Caribbean Region: Review of Economic Growth and ... - USITC

ecent years. The government has placed an emphasis on improving health and education services in orderto combat the incidence of poverty.Despite the banana sector’s decline, it remains important, as it is a significant source of direct and indirectemployment and a source of export earnings. Consequently, the sector’s decline poses substantial challengesto the country’s social development in terms of employment and social cohesion. High levels ofunemployment and underemployment (the 2002 estimate for the rate of youth unemployment was 37 percentand 12 percent for adult unemployment) have contributed to an increase in the informal sector; an IMF studyestimated informal sector activity at more than 40 percent of GDP.Domestic EconomySt. Lucia: Selected domestic economy indicatorsMRY(2000–07)Middleincomeaverage,2006Inflation (%, 2006) 2.3 4.3Labor force participation rate, total(%, 2006)Gross fixed capital formation (%of GDP, 2003)Agricultural land (% of land area,2003)Irrigated land (% of cropland,2003)72 7321 2533 3517 18Fixed line and mobile phonesubscribers (per 1,000 people,2002)411 587Number of ports and terminals 3 naPaved roads (% of total, 2000) 5 naCategory 1 and 2 airports, 2007 1 naSources: World Development Indicators; CIA World Factbook.See appendix D for sources and definitions.Source: CIA World Factbook. See appendix D for sources anddefinitions. Data for most recent year available from source.Note: GDP composition data based on 2005 estimate; GDPdata based on 2006 estimate; labor force composition basedon 2002 estimate; labor force data based on 2001 estimate.Note: MRY=most recent year for which data are available; na= “not available.”The services sector contributes approximately 80 percent to GDP, followed by the industrial sector withabout 15 percent, and the remainder contributed by the agricultural sector. Although the country’s economywas once highly dependent on the banana industry, St. Lucia’s economy is now based primarily on tourism,followed distantly by agriculture (banana production), small-scale manufacturing, and construction(infrastructure projects and tourism-related facilities). As a result of EU changes in its preference programs,continued erosion of trade preferences, and increasing competition from other suppliers, particularly LatinAmerican countries, the banana industry in St. Lucia has continued to decline. To counter this trend and todiversify the economy, the government has focused on expanding the tourism sector. It has encouragedinvestment in the tourism sector, such as the development of large-scale resorts. It has also encouragedinvestment in financial services, particularly offshore banking.4-117