St. Vincent and the Grenadines - Overview of economy
Saint Vincent and the Grenadines' economy is largely based on agriculture, bananas in particular. It has been so for many years, but other economic activities have become more important in recent years, namely tourism, manufacturing, and financial services. Bananas have been Saint Vincent's main export and source of revenue since the 1950s, when the British colonial authorities actively encouraged the establishment of a local banana industry. The regularity of income from banana-growing lay behind the island's steady economic growth in the 1980s and early 1990s, but the crop is always vulnerable to hurricanes, drought, and disease, and suffered serious problems in 1994. The removal of preferential access into the European Union (EU) market was threatened by a 1997 ruling by the World Trade Organization (WTO). The ruling stated that the EU was unfairly favoring Caribbean producers at
Recent governments have tried to encourage diversification into other agricultural exports, and Saint Vincent exports a wide range of fruits and vegetables both to the United Kingdom and to regional (that is, Caribbean) markets. The traditional cultivation of arrowroot has been expanded as an export industry, and fishing is an important sector within the economy.
Industry is divided between manufacturing for the local and regional market and that destined for export to North America. The former includes food processing (flour and rice) and brewing, while the latter includes some garment and electronic components assembly, as well as the manufacture of sporting goods such as tennis rackets. There is a mixture of small local companies and local subsidiaries of foreign corporations.
Saint Vincent and the Grenadines has also sought to develop a range of service industries, of which tourism is the most important. Tourist facilities range from extremely exclusive, mostly privately-owned resorts and villas on islands such as Mustique and Canouan to a growing cruise ship facility in Kingstown. Yachting is also extremely popular around the beautiful Grenadine island chain. In recent years, the country has entered the financial services sector, with a large number of banks and other financial institutions present in Kingstown. This sector has attracted some controversy on account of its alleged secrecy. Saint Vincent has also been subject to criticism from the United States, both for its large-scale marijuana cultivation and for the alleged role played by the southern Grenadine islands as shipment points for cocaine en route from South America to the United States.
According to the Caribbean Development Bank (CDB), Saint Vincent and the Grenadines had a total external debt of $99.3 million at the beginning of 1999. The country's major economic problem, however, remains a high level of unemployment, affecting at least 22 percent of the workforce in 1999. According to the World Bank, some 30 percent of people in the English-speaking Windward Islands live in conditions of poverty.