St. Vincent and the Grenadines - Domestic policy

St. Vincent was for years one of the poorest countries in the hemisphere. It was severely damaged by a volcanic eruption in 1979 and a major hurricane in 1980, both of which damaged the banana crop. This vital economic sector accounts for 60% of the workforce and 30% of merchandise exports. As a result of drought conditions in 1994, a Banana Rehabilitation and Replanting Programme (BRRP) was established with financial support from the European Union (EU). Tropical storms again hurt agricultural production in 1994 and 1995; Hurricane Lenny in 1999 severely damaged the banana crop.

Though tourism had by 1993 overtaken the banana industry as St. Vincent's largest industry, the country is still heavily dependent on the crop and, like all nations with economies dependent on commodities with wildly varying values, it suffers from this dependence. Gonsalves has attempted to resolve this dependency by deepening the economy, increasing trade (particularly with the United States), and pushing for more regional cooperation.

Gonsalves has also made a name for himself in the region by asserting that he and his fellow prime ministers in the Caribbean have far too much power. His remedy for this situation—which many of his fellow Caribbean political leaders don't support—is to more fully integrate Caribbean nations. Gonsalves published a book in 2001 titled The Politics of Our Caribbean Civilization in which he argues that political union is crucial for the states of the Caribbean if they are ever to emerge from the economic dependence that characterizes so many of their economies. In February 2003, Gonsalves was appointed head of a committee composed of the prime ministers of Jamaica, Antigua and Barbuda, Barbados, and Trinidad and Tobago, in addition to St. Vincent and the Grenadines. The group was established to further the integration process in the region, and especially to speed up implementation of the Caricom Single Market and Economy (CSME).

Gonsalves allocated 17% of his 2003 budget to Education, Youth, and Sports, highlighting the emphasis he places on the importance of education and the youth in the future of the country. He described his budget as "people-oriented," and focused on the development of basic skills and talent, entrepreneurship, citizenship, and social responsibility in building a strong nation. Gonsalves also stressed the need to diversify the economy, particularly in the agricultural sector.

With regard to tourism, St. Vincent and the Grenadines experienced a decline in tourism since the 11 September 2001 terrorist attacks on the United States; the Caribbean region experienced a 10% fall in tourist arrivals following September 2001. Gonsalves has indicated that tourism represents the greatest opportunity for job creation, and increased the budget allocation for the promotion of tourism by over a third in 2003.

Gonsalves has also highlighted the importance of a sound financial system as a prerequisite for growth. Nine percent of Gonsalves' 2003 budget was earmarked for health, with a substantial amount going toward efforts to fight HIV/AIDS. Although Gonsalves' vision of St. Vincent's future is positive, transformations in the economy and society must be balanced against the backdrop of US $718 million in public debt, which is 75% of GDP.