A WORLD BANK COUNTRY STUDY PU B-5241 ST. VINCENT AND THE GRENADINES Economic Situation and Selected Development Issues FILE COPY A WORLD BANK COUNTRY STUDY ST. VINCENT AND THE GRENADINES Economic Situation and Selected Development Issues The World Bank Washington, D.C., U.S.A. Copyright (© 1985 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing October 1985 World Bank Country Studies are reports originally prepared for internal use as part of the continuing analysis by the Bank of the economic and related conditions of its developing member countries and of its dialogues with the goverrunents. Some of the reports are published informally with the least possible delay for the use of govern- ments and the academic, business and financial, and development communities. 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The latest edition of each is available free of charge from the Publications Sales Unit, Department T, The World Bank, 1818 H Street, N.W, Washington, D.C. 20433, U.S.A., or from the European Office of the Bank, 66 avenue d'lena, 75116 Paris, France. Library of Congress Cataloging-in-Publication Data Main entry under title: St. Vincent and the Grenadines. (World Bank country study) 1. Saint Vincent and the Grenadines--Economic conditions. 2. Saint Vincent and the Grenadines-- Economic policy. 3. Infrastructure (Economics)--Saint Vincent and the Grenadines. I. International Bank for Reconstruction and Development. II. Title: Saint Vincent and the Grenadines. III. Series. HC156.5.Z7S297 1985 338.97298'44 85-20387 ISBN 0-8213-0625-1 Preface and Abstract This report is based on the work of IBRD economic missions to St. Vincent and the Grenadines in November 1982 and May 1984. The missions consisted of Messrs. James Sackey (mission leader), Roger Robinson (IBRD), and Gerry Ryle (Consultant). Mr. Gerard Byam and Ms. Beatrice Buyck (IARM) provided assistance to the mission on the analysis of external debt and the public sector investment program. The mission collaborated with an IMF Article IV consultation mission on both occasions. The assistance of the OECS Secretariat in the preparation of national accounting statistics is duly acknowledged. The economy of St. Vincent and the Grenadines experienced a moderate GDP growth rate of about 3% p.a. during 1982-83. The finances of the public sector improved, although that of the non-financial public enterprises continued to deteriorate as hasbeen the case over the past 5 years. Following a slight deterioration in the current account of the balance of payments in 1982, there was an improvement in 1983. The key development issues facing the economy include: (a) improvement in the finances of the non-financial public enterprises; (b) solution to the marketing and production problems of the arrowroot and sugar industries; and - (c) administrative reforms in the public sector in order to enable it to cope more effectively with the roles expected of it. On the basis of the moderate economic performance of the last two years and assumptions relating to prudent management of the economy, it is projected that the growth rate of GDP over the medium-term would average about 5% p.a. Continued growth of the economy will also depend on the inflow of external capital, largely on concessionary terms. CURRENCY EQUIVALENTS Currency Unit: East Caribbean Dollar Upon its creation in 1965, the East Caribbean dollar was tied to sterling at the rate t 1.00 = EC$4.8. In July 1976 the link with sterling was broken and the East Caribbean dollar was aligned with the US dollar at the rate US$1.00 = EC$2.70. Since July 1976: EC$1.00 = US$0.370 or US$1.00 = EC$2.700 ABBREVIATIONS AIA Arrowroot Industry Association BGA Banana Growers' Association BOP Balance of Payments CARICAD Caribbean Centre for Development Association CARICOM Caribbean Community CDB Caribbean Development Bank CIDA Canadian International Development Agency CWSA Central Water and Sewerage Authority DEVCO Development Corporation EEC European Economic Community GDP Gross Domestic Product GNP Gross National Product NCB National Commercial Bank NFS Non-factor Services NPF National Provident Fund OECS Organization of Eastern Caribbean States PSIP Public Sector Investment Program SIL Sugar Industry Limited SVMC St. Vincent Marketing Corporation USAID United States Agency for International Development VINLEC St. Vincent Electricity Services Limited Fiscal Year July 1 to June 30 Page 1 of 2 pages COUNTRY DATA - ST. VINCENT AND THE GRENADINES AREA POPULATION DENSITY 388 km2 113,896 (md-1983) 294 par km2 Rate of growths 2.0S (from 1971 to 1983) 557 per km2 of arable land POPULATION CHARACTERISTICS (IS81) HEALTH 1981 Crude Blrth Rate (per 1,000) 29.4 Population per physician 4791 Crude Death Rate (per 1,000) 6.6 Population per hospital bed 1695 Infant Mortality (per 1,000 live births) 45.6 INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP S of notlonal Income, highest qulntile .. * owned by top IO of owners iowest qulntile .. S owned by bottom IO of owners .. ACCESS TO PIPED WATER ACCESS TO ELECTRICITY S of population - urban .. * of population - urban - rural -. rural) NUTRITION EDUCATION (1981) Calorle Intake *c Z of requirements .. Adult llteracy rate S 82 Per capIta protein Intake .. Prlmary school enrollment S 90 Secondary school enrollment S GNP PER CAPITA In 1983a/: US$860 GROSS NATIONAL PRODUCT IN 19S3 ANNUAL RATE OF GROWTH (I, constant prices) US$ Min. * 1977-80 1980-83 1983 GNP at Narkot Prices 88.9 100.0 5.8 4.9 4.7 Grocs Domestic Investment 29.4 33.1 19.9 6.0 15.4 Gross National Savings 22.3 25.1 25.8 19.9 63.1 Current Account Balance -7.2 -8.1 Exporta of goods, NFS 62.4 70.2 16.4 12.7 17.9 Imports of Goods, NFS 83.2 93.6 9.0 9.6 15.8 OUTPUT IN 1983 Valuo Added USS Win. S Agriculture 11.6 15.5 Industry 19.6 26.2 Services 43.7 58.3 Total/Average 74.9 100.0 PUBLIC SECTOR FINANCE Consolidated Public Sector Central Government (ECS Min.) S of GOP ( EC$ Mn.) Z of GOP 1982/13 1983/84 1982 1983 1982/83 1983/84 1982 1983 Currant Receipts 139.5 153.7 58.2 60.0 70.5 78.4 2t.9 30.5 Current Expenditure 137.2 149.9 58.4 58.8 68.2 77.1 29.2 29.8 Current Surplus/deficit 2.3 3.8 -0.2 1.2 2.3 1.3 -0.3 0.7 Capital Expenditures 27.6 20.4 11.2 9.8 24.0 9.7 8.9 13.8 Extornal AssIstance (net) 21.0 13.0 8.7 7.0 16.9 6.7 6.8 4.8 a/ The Por Capita GNP estimate Is at 1983 market prices, calculated by the same conversion technique as the 1980 World Atlas. All othor converaIons to dolars In this toble are at the average exchange rato provaIl- Ing during the perlod covered. .not avalable ,not applicable Page 2 of 2 pages COUNTRY DATA - ST. VINCENT AND THE GRENADINES MONEY, CREDIT and PRICES 1977 1978 1979 1960 1981 1982 1983 (Million EC4 outstanding end perlod) Money and Ouasi Money 52.8 64.9 73.9 79.0 91.0 97.8 108.1 Book Credit to Public Sector 2.5 -0.1 0.8 -0.7 3.3 14.3 13.8 Bonk Crodit to Private Sector 38.3 51.3 55.3 69.0 74.8 66.2 99.4 (Percentage or Index Numbers) Money and Ouasl Money ea X of GOP 56.2 53.2 52.7 50.0 46.2 43.7 44.3 General Price Index (Jan. 1981-100) 64.4 69.8 80.7 94.6 106.6 114.4 120.6 Annual percentage changes in: Generel Price Index .. 8.4 15.6 17.2 12.7 7.3 5.4 Bank credit to Public Sector 316.7 -104.0 900.0 -187.5 571.4 333.3 -3.5 Bank credit to Private Sector 31.2 33.9 7.8 24.8 8.4 15.2 15.3 BALANCE Of PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1979-83) i901 1982 1983 UsS min. 1 (US$ MIllion) Banonaa 8.2 28.1 Exports of Goods, NFS 48.7 52.4 62.4 Flour 5.6 19.2 Imports of Goods. NFS 66.2 74.3 83.2 Arrowroot 0.7 2.4 Resource Gap (dtficit * -) -17.5 -21.9 -20.8 Sweet Potatoes 0.4 1.4 Other Factor Poymante (net) -0.7 -1.8 -1.6 All other cooodities 14.3 48.9 Net Trantefrr 12.1 12.3 15.2 Totol 29.2 100.0 Balance on Current Account -6.1 -11.4 -7.2 MLT Capital Inflow Dlrect Inveetwont 0.5 0.6 3.0 EXTERNAL DEBT, DECEMBER 31, 1983 Official Grant Aid 5.3 5.5 4.2 US$ Min. Foreign Borrowing (net) 2.7 2.3 2.6 Net Credit from IW 1.8 - - Public Debt, IRCI. guaranteed 20.9 Net Short Term Capital -1.1 6.8 -1.1 Nonguaranteod Private Debt Errors and Omissions 2.0 3.9 -1.3 Total outetending & Disbursed Increase In Reserves I-) -0.2 -0.2 -0.2 RATE OF EXCHANGE DEBT SERVICE RATIO for 1983 e/ Since July 1976 Pubile Debt, Ilci. guaranteed 2.4 USSI.OO - EC$2.70 Nonguaranteed Private Debt UStl.00 * US$0.37 Total outstanding * Disbursed IBRO/IDA LENDING, Decembar 1983 Outstandlng A Disbureed Undlaburaed Outstanding Incl. Undisbureed e/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. not available not appilcable ST. VINCENT AND THE GRENADINES Economic Situation and Selected Development Issues TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ix I. RECENT ECONOMIC PERFORMANCE AND PROSPECTS .............. 1 A. Background .*.* ... .......................... .... ...**.... I B. Recent Economic Developments ................ ....... 2 C. Public Sector Investment Program ............ 0.0 .... 7 D. Medium and Long-term Growth Prospects .............. 10 II. POLICY ISSUES IN THE MAIN SECTORS ...................... 13 A. Agriculture and Fishing ............................ 13 B. Tourism .......... *** ............ .. ............... 18 C. Manufacturing ..... .... . .... .*... .. ................. ... 20 III. SUPPORTING INFRASTRUCTURE .............................. 25 A. Economic Infrastructure ............................ 25 B. Social Infrastructure ..... ........... . ............... . 28 C. Administrative Reforms . .................... .... .... 30 D. Government's Development Priorities .... ............ 33 ANNEX I: GOVERNMENT'S PROJECT AND TECHNICAL ASSISTANCE LISTS ........ . . ............................... . 35 ANNEX II: MACROECONOMIC PROJECTIONS .......... .............. 40 ANNEX III: REVIEW OF THE AGRICULTURAL SECTOR ................ 48 STATISTICAL APPENDIX * * * * * * * * * * * ........................ *. .. ...... 58 TABLE OF CONTENTS (Cont'd) TEXT TABLES Table No. Page No. 1. GDP at Constant Factor Cost ........ 3 2. Consolidated Public Sector Balances ......o.0.00 ... 4 3. Balance of Payments -o . .. ....... . .... ... .... . . 6 4. Changing Role of Central Government in PSIP ...... 9 5. Financing Public Sector Investment Program 9 6. Selected Macroeconomic Projections . . ...... 11 7. Balance of Payments Projection ... 4.0-00.00 ........0 12 8. Operations of the AIA ....... ................... . 16 9. Operations of the SIL .............*.*..*.*.*.* 17 10. Selected Tourism Data ..........-...... . ... ... 18 SUMMARY AND CONCLUSIONS Recent Economic Performance and Prospects i. Recent economic development of St. Vincent and the Grenadines has been based exclusively upon agricultural exports, especially of bananas, arrowroot and vegetables . As such, economic growth has been determined by the vagaries of weather and international demand and has exhibited sharp fluctuations. During 1982-83, the economy exhibited signs of a slowdown with GDP growth averaging about 3% p.a., in contrast to the high growth rate in 1981 induced by the reconstruction activities in that year following the natural disasters of 1979 and 1980. The slowdown reflected weak performance in agriculture as a result of a drought in early 1982; decline in tourism resulting from the continuing world recession; limited expansion of both enclave manufacturing and retail activities as a result of, a shortage of factory facilities and the introduction in 1982 of a 3% turnover tax on distributive business; and only modest growth in the other sectors. The rate of increase in consumer prices, however, declined from about 7% in 1982 to about 5% in 1983 reflecting the deceleration in the rate of increase in import prices. ii. After two successive years of deficits in FY80/81 and FY81/82, the public sector current accounts exhibited surpluses in FY82/83 and FY83/84. The improvements in the public sector finances derived largely from surpluses in the operations of the General Government (the Central Government, the Kingstown Board and the National Provident Fund). The finances of the nonfinancial public enterprises, however, continued to deteriorate as has been the case over the past 5 years. The current account deficit of the nonfinancial public enterprises averaged EC$3.6 million p.a. over the past three fiscal years, compared to surpluses of about EC$4.5 million p.a. for the General Government over the same period. The operations responsible for the deficit of the nonfinancial public enterprises are the Arrowroot Industry Association (AIA), the Central Water and Sewerage Authority (CWSA), and the Sugar Industry Limited (SIL). The deficits of these enterprises have been financed by borrowing from the domestic banking system, especially the National Commercial Bank (NCB) whose loan to deposit ratio is currently well above the industry's average and is experiencing liquidity problems. Measures to strengthen the finances of these key nonfinancial public enterprises are being pursued by the Government. iii. Following a strong improvement in 1981 in the current account deficit of the balance of payments, which reflected recovery of the economy after the natural disasters of 1978-80, there was a renewed deterioration in 1982, which was contained in 1983. The deterioration in 1982 resulted from lower export prices and volumes and the decline in tourism; while improvements in 1983 resulted from higher export revenue from higher volumes, despite the slight decrease in export prices. The latter highlights the need to increase exports to counter unfavorable external prices, provided the net benefit is positive. A large proportion of the balance of payments current account deficit has been financed by project- related public foreign capital inflows with implications for the country's - ix - external debt. Outstanding and disbursed public and publicly guaranteed external debt quadrupled from US*4 million or 10% of GNP, at the end of December 1978, to US$20.9 million or 28.5% of GNP at the end of December 1983. The debt service ratio is, however, manageable at below 3% as a result of the highly concessionary terms of the outstanding loans. iv. Public sector investment in FY82/83 increased by about 19% over that of FY81/82, but declined by about 25% in FY83/84. The decline in FY83/84 is attributable to delays in initiating a number of large projects. Public sector investment for FY84/85 is, therefore, projected to increase by over 100% because of the implementation of the proposed Cumberland Hydroelectric project and those projects delayed in the previous year. External financing constituted about 85% of the total investment outlay for FY82/83 and FY83/84. For FY84/85, external financing is expected to decline to about 83% of total projected outlay, thus requiring a greater domestic counterpart contribution. Public sector savings are projected to increase but the increase would not be adequate and the burden on the domestic banking system is likely to be heavy. Efforts in the future to improve further the public sector savings are imperative. v. On the basis of the moderate economic performance of the last two years, despite the general slowdown in the world economy, and assumptions relating to prudent management of the economy, it is projected that the growth rate of GDP over the medium term (1985-90) would average about 5% p.a. and about 4% p.a. thereafter. The projections highlight the types of policies that are needed if the economy is to sustain the moderate growth it experienced in the past. The key factors are the inflows of project- related external resources at concessionary terms; improvements in public sector savings through expenditure controls; and expansion of agriculture, export manufacturing and tourism. Policy Issues in the Main Sectors vi. Agriculture. The most pressing issue facing the agricultural sector at this time is marketing, especially of arrowroot, in which the loss of the US market has caused about 95% of the 1982-83 crop to remain unsold. The marketing problems of St. Vincent and the Grenadines stem from inadequate knowledge of market opportunities, the lack of contacts in prospective importing countries and high cost of local production, resulting in potential export produce being priced noncompetitive in the international markets. The serious shortage of inter-island transport facilities and of adequate cargo space in regular services to countries other than the UK compounds the marketing problems for all agricultural commodities other than bananas. The Government needs to seek external technical assistance to identify solutions for the marketing problems. In addition, the Government needs to improve its agricultural extension and research activities as well as credit activities. In the case of the latter, the agricultural section of the Development Corporation (DEVCO) has recently completed negotiations for a loan with the CDB to provide credit facilities for small farmers. Efforts should also be made to encourage efficient import substitution activities, especially in livestock products which have the potential to substitute for imports and to facilitate exports to the Caribbean. vii. Tourism. The development of the industry to date has been somewhat haphazard, mainly because of the absence of a long-term program identifying the tourism potential of the country and devising strategies for exploiting it. The Ministry of Tourism is expected to receive a tourism adviser under a technical assistance program by the Organization of American States whose main responsibility would be to develop a master plan. It is recommended that in formulating and implementing any long-term tourism plan, emphasis should be placed on promoting the unique character- istic of the country as an unspoiled destination for selective tourism. The Government should also seek technical assistance to carry out a thorough cost-effectiveness study, with special attention to the potential traffic flow, so as to evaluate the extent to which the existing airport facility constitutes a constraint to tourism promotion. viii. Industry. Considerable expansion in enclave industries has taken place in recent years through the promotional efforts of DEVCO, with the help of an external assistance, and the construction of factory shells with Caribbean Development Bank (CDB) financing. The slowdown in factory shell construction in recent years has acted as a disincentive for attracting more foreign enterprises. The Government should speed up its negotiations, with both the Canadian International Development Agency (CIDA) and CDB, for an acceleration in the construction of new factory shells. The principal source of finance for local entrepreneurs seeking to establish new manufacturing undertaking is DEVCO, which also acts as the Government's industrial development agency. DEVCO's responsibilities are very broad, covering industrial development (directly or through equity participation), investment promotion, small industry and agricultural credit, students' loans, land development and farm improvement schemes. The Corporation is constrained by a number of limitations that affect its ability to cover such a wide range: (a) it is deficient in critical managerial and technical staff; and (b) its cash reserves are very low. Because of its present staff constraints, serious consideration should be given to the review of the structure and objectives of DEVCO with the view to limiting its scope of activities commensurate with its resources. Supporting Infrastructure ix. Economic Infrastructure. The main issues on infrastructure are alternative energy development and transportation. Government's efforts in developing the country's hydro potential, with external assistance, are highly commendable. Efforts at determining the country's energy needs and consumption pattern should be strengthened with an increase in the staff at the Energy Desk in the Central Planning Unit of the Ministry of Finance and by the provision of training facilities for the staff of the Energy Desk. In the field of transportation, the major outstanding issues are legisla- tive and manpower constraints in the sea port and airport subsectors and the need for improvements in agricultural feeder roads. The need for a clarification of the relevant legislation on the role of the Harbor Master and the Port Authority is urgent. Similarly, the severe manpower shortage at the airport resulting from its being administered as a department within the Central Government needs to be addressed. x. Social Infrastructure. In an effort to improve the standard of living for the people of St. Vincent and the Grenadines, the Government has increased its efforts in formulating and implementing programs in education, water supply, health and housing. In education, the Government is implementing the recommendations of a UNESCO study that aims at improving the curriculum to make the system meet the current labour needs of the economy. In the area of water supply, the main issues are technical, financial, and managerial. The Government has sought CDB's technical assistance to tackle all three. The health care delivery system is seriously constrained by the shortage of funds, facilities and personnel. There has, however, been considerable progress in the upgrading of physical facilities, and the Government is seeking external technical and financial assistance to solve the other problems. In housing, the reasons for the existing shortage are mainly financial. The development of sa-ings institutions, earmarked for the low income groups, should help ameliorate the problem in the long-term. xi. Administrative Reforms. The rapid expansion of the public sector has highlighted the need for reorganization to enable it to cope more effectively with the roles expected of it. Its main weaknesses relate to (a) clarification of the functions of various administrative units in order to avoid duplication and misallocation of resources; (b) substantial shortage of technical/professional and senior personnel compounded by a large number of low-level non-technical personnel whose supervision needs are tremendous; and (c) the lack of coordination between various ministries and the associated non-compliance and irregulerities in operational procedures. The Government is cognizant of the weaknesses of the system and in its FY82/83 Budget document indicated interest in reorganization of the public sector. Technical assistance from the Public Sector Management and Planning section of the OECS Economic Affairs Secretariat and the Caribbean Centre for Development Administration was obtained in 1983 and a preliminary consultant report on the reorganization of the Ministry of Finance, Planning and Development was submitted to the Government in mid-1983 and is under review. It is recommended that the reform proposals of the various consultant reports, once reviewed, should urgently be implemented with the view to improving the functioning of the public sector. xii. Government's Development Priorities. During the writing of this report, a new Government of St. Vincent and the Grenadines was installed following a general election on July 25, 1984. The new Government has indicated its desire to tackle the principal policy issues discussed above in a speedy manner. In particular, it is committed to: (a) strengthening the finances of the public sector by dealing with the problems of the arrowroot and sugar industries and by undertaking necessary administrative reforms; (b) encouraging the development of the private sector in the industrialization process in an effort to reduce unemployment; and (c) pursuing sectoral policies in agriculture, tourism, infrastructure, health and education that are directed at accelerating economic development in St. Vincent and the Grenadines. The Government's intentions, while still in the process of formulation, appear to be in the right direction and should be encouraged. CHAPTER I - RECENT ECONOMIC PERFORMANCE AND PROSPECTS A. Background 1.01 St. Vincent and the Grenadines, one of the less developed countries (LDCs) of the Eastern Caribbean, situated in the Windward Islands chain, is endowed with a tropical climate, ample rainfall, alluvial soils and verdant plains traversed by fast flowing rivers. The virtually impenetrable range of volcanic mountains require that, for the most part, the country's population of about 110,000 live along the coastlines of the black sand beaches of the main island. One of the country's greatest assets may well be in the still untapped potential of its dependencies--the Grenadines, a chain of eleven smaller islands extending southward with high potential for yachting and tourism. 1.02 The population is well educated, with an adult literacy rate of about 80%. Almost 70% of the population is under the age of 25, resulting in a relatively high dependency ratio. In spite of a rapid decline in the infant mortality rate, from about 69.6 per 1000 of live births in 1972 to about 45.6 in 1981, the average annual rate of population growth in recent years has slowed to about 2%, owing mainly to increased emigration and to a slight decline in the birth rate. The young population, however, has led to a steady stream of school leavers who have caused the labor force to increase at a much faster rate than can be absorbed by the economy. 1.03 In accordance with its resource endowment, the country's economic development has been based on export agriculture, largely bananas, arrowroot and vegetables, and to some extent on tourism. More recently, an embryonic manufacturing sector has emerged. The pace of ecoi,,mic development has, however, not been sufficient to generate adequate employment for the burgeoning labor force; unemployment is the country's most serious problem. Although no accurate data exist, the Labor Commission estimated it at 20-25% of the labor force in 1982, compared to about 10% in 1970. Economic Developments; 1970-81 1.04 Recent economic development of St. Vincent and the Grenadines was based exclusively upon agricultural exports, especially of bananas, arrowroot and vegetables. As such, economic growth has been determined by the vagaries of weather and international demand and has exhibited sharp fluctuations. Like most other islands of the Eastern Caribbean, it found its economy buoyed along by favorable external conditions during the 1960s. A combination of events during the early 1970s, however, led to prolonged economic stagnation. Adverse weather conditions (highlighted by severe droughts in 1973 and 1975) seriously depressed agricultural output and exports. Falling world prices for the country's main export commodities caused the performance of the key sectors to deteriorate even further. In particular, arrowroot exports declined in 1973 to 31% of their 1966 level as the entry of substitute starches into the world market depressed arrowroot prices. The deteriorating economic conditions were further exacerbated by the escalation of consumer prices which commenced in 1973 and continued at a rapid pace as oil prices quadrupled. The economy was thus confronted with simultaneous inflation, stagnation and deteriorating employment opportunities. Tourism, however, surged briefly, benefiting from political disturbances in nearby islands, although not sufficiently to offset the impact of other unfavorable economic developments. In spite of the stagnation, both private and public consumption levels were maintained by a high level of private remittances from abroad, and to a lesser extent, by UK budgetary assistance. These external inflows covered large resource gaps and made possible consumption levels far in excess of GDP. 1.05 In an attempt to arrest the economic decline, the Government placed strong emphasis on export diversification in 1975. Lands previously used for arrowroot cultivation were shifted to banana, vegetable and tobacco production; and large estates were converted into small plots with the objective of increasing output and creating additional employment opportunities. The economic outlook brightened during 1976-78 as a result of several favorable events. Ideal weather conditions combined with increasing world demand and prices and increased public sector capital expenditures in agriculture led to a vigorous output expansion of most agricultural products, particularly bananas and vegetables. Economic activities, however, slowed down again during 1979-80 as a result of a volcanic eruption in 1979 and a major hurricane in 1980 which impacted largely on agriculture. Following a timely rehabilitation program, the economy rebounded strongly in 1981 when GDP at factor cost grew by about 9% in real terms. The rapid recovery was led by the agricultural sector where production reached 1978 levels and by continued expansion of enclave industries. Inflation, meanwhile increased from 8% in 1978 to about 17% in 1980, but subsequently declined to about 13% in 1981 reflecting the deceleration of global inflation. B. Recent Economic Developments GDP Growth 1.06 In contrast to the high growth rate in 1981, induced by the reconstruction activities of that year, the economy of St. Vincent and the Grenadines exhibited signs of a slowdown during 1982-83. It is estimated that GDP grew by an average of 3% p.a. during the period and it is projected that the slowdown will persist in 1984. The continuing slowdown of the economy resulted from the weak external demand for arrowroot and the limited expansion of both enclave manufacturing and domestic retail activities as a result of, respectively, the shortage of factory facilities and the introduction in 1982 of the 3% turnover tax on distributive business. -3- Table 1: GDP at Constant Factor Cost (Annual Percentage Change) 1980 1981 1982 1983 GDP at Factor Cost 4.3 9.3 2.5 4.1 Agriculture, Fishing & Forestry -13.6 51.2 -3.3 5.1 Industry 5.3 3.1 3.8 3.3 Manufacturing (4.7) (1.8) (6.2) (2.5) Construction (5.7) (4.5) (0.0) (0.9) Services 8.4 3.4 3.6 4.1 Wholesale and retail trade (3.7) (-3.6) (3.7) (0.9) Hotels and restaurants (27.6) (-13.5) (6.3) (2.9) Source: Table 2.2. 1.07 Production in the key sectors, banana and tourism, experienced some improvement in 1983 over that of 1982. Banana production, which declined by about 4% in 1982 because of a prolonged drought in the early part of the year, grew by about 4% in 1983. Tourism grew modestly in 1983, following the decline in 1982, as a result of the military intervention in neighbouring Grenada which led to its wharfing activities being redirected to St. Vincent and the Grenadines. The total number of visitors grew by about 8% in 1983, compared to the 5% decline in 1982. This growth appears temporary and therefore the need to upgrade and expand St. Vincent and the Grenadines' tourism promotional program is imperative in view of the aggressive promotional activities now taking place in Grenada. Expansion in manufacturing output was modest while construction activities were stagnant during 1982-83 as a result of the general slow down in new investment activities, especially in enclave manufacturing. Growth in the other sectors of the economy during 1983 followed the modest trend in the main sectors, with the main significant growth being exhibited by electricity and water (both as a result the implementation of much needed rehabilitation and expansion projects) and Banking and financial services. The rate of increase in consumer prices declined from about 7.3% in 1982 to about 5.4% in 1983, reflecting a deceleration in the rate of increase in import prices. Public Sector Finances 1.08 After two successive years of deficits in FY80/81 and FY81/82, the public sector current accounts exhibited surpluses in FY82/83 and FY83/84. The improvements in the public sector finances resulted from surpluses in the operation of the General Government (the Central Government, the Kingstown Board and the National Provident Fund). As has been the case of the past five years, the finances of the nonfinancial public enterprises continued to deteriorate. The operations responsible for the deficit of the nonfinancial public enterprises included the Arrowroot Industry Association (AIA), the Central Water and Sewerage Authority (CWSA) and the Sugar Industry Limited (SIL). The deficits of these enterprises have been financed by borrowing from the domestic banking system, especially the National Commercial Bank (NCB) whose loan to deposit -4- ratio is currently well above the industry's average and is experiencing liquidity problems. Measures to strengthen the finances of the three nonfinancial enterprises are necessary as discussed below. Table 2: Consolidated Public Sector Balances (EC$ million) Actual Est. Projected 1981/82 1982/83 1983/84 1984/85 Consolidated Current Account Balance -3.4 2.3 3.8 3.9 General Government 0.1 6.6 6.9 7.2 (of which Central Government) (-4.4) (2.3) (1.3) (0.2) Nonfinancial Public Enterprises -3.5 -4.3 -3.1 -3.3 (of which: (AIA) (-3.0) (-1.8) (-0.2) (-0.8) (CWSA) (-1.0) (-1.2) (-1.2) (-1.2) (SIL) (-4.0) (-4.7) (-5.3) (-4.4) Capital Expenditure & Net Lending 22.4 27.6 20.4 45.4 Overall Balance -25.8 -25.3 -16.6 -41.5 Financing External (Net) 18.0 21.0 13.0 33.1 (of which Capital Grants) (13.9) (14.8) (8.2) (14.6) Domestic (Net) 7.8 4.3 3.6 8.4 Source: Table 5.6. 1.09 A number of fiscal measures were implemented in FY83/84 with both positive and negative impacts on the Central Government current revenues. Those with positive impacts on current revenues included: a special levy of EC$4.80/gallon on imported aerated waters; an increase from 1% to 2% of the annual levy imposed on interest bearing deposit balances at commercial banks; transient traders licence of either EC$1000 per annum or EC$250 per visit; an annual resident permit equivalent to the existing fee for tempo- rary residence; consumption tax on wines; and special duties on spirits. Together, those new measures were expected to yield about EC$959,000 in new revenues. In contrast, two new tax concessions granted in FY83/84 would have negative impacts (approximately EC$511,000) on the Central Government revenues. They were (a) the abolition of income tax on all pensions, including social security payments, whether earned locally or abroad, and (b) the reduction of consumption tax on aerated waters from EC$1.60/gallon to EC$0.80/gallon in an effort to promote production in the local soft drinks industry and to effect a reduction in price to the consumer. Of the new fiscal measures, the increase in the annual levy imposed on interest bearing balances at commercial banks might have a much greater negative implication for private domestic savings. The levy would increase costs for the commercial banks, lower interest rates on private deposits and likely limit potential private savings. A careful review of this measure is warranted before further increases in the rate of the levy are proposed in the future. -5- 1.10 Despite the weak financial performance experienced by the AIA, CWSA and SIL, the finances of the other nonfinancial public enterprises generally improved. The Banana Growers' Association (BGA) exhibited a slight decline in current revenues during FY81/82-FY82/83 as a result of the depreciation of the British pound sterling relative to the US dollar. Increases in export volumes in 1983 however helped to restore the Association's modest current account surplus. The other nonfinancial public enterprises have continue to be net creditors to the system as a result of tariff changes and the implementation of cost reduction policies. 1.11 Despite substantial increases in water charges in January 1981, the operating deficit of the Central Water and Sewerage Authority (CSWA) continued to deteriorate as a result of escalating costs. The tariff increase has also had a minimal effect because of the large percentage of unmetered connections, in the existing system. The Caribbean Development Bank (CDB) has recently approved a loan for EC$1.3 million to cover the cost of metering. The financial position of the CWSA can only be improved under the present circumstances by (a) formulating and implementing revisions in the tariff system following the installation of meters, and (b) improvements in the efficiency of the water supply through tackling CWSA's technical problems that include inadequate storage facilities and leakages in the distributive system. Significant financial problems characterize the operations of the AIA and the SIL. Both may be traced to serious production and marketing problems which are analysed in detail in subsequent chapters. Money and Credit 1.12 Net domestic credit of the commercial banks1/ grew by about 19% in the 12-month period ending March 1984; this was not matched by a corresponding increase in the banks' liabilities to the private sector. The strong increase in net domestic credit reflected a sharp rise in the public sector borrowing as well as an increase by about 13% in private sector loans. The pattern of credit to the private sector, nevertheless, reflected previous trends and may have negative implications for the productive sectors, especially tourism and agriculture. Policies which aim at encouraging the commercial banks to increase their exposure in these two sectors should be formulated and implemented. They may include differential requirements on the legal lending rates. 1.13 The increased net domestic borrowing requirements of the public and private sectors have been met largely by loans and advances from the National Commercial Bank (NCB). Its net credit to the Central Government and the private sector increased by about 88% and 26% respectively, compared to 23% and 10% respectively by the rest of the commercial banks. 1/ There are four branches of foreign banks and the state owned National Commercial Bank (NCB). The analysis excludes, for lack of data, the Cooperative Bank and the Agriculture Credit and Loan Bank which are both not commercial banks by the strict legal definition but do take deposits and make loans. -6- This has implied a higher loan to deposit ratio for the NCB than the industry's average, with associated liquidity constraints. The Government is exploring various approaches to assist the NCB to improve its liquidity position. 1.14 With a view to improving the allocation of bank credit and the incentives for savings, the commercial banks raised their prime lending rate to 10% in early 1982 and up to 12% in 1983; while deposit rates have also been adjusted upward in 1983 by some banks to 5% for saving deposits, 5.5% for 3, and 3-6 months time deposits, and 5-7.5% for 6-12 months time deposits. The low interest rate structure derives from the wide operating spread adopted by the banks which are constrained by legal maximum lending rates of 12.5% for most loans and 14.5% on certain consumer loans under EC$14,500. Loans to the Central Government and statutory bodies are subject to stipulated interest rates of 8% to 10%. The commercial banks are also subject to deposit liabilities which was increased from 2.5% to 7.5% in October 1983 (but now with accruing interest payment of 2.5% p.a.) and a levy of 2% on the interest bearing deposits. In order to further improve the incentives for saving and the allocation of bank credit, the Government should review the structure of bank interest rates with the view of reducing the spread and the cost of banking. External Sector 1.15 The external sector of a small economy, like that of St. Vincent and the Grenadines, is exogenous for policy purposes but prudent policies formulated and implemented in the domestic sector are necessary to support the economy against inevitable negative external shocks. Government policy has, therefore, been directed at a constant review of the country's balance of payments by maintaining the deficits within prudent limits. Following a strong improvement in 1981 in the current account deficit, which reflected recovery of the economy after the natural disasters in 1978-80, there was a renewed deterioration in 1982, which was contained in 1983. The deterioration in 1982 resulted from lower export prices and volumes and the decline in tourism. The improvements in 1983 resulted from higher export revenue from higher volumes, despite the slight decrease in export prices. The latter highlights the need for increasing production to counter unfavorable external prices, provided the net benefit is positive. Table 3: Balance of Payments (US$ million) 1980 1981 1982 1983 Exports of Goods & NFS 39.6 50.1 53.5 63.7 Imports of Goods & NFS 65.1 68.3 77.2 86.1 Resource Balance -25.5 -18.2 -23.7 -22.4 Factor Services & Transfers 12.2 12.1 12.3 15.2 Current Account Balance -13.2 -6.1 -11.4 -7.2 Private Capital 1.1 0.5 0.6 3.0 Public 8.8 9.6 8.3 6.9 Banking System 1.6 -2.0 6.4 -1.4 Errors & Omissions 1.7 -2.0 -3.9 -1.3 Memo Items (X) Resource Balance/GNP -44.2 -25.2 -29.2 -25.2 Current Account Balance/GNP -22.9 -8.4 -14.1 -8.1 Source: Table 3.1. -7- 1.16 The trade deficits have been financed largely by transfers, while a large proportion of the balance of payments current account deficits has been financed by project-related public foreign capital inflows. Project financing has accounted for most of the variation in external capital flows and this component is expected to increase significantly in the next few years as a result of the Cumberland Hydroelectric project. The external inflows have implications for the country's external debt service. During the period from 1978 to 1983, outstanding and disbursed public and publicly guaranteed debt (excluding undisbursed) quadrupled from US$4.0 million or 10% of GNP, at the end of December 1978 to US$20.9 million, or 28.5% of GNP at the end of December 1983. The disbursement of CDB loans especially during 1979-81 for the Sugar Industry Ltd. and the dairy plant accounted for the sharp increase. The debt service ratios in FY83 remained at the low 2.0% and 2.4% of GNP and of Exports of Goods and Non-factor services respectively, as a result of the highly concessionary terms of the outstanding loans. C. Public Sector Investment Program Background 1.17 Public sector investment in FY82/83 increased by about 19% over that of FY81/82, but it is estimated to decline by about 25% in FY83/84. The fluctuations in the level of investment are not unusual as the size of the investment package in any given year has depended on the magnitude of external inflows, estimated at over 85% of the total public sector investment over the past 5 years. For FY83/84, the public investment to GDP ratio was only about 7%, the lowest since FY78/79 when it was about 4%. The sharp decline in the level of public investment in FY83/84 is attributable to delays in initiating key projects which included the USAID financed Agricultural Diversification Program (estimated at EC$6.8 million), the CDB financed Agriculture Feeder Roads III (estimated at EC$19.6 million) and the Cumberland Hydroelectric project (estimated at EC$89.4 million). Public sector investment for FY84/85 is, therefore, projected at EC$45 million, about 16% of projected GDP. External financing constituted about 85% of the total investment outlay for FY82/83 and FY83/84. For FY84/85, external financing is expected to decline to about 83% of total projected outlay, thus requiring a greater domestic counterpart contribution. Public sector savings are projected to increase in FY84/85, but the increase would not be adequate and the burden on the domestic banking system is likely to be heavy. 1.18 Program implementation during FY82/83 and FY83/84 was satisfac- tory, except for some cash flow problems associated with CDB-financed DEVCO projects in FY82/83. The CDB suspended disbursements on some of its loans to DEVCO in FY82/83 because of procedural problems which were settled in early 1984. Completion of the Kingstown Harbor Expansion project which was scheduled for FY83/84 is delayed until FY84/85 because of technicalities associated with CDB's disbursement procedures; the CDB requires the Government to contribute its counterpart funds before its disbursements for the project are resumed. Project monitoring remains very weak. The Central Planning Unit of the Ministry of Finance, Planning and Development, -8- the principal institution which is responsible for project monitoring, is understaffed. The other project executing ministries are also understaffed with adverse effects for project monitoring. The Government is cognizant of the problem and has requested technical assistance to reorganize the public sector from the Caribbean Centre for Development Administration and the Economic Affairs Secretariat of the OECS. Government's Development Strategy and PSIP 1.19 The Government's development strategy focuses on export promotion and employment generation based on agriculture, industry and tourism, and on the satisfaction of the most basic needs of the population. The overall composition of the PSIP appears consistent with the Government's develop- ment strategy and should, in general, be maintained. 1.20 The authorities have not drawn up a formal PSIP and financing plan for FY84/85 - FY89/90, pending the completion of its proposed medium- term development plan. As a result of recent change in Government, matters related to the preparation and timing of the development plan are currently under review. However, in its annual Budget exercise for FY84/85, the Government identified an extensive list of projects in varying stages of implementation. The mission reviewed these projects and on the basis of identified sources of financing, projected the public investment for FY84/85 as EC$44.7 million with ongoing projects constituting about 45% of total outlay. The program would imply about 135% increase in expenditures over that of FY83/84, mainly because of projected outlays for key projects in the power sector. Outlays on the power sector, mainly through the execution of the Cumberland Hydroelectric project, would constitute about 25% of the total projected expenditures for FY84/85. Apart from the emphasis on power, the program is similar to the public sector investment pattern during the past 5 years and is consistent with the Government's objective of providing the necessary supporting infrastructure for the development of the economy. 1.21 A feature of the composition of the PSIP over recent years, with implications for project execution and financing, is the decline in the Central Government's share of total investment outlay. Since FY81/82, the percentage of total outlay attributed to the Central Government has declined from 80% to the projected 42% for FY84/85. The decline in the role of the Central Government in direct public sector investment, also manifested in nominal terms, may be attributed to a policy shift on the part of many aid donors to minimize program-type support and to direct assistance to specific sectors, which in St. Vincent and the Grenadines, are dominated by public sector enterprises. Furthermore, with the termination of the capital revenue flows from the United Kingdom since FY80/81, the Central Government's role in public investment has concen- trated on the provision of basic infrastructure in transportation, health and education to support the private and the rest of the public sectors. Central Government investment activities in the directly productive sectors (agriculture, forestry, fishing, manufacturing, and tourism) are directed at infrastructure development and problem solving through investigative studies. The implications for program implementation of the shift in the relative role of the Central Government vis-a-vis the rest of the public sector are possible improvements in project execution which will result from greater agency control over day to day management. -9- Table 4: Changing Role of Central Government in PSIP 1981/82 1982/83 1983/84 1984/85 Total Capital Expenditures EC$ million 21.5 25.4 19.0 44.7 Central Government 17.2 20.0 9.7 18.8 Rest of Public Sector 4.3 5.4 9.3 25.9 As Percentage of total Outlay 100.0 100.0 100.0 100.0 Central Government 80.0 78.6 51.0 42.1 Rest of Public Sector 20.0 21.4 49.0 57.9 As Percentage of GDP market Prices 10.2 10.9 7.4 16.0 Central Government 8.2 8.5 .o8 6.7 Rest of Public Sector 2.0 2.4 3.6 9.3 Source: Table 5.8 - 5.9. Selected Implementation Issues 1.22 Financing. St. Vincent and the Grenadines has relied to a large extent on highly concessional capital inflows to finance its PSIP and hopes to continue mobilizing external resources on concessionary terms. However, in order to continue to receive the support of external donors for its development efforts, it will have to increase its efforts to provide an adequate local counterpart contribution. After a number of years of negative public sector savings, the finances of the public sector have improved with current account surpluses in FY82/83 and FY83/84. The dependence on the domestic Banking system to finance the PSIP for FY82/83 and FY83/84 thus declined from EC$6.9 million in FY81/82 to an average of EC$2.2 million in both years. Of the proposed public sector investment expenditures amounting to EC$44.7 million in FY84/85, the Government expects to mobilize about EC$37.9 million or 85% of the total program outlay from external sources. Some EC$14.2 million, or 32% of the total program outlay, are already available for ongoing projects with firm commitments, leaving EC$23.7 million (or US$8.8 million) to be further mobilized. The domestic counterpart requirements amount to EC$6.8 million and will place a heavy burden on the domestic banking system if public sector savings are not increased beyond current levels. To accomplish this goal, the Government should implement policies to improve the finances of the non-financial public enterprises, notably the Sugar Industry Limited and thv Arrowroot Industry Association, and thus reduce their dependence on the domestic banking system. Table 5: Financing Public Sector Investment Program (EC$ million) 1981/82 1982/83 1983/84 1984/85 Capital Expenditure 21.5 25.4 19.0 44.7 Public Sector Savings -3.4 2.3 3.8 3.9 Net External Grants & Loans 18.0 21.0 13.0 37.9 (Committed) (18.0) (21.0) (13.0) (14.2) Net Domestic Banks 6.9 2.1 2.2 2.9 Source: Table 5.7. - 10 - 1.23 Institutional Development. Project preparation and execution in the past, as noted in previous memoranda, have suffered from the limited availability of local administrative and managerial skills. Accordingly, a substantial component of technical assistance in the areas of feasibility studies, project preparation and implementation, institution building, and management and technical training had been included in past investment programs. Furthermore, the authorities have requested additional technical assistance from the major aid donors to explore, among other things, new areas of investment in agricultural planning, tourism development and alternative energy sources. They have also indicated their willingness to use the services of outside contracting firms to implement projects whenever appropriate. These measures should minimize the existing burden on the public sector, provide training, strengthen institutions and prevent serious bottlenecks from obstructing the implementation of ongoing PSIP. D. Medium & Long-Term Growth Prospects 1.24 The moderate economic performance of the last two years, despite the general slowdown in the world economy, provides some indication of the prospects for the economy of St. Vincent and the Grenadines. On the basis of assumptions relating to prudent management of the economy in the future, an analysis of the growth prospects for the period 1985-1995 is conducted. Annex II outlines the key assumptions of the projections. In this section, the focus is on the policy implications. Growth and Employment 1.25 The medium- and long-term prospects for the economy depend on the continued expansion of agriculture, export manufacturing and tourism. Given the unexploited potential in agriculture, manufacturing and tourism, there are good prospects for rapid growth, provided project-related aid resources to finance the required supporting infrastructure continue to flow in at the anticipated rate on a timely basis. It is expected that the growth rate of GDP (at factor cost) over the medium term (1985-90) would average about 5% p.a. and about 4% p.a. thereafter, led by a strong expansion in construction as a result of the Cumberland Hydroelectric Project. The growth in agriculture is expected to be slow at the initial stages as attempts are made to rehabilitate or replace arrowroot; thereafter growth is projected to be modest. Both tourism and manufacturing are expected to be sluggish during a period of transition when attempts are made to resuscitate these industries; but modest growth rates are projected after 1990. 1.26 On the basis of anticipated high external resource inflows (especially associated with the Cumberland Hydroelectric and the Agricultural Diversification projects), gross domestic investment during the medium-term is projected to be high, averaging about 34% of GDP during 1985-1989. Gross domestic investment is expected to peak in 1987 at the high level of implementation of the Cumberland Hydroelectric Project (35% of GDP), and decline thereafter to about 31% of GDP by 1995. On the basis of the expected expansion in construction activities (because of the commencement of a large number of key new projects), the unemployment rate, - 11 - which is currently asserted by the Labour Commission to be between 20-25% of labor force, may be expected to decline below 20% by the end of the decade. The expected rise of employment and the improvements in personal incomes should improve the domestic savings from the existing estimated 5% of GDP in 1982 to the projected 10% of GDP by 1995, if appropriate interest rate policies are implemented. Table 6: Selected Macroeconomic Projections (In Percentage) 1982 1983 1984 1985-89 1990-95 GDP (factor cost) Growth 2.5 4.1 2.3 4.7 4.2 Investment/GDP 31.2 34.5 29.0 33.6 31.0 National Savings/GDP 18.4 22.3 16.4 17.1 20.3 Domestic Savings/GDP 4.8 6.3 4.5 5.6 8.6 Consumption/GDP 95.2 93.7 95.5 94.4 91.4 Source: Annex II. Public Sector Finances 1.27 The public sector finances should be expected to improve in the long-term if measures to strengthen the weak finances of the nonfinancial public enterprises (notably the AIA and the SIL) are able to reduce their deficit to zero by 1988. Policies proposed in subsequent chapters with respect to the AIA and SIL are imperative if the projected increase in the public sector savings from 1.5% of GDP in 1984 to 6.5% of GDP in 1995 is to be realized. The Central Government current revenues are expected to rise rapidly as tax revenues from international trade transactions increase as a result of the expansion in those activities and proposed improvements in tax administration. Income tax revenues are also projected to rise as employment and incomes increase. On the other hand, Central Government expenditures (especially those relating to wages and salaries) should be restrained by moderation in employment and wage practices if the projected savings targets are to be met. Although the public sector capital investment is expected to be high because of the proposed hydroelectric project, public sector reliance on the domestic banking system is projected to be low (from the estimated EC$5.1 million in 1984 to EC$0.5 million in 1993 and zero thereafter). This is because of the large expected foreign inflows (in terms of grants and concessionary loans) associated with the planned investment program. Balance of Payments and External Debt 1.28 The expected expansion in project-related activities during the period suggests that imports of capital goods are likely to rise rapidly, especially during the first half of the period (1985-1990). Exports are also expected to recover rapidly, especially during the second half of the period if new manufacturing establishments become fully operational and planned diversification in export agriculture is implemented. The resource balance is projected to increase from -US$20.8 million in 1983 to -USS68.9 million in 1995 (Table 7). The current account deficit of the - 12 - balance of payments (BOP) is thus projected to increase from US$7.2 million in 1983 to about US$30.2 million in 1995. The current account deficit is expected to be financed largely by project-related grants and loans especially during the first half of the period supplemented by private capital inflows during the second half of the period. The BOP current account to GDP ratio is therefore projected to increase from -8.3% in 1983 to -11.9% in 1988 and decline thereafter to -9.1% in 1995. Table 7: Balance of Payments Projection (US$ million) 1983 1984 1985 1990 1995 Exports of GNFS t2.4 68.3 75.4 134.9 225.2 Imports of GNFS 83.2 86.2 99.6 176.7 294.0 Resource Balance -20.8 -17.9 -24.2 -41.8 -68.9 Net Factor Income -1.6 -1.6 -2.2 -3.8 -6.8 Private Transfers 15.2 13.0 14.8 27.4 45.0 Current Account Balance -7.2 -6.5 -11.6 -18.2 -30.2 Net Public Sector 6.9 6.2 11.5 15.0 18.3 Net Private Sector 3.0 0.3 C.2 3.3 11.9 Memo Item: Current Acct/GDP (%) -8.3 -6.8 -10.7 -9.1 -9.1 Source: Annex II. 1.29 The external debt, which is estimated at US$20.9 million in 1983, is projected to more than double over the medium- and long-term period because of the expected increase in project-related loans to finance the public sector investment program. The debt-service ratio was about 2.4% of exports of goods and nonfactor services in 1983. Provided the Government succeeds in mobilizing external assistance in the form of grants and loan on largely concessionary terms during the period 1985-1995, the annual debt service ratio should not exceed 5% which is manageable. 1.30 The projections, even though they are fairly simple, highlight the types of policies that are needed if the economy of St. Vincent and the Grenadines is to sustain the moderate growth it has experienced in the past. The key factors are the inflows of project-related external resources at concessionary terms (an exogenous factor); improvements in domestic savings via the promotion of positive public sector savings through expenditure controls; and expansion of agriculture, export industries and tourism. The Government in the past has followed a moderate fiscal policy and it iB expected that policies relating to improving the weak finances of the nonfinancial public enterprises (notably AIA and SIL) would be implemented. The public sector investment program is directed at providing the necessary support for the expansion of agriculture, export industry and tourism. Provided the Government succeeds in mobilizing external resources, largely on concessionary terms to support its investment program, the moderate economic outlook projected may be attained. - 13 - CHAPTER II - POLICY ISSUES IN THE MAIN SECTORS 2.01 The prospects for economic growth in St. Vincent and the Grenadines depend crucially on the adoption of adequate policies for the main sectors of the economy to tackle the major constraints facing the economy. The constraints are (a) the inability of the economy to generate adequate domestic savings because of low output and productivity, (b) the lack of adequate technical and managerial manpower, and (c) the limited physical infrastructure. The objectives of the discussion in this chapter are to assess the role of ongoing programs in the main sectors of the economy in alleviating the constraints noted above and to raise policy issues specific to each sector. A. Agriculture and Fishing 2.02 The agricultural sector, while declining somewhat in recent years as a result of unfavorable weather and natural disaster, has managed to retain a position of crucial importance in the economy. It accounts for about 15% of GDP, 20% of the labor force and 40% of the country's export earnings. Banana (the prime commodity by a large margin), ground provisions (sweet potatoes, plantains, eddoes and dasheens, etc.) and arrowroot account for the major share of total output and exports. Sugar was re-introduced in 1980 with the intention of meeting domestic demand. Inadequacy and instability of returns to export crops have been major problems over the years. They were particularly acute in 1982 with falling returns from bananas as a result of the depreciation of the pound sterling and lower output resulting from a prolonged drought, an almost total collapse of the market for arrowroot starch, and ongoing difficulties with the marketing of ground provisions, vegetables, etc. 2.03 Higher levels of agricultural production are crucial for improving personal income levels and associated domestic savings. Severe drought from 1973 to 1975, the eruption of Soufriere volcano in 1979 and a hurricane in 1980 were among the major factors that suppressed agricultural growth. The level of domestic oriented agricultural outputs has fallen far short of domestic requirements in recent years, necessitating relatively large food imports and a corresponding foreign exchange drain. Food imports include grain and cereal products, dairy and poultry products, meats, processed fruits and vegetables, various fats and oils, legumes and fish which can be produced locally. There is, thus, the need for a significant expansion in agricultural production both for domestic consumption and for export. The Government is aware of this need and recent subsector policies have been formulated in that spirit. A detailed analysis of the sector is provided in Annex III to this report. The following sections briefly highlight the priority policy issues. General Issues 2.04 Marketing. Three important components of the marketing problems of St. Vincent and the Grenadines can be identified--market information, storage, and packaging and processing. Aside from bananas and arrowroot whose marketing is handled by the respective organizations, a substantial proportion of the remainder of the export crops is handled by the - 14 - St. Vincent Marketing Corporation (SVMC) whose services cover collecting, bagging, shipment and the collection and distribution of receipts. The remainder of the export trade is handled by private traders who provide services from the farm gate onward. Although the role of the SVMC is satisfactory within its limited resources, the services provided by the individual operators tend to be inadequate, especially as relating to grading and packaging. Furthermore, recent licensing policies by Trinidad and Tobago, the principal market, have affected the volume of trade by the private operators. The issue of marketing must be treated in a coordinated way if the situation is to be dealt with effectively. This can only be achieved through a major and coordinated effort to identify markets, the most suitable ways of selling into them and the most effective form of product. Once these have been identified, appropriate storage, processing and packaging facilities can be assessed and provided. A number of ongoing and proposed projects in the PSIP are directed at the latter issue relating to storage, processing and packaging. 2.05 Import Substitution. The main agricultural products, bananas and arrowroot, are oriented towards the export market. Substantial quantities of livestock and fishery products imported could be produced locally by increased production effort. Development possibilities for livestock are, however, constrained by the small size of existing stock because of problems of the two natural disasters in 1979 and 1980; most of the livestock population was disposed of by owners to earn cash after destruction caused to crops reduced revenue from that source. The hog population has decreased due to poor slaughtering and husbandry practices. Sheep raising also suffers from the lack of improved breeding stock and poor management practices. The poultry industry is afflicted by problems of minimum economic scale, competition from imported poultry products and recurrent shortages of day-old-chicks. As noted in last year's economic report, the potential for increasing livestock production through improved breeding stock and better husbandry practices is substantial, but there is the need (a) to solve the problem of internal parasites and the lack of veterinary facilities and equipment, and (b) to raise the level of nutrition by pasture development with special emphasis on utilization of farm by-products. On the former, the EEC is currently assisting on the development of the livestock industry with a project that is expected to be completed in FY85/86. There is also a livestock development project for which the Government is seeking donor support. Fish and fishery products are being imported, although St. Vincent exports fish to nearby islands, mainly because of poor internal marketing facilities such as chilling facilities and flake ice supplies. Efforts should be made to exploit the country's tremendous potential in this sector to substitute for imports and for further exports. 2.06 Extension and Research. Previous economic reports have noted that research activities in agriculture are thinly staffed and narrow in scope. In particular, the existing resources of about 18 extension agents operating out of 38 establishments are incapable of meeting the extension needs of the estimated 10,000 farmers. Their services are also hampered by the lack of vehicles, housing, equipment and communication facilities. Efforts are under way to solve these problems; more extension staff members - 15 - are being trained and there are plans to provide extension staff with housing and vehicles. The regional agricultural extension project being implemented with USAID assistance includes training, information and communication systems and equipment. The Government should give high priority to this program and provide the necessary support services. Additional external assistance may be required for the provision of housing, transportation and local training. 2.07 Credit. Agricultural credit is available through Barclays Bank's small farm loan program, the Banana and Arrowroot associations and the Agricultural and Cooperative Bank (ACB) now absorbed by DEVCO. Although the ACB was supposed to be the major source of financing for small farming and fishing operations, because of management and staffing problems, its role was unsuccessful. Its disbursement was small as a result of the lack of funds and its record of poor collection of outstanding loans. The merger of ACB's operation in 1982 with those of DEVCO was expected to improve the management of agricultural credit facilities. Besides the merger, a major effort should be made to attract, train and retain an appropriate number of staff at all levels, and to devote staff and financial resources to effectively prepare and supervise farm development loans. On the latter, it would be useful to establish a close working relationship with agricultural extension staff and the St. Vincent Marketing Corporation. 2.08 Land Tenure Policy. The pattern of landholdings by farm size reveals a high degree of fragmentation. Plans are thus under way to subdivide the Government's major estate holdings (5,000 acres in five estates controlled by the Agricultural Development Corporation) in small economic plots to be leased to farmers on a 30-year basis. Although the authorities recognize that individual ownership is critical if farmers are to devote their resources to developing the agricultural potential of the country, they prefer to initially use a leasing system until they become more adept in selecting farmers. After the selection process is perfected, farmers would be permitted to make outright land purchases. It cannot be overemphasized that the attainment of the objectives of full land utilization and increased productivity requires that the selection process give high weight to performance criteria and that plot size be defined in accordance with the crop to be farmed and the productivity of the land. Performance is critical if the available limited cultivable acreages are to be utilized efficiently. Plot size is crucial for farm viability and the implementation of projects for land conservation. There is, thus, the need to establish a land tenure policy that would discourage further fragmentation and would consolidate small holdings into economically viable units. Selected Priority Issues 2.09 Arrowroot Production & Marketing. Once a major crop, output of arrowroot declined steadily through the 19609 and early 1970s, reaching a low level of less than 600 tonnes of starch in 1971. It recovered to about 1,000 tonnes in 1972, declined thereafter and until recently the outlook seemed very promising with a new, lucrative and relatively large market for - 16 - use as a coating on computer paper. However, technological change in the starch industry has led to considerable price reduction in fractionated (modified) wheat starch. Competition from Brazil, where comparable quality of arrowroot starch is produced at a lower cost (resulting from the benefits of economies of scale, lower land cost and modern machinery), has also eroded both the US and UK markets for St. Vincent's arrowroot. Furthermore, production costs have increased while yields have declined as a result of lower grinding capacity and inefficiency of the factories (through obsolescence of machinery). The current production cost is estimated at US$0.45/lb. compared to the 1983 export prices of about US$0.35/lb. It has been indicated by industry officials that with appropriate technological change, it should be possible to reduce the cost to about US$0.30/lb. But such a change will require considerable external resources to rehabilitate and modernize existing factory machinery. 2.10 The Arrowroot Industry Association (AIA) is, however, still purchasing arrowroot from the producers but at a local price far lower than in previous years and some farmers are moving out of arrowroot production. (Producers are usually paid in proportion to the export price.) The financial position of the Association has deteriorated considerably as a result. Given the present uncertain outlook of the industry, it is recommended that the AIA, in order to be viable, should: (a) dispose of existing stock at the prevailing price in order to reduce its financing needs; (b) implement a well-defined policy of transferring land used for arrowroot production to other agricultural crops; (c) encourage increased productivity and cost reduction in the production of arrowroot by rehabilitating and consolidating existing processing facilities; and (d) vigorously promote the product through capitalizing on its unique properties in food products and cosmetics. Table 8: Operations of the Arrowroot Industry Association a/ (EC$ million) 1979/80 1980/81 1981/82 1982/83 Current receipts 2.0 2.9 0.8 2.0 Current expenditures 2.0 2.7 3.8 3.8 Current Account Balance - 0.2 -3.0 -1.8 Capital Expenditures 0.7 0.4 0.1 0.1 Overall deficit -0.7 -0.2 -3.1 -1.9 Financing External (Net) - - 0.1 _ Domestic (Net) 0.7 0.2 3.0 1.9 Banks (0.9) (-) (3.0) (0.1) Central Government (0.2) (-) (-) (2.0) Other (-0.4) (0.2) (-) (-0.2) Memo Items Stocks 0.4 0.4 2.3 3.5 Bank overdraft 1.0 1.2 4.1 4.3 a/ Financial year ending September 30. Source: Arrowroot Industry Association. - 17 - 2.11 Sugar Industry. The sugar industry which was revived in 1980 by the establishment of the St. Vincent Sugar Industry Limited (SIL) is still experiencing the negative effects of its extraordinary high starting-up costs. While the output of processed sugar has increased from about 1,880 metric tons in 1982 to the projected 2,700 metric tons in 1984, SIL's financial position remains precarious. Its current liabilities to the National Commercial Bank (NCB) as of September 30, 1983, amounted to about EC$19.9 million, compared to its current assets of EC$3.6 million. Furthermore, the industry is constrained by transportation difficulties which have affected the timely delivery of sugar cane to the mill and subsequently the sucrose content of the processed sugar. The management of SIL is planning to diversify into rum production in order to use up its by-product (molasses). With the view of improving the finances of SIL, the management has requested the Government to either refinance its short-term debt or convert it into equity. The proposal is currently under consideration. Table 9: Operations of the Sugar Industry Limited a/ (EC~ million) Est. 1980/81 1981/82 1982/83 1983/84 Current receipts 1.0 2.6 3.7 4.3 Current expenditures 4.2 6.6 8.4 9.6 (of which: interest payments) 0.2 1.1 2.4 2.7 Current Account Deficit -3.2 -4.0 -4.7 -5.3 Capital Expenditure 22.0 1.0 0.6 0.5 Overall Deficit -25.2 -5.0 -5.3 -5.8 Financing Capital Grants and Loans 20.3 0.2 0.4 - Domestic 4.9 4.8 4.9 5.8 Memo Items NCB Loans 5.6 5.1 4.6 5.8 Bank overdraft 5.7 10.8 15.3 18.3 Stocks 0.6 1.6 2.4 2.4 a/ Financial year ending September 30. Source: Sugar Industry Limited. 2.12 The unusually high starting-up costs and cost overrun have impacted negatively on SIL's finances. Apart from interest payments due on the loan from the CDB during construction which was converted into equity by the Government, a significant part of the rehabilitation expenditures and interest payments have been financed by bank overdraft (at 9.5% interest rate). In the financial year which ended on September 30, 1983, the interest payments made on overdraft to the NCB amounted to EC$1.2 million or 33% of total sales revenue (including molasses). During FY80/81 - FY82/83, the ratio of total interest payments to current receipts increased from 20% to 65%; most of the increase was accounted for by the dramatic increase in interest expense on overdraft to the NCB. Apart from adversely affecting the liquidity position of the NCB, the debt-service burden poses a potential constraint on SIL's ability to remain viable. - 18 - 2.13 Even when allowance is made for the fact that production is still at an early stage and that substantial advances should flow from identification of the most suitable varieties and cultural practices, yields to date have been disappointing. The low yields, compounded by mechanical problems at the mill, have resulted in an extremely high cost of production. The current cost of production (excluding interest and depreciation) is estimated at EC$0.90 (US$0.34)/lb. In view of the foregoing comments on the financial and production difficulties of SIL, there is an urgent need for a comprehensive reappraisal of the industry. Such a study, which should also address the technical problems related to the existing sugar cane varieties and mechanical issues at the mill, should have as primary objective the assessment of the technical, financial, and economic viability of the industry in St. Vincent and the Grenadines with the view to determining its future. The Government also recognizes the urgent need for such a study and is actively seeking external technical assistance. B. Tourism 2.14 Tourism growth in St. Vincent and the Grenadines is intrinsically tied up with the overall performance of the sector in the Caribbean. In the recent past, the growth of yachting, inter-island cruise-ship visitors, and guest arrivals from the region (Caribbean tourist in 1983 account for about 50% of total stopover visitors) has been significant for the sector. This has depended on the number of cruise-ship calls to St. Vincent and the Grenadines which sharply declined in 1981 and 1982 but increased significantly in 1983 because of the events in neighboring Grenada. Table 10: Selected Tourism Data 1979 1980 1981 1982 1983 Total Number of Visitors ('000) 56.2 78.0 71.5 67.6 72.7 Weighted days of stay per visitor 6.6 5.7 6.1 6.2 5.9 Weighted daily expenditure per visitor (US$) 34.4 37.8 40.6 41.0 42.3 Total Expenditure by visitors (US$ million) 12.8 16.7 17.8 17.2 18.2 Source: Table 7.2. 2.15 The development of the industry to date has been somewhat haphazard, mainly because of the absence of a long-term program identifying the tourism potential of the country and devising strategies for exploiting it. The physical structure of the main island is an inhibitive factor to tourism development. There are few beach areas of any tourism significance although there are some spectacular mountain scenery, particularly on the Leeward side and to the north. The only white sand beaches of any significance are to be found in the southern part of the island, which to some extent, are already developed. The Grenadines, on the other hand, are areas of high potential for tourism centered around yachting and high-quality hotels. They are almost entirely mountainous, forested, surrounded by long coral reefs, and possess white sand beaches. Previous economic reports have recommended, on the basis of priority, the development of Bequia, Union Island and Tobago Cays. It is further recommended that given the heavy demands on the Government's limited resources for other purposes, it should encourage private sector developers and only concentrate on the provision of basic infrastructure such as jetties, airstrips, water, and electricity. - 19 - Issues 2.16 Master Plan. Previous economic reports have recommended that a tourism master plan should be carried out. The Ministry of Tourism is expected to receive a tourism adviser, under a technical assistance program by the OAS, whose main responsibility would be the development of such a plan. It is recommended that in formulating and implementing any long-term tourism plan, emphasis should be placed on promoting the unique characteristic of the country as an unspoiled destination for selective tourism. Such a focus would require a close coordination between both DEVCO and the Central Planning Unit of the Ministry of Finance, Planning and Development and the Ministry of Tourism. The Ministry of Tourism has initiated a review of existing tourism capacity and potential (the EEC has approved 125,000 ECU for the exercise which commenced in July 1984). It is recommended that the review should be broadened to encompass recommendations for appropriate institutions and the establishment of appropriate accommodation and restaurant standards. 2.17 Hotel Facilities. Very little tourism infrastructure exists on the main island. There are few night clubs, restaurants and entertainment facilities of international standard. Small hotels form the basis of the tourism industry with 16 establishments offering 345 guest bedrooms. In addition, there are a number of guest houses, villas, cottages and apartments offering a further 198 bedrooms. Although existing capacity on the main island is used by international visitors, only three of the hotels are of high standard and only one offers anything close to a resort establishment. In the Grenadines, the establishments cater almost exclusively to the international visitor at varying levels of quality. An analysis of hotel occupancy rates indicates that tourist accommodation capacity is not a major constraint to tourism at the moment, except that there is the need for improvement in the quality of services. There is also a dire need for cultural and entertainment facilities. 2.18 Marketing. The growth of the tourism industry is critically dependent on the identification of potential markets and the implementation of an aggressive promotional campaign. The existing staffing difficulties at the Ministry of Tourism serve as a major constraint to the promotional efforts. In view of the difficulties in reaching the country, compared to some of the other islands in the Caribbean, there is the need to adopt joint promotional policies with nearby islands, notably Barbados, and to maintain a competitive pricing policy. Previous economic reports have recommended that in order to assist in assessing pricing policies and determining potential markets, the Government should seek appropriate technical assistance, not only to quantify the total market but also with specific reference to the potential shoulder and summer markets in North America, Venezuela and Europe. The tourism adviser referred to above should also be responsible for this task. 2.19 Transportation. Air transportation perhaps constitutes the major constraint to tourism promotion in St. Vincent and the Grenadines, being the main travel medium to the islands. The national airport is only capable of accommodating small aircraft, which implies that tourists must - 20 - transfer to St. Vincent from either Barbados, St. Lucia or Martinique. This complicates booking arrangements and the Government believes that the limitations of the system act as a disincentive for tourists to the island. The extension of the existing airport facility or the construction of a new one is a major investment which cannot be undertaken without a detailed cost-effectiveness study with special attention to the potential traffic flow. The Government, with the assistance of an external consulting firm, conducted a prefeasibility study to identify improvements to the Arnos Vale airport in St. Vincent. The proposed improvement project is to increase the length of the existing runway from 1,463 meters to 2,000 meters and to strengthen the bearing capacity of the runway from the existing Load Classification Number (LCN) 18 to LCN 65. The objective is to allow larger aircraft such as the DC-9 - 30 and the B737 - 200 which serve medium distance destinations (such as Miami) to land and take off from Arnos Vale. Direct medium distance flights principally from the US are expected to stimulate tourism and industrial development in St. Vincent and the Grenadines. However, several studies carried out in the past have resulted in conflicting recommendations for airport development. The optimum solution to the problem of inadequate air transport has yet to be satisfactorily defined. It is therefore necessary to conduct a comprehensive feasibility study which will establish the options for airport development in St. Vincent for the medium to long term. While efforts are being made to mobilize external assistance for this study, the Government should, in the interim, explore improvements to the existing inter-island links between St. Vincent and both Barbados and St. Lucia by the regional airline (LIAT) and other potential airlines. As regards other infrastructure, especially in the Grenadines, the Government is implementing with financial assistance from the CDB, a multi-purpose Grenadines infrastructure project, covering roads, jetties and water supply. It is also trying to mobilize resources for the construction of a 3,000 ft. airstrip in Bequia capable of accommodating inter-island type aircraft. C. Manufacturing 2.20 Because employment creation and export expansion are crucial to St. Vincent's development, the recent emergence of enclave-type export manufacturing activities will probably be the most important goal of the industrial strategy of the country. Although the manufacturing sector is still at an early stage of development (it contributed about 11% of GDP in 1983), the range of commodities produced is extensive. They include production of garments, metal products, sporting goods, electronic components, building materials, furniture, packaging, and sugar, arrowroot, flour and food processing. The source of recent expansion, however, has derived from external enclave manufacturing activities as the potential for the development of domestic-oriented manufacturing activities is constrained by the small size of the domestic market. Efforts should, however, be made to promote and sustain the growth of indigenous modern small-scale agro-based industries with the objective of achieving an acceptable ownership balance in the sector, not only to contain future potential political discontent but to promote the development of local entrepreneurial capacity. - 21 - Issues and Objectives 2.21 Current Situation. Performance in the manufacturing sector during 1983 and early 1984 has been disappointing although growth in individual firms has differed widely. Some enclave activities experienced rapid growth in 1983, while others, specially those in the production of electronic components, have experienced low capacity utilization as a result of technological developments in the cable television industry in the US. The latter highlights the vulnerability of small, island companies to dramatic shifts in the demand for its products; although electronic components and data processing activities are high growth sectors in the world economy, they are also subject to rapid technological change and obsolescence. The country's industrial strategy should thus aim at diversification rather than concentrating on relatively few high growth activities which are subject to rapid technological change and variability in potential demand. The uncertainties surrounding CARICOM trade arrangements and the imposition of import licensing by Trinidad and Tobago also impacted negatively on some manufacturers in St. Vincent and the Grenadines. The Government should promote, along with other CARICOM governments, the establishment of industrial cooperation schemes in the context of CARICOM aimed at avoiding duplication which represents a potentially important element in the future growth of manufacturing exports in the region. 2.22 The performance of import substituting manufacturing firms was also mixed during 1983 and early 1984. A number of firms with extremely low capacity utilization has been able to operate mainly because of import restrictions that confer on the local manufacturer a monopoly position. A principal dilemma confronting the Government in shaping its import- substitution policy in the sector stems from the poor performance of most of the domestic oriented firms in terms of capital efficiency and cost competitiveness. A major issue for future government strategy is how to reduce the incentive gap between export and import substituting manufacturing activities without affecting the sector's composition of investment. This can be achieved by tackling the problem from both sides; that is, reducing the amount of protection enjoyed by import-substituting sectors and promoting export orientation for all firms. 2.23 Prospects. Investment promotion efforts in 1983 were less successful and, with the exception of a brewery, no new developments have occurred in the past eighteen months. The lack of factory space was identified as the main constraint. The main reason for the shortage was the lack of finance, which in part reflected, the CDB's curtailment of disbursements to the Development Corporation (DEVCO) during FY83/84, because of policy disagreement between the two institutions. The issue has been resolved and the CDB is providing financial assistance for the construction of a 30,000 sq.ft. factory space to be completed in early 1985. The Government is receiving assistance from the Canadian Inter- national Development Agency (CIDA) both for the preparation of a feasibi- lity study for new industrial estate infrastructure and for financial assistance in the construction of new factory facilities. The policy of subsidized rental of factory space through DEVCO (factory space is rented - 22 - at EC$5-6 per square foot, considerably below commercial rates for comparable facility) might discourage the use of private sector resources in this sector and should be carefully analysed for allocative efficiency. As part of its export development policy, the Government should continue to explore alternative strategies and tools. An expansionary export policy would involve policies regarding investment incentives, financing, as well as the provision of necessary infrastructural facilities. Policies 2.24 Effects of Present Incentive System. The Ministry of Trade and Agriculture is responsible for the administration of fiscal incentives for new investments under the Fiscal Incentives Harmonization Act of 1982. The incentives conform to those available throughout the OECS, under the CARICOM treaty. The major elements of the system are the customs tariff, import licensing and investment and export incentives. The combined effect of the present incentive measures and import restrictions on competing products which form part of the tax holiday and import duty exemption package, is to build a bias in favor of production for the home market and impose a penalty on the non-traditional export industries except for the few enclave firms. It has thus encouraged high costs, inefficient use of capital and excess capacity such as the case of the local packaging company. It also penalizes the export producing sector which has to use high cost and relatively low quality intermediate inputs produced domestically in their production process. 2.25 In addition to a careful review of the impact of the incentive system, greater efforts should be given to pre and post incentive appraisal and monitoring. This will not only ensure that appropriate industries are encouraged but also provide an ongoing assessment of the applicability of the incentive package. Any monitoring system will also require improve- ments in both the quality and quantity of manufacturing sector data which presently are very deficient. Furthermore, the export incentive system should be tied directly to export performance rather than the level of investment cost or the quantity of imported inputs. Just as the general investment incentives should not merely increase output but also raise its domestically generated value added, export incentives should seek to raise not only the level of exports but also net export earnings. 2.26 Financing and Investment Promotion. The principal source of finance for local entrepreneurs seeking to establish new manufacturing undertakings is DEVCO, which also acts as the Government's industrial development agency. DEVCO's responsibilities are very broad, covering industrial development (directly or through equity participation), investment promotion, small industry and agricultural credit, students' loans, land development and farm improvement schemes. The agricultural credit function resulted from the absorption in 1982 of the Agricultural and Cooperative Bank by DEVCO, a move with dubious advantages given DEVCO's weak staffing position and extensive responsibilities. The Corporation is constrained by a number of limitations that affects its ability to cover such a wide range: (a) it is deficient in critical managerial and technical staff (extension officers and project appraisal personnel) which - 23 - has affected its credit operations as reflected by the relatively large arrears, in excess of twelve months, on the total loans outstanding; and (b) its cash reserves are very low as its original equity capital was mostly in the form of land vested in it by the Government; much of its funds available for loans are CDB's lines of credit and explains why its credit operations were very low in FY83/84 following the suspension of disbursements by the CDB. 2.27 The CDB has provided the services of a financial controller and an industrial specialist, but more technical personnel are needed. Given its present staff constraints, serious consideration should be given to a review of the structure and objectives of DEVCO with the view of limiting its scope of activities commensurate with its resources. A strong case can be made for the continuation of its industrial promotion activities but its functions with respect to students' loans, agricultural credit, and farm improvements may be best delegated to other Government institutions. It is also recommended that the Government should consider exploring other sources of finance for DEVCO as its financial constraints has limited its promotional activities mainly to the construction of factory facilities through the CDB financial assistance. 2.28 Supporting Infrastructure and Personnel. The promotion of manu- facturing activities in St. Vincent and the Grenadines is constrained by limitations in infrastructural facilities mainly in energy and transpor- tation and in managerial personnel. Electric power load shedding continues to disrupt production but the completion of VINLEC's rehabilitation program (which includes the construction of the Cumberland Hydroelectric Project) is expected to rectify this. Poor external access and high freight rates are cited by many enclave industries as a limitation to future develop- ment. Shipping rates to and from St. Vincent and the Grenadines may only be addressed in a regional context given the relatively small volume of total freight involved. The Government is exploring the expansion of the existing Arnos Vale airport to enable the use of larger aircraft. 2.29 A labor dispute in 1983, associated with an enclave manufacturing firm and attributable to inappropriate management practices and the relatively industrial inexperience of the work force, highlights a number of issues that might affect the growth of the enclave industry in St. Vincent and the Grenadines. First, there is a shortage of local entrepreneurial and managerial talent, which inhibits the scope for joint venture activities with foreign investment and the use of this talent in manufacturing operations. Furthermore, the level of understanding by foreign investors of local worker attitudes and sensitivities is often deficient. Finally, while foreign investors find the quality of labor relatively good, they are obliged to undertake considerable in-service training with its attendant high overhead costs because of the relatively high migration of qualified personnel. Serious consideration should be given to expand the training programs by the Labour Commission and the extension programs of the University of the West Indies to encompass the development of basic manufacturing skills (for school leavers and displaced workers) and managerial practices. In-plant training programs developed jointly with firms already established in the country should be encouraged. - 24 - 2.30 The Role of the Construction Industry. The industry is made up of public and private sector establishments. The public sector comprises of the Housing and Land Development Corporation (HLDC), the Central Water and Sewerage Authority (CWSA) and the Public Works Department (PWD). The HLDC is responsible for the construction of low- and middle-income houses. The CWSA deals with the construction of pipeline systems and small reser- voirs. The PWD of the Ministry of Communications & Works is responsible for infrastructure development in addition to holding construction equip- ment and leasing them out to both the public and private sectors, under the Government Funding Scheme (GFS). The private sector is relatively small, comprising eight single entrepreneur contractor companies: two civil engineering companies capable of employing 150 people and handling EC$3 million projects and six building construction companies capable of handling EC$2 million projects. There also two building electrical companies. Given the small size of the private sector construction companies, the Government needs to promote cooperation between its construction establishments and those of the private sector in order to support the growth of domestic capabilities. 2.31 The main constraints of the industry are its limited capacity to handle large projects, partly because of the lack of sufficient construction equipment, and the absence of adequate technical manpower. The Government, with external assistance, is attempting to remedy the equipment constraint by expanding and improving the GFS. There is the need, however, for the authorities to exercise more supervision over the use of facilities in order to ensure efficient utilization. The Government should also intensify its efforts to upgrade the structure of training for construction personnel. The existing trade apprenticeship, which is voluntary, is inadequate to supply the total number of technical personnel required to fill the gap created by the migration of construction workers, principally to Trinidad and Tobago. - 25 - CHAPTER III - SUPPORTING INFRASTRUCTURE A. Economic Infrastructure Energy 3.01 Petroleum products, natural gas and electricity constitute the principal commercial fuels consumed in St. Vincent and the Grenadines. As a result of recent oil price increases, there is evidence of some inter-fuel substitution of diesel for gasoline and natural gas for other domestic energy sources. Efforts to promote fuel conservation and the use of alternative resources should be intensified as expenditures on mineral and fuel imports increased by an annual growth of about 14% during 1977-83. St. Vincent and the Grenadines have no known fossil fuel resources, but do have hydro potential and, possibly, some usable geothermal resources. There is no formal energy program, although a number of strategies intended to increase self-reliance are under way. The principal government attention to date has been the administration of electricity generating systems. There is no designated energy coordinator; responsibility for energy matters remains with the Director of Planning, who calls upon technical resources within the Government structure as needed. The Government has recently set up an Energy Desk in the Central Planning Unit (upon recommendation of a technical team from the UNDP and OLADE) to focus on energy planning, to implement energy policy, and to coordinate efforts to assess the potential of various alternative sources of energy and the development of useful programs. The Unit is currently participating in the USAID alternative energy project which is being executed by CARICOM and CDB's Technology and Energy Unit (TEU). It is understaffed and thus in a poor position to assume all the responsibilities directed at it. 3.02 Electricity. The St. Vincent Electricity Services Ltd. (VINLEC), a joint corporation between the Commonwealth Development Corporation (CDC) and Government, is the sole supplier of public electricity in St. Vincent and Bequia. Its total installed capacity is 6.7 MW, 60% of which is diesel generation and 40% hydro. The main issues in electricity generation are the frequency of loan shedding because of VINLEC's low dependable capacity of about 5MW, and the weak financial position of VINLEC. As relates to the former, the main problems facing the system are: (a) the lack of adequate reserve capacity; when more than one of the larger generating units are out of service for maintenance or repair, peak loads cannot be met resulting in both frequent scheduled and emergency load shedding; (b) the very high losses caused by inadequate transmission and distribution facilities and the low system power factor, estimated at as low as 0.6 at times; and (c) the heavy dependence on diesel generation and the corresponding high cost of fuel; fuel cost alone amounted to over 40% of the total revenue received from sales of electricity. - 26 - 3.03 With external assistance from the International Development Association, the Canadian International Development Agency, the US Agency for International Development, the European Investment Bank and the Caribbean Development Bank, the Government in 1984 embarked on a five-year investment program (1985-89) to improve electricity generation in St. Vincent and the Grenadines. The program aims to reduce substantially the imports of petroleum products, improve the quality of electricity services, reduce the level of the systems distribution losses and improve VINLEC's management and staff skills. The project includes the construction of three hydroelectric power plants, rehabilitation of existing diesel engine generating plants, extension of subtransmission and distribution facilities, a loss reduction program, a training program and engineering/consultant services. At an estimated cost of US$33.8 million, the program will reduce the country's dependence on imported fuels by about 34,500 barrels of fuel per year, resulting in foreign exchange savings equivalent to US$1.3 million annually. It will also supply a reliable and efficient source of power through 1995. 3.04 Alternative Energy Sources. The country has a fuelwood supply deficit which is being met by clearing of secondary forest lands and illegal cuttings. In watershed areas, encroachment and deforestation may cause erosion problems in the longer term and consequently result in siltation at hydro development sites. It is recommended that the Government establish plantations of short-rotation fuelwood species in conjunction with a demand management program for existing forests to increase fuelwood yields. On the demand side there should be stricter regulation of charcoal makers and forest tenants; wood cutting "permit fees" should be increased to reflect the economic costs. Geothermal manifestations outside the crater of the active Soufriere volcano are scarce or non-existent. Although the outside slopes of the volcano might have some thermal potential, the recurring volcanic eruptions inhibit development of such resources close to the volcano. The geothermal potential is uncertain, however it would be useful, though not urgent, to do a reconnaissance survey. 3.05 Government policy in the use of solar energy for water heating is being implemented; new hospital buildings are being installed with experimental solar panels for water heating purposes. While government efforts are commendable, the urgent need at the moment is the formulation of policy in the area of energy demand management (conservation, efficiency and pricing policy) and reduction in petroleum dependence (through the development of renewable indigenous energy sources) for which relevant cost incentives need be implemented. Efforts at determining the country's energy needs and consumption pattern should be speeded up with an increase in the staff and the provision of training facilities for the staff at the Energy Desk. Given the wide array of energy-related projects and studies envisaged, coordination and orderly implementation of these activities are important. The Central Planning Unit may require technical assistance both for manpower training and to supplement its resources. - 27 - Transportation 3.06 Previous economic reports have discussed the constraints posed by the transport sector on the economic development of St. Vincent and the Grenadines. The discussion on tourism highlighted the constraints posed by air transportation. Transportation is also a major constraint to any large-scale promotion of export-oriented manufacturing. In particular, the lack of an adequate air cargo service has resulted in limited access to the island and might have discouraged the establishment of offshore industries. Port congestion and the lack of adequate container handling facilities at the port and of shipping facilities other than those for the flour mill, are rapidly becoming major issues. The Government is cognizant of the constraints and major physical improvements are under way for both the harbor and the airport. With a CDB loan and a CIDA grant, the Government has initiated an expansion of Kingstown Harbor and is seeking external support for upgrading the Arnos Vale Airport. The major outstanding issues in the transport sector pertain to financial and administrative constraints relating to the ports and airport subsector and improvements in agricultural feeder roads. 3.07 Ports. The financial position of the Port Authority is weak, resulting partly from an inadequate tariff and from its legal commitment as a statutory body to deposit all revenues with the Accountant General and to receive approval from that department for any expenditure greater than EC$500. On the former, the Government has approved a tariff increase of 30% on January 1983 and a further 13% in July 1984. As a condition of the CDB loan for port improvement, the Port Authority became financially autonomous in 1983. Nothing has been done to make a distinction between the role of the Harbor Master and the Port Authority which is at the moment confusing. There is the need for clarification of the relevant legislation or for a merger of the functions of the Harbor Master with that of the Port Authority. 3.08 Air Transport. Previous economic reports have noted that the airport has a severe manpower shortage resulting from it being administered as a department within the Central Government. It was noted that while the level of traffic at Arnos Vale could not support an independent statutory body, a solution might be the creation of a Transport Authority to take up the responsibility of both air and sea ports. It is recommended that the institutional issues related to both the airport and the seaport be studied carefully and relevant policies adopted. 3.09 Roads. Regarding the roads subsector, the principal need is to revitilize the feeder roads program that was delayed as a result of the destruction to government operations caused by the two natural disasters. Future feeder road investments should only be undertaken if maintenance of completed feeder roads is ensured. Some progress has been made towards the establishment of the Construction Monitoring Unit in the Ministry of Communications and Works to manage ongoing operations. The UNDP is proposing to provide the unit with technical support. The USAID is also supporting a roads' rehabilitation program, scheduled to be completed in FY84/85. - 28 - B. Social Infrastructure Education 3.10 The Government's development policies are oriented towards exploiting the considerable potential of the new growth sectors of manufacturing and tourism while simultaneously reinforcing the agricultural base of the economy. The educational system, while well developed with a ten-year universal/compulsory education and high adult literacy rate of about 822, is deficient in meeting the current needs of the economy which are mainly in technical, commercial and maritime skills. There is also some export of skilled labor (mainly in construction) to Trinidad and Tobago, which may have implications for domestic skilled manpower availability. 3.11 Implementing any program to rectify the deficiency would require considerable financial resources, technical assistance and time. The most urgent needs now include: (a) Improvement and reinforcement of the physical capacity of the system. With the assistance of the USAID, the Government has recently completed the construction of six primary schools. Proposed new projects include the construction, renovation and extension of schools for which UK and other assistance was sought. The construction of teachers' housing and training centers is also planned. (b) The formulat±on of a program along lines suggested by the 1981 UNESCO report with emphasis on adapting the educational system to the overall development stage and the existing manpower needs of the country. The USAID in 1982/83 assisted in a curriculum development project at five schools. The Government has requested that the program be stretched out because of financial constraints since extending it to all the 61 schools would be beyond the financial capacity of the Ministry of Education. The Government is also participating in a UNESCO-sponsored multi-island project for teacher education. (c) The establishment of necessary institutions and instruments to support reforms in the educational sector. The Ministry of Education envisages the separation of functions between educational administration and development. The position of a permanent secretary has been created, separate from the chief education officer. The Government also envisages the establishment of a Curriculum Development Unit for which technical assistance for staffing and the determination of structure is needed. Reforms in the administrative structure in terms of ranking and allocation of responsibilities are also planned. - 29 - Water Supply 3.12 The main issues in this sector are technical, financial and managerial. There has been deteriorating service because of inadequate storage facilities and excess leakages in the distribution system. Wastage through pipeline leakages and that resulting from inadequate storage capacity has been estimated at 45% in 1981. Training and technical assistance services for the detection and repair of leaks are being provided by the Caribbean Basin Water Management Project and PAHO/WHO/CDB to the Central Water and Sewerage Authority (CWSA). The UNDP is also addressing the issue of inadequate storage capacity through its water resource project, but general reductions in its financial allocation to St. Vincent and reallocation of existing resources in favor of the ongoing hydro project has affected the speedy implementation of the project. 3.13 Financially, the CWSA is in difficulty as a result of escalating costs; the average cost of water produced (per 1000 gallons) in 1981 was EC$0.98 while the revenue from water sales (per 1000 gallons) was EC$0.22. Prior to January 1981 when approximately a 300% tariff increase was implemented, there was no tariff revision since 1970. The tariff increase has had a minimum effect, however, because of the large percentage of unmetered connections, estimated at 98%, in the existing system. The CDB has recently approved a loan for EC$1.4 million to cover the cost of metering. The project is expected to be implemented over two years. CWSA has also proposed rate increases for 1983 and beyond on the basis of which a break-even between cost of production and revenue is expected in 1987 at EC$1.28 per 1000 gallons. The financial position of CWSA can only be improved under the present circumstances by constant revisions in the tariff system and improvements in the efficiency of water supply through tackling CWSA's technical problems. The CDB has also agreed to provide technical assistance for the employment of consultant Manager/Water Engineer for a period of two years to manage CWSA and to train managerial and operational staff. Health 3.14 The health care delivery system is seriously constrained by the shortage of funds, facilities and personnel. On the latter, a considerable number of trained health personnel migrate each year because of low wages and inadequate conditions of service. There has, however, been considerable progress in the upgrading of physical facilities. Progress continues with the construction of new clinics in Georgetown, Mesopotamia and on Union Island, and with the Kingstown Hospital redevelopment. On organizational developments, there is the need to consider the separation of the administrative and technical functions which are currently handled by the Chief Medical Officer. Furthermore, improved educational and health facilities could help increase coverage of the ongoing family planning program, which aims at containing the country's high population growth rate. - 30 - Housing 3.15 The priority needs in recent years have been the reconstruction of structures and facilities damaged by the hurricane in 1980. Several emergency repairs have been done and the remainder is being carried out with emergency financing provided by aid donors. The long-term requirements of the housing sector, as identified by previous economic reports, still need to be addressed. The main ones are the housing shortage, particularly with regard to low income groups, and the poor state of existing housing stock, 30% of which are considered minimally adequate. The Government has estimated that approximately 650 units a year, of which 40% should be located in the rural areas, would be required to satisfy present demand, replace existing substandard housing, and keep up with increasing population (in view of its youthful age structure). About 30% of these units could be supplied through rehabilitation and repair of existing structures; the remainder would have to come from new units. 3.16 The reasons for the housing shortage are mainly financial. Construction costs have risen substantially in recent years as a consequence of international inflation in imported construction inputs (about 90% of total cost of building materials), domestic wage increases, and bottlenecks in the construction industry. The middle and high income groups can obtain financing from the Building and Loan Association (BLA), the St. Vincent Cooperative Bank Ltd. and the Mortgage Bank. The low income and some of the lower middle income groups do not qualify in the private mortgage financing market. They could however benefit from housing development schemes under the aegis of the Housing and Land Development Corporation (HLDC). This organization has, however, had difficulty obtaining adequate funding for this purpose. Measures to lower construction cost should be explored; they may include the use of prefabricated units which could reduce construction costs by as much as 30%, and greater reliance on domestic resources (principally through the development of local forest resources). Means should also be developed to increase the number of people who qualify for mortgage through a system of membership in a house purchase saving scheme. The present activities of the privately run Building and Loans Association are very limited to have any significant impact on the sector and it should be encouraged to expand. C. Administrative Reforms 3.17 Like most of the newly emerging independent countries in the Caribbean, the expanding role of the public sector has been a major departure from the policy of the pre-independence period which regarded the private sector the principal engine of growth and confined the public sector to a limited, largely supporting role. The correction of this imbalance in St. Vincent and the Grenadines has been gradual and some of the achievements to date may appear modest. Compared with the past, however, significant government involvement has been made in virtually all productive sectors but not matched by the same progress in fiscal, financial and administrative reforms. The rapid expansion of public investments in various economic and social sectors and the substantially higher current outlays needed as public services improve will claim - 31 - considerably more resources than in the past, place added burden on administrative capability and require more government emphasis on training and on administrative and organizational improvements. The increasing importance of the public sector has meant that the division of responsibilities among all levels of the administration will have to be closely reviewed. 3.18 The Government is cognizant of the weaknesses of the system and in its FY82/83 Budget document indicated interest in the reorganization of the public sector in St. Vincent and the Grenadines. The Government has requested technical assistance from the Public Sector Management and Planning section of the OECS Economic Affairs Secretariat and the Caribbean Centre for Development Administration (CARICAD). In February 1983, the OECS Economic Adviser and the CARICAD Adviser identified three areas for detail evaluation: (a) Reorganization of the Service Commission's Department including the Training Division, for which the CARICAD Adviser would be responsible; (b) Comprehensive review of the tax system for which the OECS Economic Adviser would assume responsibility; and (c) Reorganization of the Ministry of Finance, Planning and Development (MFPD) which would be undertaken as a joint exercise by both the OECS and CARICAD Economic advisers. It was felt that the reorganization of the MFPD, which is the key ministry, will serve as a model for the rest of the Central Government. A prelimi- nary proposal for the reorganization of the MFPD was submitted to the Government in mid-1983 and is under review. Issues 3.19 Clarification of Functions. Despite the expanding role of the public sector and the associated expansion of its administrative functions, the respective roles of the various units have not yet been redefined. This has resulted in the duplication of functions and resource misalloca- tion in certain cases. There is also a lack of clarity about job specifications and respective roles of various levels of staff at the operating level. The lack of clarity in the definition of job functions might have resulted from the expanded range of administrative functions unaccompanied by a corresponding number of new staff. The problem has been compounded by the shortage of technical and managerial personnel so that temporary arrangements have tended to be institutionalized resulting in ill-defined job functions. It is recommended that the role of various administrative units must be defined more precisely and actions taken to ensure that implementation capacities are appropriate to assigned tasks. 3.20 Staffing and Training. The staffing problems are twofold: a substantial shortage of technical/professional and senior personnel compounded by a large number of low-level non-technical personnel whose supervision needs are tremendous. The shortage of technical/professional - 32 - personnel has affected the capacity of the civil service to conduct investigative reviews and associated follow-up; a gap that has always been filled by external technical advisors. The shortage of senior personnel has also limited the delegation of authority with the negative implication that junior and non-technical staff are unable to receive adequate super- vision and guidance and therefore have developed improper work habits and lack of motivation. 3.21 The short-term solution of the problem does not lie in salary adjustments, apart from the negative impact that any salary increase would have on the fragile finances of the public sector. The recommended approach is the reorganization of the public sector aimed at eliminating duplication and staff training and development. With the exception of the Customs and the Data Processing Departments, there are no formal arrangements for in-service training of public servants. Staff development efforts through the award of scholarships for advance studies outside St. Vincent and the Grenadines have yielded limited benefits to the public sector partly because of high costs and the failure of the beneficiaries to return to the public sector. It is recommended that training programs envisioned under the Service Commission's Department be broadened to make a maximum impact on middle-level managers, where the need is greatest, as well as to provide lower level non-technical personnel with the knowledge of the relevant administrative procedures of the civil service. Such efforts would not only provide a better quality of junior staff for promotion into the senior ranks, but would also equip personnel to derive greater job satisfaction and productivity. 3.22 Operational Procedures. The lack of coordination between various ministries and subsequent non-compliance and irregularities in operational procedures derive from the weak staffing situation of the public sector. The problem is compounded by the absence of any formal or informal proce- dures for consultation among the various heads of departments/ministries for familiarizing each other with matters critical to the public sector. The proposed restructuring of the public sector and clarification of roles should regularize operational procedures and improve communication. However, there is the need to familiarize and to insist on improved compliance by all staff (especially, accounting officers and clerical assistants) of operational procedures. This should help improve the monitoring and auditing role of the Ministry of Finance, Planning and Development. 3.23 Delays in administrative decision-making are also partly accounted for by weaknesses in the operational procedures. There is the need to improve the procedures for dealing with matters involving recommen- dations to cabinet on major issues of policy. An appropriate procedure should involve a technical investigation of the issues along with specific recommendations. The draft report should then be reviewed by the appropri- ate departments/ministries associated with the issue through formal or informal mechanisms of consultation before being submitted to Cabinet for its consideration. The critical element of the procedure is timing and it is recommended that an appropriate time-scheduling framework should be developed and implemented. - 33 - D. Government Is Development Priorities 3.24 During the writing of this report, a new Government of St. Vincent and the Grenadines was installed following a general election on July 25, 1984. The new Government has indicated its desire to tackle the principal policy issues discussed above in a speedy manner. In particular, it is committed to: (i) strengthening the finances of the public sector by dealing with the problems of the arrowroot and sugar industries and by undertaking necessary administrative reforms; (ii) encouraging the development of the private sector in the industrialization process in an effort to reduce unemployment; and (iii) pursuing sectoral policies in agriculture, tourism, infrastructure, health and education that are directed at accelerating economic development in St. Vincent and the Grenadines. The Government's intentions, while still in the process of formulation, appear to be in the right direction and should be encouraged. Finances of the Public Sector 3.25 The new Government is committed to strengthening the finances of the public sector and has established a committee to examine the public sector financing and indebtedness. In order to reduce the operating deficit of the non-financial public enterprises, the Government has indicated that with respect to the Arrowroot Industry Association, the policy strategy outlined in this report will be followed. With respect to the Sugar Industry Limited, it would seek a technical analysis of the industry to determine its future. In view of the adverse impact of the poor finances of the non-financial public enterprises on the operation of the National Commercial Bank, the Government proposes to strengthen it by requiring the NCB to adhere to commercial banking principles and practices, rather than function as a "quasi-government Central Bank." It will, therefore, promote greater autonomy and less government involvement in NCB's operations. 3.26 The Government is cognizant of the weakness of the administrative structure. As a first step, the Ministry of Finance, Planning and Development would be reorganized to enhance its capacity to deal with the pivotal role it has to play in revitalizing the economy and the development process in St. Vincent and the Grenadines. Furthermore, as part of an overall administrative reform, all public sector organizations would be given clear guidelines and budgets within which they must operate. A committee to examine administrative reforms, among other things, is to be established. Industrial Development 3.27 The Government has indicated that unemployment, especially among the youth and women, is the country's most serious problem. It is expected that the attraction of new investment, following the improvement in the - 34 - local investment climate, will assist in reducing the level of unemployment. In order to promote the industrialization process the Government intends to: (i) revise the income tax act with the view to ease the burden on wage earners at all levels; (ii) encourage private enterprise by concentrating government involvement only to the management of the economy and not direct production. A code on foreign investment will be published; and (iii) promote the growth of responsible trade unionism as well as the development of the cooperative movement. Sectoral Strategy 3.28 The Government recognizes that agriculture continues to be the main source of employment and income generation in St. Vincent and the Grenadines. In order to revitalize it, highest priority will be given to land reform in an effort to improve productivity. Emphasis will also be placed in agriculture diversification through the development of new crops and marketing avenues. 3.29 The promotion of the tourism sector along the lines suggested in this report is envisaged. In this context, the Government intends to remove any administrative obstacles which affect visitor length of stay. With regard to the constraints posed by air transportation, the discussion on the feasibility of an international airport will be revived by the execution of an adequate feasibility study for which assistance from external donors is being sought. The Government also seeks external assistance in the construction of an airport at Beguia. As part of an effort to improve the climate for the development of tourism, the Government is committed to the development of Kingstown, the capital, in a manner that would enhance its aesthetic appearance. It also intends to encourage and coordinate cultural activities through the construction of a Centre for the Performing Arts. 3.30 The country's economic development has been constrained by the lack of a well-developed physical and social infrastructure and the Government intends to develop relevant policies to overcome these obstacles. With regard to energy, the Government intends to encourage the full utilization of the country's hydro potential and alternative energy resources with the view to reduce its dependence on imported fuel. Efforts will be made to reorganize the administration for housing to facilitate long term mortgage financing. On health, the Government subscribes to the concept and practice of primary health care. Consequently, it inteends to emphasize sanitation practices, preventative health, the provision of basic health care in the rural areas, the continued improvement of the Kingstown hospital, and the promotion of self-reliance and community participation in health projects. It also intends to promote a policy of zero population growth through its family planning program. As regards education, the Government will focus on quality at all levels through improvements and expansion in physical facilities. - 35 - ANNEX I ST. VINCENT AND THE GRENADINES GOVERNMENT'S PROJECT AND TECHNICAL ASSISTANCE LISTS 1. This annex contains a list of major ongoing projects, a list of new projects for FY84/85 and a list of technical assistance requirement for the short and medium term period. A list of projects for which external finance will be sought during the period FY85/86 - FY89/90 and individual project descriptions will be prepared separately for the CGCED meeting in 1985. The lists contain the names of the projects, the executing agencies, the lenders/donors (if any), the total costs, the external financing obtained or required, and the periods for implementation of each project. 2. Data for these projects were prepared by the Government of St. Vincent and the Grenadines with assistance of the Bank mission. An updated project list will be issued at the subgroup meeting during the Seventh Caribbean Group Meeting. - 36 - Sr. VINIENo M0 QIE S INES - IJO OSOIS M*FIF UNS OF nIr CI (t1 '000) Te. _N Cd 0.ltil Total Exbtrul Fleneing Interest Amrtititlen Ones Ca__nuo t Caupeltlon Coat _oet I S --- rltc Piield Piied ODte DOts DIRECTLY PRXJCTIVE PROECTS Agriualtare, Forestry 4 Fisheries Dvlognl t of Llsetock Induetry 417 417 100 EEC - - - 16W3 29856 Input Sterap FOC iIties 392 32 100 UK - - - 123 1913o64 ernn Dove O lepunt Prgrm V IS8 298 100 UK - - - Ongoing progr_m Emrgsncy Fertilizr for Baner 103 103 100 UK - - - 134 183/4 Renovation MA Offices IN - - - - - 191A2i 12W ibngo, Anthuwrim end Pinepple Project 30 30 100 UK - - - 962/3 1A85 Indu try Industrial Estates IV 1,536 1,536 100 0 7.5 15 5 19182A2 IS845 Cmneolidbted line of credit 500 I2'50 100 D9 4 is 5 lo3m4 15/6 atiPvuI. llfRASTclm Truleprttlon Rced RahibliItetlen Progrm 3,050 2,585 a2 UtAID - - - 92/63 1914/5 Expansion Klngstews Herbor 3,404 2,t11 83 8 CIDA 7.25 25 5 18263 198AS Poar Supply luwronnt of Electricity Supply I 3,3 3,000 a 008 3J 15 5 1292M 1993/84 Educrtion Student Loans IV 350 350 100 008 4 Is 5 1I181A2 1384 HceIth Construction of 2 Health Centers 571 544 95 EC, US - - - 98/8I 1983/84 Upgreding KlngtewnA Hospltl 23200 2,300 00 EC - - - 191/62 96W84 Wtfr Supply Vbter uerlng 413 435 91 00 4 Is 5 19/3 1983/84 Other Reairs to Foreshore & Ser Sybtem 815 130 77 UtAID - - - 18/3 14S Volcano 1ienltorlng Unit 787 513 F5 LW - - - 110111 1184/5 CGaity Developont 82-83 140 133 *5 LK - - - 12923 296W4 Miulon Administratie Fund 82/13 - A/N So0 S00 100 CIDA - - - Ongelog progrm Mlcro Projoctb a -85/6 96 9 200 FRP - - - Onglng prer_ Spbcal DOvelopunt Actlvitles 82/83 - 85/ 14D 140 IOD USAID - - - Owingo p-r_ investors Ouide 6 6 100 UK - - - I9#44 19 4 - 37 - ST. VINETr = 1M inUOIHS - WJCR PRPOED PREC MS SOLUES OF FIIWICIIS (FYS4/85) (USI '00) Term and ConditIons SbtA Total External Flnancing Intsrest Amrtize- Grace Coat _At * Sonce Rbte tim Period Pa)ynt DIRECILY PRWIECTW POJECTS Agricultwo, Forestry and Filheries Input Rovolving Fhd (banana Industry) OOS 721 90 08 . Project Is proeprod Banan Developmnt Progrm 740 740 100 UI, Unnomn .. .. ContinrAtion of UlK-ftlnacd progrm Agricultural Olverslfication & Prmtbn I 2500 2,500 100 USAID - - - Sector study caplted; projet Is at lapinbtaln ctbp Ind"try Industrial Estates V 3,3 3,000 90 0 4 15 5 Project ready for bnpi_nttion Chill Storage Facility 3 16 90 08 .. .. bimplaebtion stap R; Dlstllery I,500 1,400 93 OB .. . .. hplmntbtion sta Craft D levapnt Production Unit .. .. .. ES - - - plntation stp SUFPPRTINB INRAS ICItK Tr_botation WInird Hlgh-ey 11 Ioo 800 100 t - - - TUochnical, aonic nd financial feasibillty study cipeted Anoa Vale Airport iaprom_nt 2,750 2,475 90 0B. .. .. Feasibility study opileted Agriculture Foeder Road III 7,250 6,525 90 008 .. .. Rdy for Iplmentation Powr Supply lpron_nent of Electricity Supply 11 2,222 2,000 90 008 4 15 5 Equipment nade esecflled OWIA Microhydro Sttion 200 200 100 tlK - - Streoflw studies Hydroelectric Deviopmnt 33,100 24,600 74 IDA, CIDA, etc. .. .. Implemntatlon stage OTIER Mater Suppip l Sewrap Water Devalopmntt Instaliatlon of Motors 551 496 90 COB, UnLneoi .. . .. Project Is r edy for lwlmntation Georg ew yrea Mter Suppiy Systm 600 600 100 Taiwn . mplementation stae Education Student Loans V 500 500 100 00B 4 15 5 Continuation of onoIng achm Hlim Econoeics Extension Facility .. .. .. CIDAF .. .. .. Impleentation Stge "owing Mortgege Flnance 2,500 2,500 100 06 4 15 5 Continuation of ongoing schm Gorse-Mangrove I I 30 30 100 UK - - - Cantinution of onoIng project Adeinistrative Infrastructure Purchas of Police Radino 162 162 100 11 - - - Equipwent nade specified .. Not determlned, not availablo - 38 - ST.VIiIEN AMl THE 6 ANM)ES - OCmIi. TEOI4CAL A6ISTMACE AMU TRiNI PHIUMt Seorce Ouratlon Rmer Mlnibtry of Finac, Planning C De"lo_nt liKNISTS that Indias Scholarship Scim t Se"ral years MlI Felloship (Ecomosit - tP I.IK(OI) 2 Wm years Student Lans we Several year. 194Ad5 E0I35.OO0 M4ltlannnl Training Progra EEC Several year. Varilow di elpi leas Pool of Experts EEC Sevral years Verlna eactor Lend Valuation Adeer U 2 mn years Pomalbie extnalee nte 84AS Soclo-Econeic ODvelopnt Plaming 1w Senral yearr Inclading Civil Engler/Plnnr; Fbmnelel Anlyet and bc Ecenmisnt tAebblt Exprts) Project Davelopmnt Aristaca Progrm USAIO Several yoara Project davlop nt end Ine _ea t prertien ider rglenal USAIO Project Institutional Strengthening OEEV C08 6 mn yers Acceouting and finnbial _nat, Industrial Adieer Form 1mrovemnt Officer Iaces Tax Adviner CFTC I mn year Manpoear Planning IA4 6 en wanthl 5 YTer Dmlopnat Plen UC 9 me nentha Connlteey Services I A14 OAS Seholarsilp - Canade CIDA Several years Regional Project Voluntary Servicee Overman (VSOn U(CVS) Sevral years Varloa ectore Peace Corps LISA Several years Varlona eactora Ministry of Trade nd Agrieultre Agrenamit FRAME 2 _m yeara 2 Agrnoemlt for one yar each Vaterinry Surgeon tFC 2 wnu yearn Strangtimelng of Dl_mnd Dairy EEC I own yewr tbeaer Dion"e Pilot Project CD8tTEU) RbgilnI project Sal I Farn Developunt CvATS) WN4p/WdIQ 2 me years Mhin aphsia on techiology transfer ed tralslng of extenslon staff Farming Systm Rn aarch and Developamnt (CMI) CARICDH 5 years Including tt Sarvioa of Coordinator, OSAIO Agrofeaeti Plant PFtholgbit; Poet EOF Harvest nd Techniicen Miniltry of Ctmlcations. thrka end Lab.. Fnsibilty Study - Hydro Electricity D i"opnt UCw 1 mnotha Crpiatlon epeted Jaw 1964 institutioaI Strengthening of Government Finding Sch It 4 mn year. Provinlon for mneger nd ngimer for 2 wm year each Advlur Minlatry af Crmmu4tlons. Wrtks and Labour LK 6 n manthe Engineer tOO) Chief EngqIlr - IC1L WAiD 2 an ymrs InetietlouIl strengttnig - Port Authority CIDA Sevral yrCrs Traleing Msritim Trainlng Assistance CIODA Several yearn Rgional project tucrry Developnt - Feaiblillty Study COB Ministry of heaIth yneecoleglat FRCME I ma yar District Medical Officer mRAMX I mn yer Chuteauhblair Senior Mdical Offler CFTC 2 mn yeas Hospital Admlisitrator LK Several yers Health and FdalIy Planning WRFA Sevral years Regional project including training Suppl_ntry feeding of Vulnerableb reope WP Sevral yewr Including anssl rnc In hind Feadly Nurse Precti tionr Progr_ WPAm Several yeara Regienal project lnetitutlai star ttbaling - CWSA m 2 mn yea rI_g_nt - Engimering Adviser Water Reaurces - Inagant Developmnt LW Several year. Regonal project IMidistry of Foreln Affairs, Torim nd tletim I Security Tloqrl prextlon EEC Sevral years - 39 - ST. VINMEN AMl DE GRNDWIIES - MWJOR TEGMICAL ASSISTNICE lEoliFEiNrt 19W4/85 Source Duration Remarks Multisector Doelopaent llMP Sevral years Transfer of know hl through Expatriate National (TUaTEN) Construction Monitoring Unit UmP 2 nn years Agricultural Planning Unit UIP 2 nan years Wind and Solar Energy Amssmnt CDB(TEU) Reglonal projoct Tourlan product developent - study WB Feasibility study Grenadines Multipurpose Project WB Feasibility study Airport devlopment ClWDAunknown Mainiand St. Vincsnt; Fesibillty study Hydrological Network CID Data collection Tourlm nrketing EC Including Pronotion and Marketing Services; technical assistence Tourism work plan unknown Hotel staff training sch_m ms Setting up of training progranns Land tenure WP Education Adainistrative reform unknow Dsto experts UY Sevra l yers VarIous sctors Adult education and literacy program unknowin Electrical Enginoer unknown Institutional stnengthening of Arrowroot Association unknown Joint nutrition u,oport programs unknown - 40 - ANNEX II Page 1 ST. VINCENT AND THE GRENADINES MACROECONOMIC PROJECTIONS 1. In order to evaluate the prospects for the economy of St. Vincent and the Grenadines, flow-of-funds projections for 1984-1995 were made for the principal macroeconomic variables. The base year chosen was 1982. The analysis concentrated on the important national income variables, the operations of the public sector and the balance of payments. This annex reviews in detail the key assumptions employed in the economic projections and their implications for macroeconomic policy discussion for St. Vincent and the Grenadines. Key Assumptions 2. Output and Expenditure. The projections for the overall growth of the economy were made on the following assumptions: (a) The Government would undertake a vigorous crop diversification program aimed at reducing reliance on arrowroot (for which future demand is uncertain) and bananas. The USAID financed Agriculture Diversification project (estimated at US$2.5 million) is directed at this objective. In view of the inevitable slow adjustment by arrowroot farmers, growth in the agriculture sector will be gradual and average about 5% after 1986. (b) Manufacturing output is projected to grow by 5% between 1985 and 1995. Growth in 1984 will be modest (at about 1%) as the slowdown experienced in 1983 persists. The impetus for growth in 1985 will be the brewery company which is currently under construction. (c) Construction activities will be influenced significantly by the Cumberland Hydroelectric Project, estimated to cost US$33.1 million over 5 years. In addition, the CDB financed Agriculture Feeder Road project estimated at US$7.2 million is expected to be under implementation. It is thus assumed that growth in construction will average 7Z in 1985-87 and decline thereafter to about 2.5% by the end of the period (1995). (d) The service sector is expected to grow in line with the growth of GDP. Higher growth rates are nevertheless projected for the period 1985-1989 during the construction of the Cumberland Hydroelectric project. 3. Savings-Investment Gap. Domestic savings have been very low in the past. The economy has consequently relied heavily on UK budgetary assistance (which was phased out in 1980) and private remittances from abroad to compensate for the lack of domestic savings. The flow from foreign sources made possible the generation of positive gross national savings which averaged about 20% of GDP during 1980-82. The projections assume that government policies will aim at substantial increases in domestic savings. Growth in public and private consumption is therefore assumed at 60% of the growth rate of GDP during the period. This will result in a modest 1.2% growth in per capita consumption. - 41 - ANNEX II Page 2 4. The share of the public sector investment in total investment outlays is expected to remain relatively constant at 10-12% of GDP, except for the period during the construction of the Cumberland Hydroelectric Project when slightly higher ratios are projected. The national savings, although projected to be bouyant, will not be able to narrow the savings-investment gap in the medium term. The savings-investment gap is therefore expected to widen up to 1989 and narrow thereafter as the benefits of the previous heavy investment program materialize. 5. Public Sector Finances. On the basis of policies aimed at reducing the operating deficits of the non-financial public enterprises, the public sector finances are projected to improve. It is assumed that by 1988, the finances of the two public enterprises with considerable deficits, the Sugar Industry Ltd. and the Arrowroot Industry Association, would improve so that the nonfinancial enterprises would exhibit positive savings thereafter. Public savings are expected to grow steadily, averaging about 4% of GDP. Revenues are assumed to maintain the same growth as GDP, with slight decline expected after 1988 following the slowdown of project related imports. Public sector current expenditures are projected to grow less rapidly than revenues as expenditure control policies are implemented. 6. A central feature of the analysis for the public sector is to minimize public sector use of resources from the domestic banking system. External financing would thus be needed to support the high public sector investment program (PSIP). Given the levels of public sector savings projected for the period, it is assumed that the proportion of external resources necessary to support the PSIP will decline from 75% in 1983 to 45% in 1995. 7. External Sector. The balance of payments (BOP) is projected to improve in the long-term period. In the short- and medium-term period, sharp increases in project related imports, not matched by similar levels of exports, will result in sharp deterioration in the BOP during 1985-1988. The deficit in the BOP current account is projected to decline from 13% of GDP in 1982 to 9% in 1995. Exports are projected to increase by about 5% p.a. during 1985-1995, mainly from growth in agriculture exports (at the latter part of the period) and enclave manufacturing. 8. It is assumed that St. Vincent and the Grenadines will be able to continue mobilizing external resources largely on concessionary terms through bilateral agencies. Private sector external capital inflows are however assumed to play an important role in the future. By 1995, it is assumed that private capital inflow will finance about 40% of the current account deficit of the BOP as grant resources decline in absolute terms. Despite the size of the projected external inflows, interest payments are projected to increase gradually and thus, the debt service as a ratio of exports and non-factor goods is expected to remain low. - 42 - ANNEX II Page 3 Policy Implications 9. The assumptions employed in making the projections highlight the types of policies that are necessary to maintain a modest growth in St. Vincent and the Grenadines. A key consideration is the expansion of non-traditional agriculture through crop diversification. At the moment, the economy depends heavily on the exports of bananas (the prime commodity by a large margin), arrowroot, and to a limited extent on sweet potatoes, ground provisions, spices, vegetables and some specialty crops (exported mainly to the Caribbean). Sugar was reintroduced in 1980 with the intention of meeting domestic demand. On the basis of uncertainties regarding the future demand for bananas and arrowroot (St. Vincent's competitive position for arrowroot has eroded since 1982), the projections assumed no growth for both commodities. Export growth in agriculture, therefore, would depend largely on the increase in the volume of other crops and hence, the need to intensify the agriculture diversification program. The policy issues requiring urgent attention in order to promote agriculture diversification include (in order of priority) marketing, extension services, credit and land tenure. These issues have been discussed extensively in previous economic memoranda. 10. Equally important are policies to reduce the operating deficit of the nonfinancial public enterprises (as discussed in paras. 1.05-1.06 in the main text) and to improve public sector savings. In the latter context, efforts at public sector expenditure controls including wage restraints should be pursued. The exercise of restraint in public consumption, hopefully to be followed by the rest of the economy, should help improve domestic savings and thus reduce the economy's inordinate reliance on the external sector for financing its investment program. Furthermore, improvements in tax structure and administration, as noted in previous economic memoranda, are needed. The heavy reliance on indirect taxation (on goods and services, international trade and others) instead of sales taxation makes the present tax structure inflexible with negative implications for production and consumption. The feasibility and suitability of introducing a general sales tax to replace or complement the present wide range of indirect taxes (characterized by high and diverse rates) should receive government's future attention. - 43 - mm If Tble 1I ACW.L AND PIIDJECTED WEITUE ON GOP (EC$ mlliIon, conttnt 1182 prlie) Actull ProJtad 1192 19S3 19d4 1985 1966 1167 ISo8 11i1 1160 1n1 If2 163 134 3m Agriculture 29.3 30.5 30.6 31 .7 33.3 35.0 36.7 36.6 405 42.5 44.6 46.9 49.2 51.2 Manutfcturing 20.7 21.5 21. 22.6 23.5 24.5 25.5 26.5 27.5 A.6 29. 31.0 32.2 33.5 Construction 22.4 23.3 24.5 26.2 2.0 30.0 30.7 31.8 32.3 34.1 35.3 36.5 37. 3 .1 Servica. 114.4 119.2 121.9 127.4 134.2 141.5 147.0 153.2 159.7 166.4 173.5 180. WJ 195. MP (Factor Cot) 1866. 194.5 198.9 206.0 219.1 230.9 239.1 250.1 260.6 21.7 283.2 M6.2 307. 319.C Indirect Taxes les Subldler 31.0 39.0 39.9 41.6 43.9 46.3 46.1 50.0 52.3 54.4 56. 39.2 61.6 64.0 GCP (arit price) 223A. 233.5 23SBA 249.6 263.0 M.2 23.0 300.1 312.J 32C.1 339. 354.4 36.4 353.6 TUT AdJustunt 0.0 7.6 10. 11.0 9.4 8.3 7.6 7.0 5.9 3J 1.7 0.0 -1.4 -2A Gross Datic Ine 223.8 241.1 249.6 260. 272.4 25.5 295.6 307.1 316J 32.6 341J 354.4 366.1 331.1 Export. of Goods NFS 141.5 166.6 171.A 179.1 165.9 193.0 200.4 26.1 217.2 26.7 26.7 247.2 25.3 269.7 Capacity to lIport 141.5 174.2 162.4 190.1 15.3 201.3 206.0 215.1 223.1 230.4 238.4 2473 257.0 27.1 Ivorte of Goods NFS 200.6 252.4 230.2 251.1 52J 213.4 A.6 23.7 292.3 303.0 314.1 35.6 537.5 346.8 Total Expenditweo 262.9 299.2 297.3 321.6 340.0 357.6 366.2 375.7 31.0 402.4 417.3 432.7 4"4 462J Total Invrtunt 69 1 80.6 69.2 60.9 91.5 97.6 97.4 96.1 97.0 101.1 105.4 109. 114.5 116.9 Invesb,nt Flxrd 63.5 73.7 0.2 0.9 S1.5 17.6 97.4 56.1 97.0 101.1 105.4 MG9.3 114.5 116.9 Pubilc 23.5 22.8 23.9 33.5 41.5 44. 42J 39.1 37.5 39.1 40.6 42A.5 44.3 46A Prlvate 40.0 50.9 46.4 47.4 g.0 52.7 54.7 57.0 59.4 62.0 64. 67.3 70.2 72.1 Change In Invent. 6.4 6.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Ccnaptlon 213.0 216.6 31.1 240.7 246.5 2 70.0 210. 213. 291.0 301.3 311.9 322A 334.1 343.A Public 51.7 53.6 54.5 56.0 57.6 59.7 61.1 62.6 64.2 65.9 67.5 69.3 71.0 72.7 PrIvats 161.3 164.6 173.6 164.7 190.7 2D0.3 09J 216.3 225.6 254 24 333.6 33.1 271.2 Dmstlc Savings 10. 1434 10.7 86. 14.5 17.2 17.2 20.6 21 S 24.8 26.6 31.3 35.3 39.8 Factor Service Inca. -4J -4.1 -4.0 -5.1 4.0 4.4 4.3 4.0 -5.9 4.2 4.4 4.J -7.0 .7.3 Current Transfer. 35.2 41.3 32.5 34.0 35A 377 39.2 40.8 42.6 4.4 46.3 4.2 50.3 52.2 Natlonal Saving% 33.2 52.0 39.1 37.7 44.3 4S.5 50.1 55.4 56.5 63.0 67.8 73.0 78.4 84. GhP 219.0 229.3 234.7 244.5 257.0 270.J 21 J 294.1 306.9 319.3 33.5 347.7 362.A 376.4 mma Ite (S) Invetwatnt 31.2 34.5 2.0 32.4 34. 35.2 33A 32.O 31.0 31.0 31.0 31.0 31A 31.0 Notlonal Savingeow 18.4 22.3 16.4 15.1 16A 17.5 17.4 16.5 36. 11.3 20A 20.6 21.3 22.1 PW Growth .. 4.1 2.3 4.6 5.4 54 3.9 4.2 4.2 4.2 4.2 4.2 4.3 3J Sources Mleelon *etimtel. May 1984 AN- I TablI 2 A:IUKL ADI P0ECIED PUIC SECTOR FI)I(ES CEC mIllion, constant 1902 prlis) Actul ProJected 1#2 1963 1984 1965 19616 1987 1988 1969 1990 1991 1992 1993 1994 1995 Central Oevr_u t C.rmt Ravei 70.5 76.4 85.7 93.2 107.0 120.0 134.3 150.4 166.2 163.6 2D2.9 224.2 247.S m.7 TMs 62.5 69.1 75.7 b2.3 94. 106CD 116.6 132.9 146.8 162.2 179.2 196.1 216.9 240.9 No Tam* 6.0 9.3 10.0 10.9 12.5 14.0 15.7 17.6 19.4 21.4 23.7 2.2 23.9 31.6 Ca"rnt E!,ndltwo 65. 74.1 61.9 91.7 103.2 116.1 129.5 142A 155.2 166.7 183.3 199.3 216.6 234.9 Nope and Solarie 2W.7 34) 40AO U. 5D.4 S.7 63.3 69.7 75.8 62.4 89.5 97.3 104S 114.7 Goodsand Servles 24A 2C0 21.0 31.4 35.3 9.7 44.3 468 53.0 57.7 62J 66.1 74.1 80.3 Othr 10.1 12.3 13.9 15.6 17.5 19.7 22.0 24.2 26.3 23.6 31.1 33A 3CA 38.9 Central ovemrmt Saving 4.9 4.3 3A 1.5 3.9 3.9 4.7 7.7 11.0 15.0 19.6 25.0 31.2 37.6 Social Seclrity Saving 4.2 5. 6.7 7.0 7.5 83 9 9.7 10.3 10. 11.6 12.3 13.0 13B Paracbtul Saving 464) -5) -4.6 -5.0 -3.0 -1.9 0.0 1.0 1.5 2.0 3.0 4.0 5.0 6.0 PWllc Sctor Selvgi 2.3 3) 3.9 3.5 8.5 11.2 134 18.4 22.9 27d9 34.2 41.3 49.2 57.7 Capital Expenditures 27.6 20.4 254 39.4 53.3 62.9 65.1 64.1 65.2 72.1 79.7 8O.0 97.3 107.1 OWELL PJULIC SECTIR EFICIT -25.3 -16.6 -21.9 -35.9 -44.8 -51.6 -51.3 -45.7 -42.4 -44.4 -45.5 -46.8 -48.1 -49.4 Extrnrl Financing 21.9 16.2 164S 30.9 40) 48.1 45.3 43.2 40.4 42.7 44.5 46.3 48.1 49.4 Datic Fhmaclng 4.3 0.4 5.1 5.0 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0.0 NM It_ Ratio to 60 (2) Pai Ic Sevings 1D) 1.6 1.5 1.2 2.5 2.9 3.1 3.7 4.2 4.7 5.2 5.6 6.1 6.5 General aot. Seving 2.2 1IJ 1.5 0.5 1.1 1.0 1.1 1.6 2.0 2.5 3.0 3.4 3.8 4.2 Parastatal Savinp -3.0 -2.4 -2.6 -1.7 -0.9 -0.3 0.0 0.2 0.3 0.3 0.5 0.5 0.6 0.7 Social Security Savings 1.9 2.2 2.6 2.4 2.3 2.1 2.1 2.0 1.9 1.8 1.7 1.7 1.6 1.5 Generl Govt. Renus 31.5 32.1 33.2 31.7 31.7 30.9 30.6 30.6 30.6 30.6 30.6 30.6 30.6 30.6 Ta Revemis 27.9 2S.3 29.3 2.0 26A 27.3 27.0 27.0 27.0 27.0 27.0 27.0 274) 7.0 Sourets missIon etlentee. say 1964 ANEX II Table 3 ACTUAL AN PROJECTED BP.iC OF PATWNTS (US$ mllon) Actual Projected 1962 1983 1964 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 Exports fWS 52.4 62.4 68.3 75.4 85.3 96.5 108.9 121.6 134.9 149.7 166.0 183.9 203.7 225.2 Imports GIFS 74.3 83.2 86.2 99.6 114.9 131.0 146.8 160.4 176.7 196.9 218.6 242.1 267.5 294.0 Resource Blance -21.9 -20.8 -17.9 -24.2 -29.5 -34.5 -38.0 -38.8 -41.8 -47.2 -52.6 -58.2 -63.9 -6.9 Het Factor Inc. Py)nt. -1.8 -1.6 -1.6 -2.2 -2.9 -3.3 -3.6 -3.6 -3.8 -4.2 -4.7 -5.2 -.57 -6.3 Interest/Public Debt -0.6 -0.8 -1.0 -1.5 -2.0 -2.4 -2.5 -2.4 -2.5 -2.7 -3.0 -3.3 -3.7 -4.0 Otter -1.2 -0.8 -0.6 -0.7 -0.8 -1.0 -1.1 -1.2 -1.4 -1.5 -1.7 -1.8 -2.0 -2.2 Transfers 12.3 16.0 13.0 14.8 17.0 19.5 22.1 24.8 27.4 30.3 33.5 37.0 40.8 45.0 Currnt Accout Belance -11.4 -6.4 -6.5 -11.6 -15.4 -18.3 -19.4 -17.6 -18.2 -21.1 -23.9 -26.4 -28.7 -30.2 Public Capital (not) 8.3 6.0 6.2 11.5 15.1 17.8 17.9 16.0 15.0 15.8 16.5 17.1 17.8 18.3 b Grants 5.3 3.4 3.5 3.8 4.2 4.5 5.0 5.3 4.2 3.4 2.7 2.1 1.7 1.3 1 Lenn Dlbursements 3.8 3.3 3.7 6.3 9.4 11.6 11.0 8.9 8.8 10.6 12.1 13.3 14.2 15.1 Artizaticn -0.8 -0.7 -1.0 -1.3 -1.5 -1.7 -1.9 -1 .8 -1.9 -1 .8 -1.7 -1.7 -1.9 -1.9 Private Capital (net) 3.1 0.4 0.3 0.2 0.3 0.5 1.5 1.6 3.3 5.3 7.4 9.3 10.9 11.9 MO. I tm (X) IW Current AcconVllP -13.8 -7.1 4.8 -10.7 -12.3 -12.8 -11.9 -9.7 -9.1 -9.5 -9.7 -9.7 -9.6 -9.1 Debt ServIecaExports SIPS 2.7 2.4 2.9 3.7 4.1 3.8 4.0 3.5 3.3 3.0 2.8 2.7 2.7 2.6 Sources Mission setlmtes, baed on attwclnts 1 and 2. Hey 1964 ANN II Table 3 Attachunt I PEC1ED EXPORTS OF GWS (US$ million) Actual Projectbd 1962 1963 1964 1985 1986 1967 19 1989 1990 1991 1992 1993 I9s4 1995 Banana.s Volum (million lb.) 25.0 27.3 28.5 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 Value 9.0 9.8 10.3 10.0 10.8 10.8 10. 10.8 10.8 10.8 10.8 10.8 10.8 10.8 Flour Volum (m1111.i lb.) 2.7 24.3 25.2 26.3 27.3 28.4 29.5 30.7 32.0 33.2 34.6 36.0 37.4 38.9 Valu 5.6 4.J 4.9 S.1 5.3 5.5 5.7 6.0 6.2 6.5 6.7 7.0 7.3 7.6 Other AgrIculture 4.2 7.4 7.4 7.7 8.0 8.4 8.9 9.3 9.8 10.3 10.8 11.3 11.9 12.4 Othr 155 20.9 21.1 22.0 22.8 23.7 24.7 25.7 26.8 28.0 29.2 30.5 31.9 33.3 TOTL NEROW ISE 34.3 42.8 43.7 45.5 47.0 48.5 50.1 51.7 53.6 5SS. 57.5 59.6 61.8 64.0 Non Factor Servicee 18.1 18.9 19.8 20.8 21.9 23.0 24.1 2S.3 26.8 28.5 30.2 32.0 33.9 3S.9 EXORS nS 52.4 61.7 63.S 66.3 68.8 71.5 74.2 77.1 80.4 84.0 87.7 91.6 95.7 99.9 Export Price Indices Baoms 100.0 96.6 109.6 111.0 116.2 121.4 126.6 131.J 136.1 142.0 147.9 153.8 159.7 165.8 Flour 100.0 95.4 100.0 96.8 114.6 130.4 146.2 162.0 177.8 189. 201.8 213.8 225.8 237.7 Other Agriculwlr 100.0 97.5 114.9 119.5 132.4 145.3 158.2 171.1 183.9 196.4 212.9 227.4 241.9 256.3 Other 100.0 98.6 101.8 110.0 119.9 130.6 142.4 153.1 162.3 172.0 182.3 193.3 204.9 217.2 Total Nrclundli 100.0 97.8 105.7 110.6 120.6 131.1 142.2 152.9 162.7 173.1 183.9 195.0 206.6 218.5 110 Factor Services 100.0 107.9 111.5 120.4 131.3 143.1 155.9 167.6 177.7 188.4 199.7 211.6 224.3 237.8 EXP GM 100.0 101.0 107.5 113.7 124.0 135.0 146.7 157.8 167.7 178.3 189.3 200.8 212.9 22S.4 Exports (Current Valu) Bonans 9.0 9.7 11.2 12.0 12.5 13.1 13.7 14.2 14.7 15.3 16.0 16.6 17.2 17.9 Flour 5.6 4.5 4.9 5.0 6.1 7.2 8.4 9.7 11.0 12.3 13.5 14.9 16.4 18.0 Other Agricultwur 4.2 7.2 8.5 9.2 10.6 12.3 14.0 15.9 18.0 20.4 22.9 25.7 28.7 31.7 Othr 15.5 20.6 21.5 24.1 27.4 31.0 35.2 39.3 43.5 48.1 53.3 99.0 65.3 72.2 Totbl werchendie 34.3 42.0 46.2 50.3 56.6 63.6 71.2 79.1 87.2 96.1 105.7 116.2 127.6 139.7 Non Factor Services 18.1 20.4 22.1 25.1 28.7 32.9 37.6 42.5 47.7 53.6 60.2 67.7 76.0 85.4 EmPOr Os 52.4 62.4 68.3 75.4 85.3 96.5 108.9 121.6 134.9 149.7 166.0 183.9 203.7 225.2 Way 1984 MNEX II Table 3 Attachnmnt 2 PROJECTED IWORTS OF G#S (US$ million) Actual Projected 1982 1983 1984 1985 1986 1967 1968 1989 1990 1991 1992 1993 1994 1995 Food 20.6 21.3 21.7 22.4 23.3 24.2 25.0 25.7 26.6 27.4 28.3 29.2 30.1 31.0 Conwnr kbnufacturcs 18.6 19.5 19.9 20.5 21.4 22.2 22.9 23.6 24.4 25.1 25.9 26.7 27.6 28.4 Fuels 5.1 5.6 5.7 5.9 6.2 6.4 6.6 6.8 7.0 7.2 7.5 7.7 8.0 8.2 CbumicalaFertllIzers 6.5 7.1 7.2 7.4 7.7 8.1 8.5 9.0 9.4 9.9 10.4 10.9 11.4 11.9 Raw Materlals 2.3 3.7 3.8 3.9 4.0 4.2 4.3 4.5 4.6 4.8 4.9 5.1 5.2 5.4 Capital Goods 10.5 16.2 13.8 19.0 20.3 21.0 21.0 19.2 19.4 20.2 21.1 22.0 22.9 23.8 Total Merchandls 63.6 73.5 72.0 79.1 82.9 86.2 88.3 88.8 91.3 94.6 98.0 101.6 105.2 106.6 Mon Factor Servles 10.7 12.6 13.2 13.9 14.4 15.0 15.6 16.3 16.9 17.6 18.3 19.0 19.8 20.6 IWIS (NFS 74.3 86.1 85.2 93.0 97.4 101.2 103.9 105.1 108.3 112.2 116.3 120.6 125.0 129.2 oyert Price Indices Food 100.0 97.4 105.4 109.6 123.8 138.0 152.2 166.4 181.0 195.0 2D9.0 223.0 237.0 251.2 Coan r Manufactures 100.0 97.3 100.5 108.6 118.3 129.0 140.6 151.1 160.2 169.8 180.0 190.8 202.2 214.4 Fuels 100.0 96.0 96.0 100.0 109.4 118.8 128.2 137.6 147.1 165.9 184.7 203.5 222.3 240.9 CllmicaIaFertllizers 100.0 97.3 99.3 101.0 110.2 119.4 128.6 137.8 147.1 165.9 184.7 203.5 222.3 240.9 Rw MaterIals 100.0 97.3 105.4 109.6 123.8 136.0 152.2 166.4 181.0 195.0 209.0 223.0 237.0 251.2 Capital Goods 100.0 97.3 100.5 106.6 118.3 129.0 140.6 151.1 160.2 169.8 180.0 190.8 202.2 214.4 Total Merchandlse 100.0 97.3 101.9 107.6 118.7 130.3 142.4 153.9 164.9 177.7 190.7 204.0 217.6 231.6 NMn Factor Services 100.0 93.7 96.8 104.5 113.9 124.2 135.4 145.5 154.3 163.5 173.3 183.7 194.8 206.4 IMW4S GS 100.0 96.7 101.1 107.1 118.0 129.4 141.3 152.6 163.3 175.4 187.9 200.8 214.0 227.6 Inqiorts (Current Valun) Food 20.6 20.7 22.8 24.6 28.9 33.5 38.0 42.8 48.1 53.4 59.1 65.1 71.4 77.8 Consarnr Manufactures 18.6 19.0 20.0 22.3 25.3 28.7 32.2 35.7 39.0 42.7 46 7 51.0 55.8 60.9 Fuels 5.1 5.4 5.6 5.9 6.7 7.6 8.4 9.4 10.3 12.0 13.8 15.7 17.7 19.7 C_umIcalhsIFrt Ilzers 6.5 6.9 7.1 7.4 8.5 9.7 11.0 12.4 13.8 16.4 19.2 22.2 25.4 28.7 Raw materials 2.3 3.6 4.0 4.3 5.0 5.8 6.6 7.4 8.4 9.3 10.3 11.3 12.4 13.5 Capital Goods 10.5 15.8 13.9 20.6 24.0 27.1 29.5 29.1 31.1 34.3 37.9 41.9 46.3 51.0 Total Merchandise 63.6 71.4 73.4 85.1 96.4 112.3 125.7 136.7 150.7 166.1 186.9 207.2 229.0 251.6 Hon Factor Services 10.7 11.8 12.8 14.5 16.5 18.7 21.2 23.7 26.1 28.7 31.7 34.9 38.5 42.4 lwS 6IFS 74.3 83.2 86.2 99.6 114.9 131.0 146.8 160.4 176.7 196.9 218.6 242.1 267.5 294.0 - 48 - ANNEX III Page 1 of 10 ST. VINCENT AND THE GRENADINES A REVIEW OF THE AGRICULTURAL SECTOR A. Introduction 1. The agricultural sector, while declining somewhat in recent years, has managed to retain a position of crucial importance in the economy, in spite of a wide range of constraints. The estate system has declined dramatically in the last 20 years and there are now only a handful of large scale units remaining, although there has been a great deal of success in bringing abandoned land back into use either through direct production schemes or allocation to individual farmers. The overall land base is relatively small and fragmented but has been made productive through the use of comprehensive conservation measures and the use of intensive cropping techniques. Farm units of less than 4 hectares make up about 90% of the total and a high proportion of the major export crops derives from these. 2. Cropping is based on bananas (the prime commodity by a large margin) together with arrowroot, sweet potatoes, ground provisions, spices, vegetables and some specialty crops. Sugar was reintroduced in 1980 with the intention of meeting domestic demand. In the livestock sector production methods are generally not intensive but imports of meat are at a low level with the marked exception of chicken, the value of which exceeds all other meats combined. There is a modest export trade in live animals. Agricultural commodities still make up a high proportion of the value of merchandise exports, and St. Vincent and the Grenadines is dependent for its foreign exchange on how successfully it can market these items in a competitive international system. Inadequacy and instability of returns have been major problems over the years and have been particularly acute since 1982 with falling returns from bananas due to the depreciation of Sterling, an almost total collapse of the market for arrowroot starch and ongoing difficulties with the marketing of sweet potatoes, ground provisions, vegetables, etc. B. Profile of the Sector Crop Sector 3. Bananas. This has been the dominant crop for almost twenty years. Bananas are grown in a wide variety of systems ranging from intensive production in pure stands to intercropping where other crops are dominant. A general level of production of around 30,000 tonnes per annum has been maintained since the sixties (with the exception of the period immediately following the 1980 hurricane) and the industry has demonstrated the ability to adopt progressive practices at a rapid rate. Virtually all of the crop is sold on the British market through a contract arrangement with the Geest company. After a period of improving returns, prices have recently declined sharply due to the depreciation of Sterling and in the - 49 - ANNEX III Page 2 of 10 longer term the quota arrangement under which bananas from the Commonwealth Caribbean are admitted into the UK at a preferential price may be subject to some modification. In a more general sense the future viability lies in the continued adoption of techniques to improve productivity and to ensure that the maximum of marketable produce is shipped in the best condition possible. 4. Plantains. Over the last few years, plantains have become an important export crop, production rising from 413 tonnes in 1977 to 5,300 tonnes in 1982. The rapid development of this crop--about 80% of which goes to export--indicates the responsiveness of Vincentian farmers to opportunities in the marketplace. 5. Arrowroot. Once a major crop, output of arrowroot declined steadily through the sixties and early seventies reaching a low of less than 600 tonnes of starch in 1971. Later it recovered to about 1,000 tonnes and until recently the outlook seemed very promising with a new, lucrative and relatively large market for use as a coating on computer paper. However, acceptable substitutes have been developed by modifying less expensive starches and the industry is now at a critical stage, with less than 5% of the 16,180 tonnes produced in the 1982-83 season having been sold. Until the marketing situation can be defined and resolved the outlook for the industry is very uncertain. 6. Sweet Potato. This crop also declined through most of the seventies falling from about 4,500 tons per annum in the late sixties to a low of 753 tonnes in 1977. Since then there has been a strong recovery to 1,427 tonnes in 1982. A high proportion of the crop is exported to other countries in the region, mainly Barbados and Trinidad. 7. Ground provisions. This category covers the closely related group which includes yams, tannias, eddoes and dasheen. As with sweet potato the group declined through the mid-seventies reaching a low of about 1,700 tonnes in 1977, recovering to more than 3,200 tonnes in 1980. The markets are similar to those for sweet potatoes. 8. Coconuts. Whole nuts used to be an important export item, totalling 3.8 million units in 1980, worth approximately EC$1.5 million. Exports have since declined to only about 0.6 million units. A substantial, but very variable, amount of copra is produced (depending on the market for green nuts) some of which is processed locally, providing an average of close to 1,000 tonnes of coconut meal which can be used for livestock feed. 9. Vegetables. A wide variety of vegetables are grown, of which carrots are perhaps the most important, but (even in this commodity) output has declined even though a substantial quota for imports into the MDC's is available under the Caricom Agricultural Marketing Protocol. Tomato production has declined in recent years due to disease problems; the same situation applying to cabbages. Marketing problems rather than production - 50 - ANNEX III Page 3 of 10 constraints are the prime inhibitors to greater and more profitable production. 10. Fruits. Planting of fruit trees was encouraged in recent years and the potential is thought to be much greater than present output if marketing problems can be resolved. Citrus, mangoes and avocadoes are the most important fruits at the present. 11. Spices. Output of nutmegs, mace and ginger totalled close to 800 tonnes in 1980 with the export value of the two former at almost exactly EC$500,000 equal to about EC$2.60 per kg. Although no precise data is available for ginger, it is very likely that the value of all spice exports is close to EC$1 million. 12. Sugar. This crop was reintroduced in 1980 with the intention of replacing the majority of, if not all, imports. In 1982 approximately 600 ha were harvested yielding about 30,000 tonnes of cane from which 1700 tonnes of sugar were milled. Government grew a part of this acreage but the majority came from individual farmers and eventually it is hoped that all production will pass into their hands. Even when allowance is made for the fact that production is still at an early stage and that substantial advances should flow from identification of the most suitable varieties and cultural practices, yields to date have been disappointing. 13. Tobacco. Commercial production of Virginia tobacco began in 1978 and by 1982 had reached the level of about 100 tonnes of cured leaf. Soil and rainfall conditions are favorable for the crop and it may have considerable potential for the future, especially since the local manufacture of cigarettes has established that a very acceptable final product can be produced locally. 14. Peanuts. Production of this crop was at a peak in 1975 at 94 tonnes falling to 20 in 1977. Since then it has recovered to about 50 tonnes. Growing conditions are favorable but economic success will rest on effective penetration of the confectionary market. Livestock Sector 15. The structure of the livestock sector is, in many ways, the opposite of the cropping sector. The latter is very largely geared to external markets, while with livestock there are only very modest exports in the form of relatively small number of goats, sheep and pigs shipped live to Trinidad and Tobago and Barbados. In 1979, however, St. Vincent and the Grenadines had the lowest per capita level of imported meat and livestock products among the LDC's, but in spite of this, relatively little product moves through commercial channels as the number of animals passing through the abattoir could only have provided a fraction of consumption. Apart from the very few estates operations producing beef, the great majority of livestock production occurs on small farms using local feed sources and crop surpluses rather than intensive methods. - 51 - ANNEX III Page 4 of 10 16. Beef. Imports of beef are now at a relatively low level and the industry may be reaching the point where it cannot service the demand for the higher quality cuts because of the lack of adequate slaughter, cutting and storage facilities. There are a few estates raising beef with a total of perhaps 500 head and the Government has plans for a scheme with an eventual target of 300-500 animals. The remainder of the estimated total population of 7200 are found on the smaller farms where they are reared under an extensive system with small quantities of milk as a by-product. More intensive feeding to improve carcass quality and effective abattoir facilities are the keys to further import substitution. 17. Dairy. The Government has recently initiated a production scheme as part of the Diamond Dairy development but its expansion is being held back by the unavailability of suitable cattle at reasonable prices. The ultimate target is for a production herd of 150 animals but his will likely take a considerable time to develop. Meeting even a fraction of domestic demand of about 6 million litres will be a long term process even if local production could compete with the imported condensed or dried product. There is a modern UHT plant at Diamond, but this uses imported material for a reconstitution process and the very size of the batch runs needed for economic operation is a strong inhibitor to the use of local milk which is currently available in quantities far below the minimum required by the plant. 18. Pigs. Imports of pork are at very modest levels and there had been some progress made in substituting for processed products (sausages, hams, etc.) through the establishment of a small plant. The plant processes the whole animal whereas usually the higher value cuts are sold as fresh meat and the balance processed. Overall prospects for greater pork production are promising given the relatively large amounts of cull and surplus crop products (such as bananas, sweet potatoes, ground provisions) and a supply of coconut meal from the local factory. An integrated slaughter, cutting and processing facility would open the prospect of substituting for the relatively large amounts of processed products now imported at high cost. A few live animals are currently being exported to Trinidad. 19. Sheep and goats. There is a relatively large population of sheep and goats, estimated at 12,400 with perhaps a quarter of these found in the Grenadines. Goats are estimated at 4,000. Over the years; a substantial trade in live animals has developed with Trinidad and, in 1980, 942 sheep and 170 goats were exported with a total value of more than EC$70,000. In contrast to other LDCs the prices obtained by farmers appear to be reasonable, indicating that with some improvements this trade could be very lucrative. This substantial level of exports, together with the slaughter of another 350 animals at inspected facilities and what is likely an even greater level of local use, illustrates clearly the contribution that these classes of livestock are making to local meat supplies while earning significant foreign exchange. - 52 - ANNEX III Page 5 of 10 20. Poultry Meat. Faced with the high cost of imported feed, local production is now carried on by a handful of small scale producers producing batches of a few hundred at a time. Some market protection is provided by duties on imported product and a licensing system. Per capita consumption is probably close to 20 kg per annum and imports are currently at around 15 kg, most of which is in the form of necks, backs and wings. Prospects for the development of a local industry depend very greatly on the creation of a local source of inexpensive concentrate feed and the outlook in this regard has improved considerably now that the flour mill has added a feed manufacturing facility. Local producers could offer fresh product in competition to frozen imports, a substantial proportion of which appears to be a lower grade product dumped on offshore markets. 21. Es. Virtually all of local consumption is now being met by small scale producers. The sector is probably not more than marginally profitable but again prospects have been improved now that local feed is available. 22. Rabbits. The potential for expansion of the fledgeling rabbit industry is considerable in view of the high level of poultry imports and the ready availability of suitable feed. Experience has shown that satisfactory carcasses can be obtained with a minimum of concentrate feeding and that a superior product can be obtained from modest supplementation during the last two weeks before slaughter. The product has enjoyed good market acceptance and it would be an excellent substitute for the lower value chicken cuts which make up such a large proportion of imports. C. Major Constraints Marketing 23. Three important components of the marketing problem can be identified--market information, storage and packaging, and processing. Aside from bananas and arrowroot whose marketing is handled by the respective organizations, a substantial proportion of the remainder of the export crops is handled by the St. Vincent Marketing Corporation (SVMC) whose services cover collecting, bagging, shipment and the collection and distribution of receipts. The remainder of the export trade is handled by private traders who provide services from the farm gate onward. Although the role of SVMC is satisfactory within its limited resources, the services provided by the individual operators tend to be inadequate, especially as relating to grading and packaging. The issues on marketing must be treated in a coordinated way if the situation is to be dealt with effectively. This can only be achieved through a major and coordinated effort to identify markets, the most suitable ways of selling into them and the most effective form of product. Once these have been identified, appropriate storage, processing and packaging facilities can be assessed and provided. The long-term viability of the industry is dependent on the creation of - 53 - ANNEX III Page 6 of 10 attainable and stable market opportunities which allow producers to generate the profits necessary for continued adoption of new technology and thus make agricultural development a self-sustaining process. Extension Service 24. This is a major constraint at this time as the viability of the agricultural industry is ultimately dependent on the selection, dissemination and adoption of productive techniques which allow farmers to maintain a level of efficiency comparable with their competitors. The shortcomings of the service relate much more to deficiencies in staff levels and infrastructure needed for efficient operation rather than a lack of technical capability. The Ministry of Trade and Agriculture is responsible for extension for both crops and livestock. There are at present many vacancies in its modest staff establishment, and resources to provide a comprehensive staff development program either through in-service training or external courses are lacking. The Banana Growers Association (BGA) operates its own extension services supplemented by WINBAN staff and some specialists funded by external aid agencies. USAID is currently preparing a proposal to develop the extension service and this should receive high priority. Given a rebuilding of staff deficiencies in relation to housing, transportation, equipment and communications, a substantial increase in the overall capability could be expected within a relatively short period. Over the longer term, technical capability could be significantly and rapidly improved through the provision of in-service training and use of educational programs already available within the Caribbean. Credit 25. The Agricultural and Cooperative Bank was merged with the Development Corporation (DEVCO) in 1982 to improve the availability of credit to farmers. Funds are also available through two schemes operated by CDB: The Farm Improvement Credit Scheme (FIC) and Agricultural Production Credit (APC). While both are useful, the generally high interest rates charged, the loan conditions and procedures, and limited funding available have all served to restrict coverage to only a small fraction of farmers. In general, the commercial banks are reluctant to lend to farmers, who do not have full title and, thus, have little collateral to offer. There is a pressing need for a scheme which would quickly make available small loans with the minimum of formalities and collateral. While giving full recognition to the risks and problems inherent in such an approach, the need is self-evident given that the majority of farmers lack effective access to the type of credit needed to fund the practices which would make their operations more productive. DEVCO would be a logical conduit for such a scheme, but it would need staff and institutional strengthening. - 54 - ANNEX III Page 7 of 10 D. Commodity Prospects Crop Sector 26. Bananas enter the UK under a preferential pricing arrangement for products from the Commonwealth Caribbean. The current output is less than the overall quota and there are good expectations for the continuation of this market, at least in the short and medium terms. The market for arrowroot has suffered a virtual collapse in 1982 with virtually none of the production from the 1982-83 crop year having been sold. It is by no means certain if this represents a permanent reversal or whether it is due to substitution in both the industrial and food market, or a result of inflexibility in price setting by the Arrowroot Industry Association (AIA), or a combination of the three. The need to establish what the real situation is, while at the same time attempting to clear some of the inventory, is most urgent as the outlook of the industry is uncertain. 27. On sugar, there is currently an internal market for a little more than 3,000 tons. At the usually accepted yield of 3 tons per acre this would indicate that local demand could be met by about 500 ha, which is less than what is currently under cultivation. Production beyond domestic demand would mean attempting to penetrate an extremely competitive regional and international markets. 28. The prospects for other crops (sweet potatoes, ground provisions, coconuts, vegetables, spices, fruits, and tobacco) are generally favorable, provided that vigorous and continuing efforts are made to develop and retain markets and that as wide a range as possible of market opportunities is tapped. Improved packaging or additional processing before shipment are likely to be increasingly important components in an effective market strategy for these crops. Livestock Sector 29. The structure of the livestock sector is, in many ways, the opposite of the crop sector. The latter is largely geared to the external market, while with livestock there are only very modest exports chiefly to Trinidad and Tobago and Barbados. Imports of beef are at a level of less than 1 kg per capita and much of this is a higher quality product for the tourist trade. Some penetration of this market could be obtained if proper abattoir and preparation facilities were in place. Similar facilities could also allow local sources of pig meat to meet the strong demand for processed items such as ham, bacon and sausage. 30. Current imports of poultry are high; the local industry has never been capable of meeting the demand as the price of imported concentrates-- which make up more than 75% of broiler production costs--were so high. If the new feed mill can provide consistent, high-quality feed at reasonable prices, local production may expand, especially if the Government would - 55 - ANNEX III Page 8 of 10 enact grading legislation to control the quality of imports and provide reasonable protection against dumping of produce from offshore. Sheep and goats provide a considerable contribution to local meat supplies and there are modest exports of live animals to the rest of the Caribbean. Provision of an adequate abattoir with cutting and freezing capability would enhance the prospects of export sales. 31. The local market for fluid milk is now being met by the UHT skim milk product from Diamond Dairy with domestic sales of close to one million litres annually. All the constituents for this product are imported and any really substantive substitution by local product--at least in the short term--is most unlikely. Similarly, prospects for substitution of products such as cheese, butter, milk powder, etc. are even more remote unless there is a dramatic change in world price levels. E. Projects and Measures Required to Develop Agriculture 32. An analysis of constraints and opportunities within the sector has been provided in order that the complexity of the situation should not in any way be underestimated. The main conclusion that can be drawn from that review is that Vincentian farmers have not, by and large, benefitted to the full extent from what has been an impressive production record due mainly to the inability to effectively market the wide range of agricultural commodities which are produced. This is particularly true today, with an almost total collapse of the arrowroot market, declining prices for bananas and uncertainties in relation to other export commodities. There is a wide range of constraints impinging on the ability to produce--and to achieve high levels of productivity--but overall, marketing, in all its aspects, is the key bottleneck. 33. The pitfalls inherent in a strategy of making large investments in one or two projects is illustrated by the difficulties now facing the sugar and dairy projects. The former has absorbed large amounts of capital to provide for what is essentially a small scale market opportunity, while the latter has put in place expensive processing facilities which face daunting obstacles in developing markets which will allow them to operate economically; at the same time there is no immediate prospect of a market for local milk producers. In these circumstances, the most appropriate development and investment strategy is seen to be one where the marketing problems are addressed in a comprehensive way, while at the same time dealing with the two constraints most affecting farmer's ability to achieve high productivity; i.e., extension services and credit. The following should be regarded as a starting point for further investigation and evaluation rather than firm recommendations at this point. Marketing 34. Notwithstanding the many marketing studies which have been carried out in the past, there is still a need for a comprehensive review which would address all marketing problems in a coordinated way. There are - 56 - ANNEX III Page 9 of 10 three main aspects of the problem--market information, storage and packaging and processing. In order to treat these simultaneously, the study should have the following components. (a) Market information: A review of specific market prospects for all the major agricultural commodities to include the following components: - Identification of specific markets; - recommended marketing method; direct, contract sales, commission, marketing agent, etc.; - identification of range of products to be marketed, fresh, partly processed, processed, etc. (b) Storage: - Identification of storage needs for specific commodities for marketing options as established in (a); - evaluation of the need for a multi-user general storage facility near the harbor; - evaluation of a multi-user cold storage facility including siting recommendation. (c) Packaging and processing: Inter alia, the following should be evaluated: - A multi-user packaging facility; - renovation or replacement of the existing abattoir to provide cutting, aging, chilling and freezing facilities; - a small plant for processed meat products operated in conjunction with the abattoir; - small scale copra processing facilities; - small scale facilities for the preparation of jams, juices, preserves, dehydrated products, etc. - processing facilities for specific commodities identified in (a). The Extension Service 35. The shortcomings in the service relate much more to shortage of staff and infrastructure rather than a lack of technical ability. Recent studies and discussions with officials of the Ministry indicate a good deal of agreement on current priorities, viz.: Staff. Fill existing vacancies and review general organization. Housing. Expansion of office facilities, some staff housing at outlying stations, additional storage facilities away from office accommodation. - 57 - ANNEX III Page 10 of 10 Equipment. New office equipment, facilities for mapping, etc. Transportation. Sufficient vehicles to allow all staff to efficiently carry out their duties. Training. Provision for constant upgrading of junior staff through in-service training, higher level training through courses available in the region. The ongoing USAID project envisages action on most of these items and its implementation should be encouraged at an early date. Any item not covered in that programme should be identified and be addressed by another agency. Credit 36. There is a need for an informal system to make credit available to farmers for the short and medium terms (up to 3 years) specifically for measures to permanently improve productivity. Examples for which such credit might be available would be purchase of small machinery, acquisition of improved livestock, improvements to buildings, etc. The system would rely on the farmer's record as a producer and standing in the community rather than possession of collateral and would aim to reduce formalities--and thus the time for approval--to a minimum. The approval process could be administered on a local basis and use the knowledge of Ministry staff in the area in the evaluation of applications; the process should be entirely apolitical. The difficulties and risks should not be underestimated but such a scheme is necessary if the overwhelming majority of small farmers are to escape from a situation of generally low productivity. In view of the risks, the initial amount of capital should be modest--say, EC$500,000--and the scheme should be fully evaluated after perhaps one or two years before additional capital is allocated. DEVCO would be the logical agency to administer such a scheme. The immediate effect of a pilot project of this kind would be limited, but, if successful, it would provide a suitable conduit for much larger amounts of capital in the medium term by which time, efforts to provide improved marketing options should be bearing fruit. - 58 - ST. VINCENT AND THE GRENADINES STATISTICAL APPENDIX Table of Contents Standard Tables 1. National Accounts Summary in EC$ at Current Prices 2. National Accounts Summary in US$ at Constant Prices 3. Balance of Payments in US$ at Current Prices I. Population 1.1 Selected Vital Statistics II. National Accounts 2.1 Sectoral Origin of Gross Domestic Product at Current Factor Cost 2.2 Sectoral Origin of Gross Domestic Product at Constant 1977 Factor Cost 2.3 Expenditure on Gross Domestic Product at Current Prices 2.4 Expenditure on Gross Domestic Product at Constant 1977 Prices 2.5 GDP Deflators III. Balance of Payments 3.1 Balance of Payments 3.2 Merchandise Imports (C.I.F.) by End-Use Category 3.3 Value, Volume and Unit Price of Major Exports 3.4 Terms of Trade 3.5 Direction of Trade IV. External Debt 4.1 External Public Debt Outstanding Including Undisbursed 4.2 Service Payments, Commitments, Disbursements and Outstanding Amounts of External Public Debt 4.3 Structure and Terms of External Public Debt V. Public Sector Finances 5.1 Central Government Current Expenditures 5.2 Central Government Current Revenue 5.3 Central Government Operations 5.4 Summary Operation of the General Government 5.5 Summary Operation of Public Sector Nonfinancial Enterprises 5.6 Summary Accounts of the Public Sector 5.7 Financing of Public Sector Investment - 59 - STATISTICAL APPENDIX Table of Contents (Cont'd) V. Public Sector Finances (Concluded) 5.8 Public Sector Investment Program, 1982/83-1984/85 5.9 Proposed New Projects, 1984/85 5.10 Summary of Public Sector Capital Expenditures by Sectors 5.11 Summary of Public Sector Investment Program by Sources of Financing VI. Money and Banking 6.1 Consolidated Commercial Bank Operations 6.2 The Foreign Commercial Bank Operations 6.3 The National Commercial Bank Operations 6.4 Distribution of Commercial Bank Loans and Advances to the Private Sector 6.5 Interest Rate Structure 6.6 Eastern Caribbean Central Bank VII. Agriculture, Tourism and Other Sectors 7.1 Estimated Production of Major Commodities 7.2 Selected Tourism Data 7.3 Total Visitor Arrivals By Month 7.4 Total Visitor Arrivals By First Port of Entry 7.5 Generation and Sales of Electricity 7.6 Fuel Consumption VIII. Prices 8.1 Consumer Price Index (Old Series) 8.2 Consumer Price Index (New Series) 8.3 Prices of Gasoline, Diesel and Kerosine 8.4 Wages of Selected Occupation at Bottlers Ltd. 8.5 Exchange Rate Movements - 60 - Table Is ST. VINCENT AND THE GRENADINES - NATIONAL ACCOUNTS SUMMARY (ECS Million at Current Prices) 1977 1978 1979 1980 1981 1982 1983 1. Sross Domestl Product 94.0 122.1 140.1 158.4 197.0 223.8 244.2 2. Resource Cap Cm - x) 41.1 25.2 51.5 66.1 47.2 59.1 56.1 3. Imports (t + nfs 85.9 104.0 140.1 170.9 178.7 200.6 224.6 4. Exports (9 + eta) 44.8 78.8 88.6 104.8 131.5 141.5 168.5 5. Total Expendituree to + 1) 135.1 147.3 191.6 224.2 244.2 282.9 300.3 6. Consumptlio 108.6 119.5 142.8 161.2 178.7 213.0 220.8 7. Pueblc 23.1 29.5 33.6 37.7 44.9 51.7 56.9 8. Private 85.5 90.0 109.2 123.5 133.8 161.3 163.9 S. Investment 26.5 27.8 48.8 63.0 65.5 69.9 79.5 10. Fixed lnvestefst 23.9 25.9 44.4 57.3 59.5 63.5 72.7 11. Changes In stock 2.6 1.9 4.4 5.7 6.0 6.4 6.8 12. Domestic Saying (1 - 6) -14.6 2.6 -2.7 -3.1 18.3 10.8 23.4 13. Not Factor Inoe,m - - -1.6 -2.4 -1.9 -4.8 -4.3 14. Net Currext Transters 23.5 25.1 35.9 32.9 32.7 33.2 41.0 15. NatIonal $aving (12 + 13 + 14) 8.9 27.7 31.6 27.4 49.1 39.2 60.1 Average Exchange Ratet 16. EC$ per US. 2.7 2.7 2.7 2.7 2.7 2.7 2.7 - 61 - Table 2. ST. VINCENT AND THE GRENADINES - NATIONAL ACCOUNTS SUNMARY (Nillons of US$ at Constant 1977 Prlces) 1977 1976 1971 1910 1981 1982 1963 1. Gross Domestic Product 34.6 39.1 40.5 42.3 46.1 47.4 49.4 2. Terms of Trade Effect - -1.0 -2.6 -2.5 -2.0 -0.7 3. Gross Domoestic Income 34.8 81.1 31.S 39.S 43.6 45.4 46.7 4. Resource Cop (S - 6) 15.2 6.7 IS.0 IS.7 10.6 13.4 13.2 S. Imports (9 + nfs) 31.8 35.8 40.1 40.5 40.0 4S.S 52.7 6. Capacity to Import 16.6 27.1 25.9 24.8 29.4 32.1 31.S 7. Exports (9 + nfs) 16.6 27.1 26.9 27.6 31.9 34.1 40.2 8. Total Expenditures SO.0 48.3 54.6 55.2 54.2 56.8 61.9 9. Consumption 40.2 39.8 40.3 40.1 39.5 43.2 43.9 10. Public 8.6 9.6 9.2 10.4 10.1 10.2 10.6 11. PrIvate 31.6 30.0 31.1 29.7 29.4 33.0 33.3 12. investment 9.8 8.5 14.3 15.1 14.7 15.6 18.0 13. Fixed Investment 6.9 7.9 13.0 13.7 13.4 14.2 16.4 14. Changes In Stock 0.9 0.6 1.3 1.4 1.3 1.4 1.6 IS. Domestic Saving (3 - 9) -5.4 -0.7 -0.8 -0.6 4.1 2.2 4.8 16. Not Factor Income - - -0.4 -0.6 -0.4 -1.0 -1.0 17. Not Current Transfers 6.7 8.8 10.0 6.1 7.0 7.2 9.9 i8. National Savings (15 + 16 + 17) 3.3 8.1 6.6 6.9 10.7 8.4 13.7 Local Currency DOefltors (1977-100) 19. Gross Domestic Product 100.0 115.7 128.1 138.3 158.1 179.8 162.9 20. Imports (9 + nfs) 100.0 107.S 126.7 156.4 165.5 163.2 157.8 21. Exports (g + nfs) 100.0 107.9 122.0 140.7 152.6 153.6 155.2 22. Total Expenditures 100.0 113.1 130.3 149.9 166.9 179.2 161.7 23. Public ConsumptIon 100.0 111.3 134.9 134.6 164.5 188.0 199.0 24. Private Consumption 100.0 111.1 130.2 153.8 166.3 180.8 182.1 25. Fixed Investment 100.0 120.7 126.4 154.4 165.4 166.0 163.6 26. Changes In Stocks 100.0 120.7 126.4 154.4 165.4 166.0 163.6 27. Factor Income and Transfers 100.0 105.6 133.3 150.0 172.7 171.4 153.5 26. Exchange Rate Indexa US Cent/EC$ 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Current price ECS date In Table I were converted to constant 1977 dollars using the local currency deflators shown In lines 19-28 and the exchange rate Index. In the absence of individual deflators for fixed Investment and changes In stock, tho general Investment Index Is usod for both. - 62 - Table 31 ST. VINCENT AND THE GRENADINES - BALANCE OF PAYMENTS (US$ MilIlon-Current Prices) 1977 1978 1979 1980 1981 1982 1983 1. Exports (g * nfe) 16.6 29.2 32.8 38.8 48.7 52.4 62.4 2. Merchandise (f.o.b.) 10.7 18.1 19.1 21.1 29.8 34.3 42.0 3. Nonftctor ServIcos 5.9 11.1 13.7 17.7 18.9 18.1 20.4 4. Imports (9 + nfs) 31.8 38.5 51.9 63.3 66.2 74.3 83.2 5. Merchandise (c.l.f.) 30.3 36.2 46.3 57.1 58.2 63.6 71.4 6. Nonfactor Services 1.5 2.3 5.6 6.2 8.0 10.7 11.8 7. Resource Balance (1 - 4) -15.2 -9.3 -19.1 -24.5 -17.5 -21.9 -20.8 8. Net Factor Income - - -0.6 -0.9 -0.7 -1.8 -1.6 9. Factor Receipts n.a. n.a. 0.6 0.8 1.4 1.1 1.3 10. Factor Payments n.a. n.a. 1.2 1.7 2.1 2.9 2.9 II. CM A LT Interest Paid) 0.2 0.2 0.4 0.7 0.9 0.9 0.9 12. Not Current Transfers 8.7 9.3 13.3 12.2 12.1 12.3 15.2 13. Transfer Receipts n.c. n.c. 18.6 20.0 21.2 20.5 23.6 14. Transfer Payments n.s. n.e. 5.3 7.8 9.1 8.3 8.4 15. Current Balance (7 + 8 + 12) -6.5 - -6.4 -13.2 -6.1 -11.4 -7.2 N & LT CAPITAL INFLOW 16. Direct Investment 2.9 -1.1 0.6 1.1 0.5 0.6 3.0 17. Official Grant Aid 2.4 2.7 2.8 3.9 5.3 5.3 4.2 18. Foreign Borrowing (not) 0.8 1.1 2.2 4.4 2.7 2.3 2.6 19. Disbursements 0.8 1.1 2.3 4.6 3.2 2.8 3.3 20. Repayments 0.0 0.0 0.1 0.2 0.5 0.5 0.7 21. Other N * LT (not) - - - - 0.9 0.4 0.3 22. Not Crodit from IMF - - - 0.7 1.8 - - 23. Disbursoments - - - 0.7 1.8 - - 24. Repayments - - - - - 25. Net Short Term Capital 2.1 0.1 -2.1 1.6 -2.0 6.4 -1.4 26. Capital Flows MEl n.c. n.c. n.c. n.a. n.n. na.. n.a 27. Errors and Omissions -1.2 -3.1 3.1 1.7 2.0 3.9 -1.3 28. Change In Net Reserves C- Indicates Increase) -0.5 0.3 -0.2 -0.2 -0.2 -0.2 -0.2 Table 1.13 Sr. VINIENT A DE (RENINES - SELECTED VITAL STATISTICS 1971 1972 1973 1974 1975 1976 1977 1978 1979 1960 1981 1982 1963 Tobtl End of Year Population 90,952.0 93,367.0 95,22.0 97,477.0 99,643.0 102,243.0 103,946.0 105,787.0 107,723.0 109,274.0 111,110.0 113,443.0 114,350.0 Crudr Birth Rats (per 1,000) 42.0 40.7 34.7 35.4 34.9 3S.0 3DA. 31,5 32.2 23.7 29.4 Crud Deth Rte (per 1,000) 8.3 9.8 10.6 7.5 8.5 7.9 7.6 7.2 6.6 6.9 6.6 Rate of Natural InOre 33.7 30.9 24.1 27.9 26.4 30.1 23.2 24.3 25.7 21.8 22.S Total Births 3,714.0 3,705.0 3,243.0 3,373.0 3,396.0 3,786.0 3,152.0 3,275.0 3,409.0 3,075.0 3,22.0 Total Deaths 734.0 890.0 990.0 716.0 832.0 786.0 778.0 745.0 693.0 724.0 726.0 atul Increas 2,960.0 2,815.0 2,253.0 2,657. 2,566.0 3,000.0 2,374.0 2,530.0 2,716.0 2,361.0 2,494.0 .. . Nbt Migration 1 -400.0 400.0 -400.0 -400.0 400.0 -400.0 4671.0 -69.0 -700.0 -800.0 -4.0 *- *. Not Population Incres 2,560.0 2,415.0 1,853.0 2,37.0 2,166.0 2,600.0 1,703.0 1,841.0 1,936.0 1,551.0 1,836.0 Infat D"ths 190.0 258.0 323.0 214.0 219.0 25.0 175.0 161.0 130.0 185.0 147.0 .. Infat Nartailty Rate 51.2 69.6 99.6 63.4 64.4 54.1 55.5 49.2 38.1 39.4 45.6 a/ Tere re no dab on migratin for 1971-76; the Gowsrnt stimtes nat migration for tme yars at 400/yar. Sourcs Ministry of Helth, Ministry of Finance, Planning and Dvsloot und misalon stimntes. Way 1964 - 64 - Table 2.1t ST. VINCENT AND THE GRENADINES - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST (EC$ Mililon) 1977 1978 1979 1960 1981 1982 1983 Agriculture, Livestock * Fishing 13.3 18.8 18.4 18.4 28.2 29.3 31.2 Quarrying 0.3 0.3 0.4 0.5 0.6 0.6 0.7 Construction 10.0 11.5 14.4 18.4 21.1 22.4 24.0 ManufacturIng 5.9 10.3 13.1 14.2 18.4 20.7 21.3 Electricity and Water 2.4 2.4 3.0 3.3 4.4 5.2 6.8 Transport and Communicatlons 11.5 16.5 17.9 20.1 25.0 29.8 31.1 Wholesale and Retail Trade 10.4 11.5 12.2 16.3 17.6 18.5 19.6 Hotel and Restaurants 1.4 1.9 2.2 2.7 3.7 4.1 4.5 Banking, Fineace, Real Estate & Bueinese Services 6.1 8.4 10.2 11.2 14.3 16.5 18.6 Public Administration 15.4 19.6 22.9 23.8 29.8 34.0 38.2 Other Services 2.6 3.0 3.3 4.6 5.3 5.7 6.2 GROSS DOMESTIC PRODUCT AT FACTOR COST 79.3 104.2 118.0 133.5 168.4 186.8 202.2 Sources Ministry of Finance, Planning and Development, OECS Secretariat & Mission ati.etee. Nay 1984 - 65 - Table 2.2. ST. VINCENT AND THE GRENADINES - SECTORAL ORIGIN OF 0ROSS DOMESTIC PRODUCT AT CONSTANT (1977) FACTOR COST (ECS mIllon) 1977 1976 1979 1960 1961 1962 1963 Agriculture, Livestock & Fishing 13.3 16.0 14.0 12.1 16.3 17.7 16.6 Quarrying 0.3 0.3 0.3 0.3 0.3 0.3 0.4 Construction 10.0 9.9 10.6 11.2 11.7 11.7 11.l Manufacturing 5.9 8.6 10.6 11.1 11.3 12.0 12.3 Electricity and Water 2.4 2.5 3.1 3.2 3.3 3.6 4.0 Transport and Communications 11.5 13.2 13.6 15.6 17.9 19.4 20.2 Wholesale and Retail Trade 10.4 10.0 10.7 11.1 10.7 11.1 11.2 Hotel and Restaurants 1.4 1.7 2.9 3.7 3.2 3.4 3.5 Banking, Finance, Real Estate & BusIness Services 6.1 7.8 7.3 7.7 7.9 7.9 6.3 Public Administration 15.4 16.1 17.0 17.7 IS.1 IS.I 19.2 Other Services 2.6 2.9 2.9 S.l 3.3 3.4 3.S GROSS DOMESTIC PRODUCT AT FACTOR COST 79.3 69.0 93.0 *7.0 164.0 106.6 113.0 Sourceso MinIstry of Finance, Planning and Development, 0E6 Secretariat & MIsslon estimates. May 1984. - 66 - Table 2.3i ST. VINCENT AND THE GRENADINES - EXPENDITURE ON GROSS DOMESTIC PRODUCT AT CURRENT PRICES (ECS MillIon) 1977 1978 1979 1980 1981 1982 1983 Total Coneumptlon 108.6 119.5 142.8 161.2 178.7 213.0 220.8 Public Sector 23.1 29.S 33.6 37.7 44.9 51.7 56.9 Private Sector 65.5 90.0 109.2 123.5 133.8 161.3 163.9 Gross Domestic Investment 26.5 27.8 48.8 63.0 65.5 69.9 79.S Public Sector 9.8 10.7 16.8 24.1 28.2 23.5 22.4 Private Sector 14.1 15.2 27.6 33.2 31.3 40.0 50.3 Inventory change 2.6 1.9 4.4 5.7 6.0 6.4 6.8 goode ead Mon-Factor services Solence -41.1 -25.2 -51.5 -66.1 -47.2 -59.1 -56.1 Exports of Goods and NFS 44.6 78.8 88.6 104.8 131.5 141.5 168.5 Imports of Goode and NFS -85.9 -104.0 -140.1 -170.9 -178.7 -200.6 -224.6 gross Domestic Product at Markot Prices 94.0 122.1 140.1 158.1 197.0 223.8 244.2 Minus: Indirect Texes Not of Subsidles 14.7 17.9 22.1 24.6 28.6 37.0 42.0 Gross Oomestic Product at Factor Coet 79.3 104.2 118.0 133.5 168.4 186.8 202.2 Net Factor Income - - -1.6 -2.4 -1.9 -4.8 -4.3 Factor Receipts C-) -) (1.6) (2.2) (3.8) (3.0) (3.5) Factor Payments C-) I-) (-3.2) (-4.6) (-5.7) (-7.8) (-7.8) Gross National Product at Current Factor Cost 79.3 104.2 116.4 131.1 166.5 182.0 197.9 Less Deproeletlon on Fixed Capital S.S 6.2 7.0 9.1 11.5 13.5 16.2 Net National Product at Fector Cost 73.8 98.0 109.4 122.0 155.0 168.5 181.7 Seoreess MInistry of Flnnce, Planning & Development, OECS Secretariat end Mission eat ma toe. May 1554 - 67 - Table 2.4. ST. VINCENT AND THE GRENADINES - EXPENDITURE ON GROSS DOMESTIC PRODUCT AT CONSTANT 1977 PRICES (ECS Million) 1977 1978 1979 1980 1981 1982 1983 Total Consumption 108.6 107.5 108.8 108.3 106.8 116.7 118.6 Public Soctor 23.1 26.5 24.9 28.0 27.3 27.5 28.6 Private Sector 85.5 81.0 83.9 80.3 79.5 89.2 90.0 Gross Domestic Investment 26.5 23.0 38.6 40.8 39.6 42.1 48.6 Public Sector 9.8 8.9 13.3 15.6 17.1 14.1 13.7 Private Sector 14.1 12.6 21.8 21.5 18.9 24.1 30.7 Inventory Change 2.6 1.5 3.5 3.7 3.6 3.9 4.2 Goods end Non-Factor Service Balance -41.1 -23.7 -38.0 -34.8 -21.8 -30.8 -33.7 Exports of Goods and NFS 44.8 73.0 72.6 74.5 86.2 92.1 108.6 Imports of Goods and NFS -85.9 -96.7 -110.6 -109.3 -108.0 -122.9 -142.3 Cross Domestic Product at Market Prices 94.0 105.5 109.4 114.3 124.6 128.0 133.5 MInurs Indirect Taxes NMt of Subsidies 14.7 16.1 16.4 17.3 18.6 19.4 20.5 Gross DomestIc Product at Factor Cost 79.3 89.4 93.0 97.0 106.0 108.6 113.0 Not Factor Income - - -1.2 -1.6 -1.1 -2.8 -2.4 Factor receipts C- ) (1.3) (1.5) (2.3) (1.7) (1.9) Factor payments I-) -) -2.5) (-3.1) (-3.4) (-4.5) (-4.3) Gross National Product at Factor Cost 79.3 89.4 91.8 95.4 104.9 105.8 110.6 Sources Ministry of Finance, Planning & Development, OECS Secretariat & Mission estimates. May 1984 - 68 - Table 2.5, ST. VINCENT AND THE GRENADINES - GOP DEFLATORS (1977 - 100) Wts. 1977 1978 1979 1180 1961 1982 1963 Gross Domestic Expenditure 143.8 100.0 113.1 130.3 149.9 166.9 179.2 181.7 Consumption 115.6 100.0 111.2 131.3 146.6 167.3 182.5 186.2 Investment 28.2 100.0 120.7 126.4 154.4 165.4 166.0 163.6 Exports of Goods and NFS 47.6 100.0 107.9 122.0 140.7 152.6 153.6 155.2 Imports of Goods and NFS -91.4 100.0 107.5 126.7 156.4 165.5 163.2 157.6 GOP Deflator (at Market Pr Ies) 100.0 100.0 115.7 128.1 138.3 158.1 174.6 182.9 Sources Tables 2.3 and 2.4. May 1984 - 69 - Table 3.1, ST. VINCENT AND THE GRENADINES - BALANCE OF PAYMENTS (USS Million) 1977 1978 1979 1980 1981 1962 1963 Export of Goods and NFS 16.6 29.2 32.5 38*8 4867 52.4 62.4 Merchandise Exports 10.7 18.1 19.1 21.1 29*6 34.3 42.0 Non-Factor Services 5.9 11.2 13.7 17.7 26.9 is.1 20.4 Imports of Goods and NFS 31.6 38.5 51.9 63.3 66*2 74.3 8632 Nrtchandise Imports 30*3 36.2 46.3 57*2 58.2 63*6 71.4 Non-Factor Services 1.S 2.3 5.6 6e2 860 10e7 11.8 Resource Balance -15o2 -9.3 -19.1 -24.5 -17.5 -21.9 -20.6 Factor Services and Transfers 8.7 9.3 12.7 11.3 11.4 10.5 13.6 NMt Factor Service Payments - - -0.6 -0.9 -0.7 -128 -1 .6 Transfers to Private Sector 6.7 9.3 13.3 12.2 12*1 12.3 25.2 Current Account Balance -6.5 - -6.4 -13*2 -6*1 -11.4 -7 .2 Private Capital 2.9 -1.1 0*6 1.1 0.5 0.6 3e0 Public Sector 2.7 4.1 4.6 6.6 9.6 6.3 6.9 Official Transfers 2.4 2.7 2*8 3*9 5.3 5*3 4*2 Foreign Borrowing (Not) 0.6 1.1 2.2 4.4 2.7 2.3 2*6 ECCA/ECCB _ _ _- 0 .9 0*4 0.3 IUF - - - 0.7 1.8 - - Govt. Foreign Assets (Increase-) -0.5 0.3 -0.2 -0.2 -0.2 -0.2 -0.2 Banking System 2_1 0.2 -2e1 1 6 -2.0 6.4 -1 *4 Errors and Omissions 1.2 -3.1 3.1 127 -2.0 3.9 -1.3 Sources INF staff estimates. Nay 1984 - 70 - Table 3.2s ST. VINCENT AND THE GRENADINES - MERCHANDISE IMPORT (C.I.F.) BY END USE CATEGORY (US$ Million) 1977 1978 1979 1980 1981 1982 1983 Total Merchandise Imports 30.3 36.2 46.3 57.1 58.2 63.6 7114 Consumer Goods 19.3 24.3 29.6 35.6 35.1 39.2 39.7 Food, Beverages & Tobacco 10.0 13.7 17.1 20.0 18.5 20.6 20.7 Manufactured Goods 9.3 10.6 12.5 15.6 16.6 18.6 19.0 Intermediate Goods 6.5 6*8 9.7 12.5 14.6 13.9 15.9 Minerals and Fuels 2.1 2.2 3.5 S.1 5.1 5.1 5.4 Chemical and Fertilizers 3.1 3.6 4.9 5.5 6.9 6.5 6.9 Raw Materials 1.0 1.0 1.3 1.9 2.6 2.3 3.6 Capital Goods 4.5 5.1 7.0 9.0 8.5 10.5 15.8 Machinery and Equipment 4.5 5.1 7.0 9.0 8.5 10.5 15.8 Sources Mlnistry of Finance, Planning and Development and IMF staff estimates. May 1964 - 71 - Table 3.3* ST. VINCENT AND THE CRENADINESs VALUE, VOLUME AND UNIT PRICES OF MAJOR EXPORTS (Voluo In millions ef US dollers, volume In millons of pounds, and unit price In US dollars per pound) Eat. 1977 1978 1979 1980 1981 1962 1983 Total morchandle exports a/ 10.7 18.1 19.1 21.1 29.8 34.3 42.0 Re-exports a/ 0.7 0.7 0.7 0.8 0.9 1.0 2.2 Domestic exports a/ 10.0 17.4 16.5 20.2 28.9 33.3 39.6 Bananas Value 5.6 7.3 5.9 6.3 10.1 9.0 9.7 Volume 26.2 31.0 22.3 18.8 29.6 25.0 27.3 Unit price 0.214 0.235 0.263 0.334 0.338 0.360 0.355 Flour Value - 3.2 5.4 6.0 6.4 5.6 4.5 Volume - 22.3 34.5 33.3 31.0 28.7 24.3 Unit price - 0.143 0.157 0.180 0.206 0.195 0.186 Mil feod Value - 0.7 0.9 1.0 1.1 1.0 Volume - 10.2 15.4 16.0 17.6 17.4 Unit price - 0.069 0.058 0.063 0.063 0.057 Arrowroot Value O.S 0.7 0.7 0.8 1.0 0.2 0.7 Volume 1.6 1.8 1.4 1.S 1.4 0.3 1.2 Unit price 0.313 0.389 0.472 0.555 0.741 0.701 0.598 Coconuts Value 0.3 0.3 0.5 0.6 0.3 0.2 0.1 Volume ('000 nuts) 4.1 4.7 4.1 3.8 1.8 1.6 0.6 Unit price 0.063 0.064 0.130 0.144 O.ISI O.ISI 0.160 Sweet potatoes Value 0.2 0.4 0.3 0.5 0.3 0.2 0.5 Volume 1.3 2.7 2.5 3.6 2.4 2.0 2.3 Unit price 0.131 0.148 0.133 0.137 0.123 0.126 0.19S Plantains Valu .. .. 0.2 0.2 0.6 0.7 0.6 Volume .. .. 2.1 1.9 4.0 3.9 2.9 Unit price .. .. 0.093 0.119 0.188 0.184 0.189 Eddoas and dnshocns Value .. .. 0.7 1.0 2.1 2.7 5.3 Volume .. .. 3.4 4.3 8.2 10.8 18.3 Unit price .. .. 0.204 0.237 0.250 0.254 0.292 Othor a/ 3.4 4.8 4.8 4.8 8.0 14.5 18.3 Of which, postage stamps (0.8) (1.5) 1.1 (0*.6) (2.2) (1.9) (0.6) a/ Value only. Sourcess Ministry of Flnance. Planning and Oevelopmenti St. Vincent Marketing CorporatIon; Ministry of Trade, Industry and Agricultural and Fund staff eatimates. May, 1984 - 72 - Table 3.4s ST. VINCENT AND THE GRENADINES - TERMS OF TRADE (1980X100) 1979 1980 1981 1962 1983 Export Price Index a/ 82.8 100.0 109.0 110.1 107.7 Import Price Indcx b/ 80.6 100.0 104.0 100.6 97.9 Commodity Terms of Trade 102.7 100.0 104.8 109.4 110.0 a/ Based on export prices of baonana, arrowroot, coconuts, sweet potatoes. flour, plantains, dashe*ns and eddoes, which together averaged 74S of the value of domestic exports durlng 1979-81. b/ Based on export price Indices of St. Vlncent's trading partners. Sources IMF staff estimates. May 1984 - 73 - Table 3.5s ST. VINCENT AND THE GRENADINES - DIRECTION OF TRADE (EC*'000) Jan.-June 1979 1980 1981 1982 1983 Total exports, f.o.b. 39,867 42,507 65,854 87,401 51,360 United Kingdom 19,695 21,408 30,232 26,337 16,649 United Statoe 1,042 1,722 4,521 7,778 4,933 Canada 733 252 560 315 281 CARICOM countries A/ 17,327 18,712 30,207 51,314 29,410 Trlnidad and Tobago (8,653) 10 ,761) (15,730) (27,190) (17,259) Barbados (1,902) (2,159) (3,134) (4,430) (1,955) Antigua (1,671) (582) (1,815) (3,651) (2,018) Dominica (1,177) (677) (1,616) (4,241) (2,458) St. Kitts and Nevl (I1,012) (949) (1,601) (3,057) (1,508) St. Lucia (241) (t,121) (2,859) (5,766) (2,308) Other (1,221) (695) (1,322) (2,977) 1,904) Other 1,070 413 334 1,657 87 Total Imports, c.l.f. 125,079 154,178 157,117 164,526 106,155 United Kingdom 28,190 26,341 27,016 27,967 11,230 United States 24,841 40,298 51,009 59,589 35,478 Canada 14,512 12,057 9,080 10,831 6,956 Japan 2,139 5,081 3,603 6,287 5,210 Netherlands 1,652 1,669 1,973 2,713 1,890 West Oermany 1,316 2,767 1,314 2,025 1,410 CARICON countries 34,550 44,818 42,358 31,948 34,156 Trinidad and Tobago (17,477) (23,676) (21,234) (14,645) (25,751) Barbados (5,737) (8,120) (6,925) (6,014) (3,194) Guyane (3,429) (5,520) (5,764) (2,570) (1,685) Jamalca (2,576) (2,268) (2,908) (3,408) (1,464) Antigua (306) (722) (227) (559) (132) Dominica (849) (1,007) (1,190) 1,186) (3t17) St. Lucia (3,969) (3,038) (2,735) (2,327) (984) Other (167) (467) (1,375) (1,239) (629) Other 17,879 19,147 20,762 23,166 9,825 a/ The Information for each CARICON country refers only to domestic exports. It Is assumed that the same percentage distribution for domestic exports remains when re-exports are includod. Sourceso Statistioal Unit, Minlstry of Finance, Planning and Dewelopment. Noy 1984 Table 4.1: ST. VINCENT AND THE GRENADINES EXTERNAL PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31. 1983 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) D E B t O U T S T A N D0I N G : I N A R R E A R S TYPE OF CREDITOR -----------------------:----------------------- CREDITOR COUNTRY DISBURSED :UNDISBURSED: TOTAL PRINCIPAL INTEREST SUPPLIERS CREDITS UNITED KINGDOM 527 - 527 - TOTAL SUPPLIERS CREDITS 527 - 527 - _ BONDS MULTIPLE LENDERS 242 - 242 - - TOTAL BONDS 242 - 242 - - MULTILATERAL LOANS CARIBBEAN DEV. BANK 17,685 7,080 24.765 89 415 1 OPEC FLOWS 1,000 - 1.000 - - TOTAL MULTILATERAL LOANS 18.685 7.080 25.765 89 415 4 BILATERAL LOANS CANADA 281 - 281 - - GUYANA 86 - 86 - - UNITED KINGDOM 1,063 - 1.063 - - TOTAL BILATERAL LOANS 1.430 - 1.430 - - TOTAL EXTERNAL PUBLIC DEBT 20,884 7,080 27.964 89 415 NOTES: (1) ONLY DEBTS WITH AN ORIGINAL OR EXTENDED MATURITY OF OVER ONE YEAR ARE INCLUDED IN THIS TABLE. (2) DEBT OUTSTANDING INCLUDES PRINCIPAL IN ARREARS BUT EXCLUDES INTEREST IN ARREARS. Table 4.2: ST. VINCENT AND THE GRENADINES SERVICE PAYMENTS. COMMITMENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF EXTERNAL PUBLIC DEBT PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNOISBURSED AS OF DEC. 31, 1983 DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) TOTAL YEAR DEST OUTSTANDING AT T R A N S A C T I 0 N S 0 U R I N G P E R I 0 D OTHER CHANGES BEGINNING OF PERIOD DISBURSED : INCLUDING COMMIT- DISBURSE- S E R V I C E P A Y M E N T S CANCEL- ADJUST- : ONLY :UNDISBURSED: MENTS MENTS : ------:-----------: LATIONS MENT * : : : : : PRINCIPAL INTEREST TOTAL : (1) : (2) (3) (4) (5) (6) (7) (8) (9) 1969 - - 486 486 - - - -20 1970 466 466 160 160 - 36 36 - -7 1971 619 619 243 3 - 48 48 - 1 1972 622 863 2,366 15 - 36 36 - -129 1973 637 3.100 1,325 2.137 - 49 49 - -76 1974 2.663 4.349 346 157 - 51 51 - 23 1975 2.845 4.718 i.916 363 - 57 57 - -477 1976 2.901 6,157 1.828 538 8 66 74 - -447 1977 3.112 7.530 843 731 25 87 112 - 255 1978 4.019 8.603 1,815 1.003 27 107 134 - -16 1979 5.018 10.375 6,313 1.348 69 157 226 - 436 1980 6,554 17.055 4,125 3,038 146 276 422 - 357 1981 9,664 21.391 2.936 7,662 262 358 620 - -1.382 1982 16.161 22.683 2.504 3,801 815 588 1.403 - -931 1983 18.312 23.44f 5.736 3,783 737 646 1,383 - -476 t 1984 20,884 27.964 * * * * * * THE FOLLOWING FIGURES ARE PROJECTED * * * . . * 1984 20.884 27.964 - 3.717 857 1.045 1.902 - -89 1985 23.655 27.018 - 1.209 1.219 1.104 2.323 - - 1986 23.643 25.799 - 924 1,400 1,102 2.502 - -2 1987 23.164 24,397 - 519 1,631 1.065 2,696 - - 1988 22.053 22,766 - 329 1.826 1.007 2.833 - -2 1989 20,555 20.938 - 175 1.752 920 2.672 - -3 1990 18.972 19.183 - t20 t.846 840 2,686 - 9 1991 17,254 17.346 - 81 1.785 762 2,547 - I 1992 15,550 15.562 - 11 1.694 678 2.372 - 2 1993 13.870 13.870 - - 1.683 596 2,279 - -t * THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNDISBURSED FROM ONE YEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER OF DEBTS FROM ONE CATEGORY TO ANOTHER IN THE TABLE. Table 4.3: ST. VINCENT AND THE GRENADINES Page 1 of 4 STRUCTURE AND TERMS OF EXTERNAL PUBLIC DE01 COMMITMENTS JAN. 1. 1969 - DEC. 31. 1983 * DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) AVERAGE TERMS PERIOD ENDING ------------------------------ TYPE OF CREDITOR INTEREST MATURITY GRACE GRANT GRANT TOTAf.*** CIEDITOR COUNIRY ANSUNTT* (%) (YRS) (YRS) ELEMENT(%) EQUIVALENT A*tIBU MULTIPLE LENDERS 43C 7.500 13. t3.S 18.1 4e Tomt saISs 406 7.5S0 13.5 13.5 18.1 8 44 T*AL 69t2 406 7.500 13.5 13.5 1I.1 As 7 tt at"S WILTIM E LENDERS 160 7.500 13.5 13.5 18.1 29 160 TOTAL BONDS 160 7.500 13.5 13.5 18.1 29 160 TOTAL 7012 160 7.500 13.5 13.5 t8.1 29 160 71t2 MULTILATERAL LOANS CARIBBEAN DEV. BANK 243 4.000 19.7 5.2 39.4 96 243 TOTAL MULTILATERAL LOANS 243 4.000 t9.7 5.2 39.4 96 243 TOTAL 7112 243 4.000 19.7 5.2 39.4 96 243 7212 MULTILATERAL LOANS CARIBBEAN 0EV. BANK 249 4.000 19.3 4.8 38.7 96 249 0' TOTAL MULTILAFERAL LOANS 249 4.000 19.3 4.8 38.7 96 249 BILATERAL LOANS UNITED KINGDOM 2,117 8.500 24.5 10.5 11.9 252 2.117 TOTAL BILATERAL LOANS 2,117 8.500 24.5 10.5 11.9 252 2.1t7 TOTAL 7212 2.366 8.026 24.0 9.9 14.7 348 2.366 7312 MULTILATERAL LOANS CARIBBEAN DEV. BANK 1.325 4.000 20.6 6.5 4t.2 545 1.325 TOTAL MULTILATERAL LOANS 1.325 4.000 20.6 6.5 41.2 545 1.325 TOTAL 7312 1.325 4.000 20.6 6.5 41.2 545 1.325 7412 MULTILATERAL LOANS INCLUDES INCREASES DURING TillS PERIOD TO DFBTS WITH ORIGINAL COMMITMFNT DATES rROM JAN. 1, 1900 TO DEC. 31. 1983. ** TOTAL LOANS HAVING INTEREST. GRACF PfRIOD AND MATURITY INFORMATION AVAILABLE. UJSFD TO COMPUIE AVERAGE TERMS. **' TOTAL OF ALL LOANS IN THIS BREAKDOWN REGARDLESS OF AVAILABILITY OF INTEREST. GRACE PERIOD. AND MATURITY INFORMATION. Table 4.3: ST. VINCENT AND THE GRENADINES Page 2 of 4 STRIJCTIIIF AND TERMS OF EXTERNAL PUBLIC DEBT COMMITMENTS %JAN. 1. 1969 - OEC. 31. t983 - DEBT RFPAYABLE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) AVERAGE TERMS PERIOD ENDINC ---------------------------------------------------------- TYPE OF CREDITOR INTEREST MATURITY GRACE GRANT GRANT TOTAL*** CREDITOR COUNIRY AMOUNT. (X) (YRS) (YRS) ELEMFNT(%) EQUIVALENT AMOUNT CARIBREAN DFV. BANK 58 4.000 t3.7 3.4 31.0 18 58 TOTAL MULTILATERAL LOANS 58 4.000 13.2 3.4 31.0 18 58 BILATERAL LOANS GUYANA 288 7.000 10.3 6.3 16.2 47 288 TOTAL BILATERAL LOANS 288 7.000 10.3 6.3 16.2 47 288 TOTAL 7412 346 6.497 10.8 8 R 18.7 65 346 7512 MULTILATERAL LOANS CARIBREAN DEV. BANK 1.572 4.453 20.8 5.8 37.2 585 1.572 TOTAL MULTILATERAL LOANS 1.572 4.453 20.8 5.8 37.2 585 1,572 BILATERAL LOANS CANADA 344 - 49.3 9.8 89.6 308 344 TOTAL BILATERAL LOANS 344 - 49.3 9.8 89.6 308 344 TOTAL 7512 1.916 3.653 25.9 6. 5 46.6 893 1,916 7612 MULTILATERAL LOANS CARIBBEAN DEV. BANK 1.828 4.445 22 .2 5.7 38.3 701 1.828 TOTAL MULTILATERAL LOANS 1.828 4.445 22.2 5.7 38.3 701 1.828 TOTAL 7612 1.82R 4.445 22.2 5.7 38.3 701 1.828 7712 MULTILATERAL LOANS CARIBBEAN DEV. BANK 843 4.000 18 I 6.3 39.2 330 843 TOTAL MULTILATERAL LOANS 843 4.000 18.1 6.3 39.2 330 843 TOTAL 7712 843 4.000 18.1 6.3 39.2 330 843 7812 BONDS MULTIPLE LENDFRS 223 8.000 9.8 9.8 12.2 27 223 TOTAL BONDS 223 8.000 9.8 9.8 12.2 27 223 MULTILATERAL LOANS INCLUDES INCREASES DURING TIlNS PERIOD TO DEBTS WITH ORIGINAL COMMITMENT DATES FROM JAN. 1, 1900 TO DEC. 31. 1983. ** TOTAL LOANS HAVING INTEREST, GRACE PERIOD AND MATURITY INFORMATION AVAILABLE. USED TO COMPUTE AVERAGE TERMS. * TOTAL OF ALL LOANS IN TIIIS BREAKDOWN REGARDLESS OF AVAILABILITY OF INTEREST, GRACE PERIOD, AND MATURITY INFORMATION. Table 4.3: ST. VINCENT AND THE GRENADINES Page 3 of 4 STRlICTI)RF AND TFRMS OF FXEPRNAL PUBLIC DEBT COMMIIMENTS sIAN. 1, 1969 - DEC. 31. 1983 + DEBT REPAYABlE IN FOREIGN CURRENCY AND GOODS (IN THOUSANDS OF U.S. DOLLARS) AVERAGE IERMS PERIOD ENDING ---------------------------------------------------------- TYPE OF CREDITOR INTEREST MATURITY GRACE GRANT GRANT TOTAL+** CREDITOR COUNTRY AMOUNT*- (X) (YRS) (YRS) ELEMENT(%) EQUIVALENT AMOUNT CARIBBEAN DEV. BANK 1,592 4.000 19.7 4.5 38.4 612 1t592 TOTAL MUITIIATERAL IOANS 1.592 4.000 19.7 4.5 3A.4 612 1.592 TOTAL 7812 1.8/5 4.491 18.5 5.1 35.2 639 1.815 7912 MULTILATERAL LOANS CARIBBEAN DEV. BANK 6.313 4.951 21.1 5.7 34.0 2. 148 6.313 TOTAL MULTILATERAL LOANS 6.313 4.951 21.1 5.7 34.0 2 148 6.313 TOTAL 7912 6.313 4.951 21.1 5.7 34.0 2,148 6.313 8012 SUPPLIERS CREDITS UNITED KINGDOM 1.312 7.500 7.3 0.8 7.2 94 1.312 TOTAL SUPPLIERS CREDITS 1.312 7.500 7.3 0.8 7.2 94 1.312 MULTILATERAL LOANS CARIBBEAN DEV. BANK 2 813 4.000 20.1 4.3 38.3 1.078 2.813 TOTAL MULTILATERAL LOANS 2.813 4.000 20.1 4.3 38.3 1.078 2.813 1 TOTAL 8012 4,125 5.113 16.0 3.2 28.4 1.172 4.125 8112 OD MULTILATERAL tOANS CARIRBEAN DEV. BANK 1.936 4.000 20.4 5.5 39.8 770 1.936 OPEC FLOWS 1.000 0.500 9.7 3.2 42.5 425 1.000 TOTAL MULTILATERAL LOANS 2.936 2.808 16.7 4.7 40.7 1,195 2.936 TOTAL 8112 2.936 2.808 16.7 4.7 40.7 1.195 2.936 8212 MULTILATERAL LOANS CARIBBEAN 0EV. BANK 2.504 6.596 19.2 5.6 19.9 497 2.504 TOTAL MULTILATERAL LOANS 2.504 6.596 19.2 5.6 19.9 497 2.504 TOTAL 8212 2.504 6.596 19.2 5.6 19.9 497 2,504 8312 BONDS MULTIPLE LENDERS 19 8.000 9.7 9.7 12.1 2 19 * INCLUDES INCREASES DURING THIS PERIOD TO DEBTS WITHI ORIGINAL COMMITMFNT DATES FROM JAN. 1, 1900 10 DEC. 31. 1983. ** TOTAL LOANS HAVING INTEREST. GRACE PERIOD AND MATURITY INFORMATION AVAILABLE. USED TO COMPIJTE AVERAGE TERMS. "e TOTAL OF ALL LOANS IN THIS BREAKDOWN REGARDLESS OF AVAILABILITY OF INTEREST. GRACE PERIOD. AND MATURITY INFORMATION. Table 4.3: ST. VINCENT AND THE GRENADINES Page 4 of 4 SRTtJCTuRr AND TFMS OF EXTERNAL PUBLIC DEBT COMMIIMENTS JAN. 1, 1969 - DEC. 31, 1983 * DEBT REPAYABLE IN FORFIGN CURRENCY AND GOODS (IN TilOtISANDS OF U.S. DOLLARS) AVERAGE lERMS PERIOD ENDING ---------------------------------------------------------- TYPE OF CREDITOR INTEREST MATURITY GRACE GRANI GRANT TOTAL*** CREDITOR COUNTRY AMOUNT*( (YRS) (YRS) ELEMENT(%) EQUIVALENT AMOUNT TOTAL BONDS 19 8.000 9.7 9.7 12.1 2 19 MULTILATERAL LOANS CARIBBEAN DEV. BANK 5,717 4.191 27.1 5.3 42.9 2.450 5.717 TOTAL MULTILATERAL LOANS 5,717 4.191 27.1 5.3 42.9 2.450 5,717 TOTAL 8312 5,736 4.204 27.1 5.3 42.8 2,452 5.736 TOTAL EXTERNAL PUBIIC DEBT 32.942 4.864 21.0 5.7 34.0 11,199 32.942 .0 * INCLUDES INCREASES DURING THIS PERIOD TO DEBTS WITH ORIGINAL COMMITMENT DATES FROM JAN. I, 1900 TO DEC. 31. 1983. ** TOTAL LOANS HAVING INTEREST. GRACE PERIOD AND MATURi Y INFORMAl ION AVAILABLE. USED TO COMPtJTE AVERAGE TERMS, * TOTAL OF ALL LOANS IN THIS BREAKDOWN REGARDLESS OF AVAILABILITY OF INTEREST. GRACE PERIOD, AND MATURITY INFORMATION. - 80 - Table 5.1 ST. VINCENT AND THE ORENADINES - CENTRAL GOVERNMENT CURRENT EXPENDITURESej (EC$ Mlille) Estimate Projected 1977/76 1978/79 1379/80 1930/81 1951/62 1982/83 1963/64 1984/85 Expeaditure en Goeds and Services 25.9 16.5 36.0 43.3 57.0 62.2 6g.6 76.3 Personal Emoleme.ts 13.5 20.1 IS.O 19.7 29.2 30.7 35.8 40.0 Goods and Servlees 9.4 13.0 14.2 16.4 22.0 24.8 26.0 26.0 Interest 1.6 1.3 2.1 2.3 1.8 2.2 3.0 3.6 Peasions ead Oratultle 1.4 2.1 2.7 2.3 4.0 4.5 4.8 5.3 Subsidles 0.7 0.9 1.7 2.1 2.3 2.6 3.0 3.6 Departmental Extorprises 0.3 0.3 1.3 1.8 2.1 2.3 2.8 3.3 Pubilc Enterprises and Flnaecial lnstitutions 0.4 0.6 0.4 0.3 0.2 0.3 0.2 0.3 Transfer& 1.5 1.6 1.4 2.4 3.0 3.4 4.5 5.0 Other Public 0.1 0.4 0.3 - 0.4 0.6 0.6 0.7 Private (Non-profit Institutions 0.5 0.6 0.1 0.1 0.2 0.2 0.2 0.3 Rest of the World 0.9 0.6 1.0 1.4 2.4 2.6 3.7 4.0 Totel 28.1 33.2 41.1 46.9 62.3 68.2 77.1 85.5 .-.-..-- * -.... -- *U ".--- .-UU ..... ~U */ Relates to fiscal year ending June 30. Sources Ministry of Finance, Plenaln g eand Detlepment and mission estimates. May 1964 - 81 - Table 5.2: ST. VINCENT AND THE SEENADINRS - CENTRAL &WU*R EUT G*MMET RVENUE a/ (EC$ Milii.) Eat. Proj. 1377/78 1376/79 197*/60 193/i 1&I/U 1 j81$j 1332/653 194/S5 Dlrect Taxes 5.* 6.7 10*7 j 20e4 22.7 lie... Taxes 5.4 6.5 16.3 12.6 1s1. 26.3 1s.s 21.6 Property Taxes 0.2 0.2 0.4 0.04 .4 0.04 0. 1.1 ledirect Taxes 16.3 20.1 25.2 35g 4*L 44.7 53.0 Cessumpties Tax 3.0 3.3 4.0 4.1 6.4 7.0 8.4 0.0 Import Duties 6.6 S.0 l0.S 10.l 11.e 131 14.7 16.3 Expert Dties - 0.7 0.6 0.J 1.0 0.9 1.2 1.3 Stamp Duty on Imports 2.6 3.3 4.2 4.2 s.0 7.1 6*3 3.0 Other Taxes 3.7 4*6 5.0 Se.S .1 11.6 1S.1 17.4 N.m-Tax Revenue S.4 So S .6 J_ -_ 3.3 10.0 Interest aid rest 0.1 0.2 6.2 0.2 0.2 0.2 0.3 Current Profits (ECCA Profit) 0.6 0.4 1.0 I.5 2.5 2.3 2.3 .. Geot. Dept. A Public Enterprises 1.3 0.4 1.4 2.0 I.J 1.7 2.0 .. Other (Fees, Flnss etc.) 4.4 4.0 6.0 2.4 3. 3.6 4*1 * Total 2_.S s3S 41,1 778. 4 5*S7 2 Relotes to Fiscal Teor ending June 30. Sources Ministry of Finance, Planning and Development and mlaries **tlmt*o. May 1984 - 82 - Table 5.3a ST. VINCENT AND THE GRENADINES - CENTRAL GOVERNMENT OPERATIONS (EC Million) Est. Prej. 1977/7S 1978/79 1797/80 1980/81 1981/82 1982/83 1983/84 1964/85 Current Revoene 26.3 33.8 41.1 44.1 57.9 70.5 76.4 65.7 Curreat Expenditure 2S.1 39.2 41.1 46.9 62.3 68.2 77.1 85.5 Current Aecc t Surple/Deficit 0.2 -5.4 -- -2.6 -4.4 2.3 1.3 0.2 Budgetary Grant$ tcurrent) 1.7 5.2 3.4 - - - - Current Balanee 1.9 -0.2 3.4 -2.8 -4.4 2.3 1.3 0.2 Capital Expenditure A Nat Loading 7.5 9.6 8.6 13.7 16.0 24.0 9.7 18.8 Overall Deficit -5.6 -9.8 -5.2 -16.5 -20.4 -21.7 -6.4 -18.6 Finencing 5.6 9.8 5.2 16.5 20.4 21.7 8.4 18.6 Capital create 4.0 2.7 5.9 8.3 12.8 12.2 7.4 10.6 Net Foremgn Sorrowing -0.9 5.4 - 3.3 0.7 4.7 -0.7 2.4 Net ECCA/ECC8 Berrowing - - - - 0.6 3.3 - - Forelgn Currensy Helding (-Increase) -1.1 0.6 -0.7 -1.2 1.3 -0.7 -0.4 -0.4 Net IMF - - 0.6 6.4 - - -0.5 -2.1 Net Domestic annoo 2.7 0.4 -1.5 0.3 3.1 4.4 1.0 - Roeldual 0.9 0.7 0.9 -0.6 1.9 -2.2 1.6 8.1 a/ Relat*s to fiscal year ending Juno 30. Sources MInistry of Finance, Planning and Development and mlesion estimates. May 1984 - 83 - Table 5.4s ST. VINCENT AND THE GRENADINESs SUMMARY OPERATION OF THE GENERAL GOVERNMENT a/ (in EC$ Million) Est. 1977/76 1978/79 1979/80 1980/81 1981/82 1982/S3 1983/84 Operating Revenue 32.5 38.7 45.2 48.3 63.1 75.8 85.1 Tax revenue 21.9 28.8 35.9 38.2 49.7 62.5 69.1 Other 10.6 9.9 9.3 10.1 13.4 13.3 16.0 Operating Expendituros 30.2 41.4 41.5 47.3 63.0 69.2 76.2 Central Government 28.1 39.2 40.7 46.3 61.8 67.7 76.5 Rest of General Government 2.1 2.2 0.8 1.0 1.2 1.5 1.7 Current Account Balance 2.3 -2.7 3.7 1.0 0.1 6.6 6*9 Capital Revenue and Grants 5.7 7.9 9.3 8.3 12.8 12.2 7.4 Current grants 1.7 5.2 3.4 - Capital grants 4.0 2.7 5.9 8.3 12.8 12.2 7.4 Capital Expenditure & Net Lending 7.5 9.8 8.8 14.1 16.2 24.2 10.0 Capital expenditure 5.4 3.3 6.6 10.4 16.2 20.2 10.0 Not Lending 2.1 6.5 2.2 3.7 - 4.0 - Overall Blance 0.5 -4.6 4.2 -4.8 -3.3 -5.4 4.3 Financing -0.5 4.6 -4.2 4.8 3.3 5.4 -4.3 Foreign concesslonary loans (net) -0.9 5.4 - 3.3 0.7 4.7 -0.7 Not IMF (including SDR allocation) - - 0.6 6.4 - - -0.5 Not ECCA/ECCB - - - - 0.6 3.3 - Changes In foraign assets -1.1 0.6 -0.7 -1.2 1.3 -0.7 -0.4 Not borrowing from domestic banks 0.9 -3.0 -3.9 -4.1 -1.3 0.9 -2.7 Other net domestic borrowing 0.6 1.6 -0.2 0.4 2.0 -2.8 - a/ The General Government consists of the Central Government, the Kingstown Board, and the National Provident Fund. Figures up to and Including 1978/79 Included the operations of the Philatelic Services. Sources Ministry of Finance, Planning and Development and mission estimates. May 1984 - 84 - Table 5.5s ST. VINCENT AND THE GRENADINES: SUNNARY OPERATION OF PUBLIC SECTOR NONFINANCIAL ENTERPRISES S/ (in ECS NillIon) Eat. 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 Operating Revenue 28.1 29.1 36.5 53.0 57.7 63.7 68.6 Operating Expenditures 26.8 30.4 38.7 54.8 61.2 68.0 71.7 Current Account Balonce 1.3 -1.3 -2.2 -1.8 -3.5 -4.3 -3.1 Capital Grants 0.4 0.6 0.4 6.5 1.1 2.6 0.8 Capital Expenditures and Not Lending 5.0 2.8 7.2 26.0 6.2 7.4 1 _ .4 Capital Expenditures 4.6 2.5 6.2 24.9 4.9 5.7 9.3 Net Lending (to private sector) 0.4 0.3 10 1 1 1 .3 1 .7 1.1 Overall Balance -3.3 -3.5 -9.0 -21.3 -6.6 -9.1 -12.7 Financing (Not) 3.3 3.5 9.0 21.3 6.6 9.1 12.7 Domestic Banks 1.1 3.4 5.0 3.7 6.6 3.7 6.5 Foreign Borrowing 0.6 0.4 5.8 IS.8 2.1 2.2 6.4 Central Government 1.2 0.3 0.6 - -0.2 4.0 -0.2 Other 0.4 -0.6 -2.4 1.8 0.1 -0.8 - */ Arrowroot Industry Association, Banana Growers Association, Contral Water ond Sewerage Ltd., Housing and Land Development Corporation, NMrketing Corporation, Port Authority, Authority, Development Corporation, Diamond Dairy Company, Electricity Services Philatelic Servie*s, and Sugar Industry Ltd. Data on the beala of the financial years of the Individual enterprises have been adjusted to a fInancial year ending June 30. Figures up to and Including 1978/79 excluded the Port Authority (cleasifled under Centrel Government) and the Philatelic Services (classifled under Oenoral Government). Sources Various nonfinancial enterprises as noted above. Hny 1984 - 85 - Table 5.6t ST. VINCENT AND THE GRENADINES: SUMMARY ACCOUNTS OF THE PUBLIC SECTOR (ECS Million) 1977/78 1978/79 1979/80 1980/S1 1981/82 1982/83 1983/84 Current Revenue 60.6 67.8 81.7 101.3 120.8 139.5 153.7 General Government a/ 32.5 38.7 45.2 48.3 63.1 75.8 85.1 Nonfinancial Pubilc Enterprises 28.1 29.1 36.5 53.0 57.7 63.7 68.6 Current Expenditure 57.0 71.8 80.2 102.1 124.2 137.2 149.9 General Government 30.2 41.4 41.5 47.3 63.0 69.2 78.2 Nonfinancial Public Enterprlses 26.8 30.4 38.7 54.8 61.2 68.0 71.7 Current Account Balanco 3.6 -4.0 I.5 -0.8 -3.4 2.3 3.8 General Government 2.3 -2.7 3.7 1.0 0.1 6.6 6.9 Nonfinancial Public Enterprlse 1.3 -1.3 -2.2 -1.8 -3.5 -4.3 -3.1 Capital Revenue * Grants 6.3 8.5 9.7 14.8 13.9 14.8 8.2 General Government 5.7 7.9 9.3 8.3 12.8 12.2 7.4 Nonfinancial Public Enterprises 0.4 0.6 0.4 6.5 1.1 2.6 0.8 Capital Expenditures & Not Lending 10.4 6.1 13.8 36.4 22.4 27.6 20.4 Capital Expenditures 10.0 5.8 12.8 35.3 21.5 25.4 19.0 Not Londing 0.4 0.3 1.0 1.1 0.9 2.2 1.4 Overall Surplus/Deficit -0.5 -1.6 -2.6 -22.4 -11.9 -10.5 -6.4 Financing 0.5 1.6 2.6 22.4 11.9 10.5 8.4 Not External Borrowing -0.3 5.8 6.4 25.5 2.8 6.9 5.2 Not Domestic Borrowing 2.1 0.7 -1.5 1.8 7.8 4.3 3.6 Change In Forelgn Assets (-Increase) -1.1 0.6 -0.7 -1.2 1.3 -0.7 -0.4 Roa Idue i -0.2 -5.5 -1.6 -3.7 - - - a/ The General Oovernment conslta of the Central Government, the Kingstown Board, the NatIonal Providont Fund and the PhilatolIc Serviceo. Sources Minltry of Finance, Planning and Development and misslon stimatoes. Way 1984 - 86 - Table 5.7s ST. VINCENT AND THE GRENADINES - FINANCING OF PUBLIC SECTOR INVESTMENT (ECS Million) 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 Public Sector Capital Expenditure 10.4 6.1 13.8 36.4 22.4 27.6 20.4 Capital Expenditures 10.0 5.8 12.8 35.3 21.5 25.4 19.0 Not Lending 0.4 0.3 1.0 1.1 0.9 2.2 1.4 Financing Public Sector Savings 3.6 -4.0 1.5 -0.8 -3.4 2.3 3.8 Not External Financing 4.9 14.9 15.4 39.1 18.0 21.0 13.0 Capital Revenuo * Granta 6.3 8.5 9.7 14.8 13.9 14.8 8.2 (Capital Revenue) (1.7) (5.2) (3.4) - - - - (Capital Grants) (4.4) (3.3) (6.3) (14.8) (13.9) (14.8) (8.2) Foreign Borrowing (Net) -0.3 5.8 6.4 25.5 2.8 6.9 5.2 (Foreign Concessionary Loans, Net) (-0.3) (5.8) (5.8) (19.1) (2.8) (6.9) (5.7) (Net IMF Borrowing) C-) C-) (0.6) (6.4) (-) 1-) (-0.5) Changes In foreign aessts (-lncrease) -1.1 0.6 -0.7 -1.2 1.3 -0.7 -0.4 Not Domestic Borrowing 2.1 0.7 -1.5 1.8 7.8 4.3 3.6 Net ECCA/ECCB - - - - 0.6 3.3 - Banking System 2.0 0.4 1.1 -0.4 5.3 4.6 3.6 Other 0.1 0.3 -2.6 2.2 1.9 -3.6 - Residual -0.2 -5.5 -1.6 -3.7 - - - Sources Ministry of Flnance, Planning and Development end mlssion estimates. May 1984 - 87 - T*ab 0.8i gr. V1112t & 135 WA - 0- 110 9.01 00IC KM 3 11_ MM. Ft11MIff b0t0l f1t*i0 d P0)ebt. F5W FrU Ff5 Tatel 9.6,0.3 300 I .403 E(boi Lels 13abl Ex(bMI LOI MIIMRL t_llTJ _~ - Dewlosot of LwotO4 10,61tty ry - - 250.00 250A - 0.00 SC000t - A4r71l03 t0 ta 31ie5t0gm PKu3 7S0.10 7160.10 - 250. 25.3 - I00. 00 - IWin. Amt0l8 . PImPPl_b PrOJOCb 17J2 10.75 7.13 10.10 10.10 - 200 200.00 - Ayiml3w. FPoodr R3 . 31 50.50 o00.5 - - 0 Road0. 3 bII.t.0lm Proom t6lAS3 140.72 15tJ7 2914.13 210A* 31G.1O SMA1 225J. 0.07 Eonle, of dt.S. 2727* 527AO - - - - _ _ Rawtlnm of Fort ClorlettO 11 toOA 106 00 - 1330011110 00600 I_WiNmto 47.21 - 47.21 - - - - - _ c.6tr3utl .o Health c3 tr. 400* c M - 258*0 M0* - - Upgredll KlmagoOtm 35t7.l 573 581.2 - 3000.04 3010.S 701.3 - - - Ad43t03.6.3 Oo,1lmt 003.Offi .S9 217* 173.0S 43.41 60pelr. to Fwoo,ho A lower O8 tll 00. 05.3 IOS.00 302.7 342A7 - 22. - 22.00 V4lm 3n 8lt3lo3 083t 4.00 lS4* - SO 50*00 - o - 5a C-sessmsltV DO"s_int 213 a 4M 430.16 430.11 OS 0 00.57 500 - 746A 7.0* - Spoolal 30w.lrp.oOt Ao3tl" 300*0c I3OQ0K - MAD IOOA - 1000 000 - Berle H_n llreds I 052A1 652AI - 24. 24.8 - - - - 8l3er Projects 00.00 6O0*0 - 08.0 65. 00 6 5* 00.0 - C030awo3lair Poll". Sbtbr - P.rch60 of Poll" 6e.00 - - - 25 25.3 - 240*0 230* - 0,ptor4 t0ld4 , - - - 30* IS OO I t MI3s003.I... Expoadi %We& I_ aft 6t3344t 3b61.87 1752.07 20nJ30 S .57 3153.40 1660.12 0.755* O 3046i3 36*4l04 e0.600,3 Boor t 18.2 17355.07 2570.17 S82S 71632.10 560. 12506.X6 38OO.5 487.40 WES7 OF F.IC SECIIR :(e-= tr_Are Amlatlen _neat 3 3pwnt Pror- 20*A 250.AS - 460.70 460.70 - - _ _ Imm, Ev0rgc Fort[ lr - - - 27.9A 794-4 - - A ttm d BOA 3.14 - 33.14 332.31 - 312.3 - - - Alrerft bd.f_ot 4PrOyl 033.4 o lS.1 0 - - - - Ov.w3.0t Corpotlos 8.aprosoo Por.d,tlo Cre43t 3.00 300 O . _ _ _ _ _ A3rlelt al Credit 9.0 I --- l.A0trb3l Ett0 IV 3.8* 1.51 - 000.30 01340 - 2173.52 372 - S440t,3 3on IV 13 13A - 21137 211.3 - - - - C3o4da tod Li" o Cr.d4 t - - - 120J0 I5.00 - Ifft IffSJO - hlwr t Eltr3ci3ty Supply I 6.2 6.2 - Yit.70 54.70 - pW eloo Standby atl3 Fbnt - -t 720.0 - 70.00 - Water Oewelopmnt, Nwth L061 0 - * - 673 - 107* - - br4 0 e33. - * - 75 7331 54.22 434.62 123A5 Arrowoot AC"IstIle *W3 Af~moot Pat.oy MA* 136.0 .40 6ar04t0.i Coop"tl0s 0..tr60th of C0l3 M..e 3S87 * 1 7.35 37.72 7.72 - - - E18l0d .f Klonpg 0.00 302* 62.X3 330 5041.52 3001.32 - 5004.30 30.74 034 omiblm . L.8 hwllq_t Cop".. 8.088 30m03gr.. R... .ow 3.52 41 0.31 .37 _ _ 8W4t44i l30. of Pl3s Wtcr 507.38 47no.73 S.4 m.0 0076.0 3.24 7507.10 6150.* 11033.N IOrAL 0a3l030 9 3 57.43 2OJO 5a3 31 85711.13 55.7n 1.4 34l0.0*2 N2.04 S1hares C0t803 Isim3all Unit3 li6l*36s7ry ofMssv, PIsawIiieg 040 O8 0op ol td AIu3I00 estmat. N INS * IC _ oC co p, _ *0 1 . I 00 vI 0o0 I I ON t 00 o o o0 0 * n 0 *W0 0 1 _0 ft o wn~w_w _ ~~I _ *0 __ n p , n | 0 0 n0 o 0_i_00 nt *~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I ;]W _ . - ft, 0 0 00 21 *0_ U ~ ~ ~ I J, *0 n r a - v. o0ooo0 oo3 oo o3 I .1 < ~~ ~ - NO p, o~ wOf _N _~ ft t Of N 0 o ot 00 n Oft ~oeoo C 0cI 0 0.|, oc 0. - 00t 1 0 00 00 o 00 00 0 _0 = , 0- ,,_ * ' '-';* '*_ " @ _ F o * - _ * , 1, _ |~~~~~~~t - I- - _ 0 0 _ 0*|*vs ' - °. -I ' __ ' W - = 0 - *.oa - U * _ o , C - - - ° O - _ a-. Zes*_ a ' '- 0 * j- _ 0 e_ _*U 1~~ .C.SU" C , 'I *--- CO 00- - l - o- - . 00-- - 89 - Table S.9s ST. VINCENT AND THE ORENADINES - PROPOSED NEW PROJECTS, 1934/5S (EC6 0001 Project Source of Projected Dlabureementa Cost External Total Extornal Loeal Financing- Central government Agricultural Dlversificatlen A Promotion 6750 USAID(6750) 1600.00 1600.00 - Home Economics Ext. Facility (Layon) .. CIDA/MAF 100.00 100.00 - Agriculture Feeder Road III 19570 CODB(17617.50) 2000.00 2000.00 - Natural Resource Management .. OAS 120.00 120.00 - Purchase of Fishing Vessel 1620 Telwan(1620) 1620.00 1620.00 - Craft Development Production Ulit .. UNESCO 72.90 72.90 - Georgetown-Fancy Rd.-Phase I (Windward Hyw) .. B00 750.00 750.00 - Subtotal 6262.90 6262.90 - Rest of Public Sector Banana Growers Aessecation Banana Development Program VI 1998.00 BDD(1998) 400.00 400.00 - Input Revolving Fund 2166.00 COB(1949.40) 1200.00 1198.00 2.00 OEVCO Students Loan V 1350 CDB(1350) 135.00 135.00 - Construction of Factory Shell 1000 Dev. Bond 1000.00 1000.00 - VINLEC Power Project 5054.40 CDB(4549) 4549.00 4549.00 - Cumberland Hydroelectric 89370.00 IDA/CIDA ete. 7000.00 6480.00 520.00 (66420) CWSA Water Developments Installation of meters 1488.00 CDB(1339,.20) 970.00 950.00 20.00 Water Catchment Rehab-Bequla .. CIDA/MAF 41.00 41.00 - eoorgetown/Byres - Water Supply System 1620.00 Tolwen(1620) 1620.00 1620.00 - Now Storage Building 70.00 Local 70.00 - 70.00 Purchase Equipment etc. 490.00 Local 490.00 - 490.00 Morketing Corporation Chill Storage Facility 54.00 CDB(48.60) 54.00 48.60 5.40 Sugar Factory Rum Dlteilery 40SO.OO COO(4012) 900.00 900.00 - Housing and Land Corporatlon Gorseo Mangrovo Phase 11 810.00 BDD(810) 200.00 200.00 - Subtotal 18629.00 17521.60 1107.40 TOTAL NEW PROJECTS 24891.90 23784.50 1107.40 Sources Central Planning Unit, Mlnistry of Finance, Planning and Developmont and mission estimates. May 1984 - 9o - Table 5.101 ST. VINCENT AND THE GRENADINES - SUMNARY OF PUBLIC SECTOR CAPITAL EXPENDITURES BY SECTORS (EC$'000) 1982/83 1983/84 1984/85 I Productive Sectora 2,990 2,615 12,086 Agriculture, Forestry and Fishing 2,409 1,611 5,920 Nanufacturlng & Tourism 561 1,007 6,166 11 Physical Infrastructure 13,386 9,703 20,927 Transport and Infrastructure 13,100 6,928 9,378 Power 286 2,775 11,549 III Other Infrastructure 4,948 2,798 5,056 Water Supply and Sewerage - 927 3,755 Health 4,405 1,359 Educetlon 492 512 1,101 Housing 51 - 200 IV Other 4,123 3,873 6,666 AdmlnlstratIon and Security 217 209 240 Other 3,906 3,664 6,426 Total 25,447 I6,992 44,735 s ..... ....... ..... ............. Central Governmont 19,990 9,693 18,849 Othor Public Sector 5,457 9,299 25,886 Sources: Tables 5.8 and 5.9. Nay 1984 - 91 - Table 5.11: ST. VINCENT AND THE GRENADINES - SUNMARY OF PUBLIC SECTOR INVESTMENT PROGRAM BY SOURCE OF FINANCING CEO$ 000) 1981/82 1982/53 1983/84 1984/65 Central Government 17,174 19S990 9,693 1J.849 External 14,724 17,620 7,632 14,270 Local 2,450 2,370 2,061 4,575 Other Public Sector 4,282 5,457 9,299 25,8S6 External 2,908 4,731 8,079 23,676 Local 1,374 726 1,220 2,210 Total 21,456 25,447 18,992 44,735 External 17,632 22,351 15,711 37,946 Local 3,824 3,096 3,261 6,769 (As Percentage of Total Investment) Total 100.0 100.0 100.0 100.0 Extornal 82.2 87.8 J2.7 64.8 Local 17.8 12.2 17.3 IS.2 Sources Tables 5.6 and 5.9. May 1984 - 92 - Table S.l. ST. VINCENT A*0 THE GRENADINES - CONSOLIDATED COMMERCIAL SANK OPERATIONS a/ (EC* millien) December 31 March 31 1S71 1150 1161 1162 1163 1963 1144 het Fereign Assete 6.7 2.4 7.S -9.5 -5.6 -5.2 -9.5 Assets 33.3 34.0 40.6 33.3 28.4 33.3 24.1 Foreigo eurreomy holdlns £1.91) (2.6) (1.1) (1.5) (1.7) (1.7) (1.2) Claims en ECCB (15.2) (11.2) (13.2) (6.0) (4.0) (6.0) (5.7) of whichs currency heldinsc /3.s/ /4.2/ /3.9/ /4.0/ /4.0/ /3.0/ /3.1/ Claims on ECCB area beoks (7.3) (11.0) (16.7) t12.6) 11.6) (14.2) (6.2) Claims on baks Wbreed 4.1) (6.6) (7.2) (10.0) (6.6) (7.9) (5.9) Other (4.6) (2.4) (1.6) (1.2) (7.5) (1.5) (5.1) Liabilities -26.6 -31.6 -33.0 -42.8 -34.2 -36.5 -33.6 Selna*e doe te ECCS C--) (--) (-1.3) (-5.7) (-1.9) (-2.9) (-1.6) Balance doe to ECC area boks (-1.3) t-2.2) (-1.1) (-2.7) (-2.4) (-1.9) (-2.5) Balence due te boaks *hreod t-6.2) (-5.5) (-7.4) (-6.4) (-5.4) (-5.0) (-3.5) Nonresident depesits t-19.1) -23.91) (-23.2) (-28.0) (-24.5) t-28.7) (-25.6) Demand /2.4/ /4.3/ /3.9/ /3.8/ /3.6/ /4.7/ /3.6/ Savinlg /13.6/ /15.1/ /16.0/ /19.6/ /16.6/ /19.4/ /17.6/ Time /3.1/ /4.5/ /3.3/ /4.6/ /4.1/ /4.6/ /4.6/ Not Domestic Asestc 54.3 63.7 67.8 89.6 96.7 68.1 104.6 Net credit to Central Severmamet 11.2 6.7 6.3 14.7 14.6 14.2 16.9 Treasury bills I-) I-) (O.S) (1.0) (1.0) (l.0) (1.0) Debentures (0.7) (0.6) (1.0) (0.4) (5.0) (4.9) (4.6) Loans and advances Includig overdraft (6.1) (4.1) (4.7) (11.0) (6.7) (6.8) (6.5) Specicl deposit requlremeat b/ (1.9) (2.1) (2.3) (2.5) (7.7) (2.6) (7.9) Oover.m et deposits (-) (-0.3) (-0.1) (-0.2) (-0.2) (-5.8) (-1.1) t-3.3) Net credit to ether public "ater -10.4 -7.4 -5.0 -0.4 -0.6 -2.0 0.2 Credit (9.5) (1106) (19.2) (30.5) (35.4) (29.7) (37.9) Deposti t-) (-19.9) (-19.0) (-24.2) t-30.9) (-36.2) t-31.7) (-37.7) Not credit to nenbank fiaeocial litermediarles -2.2 -2.6 -4.2 -5.4 -4.1 -5.1 -4.1 Credit (0.3) (0.3) (0.6) t0.9) (0.7) 1.5) (0.6) Deposit (-) (-2.5) (-3.1) (-4.8) (-6.3) (-4.6) (-6.6) (-4.7) Credit to prlvate seater 55.3 69.0 74.8 66.2 99.4 91.4 103.4 interbsng float 1.0 0.6 -1.5 2.3 0.3 -- 0.5 Calams (1.2) (2.6) (4.0) (7.7) (1.4) (1.6) (1.1) Liabilities (-0.2) t-2.2) (-5.5) t-5.4) t-1.1) (-1.6) t-0.6) Not unclassiflid assets -0.6 -2.4 -4.6 -7.6 -12.7 -10.4 -12.3 Assets (7.0) (9.0) (16.6) (21.1) (16.9) (18.3) (22.2) Liabilities (-7.6) (-11.4) (-23.2) (-28.7) (-29.6) (-28.7) t-34.5) Llbliltles te Private Secteor / 61.0 66.1 75.6 80.3 90.9 82.9 15.1 Demand deposits -1.6 12.2 14.1 13.3 15.1 15.4 I6.4 Savings deposits 34.1 36.6 43.0 42.8 48.6 43.0 50.4 Time deposits IS.3 IS.1 16.5 24.2 27.2 24.5 28.3 a/ Incledes eperatlons of the *rclay' Saenk. thb N&tloni Commercial Banks the Royal Bank of Canada. the lank of Nlva oeetle, and the Canadian Imperial Sank of Com_erce. b/ As of September 1963, te sepsela depeoit requirement for commerclal banks was Increased from 2.50X to 7.502 ef the total deposits. c/ Deposits of ether public entities and fineacial Institutions are excluded. Sourcess East Caribbean Centrl l*ak, ommerelei banks, and IWP Staff estimates. Nay 1964 - 93 - Table 6.2: ST. VINCENT AND THE GRENADINES - THE FORECIN CONNERCIAL BANK OPERATIONS a/ (EC$ mlle.n) December 31 Mateh 31 I979 1980 3981 1982 I9&3 1983 1984 Not Forolgn Assets 0.5 -0.7 6.7 -5.9 -10.1 -4.1 -12.4 Assets 26.4 27.6 37.2 29.5 19.7 29.7 17.1 Foreign currency holdings (3.81 (2.2) (1.5) (1.4) (1.4) (1.6) (1.0) Clalms on ECCO (14.3) (10.0) (12.8) (7.3) (3.2) (7.3) (4.6) of whIchg currency holdings /3.3/ /3.4/ /3.5/ /3.3/ /3.2/ /2.3/ /2.2/ Claims on ECCB ares banks (7.3) (11.0) (16.7) (12.5) (8.6) (14.1) (6.0) Clilme on banks abroad (3.0) (4.4) (6.2) (6.3) (5.2) (6.7) (3.9) 0Othe r1.) (- 14 Liabilities -25.9 -2S.3 -30.5 -35.4 -29.8 -33.8 -29.5 Balance duo to ECCB (--) (--) (-0.9) (-1.1) --) (-3.1) (--) Balance due to ECCB area banks (-1.3) (-2.2) (-I .) (-2.7) (-2.4) (-1.9) (-2.5) Balance due to banks abroad (-5.9) (-5.1) (-7.4) (-6.2) (-5.1) C-4.7) (-3.4) Nonresident deposits (-18.7) (-21.0) (-21.1) (-25.4) (-22.3) (-26.1) (-23.6) Demand /2.2/ /2.0/ /2.6/ /2.6/ /2.1/ /3.4/ /2.3/ Savings /13.6/ /15.1/ /16.0/ /19.6/ /16.8/ /19.4/ /17.6/ Time /2.9/ /3.9/ /2.5/ /3.2/ /3.4/ /3.3/ /3.7/ Not Domestic Assets 55.5 60.3 60.6 72.7 *4.9 73.8 90.3 Not credit to Central Government 3.6 3.7 4.2 8.6 12.7 9.0 13.2 Treasury blill 1--) (--) (0.5) (1.0) (1.0) (1.0) (1.0) Debentures (0.7) (0.6) (1.0) (0.4) (0.9) (3.0) (0.9) Loans and advances Including overdraft (1.3) (1.3) (0.5) (4.7) (3.7) (4.5) (3.5) Special deposit requirement b/ (3.9) (2.1) (2.3) (2.5) (7.7) (2.6) (7.9) Government deposits (-) (-0.3) (-0.1) (-0.1) (--) (-0.6) (-0.1) (-0.1) Not crodit to other pubilc sector 1.6 -0.3 -0.3 -0.4 -0.3 -0.4 -0.4 Credit (1.6) (--) C-} {- --} C--})- Dcposti (-1 (--1 (-0.3) (-0.3) (-0.4) (-0.3) (-0.4) (-0.4) Not crodit to nonbank financial Intermedlarles -1.9 -2.8 -3.5 -5.2 -4.1 -5.1 -3.9 Credit (0.3) (0.3) (0.5) (0.6) (0.5) (1.2) (0.5) Deposit (-1 (-2.2) (-3.1) (-4.0) -6.0) (-4.6) (-6.3) (-4.4) Credit to prIvato sector 50.9 59.8 61.6 67.2 77.9 72.1 81.2 Interbank float 0.6 0.5 -1.6 2.7 0.5 -0.1 0.4 Claims (0.6) (2.5) (3.8) (7.3) (1.0) (1.0) (0.9) LIabilities (-0.2) (-2.0) (-5.4) (-4.6) (0-.5) (1-.) ( 0.5) Not unclassified assets 0.7 -0.6 -- -0.2 -1.6 -1.7 -0.2 Assets (6.8) (8.2) (17.6) (16.3) (13.2) (14.6) (17.4) LIabilItIos (-6.1) (-8.8) (-17.8) (-18.5) (-15.0) (-16.3) (-17.6) Liabilities to Private Sector C/ 56.0 59.6 67.3 66.8 74.8 69.7 77.9 Demand deposits 10.6 11.3 13.2 11.3 13.6 3.7 14.6 Savings deposits 32.3 35.7 36.7 37.2 41.2 37.5 42.3 Tlm deposits 12.9 12.6 13.4 18.3 20.0 16.5 21.0 a/ Includes operatlons of the Barclay's Bank, the Royal Blnk ef Canada, the Bank of Nova Scotle, and the Canadian loperlal Bank of Commerce. b/ As of September 1983, the special deposit requirement for commerial banks was Increased from 2.501 to 7.50S of tho total deposits. c/ Depoeits of other public entities and financial institutiono are excluded. Sourcoes East Caribbean Central Bank. foreign commerelal banks, and IWP Staff estlates. May 1984 - 94 - Table 6.3: ST. VINCENT AND THE GRENADINES - THE NATIONAL COMMERCIAL BANK OPERATIONS (EC$ million) December 31 March 31 1979 1950 1981 1982 1983 1983 1984 Not Foreign Assets 6.2 3.1 1.1 -3.6 4.3 -1.1 2.9 Assets 6.9 6.4 3.6 3.8 6.7 3.6 7.0 Foreign currency holdings CO.1) (0.4) (0.4) (0.1) (0.3) (0.1) (0.2) Claims on ECCB (0.9) (1.2) (0.4) (0.7) (0.8) (0.7) (0.9) of which: currency holdings /0.3/ /0.8/ /0.4/ /0.7/ /0.8/ /0.7/ /0.9/ Claims on ECCB area banks (--) (--) C--) (0.1) (l) (0.1) (0.2) Claims on banks abroad (l.1) (2.4) (1.0) (1.7) (1.4) (1.2) (2.0) Other (4.8) (2.4) (1.8) (1.2) (6.2) (1.5) (3.7) Liabilities -0.7 -3.3 -2.5 -7.4 -4.4 -4.7 -4.1 Balance due to ECCB () -) (-0.4) (-4.6) (-1.9) (-1.8) (-1.8) Balance due to ECCB area banks C--) (--) (--) (--) (--) C--) '--) Balance due to banks abroad (-0.3) (-0.4) t-- (-0.2) (-0.3) (-0.3) (-0.1) Nonresident deposits (-0.4) (-2.9) (-2.1) (-2.6) (-2.2) (-2.6) (-2.2) Demand /0.2/ /2.3/ /1.3/ /1.2/ /1.5/ /1.3/ /1.3/ Savings __ __ Time /0.2/ /0.6/ /0.8/ /1.4/ /0.7/ /1.3/ /0.9/ Net Domestic Assets -1.2 3.4 7.2 17.1 11.8 14.3 14.3 Not credit to Central Government 7.6 3.0 4.1 6.1 1.9 5.2 3.7 Treasury bills (--) C--) C--) (--) (--) (--) (--) Debentures C--) (--) (--) C--) (4.1) (3.9) (3.9) Loans and advances Including overdraft (7.6) (3.0) (4.2) (6.3) (3.0) (2.3) (3.0) Spocial deposit requirement a/ C--- (-C..)--) C--) (--) Government deposits (-) C--) (--) (-O.I) (-0.2) (-5.2) (-1.0) (-3.2) Not credit to other public sector -12.0 -7.1 -4.7 -- -0.5 -1.6 0.6 Credit (7.9) (11.6) (19.2) (30.5) (35.4) (29.7) (37.9) Deposti C-) (-19.9) (-18.7) (-23.9) (-30.5) (-35.9) (-31.3) (-37.3) Not credit to nonbonk financial Intermediarles -0.3 -- -0.7 -0.2 -- -- -0.2 Credit C- ) (0.1) (0.1) (0.2) (0.3) (0.1) Deposit C-) (-0.3) (-- (-0.8) (-0.3) (-0.2) (-0.3) (-0.3) CredIt to private sector 4.4 9.2 13.0 19.0 21.5 19.3 22.2 Interbank float 0.4 0.1 0.1 -0.4 -0.2 0.1 0.1 Claims (0.4) (0.3) (0.2) (0.4) (0.4) (0.6) (0.2) Liabilities --) t-0.2) (-O.I) (-0.8) (-0.6) (-0.5) (-0.1) Not unclassified assets -1.3 -1.8 -4.6 -7.4 -10.9 -8.7 -12.1 Assets (0.2) (-0.8) (0.8) (2.8) (3.7) (3.7) (4.8) Liabilitios (-1.5) (-2.6) (-5.4) (-10.2) (-14.6) (-12.4) (-16.9) Liabilities to Private Sector b/ 5.0 6.5 8.3 13.5 16.1 13.2 17.2 Demand doposits 0.8 0.9 0.9 2.0 1.5 1.7 1.8 Savings deposits 1.8 3.1 4.3 5.6 7.4 5.5 8.1 Time deposits 2.4 2.5 3.1 5.9 7.2 6.0 7.3 a/ The National Co _erclal Bank Is exempted from the special deposit requirement. b/ Deposits of other pubilc entities and financial Institutions are excluded. Sources The Notional Comerclal lank (NCO). May 1964 - 95 - Table 6.4. ST. VINCENT AND THE GRENADINES - DISTRIBUTION OF CONMERCIAL SANK LOANS AND ADVANCES TO THE PRIVATE SECTOR ci (EC$ million) December 31 March 31 1977 1971 1979 1980 1981 1982 1983 1983 1984 Total 38.3 51.3 59.8 77.4 89.8 109.9 127.9 117.3 133.0 Agriculture 2.1 2.7 3.3 7.7 6.1 9.3 9.7 8.2 10.0 MNanufacturing 5.6 8.3 7.7 10.2 14.4 19.9 26.1 24.0 26.9 Distributive trades 7.7 9.4 14.6 15.3 16.9 17.2 14.8 18.0 22.0 Tourism 1.7 1.7 2.1 2.1 2.6 2.5 2.9 2.5 2.3 Transport 1.7 2.5 3.8 3.6 4.7 5.1 7.8 6.1 864 Public utilities 0.6 1.5 2.1 4.8 3.9 4.6 5.5 4.7 4.9 Building and construction 2.1 5.1 5.0 5.7 6.0 7.0 8.6 8.1 8.4 Personal 14.2 16.9 16.3 20.0 25.6 28.7 33.0 29.8 32.1 Othcr Advances 2.6 3.2 4.9 8.0 9.6 15.6 17.5 15.9 18.0 (As Percent of Total) Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Agriculture 5.5 5.3 5.5 9.9 6.8 8.5 7.6 7.0 7.5 Manufacturing 14.6 16.2 12.9 13.2 16.0 18.1 22.0 20.5 20.2 Distributive trades 20.1 18.3 24.4 19.8 18.8 15.7 11.6 15.3 16.6 Tourism 4.4 3.3 3.5 2.7 2.9 2.3 2.3 2.1 1.7 Transport 4.4 4.9 6.4 4.7 5.2 4.6 6.1 5.2 6.3 Public utilities 1.6 2.9 3.5 6.2 4.3 4.2 4.3 4.0 3.7 Building and construction 5.5 9.9 8.4 7.4 6.7 6.4 6.7 6.9 6.3 Personal 38.1 32.9 27.3 25.8 28.5 26.1 25.8 25.4 24.2 Other Advances 5.8 6.3 8.2 10.3 10.7 14.2 13.7 13.6 13.5 a/ Includes loans to nonresidents and nonbank financial Institutions. Source: East Caribbean Central Bank. Mny 19B4 - 96 - Table 6.5a ST. VINCENT AND THE GRENADINES - INTEREST RATE STRUCTURE (In Percent) December 31 March 31 1977 1978 1979 1960 1981 1982 1983 1984 Deposits Savings 2 -3 2 -3 2 2 2 2 -5 2 -5 2 -5 Time 3 months 3 -5 3 -5 3 -5 3-3 3-4 4-5 4-5 4-5 3-6 months 4-5 4-5 4-5 3 -4 3 -5 4 -6 4 -6 4-6 6-12 months 4-6 4-6 4-6 3 -4 3 -5 5 -8 5-7 4 -7 Lending Prime rate 8 -9 8 -9 8 -9 8-9 8-9 9-10 9-12 9-12 Other .. .. 10 10-12 12-14 12-14 11-14 Certain consumer losns under EC$14,500 .. .. .. .. 14 14 14 14 TrTeaury bill rate .. .. .. .. .. .. Sourcecs The Barclsyys Bank, the National Commercial Bank, the Royal Bank of Canada, thc Canadian Imperial Bank of Commerce, and the Sank of Noav Scotia. May 1984 - 97 - Table 6.6: ST. VINCENT ANO THE ORENADINES - EASTERN GARIBSEAN CENTRAL SANK (ECS mIliIIo) December 31 March 31 1979 I110 1981 1962 19" 1983 1964 Net International Reserves 167.4 145.2 14.6 133.8 134.8 153.4 167.1 Aces t* 210.6 212.3 181.4 133.5 133.1 153.4 169.2 Fixed Deposits and money at call */ (139.3) (93.9) (61.5) (I1.9) (12.1) (12.7) (79.2) Roglonal notes In process of redemptioe (5.7) (6.2) (2.8) t.2) tO.S) t2.2) (0.7) Other securitles b/ (65.6) (112.2) (97*1) (114.7, (123.4) (138.5) (68.3) Liabilities -43.2 -67.1 -32.6 -- -1.3 -- -1.1 Balence due to bonk abroad c/ C-43.2) (-67.1) (-32.6) () (-1.3) () (-1.1) Not Pezitlen with Sanks In ECC8 Area -69.2 -616 -55.6 -46.3 -50.6 -57.3 -7.4 Assets 6*7 6.5 7.2 11.2 6.3 5.5 2.5 Loanm to commercial banks (6.5) (4.2) (4.6) (6.6, (5.4) (2.6) (--) Deposits with commrclal banks (2.2) (2.3) (2.4) (2.6) (2.3) (2.7) (2.5) Liabilitles -97.9 -6S.1 -62.6 -57.5 -56.9 -62.8 -S0.9 Currencys notes and coina (-24.0) t-26.5) (-23.5) (-26.4) (-29.3) (-17.1) (-16.9) St. Vincent /3*6/ /4.2/ /3.9/ /4.0/ /4.0/ /3.0/ /3.1/ Other /20.4/ /22.3/ /19.6/ /24.4/ /25.3/ /14.1/ /15.6/ Oeposits (-73.9) (-41.6) (-39.3) (-29.1) (-29.6) (-45.7) (-62.01 Demand /7.9/ /12.9/ /13.1/ /17.6/ /22.9/ /21.22 /30.6/ Fixed /66.0/ /28.7/ /26.2/ /11.3/ /6.7/ /24.5/ /31.4/ Net Domestic Assets 13.3 13.9 16.4 24.3 31.0 17.3 25.6 Central Covernment (not) 33.5 40.3 45.9 53.2 56.0 53.6 56.4 St. Vincent Treasury bills (2.6) (3.1) (3.6) (5.9) (5.9) (5.9) (5.9) Other Treasury bills (16.8) (20.2) (22.9) (26.7) (31.5) (29.3) (31.9) St. Vincent debentures (1.5) (1.5) (1.1) (1.1) (1.9) (1.1) (1.3) Other debentures (12.6) (15.5) (16.3) (17.5) (16.7) (17.5) (16.7) Liabilities to nonmonetary Internationil organizations -0.4 -7.7 -2.5 -1.4 -1.2 -1.0 -1.2 Het uncleeslfled assets -19.6 -16.7 -25.0 -27.5 -23.8 -35.5 -29.6 Asets (1.9) (4.0) (3.7) 6.S) (9.1) (6.3) (2.2) Llabilitles (-21.7) (-22.7) (-28.71 (-36.0) (-33.7) (-41.6) (-31.6) Currency In Circulation 91.5 97.5 III.6 111*8 115.2 113.4 114.3 In St. Vincent 12.9 12.9 15.4 17.5 17.2 17.7 18.4 Estimates of notes and coins issued (16.5) (17.1) (l9.3) (21.5) (21.2) (20.7) (21.5) Less: commercial banks cash holdings (-3.6) (-4.2) t-3.9) (-4.0) (-4.0) (-3.0) (-3.1) In other ECC8 area countries 76.0 62.0 93.6 91.7 95.4 93.1 93.3 Estimste of notes and coins Issued (96.4) (104.3) (113.2) (116*1) (120.7) (107.2) (109.1) Loess commorcial banks cash holdings (-20.4) (-22.3) (-19.6, (-24.4) (-25.3) (-14.1) (-15.6) Coins In former member countrlie 2.6 2.6 2.6 2.6 2.6 2.6 2.6 s/ As of March 1984, the figure Includcr securities held under roperchaae agreements with the Federal Reserve bank of Now York. b/ Fer December 1962 and the subsequoet yoers. the figure Includes credit belanee with CARICOM Multilateral Clearing Facillty, end as of March 1264, excludes seesrities held under repurchase agreements with the Federal Reerve Sank of Now York. c/ 'Abroad' meaning outside ECCB area. Sources Eastern Caribbean Central Sank. May 1964 - 98 - Table 7.1i ST. VINCENT AND THE GRENADINES - ESTIMATED PRODUCTION OF MAJOR COMMODITIES (tin thousands of pounds, unless otherwise Indicated) 1977 1976 1979 1980 1981 1982 1983 Agrieulter. crops Arrowroot rhizomes .. .. 11,946 12,501 12,934 16,846 19,399 Bananas 63,000 71,934 63,028 46,145 73,240 70,000 72,860 Casava .. .. 794 893 1,000 1,897 CItrvs fruits .. .. 1,000 900 850 1,244 Coconts ('S000 note) 12,000 16,000 14,296 10,738 9,924 10,511 Eddoes and Dabheon 3,000 4,395 3,299 4,031 6,029 6,391 Ginger 1,321 1,915 2,635 1,200 2,000 2,120 Mangoes 3,810 3,809 3,810 1,269 3,810 4,039 Poeants 56 151 101 100 400 424 Plantains 926 1,830 2,411 3,231 11,200 11,872 Sugar cane (metric tens) -- -- -- -- 8,500 30,035 33,610 Sw-et Potatoes 1,686 3,493 3,200 4,652 3,016 3,197 Tamales 1,494 1,900 1,500 1,500 1,500 1,500 Tobaceo 28 84 161 190 218 219 Yams 1,310 1,000 1,000 1,000 1,000 1,000 Naufaeetvred Ceomodltieo Anlal feed -- -- 15,200 17,233 -- 21,781 25,275 Arrowroot starcb 1,487 1,838 1,493 1,562 1,616 2,110 2,208 Flour -- -- 48,302 48,252 43,426 44,988 43,899 Galvanized metal sheets (@00 foeet) -- -- -- -- 110 2,524 Sugar (motric tons) S-- -- -- 31 1,880 2,307 Sources Ministry of FInance, Planning and Development Statistical Unit. Nay 1984 - 99 - Table 7.2: ST. VINCENT ANO THE GRENADINES - SELECTED TOURISM DATA 1978 1979 1980 1981 1982 1983 Total number of visitors 48,826 56,1S6 78,015 71,475 67,598 72,719 AIr 35,249 42,714 49,751 49,732 46,173 47,405 Hotels/guest houses 13,736 16,093 19,627 19,385 18,746 19,246 Cottages/private houses 14,962 16,708 18,803 20,231 22,117 23,134 Yachts 5,568 8,426 9,625 8,598 5,033 4,693 Excurslonists a/ 983 1,487 1,699 1,518 277 332 Cruise ships by sea b/ 13,577 13,472 28,261 21,743 21,425 25,314 Weighted days of stay per vIsitor c/ 6 .61 6.59 5.67 6.14 6.20 5.93 Hotels/guest houses 9 7 7 7 7 7 Cottages/private houses 9 10 10 10 10 10 Yachts 9 9 9 9 9 9 Volume of visitors (thousand days) 322.9 370.5 442.0 438.6 419.4 433.9 Weighted daily expenditure per visitor (US dollar) 34.5 34.4 37.8 40.6 41.0 42.3 Hotels/guest houses 55 60 67 70 70 71 Cottages/private houses 17 21 21 24 26 28 Yachts (In hotel) d/ 55 60 67 70 70 71 (on boat) 31 20 25 30 32 35 Excurslonists 15 20 20 20 2Q 20 Cruise ships and others I5 20 20 20 20 20 Total expenditure by visitors (millions of US dollars) 11.1 12.8 16.7 17.8 17.2 18.2 a/ Official data combine excuralonists with yacht visitors. It Is assumed that excursionists are 15S of the total. b/ Obtained from data on cruise ship passengers with the assumption that only 65S of them disombark. c/ Assumes that excursionists end cruise ship visitors spend a day on the Island. d/ Assumes that visitors arriving by air for yachting spend on average two nights In hotols and the remaInder on boats. Sources Tourist Board and mislson ostimates. May 1984 - 100 - Table 7.3: ST. VINCENT AND THE GRENADINES - TOTAL VISITOR ARRIVALS BY MONTH 1979 1980 1981 1982 1983 January 8,702 11,222 14,242 8,553 8,858 February 7,338 10,367 12,603 6,209 8,698 March 6,941 9,248 9,472 7,120 8,641 April 4,936 8,302 8,958 6,897 7,602 May 3,498 5,339 4,011 5,451 3,864 June 3,818 5,404 3,474 4,776 4,267 July 5,122 6,504 4,552 7,167 5,850 August 5,840 6,465 5,092 6,779 5,028 September 3,044 3,829 2,265 3,267 2,513 October 3,363 4,228 2,972 4,593 3,707 November 4,030 4,939 5,582 6,293 10,457 December 6,808 17,383 9,960 12,050 16,865 TOTAL 63,440 93,230 83,183 79,135 86,350 By AIr 42,714 49,751 49,732 46,173 47,405 By Sea 20,726 43,479 33,451 32,962 38,945 Sources Tourlst Board. Nay 1984 - 101 - Table 7.4: ST. VINCENT AND THE GRENADINES - TOTAL VISITOR ARRIVALS BY FIRST PORT OF ENTRY 1979 1980 1981 1982 1983 St. Vlncent 40,658 62,692 54,628 48,980 49,867 Airport 31,165 36,537 36,748 31,400 32,712 Klngstown 9,493 26,155 17,880 17,580 17,155 BequIa 10,252 14,413 3,098 2,343 3,185 Mustique 1,666 2,050 1,948 3,046 2,985 Airport 1,464 1,892 1,749 1,536 1,358 Seaport 202 158 199 1,509 1,627 Union lsland 10,864 14,075 23,509 24,766 30,313 AIrport 10,085 11,322 11,235 13,236 13,335 Seaport 779 2,753 12,274 11,530 16,978 Total 63,440 93,230 83,183 79,135 86,350 Soure:s Tourist Board. May 1984 - 102 - Table 7.51 Sr. VIHENTI) AIHE GiM)lvES - GERAtTION AlD SAES OF ELECTRICITY Esthbut Projected t977 1978 1979 1980 t981 1952 1983 (A) ST. VI NOT Peek OmD d KW 4,110 4,750 4,890 4,630 5,010 S,090 - Increas on proe. yMr (X) 6A 15.6 2.9 5.3 8.2 1.6 - Groxe Generatlon k.Hl) Hydro 8,382 9,925 9,681 10,021 10.509 9,765 9,904 Diesel 10o,6 12.218 14,923 15,734 15,746 16,669 19,554 Total 18,618 22,143 24,64 25,755 26,255 26,434 29,45 Increae on prav. year IS) 10.3 18.9 11.1 4.7 1.9 0.7 11.4 Load factor () SI.7 53.2 57.4 63.5 64.3 Fuel conaumptlon (Inp. 9al1.) - 797,474 - 970,812 1,023,908 1,089,109 1,257,877 KWJCVhp. gall. P 15.3 - 16.2 15.3 15.3 15.5 DOmstic 7,644 8,04 - 8,926 9,172 10,060 10,104 Cuarclal S,952 6,735 - 7,110 7600 7,762 8,580 Indutrlal 1,263 2,576 - 3,226 3,236 3,256 3,616 Stroot Lighting 32 310 - 390 391 418 460 Total 15,179 17,669 - 19,652 20,399 21,486 23,570 Ineroee on prev. yr (I) 10.7 16.4 - - 3.8 5.4 9.8 Losses (S of Gross Gen.) a/ 18.5 19.2 - 23.7 22.3 18.7 19.98 No. of cuetors DtAtlc 8,744 9,136 - 9,697 10,603 - - Ca,rclal 1,091 1,136 - 1,168 1 223 - - Industrlal 55 57 - 42 39 - - Street Llghting 34 33 - 30 31 - - Total 9.924 10,364 - 10,937 11,96 - - Avg. conaqtion par cuetor K.W./yer Doetic 874 881 - 92D 865 - - Comrcll 5,456 5,929 - 6,087 6,214 IndustrIal 22,964 45,193 - 76,810 82,974 - (8) 6EOtIA Peak Daund (KW) 268 232 32 214 Inetrirnts 248 Incrw c on prey. yer CS) d_egad by fire Groas Generation (OJR) 989 1,131 1,123 1,217 - 1,32D 13I Incres on prev. year (5) 24.7 14.4 1.0 8.7 - - 4.6 Fuel coneu ptlon (ilp. gal.) - - - - - 96,614 103,630 Sales (W.R.) Danstlc 407 443 - 523 S8 646 628 Cosrcla 2J4 311 - 341 3I8 410 381 Street Lighting I I - I - - Total 140 757 780 - - - Avg. conwnptlon per cu*sr (1.00t./year) Ouastic 610 653 - 769 - - Comrclal 3,944 3,987 - 3,444 - - a Includoe por station auxillarles and cwny ucogc estImated to oranp 3S of grose gpneratIon. Sourecm St. VInent Electricity Services, Ltd. May 1984 - 103 - Table 7.6: ST. VINCENT AND THE GRENADINES - FUEL CONSUMPTION 1978 1979 1980 1981 1982 1983 Gasoline (1,000 gallons) 1,463 1,342 1,257 1,310 1,640 1,748 Kerosine (1,000 gallons) 367 388 259 231 204 250 Diesel (1,000 gallons) 1,425 1,908 1,879 1,705 2,234 2,111 Natural Gas (tons) a, 639 676 1,387 2,035 2,822 2,963 Electrlclty (mwh) 23,274 25,724 26,972 28,291 29,470 31,068 CommercIal (5,750) (6,210) (6,088) (6,403) (6,935) (7,812)b/ Domestic (8,412) (9,668) (9,124) (9,759) (10,582) (10,292) Industrial (2,574) (3,247) (3,332) (3,236) (3,554) (3,306) Public Sector (1,376) (1,500) (1,655) (1,597) (1,486) C.) Other (915) (1,008) (1,060) (1,059) (1,057) (1,152) Loss (4,247) (4,091) (5,713) (6,237) (5,856) (8,506) a/ Tons of crude oil equivalent. b/ Includes public sector. Sourcest Statistical Unit and Energy Unit of Ministry of Finance, Planning and Development. May 1984 - 104 - Table 8.1: ST. VINCENT lND THE GFtENADINES - CDNSlER PRICE INDEX (OLD SERIES) Food & Tobacco Clothing Fuel Hous Transport Other All Bever- and and foot- Hour & Furnl- hold & Ser- Items ages Alcohol war Ing Light ture Supplies CanwS. vice$ Old weights a/ 100.0 55.2 5.3 6.9 11.1 6.4 5.4 9.7 (March 1964 - 100) End of Period 1976 307.1 321.8 255.4 307.1 289.1 270.7 365.9 263.5 1977 329.8 339.7 283.1 328.1 3D5.7 313.3 400.4 298.8 1978 366.3 371.3 335.0 426.2 308.8 396.4 450.7 310.8 1979 430.4 415.6 375.4 496.4 436.1 521.5 515.4 383.5 1980 511.7 514.7 433.9 556.6 477.1 583.2 601.5 447.6 1981 556.8 528.2 500.8 687.7 549.6 659.3 741.9 494.3 New veights a/ 200.0 59.8 2.8 7.7 6.3 6.2 3.2 3.4 3.7 6.9 (January 1981 - 100) End of Period 1981 111.7 109.1 114.1 115.8 107.9 117.3 103.2 130.1 119.0 117.3 1982 117.1 113.5 120.9 120.8 108.0 121.8 114.4 142.4 121.7 133.5 1983 123.1 119.5 123.6 126.0 123.4 128.1 121.9 146.5 120.7 136.4 (Percent Chlnge) 1977 7.4 5.6 10.8 6.8 5.7 15.7 9.4 13.4 1978 11.1 9.3 18.3 29.9 1.0 26.5 12.6 4.0 1979 17.5 11.9 12.1 8.4 41.2 31.6 14.3 23.4 1980 18.9 23.8 15.6 12.1 9.4 I1.8 16.7 16.7 1981 8.8 2.6 15.4 23.6 15.2 13.0 23.3 10.4 New veights a/ 1982 4.8 4.0 5.7 4.3 0.1 3.8 10.8 9.4 2.3 13.8 1983 5.1 5.3 2.2 4.3 14.3 5.2 6.6 2.9 -0.8 2.2 a/ Welghts of Index were revised effective January 1981. Sources Statistical Unit, Ministry of FInance, Planning and Development. Nay 1984 - 105 - Table 8.2: ST. VINCENT AND THE GRENADINES: Consumer Pr!r, Index (NEW SERIES) 1979 1980 198la/ 1981 1982 1983 1984b/ 1. Perlod Averages All Itens. 400.9 469.9 529.7 106.6 114.4 120.6 122.9 C1 Food end beverages 397.7 455.0 509.9 105.6 110.6 116.4 118.5 Tobacco and alcohol 357.0 408.1 496.4 105.8 118.2 122.1 123.7 Clothing and footwear 482.3 529.5 664.0 105.1 119.6 124.9 124.3 HousIng 353.7 452.2 530.5 106.4 106.0 119.5 123.4 Fuel and light 454.9 512.4 579.0 113.4 118.3 129.2 132.9 Furniture 467.5 1 565.4 ) 717.8 ) 102.3 110.7 116.5 121.0 Household supplies I 113.8 138.8 145.2 147.2 Treanport and communications 360.2 ) 419.7 ) 461.7 ) 108.5 120.0 120.3 122.3 Other Srvices ) ) ) 109.3 128.3 134.6 138.5 (Percentage changes) All Items 15.6 17.2 12.7 ... . 7.3 5.4 4.0 d/ Food and beverages 12.2 14.4 12.1 .. . 4.7 5.2 3.7 Tobacco end alcohol 15.5 14.3 21.6 ... 11.7 3.3 1.6 ClothIng and footwear 34.0 9.S 25.4 ... . 14.0 4.3 0.6 Housing 15.0 27.8 17.3 ... 1.5 10.6 14.4 Fuel and light 30.1 12.6 13.0 ... . 4.3 9.2 3.7 Furniture 9.1 20.9 9 27.0 ... 8.2 5.2 5 .1 Household supplies ) ) 22.0 4.6 2.6 Transport and communicatlon& 16.4 I 16.5 I 10.0 1 ... 10.6 0.3 2.9 Other Services ... . 17.4 4.9 4.4 II. End of Perlod All Items 430.4 511.7 556.8 I1I.7 117.1 123.1 122.8 1 Food end boveregee 415.6 514.7 S28.2 109.1 113.5 119.5 118.2 Tobecco and alcohol 375.4 433.9 500.6 114.1 120.9 123.6 123.9 Clothing and footwear 496.4 556.6 687.7 IIS.8 120.8 126.0 123.6 Housing 436.1 477.1 549.6 107.9 106.0 123.4 123.4 Fuel and light 521.5 S83.2 659.3 117.3 121.6 128.1 134.1 Furniture 515.4 6 601.5 7 741.9 I 103.2 114.4 121.9 120.7 Houehold suppile I ) 130.1 142.4 146.5 147.2 Transport and communications 383.5 ) 447.6 ) 494.3 I 119.0 121.7 120.7 122.3 Other Services ) ) ) 117.3 133.5 136.4 139.2 (Percentage changes) All Items 17.5 18.9 8.8 ... . 4.8 5.1 3.5 f/ Food and beverages 11.9 23.8 2.6 ... 4.0 5.3 3.1 Tobecco and alcohol 12.1 15.6 15.4 ... . 5.7 2.2 2.0 Clothing and footwear 8.4 12.1 23.6 ... 4.3 4.3 -1.4 Housing 41.2 9.4 15.2 ... 0.1 14.3 14.4 Fuel and light 31.6 11.6 13.0 ... 3.8 5.2 4.0 Furniture 15.3 ) 16.7 ) 23.0 ) ... 10.8 6.6 4.9 Houshold suppiees I ) ) ... 9.4 2.9 2.2 Transport and communleations 23.4 ) 16.7 I 10.4 1 ... 2.3 -0.8 1.3 Other Serves I I I ... c 13.8 2.2 4.3 a/ Old serlco, 1964 * 100. bh Now, re-welghted series, January 1981 * 100. c/ Average, January to March, 1984. d/ Annualized to March 1964. a/ As at end-March 1984. I/ Percentage incresue, March 1994 over March 19S3. Source: Statlitical Office, Ministry of Finance, Planning and D0evlopmsnt. May 1984 - 106 - Table 8.3t ST. VINCENT AND THE GRENADINES - PRICES OF GASOLINE, DIESEL ANO KEROSENE (In East Carlbbcsn dollars per Imperial gallon) Gasoline Diesel Kerosene Wholesale Retail Wholesale Retail Wholesale Retail 1975 February 25 1.87 2.00 1.42 1.52 - - 1976 January 2 2.05 2.20 1.60 1.70 1.50 1.60 November 2 2.24 2.40 1.70 1.80 1.62 1.72 1977 January 13 2.40 2.60 1.83 1.95 1.76 1.88 September 13 2.46 2.66 1.87 1.99 1.78 1.90 1978 AprIl 25 2.54 2.74 1.93 2.05 1.84 1.96 December 12 2.63 2.85 1.99 2.13 1.93 2.07 1979 February 27 2.85 3.00 2.08 2.22 2.13 2.27 AprIl 1 2.86 3.11 2.20 2.34 2.23 2.37 May 5 3.19 3.44 2.41 2.55 2.44 2.58 July 6 3.26 3.51 2.48 2.62 2.51 2.65 August 14 3.59 3.95 3.07 3.32 3.10 3.35 November 6 3.59 3.95 3.07 3.32 3.41 3.66 1I80 February 5 4.38 4.74 3.80 4.05 3.98 4.23 March 25 4.38 4.74 3.80 4.05 4.09 4.23 April 22 4.49 4.85 3.91 4.16 4.23 4.37 August 12 4.66 5.02 4.01 4.26 4.23 4.37 October 30 4.48 4.84 3.85 4.10 4.01 4.15 198I March 3 4.65 5.01 4.07 4.32 4.11 4.25 1982 February 2 4.78 5.18 4.24 4.49 4.14 4.39 October 19 5.03 5.60 4.46 4.85 4.46 4.71 Source: Minietry of Trade, Industry and Agriculture. May 1984 - 107 - Table 8.4: ST. VINCENT AND THE GRENADINES - WAGES OF SELECTED OCCUPATIONS AT BOTTLERS LIMITED (EC$ per week) 1977 1979 1980 1981 1982 1983 Filler Operation 53.46 67.36 77.46 95.00 114.00 119.70 Syruproom Attendant 53.46 67.36 77.46 95.00 114.00 119.70 General Factory Handier 44.00 55.44 63.75 75.00 90.00 94.50 Messenger 44.00 55.44 63.75 75.00 90.00 94.50 Handyman 56.76 71.52 82.25 92.00 115.86 121.65 Watchman 52.80 70.00 80.50 90.00 113.40 119.87 Bottler Worker 35.00 44.10 50.70 60.00 72.00 75.60 Average Increasse (S) 10.0 26.0 15.0 17.5 21.7 5.0 Source: Office of the Labor Commissioner. May 1984 - 108 - Table 8.5: ST. VINCENT AND THE GRENADINES - Exchange Rate Movements Indices 1980-100 Nominal Real Effective Effective Unite per EC$ Exchange Exchange SOR USS Rates a/ Rates b/ Quarterly average 1978 - I 0.303 0.370 0.192 105.05 100.30 11 0.302 0.370 0.202 106.83 101.11 III 0.293 0.370 0.192 105.15 99.67 IV 0.285 0.370 0.186 104.37 100.86 1979 - I 0.287 0.370 0.184 104.09 0I1.82 11 0.290 0.370 0.178 103.23 100.74 111 0.284 0.370 0.166 101.09 98.87 IV 0.284 0.370 0.171 102.25 101.53 1980 - I 0.284 0.370 0.164 100.96 100.36 11 0.285 0.370 0.162 100.61 99.36 III 0.280 0.370 0.155 99.07 98.39 IV 0.288 0.370 0.155 99.36 101.89 1981 - I 0.298 0.370 0.160 100.65 104.90 11 0.313 0.370 0.178 104.30 110.50 III 0.326 0.370 0.201 108.63 114.31 IV 0.317 0.370 0.196 107.27 113.04 1982 - I 0.326 0.370 0.200 108.30 113.20 11 0.331 0.370 0.209 109.94 113.36 III 0.341 0.370 0.214 111.29 115.11 IV 0.343 0.370 0.224 112.63 117.26 1983 - I 0.339 0.370 0.241 114.63 118.66 11 0.344 0.370 0.238 114.32 117.91 III 0.351 0.370 0.245 115.63 119.29 IV 0.352 0.370 0.252 116.91 120.27 Annual average 1978 0.296 0.370 0.192 105.35 100.48 1979 0.286 0.370 0.174 102.67 100.74 1980 0.284 0.370 0.159 100.00 100.00 1981 0.314 0.370 0.183 105.22 110.69 1982 0.335 0.370 0.211 110.54 114.73 1983 0.346 0.370 0.244 115.38 119.03 as/ Based on the shares of St. Vlncent and the Grenadines' main trading partners In domestic exports, Imports, and tourism. b/ Based on consumer price IndIces. Sources: IMF, InternatIonal FlnancIal Statistics; and IMF staff estImates. May 1984 IBRD 19246 IsP 0 ~~~~~~~~~~~~~1325- STNINCENT q I 6n50 ST VINCENT & THE GRENADINES 0 a/e,nn 8J-/ -AO V og moi. -cjtieIsSvtherlond leveela, IF ' rI NwlS ge G RENADeA 53r 2/ Ci ) Overland Vrlloge 73-20 0~~~~ - Mo7is Rodi5 -/ . Traumorng K - Scrsdary POads - . Orange Hill 6e 7 MoissCspieoir I wollilabou 13- IS-~~~~-. -or 7sh 7i@, R llsrleHd \ I Rivers7 ba v C,,asO,3,> r lhnn 'LongleY Pork P1v,,' Bsrd/ " i - t H4WCHA~CHTEAUBELAIR e-., Clsoymons Ct7o ;kt Carotot~n Vrlag f'L