SAINT VINCENT AND THE GRENADINES

aint Vincent and the Grenadines’ economic freedom score is 66.8, S making its economy the 59th freest in the 2020 Index. Its overall score has increased by 1.0 point due to a higher property rights score. Saint Vincent and the Grenadines is ranked 10th among 32 countries in the Americas region, and its overall score is well above the regional and WORLD RANK: REGIONAL RANK: world averages. 59 10 The economy of Saint Vincent and the Grenadines has been considered moderately free ever since its first grading in the Index in 2009. GDP ECONOMIC FREEDOM STATUS: growth for the past five years has been tepid. MODERATELY FREE Many fundamentals for greater economic freedom, such as flexible regulations, an efficient legal system that secures private property, and macroeconomic stability, are in place. Greater access to private financing and more openness to trade and international investment would improve the business climate as well as those Index indicators. Establishment of a specialized national anticorruption agency would improve govern- ment integrity.

ECONOMIC FREEDOM SCORE

▲ UP 1.0 POINT 66.8

0 50 60 70 80 100

REGIONAL AVERAGE WORLD (AMERICAS REGION) 60.0 61.6 AVERAGE

HISTORICAL INDEX SCORE CHANGE (SINCE 2009): +2.5

RECENT FREEDOM TREND QUICK FACTS



POPULATION: UNEMPLOYMENT: 0.1 million 19.8% 68.8  67.7 66.8 65.2 65.8 GDP (PPP): INFLATION (CPI): $1.3 billion 2.4% 2.0% growth in 2018

5-year compound FDI INFLOW:  $100.5 million annual growth 0.9% $11,956 per capita PUBLIC DEBT: 73.1% of GDP 

      2018 data unless otherwise noted. Data compiled as of September 2019

BACKGROUND: Situated in the Windward Islands of the Lesser Antilles, Saint Vincent and the Grena- dines gained full independence from the United Kingdom as a parliamentary democracy in 1979. Prime Minister Ralph Gonsalves of the leftist Unity Labour Party, in office since 2001 and reelected to a fourth five-year term in 2015, was one of the few Western Hemisphere leaders to maintain support in 2019 for the government of Nicolás Maduro in Venezuela. Agriculture and tourism employ a significant portion of the workforce. Although the economy remains vulnerable to global price fluctuations and natural disasters, it has grown modestly in recent years as a result of renewed growth in construction and increased tourist arrivals at the country’s new international airport.

390 2020 Index of Economic Freedom WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES

12 ECONOMIC FREEDOMS | SAINT VINCENT AND THE GRENADINES

RULE OF LAW GOVERNMENT SIZE

(+14.0) (–1.2) (–4.4) (+1.2) (–0.6) (+4.0)

 

 

 

 

 

50.5 62.6 46.1 72.4 73.7 89.0   Property Judicial Government Tax Government Fiscal Rights E ectiveness Integrity Burden Spending Health

Although the World Bank’s 2019 Doing Business report ranks The top personal income tax rate is 30 percent, and the St. Vincent and the Grenadines very low in terms of ease of corporate tax rate is 33 percent. Other taxes include property property registration, the relatively independent and efficient and value-added taxes. The overall tax burden equals 27.8 judicial system, based on English common law, protects percent of total domestic income. Government spending property rights and enforces contracts. Judicial effectiveness has amounted to 29.6 percent of the country’s output (GDP) is hampered by a lack of resources. The rule of law is stronger over the past three years, and budget deficits have averaged and corruption is less pervasive than in some neighbor- 0.4 percent of GDP. Public debt is equivalent to 73.1 percent ing countries. of GDP.

 REGULATORY EFFICIENCY OPEN MARKETS

(–0.7) (–0.2) (–1.4) (+0.6) (No change) (No change)

 

 

 

 

 

75.8 73.3 80.8 67.2 70.0 40.0   Business Labor Monetary Trade Investment Financial Freedom Freedom Freedom Freedom Freedom Freedom

Policies and laws in the areas of tax, labor, environment, The total value of exports and imports of goods and services health, and safety are clearly defined and foster competition. equals 90.5 percent of GDP. The average applied tariff rate is Accounting, legal, and regulatory procedures are generally 8.9 percent, and onerous nontariff barriers further constrain transparent. Much of the labor force is employed in agricul- the freedom to trade. Investment-related regulations are ture or tourism. The nonsalary cost of employing a worker is complex and nontransparent, thwarting the prospects for moderate. Reducing subsidies and transfers to state-owned attracting new investment. The financial system is dominated enterprises could save more than 3 percent of GDP. by banking. Credit to the private sector has been expand- ing slowly.

The Heritage Foundation | heritage.org/Index 391