About St. Christopher and Nevis
The Country Poverty Assessment conducted in 2007 revealed a national poverty rate of 21.8 of individuals across St. Kitts and Nevis, with the situation being worse in St.Kitts than in Nevis. This is a marked reduction from levels above 30 % seen in 2000. The reduction is attributed to: putting poverty reduction at the centre of the policy framework, a greater sensitivity to targeting the poor, expansion of employment and the improvement of poorer households’ resource base by remittances.
The characteristics of the poor were quite similar for each island with: (i) poverty being highest among individuals under the age of 25 years; (ii) there was a higher proportion of the female population than the male population living in poverty; and (iii) participation rates of the poor in the labour force were high. The 'working poor' tended to engage in elementary low-level occupations that attracted low wages and require low levels of skills and educational achievement. The CPA identified a lack of education and functional illiteracy as among the major causes of poverty.
Economic Situation Analysis
Although economic performance in St Kitts and Nevis improved over 2008 with increased activity in agriculture, construction, distributive trade and transportation, output contracted by 4.5 % in 2009. The construction sector, which has contributed 12 % of GDP over the past 5 years, declined by 15.7 % in 2009, with value added from the tourism sector contracted with a 28.3 % decline in tourism receipts. The current account deficit decreased by 3.6 % to 25.4 % of GDP in 2009.
The performance continues to reflect the inherent vulnerability of the economy to developments in the global economy and natural hazards.
Geothermal Energy Project on Nevis has reached a milestone, with the completion of an Environmental Impact Assessment, work has started on the design of the physical plant. Drilling commenced in first quarter of 2011. Wind energy production officially commenced in June 2010 on the Maddens Windwatt Farm on Nevis, it is projected that 10 MWh will be received from the project annually. The government also procured 4 new generators to secure energy supply.
Challenges and Policy Issues
The major policy issues for the Government of St. Christopher and Nevis at this juncture are:
- Economic diversification
- Financial Management and public indebtedness
- Poverty reduction
- Disaster mitigation and environmental protection
Economic diversification will be the cornerstone in the pursuit of economic restructuring, with greater focus on tourism, financial services and information technology as key economic sectors in context of the pending closure or restructure of the sugar industry. Discussions are ongoing between the Government and FAO and CDB on agricultural diversification and land use management.
The tourism industry, the major pillar of the economy, is likely to improve further during the medium term with the addition of significant room capacity.
The financial services sector is identified as the second major pillar of the economy and significant efforts are being made to promote St Kitts and Nevis as strong and 'clean' financial jurisdictions.