John Austin: To ask the Secretary of State for International Development (1) what assessment he has made of the level of continuing
need for aid and assistance in Grenada following Hurricane Ivan; and if he will make a statement; [216601]
(2) what assessment he has made of the impact on the (a) tourist industry and (b) economy of Grenada of Hurricane
Ivan; and if he will make a statement; [216603] (3) what assistance is being given to Grenada to diversify its agricultural
production; and if he will make a statement; [216606]
(4) what assessment he has made of the impact of Hurricane Ivan on agriculture in Grenada, with particular reference to
(a) nutmeg and (b) cocoa; and what assistance is being given towards recovery of these industries; [216604]
(5) what assessment he has made of housing need in Grenada following Hurricane Ivan; and what assistance his Department is
providing. [216605]
Mr. Gareth Thomas: Hurricane Ivan has been a catastrophe for Grenada. Two weeks after the hurricane hit the island, the Organisation
of Eastern Caribbean States (OECS) and the Economic Commission for Latin America and the Caribbean (ECLAC) undertook a
macro-socio-economic assessment of the damage caused. This assessed that 90 per cent. of housing stock was either destroyed
or damaged, and around 30 per cent. of the population made homeless. The OECS/ ECLAC assessment indicated that the damage to
schools, hospitals, businesses and infrastructure was estimated to be in the region of £500 million, or twice Grenada's Gross
Domestic Product (GDP).
Grenada had been recording impressive growth rates in recent years and was expected to grow by 5.7 per cent. in 2004. With
significant losses to the main productive sectors of agriculture and tourism caused by the hurricane, the economy is now expected to
have contracted by 1.4 per cent. in 2004. Some 90 per cent. of hotel rooms on the island were affected by the
hurricane. A staff mission from the International Monetary Fund (IMF) will provide a further update on the post-Ivan macro-economic
situation and the prospects for economic recovery at a donor briefing meeting in Barbados at the end of February 2005.
Unemployment has increased with an estimated 40,000 jobs directly affected by the hurricane. However, as the physical reconstruction
of buildings and infrastructure gets under way, it is anticipated that unemployment levels will start to decline.
The devastation to the agricultural sector caused by Hurricane Ivan was particularly severe: 95 per cent. of nutmeg
trees--Grenada's principal export commodity-- were uprooted. Regrowth and recovery of the nutmeg industry will take an estimated
7-10 years. Grenada can, however, continue to export its reserve stocks for the next three years. This should help to cushion the
impact of the loss of the trees on the economy. Cocoa was also affected, albeit, to a much lesser extent. 30 per cent. of the
crop will need to be replanted, and it is expected that 50-70 per cent. of the harvest for next year will be available. At
the 19 November donor conference on Grenada, the IMF announced that for the calendar year of 2004, donor contributions would
fill the £21 million gap in Grenada's finances. At that time, the IMF anticipated that a financing gap of £4.2 million
remained for 2005, which would widen in 2006 to £19.2 million. The IMF currently has a team in Grenada to undertake a fuller
assessment of financing needs in 2005 and 2006. The IMF team will brief DFID officials and other development partners on their
findings at a meeting in Barbados on 23 February 2005.
One of the key financial challenges for the Government of Grenada is a high debt burden. We are working with the United States
Agency for International Development, to provide a team of debt advisers to help the Government of Grenada to restructure its total
stock of debt.
Despite the unprecedented scale of the damage to the agricultural sector, the Grenadian Government has identified significant
potential to restructure and transform the sector with support from the private sector. DFID is currently funding an evaluation of
the direct and indirect effects of Hurricane Ivan on the forestry sector in Grenada as the basis for determining the interventions
needed to rehabilitate and reconstruct the forestry sector. The study will implement a detailed assessment of the key damage to
forestation on the island, and prioritise activities to ensure that work is urgently undertaken to prevent landslides and provide
protection to the water table.
Under the United Nations Flash Appeal for Grenada, the UN's Food and Agriculture Organisation, appealed for some
£2.21 million to support agriculture. £1.4 million has so far been committed and assistance has been provided to
rehabilitate the cocoa crop and to assist the Government in its development of a strategy for nutmeg production.
The Grenada Board of Tourism now reports 50 per cent. of hotel rooms on the island are back in operation, and predicts that
the figure will be 80 per cent. by the end of December 2005. The rehabilitation has been mainly funded by private insurance
and the private sector.
Reconstruction of the housing sector is a Government of Grenada priority, and is underway. Insurance payments are being made to
those eligible, and the raw materials needed are being imported. For priority vulnerable and needy families, the Government of
Grenada has committed itself to constructing 225 low-income homes between November 2004 and February 2005 at a cost of about £8,000
per home, and providing material assistance for the repair of 1,125 roofs during the same period. The Government are also offering a
Soft Loan Facility that provides a maximum loan amount of approximately £8,000 for 10 years with a one year grace period, at an
interest rate of 3 per cent. A training and a public information programme on construction tips are also on-going, with model
houses displaying appropriate building techniques being driven around the island. Over a longer timeframe, the Government of Grenada
has set a target to construct 10,000 low-income homes under a phased programme over the next five years.
In addition, the Venezuelan Government has committed to the construction of 130 homes in the Parish of St. David's; the United
States Agency for International Development (USAID) to constructing 200 houses and repairing a further 1,500 houses by the end of
2005; and the People's Republic of China has also undertaken to provide 2,000 low-cost homes. A number of NGOs are seeking to
provide low-cost, quickly constructed homes.
DFID's micro finance project in Grenada has developed a new facility for small housing loans. The European Commission are
considering how their micro finance programme might provide similar support.
1 Conversion US$ to GBP = 1.8