Saint Vincent - Economy

Banana production employs upwards of 60% of the work force and accounts for 50% of merchandise exports in St. Vincent and the Grenadines, with an emphasis on the main island of St. Vincent. Such reliance on one crop has made the economy vulnerable to fluctuations in banana prices and reduced European Union trade preferences.

To combat these vulnerabilities, the Government of St. Vincent and the Grenadines is focused on diversifying its economy away from reliance on bananas. Recently, there has been a parallel reduction in licit agriculture and a rise in marijuana cultivation, making St. Vincent and the Grenadines the largest marijuana producer in the Eastern Caribbean.

In contrast to developments on the main island, tourism in the Grenadines has grown to become a very important part of the economy, and the chief earner of foreign exchange for the country as a whole. The Grenadines have become a favorite of high-end tourism and the focus of new development in the country. Super-luxury resorts, yachting tourism, and a commitment by the government to rehabilitate and protect the Tobago Keys as a national park have all contributed to strong tourism returns in the Grenadines.

St. Vincent and the Grenadines' currency is the Eastern Caribbean Dollar (EC$), a regional currency shared among members of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues the EC$, manages monetary policy, and regulates and supervises commercial banking activities in its member countries. The ECCB has kept the EC$ pegged at EC$2.7=U.S. $1.

St. Vincent and the Grenadines is a beneficiary of the U.S. Caribbean Basin Initiative that grants duty-free entry into the United States for many goods. St. Vincent and the Grenadines also belongs to the predominantly English-speaking Caribbean Community and Common Market (CARICOM) and the CARICOM Single Market and Economy (CSME).

Poverty eradication remained a central thrust of government policy and programming during the period. A primary aim of the poverty reduction strategy-one of the mainstays of the country's social development policies since 2003-is to achieve the Millennium Development Goal targets. A poverty assessment survey conducted in 2007–2008 reported that the Gini coefficient was 0.40, compared with 0.56 in 1996, and that 30.2% of the population was poor, down from 37.5% in 1996. It also found a marked decrease in the proportion of indigent poor, which fell from 25.7% in 1996 to 2.9% in 2008. An additional 18%, though not poor, were deemed to be vulnerable, putting the total proportion of vulnerable population at 48.2% in 2008. The highest levels of poverty were found in the rural farming communities of Georgetown and Sandy Bay (55.6%) and Chateaubelair (43.1%).