Saint Lucia is well renowned for its superb beaches and its rain forests. It is the most densely populated of the four Windward Islands; total population is 160,267. Social gaps and deficiencies can be noted, one of the most important being a high level of poverty linked to a high unemployment rate.
It is estimated that up to 40% of the banana crop was destroyed by Hurricane Ivan in September 2004. The most important crop is still bananas, although the banana production has continuously decreased, with export revenues falling from € 47 M in 1992 to just € 12 M in 2006. Also through the Special Framework of Assistance for traditional ACP banana suppliers, the country has been trying to diversify the national agricultural production while concentrating its banana production in the Fair Trade niche market. The tourism industry continues to be the most important area of economic activity. The Government’s Strategy over the medium term 2006-2011 concentrates on the need to exploit all opportunities for sustained growth and development and to restructure and reposition the economy for successful integration within an increasingly liberalized, regional and international trading environment. Key priorities include halting further declines in the agricultural sector and encouraging agriculture/wider economic diversification; providing the enabling environment to foster a private sector-led growth; encouraging education and human resource development; supporting the emerging Informatics Industry and Financial Services Sector as well as encouraging the adoption of appropriate technology as a means for achieving greater efficiency. It is deemed the most diversified economy in the Eastern Caribbean, The current economic crisis is affecting all countries in the region and threatening to reverse hard earned gains in human development. In the face of lower tourist arrivals, less remittances and stagnating revenues, governments are being called upon to expand safety nets to cushion the effects of the crisis on the poor and the most vulnerable. Real GDP is estimated to have contracted by 5.2% in 2009, due to a sharp decline in visitor arrivals, construction activity, agriculture and foreign investment, which had spillover effects on other sectors of the economy, such as wholesale and retail trade, transport, and banking and insurance. Figures show that banana production declined by 6.7% to 37,738 tonnes, a reduction of 2,000 over the production figure for 2008.
Under the 10th EDF, it is proposed to focus 85% of the financial envelope, corresponding to € 6.885 M, on Private Sector Development to assist the Government in implementing its own policies and strategies through Sector Budget Support. The remaining amount (€ 1.215 M) will be equally divided between Technical Cooperation Facility and Technical Assistance .
Saint Lucia is a member of CARIFORUM, CARICOM and the Organisation of Eastern Caribbean States (OECS), the latter having established a single monetary area and a common currency (the Eastern Caribbean Dollar) as well as a common central bank (the Eastern Caribbean Central Bank). On 29 December 2009, the OECS Leaders met in Saint Kitts and Nevis and, 28 years after the original treaty of Basseterre creating the OECS, signed a new Treaty establishing an Economic Union among them. The Treaty will have to be ratified and all institutional arrangements are not expected to be in place before mid 2010. Together with all other OECS members, Saint Lucia also committed to the Caricom Single Market and Economy (CSME), the regional pact allowing for the free movement of goods, skills, and labours, across participating countries. Saint Lucia is also a member of Petrocaribe, a Caribbean oil alliance being promoted by Venezuela; however until now Saint Lucia has not sought to access Venezuelan oil on concessionary terms.