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

He said that, in mid-2005, St. Kitts and Nevis stopped commercial production of sugar inresponse to the EU Sugar Protocol, which decreased the intervention price of sugar in theEU by 36 percent. He added that the sugar industry had directly employed 10 percent of thecountry’s workforce and the lack of economic diversity had produced vulnerability. Inresponse, St. Kitts and Nevis put forth a national adaptation strategy to transform itseconomy, emphasizing industries such as tourism, financial services, and information andcommunication technology. He also noted several retraining programs have beenimplemented to increase the skill level of the workforce.To increase international competitiveness, he said St. Kitts and Nevis has begun to focus onmacroeconomic policies to reduce vulnerability and facilitate investment, social policies tosupport economic development, and policies to promote environmentally sustainabledevelopment. He indicated that the ailing sugar industry and posthurricane infrastructurerestoration costs have resulted in a public debt totaling 190 percent of GDP, and that theresulting high debt-servicing costs have led the government to pursue debt restructuring andreduction policies, and the diversification of its national debt portfolio. He noted that St.Kitts and Nevis, with the assistance of USAID, recently established an investmentpromotion agency, or “one-stop shop,” to increase FDI, especially in the tourism sector. Thecountry is also undertaking efforts to modernize its investment incentive regime and reducethe costs of doing business.Government of St. Vincent and the Grenadines 4According to a written submission filed by La Celia A. Prince, chargé d'affaires, Embassyof St. Vincent and the Grenadines, the country, as one of the smallest in the Caribbean, istrying, in conjunction with other small-country members of the Organization of EasternCaribbean States (OECS) to form an economic union. Ms. Prince indicated that the OECSis trying to implement a regional approach to the development and marketing of productsand services to take advantage of economies of scale, and is also proposing free movementof labor. She also stated that regional organizations may help St. Vincent and the Grenadinesattract FDI and diversify away from its major industries of bananas and tourism. She notedrecent and expected continued growth in tourism, agriculture, agro-processing, lightmanufacturing, international financial services, and ICT. She also stated that after twopositive reports, in 1998, the county was removed from a list of countries labeled asuncooperative tax havens.The submission stated that St. Vincent and the Grenadines welcomes the trade benefits ofCBERA and CBTPA, but “there has been little to no significant benefit to the country’seconomy under this trading arrangement” since items with preferential treatment, mainly inthe energy and apparel sectors, are not “within the production capabilities” of St. Vincentand the Grenadines. According to her submission, only a few countries in CARICOM havebenefitted from CBERA/CBTPA, and those benefits have eroded with the implementationof NAFTA. She stated St. Vincent and the Grenadines would like to see CBTPA continuedand expanded to include services.4La Celia A. Prince, chargé d’affaires, Embassy of St. Vincent and the Grenadines, written submission,February 5, 2008. For more information on the Government of St. Vincent and the Grenadines seehttp://www.gov.vc/govt.5-2