while it adjusts to the deteriorated global environment and sustains the implementation of the longer term reform agenda. The ES DPL/DPC will help the government in maintaining macroeconomic stability and protecting the poor while enhancing economic and institutional foundations for faster development. To this end, the ES DPL/DPC supports specific actions to: (1) improve public sector governance, economic management, and debt management; (2) strengthen social safety nets; and (3) improve the business environment and financial sector stability.