Saint Kitts and Nevis is a very small independent state consisting of two islands. Nevis, the smaller of the two, with a population of just over 10,000, has considerable autonomy but has been tempted in the past by secession. The state is situated in the northern part of the Caribbean arc, closer to Puerto Rico than to Trinidad. It is one of the most prosperous states in the region, and comes in 54th place worldwide and 3rd in the regional ranking of the Human Development Index. It has been independent since 1983, and is a well-functioning Westminster-type parliamentary democracy, with full respect for human rights, without any particular problems of political governance, although about one-third of the population is considered poor.
Saint Kitts and Nevis is vulnerable due to its size - 269 km² and a population of about 50,000 -, its exposure to hurricanes and the dependence of its economy on a single activity: historically, it was based on sugar production, and for the last few decades it has concentrated heavily on tourism, particularly from Britain and the United States. In 2005, Saint Kitts ceased producing sugar cane for export, which had become uncompetitive, and would have lost even more money as a consequence of the WTO’s sugar reform. The main challenge is to promote greater economic diversification, particularly by converting agriculture and promoting other sectors and developing human resources, while preventing an increase in poverty as a consequence of the demise of the sugar industry, and by strengthening mechanisms for cooperation and regional integration, with a view to adapting the country to changes in international conditions. The national authorities consider rising crime a major concern.
Saint Kitts and Nevisis a complicated case in EU-Eastern Caribbean relations, due to the considerable importance of its now-abandoned sugar sector. The foundation of past successes in facing the challenges of the present and future in a post-sugar economy need to be consolidated. Among these, changes at regional and global level stand out, with the Economic Partnership Agreement signed with the EU at the end of 2007, and progress towards the Caribbean Community (CARICOM). Despite recent progress, public finances are suffering from major imbalances accumulated in the past, particularly due to the impact of natural disasters. It will also be necessary to analyse the prospects of tourism and financial services, whose development has for some time been seen as a priority by the national authorities, but which raises questions about transparency and the potential for practices that could be harmful to third countries. Another problem is the application of the death penalty carried out in one case in December 2008 -the first one after a long moratorium-, which has been followed by a démarche of the EU condemning the practice.
The EU/Saint Kitts and Nevis cooperation strategy for 2008-2013 concentrates on support for policies that promote human resources development and economic diversification. The 10th EDF provides approximately € 5 M for this purpose, with the concentration sector being "Internal and External Security", and the Accompanying Measures for the Sugar Protocol countries (AMSP) provide over € 40 M for the period 2007-2010. The overall emphasis is on diversification of the country’s economic foundation, in particular through targeted assistance for human resources development, as well as consolidation of public finances burdened with a very high public debt, and poverty reduction.