By the Caribbean Journal staff

The International Monetary Fund’s Executive Board has approved a disbursement for $3.1 million to Dominica under its Rapid Credit Facility.

The funding is aimed at helping Dominica with reconstruction and rehabilitation following a series of floods and landslides in the summer and fall of 2011. The floods caused millions of dollars in damage, including the destruction of a Chinese agriculture project on the island.

The total cost of reconstruction is expected to be as high as 6.5 percent, according to the IMF, which would weaken Dominica’s balance of payments, the fund said.

“Dominica suffered significant infrastructure damage following torrential rains, flooding and landslides in the second half of 2011,” said Min Zhu, deputy managing director and acting chair of the IMF Executive Board. “The recovery and rehabilitation costs will be high, putting pressures on the fiscal and balance of payments positions.”

The board said Dominica’s government was committed to returning to robust primary surpluses over the medium term to ensure downward debt dynamics by tackling pressures on current spending and strengthening the revenue base and collection.

“Structural reforms are key to supporting the fiscal effort, improving growth prospects and increasing Dominica’s resilience to natural shocks,” Zhu said. “Reforms to boost external competitiveness and enhance the business climate will be necessary to promote private sector activity.”