Economy of Saint Lucia

Saint Lucia is one of the Windward Islands, a group of islands located off the southeast coast of North America. St Lucia's economy relies primarily on the sale of bananas, and the income generated from tourism, with additional input from small-scale manufacturing.

St. Lucia Export Treemap
A proportional representation of St. Lucia's exports.

Economic history

The island's banana output was heavily impacted in 2007 by the passage of Hurricane Dean.[1] In 2006 the Governor stated:

While living standards have improved for many, a large number of people have been pushed to the margin of economic activity especially in the areas which once depended heavily on the banana industry for a livelihood.[2]

Sectors

Agriculture

Economy of Saint Lucia
CurrencyEast Caribbean dollar (XCD)
calendar year
Statistics
GDP growth
2.0% (2015), 0.9% (2016),
2.1% (2017e), 2.8% (2018f) [3]
Main industries
bananas, oils, beer made from malt
91st (2018)[4]

All values, unless otherwise stated, are in US dollars.

In addition to banana production for export, a variety of crops are produced on the island for domestic consumption.Other crops of economic importance are cocoa,coconuts,citrus fruits and livestock. There is also the establishment of tree crops such as mangoes and avocados. The island continues to produce more foods for consumption to reduce their 350 million dollar food import bill.

Tourism

The island currently attracts over 900,000 visitors annually. St Lucia has been able to attract foreign businesses and investment, especially in its offshore banking and tourism industries. Tourism is St Lucia's main source of jobs and income, accounting for 65 percent of GDP, and the island's main source of foreign exchange earnings.[5] The northern end of St Lucia is tourism's most urbanized area, with a fair number of hotels, and resorts located along beaches, or, with seaside views.This is also home to many of the island's large all-inclusive resorts.[6]

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).[7]

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.

Overview

St. Lucia's economy depends primarily on revenue from tourism and banana production, with some contribution from small-scale manufacturing. All sectors of the economy have benefited from infrastructure improvements in roads, communications, water supply, sewerage, and port facilities. These improvements, combined with a stable political environment and educated work force, have attracted foreign investors in several different sectors. Although St. Lucia enjoys a steady flow of investment in tourism, the single most significant foreign investment is Hess Oil's large petroleum storage and transshipment terminal. In addition, the Caribbean Development Bank funded an extensive airport expansion project.

Although banana revenues have helped fund the country's development since the 1960s, the industry is now in a terminal decline, due to reduced European Union trade preferences and competition from lower-cost Latin American banana producers. The country is encouraging farmers to plant crops such as cocoa, mangoes, and avocados to diversify its agricultural production and provide jobs for displaced banana workers.

Tourism recovered in 2004, following the post-11 September 2001 recession, and continued to grow in 2005, making up more than 48% of St. Lucia's GDP. The hotel and restaurant industry grew by 6.3% during 2005. Stay-over arrivals increased by 6.5%, and the United States remained the most important market, accounting for 35.4% of these arrivals. Yacht passengers rose by 21.9%. Redeployment of cruise ships, remedial berth construction, and high fuel costs prevented higher growth rates. However, several investors have planned new tourism projects for the island, including a large hotel and resort in the southern part of the island. The global recession has caused a reduction in tourist revenue and foreign investment, significantly slowing growth rates.

St. Lucia's currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

St. Lucia is a beneficiary of the U.S. Caribbean Basin Initiative and is a member of the Caribbean Community and Common Market (CARICOM). The country hosts the executive secretariat of the Organization of Eastern Caribbean States (OECS).

Regional economic ties

St. Lucia is a member of the Eastern Caribbean Currency Union (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 (ESTEL) authority, which is developing the regulations to liberalize the telecommunications sector in the region by 2004.

Economic statistics

GDP: purchasing power parity - $1,667 billion (2016 est.)

GDP - real growth rate: 3.5% (2012 est.)

GDP - per capita: purchasing power parity - $12,952 (2016 est.)[8]

GDP - composition by sector:

  • agriculture: 2.43%
  • industry: 13.43%
  • services: 84.14% (2016 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): -0.934% (2016 est.)

Labour force: 50,300 (2011)

Labour force - by occupation:

  • agriculture 21.7%,
  • industry and commerce 24.7%,
  • services 53.6% (2002 est.)

Unemployment rate: 15% (2013 est.)

Pay: best is $350 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 KWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products:
bananas, coconuts, vegetables, citrus, root crops, cocoa

Exports: $82 million (2004)

Exports - commodities:
bananas 41%, clothing, cocoa, vegetables, fruits, coconut oil

Exports - partners:
France 25%, United States 18.3%, 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:

  • $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

References

  1. ^ "Archived copy". Archived from the original on 17 June 2011. Retrieved 18 September 2009.CS1 maint: Archived copy as title (link) 2008 Statement of St. Lucia Governor to Caribbean Bank meeting. Retrieved 18 September 2009
  2. ^ http://www.caribank.org/titanweb/cdb/webcms.nsf/AllDocSearch/8093C83F1D518E67042574L200628E65/$File/StLuciaStatement.pdf?OpenElement 2006 Statement of St. Lucia Governor to Caribbean Bank meeting. Retrieved 18 September 2009
  3. ^ "World Bank forecasts for St. Lucia, June 2018 (p. 152)" (PDF). World Bank. Retrieved 6 September 2018.
  4. ^ "Ease of Doing Business in Saint Lucia". Doingbusiness.org. Retrieved 24 November 2017.
  5. ^ "St. Lucia Economic Profile 2018". Index Mundi. 18 January 2018.
  6. ^ "The 10 Best St. Lucia All Inclusive Resorts 2018 (with UPDATED Prices) - TripAdvisor". www.tripadvisor.ca. Retrieved 25 November 2018.
  7. ^ 2006 Statement
  8. ^ https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=LC
Index of Saint Lucia-related articles

The following is an alphabetical list of topics related to the nation of Saint Lucia.

Outline of Saint Lucia

The following outline is provided as an overview of and topical guide to Saint Lucia:

Saint Lucia is a sovereign island nation located in the Lesser Antilles archipelago in the eastern Caribbean Sea adjacent to the North Atlantic Ocean. Saint Lucia is located north of the islands of Saint Vincent and the Grenadines, northwest of Barbados and south of Martinique. It is also known as the "Helen of the West Indies" because it switched between British and French control so often it was likened to the mythical Helen of Troy.

Saint Lucia is one of the Windward Islands, named for Saint Lucy of Syracuse. It was first visited by Europeans in about the year 1500 and first colonized successfully by France who signed a treaty with the native Carib peoples in 1660. Great Britain took control of the island from 1663 to 1667 then went to war with France over it fourteen times, and finally took complete control in 1814. Representative government came about in 1924 (with universal adult suffrage from 1953) and from 1958 to 1962 the island was a member of the Federation of the West Indies. Finally, on February 22, 1979, Saint Lucia became an independent state of the Commonwealth of Nations. The island nation celebrates this every year with a public holiday.

Saint Lucia dollar

The history of currency in the British colony of Saint Lucia closely follows that of the British Eastern Caribbean territories in general. Even though Queen Anne's proclamation of 1704 brought the gold standard to the West Indies, silver pieces of eight (Spanish dollars and later Mexican dollars) continued to form a major portion of the circulating currency right into the latter half of the nineteenth century.

Britain adopted the gold standard in 1821 and an imperial order-in-council of 1838 resulted in Saint Lucia formally adopting the British sterling coinage in the year 1851. However, despite the circulation of British coins in St. Lucia, the silver pieces of eight continued to circulate alongside them and the private sector continued to use dollar accounts for reckoning. The international silver crisis of 1873 signalled the end of the silver dollar era in the West Indies and silver dollars were demonetized in St. Lucia in 1882. This left a state of affairs, in which the British coinage circulated, being reckoned in dollar accounts at an automatic conversion rate of 1 dollar = 4 shillings 2 pence.

From 1949, with the introduction of the British West Indies dollar, the currency of St. Lucia became officially tied up with that of the British Eastern Caribbean territories in general. The British sterling coinage was eventually replaced by a new decimal coinage in 1955, with the new cent being equal to one half of the old penny.

Saint Lucia livre

The livre was the currency of Saint Lucia until 1814. The Saint Lucia livre was a French colonial currency, distinguished by the use of various cut Spanish and Spanish colonial coins. The livre was subdivided into 20 sous, each of 12 deniers. The escalin was worth 15 sous, with the stampee worth 3 sous 9 denier (​1⁄4 escalin). Until 1813, 12 escalins were equal to 8 reales (the Spanish dollar), after which 15 escalins equaled 8 reales. In 1851, sterling was introduced for circulation.

Since the late 19th century, dollars have circulated on Saint Lucia, first the Saint Lucia dollar, then the British West Indies dollar, and currently the East Caribbean dollar.

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