About The Commonwealth of Dominica
Rates of poverty in Dominica reflect the continuing decline in banana production as well as stagnation in the country's other sectors. In Dominica, 29% of households and 40% of the general population lived in poverty as per 2003. 11% of households and 15% of the general population lived in indigent poverty. An average of 50% of Dominica's children live in poverty. Fewer than half the households with children have two resident parents. In rural areas, 1 in every 2 households is poor. More than 37 percent of households in Dominica do not have access to piped water and 25% of households have no access to toilet facilities. With total government debt currently almost equal to GDP, Dominica also struggles with structural unemployment and under-employment. The most significant differences that exist between the poor and non-poor population is educational attainment and unemployment. The rate of unemployment for poor households is 40% while non-poor households' rate of unemployment is 16%.This data demonstrates the correlation between income/employment and poverty in Dominica.
In 2002, Dominica reported a rise in the number of cases of persons affected with tuberculosis. Typically, an increased incidence of tuberculosis gives an indication of increased number of HIV/AIDS infections. Teenage pregnancy and reproductive health patterns of unprotected sex and gender-related issues have also been cited as problematic for Dominica. Dominica's current health situation sends a clear signal that HIV/AIDS prevention and education is becoming increasingly vital.
Economic Situation Analysis
Economic growth declined by 0.3 % in the fiscal year 2009-2010, following years of rough economic conditions with a decline in tourism receipts by about 16 % and reduction in family remittance inflows by about 51 %. The government has recently decided to change the base year for calculating GDP from 1990 to 2006.
Although the country experienced healthy growth rates from 2003-2006, real output growth started slowing in 2007 with much pressure on tourism and agriculture. Still, macroeconomic fundamentals remained stable, despite a number of challenges such as soaring international energy prices. 2006-2007 pressured also by hurricane Dean. The island of Dominica currently depends on agriculture (17.6% GDP), government services (22.3%), financial services (15.7%), and transport & communication (14.3%) as the main drivers behind its economy.
Poverty remains a leading development issue in Dominica, especially with the past reliance on the banana industry. Available data suggests an increased incidence of household poverty (from 27.6 percent in 1995 to 29 percent in 2002) along with the unemployment rate (from 15.7 percent in 1999 to 25 percent in 2002).
Dominica's population of about 73,000 has exhibited relatively insignificant growth due to the country's high level of emigration. The lack of growth in the tourism and offshore banking sectors has failed to combat the growth of emigration in Dominica. In the near to medium term, tourism is expected to be the principal driver in the economy. While Dominica's tourism earnings averaged 18% of GDP compared to an average 29% in other islands, tourism contribute over 30% of Dominica's foreign exchange earnings ' three times the current earnings from bananas. In order to expand its tourism industry, Dominica will need to develop a coherent marketing strategy to promote its niche market - rainforests, waterfalls, volcanic sites and coral reefs to the growing international eco-tourism market.
The EU, the country's most significant grant aid donor, supports agricultural and economic diversification initiatives including programmes for the development of eco-tourism, youth skills training, and the development of the enabling environment for private sector development. Additionally, the EU supports social and community development, including measures to assist in re-tooling and re-positioning of displaced banana farmers in other sectors of the economy. The Dominica Export Import Agency has recently been awarded an EU Grant of one million euros to enhance the competitiveness of private sector entities in Dominica through an innovative programme of business support services.
Challenges and Policy Issues
The major policy issues for the Government at this juncture are:
- Restructuring public debt
- Poverty reduction
- Economic diversification
It is expected that inflation will remain under 5% and that unemployment will remain high over the near to medium term. Because tourism is expected to be the main impetus for economic growth, Upgrading Airport Facilities and widening the main access road to the airport should be fast-tracked. This investment might weaken Dominica's economic situation in the short run.
The approval of the IMF and World Bank loans suggest confidence in the economic programmes being pursued by the Government to rescue the country from fiscal crisis brought on by years of previous mismanagement. The Government's main policy drive is to address the nation's financial situation. Through discussions, the Government of the Commonwealth is currently pursuing pre-budget negotiations with trade unions, the private sector, and civil organizations to maintain a transparent budgeting process.
The Environmental Situation
The Government of the Commonwealth of Dominica has established a National Action Plan that aims to maintain and conserve the island's eco-system. Dominica environmental issues include:
- Bio-diversity and species preservation
- Deforestation prevention and land use management
- Coastal zone management
- Water quality management
- Solid waste management
- Sustainable development
- Sustainable energy systems