Poverty Reduction Strategy Paper - UNDP Barbados and the OECS ...

2.2 Causes of Poverty
Several issues have been identified as contributing to poverty in SVG. These range from
the macro and socio-economic to the more elusive aspects of what has been called psycho
economics or the intangibles. For the purposes of this paper the following four (4) have
been employed:
2.2.1. Economic and Social Policies
SVG has adopted various models of development over the years. These have
concentrated primarily on the economic aspects with insufficient attention to the
policies necessary to ensure that social development kept pace with economic
development.
Government’s macroeconomic policies now need to be strengthened to focus on
poverty reduction. At present, the country is seeking to restructure its critical banana
industry even as it strengthens its tourism services and manufacturing sector.
Macroeconomic performance must be improved but not at the expense of equity.
There needs to be a focus on the linkages between agriculture and tourism and
creating opportunities for investment in agro processing in order to build rural
communities. Studies assessing poverty in St. Vincent and the Grenadines indicate
that poverty is greater in the rural areas. Attention needs to be paid to land use and
international trade policies in order to reduce rural/urban migration.
The private sector has traditionally focussed on economics. They now need incentives
to contribute to economic growth in the rural areas through policies that encourage
private sector investment. Policies are also required to support the development of the
small and medium enterprise sector as an important poverty alleviation mechanism.
Social planning policies impact on poverty reduction. The overall development of a
social sector policy is critical. A sector wide approach will provide an enabling
environment for the integration of actions and strategies in the areas of health,
education, employment and other development sectors that will impact more strongly
on the poor. At present the lack of a fully integrated social sector policy and a
coordinated poverty programme has led to the less than efficient implementation of
development programmes in the social sector.
2.2.2. Limited Livelihood security, Low Earnings and lack of Jobs
A major cause of Poverty, substantiated in the Community Consultations has been
attributed to the inability of persons to meet their basic needs due to low earnings and
unemployment - specifically in the banana producing areas.
The impact of the banana fallout on the economic activities in rural communities has
created the greatest effect on livelihood security. The decline in the competitiveness
of the Banana Industry resulted in the restructuring of the industry and the consequent
Final SVG I-PRSP Revision June 2003
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