Saint Vincent and the Grenadines is an independent state within the British Commonwealth. It claims as its head of state Queen Elizabeth, who is represented on the islands by a governor general. The nation's form of government is a parliamentary democracy. The governor general selects the prime minister, usually the leader of the majority party in the unicameral (one-house) House of Assembly. The House of Assembly consists of 21 seats (15 representatives chosen by popular election and 6 appointed senators). The Eastern Caribbean Supreme Court, based in Saint Lucia, carries out judicial functions. One judge from the court is based in Saint Vincent.
Vincentian politics have been dominated by the figure of Sir James Mitchell since he and his National Democratic Party (NDP) first won elections in 1984. Elections in 1998 gave the NDP its fourth consecutive victory, but there was considerable controversy. The NDP won 8 out of 15 seats in parliament but only 45.3 percent of votes cast. The opposition Unity Labour Party (ULP) won only 7 seats but 54.6 percent of the vote. After political unrest and subsequent mediation from representatives of the Caribbean Community (CARICOM) in 2000, it was agreed that fresh elections would be brought forward by 2 years to March 2001. In those elections the ULP took 56.7 percent of the vote and occupied 12 of the 15 seats in the National Assembly; the NDP took 40.7 percent of the vote and held only 3 seats. Ralph Gon-salves was subsequently appointed as prime minister.
There is little ideological difference between the 2 main parties in Saint Vincent and the Grenadines, and both support a mixed economy in which government encourages and regulates private-sector growth and foreign investment. Differences tend to be as much personal as political, although the ULP puts particular emphasis on the need to reduce unemployment through the continued rehabilitation of agriculture and government spending on infrastructure . Governments are able to exert particular influence on the economy, in part because it is so small and in part because there is a relatively large public sector .
Taxation is made up of a mixture of income tax , indirect sales taxes, and taxes levied on companies and foreign-owned financial institutions. In an attempt to increase fiscal revenues from International Business Companies (IBCs), the government introduced legislation in 1996 ensuring almost complete secrecy concerning their financial transactions. The government has also attempted to raise revenues by acting as a flag of convenience, offering registration facilities for foreign shipping companies. Both of these measures have led to criticism not only from the political opposition but also from in ternational bodies concerned with money-laundering and marine safety.