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Antigua and barbuda: Staff Report for the 2010 Article IV Consultation and Request for Stand-By Arrangement

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International Monetary Fund
Published Date:
September 2010
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Appendix I. Antigua and Barbuda: Fund Relations

(As of April 30, 2010)

I. Membership Status: Joined: February 25, 1982; Article VIII

II. General Resources Account:

SDR Million%Quota
Quota13.50100.00
Fund holdings of currency13.5099.99
Reserve Tranche Position0.010.05
Lending to the Fund
Notes Issuance
Holdings Exchange Rate

III. SDR Department:

SDR Million%Allocation
Net cumulative allocation12.50100.00
Holdings12.51100.05

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements: None

VI. Projected Payments to Fund1/

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20102011201220132014
Principal
Charges/Interest0.000.000.000.00
Total0.000.000.000.00

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Exchange Rate Arrangement: Antigua and Barbuda is a member of the Eastern Caribbean Central Bank (ECCB), which manages monetary policy and the exchange system for its eight members. The common currency, the Eastern Caribbean dollar, has been pegged to the U.S. dollar at the rate of EC$2.70 per U.S. dollar since July 1976. In practice, the ECCB has operated like a quasi-currency board, maintaining foreign exchange backing of its currency and demand liabilities of close to 100 percent.

Antigua and Barbuda accepted the obligations of Article VIII, Sections 2, 3, and 4 in November 1983. It maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions.

X. Safeguards Assessment: A safeguards assessment of the ECCB was conducted in 2007, concluding that adequate safeguards were in place to manage resources, including IMF disbursements. The assessment determined low risk ratings in all ELRIC areas.

XI. Last Article IV Consultation: Antigua and Barbuda is on the standard 12-month cycle. The last Article IV consultation was concluded by the Executive Board on February 4, 2008. The staff report is SM/08/23, and the accompanying statistical appendix is SM/08/25.

XII. FSAP Participation, ROSCs, and OFC Assessments:

Antigua and Barbuda participated in the regional ECCU FSAP conducted in September and October 2003. The FSSA is available at www.imf.org/external/pubs/ft/scr/2004/cr04293.pdf. A ROSC for a BCP assessment of Antigua and Barbuda’s offshore sector is www.imf.org/external/pubs/ft/scr/2004/cr04366.pdf.

XIII. Technical Assistance (May 2007–March 2010):

Technical Assistance Projects
FY 2007FY 2008FY 2009FY 2010
Fiscal Affairs Department
PFM: CARTAC1
Budget Management Review141
Treasury Department4
Budget Department
Public Expenditure and Financial
Accountability (PEFA) Assessment and development of a PFM Action Plan (for Ministry of Finance)1
PFM: HQ
Antigua and Barbuda:PFM: 2nd side trip1
Revenue Administration: CARTAC
ABST7
PIT24
Customs2
Other131124
Tax Policy: HQ1
Sub-total2719210
LEG
AML Law: HQ1
Financial Services Regulatory Commission: HQ1
ABST1
Sub-total2100
MCM
Money and Capital Markets Dev: CARTAC2
Sub-total2000
STA
Statistics: CARTAC
National Accounts211
Price Statistics111
Statistics: HQ
Government Finance Statistics1
Balance of Payments
Other
Sub-total0422
WHD
Macroeconomic: CARTAC4003
Sub-total4003
Grand Total3524415
Source: IMF staff.
Source: IMF staff.

Appendix II. Antigua and Barbuda: Relations with the World Bank Group

(As of April 15, 2010)

The World Bank is in the process of elaborating its Eastern Caribbean Sub-Regional Partnership Strategy for FY10–14 which is scheduled to be presented to the Bank’s Board in June 2010. The Bank’s Eastern Caribbean Country Assistance Strategy (CAS) for FY06–09 supported the sub-region’s development agenda through two main pillars: (1) stimulating growth and improving competitiveness; and (2) reducing vulnerability, by promoting greater social inclusion and strengthening disaster risk management. Antigua and Barbuda did not borrow under the FY06–09 CAS.

The Bank is engaged with the authorities through two grants offering technical assistance in: (1) preparing an Action Plan for the management of phasing out of Chloroflurocarbons ($100,000 from a Bank-administered multidonor trust fund, approved in February 2009); and (2) enhancing the efficiency of personnel expenditures by achieving a fiscally sustainable wage bill in support of the National Economic and Social Transformation (NEST) Plan ($310,000 from the Institutional Development Fund, approved in January 2010). Further, the Bank, collaborating with UNICEF and UNIFEM, has agreed to provide technical assistance in support of the government’s efforts to strengthen its social safety nets program.

In addition, the International Finance Corporation (IFC) carried out its first direct investment in Antigua and Barbuda, in the education sector in the amount of US$30 million. The loan to a tertiary institution is expected to help diversify the local economy and contribute to local employment and development of service industries. The authorities have engaged the IFC to provide advisory services on divestiture of state-owned assets.

Additionally, Antigua and Barbuda will benefit from recently completed, ongoing and planned analytical and advisory activities to support the CAS’ two main pillars including: an OECS study on Growth and Competitiveness (2005); an OECS Skills Enhancement Policy Note (2006); a Caribbean Air Transport Report (2006), and a regional study on Crime, Violence, and Development: Trends, Costs, and Policy Options in the Caribbean (2007). In addition, an OECS Private Sector Financing Study and the OECS Tourism Backward Linkages Study were completed in 2008. The publication “Caribbean—Accelerating Trade Integration: Policy Options for Sustained Growth, Job Creation and Poverty Reduction” and the “CARICOM study on Managing Nurse Migration” were released in the summer of 2009 and in the first quarter of 2010, respectively. A preparatory study, ultimately aimed at developing a Caribbean Regional Electricity Generation, Interconnection and Fuel Supply Strategy, is being finalized.

Appendix III. Antigua and Barbuda: Relations with the Caribbean Development Bank

(As of December 31, 2009)

Caribbean Development Bank (CDB) has supported Antigua and Barbuda’s economic and social development by providing finance for priority capital projects and technical assistance. In addition, CDB has undertaken analytical work and engaged in policy dialogue on major developmental issues with the Government of Antigua and Barbuda. Since its inception in 1970, CDB’s involvement in Antigua and Barbuda has included:

  • assisting in the development and implementation of macroeconomic, social and sectoral policies aimed at maintaining sustainable economic growth;

  • improving the skills of the country’s human resource base;

  • providing direct and indirect financing to the agriculture, manufacturing and tourism sectors; and

  • assisting in emergency disaster relief and rehabilitation.

Major projects currently under implementation include:

  • a consolidated line of credit to the Antigua and Barbuda Development Bank to finance mortgages, small and medium-sized enterprise development and student loans;

  • a project to improve security at the V. C. Bird International Airport and the St. John’s Deepwater Harbour to meet new international standards;

  • a loan to support the transformation of LIAT (1974) Ltd., the intra-regional airline into a profitable enterprise by increasing its operational efficiency and strengthening its institutional capabilities; and

  • a technical assistance grant to strengthen the operations of the Statistical Division in the Ministry of Finance, the Economy and Public Administration.

At the end of December 2009, CDB had approved US$71.8 million in loans, contingent loans, equity and grants to Antigua and Barbuda, of which undrawn balances totalled US$7.4 million.

CDB Assistance by Sector(Cumulative 1970–2008
SectorUS$

mn
% of Total
Agriculture3.54.9
Micro and Small1.01.4
Enterprises
Manufacturing5.88.1
Tourism1.92.6
Power and Energy0.30.4
Transportation28.539.7
Housing3.54.9
Education20.027.8
Multi-sector7.310.2
Total71.8100.0
Source: CDB
Source: CDB

Appendix IV. Antigua and Barbuda: Statistical Issues

(As of April 14, 2010)

Antigua and Barbuda participates in the Fund’s General Data Dissemination System (GDDS), but metadata for the real, fiscal and external sectors and plans for improvement have not been updated since October 2002. Data provided to the Fund are broadly adequate for surveillance purposes but significant areas for improvement remain in the real sector (including the consumer price index), fiscal and balance of payments data. An April 2007 data ROSC mission to assess monetary and financial statistics noted some recent improvements and identified some shortcomings in the ECCB’s monetary statistics. In December 2009, a STA technical assistance mission took place to follow up on the ROSC and the ECCB has developed an action plan to implement the recommendations of the mission.

1. Real sector statistics

The national accounts are currently being rebased to a more recent year (2006) in accordance with the methodology of the 1993 System of National Accounts. The ECCB is planning to release the rebased national accounts of all member countries in September 2010. As part of the rebasing exercise, improvements in coverage, data sources, and methodology will be incorporated. Revisions will also be made to the classification of the GDP by economic activity. It is expected that the current GDP series have been grossly underestimated. Annual national account statistics are provided to the IMF for publication in the International Financial Statistics (IFS).

The ECCU is also rebasing national CPIs to a more recent year (January 2010) and the new index is expected to be published in September 2010 at the same time as the rebased national accounts. The new basket of goods and services will better reflect the importance of rent and owner’s imputed rents, and additional outlets will be added to better cover services such as mobile phones, computers, and health insurance.

There is no comprehensive labor force survey and thus little coverage of the labor market developments. An Annual Wages and Hours Worked Survey for the private sector was conducted in 2003, though the coverage of Barbuda was limited. (was the survey for Antigua only or for the ECCU?) Work has already started for the 2010 population census.

2. Government finance statistics

The annual and quarterly data on central government finances published by the ECCB are compiled broadly in line with the methodology set out in the 1986 Government Financial Statistics Manual. For the past several years, however, Antigua and Barbuda has not been reporting government finance statistics to the Fund for inclusion in the Government Finance Statistics Yearbook (GFSY) and the International Financial Statistics (IFS). To better understand the underlying fiscal situation of member countries, the ECCB has agreed that the ECCU would implement the methodology of the Government Finance Statistics Manual 2001 (GFSM 2001) by May 2011. STA has proposed to organize a five-day regional workshop in St-Kitts in early Fall 2010 to help ECCU member countries move to the GFSM 2001.

3. Monetary and financial statistics

Monetary statistics are compiled by the ECCB on a monthly basis with a lag of six weeks. In July 2006, the ECCB started reporting monetary and financial statistics to the Fund in accordance with the methodology of the Monetary and Financial Statistics Manual (MFSM 2000); the associated data have been published in the IFS Supplement since September 2006.

In November 2009, a STA mission helped the ECCB expand the coverage of the Other Depository Corporations Survey (ODCs) to include mortgage companies, finance companies, building societies, credit unions, and development banks; the mission also helped develop a financial corporations’ survey, which would include other financial corporations (OFCs) such as offshore banks, trust companies, mutual funds, money service firms, and insurance companies. The ECCB has developed an action plan to implement the recommendations of the TA mission and the new ODC survey is expected be available by the end of 2010.

4. External sector statistics

The ECCB is also preparing new BOP survey forms, which will include trade in services and provide a better coverage of FDI. In the medium-term, the improved forms will allow for the presentation of the BOP in the Extended Balance of Payments Services (EBOPS) and for the preparation of the International Investment Position (IIP). Due to delay in updating the software to reflect changes made to the survey form, the launch of the new survey forms has been postponed. The ECCB reports annual balance of payments statistics for dissemination in the Balance of Payments Statistics Yearbook (BOPSY). Antigua and Barbuda, however, does not report trade data for publication in the Direction of Trade Statistics Yearbook (DOTS).

Table of Common Indicators Required for Surveillance(As of April 14, 2010)
Date of latest

observation
Date

received
Frequency

of Data1
Frequency of

Reporting1
Frequency of

publication1
Exchange RatesFixed RateNANANANA
International Reserve Assets and Reserve Liabilities of the Monetary Authorities 2,3February 201004/11/10MMM
Reserve/Base Money3February 201004/12/10MMM
Broad Money3February 201004/12/10MMM
Central Bank Balance Sheet3,4February 201004/12/10MMM
Consolidated Balance Sheet of the Banking System3,5February 201004/12/10MMM
Interest Rates6February 201004/12/10MMM
Consumer Price Index7February 201004/09/10MMM
Revenue, Expenditure, Balance and Composition of Financing8 General Government9January 201003/05/10MMA
Stocks of Central Government and Central Government-Guaranteed DebtDecember 200903/02/10AAI
External Current Account Balance10December 20093/03/10QQQ
Exports and Imports of Goods and Services10December 20093/03/10QQQ
GDP/GNP10December 200903/09/10AAA
Gross External DebtDecember 200903/02/10AAI

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions. Published yearly in the Financial Statistics Yearbook.

Published monthly in the IMF’s International Financial Statistics (IFS).

Central bank survey is published on the ECCB website and in the IFS.

Monetary survey is published on the ECCB website and in the IFS

The discount rate is published once a year in Report and Statement of Accounts and monthly in the IFS. Monthly statistics on deposits, lending, and weighted rates published annually in the Financial Statistics Yearbook. The interbank market rate, T-bills rates, deposit and lending rates, and government bond yields are published monthly in the IFS.

Published on the ECCB website.

Foreign, domestic bank, and domestic nonbank financing. Quarterly fiscal statistics are published once a year in the Economic and Financial Review.

Central government only.

Published on the ECCB website and in the IFS.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions. Published yearly in the Financial Statistics Yearbook.

Published monthly in the IMF’s International Financial Statistics (IFS).

Central bank survey is published on the ECCB website and in the IFS.

Monetary survey is published on the ECCB website and in the IFS

The discount rate is published once a year in Report and Statement of Accounts and monthly in the IFS. Monthly statistics on deposits, lending, and weighted rates published annually in the Financial Statistics Yearbook. The interbank market rate, T-bills rates, deposit and lending rates, and government bond yields are published monthly in the IFS.

Published on the ECCB website.

Foreign, domestic bank, and domestic nonbank financing. Quarterly fiscal statistics are published once a year in the Economic and Financial Review.

Central government only.

Published on the ECCB website and in the IFS.

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