Economy of Saint Lucia
Encyclopedia
Saint Lucia
is one of the Windward Islands
, a group of islands located off the southeast coast of North America. Due to its small size and relative lack of geological resources, its 2000s economy relies primarily on the sale of banana
crops, and the income generated from tourism
, with additional input from small-scale manufacturing.
In the 1960s, just before establishment of the European Economic Community
(EEC), about 80% of the island's income derived from banana-crop exports to the United Kingdom
. By the time the EEC was being phased into the European Union
in 1993, that bloc's agricultural committees had announced their intention to eliminate preferred access of Windward Islands crops to the United Kingdom, which will cause considerable reduction in the prices which banana crops previously commanded.
In order to mitigate the impact of such income reductions, the island's governments have announced several efforts to diversify the island's agricultural production. They have encouraged the establishment of tree crops such as mango
s and avocado
s.
The island's banana output was heavily impacted in 2007 by the passage of Hurricane Dean
. In 2006 the Governor stated:
In addition to banana production for export, a variety of crops are produced on the island for domestic consumption.
In order to broaden the island's economic base, the government added small computer-driven information technology and financial services as development objectives.
St. Lucia's leading revenue producers--agriculture, tourism, and small-scale manufacturing--benefited from a focus on infrastructure improvements in roads, communications, water supply, sewerage, and port facilities. Foreign investors also have been attracted by the infrastructure improvements as well as by the educated and skilled work force and relatively stable political conditions. The largest investment is in a petroleum storage and transshipment
terminal built by Hess Oil
. The Caribbean Development Bank
(CDB) funded an airport
expansion project.
Until the events of 11 September 2001, the tourism sector had made significant gains, experiencing a boom despite some untimely and destructive hurricanes. Stay-over visitors and cruise arrivals declined in 2001 and several hotels declared bankruptcy, including the Hyatt. The development of the tourism sector remains a priority, and the government is committed to providing a favourable investment environment. Incentives are available for building and upgrading tourism facilities. There has been liberal use of public funds to improve the physical infrastructure of the island, and the government has made efforts to attract cultural and sporting events and develop historical sites.
(ECCU). The Eastern Caribbean Central Bank
(ECCB) issues a common currency (the East Caribbean dollar
) for all members of the ECCU. The ECCB also manages monetary policy and regulates and supervises commercial banking activities in its member countries.
St. Lucia is a beneficiary of the U.S. Caribbean Basin Initiative and is a member of the Caribbean Community and Common Market (CARICOM) and the Organization of Eastern Caribbean States (OECS).
St. Lucia is the headquarters of the Eastern Caribbean Telecommunications (ECTEL) authority, which is developing the regulations to liberalize the telecommunications sector in the region by 2004.
GDP - real growth rate: 3.3% (2002 est.)
GDP - per capita: purchasing power parity - $5,400 (2002 est.)
GDP - composition by sector:
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 3% (2001 est.)
Labour force: 43,800 (2001)
Labour force - by occupation:
Unemployment rate: 20% (2003 est.)
Pay:
best is 100$ a week
Budget:
revenues:
$141.2 million
expenditures:
$146.7 million, including capital expenditures of $25.1 million (2000 estimate)
Industries:
clothing, assembly of electronic components, beverages, corrugated cardboard boxes, tourism, lime processing, coconut processing
Industrial production growth rate:
Electricity - production: 281 GWh (2003)
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0% (1998)
Electricity - consumption: 102 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products:
banana
s, coconut
s, vegetables, citrus, root crops, cocoa
Exports: $82 million (2004)
Exports - commodities:
banana
s 41%, clothing, cocoa, vegetables, fruits, coconut oil
Exports - partners:
France
25%, United States
18.3%, China
17.8%, United Kingdom
14.5%, Brazil
6.8% (2005)
Imports:
$410 million (2004)
Imports - commodities:
food 23%, manufactured goods 21%, machinery and transportation equipment 19%, chemicals, fuels
Imports - partners:
United States
23.8%, Trinidad and Tobago
16%, Netherlands
11.1%, Venezuela
6.3%, Finland
6.2%, United Kingdom
5.7%, France
4.7% (2005)
Debt - external:
Economic aid - recipient: $51.8 million (1995)
Currency: 1 East Caribbean dollar (EC$) = 100 cents
Exchange rates: East Caribbean dollars (EC$) per US$1 - 2.7000 (fixed rate since 1976)
Fiscal year: 1 April - 31 March
Saint Lucia
Saint Lucia is an island country in the eastern Caribbean Sea on the boundary with the Atlantic Ocean. Part of the Lesser Antilles, it is located north/northeast of the island of Saint Vincent, northwest of Barbados and south of Martinique. It covers a land area of 620 km2 and has an...
is one of the Windward Islands
Windward Islands
The Windward Islands are the southern islands of the Lesser Antilles, within the West Indies.-Name and geography:The Windward Islands are called such because they were more windward to sailing ships arriving in the New World than the Leeward Islands, given that the prevailing trade winds in the...
, a group of islands located off the southeast coast of North America. Due to its small size and relative lack of geological resources, its 2000s economy relies primarily on the sale of banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
crops, and the income generated from tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
, with additional input from small-scale manufacturing.
Agriculture
The island supports several small- and medium-sized agricultural enterprises.In the 1960s, just before establishment of the European Economic Community
European Economic Community
The European Economic Community The European Economic Community (EEC) The European Economic Community (EEC) (also known as the Common Market in the English-speaking world, renamed the European Community (EC) in 1993The information in this article primarily covers the EEC's time as an independent...
(EEC), about 80% of the island's income derived from banana-crop exports to the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. By the time the EEC was being phased into the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
in 1993, that bloc's agricultural committees had announced their intention to eliminate preferred access of Windward Islands crops to the United Kingdom, which will cause considerable reduction in the prices which banana crops previously commanded.
In order to mitigate the impact of such income reductions, the island's governments have announced several efforts to diversify the island's agricultural production. They have encouraged the establishment of tree crops such as mango
Mango
The mango is a fleshy stone fruit belonging to the genus Mangifera, consisting of numerous tropical fruiting trees in the flowering plant family Anacardiaceae. The mango is native to India from where it spread all over the world. It is also the most cultivated fruit of the tropical world. While...
s and avocado
Avocado
The avocado is a tree native to Central Mexico, classified in the flowering plant family Lauraceae along with cinnamon, camphor and bay laurel...
s.
The island's banana output was heavily impacted in 2007 by the passage of Hurricane Dean
Hurricane Dean
The name Dean was used for five tropical cyclones in the Northern Atlantic Ocean:*1983's Tropical Storm Dean, which struck the coast of Virginia, causing minor erosion and flooding...
. In 2006 the Governor stated:
- While living standards have improved for many, a large number of persons has been pushed to the margin of economic activity especially in the areas which once depended heavily on the banana industry for a livelihood.
In addition to banana production for export, a variety of crops are produced on the island for domestic consumption.
Economic trends
The level of island households living at or below the poverty level increased from 18.7 to 21.4 percent from 1995 to 2005. (As of 2006) another 16.2 percent of the island's population are vulnerable to economic shocks that could easily push them below the poverty line. One rural district had 44.9 percent of households living below the poverty line (2005).In order to broaden the island's economic base, the government added small computer-driven information technology and financial services as development objectives.
St. Lucia's leading revenue producers--agriculture, tourism, and small-scale manufacturing--benefited from a focus on infrastructure improvements in roads, communications, water supply, sewerage, and port facilities. Foreign investors also have been attracted by the infrastructure improvements as well as by the educated and skilled work force and relatively stable political conditions. The largest investment is in a petroleum storage and transshipment
Transshipment
Transshipment or Transhipment is the shipment of goods or containers to an intermediate destination, and then from there to yet another destination....
terminal built by Hess Oil
Hess Corporation
The Hess Corporation is an integrated oil company based in New York City. The company explores, produces, transports, and refines crude oil and natural gas. Vertically completing the logistical chain, about 1,360 Hess branded filling stations market gasoline to consumers in 16 states along the...
. The Caribbean Development Bank
Caribbean Development Bank
The Caribbean Development Bank is a financial institution which assists Caribbean nations in financing social and economic programs in its member countries...
(CDB) funded an airport
Hewanorra International Airport
Hewanorra International Airport , near Vieux Fort Quarter, Saint Lucia, in the Caribbean, is the larger of the country's two airports and is managed by the Saint Lucia Air and Seaports Authority ....
expansion project.
Until the events of 11 September 2001, the tourism sector had made significant gains, experiencing a boom despite some untimely and destructive hurricanes. Stay-over visitors and cruise arrivals declined in 2001 and several hotels declared bankruptcy, including the Hyatt. The development of the tourism sector remains a priority, and the government is committed to providing a favourable investment environment. Incentives are available for building and upgrading tourism facilities. There has been liberal use of public funds to improve the physical infrastructure of the island, and the government has made efforts to attract cultural and sporting events and develop historical sites.
Regional economic ties
St. Lucia is a member of the Eastern Caribbean Currency UnionEastern Caribbean Currency Union
The Eastern Caribbean Currency Union is a development of the Organization of Eastern Caribbean States, this organization is composed of Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. It is under the supervision of the Eastern Caribbean...
(ECCU). The Eastern Caribbean Central Bank
Eastern Caribbean Central Bank
The Eastern Caribbean Central Bank is the monetary authority of a group of six independent Caribbean nations namely:* Antigua and Barbuda,* Grenada,* Saint Kitts and Nevis,* Commonwealth of Dominica,* Saint Lucia,* Saint Vincent and the Grenadines,...
(ECCB) issues a common currency (the East Caribbean dollar
East Caribbean dollar
The East Caribbean dollar is the currency of eight of the nine members of the Organisation of Eastern Caribbean States...
) for all members of the ECCU. The ECCB also manages monetary policy and regulates and supervises commercial banking activities in its member countries.
St. Lucia is a beneficiary of the U.S. Caribbean Basin Initiative and is a member of the Caribbean Community and Common Market (CARICOM) and the Organization of Eastern Caribbean States (OECS).
St. Lucia is the headquarters of the Eastern Caribbean Telecommunications (ECTEL) authority, which is developing the regulations to liberalize the telecommunications sector in the region by 2004.
Economic statistics
GDP: purchasing power parity - $866 million (2002 est.)GDP - real growth rate: 3.3% (2002 est.)
GDP - per capita: purchasing power parity - $5,400 (2002 est.)
GDP - composition by sector:
- agriculture: 7%
- industry: 20%
- services: 73% (2002 est.)
Population below poverty line: NA%
Household income or consumption by percentage share:
lowest 10%:
NA%
highest 10%:
NA%
Inflation rate (consumer prices): 3% (2001 est.)
Labour force: 43,800 (2001)
Labour force - by occupation:
- agriculture 21.7%,
- industry and commerce 24.7%,
- services 53.6% (2002 est.)
Unemployment rate: 20% (2003 est.)
Pay:
best is 100$ a week
Budget:
revenues:
$141.2 million
expenditures:
$146.7 million, including capital expenditures of $25.1 million (2000 estimate)
Industries:
clothing, assembly of electronic components, beverages, corrugated cardboard boxes, tourism, lime processing, coconut processing
Industrial production growth rate:
- 8.9% (1997 est.)
Electricity - production: 281 GWh (2003)
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0% (1998)
Electricity - consumption: 102 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products:
banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, coconut
Coconut
The coconut palm, Cocos nucifera, is a member of the family Arecaceae . It is the only accepted species in the genus Cocos. The term coconut can refer to the entire coconut palm, the seed, or the fruit, which is not a botanical nut. The spelling cocoanut is an old-fashioned form of the word...
s, vegetables, citrus, root crops, cocoa
Exports: $82 million (2004)
Exports - commodities:
banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s 41%, clothing, cocoa, vegetables, fruits, coconut oil
Coconut oil
Coconut oil is an edible oil extracted from the kernel or meat of matured coconuts harvested from the coconut palm . Throughout the tropical world, it has provided the primary source of fat in the diets of millions of people for generations. It has various applications in food, medicine, and industry...
Exports - partners:
France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
25%, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
18.3%, China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
17.8%, United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
14.5%, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
6.8% (2005)
Imports:
$410 million (2004)
Imports - commodities:
food 23%, manufactured goods 21%, machinery and transportation equipment 19%, chemicals, fuels
Imports - partners:
United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
23.8%, Trinidad and Tobago
Trinidad and Tobago
Trinidad and Tobago officially the Republic of Trinidad and Tobago is an archipelagic state in the southern Caribbean, lying just off the coast of northeastern Venezuela and south of Grenada in the Lesser Antilles...
16%, Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
11.1%, Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
6.3%, Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
6.2%, United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
5.7%, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
4.7% (2005)
Debt - external:
- $214 million (2000)
Economic aid - recipient: $51.8 million (1995)
Currency: 1 East Caribbean dollar (EC$) = 100 cents
Exchange rates: East Caribbean dollars (EC$) per US$1 - 2.7000 (fixed rate since 1976)
Fiscal year: 1 April - 31 March