The Board of Executive Directors of the World Bank has approved new financing for the Commonwealth of Dominica. The funding aims to enhance the island’s fiscal and disaster resilience, focusing on domestic revenue mobilization, financial sector resilience, biodiversity conservation, and disaster preparedness. The Development Policy Credit approved amounts to US$24 million.
Dominica, a Caribbean nation, is renowned for its rich biodiversity and marine ecosystems that support its tourism-driven economy. However, it has faced significant setbacks due to natural disasters and climate-related events. Tropical Storm Erika in 2015 and Hurricane Maria in 2017 caused severe damage. Although Hurricane Beryl in 2024 did not directly hit Dominica, it still led to infrastructural damage and economic disruptions. These events have compounded financial challenges, with public debt soaring to 118.2 percent of GDP in 2020 and remaining high in the following years.
To address these challenges, Dominica's Strengthening Fiscal and Climate Resilience Programmatic Development Policy Credit was initiated. This policy credit supports a series of measures designed to implement economic and climate resilience reforms, such as excise tax reforms. Excise taxes target goods like fuel, alcohol, and sugary drinks, aiming to increase revenue and reduce environmental and health impacts. Additionally, the initiative seeks to enhance the stability of financial institutions, including the Dominica Agricultural Industrial and Development Bank and credit unions.
World Bank Division Director for the Caribbean, Lilia Burunciuc, stated, “Dominica faces the dual challenge of managing high disaster vulnerability and fiscal fragility. This initiative supports strategic policy reforms that are vital for building resilience, generating sustainable revenue, and protecting Dominica’s extraordinary natural heritage.”
Another key focus is safeguarding marine ecosystems. The project supports establishing a marine protected area specifically for sperm whales, aiming to increase permit revenue from marine tourism by 177% by 2027. This serves both conservation and economic purposes. The program also introduces a risk-based asset management system to bolster disaster preparedness and guide investment in resilient infrastructure. By 2027, it is planned that 40% of public fixed assets will be cataloged and prioritized for disaster risk mitigation.
The initiative aligns with Dominica’s National Resilience Development Strategy 2030 and its Climate Resilience and Recovery Plan 2020-2030. Developed in consultation with national and international partners, including the Caribbean Development Bank and International Monetary Fund, this policy credit provides budget support in accordance with pre-implemented policies and reforms.
The International Development Association (IDA), a part of the World Bank Group for low-income countries and small island economies, provides the funding. IDA's financial support helps to enhance countries' futures, improving living standards and fostering secure communities globally.
Learn more about the World Bank’s endeavors in the Caribbean by visiting their website, Facebook, Twitter, or YouTube channel.