Final Report Volume 1 April 2005 - OECD.org - OECD · Paola Gosparini was the Contract Evaluation...

EVALUATION OF THE COMMISSION’S REGIONAL STRATEGY FOR THE CARIBBEAN

Final Report

Volume 1

April 2005

Evaluation for the European Commission

Italy

Aide à la Décision Economique

Belgium

ECO-Consulting Group

Germany

Nordic Consulting Group Denmark

A consortium of

DRN, ADE, ECO, NCG c/o DRN, leading company:

Headquarters Via Ippolito Nievo 62 00153 Rome, Italy Tel +39-06-581-6074 Fax +39-06-581-6390 [email protected]

Belgium office Square E. Plasky 92 1030 Brussels, Belgium Tel: +32-2-7324607/7361663 Fax +32-2-706-5442 [email protected]

This evaluation was commissioned by:

the Evaluation Unit common to:

EuropeAid Co-operation Office,

Directorate General for Development and

External Relations Directorate-General

This evaluation study was carried out by Tanguy de Biolley (team leader), Philippe Monfort, Roger Short, Ernesto Ugarte and Giulia Pietrangeli (junior expert). Paola Gosparini was the Contract Evaluation

Manager. The evaluation was managed by the evaluation unit who also chaired the reference group composed by

members of the services (EuropeAid, DG DEV, DG Trade and the EC Delegations in Guyana and Barbados)

The opinions expressed in this document represent the authors’ points of view which are not necessarily shared by the European Commission or by the authorities of the countries concerned

mailto:[email protected]

mailto:[email protected]

Evaluation of the Commission’s Regional Strategy for the Caribbean DRN-ADE-ECO-NCG

Table of contents

LIST OF ACRONYMS....................................................................................................................... IV

0 EXECUTIVE SUMMARY.........................................................................................................VI

1. EVALUATION FRAMEWORK ............................................................................................. 2 1.1 EVALUATION OBJECTIVES AND SCOPE .................................................................................... 2 1.2 EVALUATION ORGANISATION AND METHODOLOGY................................................................ 2

2. CONTEXT AND OBJECTIVES OF THE COOPERATION STRATEGY WITH THE CARIBBEAN......................................................................................................................................... 6

2.1 THE CARIBBEAN REGION: OVERVIEW AND MAIN ISSUES ........................................................ 6 2.2 REGIONAL INTEGRATION IN THE CARIBBEAN ......................................................................... 7

2.2.1 Policy and institutional aspects....................................................................................... 7 2.2.2 The current state of regional economic and trade integration........................................ 9

2.3 SELECTED EXAMPLES OF MAJOR CHALLENGES FACING THE CARIBBEAN REGION................ 10 2.3.1 Bananas ......................................................................................................................... 11 2.3.2 Sugar ............................................................................................................................. 12 2.3.3 HIV/AIDS: regional issues ............................................................................................ 13

2.4 COMMISSION’S POLICY OBJECTIVES AND STRATEGY IN THE CARIBBEAN............................. 14 2.5 COMMISSION’S COOPERATION PROGRAMME IN THE CARIBBEAN ......................................... 17

2.5.1 Overview of the Commission’s interventions in the Caribbean .................................... 17 2.5.2 Programme identification and implementation mechanisms ........................................ 22

3. MAIN FINDINGS AND ANALYSIS......................................................................................... 24 3.1 EVALUATION QUESTION 1..................................................................................................... 24 3.2 EVALUATION QUESTION 2..................................................................................................... 26 3.3 EVALUATION QUESTION 3..................................................................................................... 30 3.4 EVALUATION QUESTION 4..................................................................................................... 33 3.5 EVALUATION QUESTION 5..................................................................................................... 35 3.6 EVALUATION QUESTION 6..................................................................................................... 37 3.7 EVALUATION QUESTION 7..................................................................................................... 39 3.8 EVALUATION QUESTION 8..................................................................................................... 40 3.9 EVALUATION QUESTION 9..................................................................................................... 43 3.10 EVALUATION QUESTION 10................................................................................................... 45

4. CONCLUSIONS.......................................................................................................................... 47 4.1 RELEVANCE ........................................................................................................................... 47 4.2 EFFICIENCY............................................................................................................................ 48 4.3 EFFECTIVENESS AND IMPACT ................................................................................................ 49 4.4 SUSTAINABILITY.................................................................................................................... 50 4.5 CROSS CUTTING ISSUES ......................................................................................................... 50 4.6 THE 3CS................................................................................................................................. 51

5. RECOMMENDATIONS ............................................................................................................ 52 5.1 RECOMMENDATIONS RELATED TO THE STRATEGIC LEVEL ................................................... 52 5.2 RECOMMENDATIONS AT OPERATIONAL LEVEL ..................................................................... 54 5.3 RECOMMENDATIONS RELATED TO THE CROSS CUTTING ISSUES AND THE 3CS ..................... 57

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LIST OF ANNEXES (VOLUME II) Annex 1: Terms of Reference Annex 2: List of persons met Annex 3: List of documentation Annex 4: Evaluation questions, judgement criteria and indicators Annex 5: Selected economic and social indicators for the Caribbean countries Annex 6: The Dominican Republic and the regional integration process in the Caribbean Annex 7: External and regional trade data Annex 8: Evolution of the objectives of the Commission’s cooperation with the Caribbean Annex 9: List of bilateral and regional projects in the Caribbean over the evaluation period. Annex 10: Summary of strategic and planned allocations Annex 11: Case studies

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List of Acronyms

3Cs Coordination, Complementarity, Coherence ACP Africa Caribbean and Pacific countries ACS Association of Caribbean States AIDS Acquired Immune Deficiency Syndrome CAB Caribbean Accreditation Body CAFP Caribbean Agriculture and Fisheries Programme CAIC Caribbean Association on Industry and Commerce CALP Caribbean Anti-money Laundering Programme CAREC Caribbean Epidemiology Centre CARICAD Caribbean Centre for the Development Cooperation CARICOM Caribbean Community and Common Market CARIFORUM Forum of Caribbean States CARIFTA Caribbean Free Trade Association CARTAC Caribbean Regional Technical Assistance Centre CARTF Caribbean Agribusiness Research and Training Fund CBU Caribbean Broadcasting Unit CC Competition Commission CCJ Caribbean Court of Justice CCL Caribbean Congress on Labour CDB Caribbean Development Bank CEDA Caribbean Export Development Agency CET Common External Tariff CPDC Caribbean Policy Development Centre CRIP Caribbean Regional Indicative Programme CRIS Common Relex Information System CRNM Caribbean Regional Negotiating Machinery CROSQ Caribbean Regional Organisation for Standards and Quality CRTDP Caribbean Regional Trade Development Programme CSME Caribbean Single Market and Economy CSP Country Strategy Paper CSTSP Caribbean Trade Sector Programme CULP Caribbean University Level Programme DG Directorate General DOMs Départements d'Outre Mer DR Dominican Republic DRAO Deputy Regional Authorising Officer EBA Everything But Arms EBAS EU-ACP Business Assistance Scheme EDF European Development Fund EIA Environmental Impact Assessment EIB European Investment Bank EPA Economic Partnership Agreement EU European Union FIU Financial Intelligence Units FTA Free Trade Agreement FTAA Free Trade Area of the Americas GATT Government Agreement on Trade and Tariffs GDP Gross Domestic Product HIV Human Immuno-deficiency virus HOG Heads of Governments (of CARICOM) IADB Inter-American Development Bank IFSA International Financial Sector Authority IMF International Monetary Fund LAC Latin American Countries LDCs Least Developed Countries (CARICOM definition) MDG Millenium Development Goals MS Member States

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MTS Multilateral Trading System NIP National Indicative Programme OCTs Overseas Countries and Territories ODA Official Development Assistance OECD Organisation for Economic and Cooperation Development OECS Organisation of Eastern Caribbean States OLAS Online Accounting System PANCAP Pan Caribbean Partnership Commitment for the HIV/AIDS PU Programming Unit RAO Regional Authorising Officer RIDS Regional Integration and Development Strategy RIP Regional Indicative Programme RSP Regional Strategy Paper TPR Trade Policy Review UN United Nations UNAIDS United Nations AIDS Programme UNEP United Nations Environment Programme UTECH University of Technology (of Jamaica) UWI University of the West Indies WIRSPA West Indies Rum and Spirits Producers' Association WTO World Trade Organisation

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0 Executive Summary

01. The evaluation’s aim and methodological approach (Section 1) The aim of this evaluation is to provide the Commission with key findings and lessons of experience from its past and current co-operation with the Caribbean Region (defined as the member countries of the CARIFORUM organisation). The evaluation was requested by the Commission Services as part of the 2003 evaluation programme endorsed by the Board of EuropeAid. It was launched in March 2004. The double objective of the evaluation was to assess: (i) the Commission’s co-operation strategy with the Caribbean Region and its implementation over the period 1996-2002; (ii) the relevance, logic and coherence, as well as the intended impacts, of the Commission’s regional strategy and RIP for 2003-2007. The evaluation was conducted in three phases. The first was devoted to an analysis of the overall policy context of the Commission’s cooperation with the Caribbean Region, the reconstruction of the intervention logic, the formulation of the Evaluation Questions and the related judgement criteria and indicators, and the methodological preparation of the field phase. The second phase was devoted to collection and organisation of data. It consisted of desk studies and complementary field visits to five Caribbean countries: Six case studies were conducted (cf. annex 11). They were complemented by a special study on the Dominican Republic and the regional integration process (cf. annex 6). The third phase consisted of an analysis and synthesis of the results and of the preparation of the consolidated findings, conclusions and recommendations. 02. Context, objectives and programme of the Commission’s cooperation with the Caribbean (Section 2) The Caribbean Region comprises small countries, mostly islands scattered over a wide geographical area, and characterised by a diversity of cultures, languages and economic regimes. All countries belong to the upper-middle income group except Guyana (lower middle income), and Haïti, the only low-income country. The region is vulnerable to natural disasters and faces important regional challenges, of which vulnerable products (bananas, sugar), HIV/AIDS and anti-money laundering have been the object of significant Commission assistance. Regional integration has been the

object of a long, gradual effort. Currently the main interregional agreement in the region is the Caribbean Community (CARICOM) comprising 15 countries, 12 of which are participating in the Caribbean Single Market and Economy (CSME). Their aim is to achieve comprehensive economic integration including establishment of businesses and free movement of goods, services, and factors of production. . In parallel with this deepening of regional integration among the CARICOM member states, different arrangements to widen regional integration to other Caribbean countries have taken place, in particular a Free Trade Arrangement (FTA) with the Dominican Republic. The Commission’s cooperation with the region has been carried out within the framework of the successive ACP partnership agreements. CARIFORUM was established in 1994 to coordinate policy dialogue with the EU and manage EDF regional support. It comprises the members of CARICOM and the Dominican Republic. The institution has been entirely supported by the Commission since its creation and has been used to channel EDF regional funds. In 2002 its mandate was reviewed and the decision was taken to merge the CARIFORUM and CARICOM Secretariats. The Commission’s cooperation strategy evolved over successive EDFs to develop gradually into a strategy aiming at the construction of a regional integrated space in the CARIFORUM area. It included two major objectives: regional integration and cooperation, and building of regional capacity. Four specific objectives have been pursued with varying intensity over time: (i°) regional infrastructure network; (ii°) trade and productive sector development; (iii°) institutional capacity building; (iv) human resources capacity building (tertiary education, health and environment). Finally, a series of interventions in the area of drugs, money laundering and similar issues were conducted to contribute to the eradication of major obstacles to regional capacity building. 03. Evaluation questions and main findings (Section 3) a) Questions related to the relevance of the Commission’s regional strategy and interventions. (§ 3.1, 3.2) The main line of the evolving Commission’s strategy of support to the Caribbean Region has been the construction and the strengthening of a regional integrated space. The characteristics of the

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region and the potential gains in terms of economies of scale make this objective compelling. It is shared by the partners and supported by historical developments. However, the choice of the CARIFORUM geographical zone as the basis of regional integration results from administrative considerations. The Commission’s interventions are relevant to the strategic goals but based on a pragmatic approach taking into account partners’ requests formulated in a context of competition between countries for scarce aid resources. The implications of regional integration as a tool for development have not been fully analysed and exploited in the formulation of the regional strategy. b) Questions related to the adaptation of the strategy to local needs and to the efficiency of implementation modalities and organisational mechanisms (§3.3, §3.4) The Commission’s support has been coherent in its pursuit of the objective of constructing and strengthening a regional integrated space. However, the selection of interventions is insufficiently based on systematic review of the progress of regional integration. It is difficult to demonstrate that the selected activities correspond to the real priorities. The strategy has shown good capacity to adapt to changing circumstances and environment, but has not been able to anticipate foreseeable changes. The management of regional programmes has suffered from the lack of clear delineation of roles and responsibilities as between the various actors on the Commission and Caribbean sides. The CARIFORUM Secretariat has been fully involved in the identification, programming and management of activities and this has enhanced ownership of the projects by the partners. However, the limited human resources and an excessive personalisation of the CARIFORUM Secretariat have limited its capacity to provide the required baseline material for appropriate institutional selection or to ensure that regional strategic objectives can be achieved. c) Questions related to effectiveness and impact in terms of regional economic integration and regional capacity strengthening. (§3.5, 3.6) The evaluation found ample evidence that the activities supported are used and appreciated by the beneficiaries and have produced reasonable outputs. Significant impact has been achieved in increasing human resource capacities, fostering

regional cooperation and exploitation of economies of scale. This has induced more efficient use of national human resources at regional level and has positively influenced the emergence of a regional identity. The institutional capacity to implement the CSME, and in general to identify and implement policies to eradicate the main obstacles to effective regional integration, remains insufficient. In the case of trade statistical coverage remains imperfect but suggests a deepening of intra-regional trade. There is also evidence of an improvement in trade facilitation. d) Question related to sustainability (§3.7) The sustainability of the institutions developed with the financial support of the Commission generally cannot be guaranteed. For those institutions that could become partially or totally sustainable the evaluation found that sustainability had not been factored into the design or implementation of the interventions. The sustainability of the results achieved varies according to the type of intervention. In the area of human resources, regional identity and cohesion have been strengthened. Interventions in the productive sectors have been more directed to the sustainability of the institutions and support mechanisms than to profitable involvement in productive and trade activities. This latter objective would have required fundamental restructuring and global repositioning of a number of sectors; that has not been effectively addressed. e) Question related to cross-cutting issues Cross-cutting issues have not been specifically addressed throughout the regional programmes covered by this evaluation. There is no evidence of benchmarking material for monitoring gender issues, for example. Whereas poverty alleviation may not be regarded as the dominant priority in the region, there are no studies on the impact of regional integration and trade policies on poverty issues. Environment is a notable exception. Specific projects have been implemented and when non-environmental projects have probable environmental impact this dimension is usually taken into account. f) Questions related to the 3 Cs (§3.9,$3.10) There is a general lack of coherence among the instruments used and the programmes which are generally not mutually supportive. This is particularly the case with the NIPs and the RIPs.

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Each programme and intervention has its own rationality and justification but with insufficient linkage to the Commission’s strategic objective of construction of a regional integrated space. Although a large range of interventions and instruments have been deployed to support the productive sectors, overlaps and duplications have generally been avoided owing to the magnitude and diversity of the needs. Nearly all projects are linked to the objectives of the regional strategy but there is an absence of coherence at the level of the instruments. Coordination and complementarity with other donors is limited and made difficult, at regional level, by the dispersion of the partners and of the donors’ decision-making centres. Some large programmes have attracted contributions from many donors and developed heavy coordination structures. This proved effective where the partner was in a position clearly to articulate its need and to act as a real partner in the coordination process. When it was the case it also permitted to design complementary interventions of various donors in view of a comprehensive response to the needs. The mandate of Cariforum to deal exclusively with the Commission constrained the possibilities of donor complementarities within the regional programme. Some internal EU policies (trade and agriculture) affected the region’s productive sector and generated shocks which required a coherent response in the Commission regional strategy. Owing to a lack of systematic analysis, the response has been rather ad hoc in spite of the fact that these shocks and their likely adverse effects were anticipated. 04. Conclusions (Section 4) The answers to the Evaluation Questions and the underlying findings and analysis have led the evaluators to draw 25 Conclusions grouped according to the evaluation criteria.

Relevance (Conclusions 1 to 6) The Commission has gradually and consistently supported the construction of a regional integrated space but made little use of its comparative advantage in this area. The identification of regional integration as the answer to the development needs of the Caribbean, and the rationale behind the selection of focal sectors and areas of concentration, are insufficiently supported by analytical work, and the design of the strategy does not pay sufficient attention to Caribbean specificities. Whilst individual interventions have

been found relevant there is little analysis of their combined contribution. Efficiency (Conclusions 7 to 12) Overall the strategy has been able to respond to evolving needs but its efficiency has been limited by (i°) a lack of clear organisational framework and of responsibilities for managing the regional programme, and (ii°) insufficient linkage between individual interventions and the strategic priorities. The support for the programming unit of the CARIFORUM secretariat has created a technical capacity and permitted development of regional mechanisms for consultation and programming. But important weaknesses have been observed in local capacities for consulting and dealing with the private sector. More use could have been made of analyses conducted by other donors. Effectiveness and impact (Conclusions 13 to 17) An impact has been achieved in terms of developing a regional identity across a broad range of sectors. But the inadequacy of the analysis underlying the selection of intervention has limited effectiveness and the benefits of several interventions have tended to be limited to the country of the implementation agency. When a constructive policy dialogue has taken place between a group of donors and the partner, with the full commitment of the latter, it has been a major contributing factor to effectiveness. The impact of the Commission’s interventions on the evolution of regional trade flows and on the regional institutional setting is difficult to assess. Sustainability (Conclusions 18 to 20) A number of the institutions developed with Commission assistance are still very fragile and continue to depend on external assistance. Whereas institutional sustainability is an objective of the Commission’s interventions, projects are not designed with a clear view of longer-term perspectives or of how support may be provided beyond project termination., Most institutions supported are therefore not sustainable, while sustainable involvement in profitable production and trade activities by the productive sectors benefiting from Commission assistance is generally not guaranteed. Cross-cutting issues (Conclusion 21) Cross-cutting issues have been insufficiently addressed, particularly poverty and gender issues in the context of the negative impact of regional trade liberalisation. The 3Cs (Conclusions 22 to 25)

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Consistency between the NIPs and the RIPs is not enforced. The variety of instruments offered in the context of the Commission’s assistance has not been sufficiently exploited. Coordination with other donors faces particular difficulties given the geography of the region, but for some large programmes it has led to a fruitful policy dialogue and in some cases was a factor in success. Several aspects of EU domestic policies or international arrangements are harming the Caribbean countries; so far ad hoc measures, rather than strategic coherence, have been proposed to mitigate their consequences.

05 Recommendations (Section 5) Each recommendation is assigned a priority ranking and cross-referenced to the supporting conclusions. Priority 1: recommendation applicable in the short term and involving only, or mainly, European Commission initiatives. Priority 2: recommendation applicable in the short term but involving a joint approach by the Commission and the CARIFORUM Secretariat. Priority 3: recommendation requiring relatively lengthier preparation or involving changes mainly on the Caribbean side. a) Recommendations at the strategic level. R1: Develop analytical tools to formulate and monitor a strategy for the construction of a regional integrated space that maximises the development benefits for the region. Priority 1. This recommendation implies programming based on in-depth analysis of the integration process, including reviewing implementation of the regional Treaty obligations; identification of the main constraints; and prioritisation of actions contributing to the creation of a regional integrated space. It also requires assessment of income generation opportunities; special attention to the social consequences of regional adjustment and liberalisation; and identification of indicators of progress in regional integration including support for their elaboration and measurement. R2: Deepen and extend the policy dialogue to be pursued on the regional objectives to one of identifying the major constraints to be overcome and the priority actions to be taken; and from there exploit fully the comparative advantages of the Commission in playing a proactive role in this dialogue. Priority 1. More specifically the recommendation is to engage in a policy dialogue, involving partner and donors, to develop a long-term vision (i.e. beyond one EDF) on how to achieve regional integration and

cohesion. The policy dialogue and the associated analysis should keep in view the particular characteristics of small islands and of the asymmetries in the region (including the asymmetries between CARICOM and non-CARICOM countries); it should lead to a roadmap and tentative agenda, and the Commission should use its comparative advantage to play a proactive role in this dialogue and in the formulation of the roadmap. R3: A criterion for the selection of areas and sectors of concentration under the RIP should be that enough evidence is presented on the contribution to the construction of the regional integrated space which is expected from activities programmed in those areas. Priority 2. This recommendation implies that more systematic justification, in the context of the construction of the regional space, must be provided when selecting concentration areas. Its purpose is to increase prioritisation within and across focal sectors, and complementarity between the regional and national programmes. It is complementary to R1 (development of analytical tools) and R2 (policy dialogue leading to a vision of regional integration). R4. Improve the consultation process with the private sector. Priority 2. It is recommended that more systematic and continuous consultations be organised between the Commission Services and CARIFORUM, on the one hand, and the private sector on the other. One possible approach could be the development, under the newly unified CARICOM/ CARIFORUM secretariat, of a special function of interface with private sector operators; the function could be conducted jointly with the CNRM, where the interests of the private sector also need to be well articulated and identified. b) Recommendations at operational level R5: Improve capacity to monitor the strategy and interventions so as to assess progress and results. Priority 1. To monitor the regional integration process two practical steps can be recommended: (i°) support for the development of reliable (regional) trade statistics at the level of CARICOM; (ii°) the conduct of regular surveys of progress in implementing the regional (trade) agreements. On monitoring of interventions it is recommended that a programme of Project Cycle Management training for institutions and Caribbean region consultants be implemented. Noting the benefits of “learning-by-doing”, every effort should be made to articulate it in the detailed planning of

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components of the NIPs and CRIPs of the 9th EDF. R6: Review the organisational process and procedures governing the management of the regional programme so as to increase efficiency of implementation. Priority 2. This recommendation concerns the Commission and CARIFORUM. On the Commission’s side, it means clarifying responsibilities for the management of the regional programme so as to allow easy identification of the right interlocutor when a problem arises. On the CARIFORUM side the objective should be to strengthen the institutional nature of the Programming Unit by improving its staffing and distribution of responsibilities, and by assisting the DRAOs in understanding better the contribution of regional interventions to the objectives of the strategy and their interaction with national interventions. R7: In the design of its interventions, the Commission needs to take into account, particularly for the purpose of establishing monitoring baselines, the development asymmetries between the Caribbean countries and the specific geographical constraints. Priority 1. This recommendation is complementary to R2. It means that more effort should be made to take into account the specific characteristics of a region of island states. It implies using the principles of the UN Small Islands Developing States Network to establish baselines for monitoring programmes, taking due accounts of Caribbean specificities and internal asymmetries. A more in-depth analysis of the effects of trade liberalisation and globalisation on small islands needs to be conducted using the relevant work of international economic and trade organisations. R8: An easy to use guide as to where information from other agencies can be located should be prepared to assist those involved in design, implementation, monitoring and assessment of programmes. Priority 1. (C12, 15 and C24) In order to adopt best practices and improve the speed and quality of the inception phase of major interventions, it is recommended that a guide be prepared, making possible access by theme to the wealth of information on the region accumulated by the multilateral agencies. It should be designed as a knowledge management tool for implementing agencies, DRAOs, experts, etc. R9: Inception reports and work plans for individual interventions should indicate how the intervention will support similar or complementary activities. Priority 2. Many interventions in national and regional programmes - often using different instruments - address similar issues or are likely to benefit from

good articulation; it is therefore recommended that the necessary linkages and interactions be created. The technical and administrative provisions are too general to address this point properly and it is recommended that it be done systematically in the inception reports and work programmes. R10: To improve the regional impact of interventions, mechanisms should be put in place to increase regional ownership throughout the project cycle and at termination. Priority 3. The results of many regional interventions are limited to the country hosting the implementing agency, in particular after the termination of project support. To increase regional ownership it is recommended that (i°) the link between the DRAO and an individual country be loosened, or else regional officers are appointed at the level of CARICOM/CARIFORUM, (ii°) the interventions include provision for encouraging the use of the outputs delivered. R11: Sustainability needs to be built into the design and implementation of the interventions. Priority 2/3. A clear finding of this evaluation is that most institutions or mechanisms created or supported through the Commission’s intervention are unsustainable once the Commission’s funding has terminated. The recommendation therefore requires that implementing agencies or consultants in charge of an intervention explicitly factor sustainability into their operations. c) Recommendations related to the cross-

cutting issues and the 3Cs R12: Mechanisms need to be established to ensure that the Commission’s policies on cross-cutting issues are effectively monitored in relation to implementation of the construction of the regional integrated space. Priority 2/3.) The Commission has developed a strong concern for cross-cutting issues and has developed tools to improve their integration into project cycle management. Yet reference to cross-cutting issues still remains minimal. The recommendation is therefore that implementing agencies and consultants be required to factor them into their inception reports and work plans, and to ensure that the necessary steps are taken to use the tools developed for monitoring cross-cutting issues. R13: Outcomes of future but foreseeable trends of liberalisation, or changes in EU policies, should be systematically anticipated, and response strategies identified, in collaboration with partners in the region. Priority 2. This recommendation addresses an issue of coherence between EU policies and the

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Commission’s assistance strategy to the Caribbean region. It aims at ensuring that in future foreseeable changes in the EU policies (particularly trade policy changes towards future liberalisation)

are anticipated in the assistance strategy rather than mitigated after the event with ad hoc interventions.

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1. Evaluation framework

1.1 Evaluation objectives and scope

The evaluation of the Commission’s Regional Strategy for the Caribbean was requested by the Commission Services and approved by the Board of the EuropeAid Co-operation Office. It is part of the 2003 evaluation programme of the Evaluation Unit of the EuropeAid Co-operation Office. The terms of reference1 specify that the double objective of the evaluation is to assess: the Commission’s co-operation strategy with the Caribbean, and its implementation over the period

1996-2002; the relevance, logic and coherence, as well as the intended impacts, of the Commission’s regional

strategy and RIP for 2003-2007. The study covers the co-operation with the Caribbean region, defined as the ACP group of Caribbean countries, since 1996. This period corresponds to the 8th and 9th EDF co-operation strategies; in terms of implemented projects it also includes projects funded under the 6th and 7th EDF. It has been agreed with the Reference Group that only projects started in or after 1996 would be considered2. Projects funded in favour of the Caribbean region but from other envelopes (for instance the all ACP Programmes, the special facilities), the Commission’s budget lines and EIB credits are also taken into consideration.. This report provides the synthesis of the evaluation and is organised as follows. This introductory chapter continues with a description of the evaluation organisation and methodology. Chapter 2 provides an overview of the Caribbean region and the development of the integration process and it reconstructs the intervention logic governing the Commission’s intervention. Technical annexes support these various aspects: annexe 6 is a special study, conducted during the field visits, on the position of the Dominican Republic in the regional integration process; annex 7 is an analysis of the regional and extra-regional trade flows; annex 8 is a technical document analysing the evolution of the objectives of the Commission’s cooperation with the Caribbean through successive EDF and leading to synthesis intervention logic developed under section 2.2; and finally, annexes 9 and 10 provide respectively the long list of projects and summary tables and charts of the resources allocated to the region. Chapter 3 provides a summary and analysis of the main findings and answers to the evaluation questions. It is supported by two substantial annexes presenting the special study on the Dominican Republic (annex 6 already mentioned) and the case studies (annex 11). Chapters 4 and 5 present respectively the conclusions and recommendations.

1.2 Evaluation organisation and methodology

The evaluation was conducted in three phases. The first phase structured the approach and developed the methodology. It involved the following steps: an analysis of the overall policy context of the Commission’s Cooperation with the Caribbean; a overview of the evolution of the objectives of the Commission’s co-operation with the Caribbean

region over the period of this evaluation to serve as the basis for the reconstruction of the intervention logic;

a review of the resources allocated to the region and a comparison with the ex ante intervention logic; formulation of Evaluation Questions so as to give a more accessible and precise form to the

evaluation criteria (relevance, efficiency, effectiveness, impact and sustainability and also cross-cutting issues and the 3Cs);

1 See Annex 1. Terms of Reference. 2 Annex 9 provides lists of bilateral and regional projects in the CARIFORUM region over the evaluation

period.

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derivation for each Evaluation Question of judgement criteria and quantitative qualitative indicators/sub-questions to validate them3; 10 evaluation questions have been selected in agreement with the Reference Group.

development of the methodology for the data collection and organisation for the field phase.

The 10 Evaluation Questions Questions related to relevance 1. To what extent was the Commission's strategy to support the gradual construction of a regional integrated space designed to promote the region's integration into the world trade and its sustainable development? 2. Have the Commission’s projects and interventions been properly identified and designed to contribute to the gradual construction of the regional integrated space? Questions related to efficiency 3. Has the Commission’s strategy been able to adapt or modify to meet the needs and to fulfil the stated objectives? Was it flexible enough to accommodate evolving needs and priorities or to react to external events affecting particular interventions? 4. To what extent are the organisational and institutional frameworks and the responsibilities of the main actors involved in the management and implementation of the programmed activities contributing to the attainment of the specific objectives? Questions related to effectiveness and impact 5. To what extent has the Commission’s support to the Caribbean region fostered the regional economic integration and cooperation process? 6. To what extent has the Commission’s support to the Caribbean contributed to strengthening the regional capacities? Question related to sustainabi ty li7. To what extent are the institutions supported and the results achieved by the assistance likely to be sustained without further Commission support? Question related to cross-cutting issues 8.To what extent were cross cutting issues taken into account in the programming and implementation of specific interventions implemented in the framework of the Commission’s support to the Caribbean region? Questions related to the 3 Cs 9. To what extent are the different assistance instruments deployed by the Commission (RIPs, NIPs, and own credit lines, EIB funding etc.) consistent with each other and supporting the overall strategic approach? 10. To what extent has the Commission’s strategy in the Caribbean region been designed so as to complement and to coordinate its actions with other donors programs or with other EU member states initiatives? To what extent the Commission’s strategy and realisation in the Caribbean region has been affected by other EU policies? This first phase was conducted in Brussels in close liaison with the Evaluation Unit and the Reference Group and involved a short exploratory mission to the main Delegations dealing with the regional programmes: Guyana and Barbados. Two reports were delivered and approved4. The second phase was devoted to the collection and organisation of data for the evaluation according to the scheme illustrated in diagram 1. The objective of the data collection process was to get information of the sub-questions and/or indicators5 permitting to validate the judgement criteria that in turn are used to answer the Evaluation Questions.

3 See annex 4. 4 Inception Note, 29th June 2004. Desk Phase Report, 15th July 2004. 5 Presented in annex 9 of the Desk Phase Report.

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Documentaryanalysis

Interviews(direct and

focus groups)Case studies

Sub-questions

Grids to collect infoand report on case

studies

Synthesis of fact findings

Guidance forthe collectionof information

Substantiation of theindicators

Diagram 1: Data collection for the evaluation

Process

Tool

Output

Legend:

Field visits to five Caribbean countries were organised: Guyana, Barbados, the Dominican Republic, Jamaïca, Trinidad and Tobago, in order to collect information through three main channels: Interviews with the parties involved in the strategy as actors or stakeholders. These open interviews,

either direct or with focus groups, used the sub-questions in annex 4 as the main tool. A broader guide for the collection of information6 was also developed for the evaluators.

Documentary analysis was continued during the field phase, and the visits to the countries were also

used to complete the collection of documents. The conduct of six case studies agreed upon with the reference group and selected on the basis of

various criteria (the case studies are representative of the strategic clusters identified in the intervention logic, their geographical coverage including CARICOM and non-CARICOM countries, the subject-matter mainly concerning large projects conducted under different EDFs and involving a mix of instruments). The interest of these case studies is in the fact that they permit tracking through analysis of selected interventions, their role and relevance in the cooperation strategy, their consistency with other activities and their contribution to the effectiveness and impact of the Commission’s strategy. Table 1 provides basic information on the case studies which are reported in detail in annex 11. In addition to these case studies a special study has been conducted on the Dominican Republic and the regional integration process; it is reported on in annex 6. Guidelines for data collection and reporting on these studies were developed7.

6 Presented in the annex 8 of the Desk Phase Report. 7 Presented in annex 10 of the Desk Phase Report.



Table 1: The case studies

Area Projects name EDF Planned amounts ( million €)

Main Delegation in charge of

Management

Main countries of implementation

Investment in infrastructureCaribbean Broadcasting Union

6th 4.00 Barbados

Trade and productive sector developmentCaribbean Trade Sector Programme

7th, 8th 24.00 Barbados All CARIFORUM countries

Caribbean Rum Industry 70.00 Barbados Most countriesInstitutional capacity building

Support to CARIFORUM 6th, 7th, 9th

7.25 Guyana Guyana

Human Resource Capacity BuildingCULP Programme 7th 21.00 Jamaica Jamaica

OthersAnti-Money Laundering Programme

8th 4.00 Trinidad Trinidad

The second phase was concluded by a presentation to the Reference Group of the preliminary findings. The third phase consisted of an analysis and synthesis of the results and in the preparation of the consolidated findings, conclusions and recommendations for the present report.



2. Context and objectives of the cooperation strategy with the Caribbean

2.1 The Caribbean region: overview and main issues

The Caribbean region comprises small countries, mostly islands, scattered over a wide geographical area, and characterised by a diversity of cultures, languages and economic regimes. Annex 5 regroups different tables with a selection of indicators of economic, social and trade characteristics of the Caribbean countries. Only four countries contain more than 500 000 inhabitants (see annex 5, table 1). Three countries, the Dominican Republic, Jamaica and Trinidad and Tobago account for 70% of the total GDP. Economic

performance, as measured by GDP growth over the last decade, has varied from sluggish in Jamaïca to quite substantial in the Dominican Republic. Nine out of 15 countries have experienced average annual growth above 2.5% over the 10-year period. All countries belong to the upper-middle income group, except for Guyana (lower middle income) and Haïti, the only low-income country of the region, but also one of the most populated. As reflected by the index of economic freedom, several economies in the region can be considered as full free market economies whereas others are still significantly un-free. A major characteristic is the economic vulnerability evidenced by the high current account and fiscal deficits and debt ratios, and by the heavy dependency on foreign aid. Whereas average ODA per capita and in terms of percentage of national income amount respectively to 11 $US and 0.9%, the corresponding figures for the Caribbean countries are significantly higher, in particular for the small countries. In terms of trade, the Caribbean economies are open, relying heavily on very limited number of products (see annex 5, table 2). In several countries 30% to 60% of exports are accounted for by one or two commodities. Data on the direction of exports and imports lack consistency and are scant. They indicate a fairly high degree of intra-regional trade in the small economies but, overall, intra-regional trade does not exceed 10% and has not been progressing significantly during recent years. The United States is a major



trading partner in the region but the EU is also significant, and is in particular a large importer of bananas. These data relate to merchandise; tourism and financial services also constitute an essential export for several Caribbean countries. A number of significant global and economic changes have taken place since the early 1990s, changes that have had a significant impact on the Caribbean. The formation of WTO in 1994 resulted in a further globalisation of trading practices including - and of particular significance to the Caribbean - the agricultural sector. These new developments have severe consequences for some Caribbean traditional export products, they will be briefly analysed in section 2.3. Overall the region enjoys a relatively high level of education and health (see annex 5, table 3). The level of human development is medium or high with the exception of Haïti. However, HIV prevalence is significantly higher than in other groupings with which the region can be compared. The issue has a particular significance for the Caribbean countries and is treated in section 2.3. The transparency international index, available only for a limited number of countries, reveals that most countries in the region do not rank favourably in terms of governance. Part of this problem is the issue of high criminality and the recycling of illegal money which is analysed in case study n° 6 reported in annex 11.

2.2 Regional integration in the Caribbean

2.2.1 Policy and institutional aspects8

The establishment of the Caribbean Community (CARICOM) was the result of a long and gradual regional integration process, starting with the establishment of the British West Indies Federation in 1958. However, the Federation had a very short life and came to an end in 1962.

This meant the beginning of more serious efforts on the part of the political leaders in the Caribbean to strengthen the ties between the islands and mainland by promoting new areas of cooperation. In mid-1962 a Common Services Conference was called to take decisions on these services, including the University of the West Indies (UWI), founded in 1948, and the Regional Shipping Services. The following year saw the establishment of the Caribbean Meteorological Service. In December 1965 the Heads of Government of Antigua, Barbados and British Guyana signed an Agreement at Dickenson Bay, Antigua, to set up the Caribbean Free Trade Association (CARIFTA). The new CARIFTA agreement came into effect on 1 May 1968, with the participation of Antigua, Barbados, Trinidad and Tobago and Guyana. The original idea to permit all territories in the Region to participate in the Association was achieved later that year with the entry of Dominica, Grenada, St. Kitts-Nevis-Anguilla, Saint Lucia and St. Vincent in July, and of Jamaica and Montserrat on 1 August 1968. British Honduras (now Belize) became a member in May 1971. Emerging also from the 1967 Heads of Government Conference was the establishment of the Commonwealth Caribbean Regional Secretariat on 1 May 1968 in Georgetown, Guyana, and of the Caribbean Development Bank (CDB) in October 1969 in Bridgetown, Barbados.

During the Seventh Heads of Government Conference in October 1972 the Caribbean leaders decided to transform CARIFTA into a Common Market and to create the Caribbean Community. The Caribbean Community (CARICOM) and Common Market were established by the Treaty of Chaguaramas, which was signed by Barbados, Jamaica, Guyana and Trinidad & Tobago and came into effect on 1 August 1973. Subsequently the other eight Caribbean territories joined CARICOM and a number of States in Latin America and the wider Caribbean joined in the capacity of observers in the various organs and institutions of the Community. The Bahamas became the 13th Member State of the Community in 1983, but not a member of the Common Market. Suriname joined in 1995 and Haïti in 19989.

In order to pursue economic integration at the sub-regional level and in recognition of their special development problems, seven Eastern Caribbean countries signed in 1980 the Treaty of Basseterre and 8 Annex 5, table 4 gives the status of the CARIFORUM Countries with respect to their adhesion to regional

integration groupings and the Multilateral Trading System (MTS). 9 Provisional membership; full membership in 2002.



established the Organisation of Eastern Caribbean States (OECS, Headquarters in St. Lucia). The OECS is now a nine-member grouping comprising Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines. Anguilla and the British Virgin Islands are associate members of the OECS. Its members have established an Eastern Caribbean Central Bank (based in St. Kitts) and have formed the ECCU (Eastern Caribbean Currency Union). From its inception the Community has concentrated on the promotion of functional cooperation (including air transport and maritime infrastructure policy and development; telecommunications policy; and employment generation etc) - especially in relation to human and social development - and in integrating the economies of its Member States. The Community is also responding to a regional framework prioritising the social and economic issues of its members. Among the key partners in the process are the Caribbean Congress of Labour (CCL), the Caribbean Association of Industry and Commerce (CAIC) and the Caribbean Policy Development Centre (CPDC), working along with the Governmental machinery. Since 1989 CARICOM decided to advance towards the CARICOM Single Market and Economy (CSME) as a platform into the wider international environment. The current deadline for its full implementation has been set for 2005. Bahamas, however did not join the CSME. CARICOM concluded an FTA with the Dominican Republic in 2001. The Association of Caribbean States (ACS, established in 1994) and the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM, established in 1993 with its Headquarters in Guyana) are the major hemispheric links of the Community. CARIFORUM comprises the members of CARICOM and the Dominican Republic10. Cuba joined in 200111. Its purpose is to manage and co-ordinate policy dialogue with the EU, to manage EDF regional support in the context of its Regional Integration and Development Strategy (RIDS), and , promote the widening of regional integration and cooperation, including the Caribbean OCTs and the French DOMs. CARIFORUM countries are engaged in the preparatory process of the FTAA (Free Trade Agreement of the Americas). At the global level, CARICOM has sought to strengthen its negotiating base. To this end it established the Regional Negotiating Machinery (CRNM) in 1997 to coordinate the Community's external negotiations. The priority areas of focus are the FTAA, Post Lomé IV, ACP-EU Relations, non-economic initiatives of the Miami Summit including the Second Summit and the World Trade Organisation.

In 2001 the Heads of CARICOM Member States signed the Revised Treaty of Chaguaramas establishing the Caribbean Community including the CARICOM Single Market and Economy. All CARICOM countries have signed the treaty, with the exception of the Bahamas and Montserrat. In the framework of this renewed agreement, the CSME envisages the implementation of a number of regional institutions: the Caribbean Court of Justice to serve as the arbiter of legal issues pertaining to the CSME; the Regional Organisation for Standards and Quality (CROSQ) to establish and harmonise standards within CARICOM; the Community Competition Commission (CC) for the implementation, understanding and respect of CARICOM Competition Law; and the CARICOM Accreditation Body (CAB) to ensure mutual recognition of educational qualification certificates12. In 2002 the CARIFORUM member states endorsed the Regional Integration and Development Strategy (RIDS). The stated objective of the RIDS is to improve the quality of life of Caribbean people though regional cooperation and integration and strategies related to economic, human and social development, good governance and vulnerability13. CARIFORUM economic strategies at regional level are based on economic integration, cooperation and development. An important plank of the RIDS is expansion of the regional economic

10 Annex 6 presents an analysis of the Dominican Republic and the regional integration process in the

Caribbean. 11 Cuba is not a direct beneficiary of EU-ACP financing but benefits from Commission budget lines. 12 Although it is not a structure of CARICOM or CARIFORUM it is worth mentioning the Caribbean Regional

Technical Assistance Centre (CARTAC), a non profit organisation based in Barbados to provide assistance in public expenditure management, tax and customs administration, financial sector management and in the compilation of economic statistics.

13 Annex 4 of the Regional Strategy Paper 2003-2007.



base to increase business opportunities, improve incentives for investment expansion and achieve greater economies of scale. Apart from its economic integration objectives, CARIFORUM is pursuing the objective of gradual integration into the global economy. It strategy is aimed at achieving global competitiveness, honouring international commitments, and creating strategic trade and economic partnerships. To this end, the region is entering into a number of multilateral negotiations including those in the framework of the WTO, the EPAs and the FTAA. At the same time, it is promoting its hemispheric strategy through the promotion of the implementation of existing treaties and related agreements, including the Amazon Treaty, preferential agreements with Venezuela and Colombia, protocols for the CARICOM – Cuba FTA, and the EU-LAC bi-regional strategy process, among others. The involvement of the OCTs and the DOMs in the region is another important item in the CARIFORUM agenda.

2.2.2 The current state of regional economic and trade integration

This section provides an overview of the state of integration in the Caribbean region and emphasises the main issues that can be considered as priorities in the completion of a regional economic integrated space. The main international agreement in the Caribbean is the Caribbean Common Market (CARICOM). It was registered in 1974 under GATT as an interim agreement for the formation of a custom union. Since then, there has been a deepening and widening of regional economic integration. Intra-regional trade has been liberalised and barriers to trade with third countries have been lowered. Emphasis has been set on moving towards implementation of the Custom Union agreements with harmonisation of custom tariffs, development of common rules of origin and improvement of the scheme for fiscal harmonisation. In 1989, CARICOM Member States agreed to advance towards a more comprehensive economic integration including not only liberalisation of the markets for goods but also free movement of factors of production, delivery of services and establishment of businesses. In 1991 the main areas of emphasis in the creation of the CSME were agreed with the objective of reaching full implementation in 2005. These areas included:

(i) Free movement of goods, services and factors of production (labour and capital); (ii) Harmonisation of laws affecting commerce and regulation of economic activities including

custom laws, intellectual property, competition, corporate taxation and commercial legislation in the areas of dumping and subsidies;

(iii) Reform of Community structures including the establishment of common services with particular reference to customs services and data information services;

(iv) Intensive co-ordination of macroeconomic policy, external trade and economic relations; (v) Completion of the CET with the adoption of a simplified tariff structure and the reduction of

the CET to a maximum of 20% on non-agricultural goods and 40% on agricultural goods. Much progress has been achieved to complete the CSME but, in 2003, some aspects were still pending. Although tariff barriers to the free movement of goods were eliminated, various non-tariff barriers still impede intra-regional trade flows14. For instance, some Member States still implement various types of market distorting instrument like revenue replacement taxes or discriminatory sanitary standards on goods produced in the CSME. Not all Member States have met the requirement to comply with the uniform application of rules, procedures and forms, in particular in terms of the implementation of the agreed Customs rules within the CSME. The CET and its reduction have been fully adopted by most Member States (Antigua and Barbuda, St Kitts and Nevis and Suriname still have to reach the fourth and final stage of the CET reduction). The CET is nevertheless completed by other national import-related levies such as stamp duties, import surcharges and discriminatory rates of consumption tax which introduce substantial variations across Member States in the fiscal regime applied to imports from third countries. Finally, each country has an independent customs authority and imports from third countries that pass through other Member States attract duties at each border. As for the free movement of services, the CARICOM Heads of Government (HOG) agreed that restriction should be phased out by December 2005. Most Member States have a substantial number of 14 See annex 7 for an overview of regional trade.



restrictions limiting trade in services, including cross border trade, commercial presence and temporary service providers. Also, implementation of obligations related to certification, accreditation, licensing, common standards and equivalency is hampered by institutional and political constraints. The free movement of capital is mainly affected by alien landholding legislation and exchange controls. Exchange controls have been completely abolished by Guyana, Trinidad and Tobago but are still maintained in other countries. They should be removed by 2005 according to the agenda set by the HOG. Currently, the cross-listing and trading of securities is limited to the three more established stock exchanges, i.e. Barbados, Jamaica and Trinidad and Tobago. Finally, the level of education is still a constraining factor on private operators, favouring financing capital via equity as opposed to traditional debt financing. In principle, the CARICOM States have agreed to develop policy so as to facilitate the free movement of Member States nationals throughout the region. In fact, the categories of nationals who are allowed to free movements are limited to university graduates, media workers, artists, musicians and sports persons. Except for Montserrat and Suriname, all Member States have adopted provisions to facilitate the movement of university graduates but few have enacted legislation allowing for the free movement of the other categories. Moreover, constraints affecting the movement of university graduates remain, including national administrative procedures and lack of dissemination of the arrangements for free movement. Finally, issues related to the free movement of other categories of workers, in particular unskilled workers, have yet to be addressed within the CSME. The HOG had agreed to remove passport requirements for travel within the CSME but the 2001 deadline was not achieved. Nevertheless, all countries have eliminated the need for visas to move from one island to the next except for St Kitts-Nevis and Grenada who have not abolished the requirement in respect of Suriname nationals. Finally, measures such as the harmonisation and transferability of social security benefits, procedures for establishing equivalency in academic certification, accreditation of academic institution, and establishment of a regional skill register, have been adopted in most Member States. However, the legal, administrative and institutional arrangements necessary to facilitate the agreements relating to the free movement of persons included in the Protocol II of the CSME still need to be fully implemented. Different arrangements have applied to the widening of the regional integration process and have mainly taken the form of trade agreements concluded between CARICOM and other Caribbean countries. To date, the list of these agreements is the following:

a. Free Trade Agreement (FTA) with the Dominican Republic (signed August 22 1998, entry into force December 1 2001);

b. FTA with the Costa Rica (signed March 9 2004, not yet in force); c. FTA with the Cuba (signed July 5 2000, not yet in force); d. Preferential trade agreement with Colombia (signed July 24 1994, entry into force January

1 1995); e. Preferential trade agreement with Venezuela (signed October 13 1992, entry into force

January 1 1995)15; f. Participation in the Free Trade Agreement of the America (under negotiation).

The region also pursued its deeper integration into the world economy through its participation in various bilateral (e.g. with some South and Central America countries), regional (e.g. future participation to the FTAA or the future implementation of an Economic Partnership Agreement with the European Union) and multilateral (e.g. as countries are signatories of the WTO Agreements) trade arrangements.

2.3 Selected examples of major challenges facing the Caribbean region

This subsection complements the two previous ones by highlighting a selection of issues and challenges particularly important for the Caribbean region. The selection is not exhaustive and the topics have been chosen also in view of their relation to the Commission’s assistance and cooperation strategies with the

15 The trade agreements between Colombia and Venezuela and the CARICOM initially offer CARICOM preferential access to Colombian and Venezuelan markets, but will be renegotiated to become fully reciprocal.



Caribbean. Two examples concern sensitive Caribbean productions which are influenced both by European trade and agricultural policies and by the Commission’s development assistance. The third, HIV/AIDS, is a crucial regional issue and the focus of important international assistance. Anti-money laundering is a similar example and is covered by case study n° 6 (annex 11) on the Caribbean Anti-Money Laundering Programme so as to facilitate understanding of the CALP

2.3.1 Bananas

Table 1 shows the importance of bananas in the exports of some Caribbean economies. The Windward Islands are heavily dependent upon the banana industry. It is estimated that one third of the population depend on the banana industry in St Lucia and almost seventy per cent in St Vincent with approximately fifty per cent of the former island’s export earning dependent upon bananas16 .

Table 1. Bananas and export earnings of Caribbean countries 1995-199917

Country 1995 1996 1997 1998 1999 Average Belize Volume (tonnes) 43,636 57,045 53,773 50,682 56.318 52,290 Earnings $US m 22.05 28.7 26.1 24.6 27.3 25.7 As % of exports 13.6 17.1 14.7 12.9 14.9 14.6 Jamaica Volume (tonnes) 85,000 89,000 80,000 62,000 52,000 73,600 Earnings $US m 46.0 45.0 46.0 33.0 30.0 40.0 As % of exports 3.2 3.3 3.4 2.6 2.5 3.0 Dominica Volume (tonnes) 32,300 39,500 34,900 28,100 27,200 32,400 Earnings $US m 16.4 18.2 17.1 13.7 14.2 15.9 As % of exports 32.7 34.5 31.9 22.0 23.5 28.9 Grenada Volume (tonnes) 4,500 1,900 100 100 600 1440 Earnings $US m 1.8 0.6 0.04 0.04 0.11 0.5 As % of exports 7.4 2.2. 0.1 0.08 0.2 2.0 St Lucia Volume (tonnes) 103,700 104,800 71,400 74,6000 65,200 83,940 Earnings $US m 56.0 52.7 34.5 34.6 32.2 42.0 As % of exports 48.9 61.1 49.2 49.7 47.8 51.3 St Vincent Volume (tonnes) 49,900 44,000 31,000 40,000 37,400 40,460 Earnings $US m 24.5 19.5 14.4 20.6 18.9 19.6 As % of exports 39.6 37.1 30.5 37.8 37.4 36.5

Much of the current crisis in the Caribbean banana industry is attributed to the WTO ruling against the European Union’s banana regime18. There is no doubt that the decision will have a major impact on the economies of the region and in particular the smaller islands. However, there was a gradual overall decline in production throughout the 1990s in all Caribbean countries with the exception of Belize. The EU’s “New Banana Regime (NBR)” that came into force in 1993 without a doubt contributed to this decline, for example banana production in the Windward Islands dropped from 272,000 tonnes in 1992 to 135,000 in 1997. The slightly improved market opportunities for non-ACP countries that the NBR permitted, the periods of prices decline, and tighter quality requirements in a unified (EU) market place, were all factors

16 The importance of the banana industry to the region in Restructuring and Loss of Preference :Labour challenges for

the Caribbean Banana Industry International Labour Organisation (ILO) Caribbean Office and Multidisciplinary Advisory Team, 1999, p. 2

17 Adapted from Belal Ahmed, The Impact of Globalisation on the Caribbean Sugar and Banana Industries in The Society for Caribbean Studies Annual Conference Papers Vol. 2, 2002

18 The complaint was brought against the EU banana regime by the governments of the United States, Ecuador, Guatemala, Honduras, Mexico and Panama on the grounds of unfair competition. Notwithstanding the ruling against the EU and its impact on the Caribbean, the international trade in bananas was never really based on fair competition and completely new market. Its market has been dictated to by three dominant multinationals in the sector.



that put considerable pressure on Caribbean producers19. This situation was further compounded by natural disasters in the region.

2.3.2 Sugar

One of the largest earners of foreign exchange in the Caribbean is sugar. Table 2a shows its importance for some Caribbean countries in terms of exports and employment. Table 2b illustrates that the sugar sector is also facing pressures similar to those in the banana industry. They all point to the need for re-structuring, diversification and technological development. In addition, it should be noted that these reforms have to be conducted within the Caribbean Context that provides limited opportunities for economies of scale in the sectors under threat. This situation is seen in the region as being further exacerbated by the EU’s decision to implement unilaterally its Everything But Arms (EBA) initiative that opened its markets to imports from the forty-eight poorest countries. There have been and remain fears in the Caribbean that the EBA decision will result in the destruction of the sugar and rice industries and cause serious damage to the Caribbean rum industry’s prospects for competing in the European market. It is also argued that the EBA has de facto undermined the Cotonou Agreement and the plan to phase out of preferences before the end of the Agreement20. The recent adaptations of the Common Agricultural Policy and their likely consequences in terms of guarantees to Caribbean exporters is felt to be a major threat by some Caribbean countries. Table 2b shows that these problems were not new but the obvious need to restructure the whole sector was not immediately perceived by the industry owing to the preferential arrangements under the Lomé and Cotonou Conventions and the US Sugar Quota.

Table 2: The importance of sugar in the Caribbean a) Sugar contribution to exports and employment in selected countries

Crop year 1997/98 Barbados Belize Guyana Jamaica St.Kitts TrinidadSugar as % of domestic imports 17% 29% 24% 6% 15% 1% Direct and indirect employment 3 500 10 000 31 500 63 000 2 700 30 000

b) Cost of producing raw can sugar and beet sugar in US cents/kg Product Production Year

89/90 90/91 91/92 92/93 93/94 94/95

Raw cane sugar Low cost producers 21 20.44 17.69 19.16 19.56 19.65High cost producers (among which Caribbean)

94.77 97.28 99.46 96 107.76 113.92

Major exporters 24.88 24.9 24.53 30.76 32.85 33.37Cane sugar white value equivalent Low cost producers 30.2 28.71 25.72 27.3 27.74 27.85High cost producers 109.49 112.22 114.56 110.86 123.62 130,30

Major exporters 33,53 33,55 33.15 39.91 42.2 42.77

Source: Belal Ahmed, The Impact of Globalisation on the Caribbean Sugar and Banana Industries in The Society for Caribbean Studies Annual Conference Papers Vol. 2, 2002.

19 The reduction in preferential market access and its likely impact, in Restructuring and Loss of Preference: Labour

challenges for the Caribbean Banana Industry International Labour Organisation (ILO) Caribbean Office and Multidisciplinary Advisory Team, 1999, p. 2

20 Ibid. The EBA initiative also pre-empted the commitment contained in the Cotonou Partnership Agreement (to negotiate the protocols).



2.3.3 HIV/AIDS: regional issues

The first cases of AIDS in the Region were diagnosed and reported from Jamaica and Bermuda in 1982. By 2001 the Caribbean had the highest incidence of reported AIDS cases in the Americas21 with between 350 000 and 590 000 people living with HIV/AIDS. UNAIDS reported that the region had an HIV prevalence rate of between 1.9% and 3.1% that on a global basis places the Caribbean second to Africa. Among its Member Countries, the Caribbean Epidemiology Centre (CAREC) estimated that a total of 109 395 people were living with HIV/AIDS of whom 554 were children, 39 348 women, and 69 493 men22. (See table 3)

Table 3. Estimates of People Living with AIDS by Type of Territory in the Caribbean23

Country Estimated number of HIV infected children

Estimated number of women living with HIV/AIDS

Estimated number of men living with HIV/AIDS

Total estimated number of people living with HIV/AIDS

Estimates in the Six Eastern Caribbean States Antigua & Barbuda 3 189 510 702 (526-878) Dominica 1 54 80 135(101-168) Grenada 3 156 280 439 (329-549) St Kitts & Nevis 2 178 178 359 (269-449) St Lucia 14 842 1,685 2,541 (1,906-3,176) St Vincent and the Grenadines

2 169 335 527 (395-659)

Total 25 (19-31) 1,588 (1,191 – 1,985) 3,090 (2,317– 3,863) 4,703 (3,527– 5,879)Total population: 569,345 (8.12% of the total population) Prevalence rate 0.83% (0.62% - 1.03%) Eight Territories Anguilla 1 48 119 167 (125-209) Aruba 3 401 801 1,206 (905-1,507) Bermuda 1 177 531 709 (532-886) Cayman Islands 0 20 31 51 (38-64) Montserrat 0 20 20 40 (30-50) Netherlands Antilles 11 867 1,127 2,005 (1,504-2,506) Turks and Caicos 3 161 209 373 (280-466) Virgin Islands UK 1 87 131 219 (164-274) Total 20 (15-25) 1,781 (1,356-2.226) 2,969 (2,227-3,711) 4,770 (3,577-5,963) Total population: 459,868 (6.56% of the total population) Prevalence Rate 1.03% (0.78%-1.3%) Seven Largest Member States of CAREC Bahamas 37 2,617 4,317 6,971(5,228-8,714) Barbados 8 881 2,644 3,533 (2,650-4,416) Belize 47 2,261 3,164 5,472 (4,101-6,840) Guyana 172 11,496 19,543 31,211 (23,408-

39,014) Jamaica 148 9,608 19,216 28,972 (21,729-

36,215) Surinam 23 1,753 3,506 5,282 (3,961-6,603) Trinidad & Tobago 74 7,363 11,044 18,481 (13,861-

23,101) Total 509 (382-636) 35,979

(26,984-44,974) 63,434

(47,575-79,293) 99,922 (

74,941-124,903) Total Population: 5,983,941 (8.53% of the population) Prevalence Rate 1.67%

In the English-speaking Caribbean, AIDS accounts for the largest cause of deaths among young men between the ages of 15 and 44. The epidemic is the main cause of death of young women between the

21 Status and Trends Analysis of the Caribbean HIV/AIDS Epidemic 1982-2002 Caribbean Epidemiology Centre

(CAREC)/PAHO/WHO, 2004 p.1 22 Ibid. p194 23 Ibid pp195-196



ages of 20 and 34 in certain parts of the Dominican Republic. By 1999 the cumulative number of Caribbean HIV/AIDS orphans below the age of 14 totalled some 83 00024.

2.4 Commission’s policy objectives and strategy in the Caribbean

Annex 8 describes the general framework and principles of the Commission’s co-operation in the Caribbean and the application of the different instruments available (RIPs, NIPs, All ACP project, specific facilities (STABEX, SYSMIN), EIB credits, Commission’s own budget lines) and reconstructs the theoretical logframes underlying the regional strategies of the successive EDFs starting from the 7th.. This analysis of the Commission’s regional strategies developed under successive EDFs highlights an evolution. Earlier EDF programming was dominated by national issues and regional programmes aimed at supplementing national programmes (e.g. by including projects involving two countries or by focusing on areas for which the justification for regional coverage was not strong). Gradually, however, programming moved towards the progressive elaboration of a strategy clearly supportive of a regional integration (CARICOM/CARIFORUM) process; of fostering trade policies and institutions reforms; and of channelling the Commission’s assistance into a “regional vision” when addressing issues involving a regional dimension. Diagram 2 summarises the structure of the principal elements of the Commission’s regional strategy during the different programming periods. The overall objectives of the Commission’s cooperation with the Caribbean encompass the two major objectives set out in the successive EDFs and aimed at the construction of a regional integrated space: regional integration and cooperation, on the one hand, and building regional capacity, on the other. The latter overall objective is directly strengthening the former through its institutional capacity building component. Four specific objectives are pursued and are meant to contribute to the overall objectives. i° Infrastructure development and strengthening of trade and productive sector are directed more

specifically at the objective of regional economic integration and co-operation. ii° Over time the trade and productive sectors have increased in importance both in terms of resources

allocated and in terms of their strategic role in supporting regional economic integration. Under the 9th EDF strategy the pursuit of this objective absorbs most resources.

iii° Institutional capacity building, aimed at the development of institutions capable of playing a leading role in initiation of regional integration policies and in implementation of organisational and regulatory aspects, constitutes the third specific objective of the synthesis strategy. In the early EDFs the main effort was directed to CARIFORUM and the development of its capacity to identify and manage efficiently the Commission’s assistance resources. With successive EDFs, institutional capacity building has become central to supporting regional economic integration as well as the other major objective, the building of regional capacity. The role of CARIFORUM in deepening the regional integration process and elaborating a Regional Integration and Development Strategy has been recently endorsed by the Council of Ministers of CARICOM. The institutional strengthening of CARIFORUM, together with that the Court of Justice and the Regional Negotiation Machinery and other integrating bodies, occupies therefore a central position in the Commission’s assistance strategy to the Caribbean and is a major contribution to regional capacity building.

iv° Aside from institutional capacity building, human resource capacity building - particularly in the areas of tertiary education, health and environment - constitutes the fourth specific objective..

Finally a series of interventions in the area of drugs, money laundering and similar issues contributes to the top-level objectives of sustainable development and the fulfilment of the principles of democracy and rule of law underlying the Commission’s cooperation with third countries. These interventions are also essential contributions to the eradication of major obstacles to regional capacity building. The rationale for such evolution can be understood by taking into account the particular regional context in which the Commission’s cooperation has developed. During the early part of the period covered by this evaluation, the integration of the region was still weak and faced many challenges. In particular, the Commission’s definition of the Caribbean region encompasses countries featuring fundamental 24 HIV/AIDS in the Caribbean: Issues and Options A Background Report. Human Development Sector

Management Unit, Latin American and the Caribbean Region, World Bank, June 2000




differences in terms of their economic development, history (belonging to various blocks inherited from the colonial past), culture and institutional frameworks and between which competition dominates co-operation. Moreover, the fact that the Commission operated within the context of the agreement with the ACP countries led to a strategy that focused regional integration on the ACP Caribbean States whereas traditionally the engine of regional integration had been the former British West Indies25. The approach has therefore been to build regional strategy around programmes likely to foster cross-country contacts, exchange and discussions, even if their contribution to the construction of an integrated regional space was not immediate and clear. Only when the regional identity is considered sufficient can the Commission’s programming progressively move towards elaboration of a genuine regional strategy concentrating on development and strengthening of regional institutions.

25 The study on the Dominican Republic and the Regional Integration Process, annex 6, investigates some of

the problems linked to this approach.



Diagram 2. Synthesis of intervention logic of co-operation with the Caribbean Region 1996-2004

Spec

ific

obje

ctiv

esO

vera

ll re

gion

al o

bjec

tives

EC. c

oop.

w. C

arib

bean

Proj

ects

Ove

rall

obje

ctiv

es E

Cco

op. w

ith A

CP

Poverty reduction

Sustainabledevelopment

Integration intoworld trade

Gradual construction of a regional integrated space

Regionaleconomic

integration andcooperation

Building regionalcapacity

Trade andproductive sector

development

SupportCariforum

Secretariat,OECS, Court of

Justice, RNM, etc.

Promotion, ofexport, support to

CTO; CDE;budget lines &

specialprogrammes

bananas, rice,rum; RNM

TA and inv. todevelop tertiaryand vocational

education; health;environment, etc.

Others (drugs,money

laundering,)

Specific projectsfrom NIP/RIP and

budget lines

Human resourcecapacity building

Completioninfrastructure

networkInstitutional

capacity building

Investment inairport

infrastructure ;communication,

etc.


2.5 Commission’s cooperation programme in the Caribbean

2.5.1 Overview of the Commission’s interventions in the Caribbean

The analysis of the portfolio of projects presented in this section is based on the data in annex 9 (list of regional and bilateral interventions drawn out from the CRIS and OLAS data bases) and annex 10 (aggregate synthesis tables computed from the data in annex 9). To facilitate the linkages with the intervention logic in the synthesis tables and the associated comments, the projects have been regrouped into five clusters corresponding to the blocks of projects shown in the two lowest rows of diagram 2. a) Strategic Allocations Table 4 indicates the total resources allocated in the regional and national strategy documents for the Caribbean.

Table 4. Allocation to the Caribbean (million €) RIPs NIPs

Envelope AEnvelope BEnvelope AEnvelope B

7th EDF 105 na 194 na8th EDF 90 na 258 na9th EDF 57 na 295 156Total 252 na 746

These figures refer to the strategic allocations as planned in the RIPs and NIPs. They are not comprehensive since they do not include the “all ACP” programmes and other instruments like the budget lines or the EIB interventions. The distribution of the all ACP programmes across the different regions of intervention is generally not specified ex ante and cannot be accurately integrated in table 4 above. However, some large all ACP interventions are associated to the Caribbean. Particularly important ones are, under the 8th EDF the Integrated Development Programme for Caribbean Rum Industry (€ 70 million), and under the 9th EDF the Support to the Competitiveness of the Rice Sector in the Caribbean (€ 24 million). Annex 9 and annex 10 include all interventions from the CRIS Database. Table 10a of annex 10 reviews the focal sectors in the successive national and regional indicative programmes, along with indicative allocation of resources. The diversity of the Caribbean region is reflected in the sector distribution of projects funded through NIPs. Support to the agricultural sector under the 7th EDF was confined to four countries (Dominica, Grenada, St Lucia and St Vincent & Grenadines), arguably among the poorer smaller island communities and still highly dependent upon this sector. The emphasis upon human resources development is reflected in the substantial levels of support to the education sector in NIPs. For example the majority of the 7th-9th EDF NIP budgets for Antigua & Barbuda was allocated to the education sector; for Barbados significant proportions of the 7th & 8th EDF NIPs were also directed to this sector; while almost 50% of the 9th EDF NIP for the Dominican Republic, and 80% in the case of Trinidad and Tobago, were also directed to education. Support to the health sector has taken a significant share of NIPs in Barbados (9th EDF), Dominican Republic and St Kitts and Nevis (7th and 8th EDF) and St Lucia (8th & 9th EDF), and the remaining 20% of the NIP for Trinidad and Tobago under the 9th EDF. Basic infrastructure in respect of water represents 50% of the 9th EDF NIP for the Dominican Republic. These different levels of emphasis illustrate the diverse nature and perceived needs of the individual island communities of the region.



b) Planned and contracted allocations The analysis of the portfolio of projects presented in this section illustrates the main thrust of the programmed and implemented Commission interventions. Tables 10b of annex 10 regroup regional and bilateral interventions over the period of this evaluation by sector, and in blocks of interventions corresponding to the five clusters of the intervention logic. These tables illustrate the distribution between each EDF and reflect the changes in emphasis in response to the need for integration into world trade. Charts 1–4 illustrate the distribution of planned and contracted resources on (a) regional and (b) bilateral bases within the clusters set out at the beginning of this section for each EDF falling within the scope of this evaluation. Chart 5 illustrates the total planned and contracted resources for the period 1996 – 2004. Whilst these charts serve to provide a “global overview” of the distribution of resources across the five main clusters at regional and bilateral level, further analysis of the types of project at individual country level serve to illustrate the diversity of the Caribbean region. Cluster 1, infrastructure was the main thrust under the 6th EDF both in the regional and bilateral programmes. Support was predominantly directed at the transport sector and included such projects as assistance to the Government of St Kitts and Nevis in the development of air transportation links. It has been provided in the form of grant financing to assist in runway construction and sea defences to protect the runway and ancillary buildings and equipment. Under the 8th EDF support was provided for both broadening and consolidating the regional initiatives under the 7th EDF and included, among other things, a project to contribute to improvement and integration of regional air transport by (i) improving and coordinating ATM, and (ii) enhancing human resource capacity building. Basic infrastructure in respect of water represents 50% of the 9th EDF NIP for the Dominican Republic. Cluster 2, trade and production sector, has been the focus of major efforts through successive regional and bilateral programmes, with the exception of the 6th EDF regional programme.



Of significance is that under the 7th EDF regional support was provided to trade, business development, the financial sector and commerce (Cluster 2) and included projects aimed at: improving the performance of the tourism sector by developing capacity in such areas as marketing

and promotion; product development; human resources development; research and development; and cultural heritage;

strengthening the economies of CARIFORUM Member States through support to overall trade diversification and growth efforts. As part of the programme the Caribbean Export Development Agency (CEDA) was created as the implementing agency by an Inter-Governmental Agreement among CARIFORUM Member States. It involves coordination of macro-economic and trade policy measures for the Member States, assistance to exporting firms in such areas as trade promotion, quality improvement, production efficiency, market information and training, as well as support to public and private sector trade promotion organisations.

Under the 8th EDF support was provided for both broadening and consolidating the regional initiatives under the 7th EDF and included, among others, a major programme to enhance the competitiveness of the rum sector by making it export-oriented in the segment of branded products. The components include: (1) institutional capacity building to WISPA, (2) marketing and distribution strategies; and (3) plant modernisation and meeting of environmental needs. Under the 9th EDF support was confined to four sectors with business development taking a significant share of the budget. Cluster 3, institutional capacity building to support regional integration has been supported directly under a 7th EDF project which sought to strengthen CARIFORUM by providing TA, support staff and other facilities and services for preparation, appraisal, implementation, monitoring and evaluation of regional programmes financed by the EDF. Cluster 4, human resources capacity building: the emphasis on the human resources development cluster is reflected in the substantial support to the education sector in the NIPs. For example the majority of the 7th-9th EDF NIP budgets for Antigua & Barbuda were allocated to the education sector; for Barbados significant proportions of the 7th EDF and 8th NIPs were also directed at this sector; the same applies to almost 50% of the 9th EDF NIP for the Dominican Republic and 80% of the 9th EDF NIP for Trinidad and Tobago. Support to the health sector has taken a significant part of the NIPs for Barbados (9th EDF ), Dominican Republic and St Kitts & Nevis (7th & 8th EDF ), and St Lucia (8th & 9th EDF ) and the remaining 20% of the NIP for Trinidad and Tobago under the 9th EDF. At regional level within the 7th EDF a broader spectrum of support was provided which included development of the capacity to manage regional collaboration in education, for example: establishment of regionally integrated Masters Degree programmes in economic development and

reform, public sector management, tropical architecture and monument conservation. promotion of professional interaction across the region and with the EU. promotion of co-operative research .

Regional support for human resource capacity building in the field of environment was provided through a 7th EDF project to strengthen regional cooperation in conservation management and sustainable development, and in the development of amenity areas, to ensure that greater attention is given to environmental issues through: development of a regional environmental information network; promotion of education and awareness; institutional capacity building; and enhancement of the management of amenity areas (marine, terrestrial, watersheds)

Under the 8th EDF support was provided to both broadening and consolidation of the 7th EDF regional initiatives along with, among others:



a project aimed at reinforcing capacity and cooperation between Haiti and the Dominican Republic for the protection and conservation of the lakes border area;

a project to improve management and coordination between public and private laboratories in the region, thus leading to increased availability of high quality medical laboratory services.

Cluster 5, other areas (disaster prevention, drugs, etc.): under the NIPs this category is important because it includes a large number of interventions which are of great significance for the development of individual countries (energy, urban development, etc.) but less so from the point of view of cooperation with the region. At regional level, under the 8th and 9th EDF interventions in the areas of disaster management and drugs control included: a project to mitigate the social and economic losses caused by adverse weather conditions and to

improve weather data for sensitive productive areas; a project to develop the regional capacity for combating money laundering.

This rapid overview of the main features of bilateral and regional programmes leads to a number of issues: It is not always clear how the interventions fit into the overall strategy as set out in the generic logical

framework for the period 1996–2004. For instance, under the 9th EDF the focal sector is trade and productive sector development, but important allocations have also been made to infrastructure since they were programmed under previous EDFs.

A significant component of support under the 8th EDF was directed at establishing or further developing the institutional enabling environment that might help contribute to regional integration across a broad spectrum of sectors, notwithstanding the fact that it is not clear at this stage how this fits into the overall strategy as set out in the generic logical framework for the period 1996 – 2004. The apparent isolation of the RIP within which some NIPs have been implemented raises the issue whether the enabling institutional frameworks at regional level have been appropriate for ensuring achievement of coherent goals for regional integration and for the region’s integration into the world economy.

Whilst much of the period that is the subject of this evaluation precedes the commitment to the UN Millennium Declaration, from the distribution of projects it can be interpreted that the interventions have been consistent with the six areas where the Commission’s assistance can offer comparative advantage26: - trade and development; - regional integration and cooperation; - macro-economic policies linked to poverty reduction strategies, in particular strengthening of social

services such as health and education; - reliable and sustainable transport, which plays a key role in access to basic social services and to

economic progress; - food security and sustainable rural development strategies; and - institutional capacity-building, good governance and the rule of the law.

It is not clear how far cross-cutting issues such as gender, environmental sustainability and human rights (an integral component of the Millennium Declaration) have been considered as part of the EU interventions in the Caribbean. Moreover, the extent to which the interventions form part of a coherent poverty reduction strategy, and how far the interventions indeed contributed to reducing poverty, is not apparent.

26 The Enlarging European Union and the United Nations, European Communities 2004, p18.



2.5.2 Programme identification and implementation mechanisms

Diagram 3 describes the various actors involved in the programming and management of the Commission’s assistance to the Caribbean.

Diagram 3 Caribbean - EU Institutional Relations

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DG Development : Countries/Region Desks

EuropeAID Delegations

National AuthorisingOfficers

CARIFORUM PU andRegional Authorising Officer

Deputy RAO

National Ministries Regional Organisations(OECS, CARICOM etc)

The Directorate General for Development (DG DEV) works on policy formulation at global and sectoral level. It formulates the development strategies applicable to ACP countries and regions. Strategies comprise the programming of financial resources and the monitoring of development co-operation as agreed with partner countries and regions taking due account of their ownership in the development process. EuropeAid Co-operation Office's mission is to implement the external aid instruments of the European Commission, which are funded by the European Community budget and the European Development Fund (EDF) both at national and regional levels. The Office is responsible for all phases of the project cycle (identification and appraisal of projects and programmes, preparation of financing decisions, implementation and monitoring, evaluation of projects and programmes) and ensures the achievement of the objectives of the programmes established by the Directorates-General for External Relations and Development and approved by the Commission. In 2000, the Commission adopted a programme to reform the management of external assistance, aiming at improving the effectiveness of the management of aid, the quality of the operations and their visibility. The deconcentration of the management of external aid to the Commission Delegations is a key element of the programme. Delegations are given responsibility for key operational tasks, such as project identification and appraisal, contracting and disbursement of Community funds, and project monitoring and evaluation. The major task of the Delegation and its staff is to ensure that projects and programmes financed from the funds managed by the European Commission are properly and cost effectively executed. To this end they work closely with the National/Regional Authoring Officers (appointed by the respective Governments) and line ministries in managing wide-ranging socio-economic, cultural and technical projects – and, if necessary, being directly involved.



The Delegation which has responsibility for the Caribbean Region is located in Guyana; it represents the European Commission in Guyana, Suriname, Trinidad and Tobago, and in two Overseas Countries and Territories (OCT): Aruba and the Netherlands Antilles. It has offices in Suriname and Trinidad and Tobago. The Regional Delegation is organised in four sections (Regional, Economic, Technical and Administration) and also has offices in Suriname (Paramaribo) and Trinidad & Tobago (Port of Spain). Three other Caribbean Delegations have regional responsibilities. The Delegation in Barbados carries responsibility for Antigua and Barbuda, Barbados, Dominica, Grenada, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines (Eastern Caribbean). The Delegation is also accredited to three Overseas Countries and Territories (OCTs), Anguilla, British Virgin Islands and Montserrat; and three French Overseas Department (DOMs), French Guyana, Martinique and Guadeloupe. The Delegation in the Dominican Republic represents the European Commission in the Dominican Republic and in Cuba. The Delegation in Jamaica carries responsibility for the Bahamas, Belize, Jamaica and two British Oversea Territories, Turks and Caicos and the Cayman Islands. Finally, the Delegation in Haïti is responsible for that country. CARIFORUM is the Commission's principal interlocutor for all matters relating to regional co-operation in the Caribbean, namely for the programming of resources and the identification, appraisal and monitoring of regional and sub-regional programmes. The Secretary General of CARIFORUM acts as the Regional Authorising Officer (RAO) and is assisted by a Programming Unit comprising technical and administrative staff financed from EDF resources. Implementation of projects is decentralised, each project being assigned a Deputy Regional Authorising Officer (DRAO) in the country where the project is implemented. Consequently, the project is monitored for the Commission by the Delegation in the country in question.



3. Main findings and analysis

The findings have been collected, as indicated in section 1.2, through documentary analysis, interviews in Brussels and in the Caribbean, and the case studies (annex 11) , including the special study on the Dominican Republic and the regional integration process in the Caribbean (annex 6). The presentation of the findings follows the Evaluation Questions and corresponding Judgement Criteria (annex 4).

3.1 Evaluation Question 1

To what extent was the Commission's strategy to support the gradual construction of a regional integrated space designed to promote the region's integration into the world trade and its sustainable development?

Answer to Evaluation Question 1 The Commission’s strategy of support to the Caribbean region has evolved across successive EDF programmes and it includes a large spectrum of interventions. Its “fil conducteur” is the strengthening and the construction of a regional integrated space. The characteristics of the region and the potential gains in terms of economies of scale make this objective rather compelling and it is supported by historical development.. The geographical area for the integrated space, the CARIFORUM zone, results from signature of the Lome IV Agreement, and is not the result of analysis demonstrating its relevance. The potential and implications of the region’s integration as a tool for development has not been sufficiently analysed and therefore not fully grasped, and as a result national interests tend to prevail over regional concerns. Notwithstanding these limitations the need for the construction of a regional integrated space is shared by the partners. The policy dialogue, however, has concentrated more on competing for the allocation of scarce resources among countries, sectors and institutions than on the real strategic issue of maximising the contribution of regional integration to the development of the region and its insertion in the world economy. This question relates to the link between the strategic objectives of the Commission assistance to the Caribbean and its overall cooperation objectives. It attempts to assess the justification for the central objective of supporting the gradual construction of an integrated regional economic space and to verify on which basis the Commission defined its strategic objectives. It first verifies the extent to which the Commission’s programming documents clearly set out the rationale for the establishment of a regional integrated space as a response to the main developmental needs of the region. It then examines whether the objectives of the national and regional programmes reflect the views of the partners, in particular with respect to the construction of a regional integrated space. Two judgement criteria are used to answer this question. J.1.1: The Commission’s strategic and programming documents clearly set out the rationale for

the establishment of a regional integrated space as a response to main development needs of the reg ons i

There is an “inevitability” of regional integration and the Commission’s programming documents reflect the fact that, given the small size and the openness of the Caribbean economies, regional integration together with export promotion is a key factor for the development of the region. The fragmentation of the economic space, narrowness of local markets, insignificance of individual Caribbean countries on international markets imply that important economies of scope and scale can be achieved through the region’s integration. From this point of view, the integration of regional markets for goods, services, labour and capital is a priority that also requires the appropriate level of harmonisation of national laws and regulations. If the rationale for regional integration is relatively to establish the definition of the geographical zone on which should form the regional integrated space is a more complicate issue which is not really addressed in the Commission’s programming documents.



The constitution of a regional integrated space in the Caribbean faces a number of constraints which are mainly political in nature. The diversity in history, situation and culture of Caribbean States implies that movements towards regional integration are slow and hampered by the lack of political will to implement regional decisions. This is even true within CARICOM which is the only genuine local integration initiative. For example, the CARICOM Treaty did not provide for executive institutions to monitor and implement the obligations of the Treaty. The CARICOM Secretariat is essentially an administrative institution which has essentially fostered functional cooperation between Member States without being an effective vehicle for implementing the Treaty. Identically, the CSME has not moved significantly since it was established because of the slow pace with which associated reforms have been adopted in national legal and regulatory frameworks. I this context the selection of the CARIFORUM geographical zone as the privileged area for the construction of a regional integrated space is questionable and remains an issue. CARIFORUM is defined more on the basis of administrative considerations (ACP Caribbean countries) than on regional integration reality, and the Commission’s documents do not provide a clear justification for promoting regional integration at CARIFORUM level. Moreover, except for the elements mentioned above, the partners’ constraints are much more often defined at country than at regional level and there is no clear identification of what regional integration contributes to the region’s and countries’ sustainable development. Identically, the Treaty establishing CARICOM did not provide an analysis of how to implement regional integration and it is only with the project implementing the CSME by 2005 that some direction has begun to be developed. The Commission did not, however, produce any analysis documenting the state of regional integration and establishing the priorities to be addressed in fostering the regional integration process. As a result, successive regional programmes have globally pursued an objective of regional integration with a focus on functional cooperation (health, drugs, transportation) rather than on a real integration agenda including trade, fiscal or industrial policy harmonisation. It nevertheless gradually induced a more strategic view, which was accepted by CARICOM and CARIFORUM secretariat and which gave rise to the RIDS. The 9th EDF programming includes a more comprehensive approach and constitutes the first deliberate attempt to focus assistance on regional integration. The 9th EDF RSP is the first deliberate attempt to focus assistance on regional integration. But it falls short of identifying what is really needed to complete regional integration, as demonstrated by the activities included under the focal sector “regional integration” which seem too disparate and unconnected to give the feeling that they are indeed framed into a consistent and comprehensive strategy. Finally, it may be noted that the strategy does not address a question that is fundamental to both regional integration and development, namely the very large asymmetry between the Caribbean countries. One country, almost the most highly populated, is a least developed country whereas several others belong to the group of medium-income countries. This extreme diversity poses severe challenges for regional integration which are not analysed in the regional strategy. At the same time, the potential contribution of regional integration to levelling out differences in development within the region is also not a component of the strategy. J.1.2: The objectives of the national and regional programmes reflect the views of the partners in

particular with respect to the construction of a regional integrated space .

Programming is based on a an effective demand driven dialogue at regional and national levels which in principle guarantees that the views of the partners are taken into consideration. Several points should nevertheless be mentioned: The views of certain categories of operators, whose role is essential in regional integration, are not

properly taken into consideration. In particular, private sector operators have less weight in the dialogue than civil servants.

Demand at national level is geared to national priorities which do not necessarily coincide with regional level priorities. Moreover, regional interventions are not necessarily directed to the construction of integration space but instead aim at funding regional institutions or projects of



common interest to a limited number of countries (examples are cross-border road infrastructure between Haïti and the DR, or the CAFP project, many components of which are country-specific).

Asymmetries in terms of level of development among Caribbean countries are not properly addressed in regional programmes and the impediment to the regional integration process that they represent is not really taken into consideration.

More fundamentally, the dialogue between the Commission and the Caribbean has mainly concentrated on the allocation of resources across countries and across sectors and institutions rather than on real strategic issues which in principle should be the basis of the Commission-Caribbean partnership. In the absence of an authentic strategic view, shared by the partners, concerning the regional integration process and its impact on the region’s development, there has not been a real policy dialogue on these issues. The policy dialogue has rather dealt with identification and implementation of activities within predefined envelopes but has not addressed the explicit link between these envelopes and potential strategic priorities supportive of the construction of the regional integrated space. For example, the design of the CULP project does not reflect a clear vision of the goals to be achieved in terms of mutual recognition, credits, longer term financing, or inclusion in the curricula of subject-matter supportive of regional integration. It is only recently, after 10 years of operation, that these issues have been discussed with the constitution of the Caribbean University Network.


Have the Commission’s projects and interventions been properly identified and designed to contribute to the gradual construction of the regional integrated space?

Answer to Evaluation Question 2 Overall, Commission interventions are relevant to address particular needs of the Caribbean in view of constructing a regional economic integrated space. Projects/programmes are designed to cope with specific constraints affecting regional integration and aim at tackling several issues directly related with integration among Caribbean countries and/or their integration into the world economy. However, these interventions are not clearly integrated into a global strategy which in fact fails to be clearly identified. This mainly stems from the absence of a comprehensive analysis of the Caribbean context that would be necessary to establish a prioritisation of needs and the selection of a set of interventions that would reflect genuine strategic choices based on a clear vision of the Caribbean integration process. The elements incorporated in the strategies reviewed by this evaluation seem rather based on a pragmatic approach which takes into account the partner’s requests, interventions of other donors and the Commission’s comparative advantages. This question is directed to an assessment of the existence and quality of the analysis and studies aimed at identifying of the needs underlying the construction of the regional integrated space and the formulation of assistance interventions. It focuses on how the needs have been identified, i.e. the supporting analysis, the consultations with the partners and other donors, and on how the response has been formulated in terms of selection and preparation of interventions. Three judgement criteria correspond to this question.



J.2.1 Analysis have been conducted and used to identify the priority needs relating to the construction of the regional integrated space.

Under this judgement criterion the findings can be regrouped into two categories: a) Findings relating to identification of the strategy for supporting the construction of a regional

integrated space. Judgement criterion 1.1 discussed the relevance of supporting the construction of a regional integrated space as a response to the development needs of the Caribbean region. Judgement criterion 2.1 examines the extent to which the strategy selected to support regional integration is appropriate and based on a comprehensive analysis of the regional context. It applies at two levels: identification of the major areas where support will be most necessary to meet the needs, and the identification of specific interventions. At the broader or policy level there is a lack of analysis supporting the rationale underlying the selection of focal sectors or the areas of concentration of interventions under the different EDFs. There are no systematic studies documenting or justifying the selection process and explaining why and how the selected areas and focal sectors will contribute in a sustainable way to the gradual construction of the regional integrated space. For example, no explanations are provided to justify the selection of the human development resources sector, with heavy involvement in the health sector, as a focal area in the 8th EDF, whereas it is completely absent from the 9th EDF. The areas and focal sectors selected always represent a need in the region, but there is a lack of justification of their degree of priority within the overall strategic vision. Moreover, there is an absence of ex ante and ex post analysis that can support the continuation or change of priorities or the modification of the concentration areas from one EDF to another. There has been a prevalence of political considerations (balance between the countries, support to large institutions) over analytical ones. Interviews conducted in the field have repeatedly pointed to the fact that identification of the areas of intervention and the interventions themselves has been the result of a thorough consultation process, especially at the highest level within CARICOM and CARIFORUM, and also with the Commission Delegations to define and determine priorities and concentration sectors in each EDF. The CARIFORUM Secretariat was the main engine driving this consultation process which was conducted without preparation of analytical documents presenting a justification and rationale for selecting areas of concentration, sectors or interventions. It must however be said that a positive evolution is observed in this regard and that analytical support to the strategic planning is more pronounced under the 9th EDF. It remains, however, rather general with an absence of comprehensive analysis of the needs to cover to achieve the intended goals, the degree of realisation that has already taken place and the remaining areas where priority efforts should be directed. Overall, political considerations appear to have prevailed over technical discussions. The distribution of funds between the countries and between beneficiaries was the main concern of the decision making body, rather than the strategic imperative of incorporating interventions into a self-standing strategy. At project level there are indications that interventions have been identified through a substantial consultation process, supported - in many cases and particularly for the large interventions - by preparatory technical documents. As an example, the CULP had been prepared by an initial study conducted by the British Council for the Caribbean Learning Programme and by the Association of Commonwealth Architects for the UTECH. However, these analyses, although they may be fairly extensive and go deeply into some problems, are generally limited to the sector or thematic boundaries of the project and do not really establish the links with the objectives of constructing the regional integrated space. The rum project is an illustration. In this case DIAGNOS was commissioned to prepare a feasibility study on the Caribbean Rum Industry. The study attempted to identify the needs and priorities of the industry but focused mainly on mitigating the consequences of the disappearance of the advantages linked to the quota, in particular in terms of competitiveness on the EU market. The technical components and the implementation mechanisms of the project are undoubtedly the result of a joint effort between the rum industry, CARIFORUM secretariat, WIRSPA, and DG Development in Brussels. Overall this project responds to very specific contingencies (the damage caused to the industry by the agreement on the spirits signed between the EU and the US) but does not address the potential contribution of the restructuring of the sector to strengthening the regional manufacturing sector nor the positive dynamics the regional integration could bring to the reform of the sector. Another example is



provided by the programming documents of the Caribbean Trade Sector Programme (CTSP) and the Caribbean Regional Trade Development Programme (CRTDP) which do not explicitly refer to national or regional sector policy documents because such trade policy documents have not been produced at the level of CARIFORUM; such studies, however, are currently being conducted under the auspices of the CSME. In the majority of cases specific preliminary studies were not commissioned to address the question of the linking the needs of the sector to the region’s development and to the integration process. The link between the sectoral needs and a project are established ex post, once the intervention is approved and when it the stage is reached for defining its components and determining the implementing agencies and beneficiaries. In the CARIFORUM Cultural Centres, for example, the selected institutions participating in the project were consulted on operational and technical issues, and the discussion over integration was done mainly in terms of cooperation, not in terms of integration. The functional and operational approach prevailed over the structural and integrated approach needed to promote the integration of the region. In the majority of cases projects lack an integration dimension, and the notion of contributing to the construction of an integrated region is not properly articulated. The establishment of links to structures that can contribute to the integration process is missing. This is in part due to the fact that the projects have been treated as individual initiatives and not as a part of a coherent strategy moving from country to region so as to establish and to consolidate the foundations for sustainable integration. Project documents usually refer to their relevance to regional construction or regional functional cooperation, but projects are mostly handled as separate activities with no analysis or demonstration of their combined contribution to regional construction . Alongside the issue relating to the justification of interventions is a similar one relating to the termination of interventions. There are instances where projects have been terminated or abandoned, more on the basis of administrative than strategic considerations, although their full potential contribution to the objectives could still materialise. This is the case with the CULP project and to a certain extent with the CBU. Such projects create particular difficulties insofar as they call for support extending beyond the life of a single financing agreement or even a single EDF. It is of course an issue of sustainability but also one of relevance as its call for strategic decisions implies a longer term vision. J.2.2: The mix of projects, resources and instruments proposed is designed so as to address the

prior ty needs and to contribute to the proposed objectives. i

t ti

This judgement criterion assesses the coherence of the various instruments deployed by the Commission in its assistance and verifies that they are combined so that they produce convergent results in support of the strategic objectives. As judgement criteria J.9.1 and J.9.2 are verifying very similar aspects, the findings will be regrouped under the answer to Evaluation Question 9. J.2.3: The proposed interven ions take into account the activi es of other donors and the

comparative advantages of the Commission’s assistance Regarding donor co-ordination differing situations are observed: There are a number of large programmes attracting the interest of many donors: HIV/AIDS, anti-

money laundering. In these areas considerable efforts have been made by donors and partners to achieve coordination and complementarity. This sometimes leads to heavy coordination structures (like the PANCAP for the HIV/AIDS programme) but permits distribution of areas of support, avoiding duplication of efforts and making the best use of the comparative advantage of each donor. In the case of the anti-money laundering project it also permitted one donor to cover a shortfall resulting from currency fluctuations which effectively reduced the contribution of another donor. However, a certain incompatibility of the administrative procedures of the Commission and a UN agency effectively halted the Epidemiological Surveillance System project for twelve months.

In other areas several donors intervene with limited consultation or coordination. This is the case of the CARTAC, also of regional integration supported by the Commission but also by the IMF and the IADB.



Finally there are areas where the Commission intervenes on the basis of its own priorities or specific protocols, for instance preparation of the EPAs and support to the rum sector. In these cases there is no donor coordination.

Overall the Commission programming documents usually refer to what other donors do and avoid duplicating efforts, but real coordination only takes place in a limited number of cases An important finding is that donor co-ordination is effective and performs well when the partner is in a position to clearly articulate its needs and to act as a real partner in the co-ordination process. Two positive examples illustrate this: the HIV/AIDS and the CALP projects. In both cases the ingredients of success were: 1°, at regional level there was a genuine sensitivity and concern for the problem and a willingness to address it; 2°, there existed strong institutions in the region capable of identifying the needs (CAREC and Ministries of Health for HIV/AIDS, Ministries of Finance and the CFATF for the CALP) and to obtain political support; 3°, external pressures (from UN in the case of AIDS; OECD, US and EU in the case of CALP) were exerted in favour of solving issues at regional level; 4°, the institutions mentioned under 2° are able to take the project forward and implement it. It is clear that the two projects (HIV/AIDS and CALP) have performed better and exhibit deeper ownership than others because of the presence of these four components. It is significant is that these multi-donor programmes have been clearly designed with a strategic perspective and sustainability in view. In a number of the programmes (CARTF, CARICAD, CULP, CBU) where the Commission has been the sole donor, difficulties emerged because other ingredients were also missing. The CBU was missing a strong ingredient, the CULP faced the problem of an issue of political backup due to the difficulty of widening it from the CARICOM zone to the CARIFORUM one. It was designed based on studies that had been commissioned from outside the region and it seems that certain aspects related to the peculiarities and strategic needs of the region, particularly in terms of planning for sustainability, were omitted. This reflected an unbalanced donor-partner relationship. It must be added that whereas donor coordination is particularly difficult at regional level, it is more effective in the individual countries and there is evidence (Jamaica is one such case that was verified during this evaluation) of active donor coordination in the programming and implementation stages of the national programme. Regarding the Commission’s comparative advantages, the main ones are the large variety of resources (and particularly grant funds) it can offer, its institutional experience in regional integration, the whole partnership context of Cotonou, and its specific experience is some sectors (for instance, transport). No other donor can bring to bear such diversity, but the Commission does not greatly exercise its comparative advantage, at least from a strategic point of view. For instance, the substantial experience of the Commission in developing regional integration among its Member States and in promoting it in other part of the world has not been systematically used to identify the strategic steps and priorities appropriate to constructing an integrated space in the Caribbean region. The Commission’s comparative advantages are used in a very pragmatic way, not strategically.




Has the Commission’s strategy been able to adapt or modify to meet the needs and to fulfil the stated objectives? Was it flexible enough to accommodate evolving needs and priorities or to react to external events affecting particular interventions?

Answer to Evaluation Question 3 The objective of constructing and strengthening the regional integrated space has been a continued and consistent component of the support to the Caribbean region. It is evidenced by the references in the strategic and programming documents and by the fact that the regional construction and cohesion appear as important justifications for interventions. Each intervention can be regarded as relevant against these objectives. However, the selection of activities is not sufficiently supported by a systematic review of the progress in the construction of the regional space and the identification of the most crucial obstacles to overcome, but it is more often the result of a political competing process for limited resources. Continuity is demonstrated in several areas by the succession of projects addressing the same goals, but it is often imposed by the non sustainability of the institutions supported than by strategic considerations. The Commission’s support has shown a good capacity to adapt to changing circumstances and environment. However, it has not demonstrated the strategic ability to anticipate foreseeable changes. This question addresses the issue of whether there has not only been consistency in the Commission’s assistance strategy but also a willingness to adapt to changing circumstances and whether it has been proactive in its approach. Three evaluation criteria permit an answer to the question. J.3.1: The support strategy has been consistent over the evaluation process The essence of this judgement criterion is to establish how far the Commission's strategic objectives, in particular the construction of a regional integrated space, are reflected in the programming and implementation of interventions. Evidence of continuity and consistency is illustrated by the support for two substantial initiatives through successive EDFs. These were support to the CARIFORUM Secretariat (7 ACP RPR 053, 7 ACP RPR 556, 7 ACP 361 and 9 ACP RCA 2) and the Support to the Caribbean Trade Sector Programme (7 ACP RPR 447 and 8 ACP RCA 4). As will be seen from Case Study No 4 (CARIFORUM), one of the characteristics of the Caribbean regional programmes is that there are frequently too many requests for a share of the limited resources available. Notwithstanding the fact that CARICOM has a clear picture of its sector strategies27 and needs, it would appear that there remains considerable competition between Member States and regional institutions to benefit from the regional programmes. This situation has resulted in the limited (human) resources of the CARIFORUM Secretariat being diverted to resolving these issues to the detriment of conducting preparatory studies, identifying development priorities and supervising implementation effectively. A consequence of this pressure on the CARIFORUM Secretariat could be interpreted as at times compromising the real strategic integration objectives. As an illustration, the majority of the projects examined for the purposes of developing the case studies and other projects visited had an inherent regional dimension reflecting the strategic objectives of CARICOM and CARIFORUM. However, in a majority of cases it would appear that insufficient preparatory work resulted in otherwise conceptually sound projects not realising their maximum potential. For example, the design of the CULP did not consider the following: language training for students; accreditation issues; mutual recognition of qualifications; or - of greater importance - a strategic plan for the sustainability of the programme post-Commission support. All of these issues are of critical importance when considering regional integration.

27 This was confirmed at a meeting with the Caribbean Ambassadors based in Brussels



In addition to the frequent absence of a genuine strategic analysis in project documents, often synergy between Commission interventions at a regional level is lacking. Each of these projects form part of the superstructure that is being constructed on the foundations established in the Caribbean through such institutions as CARICOM and CARIFORUM. Pursuing the analogy of a building, it seems as though these blocks are being gradually placed in a structure without the cement to bind them together with the risk that some parts may collapse early, putting the integrity of the entire integration project at risk or at best delaying it as re-construction of parts becomes necessary. Again taking the example of CULP, one of the main justifications for the programme was that it would complement the sector support envisaged in the CRIP such as, among others, agricultural diversification, trade, environment and infrastructure development. These appear to have been “appropriate words” to include in a proposal but with no reference as to how they should actually be realised. There is no evidence to suggest that there was any interaction between the CULP human resources project and those initiatives that entailed the sector orientations outlined previously. It would appear that the more strategic vision seems to have materialised in the multi-donor programmes such as HIV/AIDS and the CALP with their associated greater flexibility and where other international bodies, UNAIDS (HIV/AIDS) and OECD- FATF, had conducted thorough analysis in conjunction with CARICOM and other local institutions. This apparent lack of strategic analysis and planning for sustainability seems to have resulted in projects such as the Cultural Centres and CULP not being funded for a second phase, introducing time inconsistencies into the strategy. In effect, although regional networks such as the Caribbean University Network were established as a result of the projects, a number of the principal core activities had to be: curtailed, with reversion to predominantly national orientation, or re-invention of the whole process. This has inevitably resulted in the non-maximisation of the potential of Commission funding of the integration process in these vital areas. J.3.2: The strategy could be adapted to accommodate shocks and change of context This judgement criterion asks, firstly, whether the Commission has been able to adapt its strategy to respond in different periods to the changing needs of CARIFORUM/CARICOM. Secondly it asks how the Commission has responded to evolving needs or external events affecting the region's priorities or economic, political and social issues. During the period covered by the evaluation there have been a number of shocks and changes influencing the context of the Commission’s support. These have included: the rapid increase in globalisation; the opening up of financial markets with the resulting explosion of Offshore Financial Centres, globally and in the region, that provide tax heavens and, increasingly, channels for money laundering by lawbreakers, tax evaders at corporate and individual level, and especially those related to drug trafficking; the replacement of GATT by WTO and the resulting trade disputes that have impacted on key sectors in the Caribbean, such as bananas and sugar; the Cotonou Agreement and the evolving Economic Partnership Agreement procedures; and the rapid increase of HIV/AIDS in the region. There are two key observations in the manner in which the Commission has responded to these changes. With respect to trade related issues, the Commission has attempted to initiate a number of regional programmes that would contribute to mitigating the impact of the changes on the global environment and assist the Caribbean in its integration efforts both regionally and globally. These projects have included, among others: CULP, in particular the international business and agricultural diversification projects; CARTF – Agribusiness Research and Training Fund Support to the Trade Sector Programme; and Support to the Rum Industry Support to the Rice Industry

However, despite these initiatives, and as mentioned in the case studies for CULP and Trade Sector Programme, there seems to have been limited strategic analysis of the implications for integration and the



longer term sustainability of the actions to achieve this regional objective. Of greater importance there seems to have been limited dialogue between the various parties as to whether these were the appropriate solutions in the final form in which the programmes were drawn up. The programmes appear to have been “one off” solutions to deal with a pending problem (gradual exposure of the sugar and banana industries to global market forces) or an immediate problem (e.g. support to the rum industry). It is quite apparent that these pending problems were in evidence long before these programmes were initiated. A more constructive dialogue with CARICOM at early stage may have resulted in more strategically viable and gradual solutions for re-structuring rather than “shock solutions” that will inevitably have limited impact and have created resentment within the regional Caribbean community. J.3.3: The state of the regional integration process at the time of programming was assessed in

view of identifying what could realistically be implemented This criterion determines whether there has been a follow up of the process of construction of a regional integrated space and whether the Commission support across successive programmes has been adapted so as to strengthen the progress achieved and mitigate the main weaknesses observed. A preliminary remark is that there is a lack of accurate information on progress with regional integration. Although it is essential to know as accurately as possible where things stand in terms of the different elements contributing to the construction of an integrated regional space, no significant support has been provided or analysis conducted in that regard. Regional and extra-regional trade statistics, for instance, reveal significant limitations at CARICOM level, and it is almost impossible to assess the progress of regional trade at CARIFORUM level. Prior to the very valuable strategic study28 commissioned for the preparation of the 9th EDF Regional Strategy Paper, no comparable systematic analysis had been developed and no support had been provided to developing the regional capacity to follow up systematically the progress made and the obstacles to be overcome. No reference is found in the programming documents to assessment of the regional integration process made by other agencies, for instance the WTO in the Trade Policy Reviews. From the foregoing observations with respect to the previous two judgement criteria, it is clear that there appears to be limited analysis at the preparation stage of individual programmes with respect to the strategic objectives of regional integration. There appears to be a lack of a “template” for EU support to the integration process and as such no mechanism for monitoring progress across a broad spectrum of issues that will ultimately contribute to achieving this objective. There is a feeling in the Caribbean region that the process is being led by the European Union with limited consideration for the needs of the region and that the Commission has a very narrow view of development. This, it is claimed, is reflected in the approach under which, from the Caribbean point of view, the EU prefers to support programmes that can be easily implemented and measured in terms of delivery rather than addressing the more complex issues present in the region and its real needs29. These comments are to some extent reflected in the lack of analysis in support of the decisions as to whether or not to continue the CULP or CARTF projects.

28 ECORYS-NEI, Caribbean Perspectives on Trade, Regional Integration and Strategic Global Repositioning,

Final Report, Rotterdam, October 2002. 29 Meeting with Caribbean Ambassadors in Brussels




To what extent are the organisational and institutional frameworks and the responsibilities of the main actors involved in the management and implementation of the programmed activities contributing to the attainment of the specific objectives?

Answer to Evaluation Question 4 The evaluation has found that the management of regional programmes has suffered from the lack of a clear definition of roles and distribution of responsibilities between the different Commission Services in Brussels and in the Caribbean countries. The situation has been further exacerbated by the limited human resources in the CARIFORUM Secretariat to provide the required baseline material for appropriate institutional selection and for monitoring purposes to ensure that regional strategic objectives can be achieved. This evaluation question investigates the efficiency of the management and implementation structures created for and involved in the strategy of cooperation with the Caribbean. It is validated by three judgement criteria that consider in turn the general structure set up at the level of the Commission and the Caribbean region, the operations of the CARIFORUM Secretariat, and the regional institutions and implementing agencies. J.4.1 The Commission’s organisat on framework and division of responsib lities foster delivery

of programmes and projects. i i

A short description of the institutional structures and actors involved in programming and implementing the Commission assistance to the Caribbean is provided under section 2.4.2. For regional programmes the distribution of responsibilities, and the role of the different Commission Services in Brussels and in the Caribbean countries, are not formally set and render the management of regional programmes difficult. This creates a major problem of efficiency as it is a source of uncertainty as the various parties to a programme are not sure of who can take the final decisions. It is not simple to determine whether this lack of clarity stems from an actual lack of organisation or from a lack of information/communication. In principle, organisational charts and documents of the different services and Delegations of the Commission involved in the Caribbean are available and identify the units, departments and persons with geographical and sector responsibilities in strategic or implementation matters. However, these schemes are complicate and vary frequently and there are considerable overlaps between the different functions so that it is not easy for an operator to understand the chain of command applicable to the intervention he/she is programming or implementing. The issue is also one of communication. A visit of the Commission Services in Brussels organised in the first half of 2004 to permit Caribbean actors and operators to get acquainted with the structures and staff of the Commission was extremely well received and viewed as having contributed to a greater transparency. The point of view of most interviewees is that this unclear chain of command, or lack of perception of it, compounded both with the geographical fragmentation of the region and with the fact that Guyana, the focal Regional Delegation, is located in a country that is neither central to the region nor very significant in terms of economic weight, generates a series of difficulties: deficiencies in information; the different Delegations, including Guyana, are hardly aware of the

situation of the projects they do not manage directly; extremely long delays in response to requests; the point is particularly highlighted by the

representative of CARIFORUM (see annex 11), CARICOM and the national authorities as well as by the local operators and project managers;

lack of capacity of adaptation. For example, in the case of the AIDS and CAFP projects, the adaptation of the EC procedures to those of other donors was needed at some point but no one could take on this responsibility; in the case of the HIV/AIDS this resulted in the interruption of a component for one year.



It seems that the deconcentration which started in 2000 has improved decision-making in some cases (for instance, the Dominican Republic); for Delegations which are sub-offices of larger Delegations (for instance Trinidad and Tobago and Suriname managed from Guyana) the result is less clear. There is no evidence of strong coordination of the diverse activities supported by Commission assistance at regional and national levels and through the very diverse instruments used. The reason is that there is no formal responsibility for that kind of coordination. Each Delegation follows the activities conducted on its territory but without a regional view, that is without connecting to regional activities or to similar national activities being conducted in other Caribbean countries. The geographical dispersion and the difficulties of communication complicate this process. A weakness of the whole organisational process supporting the management and implementation of the Commission’s interventions has been often raised by the representative of private sector institutions: it is ill-adapted to consulting and working with the private sector. Identification of needs has largely taken place under a dialogue conducted by civil servants or representatives of public institutions on both sides without sufficient incorporation of the views of the private sector. It resulted in a strong emphasis on strengthening and supporting institutions rather than addressing the needs of the final beneficiaries in the productive sectors. As a result the private sector representatives are generally disappointed with the progress of regional integration whereas they originally had high expectations in that regard. J.4.2: The CARIFORUM Secretariat contributed to the identificat on of activ es and to the r

management and administration in a way that fostered delivery of results and ensured ownership by and coordination with the partners throughout the project cycle

i iti i

i

During the period of the evaluation CARIFORUM has been fully involved in the identification, programming and management of activities. CARIFORUM, in consultation with CARICOM, the national administrations of the Member States, and regional institutions, has been active in the identification and preparation of proposals for all regional interventions. This is conducted in the form of an iterative dialogue with the Commission Services in the region and in Brussels, so that it is not always possible to identify the relative contribution of each party; it remains the case that the role of CARIFORUM has been essential in identification and programming. CARIFORUM is also active in the implementation and acts as a source of knowledge and technical support for the DRAOs and implementation agencies throughout the whole life of the project. A criticism often voiced by interviewees is that the CARIFORUM PU shared with the CARICOM Secretariat and the Commission Services a preference for “institutional” consultations that did not always permit private sector operatives to express their views. The actions of CARIFORUM have certainly permitted ownership of projects by the partners. Project managers and agencies interviewed mentioned the important role of the PU in helping solve problems in implementation and in facilitating relations with the Commission. It has developed a capacity for implementation that the CARICOM secretariat lacked. As explained in the CARIFORUM case study, the fact that CARIFORUM has been very much a one-person institution has been a limiting factor: it was a source of bottlenecks, was insufficient in terms of analytical capability, and the leading role of CARIFORUM’s Head of PU in the identification of projects and beneficiary institutions was accompanied by a lack of transparency because of the “personal character” of the institution. J.4.3: The regional institutions and agencies responsible for implementing the

programmes/projects contributed to the delivery of the expected results in their area of responsib lity

Most institutions examined under this evaluation have delivered results: CARIFORUM (see annex 11, Case study 4) delivered important outputs in terms of programming

and implementation, and since 2002 in strategy formulation.



CEDA (see annex 11, case study 2) contributed analyses and studies (for instance, the preparation of FTA with DR), collection and distribution of information (although trade statistics remain poor), and promotion of exports.

The institutions supported in the context of the human development resources programmes, CAREC, UWI, UTECH can all demonstrate important contributions.

However, in many instances the institutions delivered more in a local perspective than in a regional one. This is the case of most of the activities of the CAFP and the CULP. The Cultural Centres have not put in place mechanisms to ensure a regional vision. Overall, the absence of benchmarking, as well as the practice of monitoring against project documents rather than strategic objectives, limits the scope for assessing the extent to which project outputs and results are contributing to the integration process.


To what extent has the Commission’s support to the Caribbean region fostered the regional economic integration and cooperation process?

Answer to Evaluation Question 5 The Commission’s strategy has promoted integration in supporting the export capacity and the institutional settings in charge of increasing competitiveness and market access, in developing infrastructure of regional interest and in supporting human resource development to strengthen the regional institutional capacity, cohesion and identity. In general the activities supported are used and appreciated by the beneficiaries and have produced significant outputs. It is difficult to assess accurately the contribution to the internal and external integration. In particular in the case of trade, the results are ambiguous but probably positive in terms of deepening of the intra-regional trade and improvement of trade facilitation. The institutional capacity to implement the CSME and in general to identify and implement policies alleviating the key bottle-necks in matters of regional integration remains insufficiently developed. This Evaluation Question relates to the effectiveness and impact of the support provided on the regional integration process. It is assessed through three judgement criteria that investigate respectively the progress in terms of trade (regional and extra regional), infrastructure networks and the contribution of the regional institutions. J.5.1 Intra regional trade has been facilitated and the extra regional trade capacity increased Intra-regional trade has increased over the period covered by the evaluation. As reported in annex 7, total intra-CARICOM imports have grown on average by 8.1% per annum between 1996 and 2001. This increase in imports is in fact dominated by imports originating from Trinidad and Tobago and consisted of oil and related products. The same holds for exports from CARICOM countries to other CARICOM countries which grew at an annual average rate of 8.6%. These rates should be compared with those recorded for total imports and exports, which on average were around 6% per annum between 1996 and 2001. Intra-regional trade flows therefore grew faster than the total trade of the region. The integration of the region into world trade is characterised by important differences across countries. While total CARICOM imports and exports both grew by 34% between 1996 and 2001, imports into Trinidad and Tobago have increased by 69% for the same period compared to 29% for Barbados, 22% for Jamaica and 15% for other CARICOM countries. The growth of Trinidad and Tobago exports has been roughly similar to that of its imports, revealing a fairly balanced integration into the world economy. On the contrary, exports from Jamaica, Barbados and the other CARICOM countries have declined in absolute values (respectively by 12%, 8% and 2%) which indicates that the integration of these economies into world trade is accompanied by a deficit in their trade balance. Overall an he examination of trade statistics shows that, at the level of CARICOM, the region is more and more integrated into world trade and is



deepening its internal trade. Both processes are nevertheless characterised by strong imbalances and reveal a pronounced domination of trade by Trinidad and Tobago. This is to a large extent explained by the fact that Trinidad and Tobago hosts the only oil refinery of the region and exports fuel and gas. In fact, apart from these energy products intra-regional trade is very limited. Lack of reliable data makes it impossible to draw a representative picture of trade at the level of CARIFORUM. Nevertheless, trade between CARICOM countries and the Dominican Republic increased substantially30 between 1996 and 2001. This trend has been accompanied by an increasing trade deficit of the Dominican Republic vis-à-vis CARICOM. There is no way of assessing the exact contribution of the Commission’s assistance to these developments. However, the Commission’s interventions (for instance those implemented through the trade development programmes) had positive results in terms of trade facilitation. In particular, it led to an increased awareness of local firms of the opportunities and benefits to be retrieved from intra and extra regional trade. They also contributed to improved knowledge of the regulatory framework surrounding intra regional trade, (for instance the consequences of the Common External Tariff of CARICOM) as well as to increasing sensitivity to international trade requirements in terms of quality and export promotion. On the other hand the Commission’s interventions did not succeed in increasing the pace of progress in terms of institutional capacity, implementation of the CSME, harmonisation of macro and fiscal policies, or removal of non-tariff barriers. Likewise it did not seem to affect substantially the effective materialisation of the integration process. For instance, it is widely recognised that one of the main constraints affecting regional trade potential is the difficulty of complying with international market norms, standards and regulations. Yet in terms of improving the region’s quality certification capacity, the only notable achievement of the trade development programmes is the establishment by CEDA of a registered trademark awarded to companies whose export products meet CARIFORUM’s requirements on quality assurance methods. Apart from consultations, no collaboration with CROSQ (or preceding standards and norms activities of CARICOM) took place in spite of the fact that a regional institution dealing with quality and certification issues is central to facilitating and improving regional trade capacity. J.5.2: The development of infrastructure networks (transport and communication) has facilitated

exchanges across the region and internationally In the area of transport and communication infrastructure, the Commission’s interventions have funded construction of airports and roads, support to Liat Caribbean Airline and an increase in harbour capacity. This has certainly contributed to improving the regional transport and communication network and hence reducing transport costs. But it is difficult to assess the extent to which these developments effectively translated into increased intra- and extra-regional trade and increased mobility of persons and capital. J.5.3: The reg onal ins tutions suppor ed by the Comm ss on have con ributed to reg ona

economic and trade cooperation, to the formulation of common policies and trade negotiation positions, and to the creation of an enabling trade environment.

i ti t i i t i l

The Commission has, directly and indirectly, supported a large number of Caribbean institutions and will continue to do so. Among the organisations that have benefited or are targeted to benefit from support one can mention CARIFORUM but also the Caribbean Court of Justice (CCJ), the Caribbean Regional Negotiating Machinery (CRNM), CEDA, WIRSPA and the Caribbean Tourism Organisation. Caribbean countries have used these institutions to improve economic cooperation and some of these institutions have played a role in the elaboration of common economic policies and regional trade policy positions. However, the contribution of the Commission’s activities to this process is not clear. For

30 According to data provided by the CARICOM statistical department (annex 7), over the period 1996-2001

the average annual growth of imports of CARICOM countries from “Other Caribbean” (i.e. quasi exclusively the Dominican Republic) has been 1.2% whereas the corresponding growth for exports to the “Other Caribbean” has been 11%.



instance, under the 8th EDF programme, CEDA has collaborated with the CRNM, the CARICOM Secretariat, the Caribbean Association of Business and Commerce (CAIC) and other regional and national agencies to hold 18 workshops on trade policy issues which have brought over 630 public and private sector officials together on a variety of topics. Yet, the extent to which these activities effectively generated progress in the formulation and implementation of the regional common trade policy is difficult to assess. In fact, it appears that the contribution of CEDA in this area is mainly indirect through the relaying of information to CARICOM and CRNM. More generally, this apparent difficulty to produce substantive results in terms of regional economic and trade cooperation is in part due to the fact that, since the Treaty of Chaguaramas, progress on the political, economic and trade fronts has been slow and it must be recognised that the effectiveness and impact of the Commission’s activities in these domains depends primarily on the extent of political vision and leadership in implementing integration which sometimes does not seem to go beyond words. For instance, as mentioned in section 2.2 of this report, the CSME was established in 1992 with the aim of effective implementation in 2005. Although progress in this area has been made, numerous issues concerning the implementation of the CARICOM CET, the efficiency of the regional custom system, freedom of movements for persons and capital, harmonisation of national fiscal legislations, and norms and standards aspects, still remain to be tackled.


To what extent has the Commission’s support to the Caribbean contributed to strengthening the regional capacities?

Answer to Evaluation Question 6 The extent to which the Commission’s strategy has been effective in contributing to improve regional capacities is variable. Interventions had a significant impact in increasing human resources capacities inter alia by fostering development cooperation and the exploitation of economies of scale, allowing for a more efficient use of national human resources at the level of the region. In some cases, this has contributed to improve the regional planning and management capacity but this cannot be considered as a general achievement in the sense that for particular areas, the impact has been rather limited. Finally, Commission interventions had a significant impact on the emergence of a regional identity mainly reflected by the increased awareness of the regional dimension and the necessity to exploit all its potential. A significant proportion of the Commission’s support is directed to capacity development in the broadest sense, across a broad spectrum of sectors that embrace public administration; agriculture; tourism; good governance; trade development; environment; and university level programmes. This question examines the extent to which these programmes have been effective in developing capacities that will have long-lasting impact on the regional integration process. J.6.1: Human resource capacity building has permitted to achieve economies of scale This criterion examines the areas where most benefits accrued, and the internal mechanisms for continuous monitoring of impact. It also examines how capacity needs were identified, how far capacity building initiatives have been dependent on Commission support, whether they were supported prior to seeking support from the Commission, and whether they will be sustainable without such support. Finally it examines the share of Commission funding in support of capacity building by sector. The Commission’s support has had significant impact in a number of areas. In the agricultural sector, the CARTF project has contributed significantly to capacity development in the areas of diversification and quality improvements with the ultimate aim of developing alternative export opportunities in this sector. The HIV/AIDS programme has contributed to the training of some sixty key people who will be responsible for establishing national committees throughout the region, and also to strengthening the specialisation and of selection of laboratories with adequate equipment and capacity to conduct complex tests. The Caribbean Center for the Development Cooperation (CARICAD) has developed models for strategic



planning and is assisting in their implementation throughout the region. In addition to training students across the region - in mixed nationality groups in a number of cases -, the Commission’s assistance to CULP has contributed to the development of a focal institute in the region for training architects and whose qualifications will be accredited by a Caribbean body. A further result of this Programme is that the Caribbean (CARIFORUM) University Network has been established, with the specific purpose of taking forward the principles imbedded in the CULP. The Caribbean Anti-Money Laundering Programme (CALP) has contributed significantly to developing sustainable capacity to develop and enforce legislation throughout the region to combat the potential threat to the stability of the region that the $US60 billion annual level of money laundering in the region presents. J.6.2 Human resources capacity building has improved the capacity to plan and manage with a

reg onal or cross border dimension i

i

The basis of this criterion is an identification of the sectors in which most benefits have accrued; the concrete outputs resulting from this improved capacity to plan and manage regional initiatives; and whether this capacity been used for non-Commission-funded initiatives and in which areas. The HIV/AIDS programme has contributed to the establishment of a bench-marking and monitoring process for national laboratory reporting systems throughout the Caribbean and the development of specialised curricula in UWI centres. The CALP has contributed to the establishment or strengthening of Financial Intelligence Units (FIUs) in key “high risk” countries of the region. The Programme has assisted in developing appropriate enabling environments that will permit the apprehending, prosecution and seizure of assets of perpetrators of money laundering crimes. It has undoubtedly contributed to countries in the region being removed from the OECD blacklist of non-cooperating countries. These examples illustrate that there is a genuine regional dimension in these initiatives and that mechanisms are in place to ensure sustainability and the replication of the experience gained through Commission support Conversely, the CULP, despite its significant achievements and contributions to the establishment of the university network, did not manage to incorporate measures for continuity, that is financial, and the majority of programmes have reverted to serving domestic needs. Nor has the issue of mutual recognition and accreditation been addressed. CEDA (under the auspices of Support to the Caribbean Trade Sector Programme) has contributed to many regional initiatives in a positive manner, but seems to have drifted away from its original mandate of private sector trade-related services and its activities are hindered by limited political vision and leadership. There are weaknesses in the CARIFORUM PU in that it has not conducted ex ante and ex post analyses of the contribution of regional cooperation and integration to poverty reduction and sustainable development in the region. From the viewpoint of private sector operators, it appears that the slow pace of progress in the support to the rum industry risks jeopardising the realisation of key outputs such as the regional marque. Moreover, they consider that the process is being driven by external EU consultants. J.6.3 Human resources capacity building has contr buted to creating a regional cultural identity The purpose of this criterion is to examine how support to human capacity building has contributed to building a common identity in the area of trade, that is marketing, education and accreditation Within the field of tertiary education UWI has had a longstanding image as one of the flagships of integration in the English-speaking Caribbean. Not only did the CULP contribute to the student exchange programme, there is evidence of greater mobility within the region and initiation of collaborative research across language barriers within CARIFORUM and the French Overseas Territories. Arguably, the CBU is contributing to the process of establishing a Caribbean identity and the Cultural Centres project has succeeded in highlighting and disseminating individual country cultures to other countries. Unfortunately the latter project could not fulfil its promises because it had not been designed as a long-term commitment and funding was stopped when the project had began to achieve results. The HIV/AIDS programme has contributed to regional integration through many aspects including, among others, an information network connecting all heads of HIV/AIDS departments of the Caribbean countries’ health services; sharing of findings; and mutual information exchange on the work programmes of all national



HIV/AIDS agencies. The CARTF project has sought to develop an awareness of the regional problems in order to facilitate a regional response in areas such as animal health and quarantine. In a manner similar to the Rum Sector Support Programme that is planning to introduce a regional product marque, CARTF has emphasised the need for quality control and marketing that reinforces the regional image.


To what extent are the institutions supported and the results achieved by the assistance likely to be sustained without further Commission support?

Answer to Evaluation Question 7 This evaluation concludes that the sustainability of the institutions developed with the financial support of the Commission is generally not guaranteed. Although several of these institutions are totally or partially not sustainable because they are by nature, or by default of alternatives, providers of public goods. The point is a source of concern in view of the dependency it creates and the difficult situations that develop when divergences of visions between these organisations and the Commission occur. For the institutions that could become partly or completely sustainable, sustainability has not been factored in the design and implementation of the interventions. In the area of human resource development, the Commission’s assistance has achieved sustainable results in terms of strengthened regional identity and cohesion. Regarding the interventions in the productive sector more emphasis has been placed on the sustainability of the support mechanisms and institutions than on sustainable and profitable engagement into production and trade activities. In a number of areas Commission support has been channelled through institutions created to this end or which were pre-existing but subsequently strengthened with a view of becoming instrumental in the implementation of the support strategy. An assessment of the sustainability of these institutions is the first point tackled by this Evaluation Question. The second is sustainability of the results achieved in the main strategic areas of intervention. The Evaluation Question is covered by three judgement criteria J.7.1 The institutions developed with the support of the Commission’s assistance are capable to

survive foreign assistance and continue deliver their expected services

The integration process in the Caribbean requires the support of sustainable operational and technical institutions capable of directing and managing the initiatives and implementing the strategies set out by the policy makers. In this regard the institutional structure needed to support the integration process sustainably is not yet in place. In fact, the strategy has been weak in the building up institutional support where integration can be anchored in a sustainable manner. Many of the institutions created by the Commission interventions depend wholly on external support, and there is no strategy for escaping from this external dependency, as neither the private sector nor the governments have shown a genuine commitment to support regional institutions. In addition, there are no provisions in the design of the projects for addressing the sustainability factor. The projects where the set-up of an institutional structure was requested, like the Caribbean Export Agency or the multi-donor project like CARTAC, or even CARIFORUM itself, have no feasibility plan in which the likelihood of becoming fully independent is considered. In general, no contingency plans have been designed to confront the institutions without external funding, or with an approach where part of the funding could be assumed by the member states of CARICOM/CARIFORUM. It is worth noting that the CAREC and CALP offer counter-examples showing that the sustainability issue can be solved, but it both case it is due to the creativity and conceren of those in charge of the project, not to the project design. Moreover, many of these institutions were recipients of interventions derived from different EDFs, like the Caribbean Development Agency, where the issue of sustainability has become critical for its survival. In this particular case, however, the future funding for the agency is now, under the 9th EDF, subject of a study in which its self-sustainability will be addressed. The Commission’s strategy has overlooked the future of those agencies without external funding, and this has occurred despite the good performance of some projects and institutions. Currently many of the institutions established with Commission support are still at an intermediate level of



sustainability and there are others that are likely to disappear after the withdrawal of external support, or at least they will be struggling for survival if additional external funding is not found. A typical example can be found in CARIFORUM, a critical institution for the integration process, where the funds come totally from the EC; no other international donor other than the Commission has shown any inclination to participate in the consolidation of CARIFORUM’s structures. Recently, however, the Member States of CARIFORUM have agreed, in a meeting in Suriname, to contribute financially to CARIFORUM’s structures. J.7.2/3: Improvements in productive and human development sectors achieved through the

Commission s assis ance have led to long lasting effects. Infrastructure developed is maintained.

’ t

The Commission’s interventions have contributed significantly to the Caribbean region in transferring know how and in training personnel, enhancing the region’s professional and human capacity. The Commission interventions in areas like education (CULP), CARIFORUM Cultural Centres, strategic planning for government structures (CARICAD), agriculture, trade, health, and so forth, have improved and strengthened the human development of its participants and its indirect beneficiaries. The benefits obtained through the human development projects are mostly related to the individual level, and the material produced in the form of manuals, guidelines, databases, networking, management, sector studies and so forth are tangible results that will remain a contribution to motivating the use and practice of what has been learned. For interventions in support of the productive sectors sustainability needs to be assessed in terms of its viability after support has ended; in other words, whether the agriculture, bananas, sugar, rice, rum, tourism and other supported sectors are capable of undertaking sustainable and profitable engagement in domestic production and international trade. In some of these sectors institutions have been created or supported (CEDA, WIRSPA for instance), the sustainability of which presents diverse problems as discussed under J.7.1 and in the case studies. For all these sectors long-term sustainability requires either a fundamental restructuring, the need for which was long predictable, or repositioning according to comparative advantage. A general weakness of the approach to these sectors is that neither global restructuring, nor reorientation of resources in the context of global repositioning, have been effectively addressed, although these are stated objectives. Although, the streams of benefits emanate from each individual project and are related to their specific activity niche, the strategy has fallen short of establishing links to promote and support the construction of a new culture addressing the economic and social costs and benefits derived from any sustainable process of integration. For example a critical mass of academicians, entrepreneurs and government officials properly trained to influence and support the integration process and disseminate the lessons and skills learned is missing from the strategy and from all activities related to human development. The potential to use Commission know how through educational and training activities in the construction and integration of the region is absent from the strategy. This is also as a result of a misconception in the design of the project activities, no components being included for strengthening the conceptual and operational aspects of promoting integration. For example, under the CULP project where the participants and universities have expressed satisfaction over its execution and over the benefits it has yielded, no components were designed to link the project to a vision where the main objective is not only specific education in one or more areas but also integration through the development of the activities. A similar argument can be used for the CARIFORUM cultural centres, or for the CARICAD project to train government officials in strategic planning. The promotion of a new culture that embraces integration from a conceptual and operational point of view is missing from the overall strategy, and from the specific interventions designed and implemented in the region.


To what extent were cross cutting issues taken into account in the programming and implementation of specific interventions implemented in the framework of the Commission’s support to the Caribbean region?



Answer to Evaluation Question 8

Apart from the environment for which specific projects have been implemented (e.g. CULP Natural Resources Management) and EIA obligations for EIB projects, cross-cutting issues have not been specifically addressed throughout all the EDFs that fall under the scope of this evaluation. The evaluation has not found any evidence of base-line bench marking material for monitoring purposes, particularly in the case of gender. Whilst it is acknowledged that poverty alleviation may not be regarded as a priority area in the region, there are concerns that the combination of the specific climatic conditions of the region and increased globalisation are having a significant impact on poverty levels. Poverty alleviation is an over-arching goal of the EC’s development assistance, and gender, the environment and HIV/AIDS are cross-cutting issues firmly embedded in EU development policy, reinforced by the Member States’ endorsement of the UN Millennium Declaration and the Communication from the Commission to the Council and the European Parliament: Translating the Monterrey Consensus into practice: the contribution by the European Union31. This question addresses the extent to which these issues have been taken into consideration by the initiatives supported by the Commission. J.8.1 Programming practices of the Commission in the Caribbean region takes cross-cutting

issues into account This criterion examines whether gender, poverty alleviation, environmental and HIV/AIDS issues been specifically integrated into the terms of reference of consultants for programming purposes; whether they are specifically dealt with in the NIPs and RIPs; and to what extent environmental issues have been taken into account and integrated into programming beyond the specific environmental projects and whether HIV/AIDS issues have been integrated into programming. The material available to make a substantive analysis of these issues was limited. There are no terms of reference for consultants, and as such the material on which to make a judgement has been confined to the financial agreements and monitoring reports. However, from this available material it is clear that these issues have only been addressed “in passing” in the sense that it is an obligation to mention them. The programming documents do not reveal a systematic concern for investigating and identifying needs and impact in areas such as: the contribution of regional integration to poverty alleviation; the long term developmental consequences of HIV/AIDS; and gender issues. This is in spite of evidence that these issues, and associated social problems, are of increasing concern in the region32. As such there is no base-line for monitoring progress in any of these areas. In the case of the environment, there exist obligations to address the issue through EIAs in the case of investment projects (infrastructure and tourism), particularly when such instruments as EIB funding are utilised.

31 COM(2004)150 final Brussels, 05.03.2004 32 cf. Section 2.2.4.



J.8.2 The Commission's interventions in the Caribbean region are designed and implemented so as to promote cross-cutting issues.

This criterion examines how far the Commission's interventions in specific sectors contributed to promoting gender issues or whether they have had a negative impact on gender; how far the Commission's interventions have contributed to poverty alleviation and whether there been negative impacts as a result of efforts to promote trade liberalisation, and whether these also impacted on the weaker groups e.g. women; and finally how far the Commission's direct support to the environment made a positive contribution or whether the Commission's interventions in specific sectors possibly had a negative impact on the environment. The only source of project data available related to gender is the more traditional in the sense of female participation in some of the CULP Masters’ programmes. These indicate a high percentage of female participation in some of the courses, but there is no data as to what happened after the programmes were completed (e.g. integration into the labour market). On the more serious issue of detailed analysis of potential negative or positive gender impact of the Commission’s interventions, there is a total dearth of information. Similarly, there are no project-related studies on the impact of trade policies on poverty; again evidence of some of the negative impacts is to be found elsewhere. Neither are there studies on poverty issues related to regional integration, notwithstanding the fact that even in Trinidad and Tobago an Umbrella NGO has indicated a marked increase in demand for assistance from vulnerable groups33. A further concern is the impact that globalisation is having on gender issues. A number of studies indicate that women are the most negatively affected by the consequences of trade liberalisation34. Environment is the only cross-cutting area which has been significantly taken on board in the strategy, with a large regional environment programme aiming at developing capacity building, and a number of national programmes dealing with waste, water and so forth. The environmental dimension is also taken on board in a series of programmes supporting the productive sectors (tourism, agriculture). The CULP includes a Natural Resources Programme and has permitted the bringing together of people from different universities in the region, and the Faculty is currently engaged in developing a new research project with Barbados, Haiti and Trinidad and Tobago. The status of the Faculty has reached the stage where it is also now collaborating with the UNEP. J.8.3 The Comm ssion's interventions in the Caribbean are designed and implemented so that

regional integration in the Caribbean acts as a promoting factor of cross-cutting issues i

This criterion was to have examined areas in which benefits been accrued in relation to cross-cutting issues and whether has there been an incremental increase in the extent to which these issues have been addressed in the NIPs and RIPs over the evaluation period.

33 Meeting with Clive Pantin, Director, Foundation for the Enhancement and Enrichment of Life (FEEL), 28

July 2004, Fernandes Industrial Estate Laventville Port of Spain, Trinidad and Tobago 34 One such study that focused on Jamaica indicated that there is an increasingly high proportion of Jamaicans

living in poverty, particularly women. This particular study concludes that although macroeconomic policies may have improved Jamaica's economy in the late 1990s, poverty rates have increased and are predicted to soar. Those most likely to be affected are small farmers, many of them women, in the poultry and dairy sectors had to compete with the influx of cheaper, imported products which harmed small and large producers alike. It was also noted that trade liberalisation caused women to lose jobs overall ,while men gained jobs As only few well-paid jobs are available for women without skills and an education. In White, M.; Wyss, B. Women's Edge Coalition; Caribbean Association for Feminist Research and Action (CAFRA); 2004



As will have been observed from the previous sections related to this Evaluation Question, cross-cutting issues are not addressed in a systematic manner that would provide a basis for appropriate monitoring of progress.


To what extent are the different assistance instruments deployed by the Commission (RIPs, NIPs, own credit lines, EIB funding etc.) consistent with each other and supporting the overall strategic approach?

Answer to Evaluation Question 9 The Commission has offered an important variety of instruments and programs to support the region. However, these have not always been coordinated properly. For example, the NIPs and RIPs are not designed to be mutually supportive. Each program and intervention has its own justifiable rationality but there is insufficient attempt to maximise the combined contribution of the various instruments to the strategic objective of the regional construction. The problem is particularly apparent in the multiplicity of instruments deployed in supporting the productive sectors. Because of the variety and the magnitude of the needs in this domain it has been relatively easy to avoid overlaps and duplications but it is difficult to demonstrate that the panel of instruments deployed have been designed and articulated so as to be complementary and mutually supportive of common strategic objectives.. Although it has been observed that quasi all projects can justify a link with the objectives of the regional strategy, there is no real linkage and coherence at the level of the instruments. The selection of particular instruments may often result more from their availability than from a proper assessment of why they should be preferred. This question on the “3Cs” mainly addresses aspects of the support strategy at two levels: the complementarity of the national and regional programmes (J.9.1) and the degree of coherence in the selection of the different instruments used to implement the strategy (J.9.2). J.9.1 Programmes and interventions implemented at the regional and national levels

complement each other so as to ease the attainment of reg onal and national objectivesi The NIPs are primarily directed to the national priorities of the partner without reference to their regional commitments or to the regional strategic objectives, so that overall the NIPs and RIPs are not designed to be mutually supportive. At most an effort is made to avoid overlaps and duplications. There are several reasons for this state of affairs: The programming cycle is not organised to facilitate coherence between the design of the national and

the regional programmes. In practice, the CSPs and NIPs are elaborated before the RSP and the RIP so that the latter cannot serve as a framework for the former.

The requests for the Commission’s assistance by the individual countries are focused on their own development needs without consideration of the regional strategy. The Caribbean regional context is characterised by the fact that the goals and agenda of regional integration are defined in the CARICOM Treaty and in the agreements with the non-CARICOM partners, and confirmed in the ministerial meetings; but there is no regional institution to enforce the decisions taken. The regional integration policy is therefore entirely under the control of each Member State and one would expect them to use the assistance offered to strengthen their capacity to meet their regional commitments. The fact that this is clearly not the case indicates both a weakness in the policy dialogue and also a lack of political will.

The potential benefits of the regional strategy for the sustainable development of the individual countries are not perceived by these countries and the actions needed to maximise the positive outcomes of the regional programmes are not identified.



J.9.2 The various funding instruments are suppor ing the strategic objectives and they are operated in coord nation with and complementa ity to the main interventions under the RIPs and NIPs.

ti r

The Commission’s support to the Caribbean takes the form of a very large portfolio of diverse interventions and instruments: the regional indicative programme, the national indicative programmes, the credit lines, the EIB investment facilities, and so on. Among these instruments some are specific to the Caribbean, for example the NIPs and the RIPs, whereas others have been developed in a different or broader context such as the specific budget lines or the all ACP Projects. This diversity is, on the one hand, an attractive feature of the Commission’s assistance (see analysis of judgement criteria J.2.3 under evaluation question 2) because it widens its potential scope and the fields it can reach, but on the other hand it may to some extent disperse effort away from the strategic objectives. The first area where dispersion is observed is the lack of consistency between the NIPs and the RIPs evoked under the previous judgement criterion. The second cause of dispersion comes from the fact that, on the Caribbean side as well as on the European side, an attempt is made to tap as much as possible the available sources of funding. Since these different instruments have been designed for different purposes and each have their own rules, procedures and project cycle, they do not a priori fit into the designed strategic frameworks and do not necessarily reflect a balanced mix of activities to support the construction of the regional space. The all ACP rum project offers an interesting example. It is a response primarily to political considerations and a to a willingness to mitigate the consequences of the liberalisation of the trade in spirits negotiated with the USA. The use of all ACP funding permitted mobilisation of resources greater than those of the whole 9th EDF RIP and its design embodies an internal logic not constrained by the specificities of the regional strategy (see annex 11). The constraint of the availability of resources can also be observed in the same project by the fact that grants were preferred to EIB loans. Such loans would probably have been more appropriate to enhancing the competitiveness and sustainable profitability of the sector within the context of the development of a sound regional market, but grants were preferred because their availability is certain whereas that of EIB loan depends on the quality of the request in the context both of the availability of funds and of competing requests by other investors. These considerations mean that whereas almost all projects can justify a link with the objectives of the regional strategy, there is no real linkage and coherence at the level of the instruments. This can be observed by the multitude of instruments supporting the development of the productive and trade sectors: national and regional projects, all ACP projects like DIAGNOS, EBAS, Rum, the Special Framework Assistance, many Stabex projects. These instruments offer diversified and welcome sources of funding but they are not linked or integrated with each other so as to maximise their combined contribution to the pursued goals. It must be added, however, that although there is a lack of strategic coordination the evaluation did not find evidence of duplication, mostly because the beneficiaries are different.




To what extent has the Commission’s strategy in the Caribbean region been designed so as to complement and to coordinate its actions with other donor programs or with other EU member states initiatives? To what extent has the Commission’s strategy and realisation in the Caribbean region been affected by other EU policies?

Answer to Evaluation Question 10 In general, Commission programming documents refer to activities of other donors so as to avoid duplication and overlapping of interventions. However, genuine coordination only takes place in a limited number of cases. In fact, donor co-ordination seems to perform better where the ownership of the issue by the partner is high and there is a strong institutional capacity in identifying needs and implementing the related actions. On the other hand, some EU policies had a significant impact on the Commission’s strategy for the Caribbean. The Common Agricultural and Trade Policies indeed deeply affected segments of the region’s productive sector which necessitated a response of the Commission regional strategy. However, potential impact of EU policies on regional outcomes are not systematically analysed in Commission programming documents. As a consequence, the response to EU policies-generated shocks has been rather ad hoc in spite of the fact that these shocks were anticipated and likely to adversely affect some key sectors of the Caribbean economy. This question complements the previous one on the 3Cs and addresses the issues of coordination with other donors and that of the coherence between the strategy of assistance and other internal policies. J.10.1 Activities implemented under the Commission’s support to the Caribbean region are co-

ordinated with the set of other donor’s interven ions t

t t

The point raised by this judgement criterion has already been largely covered under question 2 (J.2.3). At a more general level it may be added here that the CRIP is coordinated between the Commission and the region via CARIFORUM whose mandate was strictly to deal with the Commission. It is therefore not surprising that the CRIP has not been linked formally with other donors, although on the side of the Commission and other donors there has been some effort to maintain an acceptable level of mutual information. Deeper coordination at strategic level would require two conditions: - A broader mandate for CARIFORUM. That condition has in theory been fulfilled since the

revision of the rules of procedure allowing CARIFORUM to coordinate the allocation of regional funds not only from the Commission but from any other source.

- An extended policy dialogue between donors and partners which is particularly difficult in the Caribbean given the dispersion of the partners and the donors’ decision centres. The analysis conducted under Evaluation Question 2, Judgement Criterion 2.3, highlights the conditions for this dialogue and the fact that when such conditions materialise there is a high degree of success.

J.10.2 The achievement of the regional objectives targe ed by the Commission’s suppor to the

Caribbean region is fostered or not impeded by the provision related to other EU policies EU internal policies (Common Agricultural Policies, Trade policy, etc.) have consequences for the development of productive sectors in the Caribbean that are not analysed in the programming documents or have not always been anticipated. Changes in these policies, either for internal reasons or to comply with the rules of the MTS, transmit shocks to the Caribbean economies which generate ad hoc responses. This has been the case for important Caribbean sectors such as bananas, sugar and rum. The case of rum, analysed as a case study in annex 11, offers an interesting example. The Common Agricultural Policy and associated external tariffs protected the European producers against competition from third countries. This was likely to harm the rum producers in the Caribbean region and thus create a contradiction with the goals of the Lomé Agreements. The rum protocol of the Lomé Agreement was an ad hoc arrangement aimed at protecting the Caribbean producers from harm. When the Commission negotiated with the US, in the context of compliance with the WTO rules, an agreement to liberalise the bilateral trade in spirits, the protection offered by the quota was completely eroded, and to mitigate the



consequences the Commission offered a €70 million assistance project to the Caribbean rum industry. Although it can be advocated that the rum programme has been designed and is implemented not simply with a view to limit damage but also as an effort to restructure the industry, this succession of ad hoc measures reveals a lack of strategic vision and has not contributed to the joint strategic objectives of the region or of the Commission. There was insufficient perception of the fact that the protocol tended to lock the Caribbean rum producers into the export of low-value-added bulk products; there had been no anticipation of the inescapable liberalisation of the sector, and when it happened the response was inevitably biased towards damage limitation rather than a fundamental restructuring of the sector across the region. The banana industry is a similar case, with the offer of Special Framework Assistance. Again, the adaptation of the price of sugar under the European Common Agricultural Policy is having similarly devastating consequences on the Caribbean producers which will create pressure for an ad hoc response where a long term strategy should be put in place. These conclusions are the more important in view of the importance of these sectors, as illustrated in section 2.3 of this report.



4. Conclusions

4.1 Relevance

1. The strategic approach of the Commission has gradually and continuously supported the construction of a regional integrated space. This is apparent from the main programming documents, as evidenced in the reconstruction of the ex ante intervention logic and verified by the analysis of interventions. The regional programmes have consistently put the emphasis on those activities that would promote regional cooperation, strengthen regional identity and develop regional institutions. This effort has been conducted in the political and administrative framework of the successive agreements with the ACP countries and has led to the development of a specific structure, CARIFORUM, to manage the regional programme at the level of the Caribbean ACP countries, whereas CARICOM originally determined the area for regional integration. The relevance of the CARIFORUM area for the promotion of regional integration has not been the object of prior analysis and it has been a source of ambiguities. The evolution of CARICOM and the development of dual policy aimed at deepening and widening integration, as well as the integration of the CARIFORUM Secretariat within the CARICOM structure, are elements likely to contribute to greater consistency, provided care is taken that the regional strategy is also fully understood and owned by the non-CARICOM countries. (Justification: Sections 3.1, 3.3 , Annex 6, Case Study n° 4). 2. In supporting regional integration in the Caribbean the Commission has not made use of its comparative advantage in this area. The Commission’s considerable experience in constructing an integrated regional space on its own territory and in promoting regional integration in many regions has not been reflected in the preparation of strategic support to the Caribbean. No checklists nor roadmaps of the necessary steps to achieve the objectives have been drawn up and there has been no policy dialogue in which the Commission could share the lessons from its acquired experience. The comparative advantage of the Commission’s assistance has also been insufficiently used in preparing specific intervention strategies (for instance, the experience of the European TEMPUS programme has not been drawn on in the preparation of the CULP). Political and pragmatic considerations appear to have prevailed and the regional programmes appears to be the result of a reasonable compromise to satisfy competing demands for limited resources rather than a true strategic prioritisation. (Justification: Sections 3.1 and 3.1, all case studies). 3. The Commission’s programming documents do not discuss the extent to which the constitution of a regional integrated space is likely to address the main developmental needs of the Caribbean region. The Caribbean region is peculiar in the sense that it is a grouping of predominantly small island States. The programming documents reflect the assumption made in high-level policy documents (EU Treaties, Cotonou Agreement) that functional cooperation and development of regional institutions should contribute to sustainable development. However, the contribution of the creation of a regional integrated space for development, and the requirement to maximise this contribution, are not analysed and provide no justification for the strategic options. Rather, the set of interventions included in the regional programmes seems to stem from a pragmatic approach in which the Commission adapts to the regional context and responds to the requests emanating from its institutions. In spite of the progress noted from the 6th to 9th EDFs, the current strategy still does not reflect a long-term vision of regional integration or its contribution to sustainable development and poverty reduction. (Justification: Sections 3.1 and 3.2) 4. There is a lack of analytical foundation for the rationale behind the identification of the focal sectors and areas of concentration in the indicative programmes. Although there is an observable and evident improvement in the quantity and quality of preparatory work underlying the regional strategy conducted through successive EDFs, it remains difficult to understand the justification for the selection of the main areas of interventions and their evolution from one programme to the next.



This lack of theoretical justification is also evident when it comes to justifying the continuation or abandonment of a particular intervention. (Justification: Sections 3.1 and 3.2) 5. Whilst each individual intervention was meant to contribute to the strategic objectives, there was little analysis of how it would do so and attempts to maximise the combined contribution of complementary interventions were lacking. There was also a lack of prioritisation and consistency between the national and regional programmes and a diversification of efforts resulting from the differences of logic, procedures and cycles of the numerous instruments available (Justification: Section 3.2. Case study n°5. 6. The design of the strategy and of several major interventions does not pay sufficient attention to Caribbean specificities. There is a view that the specific peculiarities of the Caribbean, which consists of a number of small island States, are not taken into consideration. Moreover, the large asymmetry between the Caribbean countries (in particular, the extreme case of Haïti) is not addressed by the regional strategy.. (Justification J.1.1).

4.2 Efficiency

7 The organisational framework and the responsibilities for managing the regional programme are insufficiently clear and this constitutes an obstacle to efficiency. The particular configuration of the Caribbean countries compounds these difficulties and as a result many operators at the programming and implementation stages either ignore the question of with whom they should interact or tend to by-pass or short-circuit the complicated procedural channels. All these factors provoke delays, generate uncertainties and are an impediment to efficient conduct of activities. (Justification: Section 3.4, Case study n°4) 8. Overall there has been a continuity in the strategy. In some respects the strategy has been capable to respond to evolving needs, but in other areas its adaptation was more limited. Continuity is visible in the support to specific areas pursued over successive EDFs. There is also evidence that successive projects were modified to take into accounts changes in context and the lessons from past experience and from evaluations. However, the pragmatic approach may have limited the contribution of the Commission’s support to regional integration at a time when the rapid pace of globalisation would necessitate accelerated progress in this area. (Justification: Section 3.3, Case study n°2) 9 The insufficient link of individual interventions with the strategic priorities has limited the efficiency of several regional projects. This had led to situations where during implementation projects are unable to maximise their combined contribution; second, there are no criteria for deciding whether a project should be renewed or not. As a result some projects have been continued to avoid disruption even though they were not sustainable without outside support. Conversely, in other cases projects were interrupted or not renewed purely on the basis of “in project” considerations rather than on the basis of their contribution to implementation of the regional strategy.. (Justification: Section 3.3. Case Study No 4, Case Study No 5) 10. The support to the PU of the CARIFORUM secretariat has created a technical capacity and has permitted to develop regional mechanisms for consultation and programming, and it provided appreciated support for the implementing agencies and the DRAOs. However, the “personalisation” of the CARIFORUM Programming Unit has been a limiting factor. It has been



facilitated by the fact that the PU has never been fully staffed in accordance with the technical and administrative provisions of the projects. The move of the CARIFORUM PU within the CARICOM structure should correct this tendency and the strengthen a true institutional character. (Justification: Case study n° 4, Annex 6, Section 3.4)

11. Important weaknesses are observed in the capacity to consult and deal with the private sector. Private sector stakeholders are generally disappointed with the progress of regional integration and with the results of many interventions in the productive sectors. One problem is lack of communication and the difficulty private sector stakeholders experience in expressing their views in a programming process which is largely led by institutions and civil servants on the Commission and Caribbean sides; another is the difficulty of adapting the procedures governing the disbursement of the Commission’s assistance to the operations of the private sector. Justification: J.4.1, Case studies 2 and 3. 12 Use of analyses conducted by other donors and institutions can produce positive effects, but it is not generalised. Benefits can be achieved in terms of efficiency in cases where substantial background work has been conducted by other donors, institutions or organisations. The positive results of such an approach have been demonstrated in the case of the HIV/AIDS and CALP projects. In a number of areas, and in particular in support for regional integration, there is little reference to analytical work conducted by other institutions such as the IMF or the WTO. Section 3.3.. Case Sudy No 6

4.3 Effectiveness and impact

13 The majority of projects and programmes interventions supported by the Commission have made an impact in creating a regional identity across a broad range of sectors. The Commission’s activities have contributed to fostering regional integration in areas that include trade, promotion of cultural identity and diversity, product identity and regional marketing, tertiary education and crime prevention. Initiatives in trade are have also contributed indirectly to the deepening and widening of the regional integration process by assisting in, inter alia, the FTA concluded between CARICOM and the Dominican Republic and by supporting the establishment of institutions such as the Caribbean Court of Justice. (Justification: Section 3.6. Case Study No 1 Case Studies n° 2,5,6) 14 There have been a number of significant achievements, but notwithstanding these there needs to be more strategic analysis in the selection of interventions. There are a number of examples that illustrate that the EC has contributed positively to capacity development in the region, several of which have sought to achieve economies of scale within a regional context. However, in the majority of cases there has been no systematic analysis of needs or of sustainable approaches that will achieve the strategic objectives of regional integration. (Justification: Section 3.1, Case Studies 1, 2, 5, 6) . 15 When a constructive policy dialogue has engaged between a group of donors and the partner, with the full commitment of the latter, it has been a major contributing factor to effectiveness. Notwithstanding its role as the main interlocutor between the regional actors, in particular CARICOM and the EU, the CARIFORUM PU’s limited human resources have constrained its ability to interact with donors on issues of strategic importance. For example, in the case of HIV/AIDS this limited dialogue resulted in the CARIFORUM PU being confined to the role of purely administrative management of the EC assistance. (Justification: Section 3.6. Case Studies 4 and 6, HIV/AIDS)



16 Regional institutions generally deliver positive results but their benefits are often limited to the country in which they are operating. In some cases this is linked to sub-regional specificities (languages, for instance) or circumstances, but in other it results from an absence of mechanisms to ensure a real regional dimension that inevitably can be traced back to limited attention to strategic issues in the programming phase. (Justification J.4.3) 17 The impact of the Commission’s interventions on the evolution of regional trade flows and on the regional institutional setting is difficult to assess. Moreover, as regards the priorities of the regional integration agenda and the slow progress recorded in this area, the contribution of the Commission to the construction of an economic integrated space seems limited. It must be recognised that the Commission’s achievements in these domains depend primarily on the degree of political will to implement integration; but at the same time the Commission could have used its large experience in regional integration to adopt a much more proactive stance. This would have helped frame its interventions into a well-defined strategy and clarify their intervention logic by selecting targets corresponding to properly prioritised aspects of the region’s integration agenda. (Justification: Section 3.6. Case Study No 2 )

4.4 Sustainability

18 A number of the institutions developed with Commission assistance are still very fragile and depend on foreign assistance to continue delivery of their expected services. This applies to institutions per se , e.g. CARIFORUM PU, CEDA. Even when projects have been developed from existing and sustainable local institutions (like UWI) the sustainability of the project intervention is not guaranteed. The strategy has been weak in the building up of institutional structures in which support to the integration process can be anchored in a sustainable way. Many institutions created by EC interventions depend fully on external support, yet there is no clear strategy on how to escape from this external dependency, since neither the private sector nor government have demonstrated a genuine commitment to support these regional institutions.

(Section 3.7 Case Studies No 2, 4, 5) 19. Whereas institutional sustainability is an objective of the Commission’s interventions, the projects are not designed with a clear view of the longer term perspective and of how support may be provided beyond an ongoing project. Sustainability of an intervention needs to be factored into the design of the project and in its implementation from the early stages. (Section 3.7, Case study n° 6) 20. Sustainable involvement in profitable production and trade activities by the productive sectors benefiting from Commission assistance is generally not guaranteed. The focus of the assistance is often more on the sustainability of the institutions supporting the productive sector than on the viable restructuring of the sectors themselves (Justification: J.3.2, Case studies 2,3)

4.5 Cross cutting issues

21 Cross cutting issues, in particular poverty and gender issues in relation to the negative impact of regional trade liberalisation, have been insufficiently addressed. Apart from the Financial Agreements and Monitoring Reports there is limited supporting official material. None of these issues



have been addressed in the spirit of one of the Commission’s overall aid objectives, namely poverty alleviation and the related issues of gender, HIV/AIDS and the environment to which the Commission and the EU Member States have had on-going international obligations. As such there is no baseline data on which to undertake a reliable analysis of how the Commission is addressing and monitoring the progress of the issues. This situation persists despite the fact that country poverty assessments during the period have highlighted increasing proportions of populations living below the poverty line, with women particularly affected. Environment seems to be the main cross-cutting issue benefiting from regional intervention and the only one factored into other interventions (tourism, for instance). (Justification: Section 3. 8 Case Studies No 1, 2, 4, 5)

4.6 The 3Cs

22 The National Indicative Programmes tend to pursue national priorities without reference to regional strategic objectives. This provokes a lack of coherence and mutual support between the regional and national programmes. The resulting lack of convergence weakens the effectiveness of the regional strategy. (Justification: Section 3.9; annex 6) 23 The variety of instruments offered in the context of the Commission’s assistance is a potential source of flexibility and adaptability to need that is not exploited to that end. In practice instruments are selected not primarily because of their optimal appropriateness to the strategic goals but rather on the basis of pragmatism and administrative constraints. (Justification: Section 3.9) 24 Coordination with other donors faces particular difficulties in view of the geography of the region but for some large programmes it has led to a fruitful policy dialogue and was a factor in instances of success. In some countries (Jamaica) there is evidence of positive contribution of donor coordination to the formulation and implementation of national programmes. (Justification: Section 3.10, J.2.3) 25 Several aspects of EU domestic policies or international arrangements are hurting the Caribbean countries and ad hoc measures are proposed to mitigate their consequences. A number of major Caribbean products or industries (sugar, bananas, rum) faced an inescapable and foreseeable trend of liberalisation. The strategy did not anticipate this factor and instead intervened under the pressure of crisis. (Justification: Section 3.10, case study n° 3)



5. Recommendations

The following recommendations are presented in three groups: strategic level, i.e. the policy dialogue, the programming and monitoring of the strategy; implementation level, i.e. the recommendations aiming at improving efficiency, effectiveness, impact

and sustainability; recommendations related to cross cutting issues and the 3Cs

These recommendations stem from the analysis carried out during the course of the evaluation and from the conclusions presented in the previous chapter.After each recommendation there is an indication of the conclusions on which this it is based or which it addresses. Each recommendation is assigned a priority ranking: Priority 1: recommendation applicable in the sort term and involving only, or mainly, European

Commission’s initiatives. Priority 2: recommendation applicable in the short term but involving a joint approach by the

Commission and the CARIFORUM Secretariat. Priority 3: recommendation requiring a relatively longer preparation or involving changes mainly on

the Caribbean side.

5.1 Recommendations related to the strategic level

Recommendation 1: Develop analytical tools to formulate and monitor a strategy for the construction of a regional integrated space that maximises the development benefits for the region. (Priority 1) The analytical foundation to support the rationale behind the identification of the focal sectors and areas of concentration in the indicative programmes is generally weak or missing. As a result, it is difficult to understand the underlying strategy adopted by the Commission and the extent to which it effectively addresses the main constraints to the attainment of the global objective of construction a regional integrated space. There is no doubt that the Commission has reflected some of the EU experience, notably in the gradual approach starting with the easier but essential step of functional cooperation to pave the way for deeper regional cooperation and cohesion. Beyond this pragmatic approach, programming should in the first instance be based on an in-depth analysis relative to the current state of the integration process in the Caribbean region including (i) the extent to which existing treaties are being implemented, (ii) identification of the main constraints affecting the integration process, and, (iii) prioritisation of the actions to be taken to support the regional integration process, whether or not they will be addressed by the Commission’s interventions. This analytical work should provide a real basis for a strategic policy dialogue with the partners and help clarify the intervention logic of the regional programmes. In particular, it should lead to incorporation of the set of interventions into a comprehensive and coherent strategy for supporting the construction of a regional integrated space. More generally, this analysis should also focus on the contribution of the creation of a regional integrated space to the development of the region. Particular attention should be paid to the social consequences of regional adjustments and liberalisation together with income generation opportunities. The latter should be assessed through proper identification of the region’s comparative advantages. Finally, it should clearly identify the elements which permit proper monitoring of the progress of the regional integration process, including elaboration of appropriate indicators and targets which take into account the economic, social and political context of the regions. (Conclusions 1, 2, 3, 4, 5, 6, 12, 17). Recommendation 2: Deepen and extend the policy dialogue to be pursued on the regional objectives, to one of identifying the major constraints to be overcome and the priority actions to



be taken; and from there exploit fully the comparative vantages of the Commission in playing a proactive role in this dialogue. (Priority 1) Currently the objectives of the Treaty and the strategic objectives of the EDF are set out. However, there are considerable deficiencies in the more strategic view of how regional integration, regional cohesion, and cultural identity will be achieved. Therefore there is a clear need to engage in a constructive policy dialogue that should embrace the agenda and roadmap for regional integration with particular regard to the specific regional asymmetries, the complexities of the small island states, and how the Commission will respond to the needs. A vision should be long term in nature, extending beyond a single EDF. This vision must be completed by more instrumental strategic programmes aimed at better differentiating the approach in order to mitigate the asymmetries between the countries and at taking the best advantage of the large variety of instruments offered by the Commission. The selection of instruments should be the object of deeper analysis and their justification based on their combined contribution to the objectives. In this process it will be ideal to engage other donors. Substantial benefits can be gained from using the wealth of information, statistical and otherwise, possessed by multilateral agencies (for example, UN, UN Specialised Agencies and the Breton Woods Institutions), to assist those involved not only in elaborating the strategic vision but also in preparing programming and project proposals. These agencies should at least be consulted for access to their information. Moreover, such information could provide baseline material for developing monitoring guides that should form the integral part of consultants’ terms of reference.

(Conclusions 1, 4, 14, 15 & 24) Recommendation 3: A criterion for the selection of areas and sectors of concentration under the RIP should be that enough evidence is presented on the contribution to the construction of the regional integrated space which is expected from activities programmed in those areas. (Priority 2) This recommendation stems from several conclusions which point to a lack of analytical justification behind the identification and selection of focal sectors and concentration areas in the regional programmes. It emerged from the evaluation that an unclear rationale for selection was paralleled by insufficient analysis of how different interventions should be combined to maximise their contribution to the strategic objectives. It is also found that these weaknesses have limited the efficiency of several regional projects. The practical recommendation is therefore to include in the strategy papers a more systematic justification of the selection of the areas of concentration that would include: references to technical analysis supporting the diagnostic; indication of the planned results in the areas of concentration or focal sector aimed at removing the

main obstacles, overcoming the asymmetries between the different countries, or making progress along a predefined road map;

indications of how the activities undertaken under a focal sector should be combined or linked among themselves or with activities conducted in other areas or in the national programmes, so as to maximise their benefits;

This justification should permit assignment of higher-priority components to the focal sectors. The structure and prioritisation of the response strategy would be based on a reference to the needs and demands of the partners but also on agreed targets for specific aspects linked to the construction of the regional space This recommendation is linked to recommendations 1 and 2 because it requires the development of analytical tools and a strong policy dialogue. The contribution of the Member States, possibly channelled through the CARICOM/CARIFORUM structures, is essential in view of their stakes and responsibilities in the integration process.



(Based on conclusions 4, 5, 6 and 9)

Recommendation 4. Improve the consultation process with the private sector. (Priority 2) The institutional settings for preparing the Commission’s intervention assistance to the region is largely based on mechanisms that put civil servants from official institutions in the Caribbean in contact with their counterparts in the European Commission Delegations or Brussels-based Services. The views and support of the private sector operators are important at the strategic level because ultimately the development of the regional private sector is an essential goal of the regional integration process. Overall the private sector has been disillusioned with the progress of regional integration. It is therefore necessary to develop mechanisms for consulting the private sector in assessing their needs and expectations and in understanding, from their point of view, what works and what does not work in terms of regional integration. It is also important to involve private sector representatives in the selection of the intervention instruments most appropriate to their needs and in conformity with the market mechanisms. A systematic effort to improve communications with the private sector is therefore essential. This is not easy because of the geographic dispersion of the private sector, its weakness in certain countries, and its weak regional representation capacity The recommendation is therefore to organise more systematic and continuous consultation with the private sector from the sides of both the Commission Services and CARIFORUM. Efforts already undertaken, such as those conducted in the Dominican Republic in identifying the Proempresa programme, the consultations of stakeholders in the preparation of the Rum programme, and are commendable and should be continued. In the case of CARIFORUM one suggestion could be the development of a special function of interface with the private sector under the new unified CARIFORUM/CARICOM structure; that function could be conducted jointly with the CRNM where the interests of the private sector need also to be well expressed and identified. (Conclusions 11, 20, 25)

5.2 Recommendations at operational level

Recommendation 5: Improve capacity to monitor the strategy and interventions so as to assess progress and results. (Priority 1) The impact of the Commission’s interventions on the regional integration process is generally difficult to assess. At present, with regard to the limited progress recorded on the main issues in this area, its interventions can be regarded has having only a modest impact. It is therefore important to improve the Commission’s capacity to measure progress in the area of trade, including reliable trade statistics at the level of CARIFORUM and regular institutional snapshots of progress in implementing the regional trade agreements. Also, as these issues are clearly linked with the design phase, the Commission should, in collaboration with its key interlocutors in the region, implement a programme of Project Cycle Management training for institutions and indigenous consultants. Noting the benefits of “learning-by-doing”, every effort should be made to implement this activity in conjunction with the detailed planning of components of the NIPs and CRIPs of the 9th EDF. This should also help to increase the focus of programmes and projects on well-defined objectives and enrich the scope of the policy dialogue. (Conclusions 17, 22) Recommendation 6: Review the organisational process and procedures governing the management of the regional programme so as to increase efficiency of implementation. (Priority 2)



Delays, difficulties in adapting projects quickly to changes, and other inefficiencies are attributed, at least in part, to the organisational mechanisms of the Commission which are viewed as complicated and insufficiently clear in the case of the management of the Caribbean regional programme. This recommendation is therefore multiple insofar as it addresses several aspects involving different actors: on the Commission’s side the responsibilities for the management of the regional programme should

be more clearly identified so that each participant knows to whom he or she should approach to resolve a particular question; currently this is not the case; the high turnover of staff within the Commission services also requires that practical steps should also be taken to allow a for better transmission of files; care should be taken that for each particular task, strategic preparation, programming an intervention or implementing it, all parties involved are duly informed of their own responsibilities and of the identity and responsibilities of the others;

on the CARIFORUM side the institutional character of the PU should be strengthened; this would involve adequate staffing and clear division of responsibilities among the staff; such institutional development should also pursue the objective of helping the DRAOs to understand better the contribution of the projects to the strategy and their interaction with the national interventions.

This recommendation also complements recommendation 4 and extends it to the implementation aspects. When reviewing the organisational mechanisms and procedures some adaptation should be made to permit greater flexibility in the use of funds by private sector operators without losing control over their accountability. (Conclusions 7, 8, 10) Recommendation 7: In the design of its interventions, the Commission needs to take into account, particularly for the purpose of establishing monitoring baselines, the development asymmetries between the Caribbean countries and the specific geographical constraints. (Priority 1) This recommendation is complementary to recommendation 2. There is no doubt that all the services of the Commission are aware of the differences existing among the different countries and these are reflected in the programming documents. However, ore effort needs to be taken to establish baseline information for monitoring purposes in order to account of the specific characteristics of a region of island States, and the important development differences between them, when designing projects of a regional nature within the context of the overall long-term strategy. The Commission needs to take into account, in particular for establishing base lines for monitoring, the principles of the UN Small Islands Developing States Network’s35. Using the relevant work of international economic and trade organizations, a study should be undertaken on the effects of trade liberalization and globalization on the sustainable development of small island developing States, including relevant recommendations. (Conclusion 6)

35 UN Small Islands Developing States Network’s 1994 Barbados Programme of Action XV Implementation,

Monitoring and Review Section C International Implementation, Sub- section 2 Trade Clause point 99.



Recommendation 8: An easy to use guide as to where information from other agencies can be located should be prepared to assist those involved in design, implementation, monitoring and assessment of programmes. (Priority 1) This recommendation is also complementary to recommendation 2. There are clear benefits in terms of efficiency and building upon the best practice of others by drawing on the wealth of analytical information, statistical and otherwise, available in multilateral agencies (UN, UN Specialised Agencies and the Breton Woods Institutions). There is a recognised need to develop a simple guide or checklist as an integral part of the Terms of Reference of local service providers so as to improve the quality of inception reports and accelerate the inception phase. The simple guide would be broken down by economic and social data sources, sectoral information, and so on. It could be supported by a website page containing the links and an associated electronic guide of how to make use of the facility. (Conclusions 12, 15, 24) Recommendation 9: Inception reports and work plans for individual interventions should indicate how the intervention will support similar or complementary activities. (Priority 2) There are a number of interventions in the national and regional programmes, often under different instruments, that address problems which are related in certain aspects. It is important that linkages between these different efforts are created with a view to maximising their contribution to the objectives. The technical and administrative provisions are too general to address the modalities that will permit the materialisation of such convergence. It order to make it happen effectively it is recommended that the detail of project design as set out in the inception reports and work programmes includes indications of how those responsible will interact with other projects to increase mutual effectiveness. (Conclusion 9, 22, 23) Recommendation 10: To improve the regional impact of interventions, mechanisms should be put in place to increase regional ownership throughout the project cycle and at termination. (Priority 3) Results delivered by regional institutions are frequently limited to the country in which they are operating; even if it is not so during the project implementation phase, it appears that it often becomes so after the termination of the project’s financial support. Mechanisms should be adopted to increase the likelihood that the Commission’s interventions produce impact at regional level. To increase regional ownership loosening of the link between the DRAOs and particular countries is recommended. Until now, DRAOs have most of the time been designated in the country hosting the regional institution benefiting from the Commission’s support. Even if this practice helps to reduce communication costs, it also limits the regional dimension and relevance of the project or programme. Allowing for different location of the DRAOs and the projects and programmes they handle would help to enlarge the regional scope and relevance of interventions. The merger of the CARIFORUM and CARICOM Secretariat may offer an opportunity to improve regional ownership and two practical measures could be suggested: the appointment of regional officers at the level of CARICOM/CARIFORUM. For instance the

DRAO for cultural regional projects could be an officer of the combined Secretariat specialised in cultural matters. This would impose that within the Secretariat there is good representation of the different CARIFORUM nationalities. It would also have one important implication: the DRAOs under this system would in fact be paid, which is not the case under the current system where often NAO already overburden have to take over as additional functions those of DRAO for



particular project without financial compensation. The present recommendation would give the responsibilities of DRAO to professional task managers).

In view of the economic and demographic importance of that country, the appointment of a high level and high profile citizen of the Dominican Republic in the combined CARICOM/CARIFORUM secretariat.

Finally, the Commission should provide enough funding for encouraging regional use of the outputs of the interventions as this appears to be sometimes limited due to lack of resources. (Conclusion 16, 18) Recommendation 11: Sustainability needs to be built into the design and implementation of the interventions. (Priority 2 and 3) A clear finding of this evaluation is that most institutions or mechanisms created or supported through the Commission’s intervention are unsustainable after the Commission’s funding is terminated. It also shownthat the few exceptions occur in interventions where sustainability has been addressed in the design and the implementation of the projects. The recommendation therefore requires that implementing agencies or consultants in charge of an intervention explicitly factor sustainability into the operations and anticipate well in advance of the end of the project the necessary steps and endeavours to ensure sustainability. Moreover, the associated political choices to continue supporting the Institutions that provide a public good should clearly spelled out. This recommendations also requires that the Commission announces clearly in advance for how long it is prepared to support an institution. Institutional support projects should be non ambiguous about this issue and if a project requires that at its termination the institution should be sustainable, sustainability should be factored in the project from its inception. (Conclusions 18, 19)

5.3 Recommendations related to the cross cutting issues and the 3Cs

Recommendation 12: Mechanisms needs to be established to ensure that the Commission’s policies on cross cutting issues are effectively monitored in relation to implementation of the construction of the regional integrated space. (Priority 2 and 3) The Commission has had a longstanding policy in relation to cross-cutting issues and is in the process of further developing support tools to complement its current guides relating to project cycle management. These include the EuropeAid EC Toolkit for Gender Mainstreaming in Development Cooperation, and a similar guide for the Environment. These and other appropriate instruments need to be used to establish baseline data for monitoring progress in the fields relating to regional integration. To this end the requirement to deal with the cross-cutting issues, and the type of information required, should be clearly spelt out in the terms of reference of service providers hired by the Commission or Delegations. Noting in particular that the Commission has made positive steps towards dealing with the environment issue, efforts should be undertaken to develop these so as to ensure that baseline material is available for monitoring purposes. (Conclusion 21)



Recommendation 13: Outcomes of future but foreseeable trends of liberalisation, or changes in EU policies, should be systematically anticipated and response strategies identified in collaboration with partners in the region. (Priority 2) Several major Caribbean industries were subjected to severe shocks caused by changes in other EU policies. In some instances the response given by the Commission to these shocks proved rather ad hoc as they were not sufficiently anticipated and reflected in the regional strategy. Examples are bananas and sugar. In other instances, the attitude of the Commission has been much more attentive and has allowed the response to the issue to be incorporated in a well prepared and coherent set of interventions. This was for example the case with the support provided for preparing the negotiations for the future EPA. Such a practice should be the rule. Important changes affecting the environment of the regions should be anticipated and incorporated in the policy dialogue so as to be properly integrated in the regional strategy. One issue that could be the object of such a process is the termination of the Multi-Fibre Arrangement (MFA) that has ensured developing countries a guaranteed quota of manufactured clothing for export to advanced economies. With the phasing out in 2005 of the MFA, these quotas will no longer be assured, leading to considerable uncertainty for those countries that will be obliged to compete in the international economy and against countries like China and India, which is likely to increase considerably the pressure on local industries. (Conclusion 25)


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