CATEGORY:PRIVATE SECTOR DEVELOPMENT
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Overview
The establishment of the OECS Monetary Union in 1983 limits the extent to which the Government of Grenada can influence monetary policy through changes in interest rates, credit and exchange rate policies. The government of Grenada on the other hand is charged with the responsibility of creating the enabling environment to nurture this private sector development. The Government over the years has provided fiscal incentives to the sector. The Private Sector continues to be the engine of growth for the economy with its contribution to the creation of goods and services and the provision of employment.

Notwithstanding the achievements of the private sector in the production of goods and services, the sector is faced with constraints which must be addressed as we face the challenges of the new trade dispensation and the creation of trading blocs which brings with it new challenges for the sector. The growth of the private sector in Grenada has developed under a system of a very protective trade regime where competitiveness was never emphasized as countries were given preferential market access.

In the new international trading environment that emphasizes liberalization, the removal of preferential treatment for selected products, as well as rapid developments in technology and communications which have made it easy for goods and services to be freely traded across international boundaries. The Private Sector is now faced with the challenge of increasing its competitiveness on both domestic and international markets.

Several studies by international organizations have highlighted the issues that affect and impede the competitiveness of firms in Grenada. These issues include human capital development, capacity, competency, quality, transport among others.

The Government of Grenada over the last year has embarked on actions to encourage private sector development and through existing agencies have accomplished the following:

• A comprehensive review of fiscal incentives to encourage investment
• Drafting of a single Investment Act
• Drafting of a new Investment Code
• Publication of incentives approved by the GIDC
• Establishment of a Business Development Center at the GIDC
• Provision of small business development training
• Reopening of the Grenada Craft Center
• Establishment of the St Patrick’s Business Development Center
• Drafting of a National Export Strategy
• Recent launch of the Business Gateway Project at the GIDC.
• Merger of the Small Enterprise Development Unit of GDB and the GIDC

Key strategies and initiatives

The development of the private sector has been a high priority of the Government. Government recognizes private investment as the driving force in the economy to create employment, increase income, increase productivity, increase household expenditure on health, housing, and education which leads to economic growth, improved services for the poor and a reduction in poverty.

In this regard, government recognizes the creation of an enabling environment for private sector development and supporting reforms to macro economic environment as essential ingredients to foster economic growth and development.

With reconstruction broadly on track, following hurricane Ivan and Emily, government under its 2006 – 2008 home-grown medium-term Economic Reform Programme intends to pursue the following strategies:

1. Improve the enabling environment for business and investment to enhance growth within the economy through the enactment of new legislations

2. Improve the effectiveness of GIDC in promoting the country to target markets abroad through the following initiatives

3. Create an expanded diversified export oriented business sector capable of delivering increased export earnings and job opportunities

4. Ensure that economic development takes place in harmony with national environmental consideration

5. Establishment of the Grenada Management Development Institute

6. Removal of the General Consumption Tax on selected Construction equipment

7. Amendment of the Customs Service Charge on transshipped goods to encourage transshipments and encourage business opportunities at the port and airport

8. Amendment of the Environmental Levy

9. Implementation of the Grenada Business Gateway project to provide technical assistance to the business sector

10. Implementation of National Export Strategy