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St Kitts-Nevis reports four percent economic growth in 2004

Friday, May 20, 2005

BASSETERRE, St. Kitts: St. Kitts and Nevis recorded a real economic growth rate of four percent in 2004 and Prime Minister and Minister of Finance, Dr Denzil Douglas told the Caribbean Development Bank (CDB) Board of Governors Meeting Thursday that all the economic indicators suggest that the rate of economic expansion will continue to improve in 2005.

“This improved economic performance represents a substantial recovery from the relatively sluggish growth in economic activity experienced over the period 1999-2003 when our economy was tossed around by frequent exogenous shocks including natural disasters, international war and terrorism and a very volatile global economic climate,” said Prime Minister Douglas.

He added that the current economic recovery, which is still constrained somewhat by rising oil prices and continued uncertainties in global economic performance, is primarily attributable to very substantial increases in tourist arrivals and a major upsurge in construction activity.

“The people who reside in St. Kitts and Nevis in these challenging and poignant times are witnesses to the collapse of our sugar industry under the weight of trade liberalisation and the premature withdrawal of trade preferences, and to the continuing struggle to transform our sugar-based economy into a more diversified economy in which the main impetus for growth is expected to come from the services sector,” Prime Minister Douglas told the regional Ministers of Finance, Central Bank governors and financial experts and economists.

He said he was using the word, poignant deliberately, because of his Government’s decision to exit from sugar manufacturing and export at the end of the 2005 sugar harvest.

“Indeed this was a very difficult and sensitive decision for us in view of the very deep tentacles of an industry which is more than 300 years old, and which exert a great influence on all aspects of the social and economic life of the People of St. Kitts and Nevis,” said Dr. Douglas, who pointed out that his Government is now faced with issues of finding alternative employment for workers, retraining of workers, workers’ entitlement, environmental issues, land use policy, privatisation and commercialisation of certain operations and the further development of non-sugar agriculture.

He said it is not difficult to appreciate that even countries which are much larger and richer than St. Kitts and Nevis, the tiniest nation-state in the Western Hemisphere, would be severely tested by these monumental challenges.

Dr. Douglas praised the valiant efforts of the Caribbean Development Bank to assist in the provision of “wide-ranging technical assistance package aimed at facilitating the transition of our economy” and invited other donors and friends to help the Federation to confront “this mammoth task of economic transition by providing appropriate financial and technical assistance..”

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