Economic Memorandum

teportNo. 3828-SLU EconomicMemorandum Dn

Public Disclosure Authorized St.Lucia

kpril21, 1982 .atinAmerica and the CaribbeanRegional Office

FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Documentof the Wfrld Bank

Thisdocument has a restricteddistribution and may be usedby recipients only in the performanceof their officialduties. Its contentsmay not otherwise be disclosedwiLhout World Bankauthorization. CURRENCYEQUIVALENTS

Currency Unit East Caribbean Dollar

Since its creation in 1965, the East Caribbean dollar was tied to sterling a the rate of L 1.00 o EC$4.8. In July 1976 the link with, sterling was broken and the East Caribbean dollar was aligned with the US dollar at the rate US$1.00 = EC$k.70.

Since July 1976:

EC$1.00 = US$0.370 or US$1.00 = EC$2.700 FOR OFFICIAL USE ONLY

This report is the result of a joint IMF/IBRD/CDB mission to St. Lucia in November 1981. The mission con- sisted of Mr. Samuel Stephens (IMF) - Chief of Mission, Mr. Carlos Elbirt (IBRD), Mr. Alan Slusher (CDB), Mr. Ali Abdi (IMF), Federico Rubli-Kaiser (IMF), Mr. Luis Valdivieso (IMF), Ms. Dolores Velasco (IBRD) and Mr. Paolo Lucani (FAO). Chapters I - IV and most of the statisticaltables were prepared by the Staff of the IMF. The contributionby IBRD includes Chapters V - VIII and the Summary and Conclusions. The assistance of ECCM in the preparation of some basic statistics and of UNDP in the preparation of the National Accounts is duly acknowledged.

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

ST. LUCIA

Table of Contents

Page

COUNTRY DATA

SUMMARYAND CONCLUSIONS ...... , ... i-iii

I. THE DOMESTIC ECONOMY...... es ...... * ... 1

A. Overall Trends in Production and Expenditure...... 1 B. Output by Secoe...... 3 C. Energy Consumption...... O... 6 D. Population, Employment, Wages, and Industrial Reltonl...... t...i..on...s0..0 .. 7 E. Price Trends ...... ,. .... 90*..

II. THE PUBLIC SECTOR.CT...... R...... 11

A. Introduction .... *...... 00...... fee 11 B. Operations of the Central Government through FY 1980/81 ...... ,.. 0..O.* ... 0 11 C. Central Government Operations in FY 1981/82 ...... 17 D. Other Public Sector ...... 18

III. THE FINANCIAL SECTOR ...... 20

A. Characteristics and Overall Trendsr...... r... 20 B. The East Caribbean Currency Authority.... 20 C. Operations of the Commercial Banksa...... 22 D. Other Financial Intermediaries ...... 25

IV. THE EXTERNAL SECTOR ...... O...... 26

A. The Balance of Payments. y.ms...... 26 B. Merchandise Exports.#r...... * ...... 26 C. Merchandise Imports...p..... 28 D. Touim.*...i *.# sm.. 29 E. Other Transactions.a...... 29 F. External Public Debte...... e...... 30 G. Exchange Rata...... e 31 Table of Contents (Cont'd)

Page

V. DEVELOPMENT POLICY ISSUES ...... 32

VI. PRIVATE INVESTMENT AND EXPORT PROMOTION ...... 41

VII. PUBLIC SECTOR INVESTMENT PROGRAM...... GRA M.....

VIII. PROSPECTS ...... oo...... 47

APPENDIX A. EXCHANGE AND TRADE SYSTEM..So. o...... 49

APPENDIX B. TAX SUMMARY, NOVEMBER 1981 ...... 52

APPENDIX C. CHANGES IN THE TAX SYSTEM SINCE 1980.....o.... 56

GOVERNMENT'S PROJECT AND TECHNICAL ASSISTANCE LISTS ...... 62

STATISTICAL APPENDIX. o ...... 147

MAP PREFACE AND ABSTRACT

The economy of St. Lucia grew 3% in 1981 after a decline of 5% in 1981 caused by natural disasters and political instability. Public finances deterioratedin 1981 as wages and other current expenditures increased sharply. The current account deficit of the balance of payments continued to widen. Inflation decreased from 20% in 1980 to 16% in 1981. To encourage private investment, improvementsin the investment climate and improved infrastructuralservices are required. Land tenure policy, credit and extension services need to be addressed. Upgrading and increasing the supply of skilled personnel is a major requirement for industrial expansion. The Tourist Board needs to be strengthenedto better promote summer tourism. Road maintenance,port services and electricitysupply need to be improved. If the government pursues prudent policies and public sector savings are raised to earlier levels the country should enjoy a greater margin for borrowing on conventionalterms.

ST. LUCIA--COUNTRY DATA

ST. LUCIA

Area and population Area 238 sq. miles (616 sq. kilometers) Population(end-1981 proj.) 122 thousand Annual rate of populationincrease (1976-81) 1.5 per cent

GDP (proj. 1981) SDR 111.0 million

GDP per capita 1981 SDR 910

Origin of GDP (proj. 1981) (per cent) Agricultureand fishing 17 Manufacturing 7 Construction 15 Government 13 Other 52

Ratios to GDP (proj. 1981) Exports of goods and nonfactor services 59.4 Imports of goods and nonfactorservices 111.2 Central governmentrevenues (fiscal year from April 1) 30.4 Central governmentexpenditures (fiscal year from April 1) 37.3 External public and government-guaranteeddebt (end of year) 13.7 Gross domesticsavings 5.2 Gross investment 57.0 Money and quasi-money(end of September) 57.2

Annual changes in selected economic Est. indicators 1978 1979 1980 1981 (per cent) Real GDP per capita 11.7 3.6 -5.9 1.6 Real GDP (at factor cost) 13.5 4.4 -4.5 3.2 GDP at currentprices 23.3 16.8 13.0 14.8 Domestic expenditure (at current prices) 32.1 15.4 14.9 23.3 Investment (68.5) (-3.4) (17.8) (19.6) Consumption (12.2) (30.9) (13.1) (25.6)

GDP deflator 10.8 9.5 19.2 14.1 Consumer prices (annualaverages) 10.9 9.4 19.6 15.5

Central governmentrevenues (fiscal year from April 1) 10.9 38.3 5.9 3.5 Centralgovernment expenditures (fiscal year from April 1) 12.6 36.9 22.6 8.0

Money and quasi-money1/ 17.7 22.1 11.6 9.8 3/ Money (2.2) (51.8) (11.0) (-1.8)3/ Quasi-money (23.4) (12.9) (11.8) (16.1)3/ Commercial bank net domestic assets 2/ 27.5 12.8 16.6 22.6 3/ Credit to Central Government (aet)2/ (-3.4) (3.9) (-0.4) (3.9)3/ Credit to private sector 2/ (23.7) (16.4) (23.9) (16.4)3/

Merchandise exports (f.o.b., in U.S. dollars) 18.6 18.7 44.7 -12.2 Merchandise imports (c.i.f., in U.S. dollars) 39.6 22.2 22.3 11.6 Travel receipts (gross, in U.S. dollars) 55.6 20.6 17.1 -10.5 ST. LUCIA--COUNTRY DATA (Continued)

Central government finances (fiscal Proj. year from April 1) 1978 1979 1980 1981 (millions of East Caribbean dollars) Revenue 63.8 88.2 93.4 96.7 Expenditure 67.5 92.4 113.3 122.3 Current account surplus or deficit (-) 7.0 2.1 1.0 -13.0 Overall surplus or deficit (-) -3.7 -4.2 -19.9 -25.6 External financing (net) 6.9 2.1 10.3 16.5 Internal financing (net) and residual -3.2 2.1 9.6 9.1

Balance of payments (millions of U.S. dollars) Merchandise exports (f.o.b.) 26.8 31.8 46.0 40.4 Merchandise imports (c.i.f.) -82.8 -101.2 -123.8 -138.1 Travel (net) 22.4 29.2 32.7 28.8 Other services and transfers (net) 10.1 12.3 11.8 17.3 Balance on current and transfer accounts -23.5 -27.9 -33.3 -51.6 Official capital (net) 2.7 3.0 1.6 2.6 Private capital (net) and errors and omissions 20.0 23.8 28.3 44.8 SDR allocation -- 0.5 0.5 Change in official net reserves (increase -) 0.8 1.1 2.9 3.7

IMF data (as of November 30, 1981) Article VIII status Intervention currency and rate U.S. dollar at EC$2.70 per US$ Quota SDR 5.4 million Cumulative purchases SDR 5.2 million Reserve tranche SDR 0.7 million Regular purchases SDR 1.8 million Compensatory financing facility purchases SDR 2.7 million Cumulative repurchases Fund holdings of East Caribbean dollars under tranche policy 125.0 per cent of quota Total Fund holdings of East Caribbean dollars 175.0 per cent of quota Special Drawing Rights Department Cumulative SDR allocation SDR 0.74 million Net acquisition or utilization (-) of SDRs -SDR 0.51 million Holdings of SDRs 30.9 per cent of allocation Share of profits from gold sales None

1/ Includes deposits of rest of public sector (excluding the Central Government). 2/ In relation to liabilities to the private sector at beginning of period. 3/ Year ended September 1981. ST. LUCIA

SUMMARYAND CONCLUSIONS i. The economy of St. Lucia enjoyed a rapid expansion during the 1960s and most of the 1970s. The expansion took place in agriculture,tourism and, more recentlyr,in manufacturing. Natural disasters and a decline in private inveastmentdue to political instability sharply slowed down the economic growth during 1979-80. After a decline of almost 5% in 1980, the economy grew about 3% in 1981 thanks to a significantrecovery of ag;ricultureand an expansion of the manufacturingsector, which more than offset a further contraction in tourism. ii. The financial situation of the consolidatedpublic sector deterioratedsharply in FY1981/82. Public sector savings dropped from about 5% of GDP in FY1980/81 to an es.timateddeficit of 0.3% in FY1981/82 primarily as a result of a sharp increase in current expenditures, particularlywages. iii. The current account deficit of the balance of payments has widened significantlyover the last fEewyears and, in 1981, reached a record level of about US$52 million, almost 40% of GDP. The main underlying factors behind this were a sharp increase in imports associated with foreign investments,particularly for the oil transshipment terminal,and, more recently, a slowdown in export and tourist receipts. The overall deficit in the balance of payments reached about US$4 million in 1981, almost 3% of GDP. The bulk of this deficit was covered by purchases from the InternationalMonetary Fund. iv. According to recent available information,net domestic credit expanded at an annual rate of 26%, or nearly twice as fast as the growth in the deposit liabilities of the commercial banks. The strong growth in domestic credit reflected, mainly, the continued sharp upward trend in personal loans and a switch in borrowing from abroad by some enterprises in response to the low interest rates prevailing in St. Lucia. v. The inflation rate fluctuated in the range of 9 and 11% for the period 1976-79, and accelerated to around 20% in 1980 and 16% in 1981. This reflected higher import prices, increases in prices of locally produced clothing and beverages and increasedwage pressures. vi. The return to the substantial economic growth path of the 1960s and most of the 1970s primarily requires that private investment be encouraged by further improvementsin the political climate and by the existence of a well-organizedand soundly financed public sector able to efficientlyprovide the requisite infrastructuralservices. - ii -

vii. Agriculture of St. LucLa is quite vulnerable because of its high dependence on bananas and coconuts--bothcrops suffering from periodic natural disasters, low productivity, and possible market constraints. Efforts should be directed to crop diversificationand to measures to increase productivity in bananas and coconuts. These goals can be achieved if issues affecting the agriculturalsector such as land tenure, credit, extension services, and labor productivityare appropriatelyhandled. viii. There are several major requirementsfor the further development of the manufacturingsector. The promotion of overseas investments is a key priority and efforts should continue in that direction. Upgrading and increasing theasupply of managerial and trained personnel is another major requirement. Adequate training programs (and the liberal policy with respect to work permits should continue) are to be encouraged. Finally, inf)rastructuralbottlenecks should be removed promptly, particularlyby the provision of a more reliable and efficient electricitysupply and port service. ix. In tourism, the main need is the strengtheningof the Tourist Board so that it can implement more aggressive promotion campaigns, especially for summer tourism, initiate and/or coordinate training programs and assure that services meet adequate standards. x. The maintenance of a realistic exchange rate should be considered an essential element of allyeffective program directed towards stimulatingexports of goods and services. The need to monitor closely the competitivenessof the country's exports has become increasinglyimportant recently owing to the appreciationof the US$. Since the EC$ is pegged to the US$, it has appreciated considerablyagainst pound sterling during the past year. This developmenthas been particularlyharmaful to the banana industry of the Eastern Caribbean and to other exports to the EEC, and it has also rendered tourist services more expensive for visitors from Europe and Canada. xi. A main requirementin the energy sector is to complete the rehabilitationof the electricity system damaged by Hurricane Allen. Over the medium- and long-term, the installed capacity can be expanded by developing alternate sources of ene!rgysuch as the geothermal plant, charcoal exploitationand wind power projects. In the field of energy conservation,concerted efforts are required to formulate and implement a comprehensiveenergy conservationpolicy. xii. Road maintenance continues to be an urgent priority and action should be taken before the situation deterioratesto the point where reconstructionrather than normal maintenance is indicated. Although additional financial resources may be needed for a comprehensive program of road maintenance,a more efficient use of available labor at the Department of Public Works is urgently needed. - iii -

xiii. The public sector investment program was satisfactorily implemented during FY1981/82. Provisional estimates of the total disbursementson capital projects amount to EC$36.3 million, or about 7%of GDP. This investmentwas financed by external capital inflows since public sector savings were negative and no net borrowing by the public sector from the commercialbanks took place.

xiv. The updated public sector investment program for the next four fiscal years, FY1982/83 to FY1985/86 is projected at EC$204.1 million, or about 10% of GDP. Although infrastructuralprojects absorb about three fourths of the total public investment,this should not be interpretedas an imbalance since substantialadditional infrastructure(electricity, roads, airports,water, and sewerage) is needed to encourage private investment in tourism and industrial activities.

xv. The total financing requirementsfor the investment program during FY1982/83-FY1985/86are estimated at about EC$232 million, including external amortization,improvement in the financialposition with ECCA, and a slight improvementin the position of the public sector with the domestic banking system. These requirementsare projected to be filled by (a) public sector savings of EC$81 million or 35% of the total; and (b) external capital grants and loans of EC$151 million or 65%. xvi. The successfulexecution of the public sector investment program, however, will require that: (a) public savings be raised promptly to cover the domestic component financing of the investment program; (b) the new arrangementsintroduced to improve monitoring and control of project implementationbecome operational;and (c) concerted efforts be undertaken by the internationalfinancial community to provide additional financial and technicalassistance as well as to improve coordinationin programs where various donors are involved, such as roads. xvii. The outstandingand disbursed public and publicly guaranteed external debt as of the end of 1981 was estimated at about US$18 million or 14% of GDP. The debt service accounts for about 2% of foreign exchange earnings and is projected to remain at that low level during the coming years. However, due mainly to the present situation of the public finances, St. Lucia should exercise caution in assuming any additional external loans on conventionalterms. If the government pursues prudent economic and fiscal policies, public sector savings are raised to their pre-1979 levels and a favorable investment climate is reestablished,the country should enjoy a greater margin for loans on conventionalterm. In the meantime, because of the high financial requirementsfor infrastructuralprojects, heavy reliance on soft loans and grants will have to continue.

1. THE DOMESTIC ECONOMY

A. Overall Trends in Production and Expenditure 1 1. Since the mid-1970s, St. Lucia's economic growth has been spurred by agricultural exports, tourism, and more recently, manufacturing. Following several years of rapid growth--realGDP in 1976-78 grew at an average annual rate of about 11 per cent--thegrowth rate of the economy dropped to about 4 per cent in 1979, mainly as a result of a decelera- tion in construction and manufacturing activity. In 1980, damage caused by Hurricane Allen primarily to agriculture and tourism as well as uncertainty related to a leadership dispute within the ruling party, which deterred private sector investment, led to an almost 5 per cent decline in output (Table 1). In 1981 the growth of the economy is estimated at about 3 per cent on the basis of a significant recovery of agricultureand an expansion of the manufacturing sector, which more than offset a further contractionin the tourist industry.

Table 1. St. Lucia: Selected GDP Indicators

Prel. Est. 1976 1977 1978 1979 1980 1981

(In millions of East Caribbean dollars)

Real GDP at factor cost (1977 prices) 148.2 156.9 178.1 186.0 177.7 183.3 GDP deflator (index 1977 = 100) 91.4 100.0 110.8 121.3 144.6 165.0 GDP at current market prices 158.5 189.0 233.0 272.2 307.5 352.9

(Annual percentage change)

Real GDP at factor cost (1977 prices) 14.1 5.9 13.5 4.4 -4.5 3.2 GDP deflator (index 1977 = 100) 10.4 9.4 10.8 9.5 i9.2 14.1 GDP at current market prices 29.8 19.2 23.3 16.8 13.0 14.8

Sources: StatisticalAppendix Tables 2.1, 2.2, and 2.4.

1/ Official national account statistics are not available for St. Lucia. However, the staff of the World Bank and theIMF have prepared estimates for 1975-81, which can be used to provide an indication of trends in aggregate output and expenditure. - 2 -

2. During the 1976-79 period, total domestic expenditure grew by an annual averageof about 21 per cent a year and the resource gap (deficit on goods and nonfactor services in the balance of payments) expanded from 31 per cent of GDP to about 39 per cent. In 1980 gross domestic expenditurecontinued to rise quite strongly and there was a further widening of the resource gap, and indicationsare that this gap widened to a record level of almost 52 per cent of GDP in 1981, as sharp increases in both consumptionand private investmenttook place along with a decline in exports of goods and nonfactorservices (Table 2).

Table 2. St. Lucia: National Accounts (Summary)

Prel. Est. 1976 1977 1978 1979 1980 1981

(As per cent of GDP at current market prices)

Consumption 89.2 84.9 77.2 86.5 86.6 94.8 Central Government 1/ (21.5) (21.2) (18.1) (21.4) (21.8) (21.6) Private (67.7) (63.7) (59.1) (65.1) (64.9) (73.2) Gross domestic investment 41.4 46.4 63.4 52.5 54.7 57.0 Central Government 1/ (11.1) (9.6) (7.1) (7.5) (7.2) (5.4) Private 2/ (30.3) (36.8) (56.3) (45.0) (47.6) (51.7) Gross domestic expenditure 130.5 131.2 140.6 138.9 141.3 151.8 Exports of goods and nonfactor services 52.2 57.7 61.5 65.7 72.8 59.4 Imports of goods and nonfactor services 82.8 89.0 102.1 104.6 114.3 111.2

(Annual percentagechange)

Gross domestic expenditure 18.1 19.9 32.1 15.4 14.9 23.2 Consumption (19.4) (13.4) (12.2) (30.9) (13.1) (25.6) Investment 1/ (15.5) (33.7) (68.5) (-3.4) (17.8) (19.6)

Sources: Ministry of Finance and Planning; IBRD and IMF staff estimates.

1/ Prorated on calendar year basis. 2/ Includes change in inventories. - 3 -

3. Within the components of gross domestic expenditure, the share of consumption declined through 1978, but reboLtnded during the last three years even though central government con.sLkmption was maintained at about 21 per cent of GDP. Gross domestic investment expanded strongly throughout the period, reflecting private foreign investment in manufacturing and tourism, and since 1977, the conE-truction of a large oil storage and transshipment terminal by the Hes,s Oil Company. The increase in capital formation was financed larg,ely by foreign savings. In 1981, gross national savings, which averagekd about 13 per cent of GDP for the years 1979-80, are estimated to h,ave declined sharply to about 5 per cent of GDP.

B. Output by Sector

Agriculture

4. Agricultural output, which has traditionally been the major activity in St. Lucia, contributed about 14 per cent of GDP at factor cost during 1976-79, but its share was reduced to 13 petr cent in 1980 as a result of the impact of Hurricane Allen. In 1981, agricultural output is estimated to have accounted for about 17 per cent of GDP, principally reflecting improved government efforts to supply fertilizers and extension services and also substantial grant funds by the British Develop- ment Division and the European Development Fund (EUtF) (Table 3). The Government's overall agricultural policy continuas to emphasize crop diversification and to encourage the development of linkages with other sectors, particularly tourism and manufacturing.

5. Banana is the principal crop and St. Lucia's main export commodity. Over 10,000 growers market this product through the Banana Growers' Association and export the bulk through a sole shipping company (Geest). After having reached a level of 59,000 tons in 1979, bainana production declined to 35,600 tons in 1980 due to the devastating effects of Hurricane Allen, but registered an impressive recovery tin 1981 reaching approximately 56,700 tons. Sizable foreign grants helped rehabilitation and also induced new growers to join the business. Farnners have been encouraged to pack the bananas directly into boxes in order to reduce the wastage of bananas during transportation from the field to the boxing plants. The shipping company has paid a premium of EC$0.3 per pound on an experimental basis to stimulate this activity and it is expected that this program will further reduce wastage :Jn the near future.

6. The next most important crop is coconut. Aided by a irehabilita- tion program begun in 1976, coconut production has been growirng steadily reaching 25.2 million nuts in 1979 and a record of 26.7 millio;n in 1980, when the hurricane led to a heavy fall of nuts. It is estiniated that 23 million nuts were collected in 1981 as the harvest of windf all coconuts lasted into early 1981. The adverse effects of the huri7icane on output will be felt in the years ahead since the gestation period of coconut palm is six to eight years. -4-

Table 3. St. Lucia: Sectoral Origin of Gross Domestic Product at Constant Factor Cost

(Annual percentage change)

Prel. Est. 1976 1977 1978 1979 1980 1981

Real GDP at factor cost 14.1 5.9 13.5 4.4 -4.5 3.2 Agriculture,fisheries, and forestry 11.5 -2.3 21.8 1.6 -13.0 35.2 Of which: bananas (37.2) (-8.6) (26.6) (15.7) (-39.7) (59.3) coconut (-20.6) (8.3) (11.5) (8.2) (6.0) (-13.9) cocoa (-1.8) (-20.1) (27.4) (4.0) (-8.0) (0.9) Construction 28.4 -1.2 70.8 -16.8 10.3 3.0 Manufacturing 26.5 7.8 13.6 -12.0 3.2 5.4 Food (-15.9) (3.5) (12.3) (-4.1) (-9.0) (-20.6) Beverages (89.2) (41.1) (15.0) (6.7) (-30.0) (7.0) Garments (28.0) (48.8) (-2.7) (38.0) (35.2) (25.1) Cardboardboxes (59.3) (-13.3) (18.2) (-44.9) (22.4) (33.4) Other (26.7) (7.2) (13.5) (-11.9) (3.1) (6.0) Other 10.6 8.4 -3.8 10.9 -6.9 -5.6

Sources: Statist:icalAppendix Table!2.2.

7. Among other export crops, cocoa output after declining in 1977 recovered during the next two years. Because of the effects of the hurricane, output:dropped to 218,000 pounds in 1980, from 237,000 pounds in the previous year, but in 1981 there was a modest recovery to 220,000 pounds due to thiepost--hurricane rehabilitation program. Production of fruits and vege'rableshas traditionallybeen mainly for domestic consumption, though thierehas been some export activity since the mid-1970s. The AgriculturiliMarketing Board handles the marketing of all agricultural products except for bananas, coconut, cocoa, and spices. Produc- tion of tradit:ionalcrops such as pumpkins,mangoes, plantains,and yams dropped in 19 80 and 1981, while the growing of nontraditionalvegetables and fruits hELs expanded steadily.

Manufacturinr

8. Manufacturing activity in St. Lucia consists mainly of processing of food anel beverages, a garments industry, and the production of cardboard boxe s. The latter two are oriented toward export markets within CARICOM countries and the United States. Manufacturingoutput increased at an annmialaverage of 16 per cent in 1976-78 and contributed significantly to the gain in exports and real GDP. Technical difficultiesin the cardboEtrdbox plant in 1979 were responsible for a sharp reduction in output.and contributed to a 12 per cent drop in overall manufacturing producticn that year. 9. In 1980 manufacturing production expanded by 3.2 per cent mainly on the basis of a significant growth of the garment industry, a recovery in output of cardboard boxes and the starting of operations of Milton Bradley, a toy and electronic equipment manufacturer. Production gains in these three industries more than offset significant declines in the food and beverages industries. Until August 1980 the cardboard box plant produced mainly for the banana industry, but because of the fall in banana production after the hurricane, output was shifted to other domestic uses and to export. The output of the export-oriented electronic industry was increased sharply by the operations of Milton Bradley.

10. In 1981 manufacturing production is estimated to have expanded by 5 per cent, again led by the garment industry whose output is expected to grow by around 25 per cent, and cardboard boxes, with a gain of close to 35 per cent. In addition, the beverages industry, particularly soft drinks, recorded significant production gains--except for beer production which declined due to increased competition from imports. These developments more than offset a decline in food production attributable to inadequate cold storage facilities and to a rise in production costs in the frozen food processing plants. The electronic industry registered a sharp drop in output due to the closing down of the Milton Bradley factory, after only about one ?ar of operations. Also, the production of coconut derivatives--co nut oil, coconut meal, and copra--declined with the drop in output tf the basic input, and in the case of copra, also because of operational problems in the factory.

Construction

11. During the period 1976 to 1978 the construction sector grew at an annual average rate of 33 per cent and thu--zontributed significantly to the expansion of total economic activity. This was the result of buoyant construction activities in the tourist sector, the execution of large public sector projects and the construction of an oil transshipment and storage terminal. In 1979 construction declined by almost 17 per cent mainly because of work stoppage at the oil terminal due to labor disputes. In 1980 the sector expanded by around 10 per cent, reflecting resumption of work at the termina: ns well as reconstruction of buildings and roads that were damaged by v < hurricane. Growth of the sector is estimated to have slowed to 3 pe, cent in 1981 since the first phase of the oil transshipment and storage terminal was completed and public infrastructure construction was moderate.

Tourism

12. Tourism activity was stimulated at the beginning of the 1 9 7 0s by improved air facilities and the construction of two major hotels. The industry was adversely-affected by the general slowdown inworld tourism in 1974-75, but recovered strongly in the next three years, when total visitors increased at an annual average of 17 per cent to reach 158,000. Adverse effects of local elections in 1979, and recessionary conditions -6-

in industrial countries in 1980 contributed to a drop in the total number of visitors to 152,000. As a result occupancy rates declined to about 80 per cent of installed capacity during the latter year. The 1981 winter season was particularly disappointing mainly because the effects of Hurricane Allen and political unrest deterred visitors and continued recession abroad reduced tourism in the region. For the year as a whole, tourist arrivals declined to 130,000 or 14-1/2 per cent below the level of the preceding year, total tourist receipts declined by more than 10 per cent, and occupancy rates dropped further to about 60 per cent. The contribution of the industry to real GDP declined in 1981 to 5 per cent from the average of 6.2 per cent reached in 1976-80.

C. Energy Consumption

Fuel

13. St. Lucia depends entirely on imported fuel from Venezuela and Trinidad and Tobago for its energy requirements. No new major conservation measures were introduced in recent years, although an energy unit was established at the Ministry of Finance in 1981. Fuel prices are set by the Government in consultation with the marketing companies, Texaco and Shell (in July 1981 Shell acquired the operations of a third company--Esso St. Lucia). Increases in imported fuel costs are normally passed on to consumers in the form of higher prices. However, during 1981 the Government reduced the level of consumption tax in order to partially offset increases in imported costs. Since the end of 1976 when the price of an imperial gallon of gasoline was EC$2.25 (equivalent to US$0.82), the price has risen at an annual average rate of 18.4 per cent to approximately EC$5.10 (equivalent to USS1.89 per gallon) in December 1981. Diesel and kerosene prices have followed a similar pat- tern increasing at an annual average rate of 20.5 and 22.7 per cent, respectively, during the same period. At the end of 1981 a pound of liquid propane gas (LPG) sold for EC$0.90, which represents a 100 per cent increase since December 1976.

14. Consumption of gasoline and diesel expanded throughout the period 1976-79, at roughly one-and-a-half times the growth rate of real GDP (Table 4). Notwithstanding the decline in the level of economic activity, consumption of these products rose sharply to 11.3 million gallons in 1980. The consumption level in 1981 was 12.2 million imperial gallons, which represented an increase of 8 per cent compared with 1980.

15. In December 1981 the first phase of the Hess Oil Company transshipment terminal was completed. The terminal is intended for storage and transshipment of crude oil for delivery to refineries in other Caribbean islands, particularly a Hess-owned refinery in St. Croix. The terminal has an initial storage capacity of 3.2 million barrels of crude oil but will have a capacity of 5.3 million barrels in early 1982, when the second phase of the project is expected to be completed. Tenta- tively, Hess Company plans to expand the storage capacity to 10 million barrels, preliminary to possibly building a refinery in St. Lucia with potential processing capacity of about 200,000 barrels per day. -7-

Table 4. St. Lucia: Energy Consumption

(In thousands of indicated units)

Est. 1976 1977 1978 1979 1980 1981 Gasoline (imperial gallon) 2,660 2,897 3,181 3,294 4,256 4,528 Diesel (imperial gallon) 4,057 4,735 5,127 5,571 6,997 7,643 Kerosene (imperial gallon) 326 327 324 290 262 297 LPG (lbs.) 2,274 2,838 3,175 3,186 2,415 2,516 Electricity (Kwh) 44,800 49,900 56,700 60,800 58,400 57,500

Source: Statistical Appendix Table 7.2.

Elec tricity

16. Electricity is provided by the St. Lucia Electricity Services Ltd. which operates two diesel generating plants. Total electricity consumption rose at an annual average rate of about 11 per cent for the period 1976-79. Depressed economic conditions and hurricane damage in 1980 reduced the demand for electricity by 4 per cent. In 1981 the generation of electricity declined by another 1.5 per cent because of damaged lines and meters, which have not been fully restored, and because hotels required less electricity due to the downturn in tourism.

D. Population, Employment, Wages, and Industrial Relations

Population and Emplovment

17. Population and employment statistics are fragmentary. A census was carried out in 1980 but the results are not yet available. The population in 1980 is estimated at around 120,000 with an annual average growth rate for the period 1976-80 of 1.5 per cent (Statistical Appendix Table 1.1). St. Lucia's population in 1981 was approximately 122,000.

18. The labor force as a percentage of population has been stable at approximately 30.4 per cent for the last decade. In 1980 preliminary estimates indicate that 44 per cent of total employment was in agriculture and mining; manufacturing accounted for 6 per cent; construction for 7 per cent; trade and hotels for 12 per cent; and transport, communications, utilities, and other services for 31 per cent. It is reported that the unemployment rate, estimated at about 14 per cent of the labor force, increased since the downturn in tourism and agriculture in 1980, although official estimates show no significant change (Table 5). As a result of an agreement with the United States and Canada, 486 agricultural workers were sent to Florida and some 100 to Canada in 1981. -8-

Table 5. St. Lucia: Population and Employment

Census Prel. Est. 1970 1975 1980 1981

Total population (in thousands) 99.8 111.8 120.2 122.0 Annual percentage growth rate 1.6 1.6 1.5 1.5 Total labor force (in thousands) 30.3 34.0 36.5 37.2 Total employment (in thousands) 26.1 29.2 31.4 31.8 Unemployment rate (percent) 13.9 14.1 14.0 14.5

Sources: Statistical Appendix Tables 1.1 and 1.2.

Wages and Industrial Relation:

19. Wage contracts are customarily for two years; however, a few wage contracts are for three years. Scattered information from the Labor Commissioner's office for recent wage settlements in unionized industries and on wage awards in the public sector is believed to be representative of general trends in wages. The data indicate that in 1979 wage settlements in unionized industries provided for increases of 18 to 20 percent a year, compared with increases of around 17 percent a year in 1978. Settlements in 1980 were for 20 to 25 percent a year, while in 1981 the settlements in unionized industries generally provided for increases in the range of 25 to 30 percent for the first year and 15 to 25 percent in the second year.

20. Public sector settlements have been traditionally slightly higher than private sector agreements. For instance, in 1979 the civil servants' wage agreement provided for an average increase of 25 percent in wages and salaries retroactive to January 1, 1977. Additionally, the contract provided for a 5 percent increase in salaries of civil servants over the January 1, 1977 level whenever the index of retail prices rose above the base level by 15 percent. Public sector wage settlements in 1981 called for increases of 20 to 40 percent per year. For example, the daily-paid workers were granted a 40 percent increase for the first year retroactiveto April 1980 and a 20 percent for the second year. A wage agreement with established civil servants has been reached providing an average increase of 57 percent up to 1983.

21. The Port Authority, a state enterprise, awarded in mid-1981 wage increases of 40 percent for one year to workers at the terminal and an average of 25 percent to other workers. The Water Authority, another public entity, granted a 52 percent wage increase over three years -9-

1981-83 of 27.5, 14, and 10 per cent, respectively. In both cases, an automatic cost of living adjustment, 5 per cent for every 15 per cent increase in the consumer price index, was also provided. St. Lucia has a legal minimum wage which is enforced for clerks, cashiers, switch- board operators, shop assistants, porters, janitors, messengers, and agriculturalworkers.

22. There are nine active trade unions in St. Lucia which together represent about 50 per cent of the employed labor force. In 1981, the largest was the National Workers' Union; other important unions were the Farmers' and Farm Workers' Union; the Seamen,Waterfront and General Workers' Union; and the Civil Service Association. An Employers' Fed- eration represents a majority of business enterprisesin St. Lucia.

23. Industrial relations in St. Lucia are governed by labor laws and regulationswhich outline procedures for the orderly settlement of wage disputes. The Labor Commissioner, and subsequently, the Minister of Labor, act as conciliatorswhen there is a deadlock in the negotiations between management and unions. In the last six months of 1981 a Hess Company strike was the only one where agreement was reached at the con- ciliation stage. A new labor code is being prepared with technical assistance from the InternationalLabor Organization.

E. Price Trends

24. Given the high degree of openness of the St. Lucian economy, domestic price trends are influenced largely by price developmentsabroad. The inflation rate, as measured by average annual changes in the retail price index, fluctuated in the range of 9 and 11 per cent for the period 1976-79, and accelerated to around 20 per cent in 1980, mainly reflecting higher import prices and increases in prices of locally produced clothing and beverages. Despite a significant slowdown in the rate of increase of import prices in 1981, the rise in the retail price index was about 16 per cent mostly due to an acceleration of domestic food and consumer goods prices and increasedwage pressures.

Table 6. St. Lucia: Price Indicators

(Annual percentage change)

Proj. 1976 1977 1978 1979 1980 1981

Retail prices Period average 9.7 8.9 10.9 9.4 19.6 15.5 End of period 10.3 8.8 8.6 15.4 21.1 11.9

Source: StatisticalAppendix Table 8.1. - 10 -

25. Since the early 1960s the Price Control Division of the Ministry of Trade has enforced price ceilings on selected consumer goods (including fish, meat, flour, tobacco, and vehicles) and has administered prices for petroleum derivatives. The price control division carries out surveys about market conditions and mark-up margins before an item is placed under price control. In addition, a price control commission composed of members from the legal association,the Chamber of Commerce, trade unions, the consumer society, the Ministry of Trade, and an accounting organizationmakes recommendations. There are two types of controls: goods subject to percentagemark-ups, and goods and services subject to fixed prices. Since 1980 there has been no addition of items to the control list. The only decontrolled items have been locally produced eggs (in 1980), and copra for local consumption (in 1980). The Price Control Division also issues import and export licenses. - 11 -

II. THE PUBLIC SECTOR

A. Introduction

26. In this report, the consolidated public sector of St. Lucia is defined to include the Central Government, the Castries City Council, the National Insurance Scheme, the Funding Scheme, and five nonfinancial state enterprises: the Port Authority, the Water Authority, the Marketing Board, the National Development Corporation and the Electri- city Services Ltd., in which the Government holds a majority interest. 1/ Three government-owned financial institutions: the Housing Development Bank, the Agricultural and Industrial Bank, and the loans department of the National Development Corporation were combined to form the National Development Bank in May 1981 and its operations are discussed in Section III.

27. The current account surplus of the consolidated public sector averaged about 5 per cent of GDP during the three fiscal years ended in March 1980,2/ but the overall deficit declined from 3 to 2 per cent of GDP during the period as total receipts rose from 39 to 41 per cent of GDP while total expenditure rose from 42 to 43 per cent of GDP. In FY 1980/81 the overall deficit rose to 4 per cent of GDP, reflecting a sharp increase in capital expenditure for reconstruction of the hurricane damage. The performance of the public sector is expected to deteriorate sharply in FY 1981/82, primarily because of a modest growth in total receipts (4 per cent) in association with a sharp increase (25 per cent) in recurrent expenditures. As a result, the current account is expected to move from a surplus of 5 per cent of GDP in FY 1980/81 to a deficit of 0.3 per cent of GDP in FY 1981/82 and the overall deficit is projected to rise from 4 to 7 per cent of GDP. During the four years through FY 1981/82 the public sector deficit was mostly financed with loans by the East Caribbean Currency Authority (ECCA) including purchases from the IMF, foreign project loans, and credits from local commercial banks (Table 7).

B. Operations of the Central Government through FY 1980/81

28. The operations of the Central Government accounted for over 75 per cent of the receipts and expenditures of the consolidated public sector during the last four fiscal years. Consequently, trends in public sector finances were determined mainly by the fiscal operations of the Central Government.

1/ The Urban Development Corporation, which ceased operations in 1980, and a number of other public enterprises, including Radio St. Lucia and the Halcyon Days Hotel, are not covered for lack of detailed information on their operations. 2/ The fiscal year for the Central Government and some of the public entities ends on March 31. - 12 -

Table 7. St. Lucia: Operations of the Consolidated Public Sector

1977/78 1978/79 1979/80 1980/81 1981/82

(In millions of East Caribbean dollars)

Total receipts 72.85 80.35 111.77 122.58 128.03 Current receipts 66.81 74.65 100.82 114.05 122.18 Capital receipts 6.04 5.70 10.95 8.53 5.85

Total expenditure 79.00 84.77 117.34 135.33 151.80 Current expenditure 57.85 62.44 89.68 98.89 123.38 Capital expenditure 21.15 22.33 27.66 36.44 28.42

Current account surplus or deficit (-) 8.96 12.21 11.14 15.16 -1.20

Overall deficit -6.15 -4.42 -5.57 -12.75 -23.77

Financing 6.15 4.42 5.57 12.75 23.77 Foreign financing (net) 4.23 6.01 7.78 2.84 11.47 Change in foreign assets (increase -) -0.04 0.12 -1.80 -0.49 1.28 Net borrowing from ECCA I/ 0.94 2.85 3.85 9.45 9.95 Net borrowing from commercial banks -0.77 -1.16 -2.79 2.65 -0.84 Other domestic (net) 1.79 -3.40 -1.47 -1.70 1.91

(As per cent of GDP)

Total receipts 38.5 34.5 40.9 39.9 36.3 Total expenditure 41.8 37.8 43.1 44.0 43.0 Current account surplus or deficit (-) 4.7 5.2 4.0 4.9 -0.3 Overall deficit -3.3 -3.3 -2.2 -4.1 -6.7

Source: Statistical Appendix Table 5.1.

1/ Includes net purchases from the Fund. - 13 -

29. The overall performance of the Central Government had improved during the three fiscal years ended in March 1980 as a number of discretionary tax changes as well as expenditure restraint maintained moderate current account surpluses, and the overall deficit was con- tained to an annual average of 1.5 per cent of GDP. However, in FY 1980/81 current revenue growth slowed to 10 per cent while expenditure rose by 22 per cent, resulting in a virtual elimination of the current account surplus and in an overall deficit of about 7 per cent of GDP. The overall deficits of the Central Government were financed from three major sources: foreign loans, loans from the East Caribbean Currency Authority (inclusive of the counterpart of purchases from the IMF) and from the local commercial banks (Table 8).

Revenue

30. Current revenue rose by 23 per cent a year on average from FY 1977/78 through FY 1979/80. This buoyancy in revenue reflected a strong growth performance of the economy, as well as discretionary tax measures introduced in FY 1977/78 and higher income tax receipts associated with large retroactive wage payments in FY 1979/80. As a per cent of GDP, current revenue rose from 27 per cent to about 29 per cent during the three years. In FY 1980/81, however, it declined by 1 percentage point as the rate of increase of revenue slowed to 10 per cent, mostly because of the sluggish growth of tax revenues. A decline in receipts from taxes on domestic production, attributable to a decline in economic activity, and much slower growth in import tax collections because of an increase in nondutiable imports, mainly related to reconstruction and rehabilitation, were the main causes of the slackening of revenue collections in FY 1980/81.

31. In the four fiscal years through FY 1980/81 taxes on imports were the major source of recurrent revenue accounting for 39 per cent of total tax revenue. Revenue from taxes on domestic production has declined from 32 to 26 per cent of total tax revenue over the four-year period, while income tax receipts rose from 28 per cent to 34 per cent. The major sources of nontax revenue continued to be currency profits remitted by ECCA to member countries, and post office receipts which were transferred to the consolidated fund (Table 9).

Expenditure

32. Following a modest growth in the two preceding fiscal years, current expenditure rose sharply in FY 1979/80, when permanent civil servants were awarded salary increases retroactive to January 1, 1977. As a result wage and salary payments accounted for about 60 per cent of current expenditure during that year, compared with an average of 46 per cent during the preceding two fiscal years. Primarily due to the wage and salary component, total current expenditure rose from 26 per cent of GDP to about 28 per cent during the three years. In FY 1980/81 current expenditure rose by 11 per cent, and declined marginally as a proportion of GDP (Table 10). The sharpest increases were registered in purchases of goods and services, which were boosted by spending - 14 -

Table 8. St. Lucia: Central Government Operations

Actual Estimated Preliminary Budget Apr.-Sept. Outturn 1/ 1977/78 1978/79 1979i80 1980/81 1981/82 1981 1981/82

(In millions of East Caribbean dollars)

Total revenue 57.50 63.76 88.16 93.40 128.90 45.72 96.69 Current revenue 51.65 58.05 77.46 85.38 99.75 43.53 85.60 3udgetary grants 0.29 0.43 0.37 0.03 0.32 - - Capital grants 5.56 5.28 10.33 7.99 28.83 2.19 5.45 New tax measures ------5.64

Total expenditure 59.90 67.47 92.40 113.25 160.57 60.23 122.32 Current expenditure 48.72 51.52 75.78 84.36 99.22 49.58 104.20 Capital expenditure 11.18 15.95 16.62 28.89 61.35 10.65 18.12

Current balance 3.22 6.96 2.05 1.05 0.85 -6.05 -12.96

Overall deficit -2.40 -3.71 -4.24 -19.85 -31.67 -14.51 -25.63

Financing 2.40 3.71 4.24 19.85 31.67 14.51 25.63 Foreign assets (increase -) -0T 04 012 -1 8 -0.49 - 0.28 1.28 Net borrowing from ECCA includes the counterpart of purchases from the IMF 0.94 2.85 3.85 9.45 9.00 7.10 9.95 Other net foreign borrowing 2.04 3.87 0.07 1.30 17.57 3.18 5.22 Net local bank borrowiag -4.00 1.03 -0.10 8.90 - - 2.26 Other net domestic borrowing -0.25 -0.85 2.66 - 5.10 2.40 6.92 Residual 3.71 -3.31 -0.44 0.69 - 1.55 -

(As per cent of GDP)

Current revenue 27.3 24.9 28.5 27.8 28.3 ... 25.9 2/ Current expenditure 25.8 22.1 27.8 27.4 28.1 29.5 Current balance 1.7 3.0 0.8 0.3 0.2 -3.7 Overall deficit -1.3 -1.6 -1.6 -6.5 -9.0 ... -7.3

Sources: Ministry of Finance, Development and Planning; and IMF staff estimates.

1/ Both revenue and expenditure estimates are revised on the basis of adjustments introduced in November 1981. 2/ Includes estimated yield of new tax measures. - 15 -

Table 9. St. Lucia: Central GovernmentRevenue

1977/78 1978/79 1979/80 1980/81 1981/82

(Percentageincrease from precedingyear)

Total current revenue 24.4 12.6 33.1 9.7 0.2 1/ Tax revenue 33.9 8.0 37.5 8.0 -1.3 1/ Taxes on income 41.7 11.3 37.8 26.8 -7.0 Taxes on domestic production and consumption 37.4 5.0 35.9 -8.4 -3.7 Import taxes 25.9 9.0 45.8 4.2 5.5 Nontax revenue -126.0 95.4 -9.2 45.7 18.8

(In per cent of calendar year GDP)2/

Total current revenue 27.3 24.9 28.5 27.8 24.3 l/ Tax revenue 25.9 22.7 26.8 25.6 22.0 11 Taxes on income 7.2 6.5 7.7 8.6 7.0 Taxes on domestic production and consumption 8.3 7.1 8.3 6.7 5.6 New tax revenues ------1.6 Import taxes/imports, c.i.f. 11.5 8.9 10.7 9.1 8.6

(In per cent of tax revenue)

Taxes on income 27.8 28.7 28.8 33.8 31.8 Taxes on domestic production and consumption 32.2 31.3 30.9 26.2 25.6 Taxes on imports 37.4 37.8 40.1 38.8 41.5

Sources: StatisticalAppendix Table 5.3.

l/ Excludes new tax measures. _/ Except as indicated. - 16 -

Table 10. St. Lucia: Central Government Expenditure

Preliminary Budget Est. 1977/78 1978/79 1979/80 1980/81 1981/82 1981/82

(In millions of East Caribbean dollars)

Current expenditure 48.72 51.52 75.78 84.36 99.22 104.20 Wages and salaries 1/ 22.23 23.97 45.08 39.15 47.18 48.40 Goods and services 18.53 18.60 19.46 28.80 31.79 31.40 Interest 1.37 2.71 2.18 3.00 3.72 5.50 Pensions 2.65 1.60 3.08 2.49 3.12 2.60 Transfers 3.43 4.08 5.33 10.39 12.53 15.40 Subsidies 0.31 0.58 0.65 0.53 0.88 0.90

Capital expenditure 2/ 11.18 15.95 16.62 28.89 61.35 18.12

(As per cent of calendar year GDP)

Current expenditure 25.8 22.1 27.8 27.4 28.1 29.5 Capital expenditure 5.9 6.8 6.1 9.4 17.4 5.1

(As per cent of current expenditure)

Wages and salaries 45.6 46.5 59.5 46.5 47.6 46.5 Goods and services 38.0 36.1 25.7 34.1 32.0 30.1 Transfers 7.0 7.9 7.0 12.3 12.6 14.8

Sources: Statistical Appendix Table 5.4.

1/ Wage payments may be understated due to classification problems. 2/ Projects funded by Hess Oil Company which are executed outside the budget are excluded because of insufficient data. - 17 -

related to hurricane damage, and in domestic transfers,a large element of which was to financeoperating deficits of public sector agencies including the Castries City Council, the Water Authority and the National Development Corporation (StatisticalAppendix Table 5.5).

33. Capital expenditure averaged about 6 per cent of GDP during the three fiscal years ended in March 1980, but in FY 1980/81 rose to about 9 per cent of GDP, primarily as a result of reconstructionoutlays in the wake of Hurricane Allen. Capital expenditure was also boosted that year by acquisitionof assets (EC$3.5 million) to set up a National Commercial Bank.

C. Central Government Operations in FY 1981/82

34. The central government budget for FY 1981/82 provided for approximate current account balance. However, information available on the budgetaryoutturn for the first half of this fiscal year indicates that the budgetary situation has deteriorated sharply, due to both a shortfall in revenue and to substantiallyhigher than budgeted current expenditure. On revenue, a budgeted EC$6 million oil transshipment tax payable by the Hess Oil Company did not materialize as a result of delays in completion of the project. In addition, a reduction in personal income taxation with effect from January 1, 1981 was not taken into account when the budget was prepared, while taxes collected from tourism fell below expectation because of a decline in the level of activity. The sharp rise on expenditure was to a large extent attributableto a recent wage settlement granted to government daily- paid workers mentioned in Section 1 and the consequential rise in transfers to semiautonomous state agencies, such as the Castries City Council which depend on budgetary allocations for current operations. These developmentsled to a central government current account deficit of about EC$6 million during the first half of the fiscal year. Capital expenditurenot covered by project grants during the same period amounted to about EC$9 million, thus resulting in an overall deficit of about EC$15 million.

35. In order to prevent a further deterioration,the Government introduced some fiscal measures at the end of November. These measures included increases in consumption duties on a wide range of products and the impositionof such duties on a number of products that were previously exempt, a 1 percentage point increase in stamp duty on imports, and higher fees for some government services. Other tax measures, including the elimination of income tax relief measures granted in January 1981, have been planned for introductionbefore the end of the fiscal year. The Government also began daily monitoring of its cash balances with commercial banks to ensure that total monthly expenditure did not exceed the sum of monthly revenue, capital grants, and concessional loans. The Government also laid off all daily-paid workers, except those in essential services, at the beginning of December 1981. On the basis of the revenue measures which are projected to yield additional revenue of EC$5.6 million, and significant expenditure cuts, a - 18 -

current account deficit of EC$13 million (3.7 per cent of GDP), and an overall deficit of EC$26 million (7 per cent of GDP) are projected for FY 1981/82. The financing requirements are expected to be met through borrowing from ECCA (EC$10 million) mainly the counterpart of borrowing by St. Lucia from the IMF, includinga possible small compensatory financing facility purchase, foreign project loans (EC$5 million), a drawdown on government foreign asset holdings, loans from domestic commercial banks, and new issues of government securities (StatisticalAppendix Table 5.2).

D. Other Public Sector

36. In recent years, the combinedoperations of the rest of the general government (the Castries City Council, the Government Funding Scheme, and the National Insurance Scheme) have yielded current savings which, though declining in relation to GDP, have been sufficient to cover small capital expendituresand to accumulate financial assets. The National Insurance Scheme has provided most of such savings, which have more than offset current deficits incurred by the Castries City Council and, in some years, the Government Funding Scheme (Statistical Appendix Table 5.1).

37. The National Insurance Scheme (the National Provident Fund before April 1979 when benefits were enlarged from purely pensions, to cover sickness, invalidity, maternity, and hospitalization),is funded by contributionsequivalent to 5 per cent of monthly wages and salaries up to EC$700 from both employersand employees, excluding public servants. Payments for benefits and operating expenditure are as yet low and the National Insurance Scheme has been able to generate substantial surpluses which are invested in term deposits with commercial banks and, to a lesser extent, in Treasury bills. The National Insurance Scheme also lends directly to other public entities to finance their capital programs.

38. Four of the five public enterprisescovered in this section relied on central government transfers to meet their operating expenditures; the Port Authority has operated without recourse to government current transfersbecause of periodic adjustmentsin its tariff structure. The most recent tariff increasesranging from 15 to 35 per cent on specified services were awarded in July 1980. However, a recent wage settlement granting increases, retroactiveto July 1980, of 40 per cent to workers at the terminal and an average 25 per cent plus an automatic cost of living adjustment to other workers, is expected to reduce the annual surplusesof the Port Authority in the absence of further tariff increases.

39. The Central Water Authority, an island-wide authority, depends on budgetary support for over 40 per cent of its operating revenue. Water consumption in St. Lucia, except for Castries City, is directly paid for or subsidizedby the Government. The authoritywas granted a tariff - 19 -

increase in June 1980 and again in January 1981, which together raised water rates by about 100 per cent. These new rates have improved the operating position of the Authority. However, arrears of payments for rural water consumption by the Government and the previously mentioned wage increases are projected to result in cash flow problems in the current fiscal year and beyond, unless further increases on rates are granted.

40. The National Development Corporationwas established to promote foreign investment in St. Lucia and recently was assigned additional responsibilityfor indigenous industrialization. The Corporation has limited sources of funding outside budgetary transfers; revenue from rentals of factory shells and land leases remain small. The Marketing Board markets products both locally and abroad and imports fruits, vegetables,and eggs. Central government transfersassisted in covering the fairly small operating deficits of the Board.

41. The St. Lucia ElectricityServices Ltd. is managed by the Common- wealth DevelopmentCorporation which retains 33.1 per cent of ownership (the Government of St. Lucia owns 49.4 per cent, of which 37.7 is non- voting shares, and the Castries City Council owns 17.5 per cent). In recent years the company has generated current account surpluses primarily as a result of passing on to consumers fuel cost increases through a surcharge. Other operatingcosts, however, have risen sharply and, as a result, the company has a request before the Public Utilities Commission for an increase in basic tariffs (excluding the fuel surcharge) by about 25 per cent. During the last financial year damage by HlurricaneAllen resulted in large capital expenditureswhich were covered by insurance proceeds. - 20 -

III. THE FINANCIAL SECTOR

A. Characteristics and Overall Trends

42. St. Lucia has no central bank but is a member of the East Caribbean Currency Authority (ECCA), which was established in 1965.1/ Commercial banking in St. Lucia is conducted by the branches of four foreign banks and by two local commercial banks--the St. Lucia Cooperative Bank and the National Commercial Bank, which started operations in January 1981. Other financial institutions operating on the island are the St. Lucia Mortgage Finance Company in which the Government has a large minority interest, and the newly created National Development Bank which has absorbed the operations of the former Agricultural and Industrial bank, Housing Development Bank, and lending activities of the National Devel- opment Corporation.

43. Although St. Lucia does not have a comprehensive banking law to govern banking operations, commercial banks have been subject to an annual licensing fee of EC$4,000 for their main offices and EC$1,000 for each of the branch offices; the former was raised to EC$20,000 in April 1980. In July 1980, a 10 per cent legal reserve requirement was introduced on total deposit liabilities of the commercial banks, excluding the two local commercial banks which are exempt from this requirement (Statistical Appendix Table 6.5). The legal reserves, which were levied at a rate of 2-1/2 per cent per quarter, are lodged with the Treasury at no interest rate.

B. The East Caribbean Currency Authority

Background

44. St. Lucia and the other six ECCA members share a common currency, the East Caribbean dollar, issued by ECCA. Since July 1976 the East Caribbean dollar has been pegged to the U.S. dollar at the rate of EC$2.70 per U.S. dollar. ECCA is required by statute to maintain a foreign exchange cover equivalent to not less than 60 per cent of the value of its currency in circulation and other demand liabilities. ECCA has certain other attributes of a central bank, such as authority to deal with international institutions joined by any of its member governments, to maintain accounts with central banks, to offer rediscount facilities, to accept deposits from commercial banks and member governments, and to purchase securities issued by member governments. However, the Articles of Agreement and the regulations of ECCA place restrictions on the purchase of government securities and on other credit to member governments: (1) holding of Treasury bills of any government cannot exceed 10 per cent of that government's current revenue in any fiscal

1/ Besides St. Lucia, the other members of ECCA are Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts-Nevis, Anguilla, and St. Vincent and the Grenadines. - 21 -

year; and (2) holdings of other securities issued by all member governments may not exceed 40 per cent of ECCA's currency in circulation and other demand liabilities. The Board of Directors is empowered to make decisions regarding the granting of credits subject to the above specified limits. ECCA has been designated by St. Lucia as fiscal agency for dealings with the Fund in accordance with Article V, Section I of the Articles of Agreement. ECCA has also been prescribed as an "other holder" of SDRs under Article XVII, Section 3 of the Articles of Agree- ment.

Recent Developments in ECCA Operations

45. The net foreign assets of ECCA grew steadily from EC$118 million in 1977 to EC$167 million in 1979, while the commercial banks' net claims on ECCA rose from EC$71 million at the end of 1977 to EC$89 million in 1979 (Table 11). The reserve gain basically reflected a strong expansion of export earnings and tourism in the area during this period.

Table 11. St. Lucia: Summary Accounts of the East Caribbean Currency Authority

(In millions of East Caribbean dollars)

December 31 Sept. 1976 1977 1978 1979 1980 1980 1981

Net international reserves 157.2 117.8 139.1 167.4 145.2 151.5 168.0

Net position with banks in ECCA area -116.6 -71.1 -83.5 -89.2 -61.6 -87.8 -92.0

Net domestic assets 11.2 12.9 12.6 13.3 13.9 12.8 21.7 Net claims on Govern- ment 24.5 26.0 28.7 33.5 40.3 38.2 41.9 Of which: St. Lucia 3.9 3.9 5.9 9.1 11.4 11.4 11.4 Treasury bills (3.0) (3.0) (5.0) (5.8) (7.2) (7.2) (7.2) Debentures (0.9) (0.9) (0.9) (3.3) (4.2) (4.2) (4.2) Net unclassifed assets -13.3 -13.1 -16.1 -20.2 -26.4 -25.4 -20.2

Currency in circulation 51.8 59.6 68.2 91.5 97.5 76.5 97.7 Of which: St. Lucia 10.8 13.5 15.4 22.1 24.6 21.7 27.5

Source: Statistical Appendix Table 6.1. - 22 -

46. During 1980, ECCA's net foreign assets declined to EC$145 million as the net position of area banks with ECCA declined to EC$62 million. The principal factors in this development were the damage to exports in the region caused by Hurricane Allen, and the downturn in tourism, combined with a sharp rise in foreign interest rates relative to rates in the region. With the objective of reducing the interest differential, since November 1980 ECCA raised the interest rate paid on 24-hour call nmney from 6 per cent to 10 per cent per annum and on three-month deposits from 7-3/4 per cent to 12-1/2 per cent per annum. These upward adjustments--and a recovery in agricultural exports--explain the 16 per cent increase in ECCA's net foreign assets to EC$168 million during the first nine months of 1981.

47. The net credit extended by ECCA to member governments has expanded steadily over the past five years. St. Lucia borrowed from ECCA EC$2 million, EC$3.2 million, and EC$2.3 million in 1978, 1979, and 1980 respectively. As of December 1980, ECCA holdings of St. Lucia Treasury bills and debentures amounted to EC$11.4 million which was St. Lucia's legal maximum access to ECCA resources as of that date. In October 1981 St. Lucia's maximum access to ECCA resources was increased to EC$12.3 million but was again almost exhausted following an additional purchase of Treasury bills of EC$0.5 million.

C. Operations of the Commercial Banks 1/

48. Over the period 1976-79, the growth in net domestic credit of the commercial banks exceeded the increase in liabilities to the private sector, reflecting rapid increases in credits to the private sector particularly in 1977-78. The expansion in domestic credit in excess of available local resources resulted in some tightening in the liquidity position of commercial banks and in a deterioration of their foreign position. Despite these trends, however, the structure of interest rates remained low and virtually unchanged between 1977 and 1979. In 1980 credit to the private sector continued to expand strongly, rising by 24 per cent in relation to liabilities to private sector at the beginning of the period. The growth of commercial banks' liabilities to the private sector meanwhile slowed down to almost 11 per cent. Together with the introduction of the special reserve requirement on bank deposit liabilities, these factors led to a tightening of the liquidity position of the commercial banks which in turn contributed to a modest rise in interest rates.

49. During the 12 months ended September 1981 net domestic credit expanded at an annual rate of 26 per cent, or nearly twice as fast as the growth in the deposit liabilities of the commercial banks (Table 12).

1/ Prior to January 1979, the commercial banks' monthly reports to ECCA were highly aggregated, which precludes a detailed analysis of their underlying operations. Since that time, the reports include de- tails of the main components of the banks' balance sheets. - 23 -

Table 12. St. Lucia: Summary Accounts of CommercialBanks

December 31 Sept. 30 1977 1978 1979 1980 1980 1981

(In millions of East Caribbean dollars)

Net foreign assets -9.8 -20.5 -16.8 -25.8 -2.7 -21.3 Assets 16.3 18.3 22.8 25.6 42.5 21.9 Liabilities -26.1 -38.8 -39.6 -51.4 -45.3 -43.2

ECCA currency holdings 4.0 6.2 4.6 4.7 2.7 4.0

Domestic credit (net) 97.2 123.9 139.8 162.8 146.7 184.7 Net credit to Central Government 15.0 11.9 16.2 15.7 13.3 19.0 Of which: loans and advances (10.0) (9.3) (15.5) (10.2) (11.2) (7.9) Credit to private sector 1/ 96.4 118.1 136.1 166.6 158.2 182.3 Net unclassifiedassets -14.2 -6.1 -12.5 -19.5 -24.8 -16.6

Liabilitiesto private sector 2/ 91.4 109.6 127.6 141.7 146.7 167.1 Demand deposits 18.0 19.0 25.3 27.6 36.9 30.6 Savings deposits 43.0 49.2 56.4 67.9 65.2 73.4 Time deposits 30.4 41.4 45.9 46.2 44.6 63.1

(Percentagechange)

Domestic credit 3/ 8.2 29.2 14.5 18.0 ... 25.9 Net credit to Central Government 3/ -0.2 -3.4 3.9 -0.4 ... 3.9 Credit to private sector 3/ 24.8 23.7 16.4 23.9 ... 16.4 Liabilities to private sector 3.4 19.9 16.4 11.1 ... 13.9

Source: East Caribbean Currency Authority.

1/ Includes credit to public-sectorenterprises. 2t/ Includes deposits of noncentralgovernment public entities and thereforenot consistentwith StatisticalAppendix Table 35. 3/ In relation to liabilitiesto private sector at the beginning of the period. - 24 -

As a result, the net foreign asset position of the commercial banks deterioratedsubstantially compared with the 12-month period a year earlier. The strong growth in domestic credit reflected the continued sharp upward trend in personal loans and advances for house and land purchases, as well as consumer durables, and a switch in borrowing from abroad by some enterprises in response to the wide negative interest rate differentialbetween St. Lucia and foreign capital markets.

50. Interest rates in St. Lucia are market determined,with the excep- tion of mortgage rates which are set by Government (9 per cent at the end of 1980). Between 1976-79, interest rates on deposits in real terms were low and highly negative; nominal rates on saving deposits were 2 to 3 per cent, while rates on three-month time deposits ranged from 3.8 to 6.0 per cent. Some small upward adjustment in rates was made in the last two years with saving deposits yielding 5.5 per cent and time deposits a maximum of 10 per cent in September 1981, but the negative differential with international market rates remained. The prime lending rate has risen from 8 per cent in 1979 to 9 per cent at the end of 1980, 11 per cent in September 1981, and to 12 per cent in November (Table 13).

Table 13. St. Lucia: Selected Interest Rates and Financial Indicators

(In per cent)

Average 3-Month Average Treasury Time Deposit Rate Bill Rate 1/ Ratio Nominal Real Differ- of LPS 2/ Rate Rate St. Lucia U.S. ential to GDP

1976 6.00 -3.70 -- 5.00 -- 55.8 1977 3.75 -5.15 -- 5.40 -- 48.4 1978 5.25 -5.65 -- 7.50 -- 47.0 1979 5.00 -4.40 -- 10.20 -- 48.9 1980 5.50 -14.10 7.75 12.10 -4.35 48.5 1981 (Sept.) 6.00 -9.50 7.29 14.90 -7.61 49.4

Sources: Ministry of Finance and Planning; local commercial banks; Federal Reserve Bulletin; and IMF staff estimates.

1/ Three-month bill rates. T/ Total liabilities to private sector including nonresident deposits, and excludingpublic entities' deposits. - 25 -

D. Other Financial Intermediaries

51. In the early 1970s a number of developmentbanks were created: the Agriculturaland IndustrialBank, the Housing DevelopmentBank, and the loan department of the National DevelopmentCorporation. On the basis of a recommendationmade by the Caribbean DevelopmentBank (CDB) to increase the efficiency of these institutions,the Agriculturaland Industrial Bank, the Housing DevelopmentBank, and the lending operations of the National DevelopmentCorporation were combined into the newly established St. Lucia DevelopmentBank in February 1981. A close coordinationexists between the NDB and the St. Lucia Commercial Bank through sharing the same board of directors. The assets and liabilitiesof the new bank amount to approximatelyEC$11 million, including almost EC$4 million in arrears on loans. To improve the financial viability of the institution, management has set as a first priority the reduction of arrears. The CDB extended a EC$5.4 million loan to NDB for agriculturaland industrial credit and is expected to extend another EC$1 million loan, while the Governmentwill contribute about EC$4 million over a period of four years. The NDB charges up to 10 percent for loan under three years, 10.5 percent for three to five years, and 11 percent for over five years. The resourcesborrowed from CDB carry an interest rate of 4 to 7.5 percent.

52. The St. Lucia Mortgage Finance Company (SMFC) was incorporatedin 1968 to provide loans for the purchase, construction,or extension of dwelling houses. The CommonwealthDevelopment Corporation owns 51 percent of the shares and the Government of St. Lucia 49 percent but the latter is currently negotiatingthe acquisition of the shares owned by CDC. SMFC's maximum current lending rate (9 percent per annum) and its maximum single loan (EC$80,000)are controlled by the Government. As of September 30, 1981 the total mortgage assets of SMFC amounted to more than EC$16 million and the cumulativeadvances were of the order of EC$25 million. - 26 -

IV. THE EXTERNAL SECTOR

A. The Balance of Payments -

53. Over the last few years the overall balance of payments position of St. Lucia has shown a marked deterioration which was financed by foreign borrowing, particularly from the Fund, since St. Lucia became a member in November 1979. The Governmenthad borrowed US$4.3 million from ECCA as of November 1981, virtually exhausting its maximum access to ECCA resources, which amounted to US$4.6 million at that time.

54. The currentaccount deficit has widened significantlyover the last few years and, in 1981, reached a record level of about US$51.6 million, or 39.4 per cent of GDP from US$11.4 million, or 16.3 per cent of GDP in 1977. The main underlyingfactor behind the widening current deficit was a sharp increase in imports associatedwith substantialforeign investment flows, particularly for the oil terminal. More recently the further widening of the deficit reflected a slowdown in export and net travel receipts, in the aftermath of the hurricane, in addition to a continued sharp growth in imports. Capital inflows,mainly in the form of private direct investment--mainlyto finance the Hess transshipment terminal and partly to the manufacturingsector--almost tripled over the four-year period 1977-80 to about US$31 million and, they are estimated to have risen to US$42 million in 1981.

55. The overall balance of payments position shifted from approximate balance in 1977 to a deficit of US$1.2 million in 1979, and to a larger deficit of about US$2.9 million, or 2.5 per cent of GDP in 1980. In 1981 the overall deficitof the balance of payments is estimated to rise to about US$3.7 million, or almost 3 per cent of GDP (Table 14). In both 1980 and 1981 the bulk of the deficit has been covered by purchases from the Fund.

B. Merchandise Exports

56. Domestic export earnings, which had grown at an average rate of 10.7 per cent per year over the period 1977-79, grew by 20 per cent to a level of US$34 million in 1980, despite the impact of Hurricane Allen which struck the island in August 1980. Much of this impact was felt in 1981, however, when domestic exports declined to about US$33 million, or by about 2.5 per cent.

1/ St. Lucia does not prepare an official set of balance of payments statistics. Trade data are available;however, the estimates for certain other categoriesof transactionshave been made by the staff on the basis of information obtained from a variety of sources. The balance of payments statistics presented in this report, therefore, should be regarded merely as being indicativeof trends. - 27 -

Table 14. St. Lucia: Summary Balance of Payments 1/

(In millions of U.S. dollars)

Est. 1977 1978 1979 1980 1981

Goods and services and transfers -11.4 -23.5 -27.9 -33.3 -51.6 Total exports, f.o.b. 22.6 26.8 31.8 46.0 40.4 Domestic exports (20.6) (24.8) (27.9) (33.7) (32.8) Re-exports (2.0) (2.0) (3.9) (12.3) (7.6) Imports, c.i.f. -59.3 -82.8 -101.2 -123.8 -138.1 Of which: Hess Co. (-12.0) (-14.2) (-19.0) (-23.8) (-29.1) Services (net) 15.2 22.8 30.0 28.0 24.2 Transfers (net) 10.1 9.7 11.5 16.5 21.9 2/ Of which: official (2.5) (2.0) (3.7) (5.4) (7.0)

Capital account 16.7 27.3 30.4 35.8 45.8 Public borrowing (net) 1.9 2.7 3.0 1.6 2.6 Of which: central government (0.8) (1.4) (--) (2.4) (1.9) Commercial banks 1.8 4.0 1.4 3.3 1.6 Private direct investment 13.0 20.6 26.0 30.9 41.6 Of which: Hess Co. (12.3) (19.0) (24.0) (28.9) (34.1)

Errors and omissions -5.2 -4.6 -3.6 -5.9 1.6

SDR allocation ------0.5 0.5

Overall deficit (-) 0.1 -0.8 -1.1 -2.9 -3.7

Financing -0.1 0.8 1.1 2.9 3.7 Net ECCA borrowing -- 0.7 1.2 0.7 -- Change in foreign assets (increase -) -0.1 0.1 -0.1 -0.1 0.2 IMF borrowing ------2.3 3.5

Sources: Ministry of Finance,-Development and Planning; and IMF staff estimates.

1/ St. Lucia does not prepare an official set of balance of payments statistics and data for some categories of transactions started to become available only in 1977. 2/ Includes US$2.9 million corresponding to Hess Company payments earmarked for government public projects which will revert to the public sector upon completion. - 28 -

57. Banana export earnings, which had accounted on average for 48 per cent of total domestic exports over the period 1977-79, dropped to about 31 per cent of total domestic exports in 1980; an increase in export prices from US$230 per ton in 1977 to US$320 per ton in 1980, was insuf- .ficientto compensate for a drop in export volume caused by the hurricane (from an average of 46,000 metric tons in the period 1977-79 to about 33,000 tons in 1980). Since the second quarter of 1981 banana exports have recovered impressively to an estimated 45,000 tons on an annual basis, close to the 1979 production levels, as rehabilitation programs financed by several donors have been highly effective in re- storing the banana industry.

58. Coconut oil export earnings steadily increased between 1977 and 1980 to US$3 million but are expected to decline to US$2.4 million in 1981. The improvementwas almost entirely due to rising international prices, while volume declined through the four years ended in 1980, partly reflecting a shift to export of refined bulk and bottled oil instead of raw bulk oil. Following three years of growth, exports of fruits and vegetables, dropped by almost 25 per cent to US$0.4 million in 1980, mainly because of marketing problems and a significantdecline in volume following the hurricane, and by an estimated 15 per cent in 1981.

59. Nontraditionalexports, the main elements of which have been clothing, paper products,and beer and ale, increasedfrom about US$5 million in 1977 to about US$7 million in 1980. During 1981, export earnings of these products are estimated to rise to US$7.6 million (Statistical Appendix Table 3.2). In addition, export of electronic equipment,which were very small during 1977-79, rose sharply in 1980 when the Milton Bradley Toy Company began full operations, but fell in 1981 following the cessation of operationsin St. Lucia of that company.

60. The United Kingdom accounted for about 50 per cent of exports during 1976-79 but received only 38 per cent in 1980; while the share of the United States rose to 23 per cent in 1980, from 3 per cent in 1976-79. This temporary change in the direction of trade is attributed to the hurricane-relateddrop in banana exports to the United Kingdom and the high levels of nontraditional exports directed to the UTnited States, boosted by electronic items.

C. Merchandise Imports

61. Imports rose at an average rate of about 27 per cent per year over the period 1977-80, and are estimated at US$138 million in 1981, an increase of about 12 per cent in relation to the previous year. The rapid increase in imports was attributablein part to foreign private investments,particularly in the construction of the Hess Company oil transshipmentterminal and export-orientedenterprises, and to public sector investments in large infrastructureprojects such as port facilities. The slowdown of import growth in 1981 stems mainly from a decline in imports for re-export. Both Hess Company imports and other - 29 -

imports appear to have continued rising fairly strongly in 1981, particularly when account is taken of the more moderate increase in import prices. The structure of imports has heavily tilted toward inve-stment- related goods; intermediate and capital goods have averaged about 69 per cent of total imports over the last five years, while petroleum imports have remained in the 8-10 per cent range.

62. The United States, which accounted for about 28 per cent of imports in 1976-80, continues to be the major supplier to St. Lucia followed closely by CARICOM countries, which account for about 21 per cent of imports, in particular Trinidad and Tobago, supplying roughly 60 per cent of CARICOM's total (Statistical Appendix Table 3.4). The import share of the United Kingdom has fallen from 23.4 per cent of total imports in 1977 to 15.6 per cent in 1980.

D. Tourism

63. Gross earnings from tourism, which had grown at an average rate of 23 per cent over the period 1977-79, slowed down to a rate of 17 per cent to reach US$39 million in 1980. The increase in earnings in 1980 mainly reflected higher prices in St. Lucia, as the volume of tourist days rose by less than 5 per cent. The slowdown can be partially ex- plained by the depressed world demand for tourism and the view abroad that hurricane damage to tourist facilities was more extensive than actually occurred. In 1981, gross earnings declined by almost US$4 million as volume is estimated to have fallen by 25 per cent, while prices rose strongly (daily expenditure per tourist is estimated to have risen by 18 per cent).

64. The United States and Canada together have traditionally accounted for almost 40 per cent of total visitors. Another important source of visitors is the United Kingdom--23 per cent of total--followed closely by visitors from other Caribbean territories. During the last two years and partially in response to efforts to attract European and South American tourists to St. Lucia, the number of visitors from the rest of the world has increased significantly, particularly from West Germany. The average length of stay is calculated at 8.6 days for noncruise visitors. Although very little is known about expenditure patterns-- the last survey was made in 1978--the average expenditure of noncruise visitors is estimated to have risen in line with domestic inflation (Statistical Appendix Table 7.4).

E. Other Transactions

65. Net private transfers, which fluctuated around US$8 million per year over the period 1977-78, increased to about US$11 million in 1980 and are estimated to increase by an additional US$3.8 million in 1981. The increase originated in larger remittances immediately following Hurricane Allen from St. Lucians living abroad. In addition to the upward shift in traditional transfers, remittances from workers tempo- rarily employed in the United States and Canada under the agricultural - 30 -

workers' program, have been growing in importance as both the number of workers as well as the salaries paid abroad have increased. Hess Company payments earmarked for public projects which will revert to the public sector upon completion have also been an important factor in the rise in transfers.

66. Net capital inflows rose from US$16.7 million in 1977 to US$35.8 million in 1980 and are estimated to increase to US$45.8 million in 1981. The main element of net capital inflows is foreign private investment which has accounted, on average, for about 80 per cent of total capital inflows: investments associated with the Hess Company oil terminal are roughly 90 per cent of the private investment. Offi- cial capital flows have amounted to US$11.8 million on a cumulative basis during the five-year period 1977-81, while commercial banks brought into St. Lucia some US$12 million to finance domestic operations.

F. External Public Debt

67. The Central Government's direct and guaranteed external debt (excluding Fund and ECCA purchases) increased at an annual average rate of almost 31 per cent over the two-year period 1977-79. Following completion of a number of large infrastructure projects such as major roads and port facilities, the external debt rose more moderately and at the end of 1981 amounted to US$17.8 million. In relation to GDP, however, the outstanding debt has remained fairly stable at about 13.6 per cent of GDP over the past four years.

68. The increases in public external debt were primarily to public entities. As a result, the direct debt of the Central Government has declined from 78.5 per cent of the total in 1977 debt, to an estimated 62.2 per cent at the end of 1981. The main source of loan funds for central government infrastructure projects has traditionally been the CDB. The National Development Corporation, the National Development Bank, and the Port Authority are the only entities that have raised funds abroad. A loan to the Port Authority of US$4.2 million from the Central Bank of Venezuela is the principal outstanding debt to government enterprises.

69. St. Lucia's external public debt burden is modest, as the majority of loans has been contracted with long grace periods and at concessional interest rates. The debt service payments ratio has been about I per cent of total exports and tourism receipts during the period 1977-79. However, in 1980 this ratio increased moderately to 1.5 per cent as a result of unfavorable export performance and the significant increase in amortization payments (Statistical Appendix Table 4.1). - 31 -

G. Exchange Rate

70. As a member of the East Caribbean Currency Area, St. Lucia cannot unilaterally modify its exchange rate,l/ which has been pegged to the U.S. dollar at a rate of EC$2.7 per US$1 since 1976 (Statistical Appen- dix Table 3.5). The nominal trade-weighted effective exchange rate had depreciated modestly from 1976 through September 1980. With the appre- ciation of the dollar vis-a-vis the pound sterling and other currencies of St. Lucia's trading partners since the last quarter of 1980, however, the nominal effective exchange rate began appreciating, a trend which has continued into 1981. As of the end of October 1981, appre- ciation amounted to 15 per cent compared with the average 1980 level, and had returned the nominal trade weighted index almost back to the 1976 level.

1/ For a full description of the prevailing exchange and trade restrictions refer to Appendix A. - 32 -

V. DEVELOPMENT POLICY ISSUES

Introduction

71. The key issues for St. Lucia is to return to the substantial economic growth path of the 1960s and most of the 1970s--soas to create as a minimum 2,000 new productive jobs per year to keep up with the increasing labor force. The realizationof this goal primarily requires that private investment be encouraged by further improvements in the political climate. Another crucial requirement is the existence of a well-organizedand soundly financed public sector able to efficientlyprovide the requisite infrastructuralservices.

Agriculture

72. Agricultureof St. Lucia is quite vulnerable because of its high dependenceon bananas and coconuts--bothcrops sufferingfrom periodic natural disasters, low productivity,and possible market constraints. Therefore, it appears that efforts should be directed to crop diversificationand to measures to increase productivityin bananas and coconuts. These goals can be achieved if issues affecting the agriculturalsector such as land tenure, credit, extension services, and labor productivityare appropriatelyhandled.

73. Only a few farmers have legal titles to the land they cultivate. The majority have traditionalrights, which cannot be accepted by agriculturalcredit institutionsas a valid collateral for development loans. Sharecroppingand renting of lands, mostly from absentee landowners,is widespread. Under these conditions,financing of farm developmentbecomes an extremely difficult undertaking.

74. The lack of agriculturalcredit is one of the main bottlenecks to development. Funds for agricultureare scarce and there is little preparationand supervisionof farm plans. Since the majority of the farmers cannot offer any collateral for the loans, they are de facto excluded from obtaining credit unless they are banana or coconut growers, in which case they have access to credits provided by the relevant growers' association,a situation that militates against crop diversification.

75. Extension service units under the Ministry of Agriculture are poorly staffed. Present budgetary constraintsare further restraining the activities of the extension officers by restrictingthe funds available for travelingand other operating expenditures. The USAID extension program which emphasizes training, information,and supervisionof extension agents and extension facilities is intended to ameliorate the difficult situation.

76. Productivityin the agriculturalsector is very low and there is poor motivation to undertake farm development. It has been observed that the average age of farmers is increasing as a result of the out- flow of young people from agriculture towards the urban services sector and other more renumerativeopportunities. This is a serious pro- - 33 -

blem and requires prompt attention on the part of appropriateauthor- ities. Adequate incentivesneed to be put in place to encourage agricultural development.

77. Bananas provide the only cash income to a large number of small farmers, most of them working on marginal lands under intensiveannual cropping. To this extent, banana production,unless substitutedby other tree crops which can offer the same monetary incentives,is one of the most important factors responsible for social stability in the rural areas. The main issues for banana production in St. Lucia are related to productivity,farmer organization,and marketing.

78. Land productivityis very low even in the commercialplantations located on the best flat lands. Small holders grow bananas on hill slopes, sometimes very sharp inclines. Excluding the large plantations, the average farm size is one to two acres, with yields between 5 to 10 tons per acre. In the commercial plantations,yields are reported not to exceed 10 tons per acre, which is roughly half of yields in the more efficient producing countries. As a result, and given the relatively high cost of labor and other inputs, profitabilityof banana production at the farm level is marginal, unless input costs are subsidized and/or prices are kept at higher levels than the world market, as is the case.

79. Banana producers are members of the Banana Growers' Association which takes care of technical assistance, provision of inputs, services, and marketing. The Association,under the banana rehabilitation program financed by the United Kingdom and other donors, has received assistance and inputs to bring banana production to prehurri- cane levels. According to the agreement, repayment for inputs by producers should have been integrated into a revolving fund to be used in the next season. However, because of higher than forecasted administrative and input costs, funds originally allocated to input supply have served to cover the Association'sother expenditures. Notwith- standing this, the Association'sbudget still shows a large deficit, and what is more serious, the purchasing of adequate inputs for next year will not be possible unless additional funds are made available.

80. Market conditions for bananas need to be carefully examined. Presently, bananas from the CARICOM countries have a preferentialout- let in the United Kingdom, under the Lome Agreement. Demand in the U.K. market appears stabilizedat around 300,000 tons per year, of which about 130,000 tons have been supplied by the Windward Islands, 80,000 tons by Jamaica, and the rest by Belize and other nontraditional suppliers. A large increase in production in Jamaica and Belize might reduce the share of the market available for the Windward Islands, including St. Lucia, unless demand in the United Kingdom increases or other markets are found. The latter will be realized only if the production costs of St. Lucia bananas are drastically reduced and become price competitivewith world markets. It is also uncertain whether U.K. consumerswould continue to subsidize banana production in the Caribbean given the pressures from other exporting countries, including those belonging to the Lome Agreement. - 34 -

81. Because of Hurricane Allen, productionof coconuts declined from 6,000 tons per year to about 2,500 tons per year, and is not likely to recover for another five to eight years. Production of coconuts is also beset by a number of constraints,such as difficulty in recruiting labor for harvesting and drying; the lack of farm access tracks; and poor managementpractices. An FAO technical assistance team has reported favorably on the possibilityof mechanizingcopra production. A program to establish coconut nurseriesand to provide fertilizersand herbicides is being consideredby the United Kingdom. The coconut processingplant is operating at only 40 percent of capacity due to the lack og copra. Under this condition it runs the risk of closing down if additional raw materials are not found. There is a plan to upgrade this plant so it can process imported soybean or sunflower. Unless this plan materializes,the protected edible oil export market within CARICOM countries might be lost in favor of other more competitivesuppliers.

Industry

82. Official policies are based on the assumption that the private sector--bothlocal and foreign--willcontinue to play an important role in the economic developmentof St. Lucia. However, the uncertain political situationsince 1979 appears to have an adverse effect on the investment climate. In addition, the recent excessive increase in wages granted the governmentdaily workers, which generated pressures for wage increaseson the part of established civil servants and in the private sector, may discourage private investment.

83. Positive steps have been taken to reorganize and strengthen the national developmentorganizations, through the creation of the National DevelopmentBank (NDB). The National Development Corporation (NDC) is responsiblefor the promotion of overseas investmentsinto St. Lucia, the expansion and developmentof the domestic private sector, the mobilizationof local and internationalresources to support developmentinitiatives, and the execution of public participationin private sector investment.

84. The promotion of overseas investments into St. Lucia is a major priority, in view of the need to generate employment. The performance of NDC on promotion has been, overall, satisfactory. This is reflected in nine industrial companies,employing some 600 people, established thanks to NDC promotion between July 1979 and July 1980. It is also reflected in the 55,000 sq.ft. of industrial estates built and rented by the NDC in Dennery and Hewanorra during the same period. NDC has promotion office in New York, Caracas, and Cologne.

85. The manufacturingsector requires upgraded and increasedsupply of managerialand trained personnel. The country, however, does not seem to have been affected negatively by emigration of managementand skilled labor as much as some other Caribbean countries. Work permits are issued according to a largely liberal policy and acquisitionof property by foreignersis relativelysimple. - 35 -

86. Infrastructurepresents some constraintson the developmentof the industrial sector. Electricity services are not reliable and several industrialplants are using their own, more expensive generators. Port services are regarded as inefficientand expensive because of long delays to clear goods while on the wharves, and the storage charges which have to be paid to the Port Authority. This situation is associatedwith the low labor productivityat the wharves which, in turn, is related to the system of payments: by hour and not by volume discharged.

87. Within the CARICOM Harmonizationof Fiscal IncentiveGuidelines, St. Lucia offers tax incentives of up to 15 years. However, it does not usually grant full exemption. The practice is to grant exemptions for an initial number of years. A further review determines if the tax concessionwill be prolonged or not. The incentives are mostly granted for a range of products and without any quantifiablecriteria used to determine eligibilityfor incentives. This has the disadvan- tage of introducingarbitrariness and a possible monopoly situation, and is sometimes a source of contention between the local private sector and the Government.

88. Actions need to be taken in relation to the recommendationsof the UNDP study on regional industrial development,which recommended development of the site of Vieux Fort industry. Provided that the recommendationsof the UNDP study are accepted by the Government, further technical assistancemay be needed to: (i) prepare a bankable feasibility study for the selected site; (ii) prepare a technical and economic prefeasibilitystudy for improvement of the Vieux Fort- Soufriere Road; (iii) develop the preliminary regionalizationplan in support of the selected site and the national plan; and (iv) provide plan implementationand planning assistance to accelerate the industrial developmentprogram.

Tourism

89. Although St. Lucia has a relatively diversifiedeconomy, tourism plays a crucial role in its economic development. This situation is likely to continue in the foreseeable future. Therefore, the highest priority for the authoritiesis to determine a clear strategy about the type and scale of tourism desired. It is expected that the study to be carried out by the Organizationof American States (OAS) on tourism developmentwill help the authorities in this regard.

90. A major constraint on the development of tourism is the weakness of the Tourist Board which needs to be upgraded, properly staffed and well managed. The strengtheningof the Tourist Board would contribute to tourism development by providing up-to-date information;implemen- ting aggresive promotion campaigns; implementingand coordinating training programs; and controllingoffered services so that they meet adequate standards. In these activities, the Tourist Board would coordinate some efforts presently being carried out by the private sector, especially in relation to promotion and training. - 36 -

91. Infrastructurealso presents constraints to tourism development. In particular: (i) the poor condition of several roads because of damage caused by the hurricane and lack of proper maintenance;(ii) the frequent electricityoutages; (iii) the shortage of water; (iv) the accumulationof garbage in Castries; and (v) the deficienciesin airport and port facilities. While most of these constraintsare expected to be largely overcome by the execution of the investment program in the forthcomingyears, immediateactions are required in relation to (i) and (iv). Since the Hewanorra Airport is far from Castries, the road needs to be kept in good repair. It may also be worth explo- ring the possible reintroductionof shuttle flights between Hewanorra and Vigie, which is close to the capital.

92. The need to improve the linkages between tourism and the rest of the economy should be arefully examined. The value added by the sector can be increased through efficient local production of foods, particularlyfish and vegetables and a reliable supply of these items would have to be established. In this regard, the Government, through the Marketing and the Tourist Boards, can play a coordinatingrole between farmers and hotels and restaurants.

93. Some steps have been taken in the areas of tourist promotion and training. An English firm has been engaged to promote tourism in Europe. A major goal of tourist promotion is to increase occupancy in the slow summer months, thus reducing the current seasonalityand increasing full-year employment. The establishmentof a regional Hotel Trades School at the Halcyon Days Hotel, funded by EDF, is expected to help the country in solving the shortage of skilled personnel in the tourist industry. In addition, initiation of a campaign aimed at promoting attitudes of friendlinessand helpfulness toward visitors in the St. Lucia community,and to enforce regulations to prevent sand erosion of the beaches, and to protect all natural attractionswould be useful.

94. Substantialadditional local and foreign investmentswill be needed to expand the tourist industry. While local ownership and management are highly desirable, new foreign investments are also needed and should be encouraged. Local participationis expected to be increased by projects channeled through the NDC such as the Holiday Village, funded by CDB, and the Pointe Seraphim Tourist Facility,whose financing remains to be secured. As mentioned before, the Government can play an important role in providing the necessary infrastructure, in implementingpromotion and training programs, and in encouraging local management and ownership. However, the Government should clearly define its participationin tourism.

Energy

95. Energy assumes a special importance in St. Lucia in light of the islands' heavy economic reliance on tourism and industry, both highly energy-intensiveactivities. A regular and efficient supply of energy requires: (i) the rapid completion of the rehabilitationprograms aimed at repairing the damages caused to the electricity system by Hurricane Allen; (ii) the expansion of installed capacity to meet increasing demand, especially through the development of alternate energy resources; and (iii) the enforcement of a comprehensiveconservation policy. - 37 -

96. The rehabilitationof the electricitysystem, which started in September 1980 almost immediately after the hurricane, is expected to be completed in 1982; included in the rehabilitationprogram is the restoration of the SoufriereHydropower Plant and the replacementof defectivemeters.

97. There are several projects aimed at developing alternate sources of energy. They include the geothermal plant, the Roseau Dam, the Wind Powered Fish Chill Room project, and the charcoal developmentproject. Efforts to exploit geothermal resources started several years ago. A first study was conducted in 1974 funded by the U.K. Government. Based on the recommendationsof this study, five holes were drilled in the first phase of exploration in 1975 and two more in 1976. Of the seven holes, one had to be plugged due to surface ground instability,two were total failures, another had a very low output, one had high down borehole temperaturesbut did not produce any steam; the promising two holes were only about 150 feet apart. A CDC mission in 1977 concluded that further exploratorydrilling would be required before establishing the availabilityof commercial geothermal resources. A brief study undertaken by the Geothermal Energy New Zealand Limited in March 1980 revealed that the actual location and size of the geothermal field had never been established. They noted that the geophysicalprofile in the previous work was incomplete and recommended that a detailed feasibility study be undertaken. The European Investment Bank (EIB) offered to fund such a study, for which tenders were invited in August 1980. The Government of St. Lucia concluded an agreement for this study with AQUATER of Italy. The study started in February 1982 and is expected to be completed by August 1982. Provided the outcome of the study is successful, further drilling programs will be undertaken and if testings of the stream are also successful,plans for the construction of a geothermal plant will be finalized. However, if these investigationsprove that no adequate stream resources exist, the plan for geothermal developmentwill have to be abandoned. The drilling operations alone are anticipated to cost around US$0.4 million per test drilling and US$1 million per production well. About half a dozen test wells may have to be drilled and three to four productionwells may be required. The tentative cost of the project would be around US$11 million including the drilling of production wells.

98. Other programs have been implemented to develop nonconventional sources of energy. Technical assistance on charcoal has been funded by the United Kingdom. It is important to improve the exploitationof charcoal since deforestationhas had a very negative effect on the availabilityof water from creeks and on soil conservation. In this regard, the problem should be tackled by enforcing the current forestry legislationand by providing informationaimed at a more efficient use - 38 - of charcoal. CDB recently approved the financing of a wind-power chill room at Dennery and is also consideringthe financing of a project for the utilizationof municipal dumps at Union to build a Biogas Digester.

99. More concentratedefforts are required to formulate and implement a comprehensiveenergy conservationpolicy. It is particularly advisable to pay attention to the elimination of shortages and the provision of a regular and reliable supply of electricity,thus avoiding the present need for using less energy efficient small generators in several industries and the rapid introductionof a new rate system designed to encourage energy savings. An Energy Unit has been establishedin the Ministry of Finance and Planning. Studies have been undertaken on energy assessment with CARICOM and an household energy survey with OLADE.

Infrastructure

100. Road maintenancecontinues to be an urgent priority, and action should be taken before the situation deterioratesto the point where reconstructionrather than normal maintenance is indicated. Although additional financialresources may be needed for a comprehensive program of road maintenance,a more efficient use of available labor at the Department of Public Works is urgently needed. Constructionof agriculturalfeeder roads is taking place with external assistance. The program for the coming years also includes road rehabilitation, road surfacing, and improvementof the East coast road. These programs are expected to be funded by various donor agencies: CDB, EDF, Trinidad and Tobago, the United Kingdom, and Venezuela. A key issue is to strike an acceptablebalance between minimum specification,new road construction,and the maintenanceand improvementof existing roads. This will require close coordinationamong the various donors involved in road programs.

101. Works to improve airport facilites are under way. The Hewanorra airport expansion financed by CDB to accommodatewode-bodies aircraft is well advanced,with completionexpected by the end of 1981. Feasibility studies on proposals for further expansion at Hewanorra have not yet been completed. The factory shell taken over near Hewanorra has been renovated and continues to provide air cargo storage facilities pending the constructionof new facilities. Airlines using Vigie airport have indicated that airport and runway lighting need to be improved to facilitate continued night operations. Considerationis being given to strengtheningthe administrationof airports in order to improve efficiency in revenue collection. A decision has been taken to integrate the administrationof airports and seaports in order to use experienced personnelmore efficiently.

102. A port expansion program is under way. The expansion of the seaport at Castries, financedwith a loan from Venezuela, is almost completed. Until the transshipmentbusiness is fully operationaland since most of the island's exports are handled through the port at Vieux Fort, there is considerableexcess berthing capacity at Castries. Therefore, current efforts in the area of port development - 39 - should be aimed at maximizing the use of existing facilities, particularlythrough the promotion of Castries as a transshipment location.

103. The present supply of water is insufficient. This situationneeds to be corrected not only because a good water service is a requisite for the well-being of the St. Lucian population,but also because it is a priority requirementfor further developing the tourist sector. In this regard, a program of water development for about US$12 million over the 1981-85 period is envisaged. The program includes as a main project the Roseau Dam which is regarded as necessary to meet projected demand in Castries and the Northwest through to 1995. The rest of the capital program involves improvementand extension of supplies to other areas of the island. The constructionof a water dam at Sarat, Roseau, is being studied. If feasible, it is expected that the dam will supply irrigation water to the Roseau Valley and provide water to domestic users in the city during the dry season. The Government is looking to CDB, CIDA and BDD for joint financing of the project.

104. The financial position of the Water Authority urgently needs to be improved. Increase in tariff levels were implementedin 1980 and 1981 to allow the Central Water Authority to meet its operating expenses, to carry out proper maintenancework, and to make a contributionto the financing of the investment program. Based on the new tariff levels, the Water Authority had budgeted for a current operating surplus of about US$90,000 for 1981 and expected a larger operating surplus in 1982 even after increasingprovision for maintenance. However, the Central Government has fallen into arrears in its payments to the Water Authority mainly for water supplied to rural areas, and this had seriously affected the Authority'scash flow position. Under existing arrangements,the Water Authority bills the Central Government for water supplied to rural users on a bulk source-meteredbasis, and the Government in turn collects from users on an assessment basis, averaging around EC$10 per year per household. This arrangement results in a considerablesubsidy to rural users who account for more than 40 percent of the Water Authority's output. There is an urgent need to eliminate the arrears incurred by the Central Government,and to examine the type and degree of water consumptionsubsidies to be granted to rural communities. In this connection a proposal is under active considerationfor the introductionof a system of economic rates for the country as a whole over the next several years.

105. The financial position of the Water Authority can also be strengthenedby improving billing and collection procedures. In fact, a program is under way to computerizethe accounts and billing functions of the Water Authority in order to streamline and speed up procedures and recovery, and to provide timely informationto management. Systems design assistance is being provided through the Port Authority. Changes in the rate system are needed to relate charges to quantities of water consumed. This may have a positive effect on the cash flow of the Water Authority while encouraging conservationand facilitating,through a progressiverate system, the - 40 -

government policy to make piped water available to the low-income sectors of the society at low cost.

106. External management and technical assistance to the Water Autho- rity will be needed in the forthcomingyears. Some management and technical assistance continues to be provided by the Wessex Water Au- thority under an arrangementthat is currently due to terminate in July 1982. However, continuingdifficulty in locating local replacement staff makes it necessary for this arrangement,or a new one, to continue beyond that date. - 41 -

VI. PRIVATE INVESTMENTAND EXPORT PROMOTION

Introduction

107. Because of the small size of the domestic market, the development of St. Lucia's economy is closely linked to the expansion in exports. The latter is, in turn, inextricablyrelated to private (local and foreign) investment in the most important activities,namely agriculture, tourism and industry. Therefore, some of the issues we will refer to in this chapter have been already discussed in the previous sectoral issues chapter.

Investment Climate

108. The country is currently ruled by a provisionalgovernment and official policies towards the private sector will have to be formula- ted once a new constitutionalgovernment is elected. Until 1979, official policies were strongly private sector oriented. These policies resulted in a rapid economic expansion in agriculture,tourism and manufacturingand made the economy of St. Lucia one of the most diversified in the Eastern Caribbean. Since 1979, the situation has changed. In fact, the political uncertainties created by the leadership struggle within the then Government and some anti-privatesector rhetoric, have negatively affected the investment climate. The improvement of the investment climate appears to be perhaps the most important prerequisitefor expanded private activities in the near future. This improvementwould require: (a) the existence of political stability that the country expects to achieve with the new elections; (b) the existence of good, smooth industrial relations and a wage policy based on productivity;and (c) a sympatheticattitude on the part of the Government towards the private sector.

Main Issues

109. The resolutionof the land tenure problems is a crucial requirement for agriculture. As discussed above, only few farmers have legal titles to the land they cultivate and that offers little incentive to on-farm investment. Moreover, the lack of land titles prevents many farmers from obtaining agriculturalloans. Therefore, intensifiedef- forts to speed up cadastral surveys and land titling in priority areas are recommended.

110. The promotion of overseas investmentsshould continue. The National DevelopmentCooperation might contemplateadditional measures to enhance present promotionalefforts, such as the establishmentof new overseas offices and the contractingof private consultant firms experiencedin investment promotion.

111. Explicit criteria should be used to grant fiscal incentives. Within the CARICOM Harmonizationof Fiscal Incentive Guidelines, St. Lucia offers tax incentives of up to 15 years. The practice is to grant tax exemptions for an initial number of years and a further review determines if the tax concession will be prolonged or not. However, there is not a clear, explicit criteria to grant these fiscal incentives and, therefore, they should be established. - 42 -

112. The Tourist Board needs to be strengthenedso it can play an active and more aggresive role in tourism promotion. The improvement of the economic infrastructureis another crucial requirementfor tourism development. In particular electricity,roads, water and airports require attention.

113. Port services are unreliable and very expensive. This is a major bottleneck for any export/importactivity and is associated,mainly, with the system of payments to the workers: by hour and not by volume.

114. The maintenanceof a realistic exchange rate should also be considered an essential element of any effective program directed towards stimulatingexports of goods and services. The need to monitor closely the competitivenessof the country's exports has become increasinglyimportant recently owing to the appreciationof the US$. Since the EC$ is pegged to the US$, it has appreciatedconsiderably against pound sterling during the past year. This developmenthas been particularlyharmful to the banana industry of the Eastern Caribbean and to other exports to the EEC, and it has also rendered tourist services more expensive for visitors from Europe and Canada.

115. There are some other important requirements,previously discussed, to foster private investment such as: (a) the need to upgrade and increase the supply of managerial and skilled personnel by appropriate training programs while maintaining the largely liberal work permits policy; and (b) the provision of adequate extension services by the authoritiesto help increase efficiency and productivityin agriculture.

Investment Opportunitiesand Fiscal Incentives

116. St. Lucia offers investment opportunitiesin a relativelywide range of activities. This can be illustratedby the following list of activities prepared by the National DevelopmentCorporation:

Agro Industries

1. Bisccuits & Snack Foods 2. Fishery 3. Processing Food Products 4. Fruit Juice ConcentrationPlant 5. Charcoal - 43 -

Tourism

1. Holiday Village 2. Pointe Seraphin 3. Micro Projects

Industrialand Manufacturing

1. Auto Parts Re-building 2. Brick Manufacture 3. Boat Building and Maintenance 4. Housing and Construction 5. ManufacturingSandals 6. Machine Shop 7. Sashes and Doors 8. Sporting Equipment 9. Small Foundry 10. Textile Mill 11. Uniform Manufacture - 44 -

VII. PUBLIC SECTOR INVESTMENT PROGRAM

Issues Related to the Executionof the Public Sector InvestementPro- gram FY 1981/82

117. The public sector investment program was satisfactorilyimplemen- ted during FY 1981/82 notwithstandingthe state of the public sector finances and some procedural delays in donor's disbursements. Provisionalestimates of the total disbursementson capital projects amount to EC$36.3 million, or about 7 per cent of GDP.1/ This investment was financed mostly by external sources since public sector savings were negative and no net borrowing by the public sector from the commercial banks took place.

118. With respect to the compositionof investment for FY 1981/82, agriculturewas the leading sector as far as disbursementsare concerned, largely as a result of the banana rehabilitationprogram. Other important programs were feeder roads and school rehabilitation. Only 2 per cent of the estimated disbursementswere allocated to industrial projects, a situation chiefly associatedwith the lack of funds for industrialcredit programms.

Progress on Specific Projects

119. About EC$6.6 million were disbursed for banana rehabilitation. As a result, banana production picked up and reached the same level as in 1978. Some other programs, also channeled through the Banana Gro- wers Association,continued to be implemented. Other agricultural programs were carried out with various degrees of success; foremost among them, the Coconut rehabilitationand development,the Roseau AgriculturalResettlement, Beausejour Livestock, Crop Diversification and Orchard Crop Rehabilitation.

120. A land titling program on a pilot basis started during FY 1981/82 and is expected to be completed the next fiscal year. Given the importance of the land tenure issue, this type of project should be expanded to the whole country. Inventory of forest resources, another technical assistance project in agriculture,started in the current fiscal year.

121. Large disbursementstook place in relation to the feeder roads programs. This is illustratedby the fact that almost EC$7 million, or 20 per cent of the total investment during FY 1981/82, is estimated to have been disbursed on feeder road programs. However, as mentioned above, road maintenancehas not received the necessary attention. This highlights the need for a coordinatedprogram among the various donors that fully takes into acount the situation of the roads in the country.

1/ Includes projects financed by Hess Oil Company which are executed outside the budget. According to most recent informationfrom the Authoritiesthe actual level of investment exceeded this figure. - 45 -

122. Improvementof the Hewanorra Airport continued. A disbursement of around EC$1.9 million is estimated to have taken place during FY 1981/82. Progress was also satisfactory,in rural electrification with an estimated disbursementof more than EC$l million. The agreement with AQUATER to carry out the studies on geothermal energy is an important developmentthat should be carefully followed up.

123. Disbursementson water supply programs exceeded EC$2 million with more than one-half of this amount for the benefit of rural areas. School rehabilitationprograms also benefited from a large amount of disbursements,about EC$5.5 million.

124. Execution of industrial developmentprojects lagged somewhat. Although some projects such as the industrial estates and the Hewanor- ra Free Zone progressed as expected, only small amounts of disbursements took place in relation to credit programs.

125. The weakness of public sector finances, particularlyof the Cen- tral Government,led to almost a complete dependence on external sources for the execution of FY 1981/82 public investment program (Sta- tistical Appendix Table 50). Since most of the projects require some local contribution,timely execution of the investment program and maintenanceworks depend upon the ability of the public sector to revert to a position of generating savings.

126. The absence of effective institutionalarrangements to monitor and oversee the implementationof the overall public sector program had been a major shortcoming. This prevented the authoritiesfrom being well informed of the progress experiencedby various projects for which the Government is ultimately responsible. The authorities in St. Lucia have become cognisantof the need for strengtheningthe capacity of the administrativesystems to manage internal resources and attract external capital both public and private. With this in mind the Ministry of Finance and Planning has been totally integrated with particular emphasis on economic management, fiscal analysis, macroeconomicplanning, project preparation,monitoring, and control as well as improved project accounting. This has been done by setting up four separate divisions: the Budget, Fiscal, Planning and Administrationdivisions. Expenditure forecastingand control have been considerablyhightened to put the public finances in good shape. A new budgeting system is being put in place which features two separate budgets, an AdministrativeBudget and a Cash Budget. Outlines of the budget for two years in advance will be prepared. The technical capacity of the Planning Division is being strengthenedand will include four units: (1) The Economic Planning Unit (which includes the Energy Division); (2) The EnvironmentalPlanning Unit; (3) The Architecturaland Building Design Section; and (4) The Social Developmentand Manpower Unit, which is a new unit. The Department of Statisticshas now been transferredto the Minisitry of Finance and Planning and ECCM and IMF assistance have been utilized to improve quality and range of statistics. The management and structure of the Ministries, apart from Finance and Planning, are being seriously reviewed in an effort to streamlineeconomic policy making and their increased efficiencyas executing agencies. These improvementsare expected to become operationalduring the fiscal year 1982/83. - 46 -

127. Some programs need to be more carefully defined in order to fit into a clearly defined strategy. For instance, programs on bananas should be implementedconsistently with the agricultural diversificationefforts and in line with the goal of achieving an efficient banana industry. Beneficiariesof these programs should not be selected or excluded simply on the basis of the size of the land they cultivate.

128. Coordinatedefforts among various donors are required in areas such as road programs. Large amounts of money were spent on roads by the donors involved but, as mentioned before, road rehabilitationis grossly inadequate. A close coordinationamong donors would result in a more comprehensiveand efficient road program, where overall priori- ties and needs, including road rehabilitation,would be fully taken into consideration. - 47 -

VIII. PROSPECTS

The Public Sector InvestmentProgram for FY 1982/83-FY 1985/86

129. The updated public sector investment program for the next four fiscal years, FY 1982/83 to FY 1985/86 is projected at EC$204.1 million, or about 10 per cent of GDP. It allocates 26 per cent of investment expendituresto directly productive activities,50 per cent to supporting economic infrastructure,and 24 per cent to social infrastructure. On the whole, the program appears to be balanced. Although infrastructuralprojects absorb about three fourths of the total public investment,this should not be interpretedas an imbalance since substantialadditional infrastructure(electricity, roads, airports, water, and sewerage) is needed to encourage private investment in tourism and industrialactivities. StatisticalAppendix Table 51 shows a sectoral breakdown of the public investment program.

130. The investmentprogram, if successfullycarried out and comple- mented by adequate policies previously discussed, can contributeto an estimated annual increase in GDP of about 5-6 per cent during the next five years, an achievable target given the experience of St. Lucia during the 1960s and most of the 1970s. To fully realize the contribution of the investmentprogram to the economic growth of St. Lucia, three major requisitesneed to be carefully taken into consideration: (a) new investmentsmust not prevent the authoritiesfrom carrying out regular maintenanceworks; (b) programs directed toward agricultural diversificationshould be implementedin line with a clear, well- defined strategy;and (c) additional technical assistancewill have to be obtained for agriculture,industrial development,and investment management.

131. The total financing requirementsfor the investment program during FY 1982/83-FY 1985/86 are estimated at about EC$232 million, including external amortizationof EC$13 million, improvementin the financial position with ECCA of EC$12 million, and a slight improvementin the position of the public sector with the domestic banking system of about EC$2 million. These requirementsare projected to be filled by (a) public sector savings of EC$81 million or 35 per cent of the total; and (b) external capital grants and loans of EC$151 million or 65 per cent.

132. Public sector savings will have to be raised promptly to cover the domestic component financing of the investment program. They should average about 4.5 per cent of GDP during the next five years, i.e., revert to the pre-1979 level. The indicated level of public sector savings would allow the Government to finance most of the social infrastructuralprojects, to pay the scheduledamortization of external loans, to improve its position with the Monetary Authority, and to make a contributionto the financing of the directly productive and economic infrastructuralprojects of 10 to 15 per cent of the project costs. - 48 -

133. Additional external commitmentsamounting to EC$130 million are needed. Although disbursementsfor these projects are projected to start mostly toward the end of the FY 1982/83-FY 1985/86 period, external sources need to be identified expeditiously. These new commit- ments are expected to fund important projects such as road rehabilitation, agriculturaldevelopment, upgrading electricityservices, and improving water services.

Creditworthiness

134. The outstandingand disbursed public and publicly guaranteed external debt as of the end of 1981 was estimated at about US$18 million or 14 per cent of GDP. The debt service ratio accounts for about 2 per cent of foreign exchange earnings and is expected to remain at that level during the coming years. Therefore, the external debt position can be regarded as favorable. However, due mainly to the present situationof the public finances, St. Lucia should exercise caution in assuming any additional external loan on conventional terms. If the government pursues prudent economic and fiscal policies, public sector savings are raised to their pre-1979 levels and a favorable investment climate is reestablished,the country should enjoy a greater margin for loans on conventionalterms for external resources required to implement the investment program. Appropriate measures to strengthen public finances and achievementof pre-1979 level of public sector savings are urgent prerequisitesfor St. Lucia's return to the path of sound economic growth and its creditworthinessfor external borrowing. - 49 - APPENDIX A

St. Lucia: Exchange and Trade System

1. Exchange rate system

The currency of St. Lucia is the East Caribbean dollar,l/ which is issued by the East Caribbean Currency Authority. The East Caribbean dollar is pegged to the U.S. dollar, the intervention currency, at EC$2.70 per US$1. On December 31, 1981 the buying and selling rates for the U.S. dollar were EC$2.6848 and EC$2.7169, respectively, per US$1. The Currency Authority also quotes daily rates for the Canadian dollar and the pound sterling.

St. Lucia formally accepted the obligations of Article VIII, Sec- tions 2, 3, and 4 of the Fund Agreement, on May 30, 1980.

2. Administration of control

Exchange control is administered by the Ministry of Finance and applies to all currencies. Export licensing is required for a range of primary products. Import licenses are issued by the Price Commission of the Ministry of Trade.

3. Prescription of currency

Settlements with residents of member countries of the Caribbean Common Market (CARICOM)2/ must be made either in the currency of the CARICOM country concerned or in East Caribbean dollars. Settlements with residents of other countries may be made either in any foreign currency 3/ or in East Caribbean dollars. Where justified by the nature of the transaction, approval may be given to make payment for goods and services in a currency different from that of the country to which payment is to be made.

4. Nonresident accounts

External Accounts may be opened for nonresidents with the approval of the Ministry of Finance and may be maintained in any currency re- quested. These accounts may be credited with proceeds from the sale of foreign currencies and with transfers from other External Accounts but not with payments by residents. They may be debited for payments to residents payable in East Caribbean dollars and, after approval by the Ministry of Finance, for the cost of foreign exchange required for

1/ The East Caribbean dollar is also the currency of Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts-Nevis, and St. Vincent and the Grenadines. 2/ The CARICOM countries are Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago. 3/ Foreign currencies comprise all currencies other than the East Caribbean dollar. - 5u - APPENDIX A

travel purposes. Resident companies may be allowed to open External Accounts (in East Caribbean currency or the currency of receipt), provided that deposits to the accounts are restricted to funds received from overseas and that drawings on the accounts are for payments abroad.

5. Imports and import payments

All imports from South Africa are prohibited. Most goods may be freely imported under open general license. Certain other commodities require individual licenses, unless imported from CARICOM countries; St. Lucia currently follows the new CARICOM rules of origin adopted in June 1981. Payments for authorizedimports are permitted upon applica- tion and submission of documentary evidence. Advance payments for imports require prior approval by the Ministry of Finance.

Imports of live animals, milk, meat, fish, eggs, fertilizers,and most agricultural and industrial machinery are exempt from import duties. Other exempt items include most imports from CARICOM and East Caribbean Common Market (ECCM) countries, imports under industrial incentive legislationand items exempted under the Hotel Aids Ordinance. In August 1980, construction materials (including lumber and cement) were exempted from tariffs and stamp duties for a period covering October 1980 to March 1981. Import duties range from 5 per cent to 35 per cent and are scheduled to be brought into line with the CARICOM common external tariff by 1983; duties on bay rum and firearms bear a higher rate of 70 per cent. Imports of fertilizers are subject to a stamp duty of 1/5 of 1 per cent on the c.i.f. value. All other imports, excepting items on the price control list, are subject to stamp duty at 7 per cent of the c.i.f. value.

6. Payments for invisibles

Residents may purchase foreign exchange from authorized banks up to the equivalent of EC$1,500 per annum for travel outside the East Caribbean Currency Area; however, this limit may be exceeded with per- mission from the Ministry of Finance. For travel within the CARICOM area using CARICOM travelers' checks (which are denominated in Trinidad and Tobago currency), the basic allowance is EC$2,000 a year. There are no limits on the amount of local currency that may be taken out of the country. Profits may be remitted in full, subject to confirmation by the Commissioner of Inland Revenue of registration for income tax purposes. However, in cases where profits are deemed to be excessive, the Ministry of Finance reserves the right to phase remittances over a reasonable period of time. Foreign exchange is made available for all other invisible transactions. Insurance premiums are subject to tax, with a higher rate levied on nonresident insurers. - 51 - APPENDIX A

7. Exports and export proceeds

For certain commodities,no licenses are required for the export of goods to any destination. Proceeds from exports must in principle be surrendered unless an exporter qualifies for operating an External Account. The surrender requirement is not, however, enforced. A fee of EC$0.2 per barrel is applied on re-exports of petroleum.

8. Proceeds from invisibles

Foreign currency proceeds from transactionsin invisiblesmust, in principle,be surrendered. Travelers to St. Lucia may bring in freely notes and coin denominated in East Caribbeandollars or in any foreign currency. Foreign currency coin is not normally exchanged.

9. Capital

All outward capital transfers require exchange control approval. The purchase by residents of foreign currency securities and of real estate situated abroad for private purposes is not normally permitted. Personal capital transfers, such as inheritancesto nonresidents, require approval, which is normally granted provided that local tax liabilities have been discharged. Sale of property is subject to tax levied at a higher rate in the case of nonresident sellers.

10. Gold

There are no restrictionson imports of gold.

Changes since June 1980

August 19, 1980. Building materials, including lumber, galvanized sheets, nails, roofing and cement were exempted from import duties and stamp duties, through March 31, 1981.

June 1, 1981. New CARICOM rules of origin to grant preferentialimport treatmentwithin CARICOM area were adopted.

November 25, 1981. Stamp duty rate was increased from 6 per cent to 7 per cent of the c.i.f. value of dutiable imports. - 52 -

APPL.aDIA d

St. Lucia: -ax Sunmar, :'ovember 1901

(All amouncs ic.Easc Caribbean dollars)

Tax Nature of Tax Exempticns and Deductions Rates

Taxes on income and orof its

1.1 Taxes on income Basis of assessment. The basis of Exemptions. Official emoiuments of Governor Income tax is payable ac aracuated assessments is the income of the General, income ,other tnan that leriven races on chargeable income of ind:- flat previous calendar year for indi- from trade), of lo,al auchorities. Statu- vicuals and at a rate for com- viduals and the accounting year -o-y bodies, friencly societies. ecciesias- Danies as follows: for zompanies. Separate assess- rical, cnaritabie, and education instita- ment of husband and wife can be cions. Also emolunents payable to permanent (a) Individuals made. Wage and salary earners are consular memmers, rtrmed forces, wound and tax (%) subject to a pay-as-you-earn svs- disability iensions and gracuities paid to Income bracket Rate of tem. For income taxed according armed lorces, income of the Covernment ECSI - 2,300S 1: to PAYE provisions, chargeable in- Savings Bank, `ncome derived from anv allow- 3,001 - ',;00 come is income of the year of ance no public officers. allowances co the 4,501 - 91,JOO 15 3' assessment. Thief Justice of che West Indies and scholar- ,6)1 - 9,000 ships and other educational allowances, in- 9, d - il.lQ,Ol come derived from investments on deposits of ll,fi01 - i 3. 000 30 approved superannuation funds, and contribu- 13, ol - 13,300 a; tiuns to superannuation .'unds. 15.,)nl - 2n.na n 4 D,o1i - 30,0C0 ;1) :(.0l01 - tie .00 5 5 50,1001 and over nO

(b) Companies 45

Liability to income tax. Indi- Deductio:ns include aormal operating costs, viduais are taxed on income from Interesc, rent of land and industrial any source within St. Lucia. buiiding. aepreciation, previous losses not Income tax is levied on the in- alreaday offset against income, income com- come of any company registered ing under the Hotels Aid Ordinance Act 1959, in St. Lucia and on the income the Development Incentives Ordinance 1964, of foreign companies which is and other tax incentive legislation. Con- generated in St. Lucia. tributions to charitable, religious, education, and scientific institutions. Divi- dends are taxable in the shareholder's hands.

Assessable income is defined as Personal reliefs (a) earnings in money or kind Personal allowance EC$2,000 from employment; (b) profits Wife allowance from trade; (c) dividends, in- Normal ECSl,500 rerest, and discounts; (d) pen- Allowance for alimony paid Full Amounc sions and annuities; (e) pro- Each child ECS 600 perty income; (f) undistributed profits of a company controlled Housekeeper ECS 250 by no more than S persons may be Dependent relative (limit of ECS400 deemed income of the share- on dependent's income) ECS i5O holders and taxes as such pro- Life assurance (limit of 1/6 of viding it could be distributed chargeable income or EC$5,O0 which- without detriment to the com- ever is less, or 7% of caDital pany's existing business. Sub- sum assured) Whole Premium sequent distribution of such in- Earned income relief: tome is excluded from tax. 10% of earned income: maximum allowed is $500 90% of wife's earned income; maximum allowed is $500. Medical allowance: EC3400

1.2 Tax on interest, rents, tax on interest paid to nonresi- First ECS3,000 of interest on bank royalties, premiums dents is deductible for companies deposits and some other deposits and annuities pay- and credited at source against the are exempt from tax. able to nonresi- recipients' liabilities for the dents. relevant year of assessment. - 53 -

APPENDIX B

St. Lucia: Tax Summary, November 1981 (continued)

(All amounts in East Caribbean dollars)

Tax Nature of Tax Exemptions and Deductions Rates

1.3 Nonresident withhold- Payments made to a nonresident in the Nil. Dividends - 20 per cent ing tax form of a dividend, interest on dis- Rental payments - 20 per cent counts, rental, lease, premium on in- All other payments - 25 per cent come, royalties, management fees, commission, annuities or any other payment of an income nature are subject to withholding tax.

2. Taxes on Property

2.1 Land and Buildings Basis of assessment. Rental value of Government buildings used for For houses, 7 per cent of assessed house or area of land. public purposes, buildings rental value and land. First 10 acres owned and used by the University exempt; 10-1/2 to 49 acres EC$0.25 per of the West Indies. acre; 49-1/2 to 99 acres EC$0.50 per acre; 100 to 400 acres EC$0.75 per acre; 401 and up EC$1.00 per acre.

2.2 Succession duty A progressive tax levied on the value None. Value of Estate Succession duty of estate. Rate 500-1,500 1 per cent 1,501-2,500 2 per cent 2,501-5,000 4 per cent 5,001-15,000 5 per cent 15,001-25,000 6 per cent 25,001-50,000 8 per cent 50,001-100,000 10 per cent 100,001-195,000 12 per cent 195,001-290,000 15 per cent 290,001-385,000 20 per cent 385,001 and over 25 per cent

2.3 Property transfer tax A tax on all property transfers to be None (a) Where the vendor is not a citizen (Part of Stamp paid by the vendors of St. Lucia - 10 per cent Duty Ordinance) (b) Where the vendor is a citizen 2 per cent ad valorem.

3. Taxes and Goods and Services

3.1 Consumption tax Consumption taxes comprise ad valorem Goods which are exempt from cus- Representative rates include: and specific taxes on specific goods toms duty under the provisions of Motor vehicles for the transport of (mainly consumer durables and luxu- the Second Schedule of the Customs goods, and motor vehicle parts 5% ries) payable by the importer. The Act No. 25 of 1967 or under any Chemicals, perfumes, and cosmetics 15% same rate is applicable to locally specific enactment or under any Travel goods, carpets, bed linen, produced goods (e.g., beer, rum, existing agreement. Raw materials footwear, air conditioners, washing cigarettes, and furniture). used in the manufacture of goods machines, radios and televisions, liable to consumption taxes. watches 15-20% Motor cars (under 1,800 cc) 30Z Jewelry and records 35% Motor cars (over 1,800 cc) 60% Matches -. 50 cents per gross box Malt - 75 cents per liquid gallon Beer - EC$3.66 per liquid gallon Wine - 30 cents per liquid gallon 54 -

APPESDIX 3

Sc. Lucia. Tax Summary, November 1981 (continued)

(All amounts in Eas, Caribbean dollars)

Tax Nature of Tax Exemptions ana Deductions lates

-Chmpagne - ECS1.50 per :iquid gaiion Rum - ECS25.00 Der liquid gallon iro-,dv - EC$30.00 per liquid gallon Whiskey - ECS40.00 per iiquid gallon Gin - ECS40.00 per liquid gallon Vodka - ECS35.00 per liquid gallon Agarettes - ECS10.00 oer pound

3.2 Consumption tax on fuel Specific. Kerosene fuel. ECS0.6147 per imperial zallon of motor spirit ECS0.6275 per imperial gallon of gas oil, diesel oil.

3.3 Excise duties Levied on locally manufactured None. ECS6 per proof gallon. alcohol

3.4 Hotel accommodation Levied on hotel room, hotel None. 7 per cent. tax food and drink charges.

3.5 Embarkation tax Passengers embarking at an ECSS per person. airport for external flights.

3.6 Entertainment tax Levied on receipts of gaming None. 5 per cent of gate receipts. and sporting events

4. Stamp duties Ad valorem and specific duties None. Represencative rates levied on a range of specified EC$18-50 - 5 cents instruments including receipts, EC$51-100 - 10 cents certificates, and other legal ECS101-500 - 25 zents documents. EC$501-1.000 - 50 cents EC$1,001 and above - EC$1.00

5. Taxes on Imports

5.1 Taxes on imports Since 1973 St. Lucia bas used the Live animals, milk, meat, fish, The rates vary from 5 to 35 per cent. CCCN customs classification. In eggs, fertilizers, and most agri- There are, however, higher rates on bay general imports from within CARICOM cultural and industrial machinery. rum and firearms: 70 per cent. and the ECCM are exempt from duty Also, imports exempt under indus- providing they satisfy area origin trial incentives legislation; and requirements. Imports entering from those exempt under Hotel Aids outside CARICOM are subject to coon Ordinance. Diplomatic personnel. external tariff but St. Lucia and other List of items grouped under the LDC members of CARICOM have been given Second Schedule to the Customs until 1983 to adjust their rates to Act (e.g., goods for industry, the common rates. agriculture, fishery, airlines, educational and cultural purposes, sports goods and other goods for movement of persons). - 55 -

APPENDIX B

St. Lucia. Tax Summary, November 1981 (concluded)

(All amounts in East Caribbean dollars)

Tax Nature of Tax Exemptions and Deductions Rates

5. 2 Stamp dutv on A flat rate duty levied on every Bill of entry for newspapers, cata- 7 per cent of c.i.f. value except for imports bill of entry for imported goods. logues, and samples of no commercial fertilizers where the rate is Olle value. Government imports. Statu- fifth of I per cent. tory bodies and other organizations approved by Government. b.1 Export taxes Levied on bananas only. One quarter of a cent per pound. c,.2 Throughput tax Tax on oil re-exports. EC$0.02 per barrel.

7. Licenses

7.1 Bank license License fee for commercial banks. None. EC$20,000 for main banks plus EC$1,000 for each branch.

7.2 Insurance compa- Annual registration license for None. Foreign company: life insurance nies' license insurance companies. EC$1,500 per annum; motor vehicles registration EC$1,000; other insurance EC$500- Local company EC$500.

7.3 Liquor license Liceoses to sell liquor None. Licenses range from EC$120 to EC$3,000 per year depending on the size of the establishment which is obtaining the license.

7.4 Dealers' license Licenses to sell vehicles None. EC$3,000 per year.

8. Fees

8.1 Profession and busi- None. Range from EC$200 to EC$300 per year. ness registration fee

8.2 Passport fees None. EC$30.

8.3 Citizenships None. CARICOMmembers EC$300. Nonmembers EC$1,000.

8.4 Motor vehicle fees None. Motorcycle EC$40; motorcycle with sidecar EC$60; automobiles of less than 2,800 lbs. EC$80; automobiles of more than 2,800 lbs. EC$100; hearses EC$200; trailers of under one ton EC$80; trailers of over one ton EC$240; container trailers EC$500.

8.5 Other fees ;ooo. Driving permit, learners' certificate, driver examination EC$20; motor vehicle registration, police reports, visitors' permit to drive EC$15; registration of change of ownership EC$15; duplicate license, examination of vehicles EC$10; weights and measures from EC$1 to CC$10. - 56 -

APPENDIX C

St. Lucia: Changes in the Tax System Since 1980

I. March 24, 1980

The following changes in the tax system were approved, along with the budget presentationon March 24, 1980.

1. Tncome tax amendments

The chargeable income of an association of underwriters shall be 10 per cent of the amount of gross direct premiums.

A married woman living with her husband may file a separate income tax return. Hitherto the income of a married woman living with her husband was assessed in the name of her husband.

Where a company makes a loan or advances any money to a shareholder, director or higher-paid employee (whose remuneration is at least EC$15,000),the amount of such loan shall be deemed to be a dividend accrued to the employee, unless this person satisfies the Comptroller that (a) the loan or advance is repaid within one year; and (b) that the repaymentwas not made as a part of a series of loans or advances and repayments.

All companies registered in St. Lucia shall deduct from the paid dividends a tax levied at the rate paid by the company on the income out of which such dividend was paid. The amount of this tax shall be paid to the Comptroller of Inland Revenue within 15 days of the date of paymentof the dividend. This tax is held on account, and the shareholder will be given a full credit for it when assessed for income tax.

Every person who makes any payment to a nonresident (one who re- sides in St. Lucia less than 182 days in any given fiscal year) shall deduct tax from such payments, and pay such tax to the Comptroller of Inland Revenue within 30 days. Tax shall be deducted at a rate of 20 per cent on dividends and rental payments, and 25 per cent on any other payments.

Every nonresident company carrying on business in St. Lucia shall be liable to withholding tax. Profits liable to withholding tax under this ordinanceshall be the chargeable income, accrued from the carrying on of business in St. Lucia, remaining after the deduction of (a) any income tax payable in respect of such chargeable income; and (b) any part of such chargeable income which has been reinvested in St. Lucia. - 57 -

APPENDIX C

2. Enactment of tax on sa op e

The following tax on the sale of property was enacted: (1) where the vendor is a citizen of St. Lucia (a) 2-1/2 per cent ad valorem from EC$10,850 to EC$30,000, (b) 5 per cent ad valorem from EC$30,001 to EC$80,000, and (c) 7-1/2 per cent ad valorem from EC$80,001 and over; and (2) where the vendor is not a citizen of St. Lucia, 10 per cent ad valorem.

3. Enactment of tax on insurancepremiums

In addition to income tax payable under section 37 of the Income Tax Ordinance, a company carrying general insurance business shall pay (a) 3 per cent of the gross direct premium in respect of resident insurers; and (b) 5 per cent of the gross direct premium in respect of nonresident insurers.

A company carrying on life insurance business shall pay (a) 1-1/2 per cent of the premium, for the case of a resident company; and (b) in the case of a nonresident company, 3 per cent of the premium.

4. Consumption tax

The consumption tax law of 1968 was amended to increase the rates of all the items in the previous law and to broaden the coverage. The increases range from 5 per cent to 50 per cent on items such as liquor, cigarettes, plastic shoes, and certain passenger vehicles.

5. Hotel accommodationtax

The rate was increasedfrom 5 to 7 per cent.

6. Excise tax on liquor

The rate per gallon of locally manufacturedspirits was increased from EC$3.50 to EC$6.00.

7. Bank licenses

The cost of a license to operate a private commercial bank was increased from EC$4,000 to EC$20,000 per year.

8. Insurancecompanies' licenses

The annual cost of a license to operate an insurance business was increasedas shown below: - 58 -

APPENDIX C

Foreign companies Old license fee New license fee (In East Caribbean dollars) Life insurance 750 1,500 Motor vehicle insurance 500 1,000 Any other insurance 250 500 Agent or broker 250 500 Local companies 250 500

9. Liquor licenses License fees to sell liquor were increased. New licenses range from EC$120 to EC$3,000 per year, depending on the size of the estab- lishmentwhich is obtaining the license.

10. Dealers' licenses

These license fees were increased to EC$3,000 per year.

11. Stamp duty on imports The stamp duty on imports was raised from 5 per cent to 6 per cent of the c.i.f. value except for fertilizers for which the rate is maintained at 1/5 of 1 per cent.

12. Fees

Profession and Business RegistrationAct

Every person who engages or intends to engage in any profession or business shall register with the Registrar and pay a fee. All fees must be paid into the Consolidated Fund. Professionals included are lawyers, engineers,doctors, accountants, hairdressers, etc. Fees range from EC$200 to EC$300.

Passport fees were increasedfrom EC$10 to EC$20.

Citizenshipfees for nationals of CARICOM were increased from EC$200 to EC$300. Citizenship fees to non-CARICOM nationals were increased from EC$200 to EC$1,000. In addition to the fees stated above, there is a stamp duty payable on each applicationof EC$25. 59 - APPENDIX C

Motor vehicle fees (new schedule):

Annual fee

Motorcycle EC$40 Motorcycle with sidecar 60 Automobiles of less than 2,800 lbs. 80 Automobiles of more than 2,800 lbs. 100 Hearses 200 Trailers under one ton 80 Trailers over one ton 240 Container trailers 500

Other fees (new schedule):

Driving permit, learner's certificate, driver examination, motor vehicle registration, visitor permits to drive, and police reports EC$20 Registration of change of ownership 15 Duplicate of license, examination of vehicles 10 Weight and measure fees ranging from EC$1 to EC$10 5

II. April 5, 1980

Consumption duties on gasoline were reduced from EC$0.67 to EC$0.62 per gallon and on diesel from EC$0.67 to EC$0.53 per gallon.

III. August 1980

Following Hurricane Allen, Cabinet approved the exemption of all duties including import duty, consumption duty, and stamp duty on the following items:

a. Clothing and foodstuffs (noncommercial quantities) to assist victims of Hurricane Allen - from August 1980 to December 31, 1981.

b. Radio equipment consigned to the St. Lucia Amateur Radio Club (still in existence).

c. Building materials (i.e., lumber, galvanized sheets, nails, galvanized ridging, wooden shingles, asphalt roofing tiles, and cement) from August 19, 1980 to March 31, 1981. - 60 -

APPENDIX C

IV. January 5, 1981: Income Tax Changes

Income tax rates to be applied to persons' chargeable income were changed as follows:

From: To: Income bracket Rates Income bracket Rates (EC$) (Per cent) (EC$) (Per cent)

Under 2,000 5 Under 3,000 5 2,001-3,500 10 3,001-4,500 10 3,501-7,000 20 4,501-6,000 15 7,001-10,000 30 6,001-9,000 20 10,001-15,000 40 9,001-11,000 25 15,001-20,000 55 11,001-13,000 30 20,001 and over 60 13,001-15,000 35 15,001-20,000 40 20,001-30,000 50 30,001-50,000 55 50,001 and over 60

Allowances were increasedas follows:

Spouse allowances,from EC$1,000 to EC$1,500 Child allowances, from EC$300 to EC$600 Education allowances,from ECS1,000 to EC$1,750 Medical allowances,from EC$300 to EC$400 Dependent relative allowances,from EC$250 to EC$350

The first EC$75,000 of income earned by farmers and fishermen from their occupation during 1980-83 was exempted from income tax.

V. November 1981

Passport fee was increased from EC$20 to EC$30.

Exit fees of EC$5.00 were introduced for each person leaving St. Lucia.

The stamp duty on imported goods was increased from 6 per cent to 7 per cent of the c.i.f. value of dutiable merchandise.

Stamp duty on conveyanceor transfer on sale of property was reduced to 2 per cent ad valorem on value of property from:

2-1/2 per cent ad valorem from EC$10,850 to EC$30,000 5 per cent ad valorem from EC$30,001 to EC$80,000 and 7-1/2 per cent ad valorem from EC$80,001 and over; wnere the vendor is a citizen of St. Lucia or a company incorporatedin St. Lucia. TWherethe vendor is not a citizen of St. Lucia the rate was maintainedat 10 per cent. - 61 -

APPENDIX C

Consumptiontaxes on a list of products including: wines and spirits, tobacco products, pet foods, paints and varnishes, vehicles, tires, refrigerators,air conditioners,cookers, televisions,sound recorders and reproducers,cosmetics, toilet preparations,and furniture were increased from 20 to 50 per cent.

Consumptiontaxes ranging from 5 to 15 per cent were imposed on an additional list of products including buses, trucks, automobile parts, canned fruits and vegetables, and cosmetics. - 62 -

ST. LUCIA

GOVERNMENT'SPROJECT AND TECHNICALASSISTANCE LISTS

1. This annex contains a list of major ongoing projects, a list of projects for which external finance will be sought during the period FY1982/83-1985/86 and individual project descriptions. Each list contains the name of the project, the executing agency, the lender/ donor if any, the total cost, the external financing obtained or required, the counterpart contribution required, and the estimated recurrent costs during the FY1982/83-1985/86 period. The individual profiles contain additional information which should be of interest to potential donors or lenders, including technical assistance requirements and the present status of the project.

2. Data for these projects, which will be presented to the meeting of the Caribbean Group for Cooperation in Economic Development scheduled for June 15-18, 1982, were prepared by the Government of St. Lucia or estimated by the mission to the country during November 1981. - 63 -

ST. LUCIA: MAJOR ON-GOING PROJECTS AND SOURCES OF FINANCING

(US$ '000)

Total External Financing Counterpart Financing Recurrent Costs Cost Amount Source Amount % 1982/83- 85/86

Directly Productive Projects

Crop Diversification 224 224 UK - - Tree Crop Expansion Project I 241 241 UK - - WINBAN (Inputs) 400 400 UK - - Roseau Resettlement I 6,741 4,370 EDF,GEEST 2,371 35 Coconut Rehabilitation 704 704 UK - - Agricultural Production Credit 397 397 CDB - - Land Transformation - T.A. 296 196 OAS 270 34 Inventory of Forest Resources - T.A. 208 208 CIDA - - Industrial Estate 742 667 CDB 75 10 Small Industry Credit 205 205 CDB - - - Livestock Project II 1,430 1,430 FAO, EDF, Unknown - - Agricultural & Industrial Credits 2,857 2,000 CDB 857 30 Dennery Agricultural Development II 5,000 3,400 CDB, Unknown 1,600 32 Export and Tourism Promotion 167 167 EDF - - Land and Water Use 279 279 EDF - -

Economic Infrastructure

Feeder Roads 3,843 3,658 CDB, EDF 185 5 540 Delcer Irrigation 232 232 EDF - -- Input Storage Warehouse 400 400 UK - - - Marketing Board Improvement 106 93 UK 13 12 43 Hewanorra Airport 1,593 1,000 CDB 593 37 - Barre de I'Isle Road Reinstatement 611 611 UK - - 90 Rural Water Supply II 1,667 1,540 CDB 127 8 130 Electricity Development 10,560 8,448 CDB, Unknown 2,112 20 - Hewanorra Navigation Equipment 89 89 UK - -

Other Projects

Primary School (Extension & Rehabilitation) BHN 1.003 954 USAID 49 5 School Rehabilitation 6,333 6,333 HESS - - BHN Health Projects 110 110 USAID - - Police Training Center - La Toc 56 56 UK - - Mortgage Financing 1,574 850 CDB 724 46 Student Loans 443 443 CDB - - Training and Technical Assistance 352 352 EDF - Wind-powered Chillroom 48 48 CDB - - - 64 -

ST. LUCIA: MAJOR NEW PROJECTS AND SOURCES OF FINANCING (US$ '000)

Total External Financing Counterpart Financing Recurrent Costs Cost Amount Source Amount x 1982/83 - 85/86

Directly Productive Projects

Tree Crop Rehabilitation 2,111 1,729 UK, Unknown 382 18 Sugar Development 3,000 2,000 Unknown 1,000 33 Fishing Boat Development Project 400 300 EDF 100 33 Castries Fisheries Complex 3,500 3,250 CIDA 250 7 Rehabilitation of Forestry Sector 1,000 750 Unknown 250 25 Land Transformation and Cadastral Survey 1,481 1,000 Unknown 481 32 Agro-Industry Promotion 1,000 800 CDB, Unknown 200 20 Development of Tourist Attractions 1,250 1,000 Unknown 250 20 Coconut Rehabilitation Program 1,304 978 UK, Unknown 326 -25 Agricultural Production and Marketing Project 5,400 5,100 IFAD, CDB, Unknown 300 6 Holiday Village I 2,800 2,500 CDB 300 11 Point Seraphin Tourist Facility I 1,480 1,200 CDB, Unknown 280 19 Industrial Estates V & VI 2,140 1,530 CDB, Unknown 610 29 Development of Vieux Fort Port Industrial Zone 2,000 1,800 CDB, Unknown 200 10 Fisheries Infrastructure Development 1,250 1,000 Unknown 250 20

Economic Infrastructure

Feeder Roads IV & V 7,000 5,000 CDB, Unknown 2,000 29 Road Surfacing 3,098 2,445 Venezuela 653 21 - East Coast Road Strengthening 1,000 500 UK, Unknown 500 50 13 Hewanorra Airport Expansion I 9,300 6,045 CDB, CIDA, Unknown 3,255 35 - Improvement & Rehabilitation of Vigie Airport 1,167 900 CIDA, Unknown .267 23 - Vieux Fort Port Development & Rehabilitation 1,000 500 CDB, Unknown 500 50 - Development of Soufriere Port 600 400 Unknown 200 33 - Development of Castries Port 2,111 2,111 CDB, Unknown - - - Rural Electrification II 1,000 800 CDB, Unknown 200 20 Geothermal Energy Development I & II 10,850 10,600 EIB, Unknown 250 2 Rural and Urban Water Development & Distribution 3,000 2,500 Unknown 500 17 - Roseau Dam 15,000 12,000 CIDA, CDB, UK, 3,000 20 - Unknown West Coast Road Construction 10,000 9,000 Unknown 1,000 10 -

Other Projects

Windward Island Agricultural College 1,252 1,000 EDF 252 20 - Island-wide Sewerage System 3,370 2,700 CDB, UK, Unknown 670 20 - School Building Program 15,000 11,500 Unknown 3,500 23 - Island-wide Solid Waste Disposal 1,000 800 Unknown 200 20 - Expansion & Renovation of Victoria Hospital 1,945 1,165 Unknown 780 40 - Eealth Center Development Program 700 600 Unknown 100 14 - Housing Rehabilitation and Development 7,000 3,500 UNDP, US, UK, 3,500 50 - EDF,T-T, Venezuela E,stablishmentof Regional Hotel School 445 200 EDF 245 55 - Cultural Infrastructure Development I & II 3,000 1,800 Unknown 1,200 40 Iertiary Education Development I,II & III 1,000 700 Unknown 300 30 Mbrtgage Finance III 3,500 1,800 CDB 1,700 49 - 65 -

MAJOR TECHNICAL ASSISTANCE PROGRAMS

Sector/Programs Donor

On Going Programs

Agriculture

Land Transportation O.A.S. Inventory of Forest Resources C.I.D.A. Land and Water Use E.D.F. Banana Industry Management U.K.

Energy Geothermal Study E.I.B. Energy Assessment/Audit CARICOM

Economic Infrastructure Road Maintenance Program U.N.D.P. Water Resource Infrastructure U.K. Housing Administration Development U.N.D.P.

Tourism Tourism Sector Development O.A.S.

Industry Regional Planning and Plan Implementation U.N.D.P. Industrial Project Development C.F.T.C. Mechanical Workshop Training U.N.D.P.

Family Planning U.N.F.P.A.

New Programs

Additional Technical Assistance requirements have been identified in the following areas:

(i) Land Transformation and Cadastral Survey (ii) Industrial Project Development (iii) Trade, Investment and Tourism Promotion - 66 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture,Forestry and Fisheries (US$' 000)

I. NAME OF PROJECT: Tree Crop Rehabilitationand Expansion II

II. EXECUTINGGOVERNMENT AGENCY: Ministry of Agriculture,Lands, Fisheries, Labor and Cooperatives

III. TOTAL ESTIMATED COST: US$2,111

IV. EXTERNAL FINANCING REQUIRED: US$1,729

V. LENDING AGENCY: UK, Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project entails: (1) provision of propagation assistance to replant plants which were lost as a result of Hurricane Allen; (2) restorationof four damaged propagationcenters; (3) expansion of ongoing Tree Crop DiversificationProgram; (4) rehabilitationand expansion of cocoa industry; and, (5) establishmentof a 10-acre cashew seed orchard.

B. Justification: Further diversificationof St. Lucia's agricultural production so as to increase farmers' income and generate foreign exchange revenue; rehabilitationof damages inflicted by Hurricane Allen.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 382 379 761 36 Foreign Costs - 1,350 1,350 64

Total Costs - Amount 382 1,729 2,111 - - % 18 82 - 100 - 67 -

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 27 33 300 360 22 External Sources - 121 152 333 606 1,123

Total - 148 185 633 966 1,145

IX. STATUS OF PREPARATION: Phase I, which aimed to plant avocado seedlings in 220 acres in the South,was estimated to be completed by December. Also, five (5) acres had been Planted with cashew. Phase II aims to plant 250 acres to avocado in the northern part of the island and 5 more acres to cashew. This phase is intended to begin right after Phase I is completed.

X. TERMS OF FINANCING:

Interest Rate: Concessional. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Not applicable.

Xll. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: No.

B. FeasibilityStudies: No.

C. Project Implementation: Assistance of plant propagationofficer is required. - 68 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Agriculture,Forestry and Fisheries (US$'000)

I. NAME OF PROJECT: Coconut RehabilitationProgram

II. EXFCUTINGGOVERNMFNT AGENCY: St. Lucia Coconut Growers Association, Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$1,304

IV. EXTERNAL FINANCING REQUIRED: US$978

V. LENDING AGENCY: UK, Unknown

VI. DFSCRIPTIONAND JUSTIFICATION:

A. Description: Project envisages: (1) establishmentof coconut nurseries to meet planting needs of the rehabilitationprogram, and (2) purchase and applicationof fertilizer,herbicide and ratbait to hasten the recovery process.

B. Justification: All coconut trees were affected by the hurricane; some 25% of the tree stock was totally destroyed, the remaindersuffered partial wind damage. A total of 14,000 acres need to be rehabilitated.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 326 - 326 25 Foreign Costs - 978 978 75

Total Costs - Amount 326 978 1,304 - - % 25 75 - 100 -. '9 -

VIII. DISBURSEMENTPERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 99 227 - - 326 - External Sources - 171 316 - 487 491

Total 99 398 316 - 813 491

IX. STATUS OF PREPARATION: The project documents have been prepared. Phase I was expected to be finished by the end of 1981. Under this phase, a ten-acre seed garden was planted at La Farque and an additional ten acres at La Retreit. From the hurricane relief fund, 150,000 coconut seedlings, enough for 1,000 acres replanting,were bought.

X. TERMS OF FINANCING:

Interest Rate: Concessional,unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Not applicable

XII. TECHNICALASSISTANCE REQUIRED: Not required. - 70 -

ST. LUCIA

Fy82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (us$'000)

I. NAME OF PROJECT: Sugarcane Development

II. EXECUTING GOVERNfENT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$3,000

IV. EXTERNAL FINANCING REQUIRED: US$2,000

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: In an effort to develop 6,000 acres for sugarcane plantation, the project aims at: (1) establishment of nursery-acres to provide growers with planting materials, and (2) establishment of a line of credit to assist growers in procurement of inputs.

B. Justification: Project will enable the productive use of agricultural lands in low rainfall areas; contribute to the development of agro-industries in St. Lucia; generate employment; raise foreign exchange savings and revenues.

VII. COST COM-PONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1,000 - 1,000 33 Foreign Costs - 2,000 2,000 67

Total Costs - Amount 1,000 2,000 3,000 - - % 33 67 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85 86

Local Sources - - - 166 166 834 External Sources - 100 100 334 534 1466

Total - 100 100. 500 700 2300 - 71 -

IX. STATUS OF PREPARATION: Preliminary indications from the FAO mission suggest that wide spread re-introduction of sugarcane would only be feasible if all major valleys are converted to sugarcane areas. As this is probably not possible, FAO had prepared a series of small projects.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Not applicable.

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: Yes; FAO B. Feasibility Studies: Yes; FAO to be approached. C. Project Implementation: No. - 72 -

ST. LUCIA

FY81/82-84/85 Project List - IndividualProject Description

Agriculture,Forestry and Fisheries (US$'000)

I. NAME OF PROJECT: AgriculturalProduction, Marketing and Credit Project

II. EXECUTING GOVERNMENTAGENCY: Ministry of Agriculture,Marketing Board

III. TOTAL ESTIMATED COST: US$5,400

IV. EXTERNAL FINANCINGREQUIRED: US$5,100

V. LENDING AGENCY: IFAD, CDB

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project aims at (1) continuing the Emergency Food Crop ProductionProgram (provisionof essential support services and assistanceto small farmers; purchase of vehicles and equipment);(2) rehabil- itating and upgrading the marketing services (restorationof depots; purchase of vehicles and equipment);and (3) establishingvarious facilities for storage of agriculturalinputs produce.

B. Justification: Improvementof local productionand marketing of root and vegetable crops and developmentof organizationaland infrastructuralbase to meet needs of agriculturalsector as a whole.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 300 1,320 1,620 30 Foreign Costs -_ 3,780 3,780 70

Total Costs - Amount 300 5,100 5,400 - - % 6 94 - 100 - 73 -

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 200 100 - 300 - External Sources - 1,000 1,200 1,300 3,500 1,600

Total - 1,200 1,300 1,300 3,800 1,600

IX. STATUS OF PREPARATION: Basic components identified; project is ready for implementation. IFAD is providing technical assistance.

X. TERMS OF FINANCING:

Interest Rate: Amortization Period: Unknown.

XI. PROJECT IMPLICATIONS: Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages for Part I of project; accounting and field management assistance required for Part II. - 74 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (US$'000)

I. NAME OF PROJECT: Windward Islands Fishing Boat Development Project

II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$400

IV. EXTERNAL FINANCING REQUIRED: US$300

V. LENDING AGENCY: EDF

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project comprises: (1) establishment of a boat-building yard; (2) construction of an improved type of vessel; and (3) training for existing fishermen.

B. Justification: Development of Windward Islands Fisheries industry.

VII. COST COMPONFNTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 100 20 120 30 Foreign Costs - 280 280 70

Total Costs - Amount 100 300 400 - - % 25 75 - 100

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 63 18 19 - 100 - External Sources 37 113 113 - 263 37

Total 100 131 132 - 363 37 - 75 -

IX. STATUS OF PREPARATION: The site of the boat building yard has been chosen. The project is expected to start by mid-1982.

X. TERMS OF FINANCING:

Interest Rate: Grant. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: No.

B. Feasibility Studies: No.

C. Project Implementation: Training component is incorporated in the project. - 76 - ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture,Forestry and Fisheries (us$ 0ooo)

I. NAME OF PROJECT: Fisheries InfrastructureDevelopment

II. EXECUTING GOVERN'MENTAGENCY: Ministry of Agriculture,Lands and Fisheries. III. TOTAL ESTIMATED COST: US$1,250

IV. EXTERNAL FINANCING REQUIRED: US$1,000

V. LENDING AGENCY: Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

1. Description: Constructionof a new pier and upgrading of existing piers, jetties, locker rooms and storage facilities at all the landing sites throughout the island except in Castries.

2. Justification:Theenvisioned expansionof the fishing industry through introductionof larger boats and improved techniquesrequires complimentarydevelopment of facilities.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 250 125 375 30 ForeignCosts - 875 875 70 Total Costs - Amount 250 1,000 1,250 - _ % 20 80 - 100

VIII. DISBURSEMfENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 45 74 74 193 57 External Sources - 177 296 296 769 231

Total 222 370 370 962 288 - 77 -

IX. STATUS OF PREPARATION: Project concept has been identified.

X. PROJECT IMPLICATIONS:

Operating and maintenance costs: None during FY82/83-85/86

XI. TECHNICAL ASSISTANCE REQUIRED: None. - 78 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (US$ '000)

I. NAME OF PROJECT: Castries Fisheries Complex.

II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Land and Fisheries. III. TOTAL ESTIMATED COST: US$3,500

IV. EXTERNAL FINANCING REQUIRED: US$3,250

V. LENDING AGENCY: CIDA

VI. DESCRIPTION AND JUSTIFICATION:

1. Description: Construction of a fish processing plant in Castries and provision of improved fishing vessels, refrigerated vehicles and boat ramp.

2. Justification: To -improve fish marketing, storage and handling capacity in line with the proposed development of the fishing industry.

VII. COST COM1PONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %_

Local Costs 250 800 1,050 30 Foreign Costs - 2,450 2,450 70 Total Costs - Amount 250 3,250 3,500 - - z 7 93 - 100

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 250 - - - 250 - External Sources 781 1,111 1,111 247 3,250 -

Total 1,031 1,111 1,111 247 3,500 - - 79 -

IX. STATUS OF PREPARATION: Commitment from CIDA is to the amount of EC$7 million. The project is expected to commence in early 1982.

X. PROJECT IMPLICATIONS:

Operating and maintenance costs: None during the period FY82/83-85/86.

XI. TECHNICAL ASSISTANCE REQUIRED: None. - 80 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (US$'000)

I. NAIE OF PROJECT: Rehabilitation of Forestry Sector

II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCING REQUIRED: US$750

V. LENDING AGENCY: UK, UJnknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project provides for: (1) salvaging of fallen timber for use in the domestic construction industry and energy generation (this entails establishment of fencing factory, purchase of sawmill and miscellaneous equipment, modernization of charcoal production process); (2) establishing of nurseries and execution of replanting operations; (3) restoration of damaged forestry buildings; and (4) provision of nesting locations for St. Lucia parrots.

B. Justification: Hurricane damage to forest resources is believed to be extensive; it is estimated that 80% of natural rainforest sustained wind damage.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 250 - 250 25 Foreign Costs - 750 750 75

Total Costs - Amount 250 750 1,000 - % 25 75 - 100 - 81 -

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 146 50 50 246 4 External Sources - 150 150 150 450 300

Total - 296 200 200 696 304

IX. STATUS OF PREPARATION: Project components have been identified; UK was approached for the purchase of charcoal kilns.

X. TERMS OF FINANCING:

Interest Rate: AmortizationPeriod: Unknown.

XI. PROJECT IMPLICATIONS:

Operating and MaintenanceCosts:

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: No

B. Feasibility Studies: No

C. Project Implementation: Yes. - 82 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (US$'000)

I. NA4TE OF PROJECT: Land Transformation and Cadastral Survey, Phase I

II. EXECUTING GOVERNMFNT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$1,481

IV. EXTERNAL FINANCING REQIJIRED: US$1,000

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Rationalization and reform of land tenure system and provision of required infrastructure.

B. Justification: Existing land tenure system is characterized by multiple ownership patterns and fragmented plots of uneconomic size which inhibit efficient agricultural production.

VII. COST COTPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 481 556 1,037 70 Foreign Costs - 444 444 30

Total Costs - Amount 481 1,000 1,481 - - % 32 68 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 185 185 1ll 481 - External Sources 185 185 630 1,000 -

Total - 370 370 741 1,481 - - 83 -

IX. STATUS OF PREPARATION: OAS is presently providing technical assistance in project preparation.

X. TERMS OF FINANCING:

Interest Rate: 1Jnknow. Amortization Period:

XI. PROJECT INPLICATIONS:

Operating and Maintenance Costs: None.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 84 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture,Forestry and Fisheries (us$ 000)

I. NAME OF PROJECT: Feeder Roads IV & V

II. EXECUTING GOVERNMENT AGENCY: Ministry of Communicationsand Works

III. TOTAL ESTIMATED COST: US$7,000

IV. EXTERNAL FINANCING REQUIRED: US$5,000

V. LENDING AGENCY: CDB, and Trinidad and Tobago

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Continuationof ongoing program; constructionof 56 miles of feeder roads. Project includes purchase of road constructionequipment.

B. Justification: The planned developmentof a comprehensivesystem of feeder roads will provide much needed access to remote agriculturalareas.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 2,000 800 2,800 40 Foreign Costs - 4,200 4,200 60

Total Costs - Amount 2,000 5,000 7,000 - - % 29 71 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 231 222 1,037 1,490 510 External Sources - 380 1,259 1,185 2,824 212z

Total _ 611 1,481 2,222 4,314 2686 - 85 -

IX. STATUS OF PREPARATION: Project document is to be prepared and submitted to Trinidad-Tobago;CDB board presentationis tentativelyscheduled for 1983. X. TERMS OF FINANCING:

Interest Rate: Grant; unknown; usual CDB terms. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and MaintenanceCosts: None during period under Debt Obligations: consideration.

XII. TECRNICALASSISTANCE REQUJIRED:

A. Project Preparation: No

B. FeasibilityStudies: No

C. Project Implementation: Surveying and engineeringassistance required for constructionand supervision. - 86 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Agriculture, Forestry and Fisheries (US$'000)

I. NAME OF PROJECT: Windward Islands Agricultural College

II. EXECUTING GOVERNMF.NTAGENCY: Ministry of Education and Culture

III. TOTAL ESTIMATED COST: US$1,252

IV. EXTERNAL FINANCING REQUIRED: US$1,000

V. LENDING AGENCY: EDF

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Establishment of college to train future farmers and technicians from the Windward Islands. The college, comprising campus and farm, will be built on 150 acres and will have an annual intake of approximately 50 students. B. Justification: Development of comprehensive training facilities is essential to meet the need of the islands for trained agriculturalists.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 252 148 400 32 Foreign Costs 852 838 68

Total Costs - Amount 252 1,000 1,252 - - % 20 80 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 252 - - - 252 - External Sources - 500 500 - 1,000 -

Total 252 500 500 - 1,252 - - 87 -

IX. STATUS OF PREPARATION: Project document was submitted in March, 1981 The site has to be identified and acquired if implementationis not to be delayed.

X. TERMS OF FINANCING:

Interest Rate: Grant. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICALASSISTANCE REQUIRED: Not required. - 88 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Industry (US$'000)

I. NAME OF PROJECT: Agro-Industry Promotion

II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMIATEDCOST: US$1,000

IV. EXTERNAL FINANCING RFQUIRED: US$800

V. LENDING AGENCY: CDB

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Upgrading and expansion of existing processing plant to produce juices and preserves for local market (initially).

B. Justification: Project aims at demonstrating the viability of agro-processing industry with a view to attracting private enterprise to undertake investment on a larger scale.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 200 150 350 35 Foreign Costs - 650 650 65

Total Costs - Amount 200 800 1,000 - - % 20 80 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - 22 22 178 External Sources - - - 108 108 692

Total 130 130 870 - 89 -

IX. STATUS OF PREPARATION: Feasibilitystudy underway; project is tentatively scheduled for board presentationby CDB in 1983.

X. TERMS OF FINANCING:

InterestInterest Pate:Usual-Pate: CBD terms. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

XII. TECHNICALASSISTANCE REQUIRED:

A. Project Preparation: No. B. FeasibilityStudies: No. C. Project Implementation: Assistance is required for product execution. - 90 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Industry (US$'000)

I. NAME OF PROJECT: Development of Vieux Fort Free Port Industrial Zone

II. EXECUTING GOVERNMENT AGENCY: Ministry of Planning, Development and Industry

III. TOTAL ESTIMATED COST: US$2,000

IV. EXTERNAL FINANCING REQUIRED: US$1,800

V. LENDING AGENCY: CDB, Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Provision of space and facilities for development of free port industrial zone.

B. Justification: Required to meet demands of industrial expansion in that area.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 200 600 800 40 Foreign Costs - 1,200 1,200 60

Total Costs - Amount 200 1,800 2,000 - - % 10 90 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84185 85/86 Total 85/86

Local Sources - 200 - - 200 - External Sources - 720 540 540 1,800 -

Total - 920 540 540 2,000 - - 91 -

IX. STATUS OF PREPARATION: Project concept is identified. UNDP financed economic feasibilitystudy is underway.

X. TERMS OF FINANCING:

Interest Rate: Usual CDB terms; unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs:

XII. TECHNICALASSISTANCE REQUIRED: Required at all stages. - 92 -

ST. LUCIA

FY81/82-84/85 Project List - IndividualProject Description

Industry (US$'000)

I. NAME OF PROJECT: IndustrialEstates V

II. EXECUTING GOVERNMENT AGENCY: National DevelopmentCorporation

III. TOTAL ESTIMATED COST: US$2,140

IV. EXTERNAL FINANCING REQUIRED: US$1,530

V. LENDING AGENCY: CDB, Unknown.

VI. DESCRI'PTIONAND JUSTIFICATION:

A. Description: Continuationof ongoing factory-shellbuilding program. Project provides for constructionof series of shells throughoutthe country.

B. Justification: There is a growing need for increased industrial space in St. Lucia.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 610 240 640 40 Foreign Costs - 960 960 60

Total Costs - Amount - 1,200 1,600 - - % 25 75 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - 200 37 237 373 External Sources - - 333 333 1,197

Total - - 200 370 570 1,570 - 93 -

IX. STATUS OF PREPARATION: CDB Board presentationis tentativelyscheduled for 1985.

X. TERMS OF FINANCING:

Interest Rate: 4% AmortizationPeriod: 15 years (5-year grace period)

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

XII. TECHNICALASSISTANCE REQUIRED: Not required. - 94 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Tourism (US$'000)

I. NAME OF PROJECT: Holiday Village, Phase I

II. EXECUTING GOVERNMENT AGENCY: National DevelopmentCorporation

III. TOTAL ESTIMATED COST: US$2,800

IV. EXTERNAL FINANCING REQUIRED: US$2,500

V. LENDING AGENCY: CDB

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project (Phase I and II) involves construction of a locally owned and operated holiday village, which includes hotels and appartels, and shopping and recreationalfacilities.

B. Justification: Expansion of hotel accommodationcapacity; employment generation;encouragement of local entrepe- neurship.

VII. COST COMIPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 300 820 1,120 40 Foreign Costs - 1,680 1,680 60

Total Costs - Amount 300 2,500 2,800 - - % 11 89 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - 37 44 81 219 External Sources - - 333 400 733 1,767

Total - - 370 444 814 1,986 - 95 -

IX. STATUS OF PREPARATION: Project concept outlined; basic components identified. The governmentwill request CDB to prepare the project document.

X. TERMS OF FINANCING:

Interest Rate: 4% AmortizationPeriod: 15 years (5 years grace)

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 96 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Tourism (US$'000)

I. NAME OF PROJECT: Pointe Seraphin Tourist Facility,Phase I

II. EXECUTINGGOVERNMENT AGENCY: National Development Corporation

III. TOTAL ESTIMATED COST: US$1,480

IV. EXTERNAL FINANCING REQUIRED: US$1,200

V. LENDING AGENCY: Unknown

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project (Phase I and II) entails the construction of tourist facilitieson 7.5 acres of reclaimed land adjacent to Pointe Seraphin. Phase I includes constructionof the access road and parking areas, installationof all utilities,construction of 50 shopping units and constructionof a craft market passenger terminal and tourist bureau.

B. Justification: Developmentof tourist industry, promotion of local entrepreneurshipand crafts industry.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 280 - 280 19 Foreign Costs - 1,200 1,200 81

Total Costs - Amount 280 1,200 1,480 - - % 19 81 - 100 - 97 -

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 280 - - 280 - External Sources - 259 407 666 534

Total - 280 259 407 946 534

IX. STATUS OF PREPARATION: The dredging, reclaiming and the construction of two cruise ship berths have been completed at a total cost of US$704. A full feasibility study has to be done. The EDF pool of experts could be approached.

X. TERMS OF FINANCING:

Interest Rate: Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 98 - ST. LUCIA

FY82/83-85/86 - Project List - Individual Project Description

Tourism (us$ '000)

I. NAME OF PROJECT: Development of Tourist Attractions

II. EXECUTING GOVERNmENTAGENCY: Ministry of Tourism

III. TOTAL ESTIMATED COST: US$1,250

IV. EXTERNAL FINANCING REQUIRED: US$1,000

V. LENDING AGENCY: Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

1. Description: This project involves the developmentof new tourist attractionsand restorationof historicaland scenic sites. This includes Pigeon Island,Maria Island Nature Reserve, Fort Rodney, an arboretum and a sea aquarium. 2. Justification:To attract more tourists.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 250 750 1,000 80 Foreign Costs - 250 250 20 Total Costs - Amount 250 ' 1,000 1,250 - _ A 20 80 - 100

VIII. DISBURSE-MENTPERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 72 74 104 250 - External Sources - 150 148 118 416 584

Total - 222 222 222 666 584 - 99 -

IX. STATUS OF PRKPARATION: Project concept has been identified.

X. PROJECT IMPLICATIOMS:

Operating and maintenance costs: None.

XI. TECHNICAL ASSISTANCE, REQUIRED: For project preparation and design. - 100 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Tourism (US$'000)

I. NAME OF PROJECT: Establishment of Regional Hotel Trades School

II. EXECUTING GOVERNMENT AGENCY: Ministry of Education

III. TOTAL ESTIMATED COST: US$445

IV. EXTERNAL FINANCING REQUIRED: US$200

V. LENDING AGENCY: EDF

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project comprises the establishment of a Regional Hotel Trades School at the Halcyon Days Hotel.

B. Justification: Training of personnel employed in tourism industry is of utmost priority to the successful development of the industry within this region.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 156 - 156 35 Foreign Costs 89 200 289 65

Total Costs - Amount 245 200 445 - - % 55 45 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 123 122 - - 245 - External Sources 100 100 - 200

Total 223 222 - - 445 - - 101 -

IX. STATUS OF PREPARATION: Project document has been submitted.

X. TERMS OF FINANCING:

Interest Rate: AmortizationPeriod: Grant.

XI. PROJECT IMPLICATIONS:

Operating and MaintenanceCosts: None during period under consideration.

XII. TECHNICALASSISTANCE REQUIRED:

A. Project Preparation: No. B. FeasibilityStudies: No. C. Project Implementation: Yes. - 102 -

ST. LUCIA

FY1982/83-85/86 Project List - Individual Project Description

Transportation (US$'000)

I. NAME OF PROJECT: East Coast Road Strengthening

II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications and Works

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCING REQUIRED: US$500

V. LENDING AGENCY: U.K., Unknown.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Construction of Thomazo Bridge; strengthening of the road.

B. Justification: East Coast Road is of key importance to the economy.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 500 - 500 50 Foreign Costs - 500 500 50

Total Costs - Amount 500 500 1,000 -- - % 50 50 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 196 85 85 366 134 External Sources - 100 100 100 300 200

Total - 296 185 185 666 334 - 103 -

IX. STATUS OF PREPARATION: Project is ready for implementation.

X. TERMS OF FINANCING:

Interest Rate: Unknown Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: 1984/85 13 XII. TECHNICAL ASSISTANCE REQUIRED: Not required. - 104 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Transportation (US$ '000)

I. NAME OF PROJECT: Road Surfacing

II. EXECUTING GOVERNMENTAGENCY: Ministry of Communicationsand Works.

III. TOTAL ESTIMATED COST: US$3,098

IV. EXTERNAL FINANCING REQUIRED: US2,445

V. LENDING AGENCY: Venezuela

VI. DESCRIPTIONAND JUSTIFICATION:

1. Description: Resurfacingof main and feeder roads throughout St. Lucia.

2. Justification:The poor condition of the main and feeder roads hinder effective communicationand transport of agriculturalproducts.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 653 586 1,239 40 Foreign Costs - 1,859 1,859 60 Total Costs - Amount 653 2,445 3,098 - - Z 21 79 - 100

VIII. DISBURSEHENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 170 298 185 - 653 - External Sources 111 741 741 370 1,963 482

Total 281 1,039 '926 370 2,616 482 - 105 -

IX. STATUS OF PREPARATION: Agreement to be signed before the end of the year and work will commence in early 1982.

X. PROJECT IMPLICATIONS:

Operating and maintenancecosts: None during the period 1981/82 - 85/86.

XI. TECHNICAL ASSISTANCEREQUIRED: None. - 106 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Transportation (US$'000)

I. NAME OF PROJECT: HewanorraAirport Expansion, Phase I

II. EXECUTINGGOVERNMENT AGENCY: Ministry of Communicationsand Works

III. TOTAL ESTIMATED COST: US$9,300

IV. EXTERNAL FINANCINGREQUIRED: US$6,045

V. LENDING AGENCY: CDB, Unknown

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project includes: (1) Paving of runway; (2) Constructionof new arrival terminal; (3) Conversion of existing terminal into departure terminal; (4) Constructionof new cargo terminal; (5) Provision of additional fire fighting equipment;(6) Provisionof air/sea rescue craft; (7) Widening of parking apron; (8) Provision of additional fuel hydrants; (9) Provision of additional fire hydrants; (10) Improvementof airport security; (11) Improvementof navigationalaids.

B. Justification: Upgrading of Hewanorra Airport to acceptable internationalstandards.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 3,255 - 3,255 35 Foreign Costs - 6,045 6,045 65

Total Costs - Amount 3,255 6,045 9,300 - - % 35 65 - 100 - 107 -

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - 518 518 2,737 External Sources _ _ - 963 963 5,082

Total - - - 1,481 1,481 7,819

IX. STATUS OF PREPARATION: "Emergency phase" is being executed; project document for phase I is prepared.

X. TERMS OF FINANCING:

Interest Rate: Urikncwn. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 108 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Transportation (US$'000)

I. NAME OF PROJECT: Improvementand Rehabilitationof Vigie Airport

II. EXECUTING GOVERNMENT AGENCY: Ministry of Communicationsand Works

III. TOTAL ESTIMATED COST: US$1,167

IV. EXTERNAL FINANCING REQUIRED: US$900

V. LENDING AGENCY: CIDA,Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project entails: (1) improvementof existing airport, including improvementof runway, runway lighting, drainage, ramp, retentionwalls, terminal building; and (2) repair of damages inflictedby Hurricane Allen to facilities,equipment, fencing, runway extension.

B. Justification: Upgrading and rehabilitationof existing airport.

VII. COST COITONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 2b7 200 467 40 Foreign Costs - 700 700 60

Total Costs - Amount 267 900 1,167 - - % 23 77 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 80 84 103 267 - External Sources - 270 286 264 820 80

Total - 350 370 367 1,087 80 - 109 -

IX. STATUS OF PREPARATION: Basic project componentsare outlined; rehabilitation works are ready for implementation.

X. TERMS OF FINANCING:

Interest Rate: Unkno--m. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs:

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 110 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Transportation (US$'000)

I. NAME OF PROJECT: Vieux Fort Port Developmentand Rehabilitation

II. EXECUTING GOVERNMENT AGENCY: St. Lucia Port Authority

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCING REQUIRED: US$500

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project provides for: (1) expansion of port, including extension to pier and purchase of pilot boat; and (2) rehabilitationof sheds, office buildings and lighthouse which were damaged as a result of Hurricane Allen.

B. Justification: Improvements and rehabilitation required to enable port to accommodate the industrial and tourist developmentof Vieux Fort Area.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 500 - 500 50 Foreign Costs - '500 500 50

Total Costs - Amount 500 500 1,000 - - % 50 50 - 100'

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85186 Total 85/86

Local Sources - - - 92 92 408 External Sources - - 130 93 223 277

Total - - 130 185 315 685 - ill -

IX. STATUS OF PREPARATION: Basic components have been identified by Port Authority. Project is ready for implementation.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None.

XII. TECHNICAL ASSISTANCE REQUIRED: Not required. - 112 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Transportation kuss -UUO)

I. NAME OF PROJECT: Development of Soufriere Port

II. EXECUTING GOVERN.MENT AGENCY: St. Lucia Port Authority

III. TOTAL ESTIMATED COST: US$600

IV. EXTERINAL FINANCING REOUIRED: US$400

V. LENDING AGENCY: U.K., Unknown.

VI. DESCRIPTION AND JUSTIFICATION:

1. Description: Construction of a new pier and port facilities at Soufriere.

2. Justification: Soufriere Port is an important entry point for cruise and commercial ships. It is also envisaged as the site of the geothermal generating plant.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 200 - 200 33 Foreign Costs - 400 400 67 Total Costs - Amount 200 400 600 - -% 33 67 - 100

VIII. DISBURSEMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 60 118 22 - 200 - External Sources 120 104 139 37 400 -

Total 180 222 -161 37 600 - - 113 -

IX. STATUS OF PRU;PARATION: Project document is being prepared.

X. PROJECT IM!PLICATIONS:

Operating and maintenance costs: None

XI. TECHINICALASSISTANICF REQUIRED: For engineering design. - 114 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Transportation (US$'000)

I. NAME OF PROJECT: Development of Castries Port

II. EXECUTINGGOVERNMENT AGENCY: St. Lucia Port Authority

III. TOTAL ESTIMATED COST: US$2,111

IV. EXTERNAL FINANCING REQUIRED: US$2,111

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project includes: (1) purchase of tugboat; (2) mobile dockside crane; (3) refrigerated container outlets; (4) miscellaneouscargo handling equipment;and (5) treatment of soil erosion problem.

B. Justification: Completionof harbor expansionand improvement program.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs - 63 63 3 Foreign Costs - 2,048 2,048 97

Total Costs - Amount - 2,111 2,111 - - % - 100 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - - External Sources - 185 333 518 1.593

Total - - 185 333 518 1,593 - 115 -

IX. STATUS OF PREPARATION: Basic componentshave been identified by Port Authority. Project is ready for implementation.

X. TERIS OF FINANCING:

Interest Rate: AmortizationPeriod:

XI. PROJECT IIPLICATIONS:

Operating and MaintenanceCosts: None.

XII. TECHNICAL ASSISTANCEREQUIRED:

A. Project Preparation: No. B. Feasibility Studies: No. C. Project Implementation: Instructionsfor operation of equipment required. - 116 -

ST. LUCIA

FY1982/83-85/86Project List - Individual Project Description

Trans2rtation (U P$ '000)

I. Ng1E OF PROJECT: West Coast Road Construction

II, EXECUTINGGOVERNMENT AGENCY: Ministry of Communications and Works

III. TOTAL ESTIMATEDCOST: U.S. $10,000

IV. EXTERNALFINANCING REQUIRED: U.S. $9,000

V. LENDINGAGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description; Construction of the West Coast Road from Castries to Vieux Fort

B. Justifications This road would allow for improved tourist access to the-most beautiful part of the island, opening up of fertile agricultural hinterland, and provide basis for industrial development through improved communications.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1,000 3,500 4,500 45

Foreign Costs - 5,500 5,500 55

Total Costs - Amount 1,000 9,000 10,000 - - 10 90 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 200 250 250 700 300

External Sources - 1,500 2,500 2,500 6,500 2,500

Total - 1,700 2,750 2,750 7,200 2,800 - 117 -

IX, STATLS OF PREPARATION: Basic components of project identified. Preparatory work can be started immediately. Project ready for implementation upon finalization of detailed engineering design.

X. TERMSOF FINANCING:

Interest Rates, Unknown AmortizationPeriods Unknown

XI. PROJECT IMPLICATIONSs

Operating and Maintenance Costs$ None during period

XII. TECHNICAL ASSISTANCE REQUIRED: Required for detailed engineering design at all stages. - 118 -

ST. LUCIA

FY82/83-85/86Project List - IndividualProject Description

Power Supply (US$'000)

I. NAME OF PROJECT: Rural ElectrificationII

II. EXECUTING GOVERNMENTAGENCY: St. Lucia Electricity Services,Ltd.

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCING REQUIRED: US$800

V. LENDING AGENCY: CDB, Unknown

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Continuationand expansion of existing program to provide electricityin rural areas.

B. Justification: Improvementof quality of life in rural areas.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 200 - 200 20 Foreign Costs - 800 800 80

Total Costs - Amount 200 800 1,000 - _ % 20 80 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - 90 90 110 External Sources _ - 60 60 740

Total - - 150 150 850 - 119 -

IX. STATUS OF PREPARATION: Continuation of ongoing program.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

XII. TECFNICALASSISTANCE REQUIPED: Not required. - 120 -

ST. LUCIA

FY82/83-85/86Project List - IndividualProject Description

Power Supply (US$'000)

I. NAME OF PROJECT: GeothermalEnergy Development I & II

II. EXECUTING GOVERNMENTAGENCY: St. Lucia ElectricityServices, Ltd.

III. TOTAL ESTIMATED COST: US$10,850

IV. EXTERNAL FINANCINGREQUIRED: US$10,600

V. LENDING AGENCY: Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Development of Soufriere Sulpher Springs as a source of geothermalenergy. First stage involves site exploration;subsequent phases would include: (1) drilling of productionwells; and (2) construction of power station, transmissionline, etc.

B. Justification: Project will provide a cheap alternativesource of energy and reduce dependenceon imported energy petroleum products.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 250 1,920 2,170 20 Foreign Costs - 8,680 8,680 80

Total Costs - Amount - 10,600 10,850 - - % 2 98 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 220 30 - - 250 - External Sources 180 33 100 852 1.165 9A435

Total 400 63 100 852 1,415 9,435 - 121 -

IX. STATUS OF PREPARATION: EIB has been approached for funding of study on overall technical and economic feasibility. Implementation of Phase II will depend on the study and exploration phase.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Self-liquidating.

Xll. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 122 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Water Supply & Sewerage (US$'000)

I. NAME OF PROJECT: Island-wide Sewerage System - Phase I, II, III

II. EXECUTING GOVERNMENT AGENCY: Ministry of Health and Local Government

III. TOTAL ESTIMATED COST: US$3,370

IV. EXTERNAL FINANCING REQUIRED: US$2,700

V. LENDING AGENCY: CDB, UK, Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project aims at developing proper sewage facilities through the island, particularly in areas unsuitable for septic tank installation. Phase I: Castries; Phase II: Vieux Fort; Phase III: Dennery.

B. Justification: Improvement of health and housing standards.

VII. COST COIPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 670 678 1,348 40 Foreign Costs - 2,022 2,022 60

Total Costs - Amount 670 2,700 3,370 - - % 20 80 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - 289 - 289 381 External Sources - - 540 1,111 1,651 1,049

Total - - 829 1,111 1,940 1,430 - 123 -

IX. STATUS OF PREPARATION: Basic components and objectives of the project have been outlined: UK was approached on consultancy.

X. TERMS OF FINANCING:

Interest Rate: Usual CDB and UK terms; unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs:

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 124.- ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Water Su ply & SeweraGe (US $'000)

I. NAME OF PROJECT: Rural and Urban Water Development & Distribution

II. EXECUTINGGOVERNMENT AGENCY: Central Water Authority

III. TOTAL ESTLMATEDCOST: U.S. $2,000

IV. EXTERNALFINANCING REQUIRED: U.S. $1,600

V. LENDINGAGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Descriptiont Continuation of an ongoing program; extension of supply of potable water throughout the island. It also includes the purchase of generators for key installations in the NW area, where no standby generators are available.

B. Justifications Improvement in sanitary conditions and living standard of population in rural areas.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Amount Z Sources Sources

Local Costs 400 200 690 30 Foreign Costs - 1,400 1,400 70

Total Costs - Amount 400 2,000 -

- 20 80 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 50 60 120 230 170 External Sources _ 350 400 450 1,200 400

Total - 400 460 570 1,430 570 - 125 -

IX. STATUS OF PREPARATIONt Project is ready for implementation.

X. TERIS OF FINANCING:

Interest Rates Unknown. Amortization Period: Unknown.

XI. PROJECT DIPLICATIONS:

Operating and Maintenance Costst Self-liquidating.

XII. TECHNICAL ASSISTANCE REQUIREDt Not required. - 126 -

ST. LUCIA

FY81/82-84/85 Project List - Individual Project Description

Education (US$'000)

I. NAME OF PROJECT: School Building Program

II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture

III. TOTAL ESTIMATED COST: US$15,000

IV. EXTERNAL FINANCING REQUIRED: US$11,500

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Construction and equipment of five new primary and 11 secondary schools annually and replacement of existing schools as they deteriorate below acceptable standards.

B. Justification: There is a vital need to provide school places at all levels of the education system. The number of school places available is 20% short of the required level. Many schools are currently operating a double shift system in an effort to cope with the shortfall.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 3,500 2,500 6,000 40 Foreign Costs - 9,000 9,000 60

Total Costs - Amount 3,500 11,500 15,000 - -% 23 77 - 100 - 127 -

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - 533 533 2,967 External Sources - 984 984 10,516

Total _ _ _ 1,517 1,517 13,483

IX. STATUS OF PREPARATION: Basic components of project have been determined. Detailed project preparation is awaiting identification of lending agency.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 128 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Education (US$'000)

I. NAME OF PROJECT: Cultural Infrastructure Development, Phase I and II

II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture

III. TOTAL ESTIMATED COST: US$3,000

IV. EXTERNAL FINANCING REQUIRED: US$1,800

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Phase I involves construction of the National Cultural Center in Castries; Phase II involves the establishment of multipurpose community centers throughout the island.

B. Justification: To ensure and encourage preservation of the national cultural heritage; to foster community integration.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1,200 - 1,200 40 Foreign Costs - 1,800 1,800 60

Total Costs - Amount 1,200 1,800 3,000 - - % 40 60 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - 89 89 178 1,022

External Sources - - 133 133 266 1,534

Total - - 222 222 444 2,556 - 129 -

IX. STATUS OF PREPARATION: Basic project components have been identified; the site for the National Center has been selected. Detailed project design is needed.

X. TERMS OF FINANCING:

Interest Rate: Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and MaintenanceCosts:

XII. TECHMICAL ASSISTANCE REQUIRED:

A. Project Preparation: Needed for project design. B. Feasibility Studies: Not required. C. Project Implementation: Not required. - 130 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Education (US$'000)

I. NAME OF PROJECT: Tertiary Education Development - Phase I, II, III

II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCING REQUIRED: US$700

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project aims at establishing a community college at the Morne Educational Complex. This includes integration and upgrading of administrative infrastructure, establishment of a community library and a management training college.

B. Justification: Upgrading of existing institution to meet educational needs of St. Lucia.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 300 - 300 30 Foreign Costs - 700 700 70

Total Costs - Amount 300 700 1,000 - - % 30 70 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - - 45 45 255 External Sources - _ - 105 105 595

Total - _ _ 150 150 850 - 131 -

IX. STATUS OF PREPARATION: Basic project concept and components have been outlined; detailed project document is needed.

X. TERMS OF FINANCING:

Interest Rate: Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: Debt Obligations:

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: Yes. B. Feasibility Studies: Not required. C. Project Implementation: Yes. - 132 -

ST. LUCIA

FY82/83-85/86Project List - IndividualProject Description

Health (US$'000)

I. NAME OF PROJECT: Island-wideSolid Waste Disposal

II. EXECUTING GOVERNMENTAGENCY: Ministry of Health and Local Government

III. TOTAL ESTIMATED COST: US$1,000

IV. EXTERNAL FINANCINGREQUIRED: US$800

V. LENDING AGENCY: U.K., Unknown

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project aims at improvingwaste collection and disposal by treatment of refuse and effective disposal of converted refuse.

B. Justification: Current system is inadequate.

VII. COST COMPONENTSAND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 200 - 200 20 Foreign Costs - 800 800 80

Total Costs - Amount 200 800 1,000 - - % 20 s0 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources 14 186 - - 200 - External Sources 56 372 372 _ 800 -

Total 70 558 372 _ 1,000 _ - 133 -

IX. STATUS OF PREPARATION: Basic project components have been identified.

X. TERMS OP FINANCING:

Interest Rate: Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: No.

B. FeasibilityStudies: Yes.

C. Project Implementation: Yes; assistance of sanitary engineer required. - 134 -

ST. LUCIA

FY82/83-85/86Project List - Individual Project Description

Health (US$' 000)

I. NAME OF PROJECT: Expansion and Renovation of Victoria Hospital

II. EXECUTING GOVERNMENT AGENCY: Ministry of Health and Local Government

III. TOTAL ESTIMATED COST: US$1,945

IV. EXTERNAL FINANCINGREQUIRED: US$1,165

V. LENDING AGENCY: Unknown

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project includes upgrading of existing wards and the laboratory building; constructionof a new wing; access roads and sewage facilities;and completion of work in progress.

B. Justification: Present facilities are obsolete and inadequate.

VII, COST COMPONENTSAND FINANCING:

Financed by Total :Local External Sources Sources Amount %

Local Costs 780 - 780 40 Foreign Costs - 1,165 1,165 60

Total Costs - Amount 780 1,165 1,945 - -% 40 60 - 100

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources _ _ 445 148 593 187 External Sources 111 222 333 832

Total - - 556 370 926 1,019 - 135 -

IX. STATUS OF PREPARATION:Basic project components have been identified; detailed cost/benefitanalysis is required.

X. TERMS OF FINANCING:

Interest Rate: Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under -consideration.

XII. TECHNICAL ASSISTANCE REQUIRED: Required at all stages. - 136 -

ST. LUCIA

FY82/83-85/86 Project List - IndividualProject Description

Health (Us$'000)

I. NAME OF PROJECT: Health Center DevelopmentProgram

II. EXECUTING GOVERNMENT AGENCY: Ministry of Health and Local Government

III. TOTAL ESTIMATED COST: US$700

IV. EXTERNAL FINANCING REQUIRED: US$600

V. LENDING AGENCY: Unknown

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Project comprises: (1) upgrading of facilities in existing health centers; and (2) construction of new buildings.

B. Justification: Improvementof health care in rural communities.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 100 - 100 14 Foreign Costs - 600 600 86

Total Costs - Amount 100 600 700 - - % 14 86 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 15 20 20 55 45 External Sources - 90 120 120 330 270

Total 105 140 140 385 315 - 137 -

IX. STATUS OF PREPARATION: Project components have been identified; detailed cost estimates are required.

X. TERMS OF FINANCING:

Interest Rate: Unknown. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None during period under consideration.

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation: Yes. B. Feasibility Studies: Not required. C. Project Implementation: Yes. - 138 -

ST. LUTCIA

FY82/83-85/86 Project List - IndividualProject Description

Housing (US$'000)

I. NAME OF PROJECT: Housing Rehabilitationand Development

II. EXECUTING GOVERNMENT AGENCY: Ministry of Housing

III. TOTAL ESTIMATED COST: US$7,000

IV. EXTERNAL FINANCING REQUIRED: US$3,500

V. LENDING AGENCY: UNDP, US, UK, EDF, Venezuela, Trinidad and Tobago, Unknown, Local.

VI. DESCRIPTIONAND JUSTIFICATION:

A. Description: Project aims at: (1) providing a continuing assistance to home owners in the rehabilitation of hurricane-damageddwellings; and (2) developing low-income housing schemes throughout the island.

B. Justification: The housing sector is generally aged and deteriorated and has sustained very substantialdamage as a result of Hurricane Allen the project will contribute effectivelyto the resonstructionand restructuringof the sector.

VII. COST COMPONENTS AND FINANCING: Financed by Total .:t0-- .- : Local External Sources Sources Amount %

Local Costs 2,150 - 2,150 31 Foreign Costs 1,350 3,500 4,850 69

Total Costs - Amount 3,500 3,500 7,000 - >,,: 0 .0. n % 50 50 - 100 - 139 -

VIII. DISBURSEMENTPERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 228 1,091 350 1,669 1,831 External Sources - 350 350 350 1,050 2,450

Total - 578 1,441 700 2,719 4,281

IX. STATUS OF PREPARATION: Project has commencedwith assistance from US, UK, EDF, Venezuela, Trinidad and Tobago, and UNDP (approximately US$1,200). Applied for the constructionof 40 low income houses to be built at Dennery and Vieux Fort to BDD. The government applied for 140 houses to Venezuela amounting to EC$2.7 million.Construction will start in FY82/83.

X. TERMS OF FINANCING:

Interest Rate: Concessional,Unknown. AmortizationPeriod:

XI. PROJECT IMPLICATIONS:

Operatingand MaintenanceCosts: None.

XII. TECHNICAL ASSISTANCEREQUIRED: Not required. - 140 -

ST. LUCIA

FY82/83-85/86 Project List - Individual Project Description

Housing (US$'000)

I. NAME OF PROJECT: Mortgage Finance III

II. EXECUTING GOVERNMENT AGENCY: St. Lucia National Development Bank

III. TOTAL ESTIMATED COST: US$3,500

IV. EXTERNAL FINANCING REQUIRED: US$1,800

V. LENDING AGENCY: CDB, UK.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: Provision of mortgage finance to low- income class people for purchase of service sites, core houses and completed units in housing schemes throughout the country.

B. Justification: Upgrading of housing stock; reduction of rural-urban migration.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1,700 300 2,000 57 Foreign Costs - 1,500 1,500 43

Total Costs - Amount 1,700 1,800 3,500 - - % 48 52 - 100

VIII. DISBURSEMENT PERIOD: Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - 85 136 221 1,479 External Sources - - 100 160 260 1,540

Total - 185 296 481 3,019 - 141 -

IX. STATUS OF PREPARATION: Tentatively scheduled for CDB board presentation in 1982.

X. TERMS OF FINANCING:

Interest Rate: Usual CDB terms. Amortization Period:

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: None.

XII. TECHNICAL ASSISTANCE REQUIRED: Not required. - 142 -

ST. LUCIA

FY82/83-85/8.6Project List - IndividualProject Description Water (US$ '000)

I. NAME OF PROJECT: Roseau Dam

II. EXECUTING GOVERNMENT AGENCY: Central Water Authority

III. TOTAL ESTIMATED COST: US$15,000

IV. EXTERNAL FINANCING REQUIRED: US$12,000

V. LENDING AGENCY: UK, CIDA, CDB, Unknown.

VI. DESCRIPTIONAND JUSTIFICATION:

1. Description: Constructionof a dam in the Roseau Valley to provide for the water needs of the northern part of the island.

2. Justification: Serious water shortages are expected to occur from 1984 onwards in the northern part of St. Lucia. Efforts must be made to secure a sound water supply.

VII. COST COIMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount x

Local Costs 3,000 3,000 6,000 20 Foreign Costs - , 9,000 9,000 80 Total Costs - Amount 3,000 12,000 15,000 - -% 20 80 - 100

VIII. DISBURSEIMENT PERIOD:

Post FY82/83 83/84 84/85 85/86 Total 85/86

Local Sources - - 681 371 1,052 1,948 External Sources - - 830 1,481 2,311 9,689

Total - - 1,511 1,,852 3,363 11,637 - 143 -

IX. STATUSOF PRl:PARATION: The pre-feasibilitystudy is being funded by UK.

X. PROJECT IMPLICATIONS:

Operating and maintenance costs: None during the period 1982/83-85/86.

XI. TECHNICAL ASSISTANCE REQUIRFD:Required at all stages. - 144 -

ST. LUCIA

FY82/83-85/86Project List - Technical Assistance Profile

I. Sector: Industry

II. Project Title: Crafts Industry Establishment

III. Lending Agency: Unknown

IV. Executing GovernmentAgency: Ministry of Finance & Planning/ Ministry of Trade, Industry and Tourism.

V. Descriptionand Objectives: To explore feasibilityof establishing crafts industry with particular focus on: tanning and leatherwork;woodwork and wood carving, straw-work and basket- weaving; pottery.

VI. TechnicalAssistance Requirements: 1 crafts expert for three (3) months.

VII. EstimatedCost (US$'000): 16 - 145 -

ST. LUCIA

FY82/83-85/86Project List - Technical AssistanceProfile

I. Sector: Industry

II. Project Title: Development of ConstructionMaterials

III. Lending Agency: Unknown

IV. ExecutingGovernment Agency: Ministry of Finance & Planning/ Ministry of Communications& Works.

V. Descriptionand Objectives: Developmentof local inputs for use in constructionindustry with emphasis on use of pumice reserves in road maintenance programmeand building construction.

VI. Technical AssistanceRequirements: 1 constructionmaterials expert, for three (3) months.

VII. Estimated Cost (US$'000): 25 - 146 -

ST. LUCIA

FY82/83-85/86Project List - Technical AssistanceProfile

I. Sector: Tourism

II. Project Title: Beach Erosion Control

III. Lending Agency: Unknown

IV. Executing GovernmentAgency: Ministry of Finance & Planning/ Ministry of Communications& Works.

V. Descriptionand Objectives: Study and control of beach erosion problem.

VI. Technical AssistanceRequirements: 2 engineers for 2 months.

VII. Estimated Cost (US$'000): 93 - 147 -

ST. LUCIA

FY82/83-85/86Project List - Technical Assistance Profile

I. Sector: Tourism

II. Project Title: Historic Sites Restoration

III. Lending Agency: Unknown

IV. ExecutingGovernment Agency: Ministry of Finance & Planning/ Ministry of Trade, Industry & Tourism.

V. Descriptionand Objectives: Restorationof Historic Sites including historic Fort Rodney located on Pigeon Island and Military sites at Morne Fortune.

VI. TechnicalAssistance Requirements: Expert in Historic Restoration for 2 months.

VII. Estimated Cost (US$'000): 15 - 148 -

ST. LUCIA

FY82/83-85/86Project List - Technical Assistance Profile

I. Sector: Tourism

II. Project Title: Arboretum

III. Lending Agency: Unknown

IV. Executing GovernmentAgency: Ministry of Finance & Planning/ Ministry of Agriculture& Land.

V. Descriptionand Objectives: Establishmentof tropical arboretum as tourist attraction.

VI. TechnicalAssistance Requirements: One tropical agricultureexpert for 4 months.

VII. Estimated Cost (US$'000): 16 - 149 -

ST. LUCIA

FY82/83-85/86Project List - Technical Assistance Profile

I. Sector: Tourism

II. Project Title: Sea Aquarium

III. Lending Agency: Ministry of Communications& Works.

IV. Executing GovernmentAgency: Ministry of Finance & Planning/ Ministry of Communicationsand Works.

V. Descriptionand Objectives: Establishmentof sea aquarium to exhibit profusion of tropical fish that exist in local waters.

VI. Technical AssistanceRequirements: One tropical fish expert for 4 months.

VII. Estimated Cost (US$'000): 16 - 150 -

ST. LUCIA

FY82/83-85/86Project List - Technical Assistance Profile

I. Sector: Works and Transportation

II. Project Title: Public Works MaintenanceTraining

III. Lending Agency: Unknown

IV. Executing Government Agency: Ministry of Finance & Planning/ Ministry of Communications& Works.

V. Descriptionand Objectives: Three to nine months training for ten individualsover a three-year period in road and public works maintenance.

VI. TechnicalAssistance Requirements: Scholarships.

VII. Estimated Cost (US$'000): 200 - 151 -

ST. LUCIA

FY82/83-85/86 Project List - Technical Assistance Profile

I. Sector: Water Supply

II. Project Title: Water Resource Development - Roseau Dam

III. Lending Agency: CDB

IV. Executing Government Agency: Ministry of Finance & Planning/ Central Water Authority.

V. Description and Objectives: Site investigation study for construction of water dam in Roseau Valley.

VI. Technical Assistance Requirements: Above study.

VII. Estimated Cost (US$'OOO): 200 - 152 -

ST. LUCIA

FY82/83-85/86Project List - Technical AssistanceProfile

I. Sector: Transportation

II. Project Title: Constructionof West Coast Road

III. Lending Agency: Unknown

IV. Executing Government Agency: Ministry of Finance & Planning/ Ministry of Communications& Works.

V. Descriptionand Objectives: Engineeringdesign for main road along West Coast between Castries and Vieux Fort.

VI. Technical AssistanceRequirements: 22 man months.

VII. Estimated Cost (US$'000): 266 - 153 -

STATISTICAL APPENDIX

Table of Contents

Table Number Page

I. POPULATION AND LABOR FORCE

1.1 Population Trends...... 155 1.2 Labor Force and Employment ...... 156

II. NATIONAL ACCOUNTS

2.1 National Accounts ...... 157 2.2 Gross Domestic Product at Constant Prices ...... 158 2.3 Gross Domestic Product at Current Factor Cost by Sectoral Origin ...... 159 2.4 GDP Deflators ..... 0...... 160 2.5 Estimated and Projected Sources and Uses of Resources, 1981-85...... 161

III. BALANCE OF PAYMENTS

3.1 Balance of Payments ...... 162 3.2 Merchandise Exports ...... 163 3.3 Merchandise Imports by End-Use ...... 164 3.4 Direction of Trade ...... o .... o...... 165 3.5 Effective Exchange Rates...... 166 3.6 Estimated and Projected Balance of Payments, 1981-85...... 167

IV. EXTERNAL PUBLIC DEBT

4.1 Summary of External Public Debt Operations ...... 168 4.2 Structure of External Debt ...... 169 4.3 External Debt Operations ...... 170

V. PUBLIC SECTOR FINANCES

5.1 Operations of the Consolidated Public Sector...... 172 5.2 Central Government Operations...... 176 5.3 Central Government Current Revenue ...... 177 5.4 Central Government Current Expenditures ...... 178 5.5 Central Government Current Transfers ...... 0*...... 179 5.6 Selected State Enterprises ...... 180 5.7 Financing of Public Sector Investment Program for FY1982/83-FY1985/86 ...... ,...... 183 5.8 Breakdown of Public Capital Expenditure, FY82/83-85/86.... 184 5.9 Public Sector Investment Program--Sectoral Composition.... 187 - 154 -

Table Number (Cont'd) Page

VI. MONEY AND BANKING

6.1 East Caribbean Currency Authority ...... 188 6.2 Commercial Bank Operations ...... 189 6.3 Commercial Bank Loans and Advances ...... 190 6.4 Structure of InterestRates ...... 191 6.5 Commercial Banks Liquidity Position ...... 192 6.6 Summary Accounts of the St. Lucia Mortgage Finance Company, Ltd ...... 193 6.7 Summary Accounts of the National Development Bank ...... 194

VII. AGRICULTURE, INDUSTRY AND TOURISM

7.1 Output of Selected Commodities...... #...... 195 7.2 Energy: Consumption and Retail Prices ...... 196 7.3 Index of Manufacturing Production ...... 197 7.4 Selected Tourism Statistics ...... 198

VIII. PRICES

8.1 Retail Price Index, 1975-80 ...... 199 - 155 -

Table 1.1: ST. LUCIA D POPULATION TRENDS

Est. 1976 1977 1978 1979 1980

Midyear population estimates 113,600 115,600 117,500 118,400 120,200

Annual percentage growth rate (midyear) 1.6 1.8 1.6 0.8 1.5

Crude birth rate of midyear estimated population (per thousand) 34.5 35.7 33.5 31.5 30.7

Crude death rate of midyear estimated population (per thousand) 7.8 7.1 6.7 7.2 7.0

Rate of natural increase of midyear estimated population (per thousand) 26.7 28.7 26.8 24.4 23.7

Total births 3,920 4,127 3,936 3,732 3,695

Total deaths 883 816 790 848 845

Natural population increase 3,037 3,311 3,146 2,884 2,850

Net migration 1,230 1,250 1,271 1,293 1,315

Net population increase 1,807 2,061 1,875 1,591 1,535

Sources: Government Statistical Office; and ECCM Secretariat. - 156 -

Table 1.2: ST. LUCIA - LABORFORCE AND EMPLOYMENT

Census Est. Est. Est. 1970 1975 1980 1981

(In thousands)

Total population 99.8 111.8 120.2 122.0

Labor force 30.3 34.0 36.5 37.2 Employed 26.1 29.2 31.4 31.8 Agricultureand mining (10.4) (11.6) (13.7) Manufacturing (2.1) (2.3) (1.9) Construction (0.2) (3.4) (2.3) ( ) Tourism (3.0) (3.4) (3.6) (-..) Other services (10.4) (8.5) (9.9) ( ) Unemployed 4.2 4.8 5.1 5.4

(As per cent of total population)

Labor force 30.4 30.4 30.4 30.5

(As per cent of employed)

Agricultureand mining 39.9 39.7 43.6 ... Manufacturing 8.1 7.9 6.1 Construction 0.8 11.6 7.3 Tourism 11.5 11.6 11.5 Other services 39.9 29.1 31.5 ...

(As per cent of labor force)

Unemployed 13.9 14.1 14.0 14.5

Sources: Government StatisticalOffice; ECCM Secretariat;and Fund staff estimates. - 157 -

Table 2.1: ST. LUCIA - NATIONAL ACCOUNTS

(In millions of East Caribbean dollars)

Prel. Est. 1976 1977 1978 1979 1980 1981

Consumption 141.4 160.4 179.9 235.5 266.4 334.5 Central Government (34.1) (40.1) (42.2) (58.3) (66.9) (76.2) Private (107.3) (120.3) (137.7) (177.2) (199.5) (258.3) Gross domestic investment 65.6 87.7 147.8 142.8 168.2 201.2 Central Government (17.6) (18.1) (lb.6) (20.3) (22.0) (18.9) Private 1/ (48.0) (69.6) (131.2) (122.5) (146.2) (182.3)

Gross domestic expenditure 207.0 248.1 327.7 378.1 434.6 535.7

Exports of goods and nonfactor services 82.8 109.1 143.2 178.7 224.4 209.5 Imports of goods and nonfactor services -131.3 -168.2 -237.9 -284.6 -351.5 -392.3

Nominal GDP at market prices 158.5 189.0 233.0 272.2 307.5 352.9 Indirect taxes 23.7 32.4 36.2 47.2 51.1 51.2 Subsidies -0.6 -0.3 -0.5 -0.6 -0.6 -0.8

Nominal GDP at factor cost 135.4 156.9 197.3 225.6 257.0 302.5

Sources: Ministry of Finance and Planning;IBRD; and Fund staff estimates.

1/ Includes change in inventories. - 158 -

Table 2.2: ST. LUCIA - GROSS DOMESTIC PRODUCT AT CONSTANT PRICES

Prel. Est. 1976 1977 1978 1979 1980 1981

(In millions of 1977 East Caribbean dollars)

GDP at factor cost 148.2 156.9 178.1 186.0 177.7 183.3 Agiiculture, fisheries, and forestry 21.6 21.1 25.7 26.1 22.7 30.7 Mining and quarrying 2.0 1.9 2.1 2.6 2.9 3.2 Manufacturing 11.6 12.5 14.2 12.5 12.9 13.6 Electricity and water 3.4 4.0 4.2 4.1 3.9 3.9 Construction 17.3 17.1 29.2 24.3 26.8 27.6 Wholesale and retail trade 21.1 23.1 25.0 27.2 27.2 27.2 Hotel and restaurants 6.9 8.6 10.9 14.3 12.5 9.4 Transport and communications 10.9 12.2 11.5 12.5 12.2 11.8 Government services 23.3 26.2 25.1 28.2 24.8 24.1 Banking, insurance, real estate, including rents 21.8 22.1 22.0 24.2 24.7 25.0 Miscellaneous services 8.3 8.1 8.2 10.0 7.1 6.8

(Percentage change)

CDP at factor cost 14.1 5.9 13.5 4.4 -4.5 3.2 Agriculture, fisheries, and forestry 11.5 -2.3 21.8 1.6 -13.0 35.2 Mining and quarrying 11.1 -5.0 10.5 23.8 11.5 10.3 Manufacturing 26.5 7.8 13.6 -12.0 3.2 5.4 Electricity and water 3.0 17.7 5.0 -2.4 -4.9 -- Construction -28.4 -i.z 70.8 -16.8 10.3 3.0 Wholesale and retail trade 12.9 9.5 8.2 8.8 -- -- Hotel and restaurants 115.6 24.6 26.7 31.2 -12.6 -24.8 TranspQrt and communications -2.7 11.9 -5.7 8.7 -2.4 -3.3 Government services 2.2 12.5 -4.2 12.4 -12.1 -2.8 Banking, insurance, real estate, including rents 11.3 1.4 -0.5 10.0 2.1 1.2 Miscellaneous services -1.2 -2.4 1.2 22.0 -29.0 -4.2

Sources: Ministry of Finance and Planning; IBRD; and Fund staff estimates. - 159 -

Table 2.3: ST. LUCIA - GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST BY SECTORAL ORIGIN

Prel. Est. 1976 1977 1978 1979 1980 1981

(In millions of East Caribbean dollars)

GDP at factor cost 135.4 156.9 197.3 225.6 257.0 302.5 Agriculture,fisheries, and forestry 19.7 21.1 28.5 31.6 32.8 50.7 Mining and quarrying 1.8 1.9 2.3 3.2 4.2 5.3 Manufacturing 10.6 12.5 15.7 15.2 18.7 22.4 Electricityand water 3.1 4.0 4.6 5.0 5.6 6.4 Construction 15.8 17.1 32.4 29.5 38.7 45.5 Wholesale and retail trade 19.3 23.1 27.7 33.0 39.4 44.9 Hotel and restaurants 6.3 8.6 12.1 17.3 18.1 15.5 Transport and communications 10.0 12.2 12.7 15.2 17.6 19.5 Governmentservices 21.3 26.2 27.8 34.2 35.9 39.8 Banking, insurance,real estate, includingrents 19.9 22.1 24.4 29.4 35.7 41.3 Miscellaneousservices 7.6 8.1 9.1 12.1 10.2 11.2

(As per cent of GDP at factor cost)

GDP at factor cost 100.0 100.0 100.0 100.0 100.0 100.0 Agriculture,fisheries, and forestry 14.5 13.4 14.5 14.0 12.8 16.8 Mining and quarrying 1.3 1.2 1.2 1.4 1.6 1.8 Manufacturing 7.8 8.0 8.0 6.7 7.3 7.4 Electricityand water 2.3 2.5 2.3 2.2 2.2 2.1 Construction 11.7 10.9 16.4 13.1 15.1 15.0 Wholesale and retail trade 14.3 14.7 14.0 14.6 15.3 14.8 Hotel and restaurants 4.7 5.5 6.1 7.7 7.0 5.1 Transportand communications 7.4 7.8 6.4 6.7 6.8 6.4 Government services 15.7 16.7 14.1 15.2 14.0 13.2 Banking, insurance,real estate, includingrents 14.7 14.1 12.4 13.0 13.9 13.7 Miscellaneousservices 5.6 5.2 4.6 5.4 4.0 3.7

Sources: Ministry of Finance and Planning; IBRD; and Fund staf' estimates. - 160 -

Table 2.4: ST. LUCIA - GDP DEFLATORS

Est. Weight 1976 1977 1978 1979 1980 1981

(1977 = 100)

Consumption1/ 82.2 91.9 100.0 110.9 -121.3 145.0 167.5 Investment 2/ 54.3 91.4 100.0 110.4 126.1 152.2 171.5 Exports of goods and nonfactor services (GNS)3/ 62.5 90.5 100.0 109.6 132.2 161.0 171.2 Imports of goods and nonfactor services (GNS)4/-99.0 91.2 100.0 109.9 130.8 159.4 174.5

(WeightedIndex)

Consumption 75.5 82.2 91.2 99.7 119.2 137.7 Investment 49.6 54.3 59.9 68.5 82.6 93.1 Exports of GNS 56.6 62.5 68.5 82.6 100.6 107.0 Imports of GNS -90.3 -99.0 -108.8 -129.5 -157.8 -172.8

GDP deflator 91.4 100.0 110.8 121.3 144.6 165.0

Percentage change 10.4 9.4 10.8 9.5 19.2 14.1

Source: Fund staff estimates.

1/ Deflated by cost of living index. 2/ Deflated by cost of living index 50 per cent, and by partner countries'export prices 50 per cent. 3/ Deflated by export price index using the banana and coconut export unit prices. 4/ Deflated by partner countries' export prices (includingoil). - 161 -

Table 2.5: ST. LUCIA - ESTIMATED AND PROJECTED SOURCES AND USES OF RESOURCES, 1981-85

(EC$ million 1977 prices)

Estimated Projected 1981 1982 1983 1984 1985

Gross Domestic Product 213.9 222.5 233.6 245.2 257.5

Imports (including NFS) a/ 224.8 238.3 252.6 265.2 278.5 Exports (including NFS) a/ 122.4 129.7 137.5 145.7 154.5

Consumption 199.0 206.1 210.0 217.0 226.0 Public b/ 45.3 45.0 50.0 55.0 60.0 Private7c/ 153.7 161.1 160.0 162.0 166.0

Investment 117.3 125.0 138.7 147.7 155.5

Gross National Savings 32.2 40.0 48.0 52.0 60.0 Public -0.7 9.0 10.0 11.0 13.0 Private 32.9 31.0 38.0 41.0 47.0

Memorandum Items Investment Financing 117.3 125.0 138.7 147.7 155.5 National Savings 32.2 40.0 48.0 52.0 60.0 Current Account Balance 85.1 85.0 90.7 95.7 95.5 (As % of GDP in constant prices)

Gross Domestic Product 100.0 100.0 100.0 100.0 100.0

Resource Gap 47.9 48.8 49.2 48.8 48.2 Imports (including NFS) 105.1 107.1 108.1 108.2 108.2 Exports (including NFS) 57.2 58.3 58.9 59.4 60.0

Consumption 93.0 92.6 89.8 88.5 87.8 Public 21.2 20.2 21.4 22.4 23.3 Private 71.8 72.4 68.4 66.1 64.5

Investmnent 54.9 56.2 59.4 60.3 60.4

Gross National Savings 15.0 17.9 20.5 21.2 23.3 Public -0.3 4.0 4.3 4.5 5.1 Private 15.3 13.9 16.2 16.7 18.2

Memorandum Items Investment Financing 54.9 56.2 59.4 60.3 60.4 National Savings 15.0 17.9 20.5 21.2 23.3 Current Account Balance 39.9 38.3 38.9 39.1 37.1

a! Excludes refined petroleum operations b/ Central Government c/ Includes change in inventories - 162 -

Table 3.1: ST. LUCIA - BALANCE OF PAYMENTS 1/ (In millions of U.S. dollars)

Est. 1977 1978 1979 1980 1981

Goods and services -11.4 -23.5 -27.9 -33.3 -51.6 and transfers -72*-T -K7 Total exports, f.o.b. (2.0) (2.0) (3.9) (12.3) (7.6) Of which: re-exports -59.3 -82.8 -101.2 -123.8 -138.1 Imports, c.i.f. (-12.0) (-14.2) (-19.0) (-23.8) (-29.1) Of which: Hess Co. 14.8 22.4 29.2 32.7 28.8 Travel (net) (17.8) (27.7) (33.4) (39.1) (35.0) Receipts (-3.0) (-5.3) (-4.2) (-6.4) (-6.2) Payments -- -0.1 -0.2 -1.0 -1.7 Interest (0.3) (0.4) (0.4) (0.1) (0.2) Receipts (-0.3) (-0.5) (-0.6) (-1.1) (-1.9) Payments 0.4 0.5 0.6 0.8 1.2 ECCA profits ...... 0.4 -4.5 -4.1 Other services (net)2/ 10.1 9.7 11.5 16.5 21.9 3/ Transfers (net) (2.5) (2.0) (3.7) (5.4) (7.0) Of which: official 16.7 27.3 30.4 35.8 45.8 Capital account Public sector borrowing (net) 1.9 2.7 3.0 1.6 2.6 Of which: Central Government (0.8) (1.4) (--) (2.4) (1.9) Commercial banks 1.8 4.0 1.4 3.3 1.6 Private direct investment 13.0 20.6 26.0 30.9 41.6 Of which: Hess Company (12.3) (19.0) (24.0) (28.9) (34.1)

Errors and omissions -5.2 -4.6 -3.6 -5.9 1.6

SDR allocation - --- 0.5 0.5

Overall deficit 0.1 -0.8 -1.1 -2.9 3.7

Financing -0.1 0.8 1.1 2.9 3.7 Net ECCA borrowing -- 0. 1.2 _7-- Change in foreign assets (increase -) 0.1 0.1 -0.1 -0.1 0.2 IMP borrowing ------2.3 3.5

Sources: Ministry of Finance and Planning; Post Office; Hess Company; Tourism Board; commercial banks; and Fund staff estimates.

1/ St. Lucia does not prepare an official set of balance of payments statistics and data for some categories of transactions started to become available only in 1977. 2/ Includes an estimate of the payments for royalties, dividends paid by concessionaries,and also crude oil fees paid until early 1980 and suspended thereafter. 3/ Includes US$2.9 million corresponding to Hess Company payments earmarked for government public projects which will revert to the public sector upon completion. - 163 -

Table 3.2: ST. LUCIA - MERCHANDISE EXPORTS

(Value in thousands of U.S. dollars; volume in thousands of kilograms unless otherwise specified; unit price in U.S. dollars)

Est. Jan.-June 1977 1978 1979 1980 1981 1980 1981

Total exports 22,586 26,811 31,842 45,996 40,477 26,044 16,300

Re-exports 1,996 1,991 3,899 12,256 7,600 6,470 3,203

Total domestic exports 20,591 24,820 27,943 33,740 32,877 19,574 13,097

Bananas Value 9,454 12,113 13,520 10,511 14,900 9,636 2,838 Volume (metric tons) 41,405 47,820 48,241 32,826 37,242 30,651 7,773 Unit price 0.23 0.25 0.28 0.32 0.39 0.31 0.37

Coconut oil (unrefined) Value 849 971 1,627 1,258 611 522 312 Volume (000 liters) 1,466 1,602 2,370 1,579 1,097 385 514 Unit price 0.58 0.61 0.69 0.80 0.56 0.61 0.61

Coconut oil (refined) Value 1,193 1,033 1,044 1,686 1,748 612 874 Volume (000 liters) 1,565 1,228 886 1,113 1,249 723 1,056 Unit price 0.76 0.84 1.18 1.52 1.4 0.85 0.83

Fruits and vegetables Value 280 440 529 399 340 293 156 Volume 1,169 2,352 2,034 1,474 906 1,067 481 Unit price 0.24 0.19 0.26 0.27 0.37 0.27 0.32

Beer and ale Value 953 1,131 1,590 1,219 1,253 592 506 Volume (000 gallons) 443 430 549 336 429 171 132 Unit price 2.15 2.63 2.90 3.63 2.92 3.46 3.83

Paper and paperboard Value 3,508 2,882 1,923 2,596 3,775 1,107 2,597 Volume 5,495 5,136 3,033 3,490 4,907 1,700 3,376 Unit price 0.64 0.56 0.63 0.74 0.77 0.65 0.77

Clothing Value 828 2,211 1,765 2,836 2,575 991 1,470 Volume 85 158 91 140 162 61 93 Unit price 9.74 14.00 19.40 20.26 15.8 16.24 15.8

Other Value 3,526 4,039 5,945 13,235 7,675 5,786 4,344

Source: Statistical Office. - 164 -

Table 3.3: ST. LUCIA - MERCHANDISE IMPORTS BY END-USE (IA millions of U.S. dollars)

Est. 1977 1978 1979 1980 1981

Total imports, c.i.f. 59.3 82.8 101.2 123.8 138.1

Food 13.1 17.1 19.3 22.4 25.0

Beverages and tobacco 1.9 2.0 2.4 3.1 3.5

Crude materials 1.2 1.9 2.6 3.7 4.1

Fuels 4.7 5.4 10.0 12.4 13.8

Oils and fats 0.2 0.7 0.4 0.6 0.7

Chemicals 6.3 6.9 8.6 10.8 12.0

Manufacturedgoods 15.9 20.2 29.1 29.3 32.9

Machinery and transport equipment 10.1 21.7 19.9 29.3 32.1

Miscellaneousmanufac- tured goods 5.6 6.8 7.9 12.2 14.0

Miscellaneous 0.3 0.1 1.0 -- --

Source: Department of Statistics. - 165 -

Table 3.4: ST. LUCIA - DIRECTION OF TRADE

(As per cent of total)

1976 1977 1978 1979 1980

Domestic exports, f.o.b. 100.0 100.0 100.0 100.0 100.0 United Kingdom 47.9 48.2 51.7 51.0 33.0 Canada 0.4 0.1 -- -- 0.2 United States 2.6 2.0 1.8 4.7 23.1 West Indies 47.0 47.8 43.9 40.5 38.1 Barbados (7.8) (9.8) (9.0) (6.1) (4.9) Guyana (1.7) (1.9) (0.6) (1.8) (0.8) Jamaica (5.4) (5.5) (6.2) (7.2) (12.4) Trinidad and Tobago (9.4) (6.1) (8.8) (8.5) (7.1) Other (22.7) (24.5) (19.3) (16.9) (12.9) France 0.2 0.2 1.2 2.3 2.4 Netherlands 0.4 ------1.4 Rest of world 1.5 1.7 1.4 1.3 1.8

Total imports, c.i.f. 100.0 100.0 100.0 100.0 100.0 United Kingdom 24.5 23.8 19.4 16.5 15. Canada 11.6 6.9 3.6 3.9 4.2 United States 19.8 24.9 36.3 29.6 31.3 West Indies 23.8 21.5 17.0 20.1 21.7 Barbados (3.6) (3.4) (2.5) (2.7) (3.2) Guyana (2.2) (1.9) (1.6) (1.2) (2.0) Jamaica (2.1) (2.0) (1.6) (2.3) (1.8) Trinidad and Tobago (15.0) (13.0) (9.8) (12.5) (12.3) Other (0.9) (1.2) (1.5) (1.4) (2.4) West Germany 1.0 1.1 0.8 0.7 1.0 France 0.6 0.7 1.1 0.7 0.5 Netherlands 2.3 3.3 2.8 3.0 2.4 Venezuela 2.8 0.7 1.5 0.7 3.7 Honduras 1.4 1.3 1.3 1.2 1.0 Japan 2.4 4.6 4.7 9.8 5.7 China 0.5 0.6 0.5 0.7 0.4 Rest of world 9.3 10.6 11.0 13.1 12.5

Source: Statistical Office. - 166 -

Table 3.5: ST. LUCIA - EFFECTIVE EXCHANGE RATES

Trade Weighted Exchange Rate 1/ Annual Units per EC$ (December1976 Averages SDR US$ Pound = 100)

1972 0.477 0.518 0.208 116.4

1973 0.428 0.512 0.208 114.2

1974 0.407 0.490 0.208 112.1

1975 0.379 0.459 0.208 108.8

1976 0.331 0.382 0.213 100.0

1977 0.317 0.370 0.211 97.9

1978 0.295 0.370 0.192 93.4

1979 0.286 0.370 0.174 89.6

1980 0.284 0.370 0.159 85.8

October 1981 0.322 0.370 0.201 98.7 2/

Source: IMF, International Financial Statistics.

1/ Based on the shares of St. Lucia's main trading partners (exports plus imports) in 1971-73. 2/ End of period. - 167 -

Table 3.6: ST. LUCIA: ESTIMATED AND PROJECTED BALANCE OF PAYMENTS, 1981-85

(US$ million)

Estimated Projected 1981 1982 1983 1984 1985

Exports of Goods and NFS a/ 75.4 87.5 100.0 112.0 132.0

Imports of Goods and NFS a/ 144.3 167.0 191.0 212.0 230.0

Resource Balance -68.9 -79.5 -91.0 -100.0 -98.0

Net Factor Service Payments b/ -4.6 -5.0 -7.0 -9.0 -10.0

Transfers (Net) c/ 21.9 25.5 38.0 43.0 42.0

Current Account -51.6 -59.0 -60.0 -66.0 -66.0

Private Capital d/ 43.2 53.8 53.6 58.4 56.3

Public Capital e/ 6.8 5.2 6.4 7.6 9.7 Loans 6.6 f/ 7.0 8.2 10.2 12.7 Amortization - -0.7 -1.1 -1.5 -1.5 ECCA - -1.1 -0.7 -1.1 -1.5 Change in Foreign Assets (increase-) 0.2 - - - -

Commercial Banks (+ increase) -1.6 - - - -

a! Excludes refined petroleum operations b/ Includes ECCA profits/losses c/ Includes grants to the public sector d/ Includes errors and omissions e/ Includes IMF borrowing and SDR allocation f Net - 168 -

Table 4.1: ST. LUCIA - SUMMARY OF EXTERNALPUBLIC DEBT OPERATIONS 1/

Prel. Est. 1977 1978 1979 1980 1981

(In thousandsof U.S. dollars)

Outstandingdebt at end of period 8,017 10,715 13,713 15,348 17,848 Outstandingdebt at beginning of period 6,114 8,017 10,715 13,713 15,348 Net drawings 1,854 2,675 2,984 1,590 2,500 Drawings (1,862) (2,692) (2,929) (1,904) (2,926) Amortization(-) (-8) (-17) (-55) (-314) (-426) Valuation adjustment 49 23 14 45 --

Debt service payments 347 514 675 966 1,116 Amortization 8 17 55 314 426 Interest 339 497 620 652 690

(In per cent)

Debt outstanding/GDP 11.4 12.4 13.6 13.6 13.7 Net drawings/GDP 2.6 3.1 3.0 1.4 1.9 Debt service/exports and tourism 0.9 1.0 1.1 1.5 1.3 Average interest rate 2/ 5.5 6.2 5.8 4.8 4.5 Debt outstanding (growth rate) 31.1 33.7 28.0 11.9 16.3

Sources: Ministry of Finance and Planning; and Fund staff estimates.

1/ Excludes debt to the Fund and the East CaribbeanCurrency Authority. 2/ Ratio of interest payments to debt at beginning of period. - 169 -

Table 4.2: ST. LUCIA - STRUCTUREOF EXTERNALDEBT"y

Authorized Interest Beginning Amount Rate of Dis- (thousand (Per Period of Currency of bursement EC$) cent) Repayment Purpose

C1eeral rOvernment bonded debt Debentures 2/ Water and road 1968 1,510 7-1/2 1980-82 ECG W3ter and road development Land and rood 1971 1,105 7-3/4 1981-83 ECG Land and road development Development 1979 220 8 1990-92 EC$ Development projects

Central govermenet loans Emergency fund 1976 1,000 6 1981-85 EC$ 3/ Catribbean Development Bank 4/ Castries Port Development 1974 620 8 1977-94 TT$ Deepwater Port Castries Port Development 1975 4,500 4 1980-2005 0S$ Deepwater Port Castries Port Development (additional) 1975 510 4 1980-2005 US$ Deepwater Port-additional loans St. Lucia Port Authority 1977 818 4 1978-93 DM Cold storage facilities Vigie Air Terminal 1974 516 4-B 1976-93 CE/ECG Air terminal buildings Feeder roads 1975 2,251 4 1980-95 C$ Road works Feeder roads (CCF) 1977 190 4 1982-97 TT$ Road works-counterpart funds FPoder roads (second loan) 1978 3,480 4 1982-97 US$ Road works Feeder roads (third loan) 1980 6,000 4 15 vears 5/ US$ Road works Bridge reconstruction 1974 933 4 1978-95 Stg. Bridges Bridge reconstruction (additional) 1976 754 4 1979-96 Stg. Bridges-additional loans Bridge reconstruction (CCF) 1976 317 4 1978-95 TTO Bridges-counterpart funds Water supplies 1974 888 4-8 1979-94 CG/EC$ Water supplies Water supplies (CCF) 1978 222 4 1979-94 TTS Water supplies-counterpart funds Water supplies (second loan) 1981 4,160 4 15 years 5/ C$/US$ Water supplies Castries Sewerage Project 1976 765 4 1979-97 DM Castries Sewerage Project Cantries Sewerage Project (CCF) 1977 90 4 1980-95 TT$ Castries Sewerage-counterpart ford Investment study 1978 54 4 1980-90 us$ Cul-de-Sac Free Trade Zone Hewanorra improvements 1981 2,700 4-8 15 years 5/ US$ Airport improvements CIDA 1974 2,035 free 1994-2024 CS Viesx Fort water supplies 6/

Covernment-guaranteed loans Caribbean Development Bank NDC - Industrial estates 1974 I80 4 1978-92 US$ Small factory buildings NDC - Induoprial estates 1974 500 4 1978-93 US$ Large factory buildings NDC - Industrial estates 1975 1,142 4 1980-95 us$ Vieux Fort estate NDC - Industrial estate (counterpart contributions) 1976 65 4 1979-94 TT$ VP estate counterpart fuods NDC - Industrial estate (fourth loan) 1979 1,800 4 1984-99 us$ Industrial estates NDB - Industrial credit 162 BAH$1Stg. NDB - SIC 1973 270 4 1979-94 US$ Small industrv credit NDB - SBC (counterpart contributions) 1977 11 4 1977-92 TT$ SIC counterpart fuods NDB - SIC -- 554 4 15 years 5/ US$ Small industry credit NDB - SIC (counterpart contributions) -- 55 4 15 years S/ TT$ SIC counterpart funds NDB - Student loans 1974 200 4 1979-88 Stg. Scholarships NDB - Student loans (first additional) 1976 64 4 1979-88 Stg. Scholarships NDB - Student loans (second additional) 1977 194 4 1979-88 Stg. Scholarships NDB - Stadent loans (second loan) 1977 1,196 4 1983-93 CG/Stp/US$ Scholarships NDB - Agricultural production credit 1978 1,072 4 1982-97 USB Small farmers' credit NDB - FIC 1974 525 4 1979-94 CS Farm improvement credit NDB - FIC (second loan) 1976 500 4 1980-95 CO Farm improvement credit NDB - FIC (third loan) 1979 500 4 1983-98 CG Farm improvement credit NDB - Mortgage Finance 1977 705 7-1/2 1977-97 7/ Housing finance NDB - Mortgage Finance (second loan) 1,620 4-1/2 - 7-1/2 15-18 years 8/ US$/TT$/BDS$ Housing finance St. Lucia electricity -- 863 4 20 years 9/ US$ Rural electrification Port Authority - Central Bank of Venezuela 1978 11,300 4 11/20 1981-2001 BS Deepwater port NDB - Colonial Life Insurance 700 10/

Source: Ministry of Finance and Planning; National Development Corporation; and National Development Bank.

1/ Exclades ECCA and IMF. 2/ Authorizod amount is amount outstanding at the end of the year and excludes debentures issued domestically. Total debentures issued were EC$2.069 million, EC$4.131 million, and EC$4.041 million, respectively. 3/ Loan from various donors and adninistered by CDB and ECCA and used to pay arrears on common regional services. 4/ Most of these loans have been disbursed directly by the corresponding agencies and have not been recorded as budgetary operations. They represent, however, a direct liability of the Central Government and the budget estimates include funds for servicing some of these loans. 5/ Starting five years after first disbursement. 6/ The loan provides for the establishment of a sinking fund at 4 per cent of the loan a year for 30 years, beginning 1979. 7/ Repayable in Canadian, U.S., Trinidad and Tobago, and Bahamian dollars. 9/ The CDB portion is repayable two yearn after first disbursement, the IBRD portion is repayable from 1983. 9/ Starting nine years after first disbursement. 10/ Repayment period being rescheduled. Table 4.3: ST. LUCIA - EXTERNAL DEBT OPERATIONS

(In thousands of U.S. dollars)

Out- Operations in 1977 Out- Operations 1978.an Out- standing Amorti- standing Amorti- standing 12/31/76 Drawings zation Valuation 12/31/77 Drawings zation Valuation 12/31/78

Total 6,114 1-862 8 49 8,017 2.692 -17 23 j09715

Central government total 4,636 1,600 -8 66 6,294 1,697 -14 41 8,01_

Bonded debt 968 ------968 -- -- 968 Debentures 968 --- -- Water and roads (559) (--) (--) (--) (559) (--) (--) (--) (559) Land and roads (409) (--) (--) (-_) (409) (__) (.) () (409) Develupment(-) (- (-)(-(_)(_ _ __ _

Loans 3,668 1,600 -8 66 5,326 1,697 -14 41 7,050 Emergency Fund 222 148 -- -- 370 -- 370 Caribbean Development Bank 3,201 1,452 -8 85 4,730 1,691 -14 58 6,471 Castries port development (1,631) (450) (--) (-3) (2,078) (164) (--) (-1) (2,241) - St. Lucia Port Authority (--) (303) (--) (31) (334) (--) (--) (50) (384) Vigie air terminal (222) (--) (-3) (-15) (204) (--) (-8) (-13) (183) Feeder roads - (177) (467) () (-25) (619) (1,428) () (-52) (1,995) Bridge reconstruction (724) (10) (-5) (72) (801) (3) (-6) (46) (844) Water supplies (257) (106) (--) (-17) (346) (82) (--) (-20) (408) Castries sewerage project (190) (116) (--) (42) (348) (--) (--) (48) (396) Investment study (__) (__) (--) (--) (--) (20) (--) (--) (20) Hlewanorra improvements (--) (--) (--) (--) (--) (--) (-) ( ) CIDA 245 -- -- -19 226 -- -- -17 209

Government-guaranteed loans 1,478 262 -- -17 _723 995 -3 -18 2,697 Caribbean Development Bank 1,219 262 -17 1,464 272 -3 -18 1,715 NDC - SIC 1/ 59 18 -- -- 77 22 -- -- 99 NDB - Industrial estates 749 13 -- -- 762 10 --3 --- 769 NDB - student loans 1/ 61 42 __ 12 115 68 -- 12 195 NDB - producers' credit ------75 -- -- 75 NDB - FIC 245 35 -- -21 259 97 -- -23 333 NDB - Mortgage finance 105 154 -- -8 251 -- -- -7 244 NDB - industrial credit - ______NDB- Colonial Life Insurance 259 ------259 ------259 Port Auttiority - Venezuela Central Bank ------723 -- -- 723 Table 4.3: ST. LUCIA - EXTERNALDEBT OPERATIONS(Concluded) (In thousands of U.S. dollars)

Out- Operations in 1979 Out- Operatinns in 9RO_ Out-- Prel.Out- standing Amorti- Valua- standing Amorti- Valua- standing standing 12/31/78 Drawings zation tion 12/31/79 Drawings zation tion 12/31/80 12/31/81

Total 10.715 3.020 -50 28 13,713 1,904 -314 45 15,348 17,848

Central government total 8,018 203 -39 21 8,203 223 -191 32 8,267 10,056

Bonded debt 968 81 ------1,049 1.049 Debentures 968 81 -- -- 1,049 -- -- 1,049 1,049 Water and roads (559) (--) (--) (--) (559) (-) () (--) (559) - (559) Land and roads (409) (--) (--) (--) (409) (--3 (-) (-) (409) (409) Development (--) (81) (--) (--) (81) (--) (--) (--) (81) (81)

Loans 7,050 122 -39 21 7.154 223 -191 32 7,218 9,007 Emergency Fund 370 ------370 -- 370 370 Caribbean Development Bank 6,471 122 -39 18 6,592 223 -191 32 6,636 8,433 Castries port development (2,241) (--) (--) (--) (2,241) () (-107) (-) (2,134) (1,908) St. Lucia Port Authority (384) (--) (--) (22) (406) ((--) (-31) (375) (361) Vigie air terminal (183) (--) (-12) (2) (173) (--) (-5) (-2) (166) (154) Feeder roads (1,995) (122) (__) (12) (2,129) (223) (-9) (-8) (2,335) (3,135) Bridge reconstruction (844) (--) (-14) (-41) (789) (--) (-37) (72) (825) (779) Water supplies (408) (--) (-13) (3) (398) (--) (-18) (-3) (377) (696) Castries sewerage project (396) (--) (--) (20) (416) (--) (-15) (3) (404) (380) Investment study (20) (--) (--) (--) (20) (--) (--) t--) (20) (20) Hewanorra improvements (--) (--) (--) (--) (--) (--) (-) (--) (--) (1,000) CIDA 209 -- -- 3 212 ------212 204

Government-guaranteed loans 2 697 2,817 -11 7 5510 1,681 -123 13 7.081 7,792 Caribbean Development Bank 1,715 483 -11 7 2,194 851 -123 13 2,935 3,348 NDC - SIC 1/ (99) (6) (--) (--) (105) (--) (--) (-1) (104) (104) NDB - industrial estates (769) (56) (-11) (14) (828) (430) (-69) (--) (1,189) (1,325) NDB - student loans 1/ (195) (66) (--) (-14) (247) (74) (-32) (22) (311) (386) NDB - producers' credit (75) (125) (--) (--) (200) (93) C--) C--) (293) (385) NDB - FIC (333) (170) (--) (6) (509) (21) (-14) (-6) (510) (508) NDB - Mortgage Finance (244) (-_) (--) (1) (245) (233) (-8) (-2) (468) (580) NDB - industrial credit (--) (60) (--) (--) (60) (--) (__) (--) (60) (60) NDB - Colonial Life Insurance 259 -- __ __ 259 -- __ __ 259 259 Port Authority - Venezuela Central Bank 723 2,334 -- -- 3,057 830 -- -- 3,887 4,185 Source: Ministry of Finance; and Caribbean Development Bank. 1/ Loans transferred from National Development Corporation to National Development Bank effective February 1, 1981. National Dev- elopment Bank amalgamates the functions of Agricultural and Industrial Bank (AIB) and the Housing Development Bank (HDB). - 172 -

Table 5.1: ST. LUCIA - OPERATIONSOF THE CONSOLIDATEDPUBLIC SECTOR

(In millions of East Caribbeandollars)

Est. 1977/78 1978/79 1979/80 1980/81 1981/82

Total receipts 72.85 80.35 111.77 122.58 128.03 Current receipts 66.81 74.65 100.82 114.05 122.18 Capital receipts 6.04 5.70 10.95 8.53 5.85

Total expenditure 79.00 84.77 117.34 135.33 151.80 Current expenditure 57.85 62.44 89.68 98.89 123.38 Capital expenditure 21.15 22.33 27.66 36.44 28.42

Current account surplus or deficit (-) 8.96 12.21 11.14 15.16 -1.20

Overall deficit -6.15 -4.42 -5.57 -12.75 -23.77

Financiug 6.15 4.42 5.57 12.75 23.77 Foreign financing (net) T23 6.01 7.78 2.84 11.47 Change in foreign assets -0.04 0.12 -1.80 -0.49 1.28 Net borrowingfrom ECCA (includesIKF purchases)0.94 2.85 3.85 9.45 9.95 Commercialbanks (net) -0.77 -1.16 -2.79 2.65 -0.84 Other domestic including residual 1.79 -3.40 -1.47 -1.70 1.91

I. Central GovernmentOperations

Total revenue 57.50 63.76 88.16 93.40 96.69 Current revenue 51.65 58.05 77.46 85.38 85.60 Budgetarygrants 0.29 0.43 0.37 0.03 -- Capital grants 5.56 5.28 10.33 7.99 5.45 New tax measures ------5.64

Total expenditure 59.90 67.47 92.40 113.25 122.32 Current expenditure 48.72 51.52 75.78 84.36 104.20 Capital expenditure 11.18 15.95 16.62 28.89 18.12

Current balance 3.22 6.96 2.05 1.05 -12.96

Overall deficit -2.40 -3.71 -4.24 -19.85 -25.63

Financing 2.40- 3.71 4.24 19.85 25.63 Foreign assets (increase -) -0.04 0.12 -1.80 -0.49 1.28 Net borrowing from ECCA(includesthe counterpartof purchasesfrom the IMF) 0.94 2.85 3.85 9.45 9.95 Other net foreign borrowing 2.04 3.87 0.07 1.30 5.22 Net local bank borrowing -4.00 1.03 -0.10 8.90 2.26 Other net domestic borrowing -0.25 -0.85 2.66 -- 6.92 Residual 3.71 -3.31 -0.44 0.69 -- - 173 -

Table 5.1: ST. LUCIA - OPERATIONSOF THE CONSOLIDATEDPUBLIC SECTOR (Continued)

(In millions of East Caribbean dollars)

Est. 1977/78 1978/79 1979/80 1980/81 1981/82

II. Rest of General Government

Current receipts 7.06 6.68 11.45 16.75 16.52 Of which: central government contributions1/ 0.53 0.45 0.50 1.65 2.22

Expenditure 5.72 4.04 4.98 8.22 9.35 Current expenditure 3.52 3.84 4.94 6.36 7.65 Capital expenditure 2.20 0.20 0.04 1.86 1.70

Current savings 3.54 2.84 6.51 10.39 8.87

Overall balance (deficit -) 1.34 2.64 6.47 8.53 7.17

Financing -1.34 -2.64 -6.47 -8.53 -7.17 Governmentloans (net) 0.20 0.25 -0.45 -1.88 -3.50 Other public sector (net) -3.45 -1.51 -3.57 -0.24 __ Commercialbanks (net) 1.50 -1.26 -1.61 -5.52 -2.97 Other domestic (including residual) 0.41 -0.12 -0.84 -0.89 -0.70

II (a). Castries City Council

Total revenue 1.10 1.08 1.82 2.30 2.92 Current revenue 1.10 1.08 1.82 2.3.0 2.92 Of which: government transfers (0.53) (0.45) (0.50) (1.65) (2.22)

Expenditure 1.30 1.43 1.08 2.02 2.92 Current expenditure 1.30 1.43 1.98 2.02 2.92 Capital expenditure ------

Current savings -0.20 -0.35 -0.16 0.28 --

Overall balance (deficit -) -0.20 -0.35 -0.16 0.28 --

Financing 0.20 0.35 0.16 -0.28 - Government advances 0.20 0.25 0.25 -- -- Commercial banks ------Other domestic -- 0.10 -0.09 -0.28 -- - 174 -

Table 5.1: ST. LUCIA - OPERATIONSOF THE CONSOLIDATEDPUBLIC SECTOR (Continued) (In millions of East Caribbean dollars)

Est. 1977/78 1978/79 1979/80 1980/81 1981/82

II (b). National Insurance Scheme/ProvidentFund 1/

Current receipts 4.05 3.54 7.45 11.85 9.30 Contributions(net) 3.11 2.47 5.90 8.86 6.60 Other 0.94 1.07 1.55 2.99 2.70

Expenditure 0.26 0.25 0.79 3.61 2.50 Current expenditure 0.26 0.25 0.79 1.75 2.50 Capital expenditure ------1.86 --

Current savings 3.79 3.29 6.66 10.10 6.80

Overall balance (deficit-) 3.79 3.29 6.66 8.24 6.80

Financing -3.79 -3.29 -6.66 -8.24 -6.80 Net lending to public sector -3.45 -1.51 -4.27 -2.12 -3.50 St. Lucia Mortgage Finance Corporation (-0.20) (--) (-1.10) (--) Urban Development Corporation (-1.00) (-0.38) (-0.40) (0.34) (--) National Development Corporation (--) (-0.24) (-0.60) (--) (--) St. Lucia Housing Authority (-0.35) (0.11) () (0.15) (--) National Development Bank (-1.35) (--) (0.17) (-0.50) (--) Central Government (--) (--) (-0.70) (-1.88) (-3.50) Port Authority (-0.50) (-0.50) (--) (0.07) Electricity Company (--) (-0.50) (-1.30) (--) (-- Commercial banks 0.70 -1.56 -1.61 -5.51 -2.60 Other -1.04 -0.22 -0.78 -0.61 0.70 175 -

Table 5.1: ST. LUCIA - OPERATIONS OF THE CONSOLIDATEDPUBLIC SECTOR (Concluded) (In millions of East Caribbean dollars)

Est. 1977/78 1978/79 1979/80 1980/81 1981/82

II (c). Government Funding Scheme

Current receipts 1.91 2.06 2.18 2.60 4.30 Operatingincome 1.87 2.02 2.11 2.60 3.40 Other (including capital grants) 0.04 0.04 0.07 - 0.90

Expenditure 4.16 2.36 2.21 2.59 3.93 Current expenditure 1.96 2.16 2.17 2.59 2/ 3.03 Capital expenditure 2.20 0.20 0.04 - 0.90

Current savings -0.05 -0.10 0.01 0.01 0.37

Overall balance (deficit -2.25 -0.30 -0.03 0.01 0.37

Financing 2.25 0.30 0.03 -0.01 -0.37 Government loans (net) -- Commercial banks (net) 0.80 0.30 -- -0.01 -0.37 Other domestic 1.10 - 0.03 -- -- Residual 0.35 ------

III. Selected State Enterprises (Consolidated)

Total receipts 9.61 15.03 14.19 17.21 20.41 Current receipts 8.87 11.37 13.23 15.78 20.01 Of which: Government transfers (0.53) (1.43) (1.53) (2.24) (3.33) Capital receipts 0.74 3.66 0.96 1.43 0.40 Of which: Government transfers (0.26) (3.24) (0.34) (0.89) (--)

Total expenditure 14.70 18.38 22.33 18.64 25.68 Recurrent expenditure 6.67 8.96 10.99 12.06 17.08 Capital expenditure 8.03 9.42 11.34 6.58 8.60

Current account surplus or deficit (-) 2.20 2.41 2.66 3.72 2.93

Overall deficit -5.09 -3.35 -8.14 -1.43 -5.27

Financing 5.09 3.35 8.14 1.43 5.27 Foreign financing (net) 2.19 2.14 7.71 1.54 6.25 Domestic financing 2.90 1.21 0.43 -0.11 -0.98 Commercial banks (net) (1.73) (-0.93) (-1.08) (-0.73) (-0.13) Central Government (-0.12) (-0.45) (0.40) () (-) National Provident Fund (-) (1.24) (1.81) (-0.07) (--) Other (1.29) (1.35) (-0.70) (0.69) (-0.85)

Sources: Ministry of Finance and Planning; Castries City Council; National Insurance Scheme; Government Fundtng Scheme; and selected state enterprises (Table 33).

1/ 1979/80 financial year for 11 months ended in February 1980; and 1980/81 financial year for 16 months ended in June 1981. 2/ Excludes EC$0.35 million backpay to daily-paid workers which is expected to be paid by the Central Government. - 176 -

Table 5.2: ST. LUCIA - CENTRAL GOVERTMENT OPERATIONS

Actual Estimated Preliminary Budget Apr.-Sept. Outturn 1/ 1977/78 1978/79 1979/80 1980/81 1981/82 1981 1981/82

(In millions of East Caribbean dollars)

Total revenue 57.50 63.76 88.16 93.40 128.90 45.72 96.69 2/ Current revenue 51.65 58.05 77.46 85.38 99.75 43.53 85.60 Budgetary grants 0.29 0.43 0.37 0.03 0.32 -- -- Capital grants 5.56 5.28 10.33 7.99 28.83 2.19 5.45 New tax measures ------5.64

Total expenditure 59.90 67.47 92.40 113.25 160.57 60.23 122.32 Current expenditure 48.72 51.52 75.78 84.36 99.22 49.58 104.20 Capital expenditure 11.18 15.95 16.62 28.89 61.35 10.65 18.12

Current balance (includes budgetary grants) 3.22 6.96 2.05 1.05 0.85 6.05 -12.96

Overall deficit -2.40 -3.71 -4.24 -19.85 -31.67 -14.51 -25.63

Financing 2.40 3.71 4.24 19.85 31.67 14.51 25.63 Foreign assets (increase -) -0.04 0.12 -1.80 -0.49 - 0.28 1.28 Net borrowing from - ECCA(includes the counterpart of purchases from the IMF) 0.94 2.85 3.85 9.45 9.00 7.10 9.95 Other net foreign borrowing 2.04 3.87 0.07 1.30 17.57 3.18 5.22 Net local bank borrowing -4.00 1.03 -0.10 8.90 -- -- 2.26 Other net domestic borrowing -0.25 -0.85 2.66 - 5.10 2.40 6.92 Residual 3.71 -3.31 -0.44 0.69 - 1.55 __

(As per cent of calendar GDP)

Currentrevenue 27.3 24.9 28.5 27.8 28.3 ... 25.9 2/ Current expenditure 25.8 22.1 27.8 27.4 28.1 ... 29.5 Current balance 1.7 3.0 0.8 0.3 0.2 ... -3.7 Overall deficit -1.3 -1.6 -1.6 -6.5 -9.0 ... -7.3

Sources: Ministry of Finance, Development and Planning; and Fund staff estimates.

1/ Both revenue and expenditure estimates are revised on the basis of ad,ustments introduced in November 1981. 2/ Includes estimated yield of new tax measures. - 177 -

Table 5.3: ST. LUCIA - CENTRAL GOVERNMENTCURRENT REVENUE

(In millions of East Caribbean dollars)

Actual Est. Preliminary Budget Apr.-Sept. Outturn 1977/78 1978/79 1979/80 1980/81 1981/82 1981 1981/82

Total current revenue ( icluinRbud2etar grants) 51.94 58.48 77.83 85.41 100.07 43.53 91.24

Current revenue (excluding grants) 51.65 58.05 77.46 85.38 99.75 43.53 91.24

Tax revenue 49.04 52.95 72.83 78.63 91.67 38.27 83.22 Tax on income 13.66 1 =.I 20.96 26T7 25.00 1370 24.70 Property and estate tax 0.42 0.48 0.48 0.47 0.60 0.24 0.49 Aliens land holding tax 0.64 0.40 0.78 0.33 0.20 0.06 0.16 Taxes on domestic production 15.77 16.56 22.51 20.62 30.23 9.38 19.85 Consumption duties (8.80) (8.46) (11.26) (12.30) (14.70) (6.03) (13.12) Hotel occupancy tax (1.27) (1.81) (2.71) (2.23) (2.50) (0.77) (1.72) Excise taxes (0.68) (0.63) (0.65) (0.91) (0.95) (0.46) (0.96) Hess ComDany taxes (--) (--) (2.42) (0.10) (6.00) (--) (--) Fees and licenses (2.81) (3.40) (3.40) (2.96) (3.60) (1.27) (2.39) Airport tax (0.57) (0.60) (0.61) (0.63) (0.95) (0.21) (0.38) Entertainment tax (0.12) (0.11) (0.11) (0.12) (0.13) (0.05) (0.09) Stamp duties 1/ (1.52) (1.55) (1.35) (1.37) (1.40) (0.59) (1.19) Taxes on international trade 18.55 20.30 29.45 30.64 35.35 14.89 32.38 Import duties (13.27) (14.08) (20.38) (19.74) (22.00) (9.52) (20.97) Export duties (0.20) (0.29) (0.28) (0.15) (0.25) (0.04) (0.22) Stamp duties (customs) (5.08) (5.93) (8.79) (10.75) (13.10) (5.33) (11.19) Telephone surcharge 2/ ------0.29 -- -- New tax measures 3/ -- -- 5.64

Nontax revenue 2.61 5.10 4.63 6.75 8.08 5.26 8.02 Interest and rents 0.20 0.03 0.04 0.12 01-- Currency profits 0.89 1.48 1.74 2.32 2.00 3.53 3.53 Loan repayments 0.12 0.07 0.15 0.10 0.05 -- -- Supply and post offices 0.57 1.56 1.28 2.96 3.26 1.00 2.96 Other 0.83 1.96 1.42 1.25 2.66 0.73 1.53

Budgetary grants 0.29 0.43 0.37 0.03 0.32 _ -

Source: Ministry of Finance anid Planning.

1/ Includes stamp duty on property transfer. T/ Surcharges on international telephone calls not implemented. 3/ Based on estimated yield of tax measures proposed in November 1981, some of which were implemented on November 25 and 30. Table 5.4: ST. LUCIA - CENTRAL GOVERNMENTCURRENT EXPENDITURE

(In millions of East Caribbean dollars)

Actual Preliminary Budget Apr.-Sept. Est. 1977/78 1978/79 1979/80 1980/81 1981/82 1981 Outturn

Current expenditure 48.72 51.52 75.78 84.36 99.22 49.58 104.20 Wages and salaries 1/ 22.23 23.97 45.08 39.15 47.18 23.43 48.40 2/ Goods and services 18.53 18.60 19.46 28.80 31.79 14.15 31.40 1 Interest 1.37 2.71 2.18 3.00 3.72 2.99 5.50 Pensions 2.65 1.60 3.08 2.49 3.12 1.29 2.60 c Transfers 3.43 4.08 5.33 10.39 12.53 7.44 15.40 Local (2.16) (1.95) (2.48) (8.09) (8.49) (5.24) (10.53) Foreign (1.27) (2.13) (2.85) (2.30) (4.04) (2.20) (4.87) Subsidies 0.31 0.58 0.65 0.53 0.88 0.28 0.90

Source: Ministry of Finance and Planning.

1/ Due to classification problems, wage payments may be understated and the purchase of goods and services correspondingly overstated. 2/ Assumes payment of EC$1.5 million of retroactive wages to daily-paid workers. - 179 -

Table 5.5: ST. LUCIA - CENTRAL GOVERNMENT CURRENT TRANSFERS

(In thousands of East Caribbean dollars)

Actual Est. Preliminary Budget Apr.-Sept. Outturn 1977/78 1978/79 1979/80 1980/81 1981/82 1981 1981/82

Total 3,427 4,076 5,329 10,390 12,527 7,443 15,404

To rest of public sector 1,165 1,370 1,325 5,406 4,883 3,146 6,993 Castries City Council 525 450 500 771 550 801 2,200 Funding Scheme 93 27 93 Port Authority 90 ------Central Water Authority 40 40 50 1,498 1,000 1,099 2,200 Urban Development Corporation 30 30 30 ------National Development Corporation 350 450 450 1,426 600 540 860 Banana Growers' Association 130 250 200 ------Electricity Company -- 150 95 -- 90 62 90 Towns and villages ------727 550 18 550 Tourist Board ------984 2,000 599 1,000

To private sector 992 576 1,158 2,689 3,606 2,098 3,544 St. Jude's Hospital ------1,163 1,692 688 1,990 Churches ------33 33 Public assistance ------418 914 249 250 Other ------271 271 Refunds and rebates ------1,108 1,000 857 1,000

Transfers abroad 1,270 2 ,130 2,346 2,295 4,038 2,199 4,867 University of West Indies ------1,250 1,800 1,355 2,300 West Indies Council of Ministers ------2u9 476 55 476 Commonwealth Secretariat ------291 241 64 241 Other regional and international agencies ------545 1,521 725 1,850

Sources: Central Library; and Ministry of Finance and Planning. - lbu -

Table 5.6: ST. LUCIA - SELECTED STATE ENTERPRISES

(In millions of East Caribbean dollars)

Est. 1977 1978 1979 1980 1981

I. Port Authority 1/

Total revenues 4.30 8.73 7.72 8.68 10.20 Current revenues 4.30 6.29 7.72 8.68 10.20 Of which: Central Govern- ment transfers (0.09) (--) (--) (--) Government capital transfers -- 2.44 ------

Total expenditures 9.49 11.31 14.08 8.86 10.40 Recurrent 2.50 4.25 5.62 6.00 7.90 Capital 6.99 7.06 8.46 2.86 2.50

Current account surplus 1.80 2.04 2.10 2.68 2.30

Overall deficit -5.19 -2.58 -6.36 -0.18 -0.20

Financing 5.19 2.58 6.36 0.18 0.20 Foreign financing 2.13 2.43 7.40 1.29 1.15 Commercial banks 1.39 -0.75 -0.61 -1.04 -0.50 Treasury bills -0.12 -0.45 0.40 -- -- National Provident Fund -- 0.50 -- -0.07 -- Other 1.79 0.85 -0.83 -- -0.45

II. Central Water Authority 2/

Total receipts 2.24 2.87 2.67 4.15 5.10 Current revenues 1.78 2.07 2.24 3.17 5.10 Of which: central government transfers (.) (0.73) (0.81) (1.20) (2.20) Capital receipts 0.46 0.80 0.43 0.98 -- Of which: government (0.26) (0.80) (0.34) (0.89) (--)

Total expenditures 2.94 3.25 3.31 3.88 5.40 Recurrent 2.31 2.45 2.89 3.48 4.10 Capital 0.63 0.80 0.42 0.40 1.30

Current deficit (-) -0.53 -0.38 -0.65 -0.31 1.00

Overall deficit (-) -0.70 -0.38 -0.64 0.27 -0.30

Financing 0.70 0.38 0.64 -0.27 0.30 Foreign financing 0.24 0.19 0.20 -- -- Commercial banks -0.03 -- 0.44 -0.27 0.30 Other 0.49 0.19 ------181 -

Table 5.6: ST. LUCIA - SELECTED STATE ENTERPRISES (Continued)

(In millions of East Caribbean dollars)

Est. 1977 1978 1979 1980 1981

III. National Development Corporation 2/

Total receipts 0.67 0.80 1.05 1.25 2.04 Current receipts 0.39 0.38 0.52 0.80 1.64 Of which: government trans'ers (0.33) (0.38) (0.52) (0.80) (0.89) Capital grants 0.28 0.42 0.53 0.45 0.40

Total expenditures 0.81 1.33 1.90 1.96 3.10 Recurrent 0.50 0.65 0.77 0.76 1.60 Capital 0.31 0.68 1.13 1.20 1.50

Current account surplus or deficit (-) -0.11 -0.27 -0.25 0.04 0.04

Overall deficit -0.14 -0.53 -0.85 -0.71 -1.06

Financing 0.14 0.53 0.85 0.71 1.06 Foreign financing 0.23 0.27 0.22 0.40 0.80 Commercial banks ------0.26 National Provident Fund -- 0.24 0.51 -- -- Other -0.09 0.02 0.12 0.31 --

IV. Electricity Services Limited 2/

Total receipts 2.11 2.07 2.27 2.65 2.65 Current receipts 2.11 2.07 2.27 2.65 *2.65 Of which: Central government transfers (0.11) (0.13) (0.10) (0.14) (0.14)

Total expenditures 1.21 1.97 2.58 3.72 6.55 Recurrent i.11 1.28 1.25 1.60 3.25 Capital 0.10 0.69 1.33 2.12 3.30

Current surplus or deficit (-) 1.00 0.66 1.02 1.05 -0.60

Overall surplus or deficit (-) 0.90 0.10 -0.31 -1.07 -3.90

Financing -0.90 -0.10 0.31 1.07 3.90 Foreign financing -0.41 -0.75 -0.11 -0.15 4.30 3/ Commercial banks 0.35 -0.14 -0.86 0.84 -- National Provident Fund -- 0.50 1.30 -- -- Other -0.84 0.29 -0.02 0.38 -0.40 - 182 -

STATISTICALAPPENDIX

Table 5.6: ST. LUCIA - SELECTED STATE ENTERPRISES (Concluded)

(In millions of East Caribbean dollars)

Est. 1977 1978 1979 1980 1981

V. Marketing Board 2/

Total revenues 0.29 0.56 0.48 0.48 0.42 Current receipts 0.29 Q.56 0.48 0.48 0.42 Of which: Central government transfers (--) (0.19) (0.10) (0.10) (0.10)

Total expenditures 0.25 0.52 0.46 0.22 0.23 Recurrent 0.25 0.33 0.46 0.22 0.23 Capital -- 0.19 ------

Current account surplus 0.04 0.04 0.02 0.16 0.09

Overall surplus, 0.04 0.04 0.02 0.26 0.19

Domestic financing -0.04 -0.04 -0.02 -0.26 -0.19 Commercial banks 0.02 -0.04 -0.05 -0-.26 -0.19 Other -0.06 -- -0.03 -- --

Sources: Ministry of Finance and Planning; Central Water Authority; Port Authority; St. Lucia Electricity Services Ltd.; National Develop- ment Corporation;and Marketing Board.

1/ The Port Authority kept records on a calendar year basis until 1978 when it switched to a fiscal year basis. Data for 1978 cover the 15 months ended March 31, 1979. 2/ The financialyears of the CentralWater Authority, the National Development Corporation,the Electricity Services Company, and the Marketing Board are on a calendar year basis. 3/ Insurancepayments resulting from hurricane damage during 1980. Table 5.7: ST. LUCIA: FINANCING OF PUBLIC SECTOR INVESTMENT PROGRAM FOR FY 1982/83-FY 1985/86

(In millions of East Caribbean dollars)

Total Estimates 1982/83- Per 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1985/86 Cent

USES 36.4 36.3 45.0 52.0 62.0 73.0 232.0 100.0

Public sector capital expenditure 36.4 36.3 37.1 47.0 35.0 65.0 204.1 88.0 Central Government (28.9) (18.1) (23.9) (28.5) (35.0) (40.0) (127.4) (54.9) Rest a/ ( 7.5) (18.2) (13.2) (18.5) (20.0) (25.0) (76.7) (33.1) External amortization b/ (...) (.) 2.0 3.0 4.0 4.0 13.0 5.6 Amortization of ECCA (.) (.) 3.0 2.0 3.0 4.0 12.0 5.2 Amortization of Commercial X Bank loans and other domestic loans (.) (.) 2.9 - - - 2.9 1.2

SOURCES 36.4 36.3 45.0 52.0 62.0 73.0 232.0 100.0

Public sector savings 15.2 -1.2 17.0 19.0 21.0 24.0 81.0 34.9 External financing (Gross) 10.9 26.4 28.0 33.0 41.0 49.0 151.0 65.1 Borrowing from ECCA c/ 9.4 10.0 - - - - Banks and other domestic sources d/ 0.9 1.1 - - - -

Sources: Ministry of Finance, Development and Planning; and IBRD staff projections.

a/ Includes the St. Lucia Development Bank, The Banana Growers' Association, and the Coconut Growers' Association. b/ Includes change in foreign assets. c/' Includes IMF purchases. d/ Includes residual. - 184 -

Table 5.8: ST. LUCIA - BREAKDOWNOF PUBLIC CAPITAL EXPENDITURE,FY82/83-85/86 -/ (EC$ '000)

FY82/83 FY83/84 FY84185 FY85/86 Total External Local Total External Local Total External Local Total External Local

ON-GOING PROJECTS

Central Government

Crop Diver-ification 288 288 - Tree Crop Expensioe Project 480 480 ------Delcer Irrigation 198 198 - Input Storage Warehoune 360 360 - 120 120 - - Land Transformation - T.A. 350 295 55 215 - 215 - - _ - - - Inventory of Forest Rencarcex - T.A. 452 452 - - - - - Feeder Roads 2829 2752 77 600 600 - - Pritary School (Extension and Rehabilitation) 1711 1626 85 - - - - School Rehabilitation 6360 6360 - - - - - BHN Health Projects 96 96 - - - - - Hewanorra Airport 1692 1500 192 - - - - Barre de L'Isle Road Reinstatement 675 675 - - - - - Training and T.A. 450 450 - - - - - Police Training Center - La Toc 120 120 ------

Sub-Total-Central Government 16061 15652 409 935 720 215

Rest of the Public Sector

WINIBAN (Inputs) 480 480 ------Roseau Resettlement (NDC) 2900 1000 1900 2900 2900 - 2900 2900 - 2900 2900 Coconut Rehabilitation (CGA) 132 132 ------Marketing Board Improvement (MB) 250 250 ------Agricultural Production Credit (NBD) 103 103 - 86 86 - - - Small Industry Credit (NDC) 189 189 - 143 143 - - - Aircargo Warehouse (NDC) 675 610 65 449 402 47 - - Rural Water Supply II (CWA) 2000 1658 342 1260 1260 - 190 190 Industrial Estate (NDC) 75 68 7 - - - - - Mortgage Financing (NDB) 644 348 296 370 200 170 - Student Loans (NDB) 305 305 - 232 232 - - - Livestock Project II (NDC) 464 464 - 700 700 - 800 800 - 800 800 - Dennery Agricultural Development II(NDC) 1715 500 1215 1950 1520 430 1800 800 1000 1800 800 1000 Agricultural and Industrial Credit(NDB) 1026 508 518 1644 1291 353 1000 700 300 1000 700 300 Electricity Development(LUCELEC) - _ - 2940 500 2440 1500 1200 300 1500 1200 300

Sob-Total-Rest of Public Sector 10958 6615 4343 12674 9234 3440 8000 6400 1600 8000 6400 1600

TOTALON-GOING PROJECTS 27019 22267 4752 13609 9954 3655 8000 6400 1600 8000 6400 1600

a/ Fiscal year covers April to MNrth. - 185-

Table 5.8: ST. LUCIA - BREAKDOWNOF PUBLIC CAPITAL EXPENDITURE, FY82/83-85/86 (Continued)

FY82/83 FY83/84 FY84/85 FY85/86 Total External Local Total External Local Total External Local Total External Local

NEW PROJECTS

Central Government

Tree Crop Rehabilitation - - _ 400 328 72 500 411 89 1709 900 809 Sugar Development - - - 270 270 - 270 270 - 1350 902 448 Land and Water Usa 159 159 - 398 398 - 397 397 - - - - Fishing Boat Development Project 270 100 170 354 304 50 354 304 50 - - - Fisheries Infrastructure Development - - - 600 479 121 1000 800 200 1000 800 200 Castries Fisheries Complex 2785 2110 675 3000 3000 - 3000 3000 - 665 665 - Rehabilitation of Forestry Sector - - - 800 405 395 540 405 135 540 405 135 Land Transformation and Cadastral Survey - - - 1000 300 500 1000 500 300 2001 1701 300 Feeder Roads IV and V - - - 1650 1025 625 4000 3400 600 6000 3200 2800 Windward Island Agricultural College 680 - 680 1350 1350 - 1350 1350 - - - - Export and Tourism Promotion 50 50 - 200 200 - 200 200 - - - - Agro-Industry Promotion ------350 290 60 Development of Tourist Attractiona - - - 600 405 195 600 400 200 600 320 280 Road Surfacing 759 300 459 2805 2001 804 2500 2000 500 1000 1000 - EBat Coast Road Strengthening - - - 800 270 530 500 270 230 500 270 230 Esland-wide Sewerage System ------2237 1458 779 3000 3000 - School Building Program ------4097 2656 1441 Literacy and Continuing Program 135 108 27 450 324 126 390 324 66 375 324 51 Island-wide Solid Waste Disposal 189 151 38 1506 1004 502 1005 1005 - - - - Expansion & Renovation of Victoria Hospital ------1500 300 1200 1000 600 400 Health Center Development Program - - - 284 243 41 378 324 54 378 324 54 Housing Rehabilitation and Development - - - 1560 945 615 3890 945 2945 1890 945 945 Development of Vieux Fort Free Port Industrial Zone - - - 2484 1944 540 1458 1458 - 1458 1458 - Establishment of Regional Hotel Trade School 602 270 332 600 270 330 ------hewanorra Airport Expansion I ------4000 2600 1400 Improvement and Rehabilitation of Vigie Airport - - - 945 729 216 999 772 227 990 712 278 Cultural Infrastructure Development I&II ------600 360 240 600 360 240 Tertiary Education Development I,II&III ------255 180 75 Wind-powered Chillroom 70 54 16 ------Other Projects 1/ 1900 1214 686 5962 4517 1445 6749 5580 1169 6636 5088 1548

Sub-Total-Central Government 7803 4693 3110 27568 20587 6981 35027 25909 9118 40019 28376 11643

I/ Includes Agricultur,al Production and Marketing Program and West Coast Road Construction. a/ Fiscal year covers April to March. - 186 -

Table 5.8: ST. LUCIA - BREAKDOWNOF PUBLIC CAPITAL EXPENDITURE, FY82/83-85/86 (Concluded)

Rest of Public Sector

Coconut Rehabilitation Program (CGA) 267 - 267 1075 462 613 853 853 Agricultural Production and Marketing Project (MB) - - - 1500 221 1279 684 500 184 500 500 Holiday Village I (NDC) - - - - - 1000 900 100 1200 1080 120 Point Seraphin Tourist Facility I (NDC) - - - 756 _ 756 700 700 - 1100 1100 - Vieux Fort Port Developnent and Rehabilitation (Port Authority) - - - 350 350 - 500 250 250 Development of Soufriere Port (Port Authority) 486 324 162 600 281 319 434 375 59 100 100 - Development of Castries Port (Port Authority) ------500 500 - 900 900 - Rural Electrification II (LUCELEC) ------405 162 243 Geothermal Energy Development I&II (LUCELEC) 1080 486 594 170 89 81 270 270 - 2300 2300 - Rural and Urban Water Development (CWA) - - - 270 189 81 359 251 108 810 567 243 Roseau Dam (CWA) ------4080 2240 1840 5000 4000 1000 Mortgage Finance III (NDB) ------500 270 230 800 432 368 Industrial Estates V(NDC) ------540 - 540 1000 900 100 Other Projects_l/ 459 367 92 1458 1242 216 1728 1495 233 2408 1949 439

Sub-Total-Rest of Public Sector 2292 1177 1115 5829 2484 3345 11998 8704 3294 17023 14240 2783

TOTAL - NEWPROJECTS 10095 5870 4225 33397 23071 10326 47025 34613 12412 57042 42616 14426

SUMMARY:

On-gBing Projects 27019 22267 4752 13609 9954 3655 8000 6400 1600 8000 6400 1600 Central Government (16061) (15652) (409) (935) (720) (215) (-) (-) (-) (-) (-) (-) Rent of Public Sector (10958) (6615) (4343) (12674) (9234) (3440) (8000) (6400) (1600) (8000) (6400) (1600)

New Projects 10095 5870 4225 33397 23071 10326 47025 34613 12412 57042 42616 144426 Central Government (7803) (4693) (3110) (27568) (29587) (6981) (35027) (25909) (9118) (40019) (28376) (11643) Rest of Public Sector (2292) (1177) (1115) (5829) (2484) (3345) (11998) (8704) (3294) (17023) (14240) (2783)

TOTAL 37114 28137 8977 47006 33025 13981 55025 41013 14012 65042 49016 16026

Central Government (23864) (20345) (3519) (28503) (21307) (7196) (35027) (25909) (9118) (40019) (28376) 111643) Rest of Public Sector (13250) (7792) (5458) (18503) (11718) (6785) (19998) (15104) (4894) (25023) (20640) (4383)

a/ Fiscal year covers April to March. 1/ It includes Rural and Urban Water Developnent Distribution. - 187 -

Table 5.9: ST. LUCIA - PUBLIC SECTOR INVESTMENT PROGRAM-- SECTORAL COMPOSITION (In millions of East Caribbean dollars)

Per On-Going New 1/ Total Cent

Total cost of projects 77.9 423.4 501.3 100

Directly productive Agriculture 28.9 70.7 99.6 20 Industry 1.1 17.8 18.9 4 Tourism 1.6 10.0 11.6 2

Economic infrastructure Electricity 1.6 60.7 62.3 12 Roads, airport, and port 16.5 93.9 110.4 22 Water, sewerage, and solid waste disposal 6.2 73.7 79.9 16

Social infrastructure Education 20.1 52.6 72.7 15 Other 1.9 44.0 45.9 9

Of which: to be disbursed during FY 1982/83- FY 1985/86 77.9 126.2 204.1 --

Sources: Ministry of Finance, Development and Planning; and IBRD staff projections.

1/ New projects scheduled to start between FY 1982/83 and FY 1985/86. - 188 -

Table 6.1: ST. LUCIA - EAST CARIBBEAN CURRENCYAUTHORITY

(In millionsof East Caribbeandollars)

December31 September30 1976 1977 1978 1979 1980' 1980 1981

Net internationalreserves 157.2 117.8 139.1 167.4 145.2 151.5 168.0 Assets 170.7 144.2 176.2 210. 6 212. 3 2-07.7 207.6 Current assets and money at call (156.3) (111.0) (117.6) (139.3) (93.9) (126.1) (127.7) Regularnotes in process of redemption (1.7) (4.4) (1.7) (5.7) (6.2) (11.0) (1.4) Other securities (12.7) (28.8) (56.9) (65.6) (112.2) (70.6) (78.5) Liabilities -13.5 -26.4 -37.1 -43.2 -67.1 -56.2 -39.6 Balancesdue to banks abroad 1/ (-13.5) (-26.4) (-37.1) (-43.2) (-67.1)(-56.2) (-39.6)

Net positionwith banks in ECCAarea -111.0 -65.9 -75.7 -89.2 -61.6 -87.8 -92.0 Assets 5.3 4.5 2.8 8.7 6.5 4.9 5.2 Bankers' balances 2/ (3.2) (2.6) (0.8) (6.5) (4.2) (2.6) (2.8) Balances with banks in area 3/ (2.1) (1.9) (2.0) (2.2) (2.3) (2.3) (2.4) Liabilities -116.3 -70.4 -78.5 -97.9 -68.1 -92.7 -97.2 Currency notes and coins (-9.6) (-14.0) (-17.7) (-24.0) (-26.5) (-25.9) (-16.8) St. Lucia /2.1/ /2.5/ /3.9/ /4.6/ /4.7/ /2.7/ /4.0/ Other /7.5/ /11.5/ /13.8/ /19.4/ /21.8/ /23.2/ /12.8/ Deposits -106.7 -56.4 -60.8 -73.9 -41.6 -66.8 -80.4 Demand (-5.3) (-3.7) (-7.1) (-7.9) (-12.9) (-15.2) (-36.6) Fixed (-101.4) (-52.7) (-53.7) (-66.0) (-28.7) (-51.6) (-43.8)

Net domestic assets 11.2 12.9 12.6 13.3 13.9 12.8 21.7 Central Government (net) 24.5 26*0 =2T =5 70T =2 41_.9 St. Lucia Treasury bills (3.0) (3.0) (5.0) (5.8) (7.2) (7.2) (7.2) Other Treasury bills (8.0) (8.7) (7.9) (13.6) (16.1) (14.0) (15.7) St. Lucia debentures (0.9) (0.9) (0.9) (3.3) (4.2) (4.2) (4.2) Other debentures (12.6) (13.4) (14.9) (10.8) (12.8) (12.8) (14.8) Liabilities to nommonetary international organizations -1.4 -0.4 -0.4 -0.4 -7.7 -0.3 -2.8 Net unclassified assets -11.9 -12.7 -15.7 -19.8 -18.7 -25.1 -17.4 Assets (0.6) (1.6) (2.7) (1.9) (4.0) (6.2) (8.0) Liabilities (-12.5) (-14.3) (-18.4) (-21.7) (-22.7) (-31.3) (-25.4)

Currencyin circulation 57.4 64.8 76.0 91.5 97.5 76.5 97.7 In St. Lucia 12.1 1_5.0 177.7 224-.6 ~7MY Estimate of notes and coins issued (14.2) (17.5) (21.6) (26.7) (29.3) (24.4) (31.5) Less: commercial banks' cash holdings (-2.1) (-2.5) (-3.9) (-4.6) (-4.7) (-2.7) (-4.0) In other ECCAcountries 42.0 47.2 55.7 66.8 70.3 52.2 67.6 Estimate of notes and coins issued (49.5) (58.7) (69.5) (86.2) (92.1) (75.4) (80.4) L.ess: commercial banks' cash holdings (-7.5) (-11.5) (-13.8) (-19.4) (-21.8) (-23.2) (-12.8) Coins in former member countries 3.3 2.6 2.6 2.6 2.6 2.6 2.6

Source: East Caribbean Currency Authority.

I/ "Abroad'meaning outside ECCA area. 2/ Foreign currency loans to area commercial banks. 3/ Domesticcurrency loans to area coimmercialbanks. - 189 -

Table 6.2: ST. LUCIA - COMMERCIAL BANK OPERATIONS

(In millions of East Caribbean dollars)

December Sept 1979 1980 180 1981

Net foreign assets -16.8 -25.8 -2.7 -21.3 Assets 1ZT 23 4 -27T1 Foreign currency holdings (2.7) (3.7) (2.4) (1.4) Claims on ECCA (4.4) (4.2) (7.2) (1.2) Claims on ECCA area banks (2.1) (10.7) (20.3) (3.0) Claims on banks abroad (9.5) (3.5) (9.1) (13.7) Other (4.1) (3.5) (3.6) (2.6) Liabilities -39.6 -51.4 -45.3 -43.2 Balance due to ECCA (0.6) (0.8) (0.4) (0.5) Balance due to ECCA area banks (7.9) (9.0) (5.9) (5.7) Balance due to banks abroad (11.3) (19.0) (20.0) (9.7) Nonresident deposits (19.8) (22.6) (19.0) (27.3) Demand /4.7/ /5.3/ /3.9/ /8.3/ Savings /7.7/ /9.9/ /8.8/ /10.4/ Time /7.4/ /7.4/ /6.3/ /8.6/

ECCA currency holdings 4.6 4.7 2.7 4.0

Net domestic assets 125.4 147.5 130.8 164.6 Net credit to Central Governmnt 2 5 -16I-T T Treasury bills (2.6) (0.4) (0.5) (0.3) Debentures (1.2) (3.2) (2.8) (2.7) Loans and advances including overdraft (15.5) (10.2) (11.2) (7.9) Government deposits (-) (-3.1) (-5.8) (-4.8) (-6.2) Special deposit requirement 1/ (-) (7.7) (3.6) (14.3) Net credit to other public sector -6.1 -10.1 -7.7 -13.2 Credit (5.2) (2.0) (4.1) (4.4) Deposit (-) (-11.3) (-12.1) (-11.8) (-17.6) Net credit to nonbank financial intermediaries -2.3 -3.0 -3.5 1.6 Credit (0.8) (0.2) (0.6) (4.1) Deposit (-) (-3.1) (-3.2) (-4.1) (-2.5) Credit to private sector 130.1 164.4 153.5 173.8 Of which: commercial bills discounted (2.7) (1.8) (0.6) (0.5) Interbank float -0.9 -7.3 -8.1 0.7 Claims (19.7) (18.3) (18.6) (18.3) Liabilities (-20.6) (-25.6) (-26.7) (-17.6) Net unclassified assets -11.6 -12.2 -16. 7 -17.3 Assets (12.7) (14.6) (12.7) (15.5) Liabilities (-24.3) (-26.8) (-29.4) (-32.8)

Liabilities to private sector 2/ 113.2 126.4 130.8 147.0 Demand deposits 24 1 -f4r. -6i T57W Savings deposits 59.4 63.0 64.8 73.2 Time deposits 29.7 39.3 29.9 47.2

Sources: Ministry of Finance and Planning; and East Caribbean Currency Authority.

1/ Since January 1979 the reporting forms from ECCA changed their format allowing for a major breakdown. Therefore, it is not possible at this time to follow the same format for the years prior to 1979. 2/ Deposits of other public entities and financial institutions are excluded. - 190 -

Table 6.3: ST. LUCIA - COMMERCIALBANK LOANS AND ADVANCES 1/

December 31 September 30 1976 1977 1978 1979 1980 1980 1981

(In millions of East Caribbean dollars)

Total 74.5 96.4 118.4 137.8 163.1 157.0 183.0

Agriculture 5.0 5.3 8.0 4.3 8.6 7.7 11.2

Manufacturing 12.7 14.9 19.7 22.3 23.3 23.3 21.6

Distributive trade 17.6 18.6 19.6 28.3 26.9 26.1 31.8

Tourism 5.4 9.0 9.6 9.5 12.8 11.8 14.7

Transport 5.6 8.7 10.0 12.0 12.2 12.3 13.9

Construction 6.9 8.6 9.8 9.8 9.9 10.7 9.9

Public utilities 1.5 1.8 2.5 1.0 2.4 1.4 0.7

Personal and other advances 19.8 29.5 39.2 50.6 67.0 63.7 79.2

(As per cent of total)

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Agriculture 6.7 5.5 6.8 3.1 5.3 4.9 6.1

Manufacturing 17.1 15.5 16.6 16.2 14.3 14.8 11.8

Distributive trade 23.6 19.3 16.6 20.5 16.5 16.6 17.4

Tourism 7.3 9.3 8.1 6.9 7.9 7.5 8.0

Transport 7.5 9.0 8.5 8.7 7.5 7.8 7.6

Construction 9.3 8.9 8.3 7.1 6.1 6.8 5.4

Public utilities 2.0 1.9 2.1 0.7 1.5 0.9 0.4

Personal and other advances 26.6 30.6 33.1 36.7 41.1 40.6 43.3

Source: East Caribbean Currency Authority.

1/ Excludes loans and advances to the Central Government and other statutory bodies. Table 6.4: ST. LUCIA - STRUCTURE OF INTEREST RATES

End of Period Sept. 1976 1977 1978 1979 1980 1981

Deposits Savings 3.00 2.50-3.00 2.50-3.00 2.50-3.00 2.50-4.50 3.00-5.50 Time 3 months 4.00-8.00 3.50-4.00 5.00-5.50 5.00 5.00-6.00 4.00-8.00 6 months 8.50 4.50 5.50-6.00 5.50 5.50-6.50 5.00-8.00 12 months 7.00-9.00 5.00-5.50 6.00-6.50 6.00 6.00-8.00 6.00-10.00

Lending Prime rate 9.50-11.75 7.50-8.50 7.50-10.00 7.50-8.00 9.00 8.50-11.00

Treasury bill rate ...... 7.50-8.00 6.56-8.01 Interbank deposit rate ...... 13.00 7.00-13.5

Sources: Ministry of Finance and Planning: and local commercial banks. - 192 -

Table 6.5: ST. LUCIA - COMMERCIALBANKS' LIQUIDITY POSITION

1980 1981 June Sept. Dec. Mar.

(In millions of East Caribbean dollars)

Special deposit requirement1/ 3.6 7.7 11.5 14.3

Total deposits 136.6 149.8 149.0 172.1 Residents 117.0 130.8 126.4 148.4 Nonresidents 19.6 19.0 22.6 23.7

(As per cent of total deposits)

Special deposit with Treasury 2.5 5.0 7.5 10.0 Other liquid assets 5.6 4.0 5.6 3.7 Total liquid assets 8.1 9.0 13.1 13.7

(In millions of East Caribbean dollars)

Memorandum items Special deposit requirement by bank 1/2/ Royal Bank 1.] 1.3 1.0 0.9 CIBC 0.4 0.4 0.4 0.2 Nova Scotia 0.7 0.8 0.8 0.7 Barclays 1.4 1.7 1.6 1.0

Source: Ministry of Finance and Planning.

1/ Collected as of July 14, 1980; October 24, 1980; February 20, 1981; and September24, 1981, respectively. 2/ Excludes National Commercial Bank and St. Lucia CooperativeBank which are exempt from the requirement. Table 6.6: ST. LUCIA - SUMMARY ACCOUNTS OF THE ST. LUCIA MORTGAGE FINANCE COMPANY, LTD.

(In thousands of bast Caribbean dollars)

December 31 Sept. 30 1976 1977 1978 1979 1980 1981

Claims on commercial banks 129.5 263.2 302.1 -10.6 364.7 277.8 Cash 129.5 263.2 302.1 0.3 364.7 277.8 Overdraft ------10.9 -- --

Net domestic credit 7,328.0 7,670.4 7,546.4 7,860.4 9,625.7 10,474.7 Claims on private sector 10,155.1 10,167.7 11,288.3 13,032.8 15,056.5 16,281.6 Mortgage loans (10,081.1) (10,150.3) (11,162.0) (12,933.6) (14,957.5) (16,233.5) Other loans (74.0) (17.4) (126.3) (99.2) (99.0) (58.1) Claims on public sector (net) -1,677.0 -1,918.8 -3,163.7 -4,235.5 -4,751.5 -4,765.1 Central Government (-577.0) (-618.8) (-663.7) (-235.5) (-251.5) (-265.1) Other public sector (-1,100.0) (-1,300.0) (-2,500.0) (-4,000.0) (-4,500.0) (-4,500.0) Other assets (net) -1,150.1 -578.5 -578.2 -936.9 -679.3 -1,041.8

Long-term foreign liabilities1/ 7,436.7 7,791.5 7,764.8 7,760.0 9,705.1 10,410.0

Liabilities to private sector 20.9 142.1 83.8 89.8 285.3 342.4

Source: St. Lucia Mortgage Finance Company, Ltd.

1/ CommonwealthDevelopment Corporation equity and loans. - 194 -

Table 6.7: ST. LUCIA - SUMMARY ACCOUNTS OF THE NATIONAL DEVELOPMENTBAhNK

(In thousands of East Caribbean dollars)

Projected February March 1981 1982

Claims on commercialbanks 132.1 2,903.0 Cash 132.1 708.0 Fixed deposits -- 2,195-.0

Net domestic credit 10,966.7 9,753.9 Claims on the private sector 11,078.3 11,227.6 Other assets (net) -111.6 -1,473.7

Long-termforeign liabilities 7,585.8 9,102.5

Liabilities to private sector 1/ 3,513.0 3,554.4

Source: National DevelopmentBank.

1/ Includes deposits of public entities. - 195 -

Table 7.1: ST. LUCIA - OUTPUT OF SELECTED COMMODITIES

(In thousands of indicatedunits)

Est. 1976 1977 1978 1979 1980 1981

Agriculturalproductior Bananas (tons) 44.1 40.3 51.0 59.0 35.6 56.7 Cocoa (pounds) 224.0 179.0 228.0 237.0 218.0 220.0 Coconuts (nuts) 19,300 20,900 23,300 25,200 26,700 23,000

Industrialproduction Raw coconut oil (gallons) 747 820 868 911 908 782 Refined coconut oil (gallons) 2,613 2,917 4,026 3,437 3,757 3,236 Laundry soap (pounds) 938 1,058 839 753 672 579 Coconut meal (pounds) 3,406 3,735 3,871 4,043 4,041 3,565 Copra (tons) 4.7 5.2 5.7 5.7 5.6 4.8 Rum (gallons) 185 203 206 181 186 -- Animal feed (tons) -- 645 1,948 ... Paper/cardboard(cartons) 10,474 9,195 10,869 5,989 7,333 9,780 Clothing (dozens) 120 152 194 190 273 368

Sources: Banana Growers' Association;Coconut Growers' Association;and GovernmentStatistical Office. - 196 -

Table 7.2: ST. LUCIA - ENERGY: CONSUMPTIONAND RETAIL PRICES 19

Est. 1976 1977 1978 1979 1980 1981

Gasoline Consumption (thousandsof imperial gallons) 2,660 2,897 3,181 3,294 4,256 4,528 Retail price (EC$ per imperial gallon) 2.25 2.50 2.75 3.68 4.83 5.10

Diesel Consumption (thousandsof imperial gallons) 4,057 4,735 5,127 5,571 6,997 7,643 Retail price (EC$ per imperial gallon) 2.00 2.15 2.40 3.48 4.53 4.90

Kerosene Consumption(thousands of imperial gallons) 326 327 324 290 262 297 Retail price (EC$ per imperial gallon) 1-68 1.77 2.00 3.21 4.04 4.39

LPG (gas) Consumption (thousandsof pounds) 2,274 2,838 3,175 3,186 2,415 2,516 Retail price (EC$ per lb.) 0.45 0.48 0.48 0.70 0.90 0.90

Electricityconsumption (millionsof kwh) 44.8 49.9 56.7 60.8 58.4 57.5 Of which: Domestic 9.2 9.6 11.3 12.9 12.1 13.5 Commercial 19.0 21.8 24.2 27.8 25.8 24.0 Industrial 6.2 6.7 7.7 8.0 7.2 7.6 Other and losses 10.4 11.8 13.5 12.1 13.3 12.4

Sources: GovernmentStatistical Office; Esso, Texaco and Shell Agents; and St. Lucia ElectricityServices.

1/ Retail prices as of December 31. - 197 -

Table 7.3: ST. LUCIA - INDEX OF MAzNUFACTURING PRODUCTION

Est. Weights 1976 1977 1978 1979 -1980 198

(Index 1975 = 100)

Overall index 100.0 126.5 135.9 154.1 136.1 139.9 148.3 Food 41.8 84.1 87.0 97.7 93.7 85.3 67.8 Beverages 13.1 189.2 266.9 307.0 327.4 229.2 245.2 Tobacco 5.4 103.6 112.0 114.2 122.4 Textile goods 0.5 69.3 141.0 70.4 211.2 234.0 250.4 Wearing apparel 4.7 174.6 221.9 282.7 276.1 424.6 573.2 Timber and lumber 0.4 127.1 408.0 180.7 42.7 , ... Furniture 1.4 97.6 66.9 103.3 97.5 ...... Cardboard boxes 27.9 159.3 138.1 163.2 89.9 110.0 146.7 Industrial chemicals 2.4 71.4 72.4 63.1 56.6 Tire and tube retreading 0.7 324.9 264.3 233.3 206.5 ...... Plastic products 0.8 159.9 182.4 100.2 297.5 Fabricated metal products 0.1 94.2 38.2 42.9 39.3 Electrical products 0.8 90.1 122.7 111.0 132.4 714.4 169.3 Other manufactured items 0.1 90.8 201.0 147.4 621.3 1,230.2 935.0

(Percentage change)

Overall index 26.5 7.4 13.4 -11.7 2.8 6.0 Food -15.9 3.5 12.3 -4.1 -9.0 -20.6 Beverages 89.2 41.1 15.0 6.7 -30.0 7.0 Tobacco 3.6 8.1 2.0 7.2 ... Textile goods -30.7 103.5 -50.1 200.0 10.8 7.0 Wearing apparel 74.6 27.1 27.4 2.3 53.8 35.0 Timber and lumber 27.1 221.0 -55.7 -76.4 ... Furniture -2.4 -31.5 54.4 -5.6 ...... Cardboard boxes 59.3 -13.3 18.2 -44.9 22.4 33.4 Industrial chemicals -28.6 1.4 12.9 -10.3 Tire and tube retreading 224.9 81.4 -15.5 -7.5 ...... Plastic products 59.9 14.1 -45.1 96.9 Fabricated metal products -5.8 -59.5 12.3 -8.4 Electrical products -9.9 36.2 9.5 19.3 439.6 -76.3 Other manufactured items -9.2 21.4 -26.7 321.5 98.0 -24.0

Sources: Government Statistical Office; and Fund staff estimates. - 198 -

Table 7.4: ST. LUCIA - SELECTED TOURISM STATISTICS

Est. 1977 1978 1979 1980 1981

(Number of visitors)

Total visitors 149 000 158,500 153,300 151,992 129,903 Cruises 1/ 84,300 89,200 76,800 72,000 71,800 Other 64,700 69,300 76,500 80,192 59,903 By air (61,900) (66,500) (73,700) (78,908) ( ) By sea (2,800) (2,800) (2,800) (1,284) ( ) United States (17,100) (16,200) (17,500) (16,000) ( ) United Kingdom (10,700) (13,000) (15,000) (18,500) ( ) Canada (13,200) (15,000) (17,500) (15,500) ( ) Caribbean countries (14,200) (14,600) (15,000) (16,000) ( ) South America (2,000) (2,000) (2,000) (1,000) All others (7,500) (8,500) (9,500) (13,192)

(In millions of U.S. dollars)

Total expenditure 2/ 17.8 27.7 33.4 39.1 35.0 Cruise visitors 1.2 1.8 1.6 1.8 2.0 Other visitors 16.6 25.9 31.8 37.3 33.0

(In days)

Average length of stay of non-cruise visitors 8.0 8.5 8.6 8.6 8.6

(Annual percentage change)

Total visitors 18.7 6.4 -3.3 -0.9 -14.5 Cruises 377 -5T.7 6. -0.3 Other 14.7 7.1 10.4 4.8 -25.3

Total expenditure 42.4 55.6 20.6 17.1 -10.5

Sources: Tourism Board; Economic Consultants Limited; and Fund staff estimates.

1/ Includes 12,800 yacht passengers, from 1978. T/ Expenditure for stopover visitors = inumber visitor x average stay x 0.92 (: guest nights) x daily spending (estimated at US$48.00 for 1978). Guest nights = it is assumed that 8 per cent of stopover visitors stay with relatives ot friends, thus only 92 per cent stay in hotels or guest houses. Cruise-ship visitors' average stay is three hours and average spending US$22.00 in 1978. Yacht visitors' average stay is three days and daily spending US$6.00 in 1978. 1 99 -

Table 8.1: ST. LUCIA - RETAIL PRICE INDEX, 1975-80

Alcoholic Household Drinks Fuel and Mis- Clothing and Hous- and cellaneous and Ser- Items Food Tobacco ing Light Items Footwear vices

(April 1964 = 100)

Weights 1,000.0 565.6 68.8 101.0 55.9 50.3 81.1 77.3

Period average 1976 305.5 330.1 249.9 329.0 250.8 267.5 225.2 292.1 1977 332.6 356.7 267.9 339.7 271.9 340.9 263.7 314.9 1978 368.7 395.2 293.1 400.4 301.3 385.7 284.8 329.1 1979 403.5 432.0 328.9 412.6 389.3 428.8 315.2 339.3 1980 482.4 507.0 423.9 450.8 594.2 488.5 395.4 390.1 Nov. 1979- Oct. 1980 466.8 490.5 413.5 437.7 566.3 480.7 382.1 384.1 Nov. 1980- Oct. 1981 546.5 592.5 438.7 501.6 641.5 552.8 409.6 436.1

End of period 1976 320.0 345.2 254.6 335.8 264.4 304.1 238.8 308.9 1977 348.0 374.0 282.4 340.3 304.8 376.3 274.5 316.6 1978 378.0 403.5 306.7 406.7 307.2 405.9 299.5 332.1 1979 436.2 464.1 405.1 413.3 491.5 470.6 326.4 342.4 1980 528.4 565.5 443.9 494.3 646.0 507.5 406.3 433.3 Oct. 1980 513.6 550.0 441.8 463.3 607.8 502.6 406.3 427.9 Oct. 1981 568.7 622.9 426.6 503.7 647.9 649.2 413.6 438.2

(Percentagechange)

Period average 1976 9.7 10.0 8.4 9.7 14.4 15.2 6.9 4.4 1977 8.9 8.1 7.2 3.3 8.4 27.4 17.1 7.8 1978 10.9 10.0 9.4 17.9 10.8 13.1 8.0 4.5 1979 9.4 9.3 12.2 3.0 29.2 11.2 10.7 3.1 1980 19.6 17.4 28.9 9.3 52.6 13.9 25.4 15.0 Nov. 1980- Oct. 1981 17.1 20.8 6.1 14.6 13.2 15.0 7.2 13.5

End of period 1976 10.3 10.6 5.3 4.5 18.4 23.6 10.9 8.0 1977 8.8 8.3 10.9 1.3 15.3 23.7 14.9 2.5 1978 8.6 7.9 8.6 19.5 0.8 7.9 9.1 4.9 1979 15.4 15.0 32.1 1.6 60.0 15.9 9.0 3.1 1980 21.1 21.9 9.6 19.6 31.4 7.8 24.5 26.5 Oct. 1981 10.7 13.3 -3.4 8.7 6.6 29.2 1.8 2.4

Source: Government StatisticalOffice.

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