St. Vincent and the Grenadines & the EU – Political and Economic relations
St. Vincent and the Grenadines has had a formal relationship with the European Union (then the European Economic Community) since 1984. As a former British colony, which became independent in 1979, it was the entry into the EEC by Britain in 1973 which offered St. Vincent and the Grenadines and other Commonwealth countries in Africa, Caribbean and the Pacific (ACP) the possibility of negotiating their future relations with the EU.
The overall aim of EU co-operation is to improve the quality of life of the populations in the beneficiary countries through targeted and sustainable programmes. In 2010 the EU Delegation to Barbados and the Eastern Caribbean, which covers St. Vincent and the Grenadines, disbursed €130 million in development co-operation aid amongst the ten countries it is accredited to in the region.
Historically EU-ACP co-operation has been underpinned by four Lome agreements and now the Cotonou Agreement signed in 2000, through which the European Development Fund (EDF) provides grant aid towards development projects and programmes. The European Commission manages the funds and jointly implements the projects. Lome also introduced the STABEX system, to compensate ACP countries for the shortfall in export earnings due to fluctuations in prices.
Today the EU is St. Vincent and the Grenadines' largest grant aid partner for development. Apart from the EDF which runs in five year cycles, between 1993 and 1999 St. Vincent and the Grenadines benefitted from STABEX transfers totalling €77 million. These payments were given for loss of export earnings from bananas. The EU assistance was used to develop a more competitive agricultural sector, as well as the maintenance of the banana industry and the provision of social recovery for displaced farmers and their families. Substantial sums of these allocations have been used in the Public Sector Investment Programme (PSIP), construction of reception and palletisation centres, the Tourism Development Project and two large irrigation projects which have introduced a total of approximately 1,800 acres of irrigation on smallholder banana lands.
In addition to STABEX, in 1999, as the foreseeable withering of the banana regime became clear and in recognition of Lomé IV and Cotonou commitments in support of the traditional ACP banana industry and its access to EU markets, another instrument, the Special Framework of Assistance (SFA) to traditional ACP Banana producers, was created to provide assistance in the transitory period. Programmed on an annual basis for a period of ten years and using funds from the EC budget (as opposed to the EDF), the SFA was aimed at further assisting ACP banana producing countries in their efforts to enhance the competitiveness of the banana sector; diversify agriculture, enhance human resources and in general the economy of St. Vincent and the Grenadines; and to create safety nets for former banana producers. St. Vincent and the Grenadines was allocated €51 million (including interest) of SFA resources.
Projects and programmes supported by the EU in St. Vincent and the Grenadines also include construction of a school in Union island one of the islands in the Grenadines, expansion of the automotive laboratory at the Technical College, Education Support Programme which encompassed early childhood along with primary, secondary and tertiary education. The present EU 10th EDF intervention in St. Vincent and the Grenadines focuses on Health Sector Reform, which has a financial envelope of €9.24 million.
St. Vincent and the Grenadines also benefits from the EU's Fluctuation in Export Earnings (FLEX) mechanism, which was introduced in 2000 for ACP countries, to assist governments facing sudden loses of revenues. It provides additional budgetary support in situations where countries have registered a 10% loss in export earnings and a 10% worsening of the programmed public deficit.
The European Investment Bank (EIB) also helps to implement the EU’s cooperation and development policies outside the EU and has made loans available to St. Vincent and the Grenadines. EIB lending has been utilised for port development specifically in the construction of docking facilities for cruise ships and ferries. Lines of credit have been provided to the Caribbean Financial Services Corporation to small and medium size enterprises. There have also been numerous loans to the St. Vincent Electricity Services Ltd. for construction of a diesel plant.
The EU’s Humanitarian Aid Department ECHO has also provided emergency and post emergency aid to assist with the country’s rehabilitation following the passage of Hurricane Tomas in October 2010.
The EU is placing increasing emphasis on climate change, alternative energy and food security as well as mainstreaming issues such as environmental protection, gender and governance in its development co-operation. The EU is committed to the promotion of Human Rights, the rule of law and democracy worldwide. The European Union Delegation continues to work closely with all stakeholders in St. Vincent and the Grenadines and has assisted with the establishment of the Non-state Actors Panel which is actively involved in all aspects of our cooperation from programme formulation to implementation.