St. Vincent and the Grenadines - Future trends



Saint Vincent and the Grenadines' short-term economic prospects depend to a large extent on the fate of its banana industry. If preferential access into the EU is removed or substantially reduced, the industry will not be able to compete with large Latin American producers and will collapse, creating widespread poverty among small farmers. Attempts to diversify away from dependency on bananas have begun, but will need to be accelerated over the next decade. The country's food processing and export industry also faces potential threats from cheaper regional competitors such as the Dominican Republic, which are now involved in reciprocal free-trade agreements with CARICOM countries.

Tourism seems to have a more healthy future, and the potential of the main island and its dependencies has yet to be fully realized. The authorities will have to balance the need for increased visitor arrivals with keeping the islands' reputation as an unspoiled and exclusive destination for the wealthier tourist. More doubtful is the outlook for the financial services sector, especially if the government is forced to remove secrecy provisions through international pressure. Overall, the medium-term future for Saint Vincent and the Grenadines does not look particularly bright, and the government will face an uphill task in reducing current levels of unemployment and poverty.

The Unity Labour Party, which attained a majority in the 2001 parliamentary elections in March of 2001, has stated that its aim is to add 1,500 jobs to the economy right away, invest in infrastructure to allow for the creation of more jobs in the medium and long term, boost the information technology and tourism industries, and provide more support for the production of bananas, sugar, and arrowroot. However, it is too early to say whether these ambitious plans can be realized, especially as many of these plans rely on government expenditures which may not be possible given existing government funding.

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