|St Lucia Economy|
Located in the eastern section of the Caribbean Sea is the island nation of St Lucia. The island is situated between the island of Martinique (to the north) and St Vincent & the Grenadines (to the south-east). The island is a moderate size covering an area of approximately 238 square miles and has a population of around 178,000 people. Like several other nations and territories in the Caribbean area, the island uses the East Caribbean Dollar as its currency, which is tied to the rate of the US Dollar. The St Lucia economy is quite stable with a few mainstay industries keeping it in this position.
Shift in Agriculture & Trade
St Lucia was first inhabited by Western civilisation in the 17th century with the arrival of the French. The island then became a centre for sugar cane production and this continued even after the island was taken over from the French by the British. Sugar cane demand began to dwindle in the latter part of the 19th century and the start of the 20th century, resulting in the St Lucia economy having to adapt. In the 1920s the island began to take advantage of the production of bananas, which overtook sugar cane as the number one agricultural product.
In today's climate, the agricultural sector on the island has taken quite a knock. The banana trade faced issues in the late 1990s when the European Union stated that it was no longer giving preference to the island's production of the product and as a result the banana trade practically went the same way as sugar cane. As a result, agriculture only accounts for 5% of the country's GDP (Gross Domestic Product). The government is not resting on its laurels and is encouraging farmers to produce crops of mangoes and avocadoes as well as trying to revitalise the banana trade on the island.
Welcome to St Lucia!
The largest sector that contributes to the St Lucia economy is tourism. Thousands of travellers flock to the island every year, with a mixture of overnight travellers and day trippers arriving via cruise ships. Currently the tourism industry makes up around 48% of the country's GDP and has had to recover slightly from events such as the September 11th attacks and the recent recession in some prominent Western countries. These issues have not had a dramatic impact on the tourism sector on St Lucia and associated industries such as construction, retail and hospitality have seen a light growth in the last few years.
Key Contributions from the Finance Sector
Second in terms of contributions to the St Lucia economy is the offshore banking sector. This is a relatively new sector on the island having started in 2000 and was slow in the first few years to get off the ground. This is due to the fact that there were some negative comments about the financial practices on St Lucia, however, the island has tried hard to turn this situation around.
Without a doubt the St Lucia economy is very dependent on the tourism industry, yet has managed to stay buoyant even with several problems having cropped up in recent years. It is certain that the island has room to manoeuvre and diversify in terms of its economy in the years to come.