Saint Vincent and the Grenadines is a country in West Indies region of the Lesser Antilles Island Arc. It covers an area of approximately 150 square miles with the territory consisting of the main island of Saint Vincent and the northern portion of the Grenadines. Grenadines is a chain of 32 small islands including Saint Vincent. Some of these islands are inhabited but the majority are not. A significant part of Saint Vincent and the Grenadines is within Hurricane Alley. Saint Vincent is bordered to the north by Saint Lucia and to the east by Barbados. The country has a population of approximately 110,000 people and is one of the most densely populated countries in the world with over 300 people/square kilometers.
Economy of Saint Vincent and the Grenadines
The economy of Saint Vincent and the Grenadines is heavily dependent on agriculture. It is the top producer of arrowroot in the world. However, the country’s dominant crop is banana which accounts for more than half of the workforce. The overreliance on a single crop has made the economy vulnerable to external factors. The service sector is mainly based on the growing tourism industry which also plays a critical role in the growth of the economy of Saint Vincent. The government has not been successful in introducing other industries and the unemployment rate remains very high. The manufacturing sector is still small and the small offshore financial sector mainly serves the International Businesses. Saint Vincent and the Grenadines has greatly benefited from the US Caribbean Basin Initiative through the promotion of trade and investment in the region. Below are the country’s biggest industries and their role in the economy.
The agriculture sector has historically been one of the major pillars of the economy of Saint Vincent and the Grenadines. In the years past, banana and root crops were predominant, resulting in agriculture accounting for about 20% of the total GDP. However, with the advance in globalization and the country’s loss of its banana preferential market in the European Union, there has been a significant decline in foreign earnings. Today, agriculture contributes just over 10% of the GDP but still remains the largest source of employment in the country. Banana is still the country’s chief crop, accounting for over 60% of the labor force and 50% of the total export. There has also been increased planting of root crops such as sweet potatoes, cassava, arrowroot, and yam. Saint Vincent and the Grenadines is the world’s top producer of arrowroots. The recent national disasters such as Hurricane Thomas, drought, and excessive rain adversely affected the agriculture sector. Because of the importance of agriculture to the economy, the government of Saint Vincent and the Grenadines is in the process of implementing a number of structural reforms to increase and promote investment in the sector. Some of the reforms include the reorganization of the banana industry and diversification of agriculture.
Tourism is the main component of the service sector and has developed to become an important contributor to the economy. In the early 1990s, the tourism industry supplanted banana export as the main source of foreign earnings. By the end of the decade, earnings from tourism was almost four times that of banana. Saint Vincent is a favorite of the up-market yachting crowd. Yacht visitors have the greatest potential for the development of the tourism industry in the country. Apart from Yachting, tourists also visit the country to enjoy the pristine beaches. Although the beaches are not large and can only accommodate a few visitors, they are still important sources of revenue to the locals and the government. The new investment in tourism infrastructure, especially in the mid-2000s, spurred economic growth by about 5.6% per annum between 2004 and 2008. However, the industry was not spaced by the world economic downtown of 2008 and only returned to modest growth in 2011.
Because of Saint Vincent’s undeveloped economy, the growth of most industries has been dwarfed. The economy is very vulnerable to external factors, as it is heavily dependent on agriculture, especially bananas. The manufacturing industry is very small and accounts for less than 3% of the GDP. The financial service industry mainly consists of offshore banks thank serve the international businesses. However, there is increased demand for financial services such as stock exchange.