St. Lucia Economic Memorandum

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No SLU St. Lucia Economic Memorandum October 28, 1983 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the World Bank 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.

2 CURRENCY EQUIVALENTS Currency Unit East Caribbean Dollar Since its creation in 1965, the East Caribbean dollar was tied to sterling at the rate of L 1.00 = 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$2.70. Since July 1976: EC$1.00 = US$0.370 or US$1.00 = EC$2.700

3 FOR OFFICIAL USE ONLY PREFACE This report is largely based on the findings of an IBRD economic mission to St. Lucia in January The mission consisted of: Carlos Elbirt, Chief (IBRD), Beatrice Buyck (Inter-Agency Resident Mission), David Glassborow (Overseas Development Agency), Paul Mlorgan (CDB), and Allan Slusher (CDB); it also incorporates statistical material contained in the May 1983 report by the IMF as well as references to significant recent events. The report focusses on the main policy issues, on the public sector investment program, and on the economic outlook for St. Lucia. It discusses the transportation sector in some depth and briefly surveys such other sectors as agriculture, tourism, and industry which were analyzed in greater depth in previous IBRD reports on St. Lucia. The economy grew rapidly during the 1960s and most of the 1970s. A favorable investment climate facilitated increased economic activities in agriculture, tourism, and light-industries. Economic growth was interrupted in 1980 by political instability, natural disasters, and unfavorable international conditions. As a result, public finances deteriorated seriously. Resumption of sustained economic growth requires preservation of the favorable investment climate achieved in The public sector investment program aims at improving the country's infrastructure, at achieving agricultural diversification, and at promoting export-oriented activities. The country will have to rely, to a large extent, on external concessional assistance in the foreseeable future. This document has a restrictedistribution 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.

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5 ST.LUCIA TABLE OF CONTENTS Page COUNTRY DATA SUMMARY AND CONCLUSIONS... i - v I. ECONOMIC BACKGROUND... 1 A. Introduction... 1 B. Economic Growth... 1 C. Prices, Wages and Employment... 2 D. Public Sector Finances... 3 E. Balance of Payments... 7 F. Money and Credit... 8 G. Investment, Savings and Consumption II. MAJOR SECTORAL ISSUES A. Introduction B. Agriculture C. Tourism D. Transport E. Manufacturing III. PUBLIC SECTOR INVESTMENT PROGRAM A. Introduction B. Progress in the Implementation of the Public Investment Program C. The Public Sector Investment Program for Period FY1983/84 - FY1987/ IV. OUTLOOK A. Output and Expenditure B. Balance of Payments C. Creditworthiness GOVERNMENT'S PROJECT LIST STATISTICAL APPENDIX MAP

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7 Page 1 of 2 pages COUNTRY DATA - ST. LUCIA AREA POPULATION DENSITY 616 km 2 125,500 (mid-1982) 200 per km 2 Rate of Growth: 1.5% (from 1977 to 1982) 315 per km 2 of arahle land POPULATION CHARACTERISTICS (1980) HEALTH 1981 Crude Birth Rate (per 1,000) 30.7 Population per physician Crude Death Rate (per 1,000) 7.0 Population per hospital bed 204 Infant Mortality (per 1,000 live births, 1978) 26.9 INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP % of national income, highest quintile.. % owned by top 10% of owners lowest quintile.. % owned by bottom 10% of owners ACCESS TO PIPED WATER ACCESS TO ELECTRICITY % of population - urban.. % of population - urban - rural.. - rural) NUTRITION EDUCATION (1981) Calorie intiake as % of requirements.. Adult literacy rate % Per capita protein intake.. Primary school enrollment % 95.0 GNP PER CAPITA in 1981: US$840 a/ GROSS NATIONAL PRODUCT IN 1981 ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. % GNP at Market Prices Gross Domestic Investment Gross National Savings Current Account Balance Exports of Goods, NFS Imports of Goods, NFS ,0 OUTPUT 1981 Value Added US$ Mln. % Agriculture Industry b, Services Total GOVERNMENT FINANCE Consolidated Public Sector Central Government EC$ million) % of GDP (EC$ million) % of GDP 1980/ / / / / / / /82 Current Receipts Current Expenditure Current Surplus 9, Capital Expenditures External Assistance (net) ,9 5.2 a/ Estimated using the World Bank Atlas methodology and adjusted exchange rates (according to the US and St. Lucian inflation). This figure is subject to possible further adjustments based on a forthcoming review of the share of gross domestic product imputed to foreigners. b/ Includes construction. not available not applicable

8 Page 2 of 2 pages COUNTRY DATA - ST. LUCIA MONEY, CREDIT and PRICES Money and Quasi Money a/ Bank Credit to Public Sector Bank Credit to Private Sector b/ (Percentages or Index Numbers) Money and Quasi Money as % of GDP General Price Index (1964 = 100) Annual percentage changes in: General Price Index Bank credit to Public Sector 36.1 e/ Bank credit to Private Sector BALANCE OF PAYMENTS MERCHANDIS EXPORTS (AVERAGE ) US$ Mln. X (Millions US$) Exports of Goods, NFS Bananas Imports of Goods, NFS Coconut Products Resource Gap (deficit -) All other commodities Factor Payments (net) Total Net Transfers Balance on Current Account (Excludiag Hess Investments) (-11.3) (-12.5) (-13.0) (-15.8) EXTERNAL DEBT, DECEMBER 31, 1982 US$ Mln Public Cipital (Grants) Public Debt, incl. guaranteed 23.8 (Loan Disbursements) Non-Guaranteed Private Debt (Amortization) Total outstanding & Disbursed DEBT SERVICE RATIO for 1982 c/ Private Capital d/ % Change in Foreign Assets (-increase) Public Debt, incl. guaranteed 2.9 Non-Guaranteed Private Debt Total outstanding & Disbursed RATE OF EXCHANGE Since July, 1976 US$1.00 = EC$ = US$0.37 a/ Defined as demand savings and time deposits. b/ Includes other than public sector organizations. c/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. 4Y! Includes financial system, errors and omissions. e/ Only Central Government. not available not applicable

9 SUMMARY AND CONCLUSIONS i. St. Lucia attained independence from the UK in An island of 616 km 2, it is populated by 124,000 inhabitants mostly of African background. The rate of population growth has been relatively low, around 1.5% per year, mainly because of heavy emigration. The population is very young, about 60% is under the age of 25. ii. The economy is fairly diversified, based on agriculture, tourism, and manufacturing. Having totally abandoned sugar in the early 1960s, agriculture comprises bananas, coconuts, fruits and vegetables. The country became a significant tourist destination in the 1960s, favored by the "unspoiled" state of the island. Manufacturing consists of processing of food and beverages, garments, assembly of electronics, cardboard boxes, and handicrafts. iii. Based on export-oriented activities, the economy grew rapidly during the 1960s and 1970s. The growth reflected the increase in tourism and tourist-related construction, the establishment of new industries, the undertaking of large private and public investments and the introduction or expansion of agricultural production such as bananas, cocoa, fruits and vegetables. iv. Economic growth stopped in Real GDP declined slightly as a result of Hurricane Allen which adversely affected agriculture and, to some extent, tourism. A contributing factor to the decline was the political instability generated by the leadership struggle within the then Government which discouraged private investment. A modest recovery took place in 1981 and Real GDP grew by 2 to 3% in each of these years as a result of high levels of public spending and, more recently, some recovery in agriculture, tourism, and industry. V. Gross domestic investment has traditionally been high, often more than 50% of GNP. Several reasons explain this high level of investment. First, given the small size of the economy, the execution of any major project tends to dwarf the rest of the economy, and in recent years the public sector has executed several sizeable projects. In addition, a foreign company invested in the largest single project ever implemented in St. Lucia, the oil transshipment terminal, which was implemented during the last quinquennium and completed in But even excluding the oil terminal, investment has been around 30% of GNP. National savings, on the other hand, have also been high, more than 23% of GNP. But they declined to about 14% in 1982 as a result of the decline in both public and private savings. vi. Local prices are very sensitive to international prices because the economy of St. Lucia is very open. Prices rose by about 25% in 1973 and 1974, largely reflecting the "oil shock". After this, the inflation rate kept declining until 1977 when prices increased by about 9%. Inflation accelerated again to almost 20% in 1980 and to 15% in 1981 as a result of the international inflation, supply shortages associated with Hurricane Allen, and high wage settlements. The inflation rate is currently declining to less than 4% per annum. vii. Unemployment appears to have increased in recent years as a result of the slowdown in economic growth and the rapid increase in the labor force and could become a dominant issue in the years to come. The labor force is projected to grow rapidly in line with absorption of young workers and females and, possibly, to the decline in emigration. Thus, unemployment could increase even if

10 - ii - the economy grows rapidly. This issue points up the importance of family planning in keeping the long run increase in the labor force down to a manageable level. viii. Public finances deteriorated steadily during This deterioration resulted from sharp increases in the wage and salary bill. The need to undertake rehabilitation programs after Hurricane Allen also contributed to the fiscal weakening. The wage increases adversely affected the Central Government finances in particular. Thus, although Central Government current revenues have been kept at high levels, increasing from 25% of GDP in 1978 to 29% in 1982, current expenditures increased even faster, from 22% of GDP in 1978 to 32% in These developments resulted in a drop in public sector savings which traditionally accounted for 5 to 6% of GDP to about 3% in 1980 and 1981 and to practically zero in ix. The present Government, which inherited a deteriorated financial situation, has announced a number of measures to improve public finances. The authorities stated that the wage/salary bill for FY83/84 will be lower than that for FY82/83 by an amount equal to last year's retroactive payments. Reductions are also planned in expenditures on goods and services. As a result, a Central Government current account surplus of about 2% of GDP is projected for FY1983/84. While these short-term stabilization measures are implemented, it is advisable that attention be paid to the following medium- and long-term issues: (a) the level and structure of wages and salaries should allow the Government not only to achieve its financial targets but also to keep its highly qualified personnel, some of whom are presently performing their duties under special technical assistance programs financed by external sources; and (b) the composition of current expenditures should reflect the commitment expressed by the Government to carry out needed maintenance works. In this regard, expenditures on goods and services might need to be increased in relative terms over the medium-term. x. The public sector has implemented several development projects in recent years. Public investment has accounted for about 10% of GDP with the main projects being the Castries Port, road rehabilitation, factory shells construction, water supply expansilon, and airport improvement. External grants and loans have played an increasiiig role in financing these public works, particularly in view of the declining trend experienced by public savings. Domestic borrowing by the public sector has not, on the whole, been significant. xi. The balance of payments reflects an open economy. Exports of goods and non-factor services account for about 60% of GDP; imports, for about 100%. Tourism is the most important source of foreign exchange earnings followed by bananas, coconut oil, clothing, assembly products, and beer. On the import side, the food bill represents around 25% of total imports and the fuel bill around 14%. Other important imports are machinery and equipment, which vary between 20 and 30% of total imports, and manufactured goods--mostly durable-consumption goods--which account for about 30%. External trade and tourism are conducted mainly with the UK, USA, Canada, Germany and the West Indies.

11 - iii - xii. Current account balance of payments deficits have traditionally been high in St. Lucia, around 30% of GDP during the last quinquennium. This performance has been associated with sizeable imports related to foreign-financed private investments and hurricane rehabilitation programs. Investments for the oil transshipment terminal (Hess Co.) had a strong impact on the balance of payments as evidenced by the fact that excluding the Hess imports, the current account deficit for the period accounted for around 12% of GDP. But the deficit increased to 18% in 1982 as exports stagnated while imports of durable-consumption goods and fuels continued to increase. xiii. Net domestic credit from the commercial banks has increased in line with the level of economic activity. The outstanding credit has remained at about 47% of GDP during the last quinquennium. Credit to the private sector has increased faster than that to the public sector. The Government has also borrowed from the East Caribbean Currency Authority (ECCA) subject to maximum prevailing ceilings. xiv. The Government's development strategy emphasizes tourism, agriculture, and light industry. Development policies and public investment programs are on the whole sound and consistent with this strategy. The resumption of steady economic growth will require, however, a recovery of the world economy and the preservation of the favorable investment climate achieved since the 1982 election. xv. Several steps have been taken by the Government to increase agricultural production. First, a land titling program is being implemented. The lack of land titles has been identified as a major impediment for farmers in obtaining bank credit which, in turn, militates against agricultural diversification. Second, the Banana Growers' Association is now under an improved management. This is expected to reduce its high administrative costs leaving more resources available to provide assistance (fertilizer, pesticide, etc.) to banana growers. Third, an administrative reorganization of the Coconut Growers' Association is underway so that the external financial resources available for coconut rehabilitation can be used more efficiently. xvi. The Government is trying to expand industry through active promotion, and through the construction of factory shells which are rented to new industries. The system of fiscal incentives, which is similar to other Eastern Caribbean countries, has reputedly encouraged industrialization. A bottleneck for the expansion of the industrial sector, however, is the educational system which needs to become more technically oriented and with greater emphasis on management training. xvii. The execution of the public sector investment program during the past year can be regarded as satisfactory from the point of view of its level and composition. Public investment accounted for almost 11% of GDP in spite of the serious financial difficulties. Emphasis was given to road programs, airport improvements, water supply, banana rehabilitation, farm settlement, factory shell construction, and education. The country has continued to receive a great deal of external technical assistance for this investment program. xviii. The public sector investment program for the next quinquennium is projected to average about US$23 million per year, or 12% of GDP. This amount is in line with sectoral priorities and with the absorptive capacity of the country. The overall composition of the investment program is sound but special care should

12 - iv - be taken in relation to two main issues. First, the Government policy on maintenance should continue so as new investments do not take precedence over proper maintenance work, which in previous years was badly neglected. Second, feasibility of the new projects should be carefully studied so that their size and scope are tailored to the needs of St. Lucia. xix. The successful financing of the public investment program is perhaps the most crucial issue facing St. Lucia in the years to come. It requires several conditions. First, public sector savings must increase to at least 5% of GDP by This is achievable if the Government limits current expenditures as it intends to do. Moreover, such an improvement will be a decisive element for determining the creditworthiness of St. Lucia for external borrowing. Second, external concessional assistance will be necessary for the foreseeable future. Disbursements of external grants and concessional loans are projected to increase slightly in nominal terms. Third, borrowing from local banks is projected to finance a very small part of the investment requirements, thus, leaving more financial resources to be available to the private sector. xx. If the policies noted earlier are enforced, St. Lucia could experience a resumption of steady economic growth. Based on preliminary information, a maximum of 3.3% economic growth is projected for The growth is projected to accelerate to 5% in 1984 and to average 5.3% from 1985 on. Tourism, agriculture, and industry are projected to grow. The projected growth is predicated on the assumption that the international economic situation will improve and, therefore, St. Lucia will benefit from a strong demand for tourism, and agricultural and industrial goods. It is also assumed that development policies, which are generally sound, will be maintained thus helping the preservation of a favorable investment climate, a primary requirement for industrial growth. The successful execution of the public investment program, a crucial requirement to complete the needed infrastructure, will be possible if the public sector is able to keep its highly motivated and sophisticated personnel and to obtain the needed financing. xxi. Over the medium-term an improvement in the balance of payments may beexpected. First, the food import bill is projected to be reduced through increased production of vegetables, fruits and livestock for which several programs are under execution. Second, expanded industrial activities and the rehabilitation of the banana and coconut industries currently underway are projected to provide additional foreign exchange earnings for the country. Third, an increase in tourism earnings is projected through increase in the number of visitors as well as in the value added generated by the activity. Fourth, savings in energy, and consequently in the imported oil bill, are projected to be achieved through the implementation of the energy projects currently in the pipeline such as the geothermal plant. xxii. If the programs and policies to improve the balance of payments are successful, the current account balance of payments deficit is projected to decline from 18% of GDP in 1982, excluding imports for the transshipment terminal, to 8% in 1990 and to 6% in The level of deficit projected from 1990 on can be regarded as relatively low in view of the still high levels of projected investment, more than 40% of GDP.

13 xxiii. The outstanding and disbursed public and publicly guaranteed external debt as of the end of 1982 accounted for US$24 million or 18% of GDP. Due to the concessionality of many loans, the debt service has been low, about 3% of total exports. But it is projected to increase to about 7% of exports in 1983 as some short-term debt becomes repayable and as more loans on conventional terms are contracted. However, the external public debt is projected to increase to no more than 26% of GDP. These ratios are predicated on the assumption that a large part of the capital requirements for the foreseeable future will be obtained on concessional terms. Therefore, external concessional assistance is projected to play a crucial role in the St. Lucia economy. If this assistance is forthcoming, the projected levels of indebtness and debt service ratio should remain within manageable limits.

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15 I. ECONOMIC BACKGROUND A. Introduction 1. St. Lucia is a Caribbean nation of 124,000 people and 616 km 2. It attained independence from the United Kingdom in A tropical island, it has an excellent combination of warm beaches, rugged mountains, ample rainfall, volcanic soil, lush vegetation and sulphur springs. The St. Lucian population is mostly of African background; the official language is English although a local dialect, the French Patois, is widely spoken. The literacy rate is high; over 90%. 2. The population of St. Lucia has been growing relatively slowly in recent years, about 1.5% per year. This results mainly from a heavy emigration since natural population increase (births minus deaths) has been relatively high, around 2.3% per year. Birth and death rates are declining steadily. The population is very young: approximately 65% are under the age of 25. This has, certainly, important implications on employment and emigration. 3. St. Lucia's economy is one of the most diversified in the Eastern Caribbean. It is based on agriculture, tourism, and manufacturing. Having totally abandoned sugar production in the early 1960s, agriculture comprises of bananas, coconuts, fruits, and vegetables. The country became a significant tourist destination in the 1960s. Tourism is favored by the "unspoiled" state of the island which appeals to visitors mainly from the US, Canada, UK, and Germany. Manufacturing consists mainly of processing of food and beverages, garments, assembly of electronics, cardboard boxes, and handicrafts. B. Economic Growth 4. The economy expanded rapidly during the 1960s. Favored by a good investment climate, real GDP grew over 7% per year reflecting the boom in tourism, in tourist-related construction, in manufacturing, and in the execution of several government infrastructure projects. However, agricultural production fell sharply in overall terms as the country moved out of sugar, although banana and cocoa production grew rapidly, particularly in the early 1960s. 5. The economic growth continued during the first half of the 1970s. Tourism, construction and manufacturing performed very well, more than offsetting the decline experienced in agriculture. Both, long stay and cruise ship tourist arrivals continued to increase. Several new industries were established in the country attracted by favorable tax laws, good external communications and a favorable investment climate. On the other hand, bananas, the dominant crop after replacing sugar in the 1960s, was badly affected by drought, poor cross-breeding and plant diseases; cocoa production also fell. 6. Practically all economic sectors continued to grow in the second half of the 1970s. Construction increased sharply as the Hess Oil Company undertook the construction of a transshipment terminal. The Government continued to execute large infrastructure projects while tourism and manufacturing performed satisfactorily. Agriculture, which had been declining, started to recover. Rehabilitation programs for bananas and cocoa, together with generally favorable weather conditions, improved the performance of these traditional export products. New crops, fruits and vegetables, were introduced.

16 The economic growth stdpped in Real GDP declined slightly (0.1%) as a result of Hurricane Allen which adversely affected agriculture and, to some extent, tourism; and the political instability, resulting from the leadership struggle within the then Government, which slowed down private investment. A modest recovery took place in Real GDP grew by 3% as government spending increased sharply reflecting the implementation of rehabilitation programs mostly financed with external resources. However, tourism continued to decline while agriculture and manufacturing remained at about the same level as in The recovery continued through Real GDP grew by about 2.1%; this time as a result of a substantial recovery in agriculture and manufacturing, some growth in tourism and continued high levels of public expenditures. The mission projected a real GDP growth of 3.3% for This projection was based on information available for the first quarter of the year. The final outcome, however, might be less favorable as a result of the tropical storm which hit the island in September 1983 causing severe damage to agriculture and housing. C. Prices, Wages and Employment 8. Local prices are very sensitive to international prices because the economy of St. Lucia is very open. Domestic consumer prices rose by about 25% in 1973 and, again, in 1974, largely reflecting the increase in oil prices. After this, the inflation declined untill 1977 when consumer prices increased by 8.9%. Inflation accelerated again reaching 19.6% in 1980 and 15.0% in This new high level of inflation reflected the combined effect of the international inflation, supply shortages resulting from the hurricane and demand pressure associated with high wage settlements. Inflation is presently declining sharply; consumer prices rose by only 4.6%' in 1982, on annual-average basis, and by only 0.6% on end-of-the-period basis. 9. Wage contracts are agreed to usually for two years; in some cases for three. Although data are far from complete, there are indications that wage increases during the late 1970s t:ended to be high because of the inflationary environment and high expectations. But, the situation now appears to be changing. The decline in inflatjion and the economic slowdown with the consequently rise in unemployment: have compelled the parties to agree to more realistic wage settlements. 10. Wage and salary increases for the public sector have been generally higher than those for the private sector. For instance, the last two agreements with daily-paid public workers provided for an increase of 40% in the first year and 20% in the second year. At the same time, the agreement with the established civil servants in early 1982 provided for a retroactive nominal salary increase of approximately 10% per year for the period October March 1983 in addition to the 5% cost of living allowance granted in November The agreements proved to be unrealistic. They created distortions in the wage and salary structure as wages for unskilled workers were in some cases higher than salaries for trained personnel. Moreover, they increalsed the wage bill of the public sector to unaffordable levels. As a result, the Government decided to lay off all nonessential daily-paid workers at the end of 1981, although some workers were subsequently rehired. The wage/salary policy within the public sector is being addressed by the Government as part of the ongoing negotiations with the trade unions.

17 Unemployment appears to have increased. Although there are no reliable data on unemployment, there are indications that it is increasing as a result of the slow-down of the economic growth toward the end of the 70s and early 80s, and the rapid increase of the labor force. Open unemployment has been estimated at about 15% of the labor force. Private sector employment has been negatively affected by the slowdown in tourism and the completion of the Hess terminal. Public sector employment grew in 1980 and 1981 when additional workers were needed to undertake reconstruction work after Hurricane Allen. In December 1981 about 2,000 daily-paid workers, out of a labor force of 31,000, were laid off; subsequently some of them were rehired on a contract basis. D. Public Sector Finances 12. The public sector of St. Lucia, as defined in this chapter, comprises the Central Government, the Castries City Council, the National Insurance Scheme and seven non-financial public enterprises (the Port Authority, the Central Water Authority, the National Development Corporation, the St. Lucia Electricity Services, the Banana Growers' Association, the Marketing Board, and the Government Funding Scheme). In addition, the Government owns the St. Lucia Development Bank whose operations are included in the financial sector. 13. A steady deterioration in public finances took place during The consolidated current account surpluses declined from 5% of GDP in FY to about 3% in the fiscal years l/ 1979/80, 1980/81 and 1981/82 and the estimated current account surplus for FY1982/83 is close to zero. This deterioration reflects, to a large extent, the weakening of the Central Government finances caused by large and retroactive increases in wages and salaries granted by the previous Government, and to some extent, by post-hurricane reconstruction expenditures in 1980 and Central Government finances also deteriorated in the period Increases in expenditures, rather than decline in revenues, explain this deterioration. Central Government current revenues have increased as a percentage of GDP to almost 30% in FY1982/83. But current expenditures increased even faster reaching almost 32% of GDP in FY1982/83. Table 1: Central Government Finances (% of Calendar Year GDP) Fiscal Current Current Current Year 1/ Revenue Expenditure Account Surplus Source: IMF, Mission estimates. 1/ Fiscal years end in March 31.

18 The level and composition of the Central Government current revenues appear reasonable. First, tax revenues have averaged in recent years about 24% of GDP which makes inadvisable any increase in overall taxation. Second, taxes on income, on goods and services, and on international transactions, are well balanced. This makes the revenue system less vulnerable but, of course, it cannot avoid the impact of an overall economic recession such as the present one. The general conclusion is, therefore, that measures to improve the financial situation of the Central Government should focus, almost exclusively, on the expenditure side. Table 2: Central Government Revenues (% of Calendar Year GDP) Taxes On Fiscal Tax Non--tax Goods International Year a/ Total Revenues Revenues b/ Income and Services Transactions c/ a/ Fiscal years end in March 31 of the indicated year. b/ Includes profits in ECCA, in the post office and in the supply department which has a monopoly on the imports of sugar, flour, rice, and cement. c/ Includes "other taxes". Source: IMF. 16. Large increases in the wage bill have been the main reason for the deterioration in Central Government's finances. The previous government sharply increased both wages/salaries and employment, particularly for non-established civil servants. As a result, the wage bill doubled in FY1979/80 and increased by 50% in FY/82/83. Moreover, the increase granted to non-established civil servants in 1981 (about 60%) created unbearable pressure on the Government's finances as wel:l as large distortions in the wage structure. This forced the Government to lay off a great number of daily-paid workers in Some of these were rehired for established positions in early 1982 at lower wage scales. The gravity of the situation is illustrated by the i-act that the Central Government's wage bill increased from 11% of GDP in 1978 to 19% in 1982, of which retroactive payments accounted for 2.4% of GDP. 17. Expenditures on goods and services have remained at about 7% of the GDP during the last quinquennium. Subsidies and transfers, on the other hand, have increased marginally from 3.4% of GDP in FY1978/79 to 5.2% in FY1982/83. This largely reflects the introduction of Government subsidies for water consumption in rural areas. 18. The performance of the rest of the public sector have been mixed in recent years. It must be noted, however, that the increase in wages and salaries

19 - 5 - granted for the public sector have adversely affected practically all the public enterprises. A review of the main public enterprises indicates the following: (a) (b) (c) the National Insurance Scheme (NIS) has been running relatively large surpluses. However, the surpluses have grown little over the past three years principally because of the increase in arrears from employers, and rising unemployment. Moreover, the scheme is supposed to generate large surpluses because it is relatively new and because the labor force has been growing rapidly. The surpluses have been deposited in commercial banks and official financial institutions. They have also been loaned to the Central Government and to nonfinancial public enterprises to cover, on occasions, current deficits; the Central Water Authority (CWA). About half of its operations are subsidized by the Central Government which takes the form of payments for water consumption in rural areas. If the Government decides, for social reasons, to keep these subsidies, it must assure that: (i) only specific, targeted social groups get the benefits; (ii) prevailing tariffs in non-subsidized areas are periodically adjusted in line with costs and/or inflation; and (iii) arrears from Government to the CWA are gradually eliminated; the Port Authority appears to have been managed efficiently but, nevertheless, its finances have deteriorated mainly as a result of the stagnation in port activities and the absence of tariff increases since July 1980 in a period when wages were increased; (d) the main problem faced by the St. Lucia Electricity Serv:Lces is the build up in arrears from the Central Government, from the Castries City Council, and from the Central Water Authority; (e) the Banana Growers' Association has been running current deficits which grew significantly after the hurricane. These deficits largely reflect subsidized inputs distributed to farmers but they also reflect some inefficiencies. The Association has taken steps to improve efficiency by rationalizing its administrative operations and by introducing field packing of bananas; and (f) other public institutions (the Castries City Council, the Government Funding Scheme, the Marketing Board, and the National Development Corporation) have had a mixed performance. Their level of operations, however, cannot be regarded as crucial in determining the financial situation of the public sector. 19. Public capital expenditures have represented around 10% of the GDP during the last quinquennium, or 30 to 35% of the domestic investment excluding the Hess Company's investment. The public sector has implemented projects such as the Castries Port, road rehabilitation after Hurricane Allen, factory shells, water supply expansion, and airport improvement.

20 - 6 - Table 3: Public Sect:or Capital Expenditures and Financing (EC$ million) Financing Capital Current Foreign Fiscal Expenditure Account Loans and Other a/ Year and Net Lending Surplus Grants (Net) (Net) a/ Includes change in Central Government payment arrears, borrowing from ECCA and net domestic bank borrowing. Source: IMF. 20. External grants and loa,ns have played an increasing role in financing public capital expenditures, particularly in view of the declining trend in public savings. The situation reached dramatic levels in FY1982/83 when net external financing represented more than 85% of the capital expenditures. The external public debt which amounted to 14% of GDP in 1981, increased to 18% in 1982 as the Government obtained new loans such as US$4.0 million from neighboring countries against one-year, renewable treasury bills. The financial situation of the public sector has also resulted in an increased use, particularly by the Central Government, of local comniercial bank resources; at the end of 1982 the Central Government's overdraft felcility and payment arrears reached critical levels. Nevertheless, domestic borrowing by the public has not, overall, been an important resource for financing public capital expenditures. 21. The new Government, which inherited a deteriorated financial situation, is taking appropriate steps to sclve it. The authorities stated that the wage/salary bill for FY1983/84 will be kept at the 1982/83 level, excluding the retroactive payments made in that fiscal year. Since there are wage and salary negotiations underway, this target can only be achieved if any increase in wages and/or salaries is offset by a ccorresponding reduction in the work force. Cuts are also planned on expenditures on goods and services. As a result, a Central Government current account surplus of about 2% of GDP is projected for FY1983/84. The rest of the public sector is also projected to improve, although marginally, its financial position. While these short-term, stablization measures are implemented, it is advisable that: attention be paid to the following medium- and long-term issues: (i) the level and structure of wages and salaries should allow the Government not only to achieve its financial targets but also to keep its highly qualified personnel, some of whom are presently performing their duties under special technical assistance programs financed by external sources; and

21 - 7 - (ii) the composition of current expenditures should reflect the commitments expressed by the Government to carry out needed maintenance works. In this regard, expenditures on goods and services might need to be increased in relative terms over the medium term. E. Balance of Payments 22. St. Lucia is one of the seven members of the East Caribbean Currency Authority (ECCA). 2/ As such, its balance of payments position is defined to exclude net borrowing from ECCA and the IIIF as well as net changes in St. Lucia's official foreign assets; all these are financing items of the overall balance of payments position. Payments and transfers for international transactions are subject to controls; the surrender of foreign currency from exports and invisible transactions is mandatory. There is freedom of capital movements within the ECCA region provided they are made in the regional currency; the scope and degree of enforcement of exchange controls differ among ECCA's member states. 23. The country's economy is very open. Exports of goods and non-factor services account for more than 60% of GDP; imports, for about 100%. Tourism is the most important source of export earnings; it provides about half of the total. Bananas account for 40 to 50% of the total merchandise exports, coconut oil for about 8%, beer and ale for about 5%, and clothing and assembly products, which are largely reexport operations, for about 25%. On the import side, the food bill represents about 25% of the total imports; the fuel bill about 14%. Any major investment is reflected in imports of machinery and equipment which vary between 20 and 30% of the total imports. Import of manufactured goods, which are mostly durable consumption goods, have reached 30% of the total imports. External trade and tourism are conducted mainly with the UK, USA, Canada, Germany, and the West Indies. Table 4: Exports and Imports (% of GDP) Resource Gap Excluding Imports Related to the Exports of Imports of Investment of the Year Goods and NFS Goods and NFS Resource Gap Hess Co Source: Statistical Department, IMF, Mission estimates. 2/ Other members are: Antigua and Barbuda, Dominica, Grenada, St. Kitts-Nevis, St. Vincent and the Grenadines, and Montserrat.

22 Current account balance of payments deficits have been traditionally large in St. Lucia, around 30% of GDP during the last quinquennium. This performance is largely associated with sizeable imports of foreign-financed investments such as the transshipmnent terminal (Hess Co.) and hurricane rehabilitation programs. Excluding imports for the Hess Co., current account deficit accounted for around 12% of GDP during the period but increased to 18% in The main elements tlnat underline this high-level deficit and its recent deterioration are: (a) the stagnation, and in some products the decline, in exports. Since 1980, tourism earnings have increased only very slightly as a result of the international recession and to some extent, to the negative perception of the country created by the political crisis. After the hurricane in 1980, banana production declined sharply. The subsequent recovery has been rapid but, nevertheless, the volume of exports is still 15% lower than that reached in In addition, banana prices have been adversely affected in recent times by the depreciation of the Pound Sterling with respect to the EC$; and (b) the rapid increase in imports of food, fuel and durable consumption goods. Since 1978, imports of food have increased by 45%, fuel imports have almost tripled, and manufactured goods, which includes durable consumption goods, have increased by 50%. 25. The current account def:lcit was financed mainly by private investment--dominated by the Hess Co.--and by increasing amounts of loans and grants to the public sector. The balance of payments have recorded overall deficits in every year during the last quinquennium except in 1982 when a small surplus was obtained. These deficits have been financed by borrowing from ECCA and by purchases from the IMF, under the reserve tranche policy in 1980 and under the compensatory financing facilil:y in A medium- and long-term improvement in the balance of payments position of St. Lucia may be expected. Several elements are likely to contribute to this improvement. First, the identified ongoing and new projects for efficient import-substitution in agriculture, which should reduce the food import bill. Second, some increases in export earnings from bananas and coconuts are likely to take place. There are several rehabilitation programs underway which essentially aim at achieving the levels of production which prevailed in 1978 and Third, increases in export earnings from industrial goods are expected. This is to be achieved through the establishment of new light industries, an objective being actively pursued by the present Government. Fourth, the geothermal energy project under study which, if feasible, should reduce the imported fuel needs of St. Lucia. F. Money and Credit 27. St. Lucia has no Centra:L Bank. As mentioned before, it belongs to ECCA, which was established in The members of ECCA share a common currency, the East Caribbean dollar (EC$), which has been pegged to the US dollar since July The main characteristics of ECCA are:

23 -9- (i) it is obliged by statute to maintain a foreign exchange cover of no less than 60% of the value of currency in circulation and other demand liabilities; (ii) it has the authority to offer rediscount facilities, to accept deposits from commercial banks and member governments, and to purchase securities issued by member governments; and (iii) loans granted to member governments are subject to the following ceilings: (a) total loans cannot exceed 40% of currency in circulation and other demand liabilities; (b) holdings of securities other than Treasury Bills cannot exceed 15% of demand liabilities; and (c) holdings of Treasury Bills of any government cannot exceed 10% of that government's current revenue during the fiscal year. 28. ECCA's net foreign reserves,ncreased steadily until They declined sharply in 1980 as a result of: (a) the drop in tourism and exports caused by Hurricane Allen; and (b) the outflow of capital caused by the rise in foreign interest rates. A recovery in exports led to a modest increase in net foreign reserves in But they fell again in 1982 as the international recession adversely affected tourism and other export earnings. 29. ECCA lending to member countries has expanded relatively fast, about 17% per year since Lending to St. Lucia increased even faster, about 28% per year during Because of this, St. Lucia reached its borrowing ceilling of EC$12.4 million in No new lending to St. Lucia took place in 1982 because the overall borrowing ceiling to ECCA loans was not adjusted during that year since loanable funds remained at about the same level as in It should be noted, however, that borrowing from ECCA has not been a significant financial resource for the member countries. 30. The financial sector of St. Lucia comprises four branches of foreign banks and two local banks. Other financial institutions are the St. Lucia Development Bank and the St. Lucia Mortgage Finance Company. There are also a number of foreign insurance companies and local credit unions operating in the country. There is no comprehensive banking law in St. Lucia. Banks are allowed to move funds freely within the ECCA area and, with some restrictions, to overseas banks. 31. Net domestic credit from the commercial banks increased relatively rapidly until 1981 but slowed down in During , the banking credit grew by about 15% per year; during 1982 by 3%. As a percentage of GDP, however, the total outstanding credit has remained at about 47% of GDP. Credit to the public sector has grown relatively slowly while credit to the private sector has expanded rapidly. 32. Commercial bank lending has been increasingly oriented towards private consumption. Loans and advances for "personal purposes", largely for purchasing of durable-consumption goods, which accounted for 33% of the total outstanding commercial bank loans and advances in 1978 increased to 47% in As mentioned

24 before, this is putting pressure on the balance of payments. However, in 1983 the commercial banks have proceeded t:o restrict credits for consumption purposes. 33. Interest rates are freely determined by market forces except for loans granted by the St. Lucia Development Bank and by the St. Lucia Mortgage Company which are set by the Government. The outstanding loans of these official banks do not exceed 15% of the commercial banks' lending. Prevailing interest rates were negative in real terms until 1981 but they became positive in G. Investment, Savings and Consumption 34. Gross domestic investment has been traditionally high in St. Lucia. Available information on national. accounts indicates that, since 1975, investment has represented between 43 and 62% of GNP. Several reasons explain this high level of investment. First, given the small size of the economy, a major project will be necessarily a large part of expenditures in GNP. Second, the public sector has executed several relatively large projects in recent years. Third, the private sector has carried out large investments particularly the oil transshipment terminal, the Largest single project ever implemented in St. Lucia. But even excluding the oil transshipment terminal, investment has been high, around 30% of GNP. 35. Gross domestic investment declined in both real and nominal terms during Private investment declined sharply as the oil transshipment terminal was completed in mid-year. Public investment also declined as several projects were either completed or their execution was slowed down due to financial constraints. Nevertheless, the overall level of investment was still high, 44% of GNP or 29% excluding the oil terminal. 36. The economy has been able to generate relatively high levels of savings. National savings accounted for more than 23% of GNP until 1982 when they declined to about 14%. Since transfers received from nationals living abroad are fairly large, domestic savings have been smaller than national savings but, nevertheless, relatively high. Domestic savings fluctuated between 15 and 20% of GNP until 1982 when they declined to about 9%. Table 5: Investment and Savings (% of GNP) Gross Domestic Investment (Excluding the Savings Year Total Oil Terminal) External National Public Private (31.5) (5.6) (19.2) (31.7) (3.8) (21.3) (34.6) (3.2) (24.9) (31.9) (3.1) (20.8) (30.2) (0.9) (13.7) Source: Statistical Department, :[MF, and mission estimates.

25 Consumption has been increasing steadily, from 85% of GDP in 1978 to 91% in Real consumption increased at an annual average of 6.5% during the last quinquennium, or about 5% in per capita terms. This increase is attributable to both the public and the private sector. Public consumption had increased generally faster than private consumption although this situation reversed in 1982 when real private consumption increased by more than 25% as a result of some wage increases, voluntary payments made by the Hess Co. to laid-off workers when the oil terminal was completed and, possibly, the appreciation of the EC$ against the pound sterling which has encouraged consumption mainly of imported durable goods.

26 II. MAJOR SECTORAL ISSUES A. Introduction 38. The present Government's development strategy emphasizes tourism, agriculture and light industry, in line with the rapid growth path of the 1960s and most of the s. This strategy is reflected consistently in Government policies designed to promote private sector activities as well as in the public sector investment program. 39. The present Government has taken a very serious and critical view of the main bottlenecks to development. It has greatly improved the investment climate, previously damaged by political instability, and has identified the key issues that need to be resolved. The Government, with assistance from its technical staff, has addressed these issues in a sophisticated and practical manner. B. Agriculture 40. The basic aims of the Government in agriculture are to restore the banana and coconut industries and to embark upon a program of agricultural diversification aimed mainly at the tourist industry. Several programs, including the US$8 million Agricultural Structural Adjustment USAID loan, are expected to contribute decisively to the realization of these aims. 41. The Government is comm:itted to a policy for improving efficiency in the Banana Growers' Association (BGA). The latter assists farmers with agricultural inputs and takes care of marketing bananas. Several measures are being planned or have already been taken to improve the situation at BGA. First, the Government has stated that any attempt to politicize BGA, as it appears to have happened in the past, will be strongly resisted and, therefore, decisions will be taken based on strictly economic considerations. Second, BGA's high administrative costs are expected to be reduced by improved management and financial controls. In this connection, the country is receiving technical assistance from the UK which is financing a new BGA's Manager and a new BGA's Financial Controller. Third, BGA is introducing field packing of bananas which is expected to greatly reduce wastage. 42. Market conditions for bananas need to be carefully examined. At present, bananas from the CARICOM countries have a preferential outlet in the United Kingdom, under the Lome Agreement. Demand in the UK appears stabilized at around 300,000 tons per year, of which about 120,000 tons have been supplied by the Windward Islands, and the rest by Jamaica, Belize and other nontraditional suppliers which make up for any shortfall in supply. St. Lucia now exports about 40,000 tons of bananas per year, so its share of the UK market is fairly large. As of now, there are no apparent prospects for a substantial increase in demand in the UK. Therefore, if Belize and/or Jamaica experience large increases in their production, St. Lucia could potentially face market constraints. In addition, it is not realistic to assume that even with improved efficiency, St. Lucia will be able to compete in other, nonpreferential markets. Therefore, expansion of exports appears limited by prospective demand; exports of more than 60,000 (20%) tons per year, above the historical peak (50,000 tons), do not look feasible during the next fifteen years- The expansion of banana production will have to be based on increased land productivity because significant additional land for

27 banana plantations is not available, moreover, banana cultivation on hill slopes, sometimes very sharp inclines, should be gradually phased out as it adversely affects soil conservation. 43. Rehabilitation of the coconut industry is a key issue. About 50% of the bearing trees were lost in 1980 because of Hurricane Allen. This rehabilitation requires an efficient use of the foreign aid available for coconut rehabilitation which, in turn, requires that the administrative structure of the Coconut Growers' Association (CGA) be improved. To this end the Government is undertaking an administrative reorganization of the CGA. 44. There is room for efficient import substitution in vegetables and fruits. The Government is committed to the encouragement of local food production by providing marketing information to producers and consumers (including hotels) and by strengthening its institutional capability to deliver extension services and credit. Additional benefits are expected from the program on land titling, currently underway, which will facilitate access to credit by small and medium-size farmers. Few farmers have legal titles to the land they cultivate and this has been identified as a major bottleneck for the farmers in obtaining agricultural credits and, therefore, in diversifying agricultural production. C. Tourism 45. The present Government has addressed itself to the main issues affecting tourism and is taking appropriate steps to solve them. The mission noted that: (i) the Tourist Board has been strengthened. It is now managed by a Director who appears to be in a good position to carry out her duties, which include provision of up-to-date statistical information, promotion tourism, implementation and coordination of training programs, and enforcement of quality control; (ii) the Government is actively improving the linkages between tourism and the rest of the economy. It will promote agriculture by providing information to consumers (hotels and restaurants) and producers (farmers); (iii) the type of tourism that the authorities are encouraging will facilitate its integration with the St. Lucian society. The authorities believe that tourism should reflect the country's history, scenery, climate, cultural heritage and should, therefore, be favorably perceived by the local population; (iv) the efforts made by the Government to keep the cities and towns clean and the countryside free of littered garbage and abandoned vehicles are expected to have a positive impact on tourism environment; (v) the approach taken by the Government in promoting tourism is sound. It emphasizes the rationalization of overseas toulrist representative offices to effect savings, the promotion through

28 professional advertising firms and the increase in the number of scheduled flights into St. Lucia; and (vi) the public expenditures directly related to tourism appear sound. They irlclude the construction or improvement of shopping and recreationall facilities (such as Point Seraphin) and loans for tourist-related activities (hotels and recreational facilities). Development loans to the private sector for tourist-related purposes seem to be an appropriate way to develop tourism further while the Government takes care of the basic support infrastructure and, to some extent, the overseas promotion. However, loans for hotel construction and/or expansion granted by the National Development Bank need to be carefully examined because: (a) in some cases loans for upgrading and/or refurnishing present facilities may be more cost-effective than for construction of new ones; (b) new construction should be in line with actual utilized hotel capacity and prospective demand; and (c) expansion of tourism should take place in a consistent manner with the resolution of some infrastructural bottlenecks, particularly water and electricity. 46. There are some steps that could help tourism and, therefore, deserve the Government's attention. Foremost among them are: (i) historic plalces such as Pigeon Island should be restored and promoted. With proper administration, these places should be able to generate the necessary income for their maintenance; and (ii) provision of coastal shipment service need to be examined; it might be a way to provide additional attraction to tourists. Introduction D. Transport 47. The transport infrastructure of St. Lucia consists of 320 miles of paved roads, 160 miles of gravel and earth roads, two principal ports (Castries and Vieux Fort), and two airports (Hewanorra and Vigie). The basic capacity of the ports and the airports is more thian adequate to handle present traffic. The location of the airport at Hewanorra, however, is not ideal for tourist traffic. By the same token, the location of the port at Castries is not ideal for the proposed industrial development zone in the Vieux Fort area. The Road System 48. The present network of paved roads, supplemented by the improvement of the existing unpaved feeder roads, should be generally adequate to satisfy the needs of the population. It is evident, however, that the condition of the roads requires prompt and thorough attention. At present a large proportion of the road system needs rehabilitation, goirlg well beyond surface patching and minor base renewal. This situation has been fully recognized by the Government and donor

29 agencies and resources are likely to be available, adequate to finance a three-year program of roadworks sufficient to bring the system into a good state of repair. 49. If these resources are to be spent in the most effective way, the program of roadworks needs to be carefully planned so as to deal with the causes of the present road conditions: (i) the failure to deal promptly with minor surface damage and to carry out preventive maintenance on those roads which have been properly designed and constructed (with a base of the strength and composition needed for the weight of traffic and with drainage adequate to cope with both surface and underground water); (ii) the materials used in the original construction were not up to specification or the original design was not complied with, so that the surface, base of sub-base have failed, due to the weight of traffic or weakening from water penetration; (iii) the original design of the road and its drainge was inadequate for the traffic and the prevailing site conditions; and (iv) the sub-grade conditions have special features which require abnormal measures to be taken. A first priority is a compreliensive survey of road conditions so as to establish the parts of the road system to which the above circumstances apply. 50. An adequate supply of serviceable roadmaking plant, machinery and vehicles is a prerequisite for the execution of any cost-effective program of roadworks. This requires an efficient heavy maintenance organization. The necessary maintenance facilities appear to be available to the St. Lucian Government but are not being properly used. 51. Roadmaking materials should not be a problem. It is important that proper supervision is provided, to ensure that the specified materials and mixes are used, that the right quantities of each are supplied and used, for base and surface courses, and that they are available on site at the time needed. The supply to site of the correct materials in the proper quantities at the right time does not appear to have been achieved in the past as often as it should have been. Priorities for Improvement of the Road System 52. In the light of present economic needs, attention should first be given to bringing the East Coast Road between Castries and Vieux Fort into a fully serviceable condition. The East Coast Road is the major traffic artery of St. Lucia. It provides the first impression of St. Lucia for most of the tourists arriving at Rewanorra Airport; it carries a relatively heavy burden of industrial traffic, including the movement of 40-foot long containers to and from Castries Port. While some lengths of the East Coast are in good repair, in other places it

30 requires substantial attention to the base and to drainage to avoid the need for recurrent expensive repair work. 53. A quick survey indicates that much of the improved feeder road system already needs rehabilitation. It may be that this is due to the original design specification having been inadequate but there are indications that the original construction was, in some cases, not properly carried out. In view of the importance of the feeder roads both to agriculture and to the communities served, high priority should be given to the task of restoring them. 54. The same remarks apply to the section of the West Coast Road between Vieux Fort and Soufriere. The communities in this area, which is the "breadbasket" of St. Lucia, are.like:ly to suffer a stagnation in economic activity unless good access to the markets in St. Lucia and overseas can be provided for local agricultural produce and daily travel made easier for workers to the proposed industrial developments in the Vieux Fort region. There appear to be no serious engineering obstacles to the improvement of this road to a suitable standard. 55. The Government is considering the improvement of the West Coast Road between Castries and Vieux Fort. A team of engineering consultants is at present working on behalf of the Government, assessing what can and should be done to improve it. It appears from the topography of the road between Soufriere and Anse la Raye that the cost of the rea.lignment thal: would be needed in this section to reduce journey time and to allow for safe use by heavy goods vehicles would prolbably be too costly in relation to the benefits to be obtained. 56. Other less expensive ways to improve the West Coast should be considered. For instance, the widening of some parts of the road, the improvement of vertical alignments in some places, the easing of some curves, and a general resurfacing. All this would mnake the road more attractive for tourism and leisure travel, where journey time is less critical. The road base seems strong enough for the present normal axle loadings of vehicles using the road, except in some places where the drainage is inadequate. Road improvements between Vieux Fort and Anse La Raye would be of considerable value for the development of tourist facilities in that area. The spectacular scenery and coastline in this part of the island would complement and expand present tourist activities which are still bas:ically confined to beaches and hotel activities. 57. The section of the West. Coast Road between Anse la Raye and its junction with the East Coast Road has mnuch the same function as the road from Soufriere to Vieux Fort and should be given a similar priority for improvement. The Ports (a) Castries 58. The port of Castries ha.s more berth capacity than it is presently hanclling. A refrigerated storage warehouse is about to come into use, designed for transshipment traffic out of containers. A heavy lift mobile crane is at present available for hire from a. shipping line, but the hiring rate makes it unprofitable for other shipping lines to use it. New raltes should be negotiated; only if the negotiations are unsuccessful, the port authority might examine the

31 purchase of a crane. Without a crane, the port will not be able to compete with other ports for the transshipment traffic which it is otherwise well-placed to handle. It should be noted, however, that the current annual movement of 5,000 containers is insufficient to justify the cost of a gantry crane--whose break-even point is about 20,000 containers a year. 59. The port has a small dredger which requires a 150 ton hopper barge to complement it if it is to be effectively used. With this barge, the dredger would be able to cope with all the recurring needs of the port. It would also be suitable for other small dredging tasks around the island, such as the construction of yacht marinas. 60. Castries also has a berth usable for roll-on/roll-off services. This service, combined with an improved road to Vieux Fort could meet the needs of both areas. (b) Vieux Fort 61. This port handles without serious delay all the cargo consigned through it. It has a jetty and a banana shed through which some 40% of St. Lucia's banana exports are shipped. 62. The few containers which are used by the industry in the Vieux Fort area are moved from and to Castries by the East Coast Road. The present number of containers - from 250 to a maximum of 500 a year - does not justify regular calls by container shipping lines at Vieux Fort. It is also questionable whether the jetty, lbuilt in the early s to serve the US airbase, is strong enough for the handling of 40-foot containers. In addition, the banana facilities on the pier are being relocated so as to provide better access for non-banana traffic. 63. There are complaints about the costs of handling freight, both imports and exports, whether these pass directly through the port or are moved by road to and from Castries. It seems, however, that the kind of light industry most likely to be attracted to St. Lucia can, in most cases, be served by air freight through Hewanorra Airport. The Airports a) Hewanorra 64. The capacity of Hewanorra is more than sufficient to handle any foreseeable growth in aircraft movements. However, the terminal is not fully equipped for the arrival of large passenger aircraft, such as a Boeing 747. If the tourist industry is to expand, attention must be paid to this aspect of the airport, as well as to the completion of the modernization of the air traffic control system and other components of safety. Also, additional storage facilities will be needed if light industry develops as envisaged. b) Vigie 65. This airport is conveniently located for both business and holiday travellers, since the main development of hotels has been in the Castries area.

32 The scope for converting the airport to handle larger capacity aircraft such as DC9 and Boeing 767 is limited arld the cost of doing so will be quite high. The Vigie Airport, however, can be developed, at relatively low cost, to handle more passengers by improving the terminal buildings. At present Vigie is underused because the number of travellers is insufficient to support more frequent service to other Caribbean islands, which is done by small aircraft able to land and take off at Vigie. Main Conclusions on Transport Infrastructure 66. The basic transport infrastructure is generally adequate to support the development of the economy, once the condition of the road system is brought to the proper standards and the facilities at Castries port and at Hewanorra airport outlined above have been provided. 67. There is, however, a strong case for assessing the feasibility, technical and economic, of providing a coastal shipping service between Castries and Vieux Fort, calling in at Scufriere. Such a service could be designed to carry both passengers and cargo. There are potential advantages in the use of the roll-on/roll-off technique but the feasibility of such a service would be dependent, among other factors, on the cost of providing a suitable berth at Soufriere. 68. Consideration should also be given to the building of small jetties or quays at one or more of the smaller coastal towns of Laborie, Choiseul, Canaries and Anse la Raye. It might well be the case, however, that improved roads would make unnecessary improved access by sea other than at Soufriere. The provision of a link by sea between Castries and Soufriere would probably cost less than the roadworks needed to improve, to a similar degree, the movement of goods between the two areas. 69. Any substantial expenditure on the development of Vieux Fort Port would require a careful feasibility study. The development of this port includes as possible options the building of a cross jetty at the end of the present one to form a "T", or the building of a second parallel jetty to form a "U"; both require the retention of the existing jetty. The cost of essential repairs to this jetty has not been accurately assessed and its likely residual life, once repaired, is not known. Another idea which does not involve the ultimate retention of the present jetty, is to build a sea wall across the bay broadly at right angles to the jetty and to reclaim the land behind it. Part of the wall could be developed as a quay, providing whatever number of berths are though to be needed. The amount of land to be reclaimed would depend on the depth of water needed at the berths and the amount of dredging required to provide it. The Administrative Structure (a) Roads 70. The key issue is the strengthening of the public institutions so as to maintain, rehabilitate and develop the road system. Functions that need to be carried out are: (i) surveys on condiltion of the road system. Once the roads have been brought to a proper standard the continuing survey of road conditions will require fewer staff;

33 (ii) road traffic counts. It was observed that counts are available for some sections of road. They need to be collected and any gaps in information filled; (iii) formulation of a comprehensive road rehabilitation program. This will result from the road condition survey and traffic counts; (iv) implementation of the road rehabilitation program. This will require the strengthening (or even creation) of an organization capable of carrying out the required works, supplying the necessary plant, machinery and vehicles and arranging for the timely supply of the mixes and aggregates to the correct specification. This organization should also be responsible for choosing and controlling outside contractors; (v) inspection of roadworks in progress and approval on completion. This function can probably be carried out by the same staff that undertake the road conditions survey. The materials testing laboratory should be linked with this function. Such inspection should cover work in progress on new construction as well as repair; (vi) maintenance of roadmaking plant and machinery. An inventory should be made of all plant and machinery, wherever it is at present deployed, and decisions taken about which items should be retained for future use and which should be scrapped as beyond economical repair. If plant is assigned to the use of contractors, they should be required to return it in full working order or to pay for its subsequent overhaul and repair; and (vii) financial management and audit. The variety of sources from which funds are likely to be available makes it important to set up a system of financial management and audit. (b) Ports and Airports 71. A scheme has been implemented to set up a combined administration for the sea ports and airports, extending the responsibilities of the St. Lucia Port Authority to cover airport matters as well. The St. Lucia Port Authority was responsible only for managing the ports of Castries and Vieux Fort. It efficiently carried out its duties, promptly produced proper accounts and was not a financial burden on the Government. The airports have been run as part of the Ministry of Communications and Works, with no effective financial management, no business accounts and on a cash basis loss. The intention of the administrative changes is to ensure that the airports will be managed in the future as a public authority paying its way, including providing for depreciation and meeting capital charges of interest and amortization of debt. E. Manufacturing 72. Promotion of private sector activities in manufacturing is one of the main goals of the St. Lucian Government. The authorities believe that the main duty of the public sector is to provide the basic infrastructure (roads, water,

34 electricity, etc.) and an appropriate environment for the development of private sector activities (legal order, stable currency, weights and measures, fair and equitable tax structure, and effticient, responsive administrative system). It has been stated, however, that the public sector must on occasion take initiatives in areas considered of national interest but in which the private sector is hesitant to enter. The Government's attitude towards the private sector can be defined, therefore, as favorable and pragmatic. 73. The Government encourages both the local and the foreign private sector to undertake new manufacturing activities. New foreign investments are promoted, particularly for light assembly-type industries. Efforts are being made to encourage the local private sector to divert somewhat its activities from trading to small industries. To achieve their goal of developing manufacturing, the St. Lucian authorities rely on several policies, institutions and programs: (a) (b) (c) (d) (e) improved investment climate. The political stability achieved under the preserlt Government since May 1982, has greatly improved the investment climate; sound incomes policy. Shortly after its election victory, the Government proposed a tripartite commission involving the Trade Unions, the Government, and the Private Sector. This commission would analyze the main incomes policy issues such as prices, wages, productivity and emp:loyment, al: considered vital to the country's econonmic recovery. So far the Unions deemed the proposal unacceptable but the Government has nevertheless stated its intentions to continue 'Looking at industrial relations. This approach appears essential in view of the fact that there are still some unsettled labor conflicts which could adversely affect the investment climate; fiscal incentives. These are available under the St. Lucia Fiscal Incentive Act which includes tax holidays up to 15 years, export allowances and duty-free importation of machinery, raw materials, equipment, and spare parts for the duration of the tax holiday. These incentives are similar to the ones of the other Eastern CaribbeaLn countries; development loans. These are available from the St. Lucia Development Bank which, in turn, has the Caribbean Development Bank as the main source of funds; industrial promotion through the National Development Corporation (NDC). NDC has offices in New York and Cologne to attract investments. Thie training of St. Lucians overseas in investment promotion through assistance from UNIDO has served to enhance NDC's capabilities. To complement NDC's efforts, USAID is financing a two-year program called Project Development Assistance Program (PDAP). Similarly, CDB assigned an Investment Promotion SpeciaLlist to NDC under a technical assistance agreement;

35 (f) construction of factory shells. In addition to its promotion activities, NDC is in charge of the construction, supervision and financial management of factory shells which are rented to the private sector. For the construction of these shells, NDC has been borrowing funds from the CDB. The CDB has made five loans over the past two years to St. Lucia totalling US$4.5 million to finance the construction of 13 factory shells in various parts of the island, including Vieux Fort. CDB's policy is to make new loans for factory shell construction to keep pace with demand; it may be expected to continue financing factory shell construction in the future. This program has been generally satisfactory; and (g) establishment of a Free Zone area in View Fort. Vieux Fort is located at the southern tip of St. Lucia. The capital of St. Lucia, Castries, is in the heavily populated and more developed northern part. The economic activity centered around Castries has created urban migration and the Government is concerned about the social pressures that the migration is causing. Their strategy--and that recommended in a UNDP-financed Report--is to create a development pole at the southern--vieux Fort--end of the island. The economic base of the pole would be expanded export-oriented manufacturing industries. The UNDP Report has identified principal growth potential especially for the electronics and garment industries. The Vieux Fort area has already received substantial infrastructure investment which would support further industrial growth. The main advantage of this free-zone would be to enable firms to bring in raw materials and equipment with no bureaucratic interference. Other considerations such as the leakage of merchandise into the domestic market and the exemption from import duties are not very relevant for the free-zone concept because the domestic market is very small and most new investments enjoy fiscal incentives anyway. 74. The policies, institutions and programs of the St. Lucian Government are generally adequate to develop the manufacturing sector. Therefore, a successful performance depends, to a large extent, on the recovery of the international economy, particularly in the USA, and on the preservation of a favorable investment climate and smooth industrial relations. There are, however, some other issues that need to be resolved: (a) (b) the educational system needs to become more technically oriented with management training being more emphasized. The Government is fully aware of this issue and specific measures are expected to be implemented soon; some goods produced locally are controlled by fixed prices whereas imported goods are controlled by percentage markups. Although price controls do not appear to be a major issue, this system encourages import trade as opposed to local, efficient manufactures. Thus, elimination or relaxation of these controls would serve two purposes: (i) encouragement of local manufacture through efficient import substitution; and (ii) some reduction in the import bill; and

36 (c) shortage of local f:lnance. The Government is making efforts to solve this issue by improving its finances and, therefore, reducing public secitor demand of commercial bank credits so that more funds will be available to the private sector.

37 III. PUBLIC SECTOR INVESTMENT PROGRAM A. Introduction 75. The present Government which took office in May 1982 has re-examined the public sector investment program and has clearly defined the projects on which efforts will be focussed. It has also stated that additional emphasis will be given to maintenance because the capital stock had not been maintained properly. B. Progress in the Implementation of the Public Investment Program 76. The execution of the public sector investment program during FY82/83 be regarded as satisfactory from the point of view of level and composition. can Estimated public sector capital expenditures reached 11% of GDP, somewhat short of the EC$45 million projected in the 1982 World Bank Economic Memorandum. This is satisfactory particularly in view of the difficult financial situation faced by the public sector. The composition appears generally adequate. Emphasis was placed on road programs, airport improvements, water supply, agriculture (banana rehabilitation and farm resettlement), factory shell construction and education. The purchase and exploitation of the Dennery Farm, decided upon by the previous Government, also required some capital disbursements by the present administration. Table 6: Public Sector Investment Program FY1981/82 FY1982/83 a. Capital Expenditures (EC$ million) b. Projected in 1982 Economic Memorandum (EC$ million) c. Executed/Projected (a/b-%) d. Capital Expenditures/GDP (%) e. Net External Financing/Capital Expenditure (%) Technical assistance received by St. Lucia in recent years accounts for about US$2.0 million per year. About one-half of the assistance is project-related; the rest consists of personnel working directly for the Central Government or government enterprises. Project-related technical assistance has been concentrated in agriculture (Cadastral Survey, water use, livestock development), energy (geothermal study, Roseau Dam), tourism, industrial promotion, and communications (Western Road). More than 30 persons are working for various government departments or agencies; they include positions such as

38 water management consultant, general manager and financial controller at the Banana Growers' Association, the Director of Tourism, a mechnical engineer, a statistician, and a pediatricilan. 78. Technical assistance programs generally seem to be progressing satisfactorily. But the final outcome will depend on the ability of the country to absorb the assistance and, therefore, to gradually reduce the need for it. Since the public sector has a relatively high degree of organization and managerial capability, it should not be difficult to make rapid progress in this regard. It must be noted that in many cases non project-related technical assistance becomes necessary not because the country does not have the qualified personnel but rather because the level and structure of salaries is not conducive to the maintenance of highly qualified personnel in the public sector. 79. As mentioned previously, the critical financial situation faced by the public sector has been a major constraint in the implementation of the public sector investment program. This is evidenced by the heavy reliance on external funds which funded more than 85% of the total investment in FY82/83. Since Government borrowing from local banks has already reached a high level and since public sector savings are still small, it has been very difficult for the authorities to meet the bridge-financing requirements of projects externally funded or to carry out maintenance works, which are normally locally financed. 80. The present Government 'has reorganized the Ministry of Finance and Planning so as to strengthen the capacity of the administrative system to manage internal resources and to attract external capital. Particular emphasis is being placed on economic management, fiscal analysis, macroeconomic planning, project preparation, monitoring, and control as well as improved project accounting. The reorganization is also expected to increase the country's absorptive capacity and to improve efficiency in the use of financial and technical resources. C. The Public Sector Investinent Program for Period FY83/84 - FY87/ The public investment for the next five years is projected to reach an annual average of about US$23 mil:lion, or 12% of GDP. This level of investment includes ongoing and new projects (or project "ideas") currently in the pipeline. There should not be any problem in reaching this level of investment from the point of view of the absorptive capacity of St. Lucia, because: (i) it is not signifiicantly higher than the previous level of investment; (ii) the country's institutional capability to monitor and execute small-and medium--size projects is, overall, sound; and (iii) the required teclnical assistance for the execution of large projects has been already obtained or is expected to be obtained as a part of the project-related external assistance. 82. The composition of the public investment program is sound. The identified projects are consistent: with the Government's strategy to improve infrastructure and to promote light industry and tourism (See detailed information in Annex A). The following conclusions also emerged from the public sector investment program projected for t:he FY83/84 - FY87/88 period:

39 Mi) current ongoing projects should be completed during the next three years; (ii) disbursements related to the execution of new projects are projected to gradually increase as the required project preparation is completed; (iii) fixed investment is projected to represent about 93% of the total public capital expenditures; and (iv) financial investments, that is to say disbursements of development loans to the private sector through the St. Lucia Development Bank, are projected to average about US$1.5 million per year, or US$12 per capita, which seems to be adequate to finance requirements coming predominantly from the local private sector. Table 7: Composition of the Public Sector Investment Program FY83/84 - FY87/88 (EC$ million) 1983/ / / / /88 Total Fixed Investment Ongoing New Financial Investment Ongoing New TOTAL Ongoing New The Government has analyzed the project list of the previous administration and has taken a number of appropriate decisions. For instance it has dropped from the list the sugar factory project, an import-substitution project of low economic return. The Government has also discontinued, in early 1983, the Dennery Farm Project, which did not appear feasible. It has to decide now what to do with the land already purchased. However, there are a number of projects that should be carefully examined by the Government and by the external funding agencies so as their size and scope are tailored to the needs of the country, particularly: (i) improvement of the Vigie Airport. While improvement of the terminal building and landing equipment are highly desirable, the enlargement of this airport, to enable it to take larger aircraft, is not likely to be as cost effective as keeping the

40 Hewanorra ailrport as the main entrance and simply improving the road between Castries and Hewanorra; (ii) improvement of the West Coast Road (Castries-Vieux Fort). Widening some parts of the road, improvement of some vertical alignments, easing some curves, resurfacing, and better drainage as proposed by the Government all appear acceptable; and (iii) Vieux Fort Development. In addition to the development of the particular atrea, this project should address, as recognized by the Government, some industrial and infrastructural problems which go beyond Vieux Fort. If feasible, it should include elements such as additional cargo facilities at the Hewanorra Airport, improved access to the adjoining industrial estate, rehabilitation of the jetty at the Vieux Fort Port, purchasing of a crane to handle container cargo, "low-income" houses, and financial and technical assistance for industrial promotion and planning. F'inancial constraints may dictate this project to be executed in phases. 84. The financing of the public sector investment program is a crucial issue. First, public sector savlngs need to be increased substantially. Second, foreign financing needs to be secured. A sizeable part of the requirements has been already obtained or is in the pipeline mostly from concessional sources. Third, financing from other domestic sources such as local banks should be very limited for the next several years because funds from these sources have already reached a high level and because of the need to leave more funds available to the private sector. The public investment program and its suggested financing is shown in Table 9; its main characteristics are: (a) the total to be financed in the period 1983/ /88 amounts to EC$347.2 million (or US$128.6 million), including amortization of external public debt of EC$40.2 million (or US$14.9 million); (b) public sector savings are projected to increase gradually as percentage of GI)P to 2.4% in FY83/84, 3.5% in FY84/85, reaching 5% in FY86/87 and FY87/88. These savings are projected to finance about 31% of the public sector investment program. The financial improvement is expected mainly from the Central Government which projects a restraint on current expenditures (See Table 5.4, Statistical Appendix). To the extent that public savings of the order of 5% of GDP were already achieved in the past, the projected improvement in public finances is realistic. Moreover, this is the crucial element for determining the creditworthiness of the country. Since St. Lucia belongs to a larger monetary unit, improved public finances rather than balance of payments substainability is the primary determinant factor of creditworthiness; (c) external capital inflows are projected to finance almost 70% of the public sector investment program. The need for external funds is projected to gradually decline in line with the improvement in the financial performance of the public sector

41 but, nevertheless, external funds are projected to remain as an important source for the foreseeable future. Short-term nonproject related funds, such as Treasury bills to be sold--or renewed--in neighboring countries are projected to be needed only until 1985; and (d) borrowing from local banks is projected to finance a very small part of the investment program, less than 1% of the total requirements.

42 Table 8: Public Sector Investment Program and its Financing (EC$ millions) Actual Estimated Projected 1981/ / / / / / /88 Total Total (x) USES Capital Expenditures Amortization of External Debt TOTAL SOURCES External Capital Inflows (Gross) X Grants Loans - Project-Related Loans - Non-Project Related a/ Public Sector Savings Other b/ TOTAL a/ Renewal of Treasury bills sold in neighboring countries. b/ Includes commercial bank borrowing. Source: Mission estimates.

43 IV. OUTLOOK A. Output and Expenditure 85. Resumption of steady economic growth in St. Lucia will depend mainly on on the preservation of a favorable investment climate, on the successful execution of the public sector investment program, and above all on the improvement of the world economy. Given the small size of the economy, economic growth needs to be based on an export-oriented strategy. As such, the growth of the tourist industry, the light industrial sector, and, to some extent, the agricultural sector will be possible if the economic situation prevailing in trading-partner countries is favorable, particularly in the USA, the UK, Canada, Germany, and the West Indies. New light industries, especially assembly-type, will be established in the country if, among other things, a favorable investment climate and smooth industrial relations are maintained. The successful execution of the public sector investment program is another major requirement not only in relation to maintenance, improvement, or construction of infrastructure but also in connection with programs related directly to the productive sectors such as agriculture and industry. 86. After the slowdown of , St. Lucia is expected to resume steady economic growth. A 3.3% economic growth is projected by the mission for 1983, accelerating to 5% in 1984 and to 5.3% from 1985 on. This projected growth is optimistic but not unrealistic. First, the projected rates of economic growth are lower than the ones experienced during the 1960s and most of the 1970s. Second, the international situation appears to be improving. Third, Government's policies are generally sound; this will play a positive role in the preservation of a favorable investment climate. Fourth, key technical positions within the public sector are staffed with motivated and sophisticated personnel; this will contribute to a successful execution of the public sector investment program which is an important element for achieving economic growth. The main contributors to the projected economic growth are expected to be: (i) Tourism. The growth is expected not only from an increased number of tourists but also from a more integrated, higher value-added activity; (ii) Manufacturing. New light industries are expected to be attracted by St. Lucia's relatively good facilities, by smooth industrial relations and by an easily trainable labor force; (iii) Construction. This sector should grow steadily in line with the execution of the public sector investment program, housing programs, and tourist-related construction; and (iv) Agriculture. Large amounts of resources are projected to be invested in agriculture for banana and coconut rehabilitation as well as for agricultural diversification. The growth of this sector, however, is projected to be slightly lower than the growth for the whole economy.

44 Table 9: Actual and Projected Real Growth by Sectors (X) Average Average Prelim. Projected Ul Agriculture and LLvestock n.a Manufacturing n.a Construction n.a Se:rvices n.a GDP ~~~~_ = = Source: Statistical Department, IMF, and mission estimates. 87. Gross domestic investment during is projected to remain at high levels, about 42% of GNP. This level is higher than the one which prevailed during the last decade, excluding investments in the oil terminal. This high level of investment is required to support a sustainable economic growth. In other words, the ICOR is projected to remain high because some basic--and costly--infrastructure needs to be completed; moreover, because of the relatively small population, per capita infrastructure costs are very high. The economy will need to generate more savings in order to finance the increasing amounts of projected investment. National savings are projected to increase from about 23% of GNP in the period to about 29% in 1985 and to 33% in But there will still be room for increasing public and private consumption. Real public consumption is projected to increase by 1.7% per year during the period and 2.1% during Real private consumption is projected to increase by 1.2% per year during the period and by 4.7% during The projected increase in private consumption for is reasonable especially in view of the rapid increase that took pla,ce in previous years.

45 Table 10: Expenditure Components of GDP (%) Average Annual Growth Rate Composition GDP Investment Private Consumption Public Consumption National Savings Source: Statistical Department, ISF, and mission estimates. 88. Unemployment could remain high in the years to come. If the labor force grows at about 2.5% per year, as it appears to have been the case, the new workers can be absorbed by an economy growing at about 5%. But in that case, reduction of unemployment would be rather marginal. On the other hand, if the labor force grows by more than 2.5% per year, because female participation increases or because emigration declines, unemployment could increase even in spite of expected high rates of economic growth. This illustrates a fundamental issue in St. Lucia: given the limited natural resources and the small size of the island, the population must stop growing sometime during this century. In fact, to the extent that emigration cannot be a sustainable way of achieving equilibrium, continued programs of family planning appear to be crucial requirements for the long run well-being of St. Lucia. B. Balance of Payments 89. The medium- and long-term balance of payments sustainability largely depends on the situation of ECCA of which St. Lucia is a member. Thus, balance of payments constraints are regional rather than national problems. Balance of payments projections for St. Lucia are, nevertheless, presented in this chapter but they incorporate a key assumption. ECCA will perform satisfactorily or, at least, without any serious disruption. 90. The balance of payments projections are based on the export-oriented strategy stated by the Government. It emphasizes steady and fast growth of tourism and light industry as well as efficient import-substitution of food. The main assumptions incorporated in the export and import projections are:

46 (a) banana exports will grow from 42,000 metric tons in 1982 to 61,000 in 1990; then they will remain at that level (almost 50,000 metric tons were already exported in 1979); (b) coconut oil exports will gradually increase as the industry is rehabilitated. They are projected to increase by an annual average of 4.7% during and by 4.1% during The level of real. exports in 1990 is projected to be about the same as the one that prevailed in 1978, (c) tourism and light industries are projected to be the most dynamic exports. They a:re projected to increase by 5.5 to 6% per year in real terms during the next 13 years. As previously mentioned, the attraction oi. new industries will be the crucial contributor to the achievemenit of this performance; (d) (e) (f) food imports are projected to slow down. The undertaking of several programs aimed at efficient-import substitution is projected to allcow St. Lucia to reduce its dependance on imported food. The import:ed food bill is projected to grow, however, in real terms, by an annual average of 3.4% during and 3.7% during This implies an elasticity, respect to GDP, of about 7, fuel consumption is projected to increase slower than GDP. It was assumed that the elasticity of fuel imports to GDP will be between.67 and.75 in the period This will require two main conditions. First, energy-saving measures will have to be introduced. 'For instance, an increase in the consumption tax on oil is advisable so as to match the recent decline in prices. This is currently envisaged by the authorities. Second, at least one of the possible projects in energy, geothermal energy, or another identified project for the electricity company, will prove to be feasible and will be successfully implemented} and other imports will slow down, particulaxly durable-consumption goods. This :ls expected to be achieved mainly by a more realistic policy on public expenditures, particularly on salaries and wages.

47 Table 11: Actual and Projected Exports and Imports of Goods and Non-Factor Services (In 1981 US$ mnillion) Annual Increase Actual Prelim. Projected (X) Exports Bananas Coconut Oil Other Merchandise a/ Non-Factor Services b/ TOTAL FWT 7WXT 9&.6 T2573 T5TTE -5Tu J.T7 _ = =::' -! Imports Food Fuel Hess-Related Investment n.a. 0.0 Other Merchandise Non-Factor Services TOTAL c/ 3.7 = = _== = =! a/ Includes industrfat-oids. b/ Includes tourist-related earnings. c/ Excluding Hess-related investment imports in Source: Mission estimates. 91. The world economy is expected to favor St. Lucia in the years to come. First of all, demand for its products and for tourism is expected to increase. Second, the terms of trade are expected to remain at least at the same level as in 1982 which, itn turn, shows an improvement in relation to All these are expected to improve public finances. 92. Conservative assumptions were made in projecting external transfers received by St. Lucians. Private transfers received from nationals living abroad are projected to remain constant in real terms during On the other hand, factor service payments are projected to increase in line with interest charged on largely concessional assistance provided by the international community to the public sector. Nevertheless, interest payments are projected to increase four times in nominal terms during , or about twice in real terms. 93. The current account balance of payments deficit is projected to decline relative to GDP. The current account deficit which accounted for 18% of GDP in 1982 (excluding Hess imports) is projected to decline to about 8% in 1990 and to 6Z in The level of deficit projected from 1990 on can be regarded as relatively low in view of the high level of projected investment, more than 40% of GDP.

48 Reflecting the overall strategy of the Government, it is projected that the public sector will gradually reduce its needs for net external capital financing. On the other hand, the foreign private sector is projected to increase its capital inflows into St. Lucia attracted by favorable conditions. Net capital inflows to the public sector, including grants, for about US$15 million per year are projected for the period , declining to about US$13 million per year during Present Debt C. Creditworthiness 95. St. Lucia has traditionally received large amounts of grants and concessional loans. Grants have accounted for more than 40% of the gross inflow of external capital to the public sector. Grants were particularly important in "hurricane years". Loans have been obtained generally on favorable terms. For the loans committed between January 1, 1974 and December 31, 1982: (a) the average interest rate is 5.1%; (b) the average maturity years is 19 years; (c) the average grace period, 4.2 years; (d) the grant element is 32%; and (e) the external public and publicly guaranteed debt at the end of 1982 was about US$24 million or 18% of GDP. 96. Several short-term loans were contracted during The public sector borrowed about US$4.4 million frdm Caribbean countries which bought St. Lucian Treasury bills. Some of these loans are repayable in EC$ but, nevertheless, are treated as foreign debt. As a result of these short-term loans, the debt service which traditionally accounted for less than 3% of the total foreign exchange earnings, is projected to increase to 6.6% in Projection of Capital Inflows 97. The public sector wrill have to rely on external capital inflows for the foreseeable future. Even if, as expected, a great improvement in the public finances takes place the generatted savings will not be sufficient to finance fully the investment program and to amortize previously contracted debt. By analyzing the balance of payments projections we can conclude that: (a) (b) large amounts oe funds need to be committed, particularly to finance Government's requirements from 1985 on. Since these funds are mostly going to finance investment projects, commitments need to be secured far in advance; and large amounts ofi grants and concessional loans will be required in the foreseeable future. Disbursements of grants and concessional loans are projected to increase slightly in absollite terms but to decline as percentage of the total external capital inflows from 75% in 1983 to 40% in 1990, and to 36% in 1995 (See Table Stal:istical Appendix). External concessional assistance is, l:herefore, projected to play a crucial role in the St. Lucian economy in the years to come.

49 Given the above scenario, the debt service ratio is projected to remain within manageable limits, no higher than 6%. The total debt is also projected to remain within moderate levels, increasing from 18% of GDP in 1982 to 26% in 1990 and then declining to 23% of GDP in It should be noted, again, that this projection assumes a large inflow of loans on concessional terms.

50

51 GOVERNMENT'S PROJECT LIST ANNEX A

52

53 ST LUCIA - MAJOR ONrOING PROJECTS AND SOURCES OF PINUCING (USS '000) DIRCTLY PRODUCTIVE PROJECTS Term and Conditions e Estiata d */ EatimtedT7 Total External Financing Interest Amortizatton Grate Commencement Completin _ Cost A ount Y Seurte Rate Period Period PY FY Aaricultuce,fpreotro & Fisheries Struc-vral AdjuAtment Program 8,500 8, IISAID - 83/84 85/h6 K.t n_too Project (R) USAID;CAEP /8" post R5/86 lelcer Irrigation EtC /84 84'85 Micro Irrtgation Projects FRC /84 85/8t Roexo Resettlement (SLU Model Farms) 6,185 6, EEC,CDC, Ge.ot -; -; -; RO/81 8h/87 RecuaiJour Llveotock Oeleiopaent 1,518 1, EEC /8O 83/84 Tr e Crop Uiveraificatton UK pr Rl/82 RS/Rh Input R-olving F.od-Sananao(R) CDB 83/84 85/89 Ban.na Dv.lopaent Progra IV, V UK R1/82 93/R4 Fore-try Manag e nt As.it.ace CIDA _ 81/R2 84/8S Can!ries IF.heries Complex 3,000 2, CIDA - _ /R8 Farmero I-pro aeent Credit CDB pre 81/82 82/83 Agriculture Production Credit CDO pre 81/82 R2/83 _nduestry Industrl.1 Estates V 1, CDN 4 IS 5 82/83 84/8s Sn0ll Industry Credit CDB /82 82/83 SUPPORTING INFRAESTRUCTURE Trnanportat ion Road Rehabltit.tlon Program 5,500 5, US /83 84/8S Road Re*urfAcing 2,592 2, Ven... 1,, 84/R5 post 8S/86 HeWanorra Airport Developsent 2,000 1, CODB,L 4; - 15; - 5; - pre 81/82 83/84 Poser Supply El ctricity Expansion 11 3,380 2, CDB /83 84/R5 Rural Elctrific tioo Program CON 4 IS 5 82/83 R3/84 8.ter Supply laprov.sent Water Supply 2,743 2, US(HHN),UK,CDA -;4 -;5 -;5 80/81 A3/84 OTHER PROJECTS Educ.t Ion School Rehabilitation Program 6,780 6, Private /81 85/86 School l.pronesent Program 1, US (8H6) /81 83/84 St. Aloysius Boys School UK /83 83/84 Hurric-ne Allen School Reconot CIDA /81 83/84 Itodent Loans 11, 1 add COB 4 IS 5 pre 81/82 84/95 MortgagS FLnance It I00 CDB pro 81/;2 84/85 Other Sil -help Community Development UK - pre R1/82 83/R4 Mlision Administered Punds (per anna.) CIDA on8l8010 OnEnng Consolidated Line of Credit 2,000 2, CDB /84 85/86 Unavailable (R) Part of Regional Prograa; Approximate Coat o Actual Project laplementation.

54 ST, LUCXA - MAJOR PIDJKC?S MD SOURCES OF PIMACIEI (Us$ '000) Tsnm of Conditions Total Exesrnal Int,~ oerest Amortization Grecs Cost Am.it Muc late Period period STATUS DIRECTLY PRODUCTIVE PSOJUCTS Agric.1t.re. Forestry & Fisheries Input Supply Scheme 6,500 5,550 t0 Ms Idea stage; preliet.ary cost estimete.. Production and Markeing 5, IPdD,03,Unknome 4;.. 15; Appraisal Ongoing. Tr*e Crop Di-esification 2,000 1, AJ, Unkowen -;.. -;.. -;.. Continuation ongoing progra.; prelim. estimtes. Co..o wt Input Supply Scheme 3,000 2,700 I0 ims IS1 5 Ready for i.plement.tio.. Fisher~ies I.fraotruct.r. Os.- 1,250 1,000 s0 Un.k.own;CIUA.... Id" stag.; prelli..nsy c..ot -stieates. D-n.ipment Poreatry Sector 4,500 4,500 too CIDA --- Idea stage; preli.. root etoeetite.. Agricult.rsl Sector Credit 3,000 3, C Appropriate schemes need to be designed. InduU)fry Agro-!'rocesiSo Industry 0.'.. 1,111 1, Ms S Preli.. our,ey completed; fe*.1biltty tudy rqd. Industrial Z.t.t.. VI 1,667 1, CDs Continoscion ong.iog progre.. Vieso Fort Industrial Pree Zoos 7,000 5, IBSED/COR.... Idea stage; Prelie.est. ;fen.ibiltty study rqd. Industry Sector Credit 3,000 3, Ms Conti-ution of ongoing progra.. Turmas H.oLdoy Vill.ge 2,500 2,250 g0 MsS Idea tores; full fe.. ibility study etc. r-quir.d. Po1nt Seraphin. Touris. P.c. 1 2,000 1,800 P0 wi Project apprai-1i ongoing. Do-I.speent Tourist Attractions 1,230 1, OAS/Unko"W.. Idea stage; prelim. -ot estiwte.. T-ourm Sector Credit 2,000 2, Ms Idea stage. SUPPORTING INFRATRUCTURE Traneportatios Agricultural fssder Rodad IV-V 5,778 5,200 M0~ s 4;.. 15;.. 5;.. Costinuation of ongoing pr-gro.. last Coast Reed Strenghtenisg 3,000 2, Unknown... Prelimisary coot est.; detailed design retuired. West t"oat Road Constructio. 10,000 9, Unkosse, OPIEC, CDS F-... aibility Study & prelim. deolgo coepleted. H-eosoorr Airport D.'.. I 9,300 6, '.IDA, Usnkowo ;.-;. -. Project components ideot.; f... study required. Vi40. Airport DenelogmeOt 7,000 5, US,1CIOA,Priw.ts a Idea stage; Pr.li.. root est (co.pon...t 2). Castrl.. Port Senslopeent uohnom.a... Id.. stage; Preli.. cost.otimats.. Vieos Port Port Development 1,500 1, D,Unkoom a.... Idea stage; Preli.. -ot estieate.. Electnlcy' D'e-lopmsnt III 10,00)0 7, RB, Unknown Dntailed design., bidding documets are being prepared. Geotherml Egergy D-s.lopmswt I 5,533 5, UI.AIO/Private... Pr.liegnary -ureys, drilling. onepleted. Rsral Electtifioatiwe V 1,667 1,500 1O : Cootionstion ongoing program; prelimioary eatie. Wager Supply IsteSreted Water 0.velopmeot 2,400 2, ,B UK 4;- IS;- 5;- Continution of ongoing prog; project appraised. gosean asa 15,000 11, CIDA, (25, Usknoon..;4..;15..;S Feasibility study, cox. design.sare being preprd. Other iwilding Mtaterials 0.'enipeent 3,000 2, ; Unknown 4;.. 15;.. 5;.. Ides Stage; prelim. entleate.; Pilot prolect OTEE MlOJUCTs Education School Insildleg Program 7,000 5,600 s0 ionkmoos.. Id.a Stag.; preliminary cost estimates. WI Agricultural College 1,250 1,030 50o lec -- project D.cueeot eubeitted; site sele.tsd. Regional NRdta Trade ghoel le -- Project Documet.. beitt.d. Cultural Infrosatr.sctare be-..,ii 5,000 1, lishnown.... Idea Stag.; preliminary cost astiestes. Tertiary Education Development 1, :70 UlIehown... Idea Stag.; preliminary cost estimates. Health TslmnsUide Samer.g. System 3,333 3, s, usunown 4; ;.. Id.& Stage; preli.inary cost estimate.. improv.ement Victoria Nospital 2,000 1,600 so lenkoowo.... Idea Stage; pr-liesry cost estimates. Housing Deeslopeest 7,000 4, Vanes., ids, Unknown -. ;. -.. Selected components are ready for implemeotation. Housaing 6 Mortga" Fames,o 6,000 6, s 4 13 S Continuation ongoing Program. Dtber Pu1ler Sadio In Ready for implementation,.. Not determined. eet s'av43abla.

55 ST. LUCIA ONGOING TECHNICAL ASSISTANCE (US '000) Est imated Total Source of Completion Cost F~inancini Duration. Date Status - Comments I. PROJECT-RELATED Land Transeformation 1,481 OAS... Government Contribution 296 Land, Water Use 279 EEC.. Project has not yet commenced Beausejour Livestock Development 50 EEC 'Life of Proj FY 83/84 Technical Assistance Component of EEC - financed project Export, Tourism Promotion 167 EEC Roseau Dan Construction 741 CIDA 2 years FY' 84/85 Feasibility Study; estimated commencement Feb, 1983 Development of Construction Materials 68 CFTC 3 manmonths 1983 Feasibility Study West Road Construction 210 EEC 3 manoonths 1983 Feasibility Study II. OTHER Water Management Consultances 8G UK Several Years 1985 Institutional strengthening Central Water Authority General?Ianager BGA 50 UK 1 manyear Dec., 1983 Institutional strengthening Banana Growers' Association Financial Controller BGA 50 UK I manyear Dec., 1983 Institutional strengthening Banana Growers' Association Fisheries Officer. Canada (CDF) 2 manyears April, 1984 Ministry of Agr., Fisheries, Lands & Cooperatives Fisheries Officer. Canada (IDRC) 3 manyears June, 1984 Ministry of Agr., Fisheries, Lands & Cooperatives Forestry officer. CIDA 3mnanyears August, 1984 Nfnistry of Agr., Fisheries, Lands & Cooperatives Forestry Officer. CIDA 1Imanyear Mlay, 1983 Ministry of Agr., Fisheries, Lands 6 Cooperatives Forestry Officer CIDA B manmonths 1983 Agricultural Economist 54 UK (0DI) 3 nanyears 1983 Trade Officer. CFTC 2 manyearsr Feb., 1984 Project Dev.; Ministry of Trade Legal Oraftsmen.. CFTC 2 manyears. Ministry of Legal Affairs Legal Draftsman 50 UK 1 manyear Oct., 1983 Part-time s Mechanical Engineer GFS 50 UK I manyear Oct., 1983 Institutional strengthening Govt. Funding Scheme Manager GFl 200 UK 4 manyearsr August, 1983 Institutional strengthening Govt. Funding Scheme Accounting Specialist GFS 1 CDB Institutional strengthening Govt. FundinR Scheme Statistician UNDPm 2 manyears June, 1984 Ministry Finance, Planning and Statistics Director of Health Services 200 ODA 4 manyears July, 1984 Ministry of Health; Institutional strengthening Pediatrician 200 ODA 4 manyears Oct., 1984 Pathologist 100 UK 2 menyears Sept., 1983 Primary Health Care F. rance 2-4 manyears Apr/N4ay,B3184 Two officers for one to two years each Computer Adviser (R). UK... Regional Adviser based In St. Lucia Marketing Adviser (R). UK... Regional Adviser based In St. Lucia Tree Crop Adviser (R).. UK..Regional Adviser based In St. L.ucia Training, Technical Assistance 352 EEC Several years. Various Sectors West Indies Training Scheme (R) 75 UK Ongoing prog.. Approximsate disbursement per anntum 75, scholarshitps Canada Training Awards (R) 1,000 CII)A Ongoing prog Fellowships; Totsl Coat 7,20n for all 1.0Cs Maritimke Training Assistance (R) 100 CIDA Ongoing prog Approximately 100 disbursement per annum per island Smell business Development (R) 80 CIlIA Ongoing prog.. Total cost 692; appr. dish, per snnum per island 80 Multi-Island Education Project (Rt) 27 UNDP 24 manmonths Note - Voluntary" technical assistance (VSO, Peace Corps) has not been Included. -Short-term workshops and courses have been exc luded. -Selected regional programs have been incluided...not available, not determined. - R) regional.

56 ST. LUCIA - MAJOR NEW TECHNICAL ASSISTANCE (JSS '000) Total source of Cost Finncing Duration Status - Comments 1. PROJECT-RELATED Tropical Fruits Marketing (R) 55 CFTC 12 manmonths Feasibility Study Promotion & Marketing Service Small flotels.. Unknown Short-term Estab. of mechanist tor joint ptomotion b marketing Crafts Industry Establishment 66 USAID 12 manmonths Pre-Investment Study Beach Erosion Control 35 Unknown 4 manmonths Study & Control of erosion 2 engineers for 2 months each Soil & water conservation IIU CDB 24 manmonths Assistance to Agriculttiral Engineering Unit NDC Legislation 24 USAID 3 manmonths Revision and modernization of NDC charter, codes, procedures Adult Education & Literacy Programs.. OAS 20 manmoniths Implementation nation-wide program Fisheries Sector Assistance 200 CIDA. Fisheries Management plan; assistance to coops, ruiral infrastructure Bioaass Assessment (R) 21 CDB (TEU). Total cost 150 for all LDCs Wind & Solar Energy Resource Assessment (R) 95 CDB (TEU).. Total cost 850 for ECCM countries - 3 phases Import System 20 UNDP.. Consulting Services 11. OTHER Technical Vocational Education 110 CDB 24 manmonths Engineering Adviser - Trainer 240 CFT5.. LUCELEC; Training component included. Note - Technical assistance related to capital projects included in the list of new projects has not been listed. - 'Voluntary" technical assistance (VSO, Peace Corps) has not been included. - Short-term workshops and courses have been excluded. - Selected regional programs have been included... not available, not determined. - (R) regional.

57 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Agriculture Input Supply Scheme II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 6,500 IV. EXTERNAL FINANCING REQUIRED: 5,850 V. LENDING AGENCY: CDB VI. DESCRIPTION: Establishment of input revolving fund to ensure adequate supply and accessibility of non-labor inputs (fertilizers, herbicides, pesticides, etc.) required to raise production level, and quality of output of food crops other than bananas, coconuts, cocoa and spices. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs Foreign Costs - 5,850 5, Total Costs - Amount 650 5, %

58 VIII. DISBURSEMENT PERIOD: Project is at idea stage; it has not yet been determined how the IRF would be structured ands administered. IX. TERMS OF FINANCING: Interest Rate: Amortization Period: Ususal CDB terms Grace Period: X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XI. TECHNICAL ASSISTANCh; REQUI:RED: Project Formulation: CDB will prepare the project Project Evaluation: CDB will appraise the project Project Implementation: Not yet determined.

59 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries -(US$ '000) I. NAME OF PROJECT: Agriculture Input Supply Scheme II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 6,500 IV. EXTERNAL FINANCING REQUIRED: 5,850 V. LENDING AGENCY: CDB VI. DESCRIPTION: Establishment of inout revolving fund to ensure optium supply and accessibility of non-labor inputs (fertilizers, herbicides, pesticides, etc.) required to raise production level, and quality of output of food crops other than bananas, coconuts, cocoa and spices. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount _ Local Costs Foreign Costs - 5,850 5, Total Costs - Amount 650 5, z

60 VIII. DISBURSEMENT PERIOD: To be determined when the project is designed. IX. TERMS OF FINANCING: Ususal CDB terms X. PROJECT IMPLEMENTAT'ION: Operating and Maintenance Costs: Not applicable XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: CDB will prepare the project Project Evaluation: CDB will appraise the project Project Implementation: Not yet determined.

61 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Agricultural Production and Marketing II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 5,400 IV. EXTERNAL FINANCING REQUIRED: 5,100 V. LENDING AGENCY: IFAD, CDB, Unknown VI. DESCRIPTION: 1. Continuation of Emergency Food Crop Production Program (provision of essential support services and assistance to small farmers; purchase of vehicles anr equipment); 2. Rehabilitation of upgrading of marketing services (restoration of depots; purchase of vehicles and equipment); and 3. Establishment of facilities for storage of agricultural produce. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs 300 1,320 1, Foreign Cost - 3,780 3, Total Costs - Amount 300 5,100 5,400 - %

62 VIII. DISBURSEMENT PERIOD: Post FY83,/84 84/85 85/86 Total 85/86 Local Sources External Sources ,482 3,618 Total - Amount ,648 3,752 - X IX. STATUS OF PREPARATION: Project document has been prepared by Ministry of Agriculture and has been reviewed by IFAD. Presentation to CDB and IFAD Boards are scheduled for X. TERMS OF FINANCING: Usual CDB terms; unknown XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during FY83/84-85/86 XII* TECHNICAL ASSISTANCE REQUIRED: Project Formulation: None Project Evaluation: Yes Project ImplementatiLon: Accounting and Field Management

63 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Tree Crop Diversification II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 2,000 IV. EXTERNAL FINANCING REQUIRED: 1,500 V. LENDING AGENCY: UK, Unknown VI. DESCRIPTION: 1I, Provision of propagation assistance to replant plants which were lost as a result of Hurricane Allen; 2. Restoration of four damaged propagatiqn centers; 3. Expansion of ongoing Tree Crop Diversification Program; 4. Rehabilitation and expansion of cocoa industry; and 5. Establishment of a 10-acre cashew seed orchard. VII. COST COMPONENTS AND v'inancing: Source of Financing Total Local External Amount _ Local Costs Foreign Costs - 1,500 1, Total Costs - Amount 500 1,500 2, %

64 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,300 Total - Amount ,800 -% IX. STATUS OF PREPARATION: The UK is currently financing a Tree Crop Diversification Project, which involves mainly planting of avocado seedlings in the South (220 acres). UK has indicated interest in financing an expansion of the project involving planting of 250 acres with avocado seedlings in the North. X. TERMS OF FINANCING: Concessional; Unknown XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XII. TECHNICAL ASSISTANCE REQIJIRED: Project Formulation: Yes Project Evaluation: No Project Implementation: Plant Propagation Officer

65 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Coconut Input Supply Scheme II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 2,700 V. LENDING AGENCY: CDB VI. DESCRIPTION: 1. Establishment of Nurseries to meet planting needs of Hurricane Allen Rehabilitation Program. Production of coconuts declined from 6,000 tons to 2,500 tons per annum as a result of Hurricane Allen; it is estimated that a total of 14,000 acres need to be rehabilitated; 2. Establishment of Revolving Fund to ensure optimum supply and accessibility of non-labor inputs (Rat bait, fertilizer, herbicides and pesticides) required to raise production levels, improve productivity and quality of output; and 3. Provision of extension services to improve cultural practices. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount x Local Costs Foreign Costs - 2,250 2, Total Costs - Amount 300 2,700 3, %

66 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources , Total - Amount , x IX. STATUS OF PREPARATION: Project document has been prepared for component (1); appraisal of component (2) has been completed in The UK has financed a coconut improvement and rehabilitation project. Under this project, a ten-acre seed garden was planted at La Farque and an additional ten acres at La Retrait. From the hurricane relief fund 150,000 coconut seedlings -- enough for 1,000 acres replanting -- were bought. IX. TERMS OF FINANCING: Usual CDB terms; Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Assistance required for component (2) Project Evaluation: Assistance required for component (2) Project Implementation: Yes. Plant Propagation Offeer

67 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Fisheries Infrastructure Development II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 1,250 IV. EXTERNAL FINANCING REQUIRED: 1,000 V. LENDING AGENCY: CIDA, Unknown VI. DESCRIPTION: Construction of new piers and upgrading of existing piers, jetties, locker rooms and storage facilities at all the landing sites throughout the island except in Castries. The envisioned expansion of the fishing industry through introduction of larger boats and improved techniques requires complimentary development of facilities. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs Foreign Costs Total Costs - Amount 250 1,000 1,250 - %

68 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. A Fish Processing Plant is presently under construction in Castries with assistance of CIDA. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during FY 1983/84-85/86 XI. TECHNICAL ASSISTANCE REQiJIRED: Project Formulation: Technical Assistance not required. Project Evaluation: Teclnical Assistance not required. Project Implementation: Technical Assistance not required.

69 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Development of Forestry Sector II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Lands, Fisheries and Cooperatives III. TOTAL ESTIMATED COST: 4,500 IV. EXTERNAL FINANCING REQUIRED: 4,500 V. LENDING AGENCY: CIDA VI. DESCRIPTION: 1. Salvaging of fallen timber for use in the domestic construction industry and energy generation (this involves establishment of fencing factory, purchase of sawmill and miscellaneous equipment, modernization of charcoal production process); 2. Establishment of nurseries and execution of replanting operations; 3. Restoration of damaged forestry buildings; and 4. Provision of nesting location for St. Lucia parrots. Presentation and expansion of the forest reserves is essential for maintenance of ground-water supplies, for reduction of erosion and siltation and for provision of timber, charcoal and other forest products. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs - 1,575 1, Foreign Costs - 2,925 2, Total Costs - Amount 4,500 4,500 - x

70 VIII. STATUS OF PREPARATION: Project is at idea stage,, preliminary cost estimates. Surveys and demarcation of forestry reserves are currently being executed with assistance of CIDA. Charcoal kilns have recently been purchased with assistance from the UK. IX. TERMS OF FINANCING: Concessional X. PROJECT IMPLEMENTATION: Operating and Maintenance! Costs: None during period under consideration XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Technical Assistance required at all stages Project Implementation:

71 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Agriculture, Forestry and Fisheries (US$ '000) I. NAME OF PROJECT: Agriculture Sector Credit II. EXECUTING GOVERNMENT AGENCY: St. Lucia Development Bank III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 3,000 V. LENDING AGENCY: CDB VI. DESCRIPTION: Provision of funds to SLDB for on-lending to farmers. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs - 1,050 1, Foreign Costs - 1,950 1, Total Costs - Amount - 3,000 3, % VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,667 Total - Amount ,667 - %

72 IX. STATUS OF PREPARATION: C,DB provides funds to SLDB for onlending to farmers under 2 schemes (Agriculture Production Credit; Farm Improvement Credit). Loan conditions are not tailored to farmers needs and means; substantial arrears have been incurred. A new supervised credit scheme should be designed. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: CDB will prepare the project Project Evaluation: see under IX; CDB will appraise the project Project Implementation: Not yet determined

73 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Agro-Processing Industry Development II. EXECUTING GOVERNMENT AGENCY: National Development Corporation III. TOTAL ESTIMATED COST: 1,111 IV. EXTERNAL FINANCING REQUIRED: 1,000 V. LENDING AGENCY: CDB VI. DESCRIPTION: Conversion of Agriculture Produce Lab at Union Station into a Commercial Pilot Processing Plant. Supply of raw materials could be guaranteed through contract - farming on government - owned land at Union. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Z Local Costs Foreign Costs Total Costs - Amount 111 1,000 1, %

74 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,000 Total - Amount ,111 -% IX. STATUS OF PREPARATION: A Preliminary Survey of existing facilities at Union has been carried out by CDB (TEU); CDB has been approached for preparation and design of the pilot project. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Yes, See IX Project Evaluation: Yes, including full feasibility study Project Implementation: Turnkey operation envisaged; training in operation and maintenance of plant and equipment required.

75 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Industrial Estates VI II. EXECUTING GOVERNMENT AGENCY: National Development Corporation III. TOTAL ESTIMATED COST: 1,667 IV. EXTERNAL FINANCING REQUIRED: 1,500 V. LENDING AGENCY: CDB VI. DESCRIPTION: Continuation of ongoing factory - shell building program. Project provides for construction of series of shells throughout the country. VII. COST COMPONENTS AND FINANCING: Source of Financin Total Local External Amount x_ Local Costs Foreign Costs - 1,000 1, Total Costs - Amount 167 1,500 1, %

76 VIII. DISBURSEMENT PERIOD: Post FY83/B4 84/85 85/86 Total 85/86 Local Sources External Sources ,000 Total - Amount ,111 -% IX. STATUS OF PREPARATION: Continuation of ongoing program; CDB has provided St. Lucia with loans totalling 2,285 for construction of approximately 15,000 sq. ft. of floor space. CDB recently approved a loan of 951 for 38,640 sq. ft. which should be constructed by X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Not required Project Evaluation: Not required Project Implementation: Not required

77 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Vieux Fort Industrial Free Zone II. EXECUTING GOVERNMENT AGENCY: National Development Corporation III. TOTAL ESTIMATED COST: 7,000 IV. EXTERNAL FINANCING REQUIRED: 5,950 V. LENDING AGENCY: Possibly IBRD/CDB VI. DESCRIPTION: Establishment of Industrial Free Zone on government-owned land in Vieux Fort area, including construction of factory space and provision of supporting infrastructure. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount _ Local Costs 1,050 1,400 2, Foreign Costs - 4,550 4, Total Costs - Amount 1,050 5,950 7, %

78 VIII. STATUS OF PREPARATION: Legislation regarding establishment and operation of Free Zone in St. Lucia is being prepared; a 'UNDE' financed Regional Development Study has been completed. Project is at. idea stage; Preliminary cost estimates. X. TERMS OF FINANCING: Unknown XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Yee; Project Evaluation: Y'es, including full feasibility study Project Implementation: Not yet determined.

79 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Industry (US$ '000) I. NAME OF PROJECT: Industry Sector Credit II. EXECUTING GOVERNMENT AGENCY: St. Lucia Development Bank III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 3,000 V. LENDING AGENCY: CDB VI. DESCRIPTION: Replenishment of ongoing scheme. Provision of funds to SLDB for on-lending to local entrepreneurs. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Z Local Costs - 1,050 1, Foreign Costs - 1,950 1, Total Costs - Amount - 3,000 3,000 - %

80 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,630 Total - Amount ,630 - % IX. STATUS OF PREPARATION: Continuation of ongoing program. It is estimated that available funds would be exhausted during FY 84/85. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: CDB will prepare project document CDB will appraise Project Project Implementation: Not required

81 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Tourism (US$ '000) I. NAME OF PROJECT: Holiday Village II. EXECUTING GOVERNMENT AGENCY: National Development Corporation III. TOTAL ESTIMATED COST: 2,500 IV. EXTERNAL FINANCING REQUIRED: 2,250 V. LENDING AGENCY: CDB VI. DESCRIPTION: Construction of locally owned and operated village, including hotels apartels, shopping and recreational facilities. The project is to be so designed and operated as to attract mainly visitors from within the Caribbean region. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs Foreign Costs - 1,625 1, Total Costs - Amount 250 2,250 2, %

82 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. Government has requested assistance froin CDB for (1) preparation of project document and (2) feasibility study. IX. TERMS OF FINANCING: Usual CDB terms X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Yes. See under VIII Project Evaluation: Yeis. Full feasibility study, detailed drawings required. Project Implementation: Project will most likely be executed by private contractors.

83 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Tourism (US$ '000) I. NAME OF PROJECT: Point Seraphine Tourism Facilities I II. EXECUTING GOVERNMENT AGENCY: National Development Corporation III. TOTAL ESTIMATED COST: 2,000 IV. EXTERNAL FINANCING REQUIRED: 1,800 V. LENDING AGENCY: CDB VI. DESCRIPTION: Construction of tourist facilities on 7.5 acres of reclaimed land adjacent to Point Seraphin. Phase I includes construction of the access road and parking areas, installation of all utilities, construction of 20 shopping units and construction of a craft market passenger terminal and tourist bureau. Point Seraphin is located opposite the Castries Port; shopping facilities would be available to cruise-ship and long-stay visitors. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs Foreign Costs - 1,300 1, Total Costs - Amount 200 1,800 2, %

84 VIII. DISBURSEMENT PERIOD: Post FY833/84 84/85 85/86 Total 85/86 Local Sources External Sources ,800 - Total - Amount , % IX.. STATUS OF PREPARATION: Project is at idea stage. The dredging, reclamation and construction of 2 cruise-ship berths have been completed. Consultants have begun work on the preliminary phase of the project. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Ongoing - See IX Project Evaluation: Full Feasibility study, detailed drawings and designs required. Project Implementation: Project will most likely be executed by private contractors.

85 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Tourism (US$ '000) I. NAME OF PROJECT: Development Tourist Attraction II. EXECUTING GOVERNMENT AGENCY: Ministry of Trade, Tourism and Industry; St. Lucia Tourist Board. III. TOTAL ESTIMATED COST: 1,250 IV. EXTERNAL FINANCING REQUIRED: 1,000 V. LENDING AGENCY: OAS/Unknown VI. DESCRIPTION: 1. Development of new tourist attraction; and 2. Restoration of historical and scenic sites, including Pigeon Island, Maria Island Nature Reserve, Fort Rodney. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs Foreign Costs Total Costs - Amount 250 1,000 1,250 - %

86 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Technical Assistance required at all stages (PROJECT Formulation, Evaluation and Implementation).

87 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Tourism (US$ '000) I. NAME OF PROJECT: Tourism Sector Credit II. EXECUTING GOVERNMENT AGENCY: St. Lucia Development Bank III. TOTAL ESTIMATED COST: 2,000 IV. EXTERNAL FINANCING REQUIRED: 2,000 V. LENDING AGENCY: CDB VI. DESCRIPTION: Provision of funds to SLDB for onlending to local entrepreneurs for the development and expansion of smaller tourist-oriented facilities, including small hotels and craft centers. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Local Costs Foreign Cost - 1,300 1, Total Costs - Amount - 2,000 2, %

88 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,707 Total - Amount ,707 - % IX. STATUS OF PREPARATION: Project concept identified. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: CDB will prepare project document Project Evaluation: CDB will appraise the project Project Implementation: No

89 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (US$ '000) I. NAME OF PROJECT: Agricultural Feeder Roads IV - V II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labour III. TOTAL ESTIMATED COST: 5,778 IV. EXTERNAL FINANCING REQUIRED: 5,200 V. LEINDING AGENCY: CDB VI. DESCRIPTION: Continuation of ongoing program; construction of approximately 14 miles of road throughout the island. The development of a comprehensive system of feeder and rural roads will provide much needed access to remote agricultural areas and thus increase production and productivity, enchance rural welfare and raise existing low levels of income and employment. Quality of marketed crops will also be improved, as there will be less crop damage due to transportation along inadequate roads. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Local Costs 578 1,732 2, Foreign Cost - 3,468 3, Total Costs - Amount 578 5,200 5,778 - %

90 VIII. DISBURSEMENT PERIOD: Post FY83 /84 84/85 85/86 Total 85/86 Local Sources ill External Sources 370 1,111 1,019 2,500 2,700 Total - Amount 463 1,185 1,130 2,778 3,000 - % IX. STATUS OF PREPARATION: Final project document to be prepared and sumbitted to CDB. Roads have been identified. CDB has so far provided 3 loans amounting to 4,416 for construction of feeder roads; all approved funds have been exhausted. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Non during FY83/84-85/86 XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: Technical Assistance not required Technical Assistance not required Technical Assistance not required

91 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (US$ T'OO) I. NAME OF PROJECT: East Coast Road Streughtening II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labor III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 2,550 V. LENDING AGENCY: Unknown VI. DESCRIPTION: The East Coast Road is the main link between Castries and the Southern part of the Island. The projected improvements include: widening of the roads, better draining, improvement of road bed and resurfacing. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount _ Local Costs , Foreign Casts - 1,950 1, Total Costs - Amount 450 2,550 3, %

92 VIII. STATUS OF PREPARATION: Preliminary cost estimaltes; assessment of degree of deterioration and required improvements rleeded; detailed engineering designs requires. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and MaintenarLce Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: No Assistance may be required for detailed engineering designs Project Implementation: No

93 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (US$ '000) I. NAME OF PROJECT: West Coast Road Construction II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labor III. TOTAL ESTIMATED COST: 10,000 IV. EXTERNAL FINANCING REQUIRED: V. LENDING AGENCY: OPEC, CDB, Unknown VI. DESCRIPTION: Construction of a road along the West Coast between Castries and Vieux Fort to improve tourist accessibility to the South, to open up fertile agricultural hinterlands, and to support the industrial development of the area. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs 1lOOO 3,000 4, Foreign Costs - 6,000 6, Total Costs - Amount 1,000 9,000 10, %

94 - 78 _ VIII. STATUS OF PREPARATION: Feasibility study and preliminary designs have been prepared with assistance provided by EEC; detailed designs and costing study to be done with assistance from CDEI. Economic feasibility of the realignment of the West Coast Road between Anse la Raye and Soufriere very doubtful, that is why careful evaluation i.s needed prior to final decisions. X. TERMS OF FINANCING: Unknown XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during FY 83/84-85/86 XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: None. See under VIII Detailed engineering designs; See under VIII. Project is likely to be executed by private contractors.

95 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (us$ '000) I. NAME OF PROJECT: Hewonorra Airport Development I II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labor III. TOTAL ESTIMATED COST: 9,300 IV. EXTERNAL FINANCING REQUIRED: 6,045 V. LENDING AGENCY: CIDA, Unknown VI. DESCRIPTION: 1. Paving of runway; 2. Construction oc new arrival terminal; 3. Conversion of existing terminal into departure terminal; 4. Construction of new cargo terminal; 5. Provision of additional fire fighting equipment; 6. Provision of air/sea rescue craft; 7. Widening of parking apron; 8. Provision of additional fuel hydrants; 9. Provision of additional fire hydrants; 10. Improvement of airport security; and 11. Improvement of navigational aids. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs 3,255-3, Foreign Costs - 6,045 6, Total Costs - Amount 3,255 6,045 9, x

96 VIII. STATUS OF PREPARATION: Emergency phase is presently being executed and should be completed in 83/84. Certain project c:omponents could be considered for financing under CIDA's proposed Regional Airport Safety Project. X. TERMS OF FINANCING: Concessional, Unknown. XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XII. TECHNICAL ASSISTANCE REQUJIRED: Project Formulation: Yes Project Evaluation: Yes Project Implementation: Project will most likely be executed by private contractors.

97 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (US$ '000) I. NAME OF PROJECT: Vigie Airport Development II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labor III. TOTAL ESTIMATED COST: 7,000 IV. EXTERNAL FINANCING REQUIRED: 5,600 V. LENDING AGENCY: USAID, CIDA, Private VI. DESCRIPTION: 1. Improvement of existing airport including improvement of runway, runway lighting, drainage, ramp, retention walls, and terminal building; and 2. Extension of runway to accommodate international jet traffic (DC 9 and Boeing 767). Ihe Government feels that the expansion of the airport will help development of the commercial and tourism sector in the northern part of the island. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs 1, , Foreign Costs - 4,900 4, Total Costs - Amount 1,400 5,600 7, %

98 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates; project proposal for component (2) of project has been submitted to USAID; a report on possible airport improvement (component 1) has been completed by CIDA. Certain aspects of the project could be considered for financing under CIDA's proposed Regional Airport Safety Project. The extension of the runway needs to be carefully evaluated and only if economically feasible, it should be pursued. IX. TERMS OF FINANCING: Concessional, Unknowm X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XII. TECHNICAL ASSISTANCE REQ'UIRED: Project Formulation: At All Stages; see VIII Project Evaluation: At All Stages; see VIII Project Implementation: At All Stages; see VIII

99 ST. LUCIA FY83/84-83/86 Project List - Individual Project Description Transportation (US$ '000) I. NAME OF PROJECT: Castries Port Development II. EXECUTING GOVERNMENT AGENCY: St. Lucia Port Authority III. TOTAL ESTIMATED COST: 1,100 IV. EXTERNAL FINANCING REQUIRED: 990 V. LENDING AGENCY: Unknown VI. DESCRIPTION: 1. Purchase of 150 ton hopper bargo to exeute dredging works; 2. Purchase of mobile dockside crane; 3. Construction of refrigerated container outlets; 4. Re-construction of workshop; retooling and upgrading of stock of spare parts; and 5. Construction of call-out stand for dock labor. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Local Costs Foreign Costs Total Costs - Amount ,100 - X

100 VIII. STATUS OF PREPARATION: Basic project components have been identified; cost estimates are preliminary. For somie of the components listed before, economic feasibility is yet to be proven. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATIO)N: Operating and Maintenance Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementataion: Specific equipment requirements need to be identified May be required for selected project components Training and instructions for operation and maintenance of equipment are required.

101 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Transportation (US$ '000) I. NAME OF PROJECT: Vieux Fort Port Development II. EXECUTING GOVERNMENT AGENCY: St. Lucia Port Authority III. TOTAL ESTIMATED COST: 1,500 IV. EXTERNAL FINANCING REQUIRED: 1,350 V. LENDING AGENCY: Possibly IBRD/Unknown VI. DESCRIPTION: 1. Strenghtening and extension of jetty; and 2. Purchase of pilot tug boat. Improvement of the port is required to support the development of the industrial and tourism sector of the Vieux Fort area. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Z Local Costs Foreign Costs - 1,200 1, Total Costs - Amount 150 1,350 1, %

102 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: Technical Assistance not required Technical Assistance not required Technical Assistance not required.

103 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Power Supply (US$ '000) 1. NAME OF PROJECT: Electricity Development III II. EXECUTING GOVERNMENT AGENCY: St. Lucia Electricity Services Ltd. III. TOTAL ESTIMATED COST: 10,000 IV. EXTERNAL FINANCING REQUIRED: 7,000 V. LENDING AGENCY: CDB, Unknown VI. DESCRIPTION: The project would possibly include: 1. Installation of a new power station at Cul-de-sac; and 2. Installation of 69 KV North to South interconnector. 3. Rehabilitation of the hydroplant in Soufriere. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount _ Local Costs 3,000-3, Foreign Costs - 7,000 7, Total Costs - Amount 3,000 7,000 10, z

104 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. CDB is currently financlng consultant's services to prepare detailed designs and bidding documents for the 5 MW diesel engine generating plant and the 69 KV Castries-Vieux Fort transmission line. IX. TERMS OF FINANCING: Usual CDB terms; Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: See VIII See VIII Turnkey operation likely. Training in operation and maintenance of equipment may be required.

105 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Power Supply (US$ '000) I. NAME OF PROJECT: Geothermal Energy Development II. EXECUTING GOVERNMENT AGENCY: St. Lucia Electricity Services Ltd. III. TOTAL ESTIMATED COST: 5,555 IV. EXTERNAL FINANCING REQUIRED: 5,555 V. LENDING AGENCY: USAID, Unknown VI. DESCRIPTION: Development of Soufriere Supher Springs as a source of geothermal energy. First phase involves site exploration; subsequent phases would include: 1. Drilling of production wells; and 2. Construction of power station and transmission lines. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs - 1,666 1, Foreign Costs - 3,889 3, Total Costs - Amount - 5,555 5, %

106 VIII. STATUS OF PREPARATION: Geothermal surveys and explorations have recently been completed with assistance provided by ithe EEC, anf the UK. Additional exploratory drillings will need to be undertaken. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Not required. See VIII Project Evaluation: See VII; full feasibility study and detailed designs required. Project Implementation: Project is likely to be executed by private contractors.

107 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Power Supply (US$ '000) I. NAME OF PROJECT: Rural Electrification V II. EXECUTING GOVERNMENT AGENCY: St. Lucia Electricity Services, Ltd. III. TOTAL ESTIMATED COST: 1,667 IV. EXTERNAL FINANCING REQUIRED: 1,500 V. LENDING AGENCY: CDB VI. DESCRIPTION: Continuation of rural electrification program. The program comprises extension of national electrification system to rural communities. Areas which are proposed to be covered under phase V include Laborie, Choiseul, Soufriere, Canaries, Northern Region. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Ax Local Costs Foreign Costs - 1,167 1, Total Costs - Amount 167 1,500 1,667 - %

108 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources , Total - Amount , % IX. ETATUS OF PREPARATION: Continuation of program; areas are identified. Preliminary cost estimates. The provision phase of the program was completed in 1982/83 with CDB financing (total cost 355). X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating KII. TECHNICAL ASSISTANCE, REQUIRED: Project Formulation: CDB will prepare project document Project Evaluation: CDB will appraise the project Project Implementation: Not required

109 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Water Supply (US$ '000) I. NAME OF PROJECT: Integrated Water Development 11. EXECUTING GOVERNMENT AGENCY: Central Water Authority III. TOTAL ESTIMATED COST: 2,400 IV. EXTERNAL FINANCING REQUIRED: 2,250 V. LENDING AGENCY: CDB, UK VI. DESCRIPTION: Continuation of an ongoing program; extension of supply of portable water throughout the island. The project also includes purchase of pumps for installations in the Northwest, where no standby pumps are available. The project supports the development of the industrial and tourism sectors as well as the improvement of the sanitary conditions in rural areas. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount x Local Costs Foreign Costs - 1,680 1, Total Costs - Amount 150 2,250 2, %

110 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,140 2,250 - Total - Amount ,175 2,400 - x IX. STATUS OF PREPARATION: Continuation of ongoing program. Areas have been identified; CDB is currently appraising the project. In the past CDB has provided 2 loans for water supply improvement (totalling 1,951). K. TERMS OF FINANCING: Usual CDB terms; concessi.onal XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating X,I. TECHNICAL ASSISTANCE REQIUIRED: Project Formulation: Project Evaluation: Project Implementation: CDB will preare and appraise part of the project; technical assistance is not required for other project components. Not required.

111 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Water Supply N(US '000) I. NAHE OF PROJECT: Roseau Dam Construction II. EXECUTING GOVERNMENT AGENCY: Central Water Authority III. TOTAL ESTIMATED COST: 15,000 IV. EXTERNAL FINANCING REQUIRED: 11,250 V. LENDING AGENCY: CIDA, CDB, Unknown VI. DESCRIPTION: Construction of a dam in the Roseau Valley to provide for the water needs of the northern part of the island, where serious water shortages are expected to occur from 1985 onwards. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs 3,750-3, Foreign Costs - 11,250 11, Total Costs - Amount 3,750 11,250 15, %

112 VIII. STATUS OF PREPARATION: CIDA has agreed to finance economic, financial and technical feasibility study and detailed engineering designs; study should commnce in IX. TERMS OF FINANCING: Concessional, usual CDB terms, unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: Not required See VIII To be determined

113 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Other Supporting Infrastructure (US$ '000) I. NAME OF PROJECT: Building Materials Development II. EXECUTING GOVERNMENT AGENCY: Ministry of Communications, Works, Transport and Labor III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 2,500 V. LENDING AGENCY: CDB, Unknown VI. DESCRIPTION: Development of local raw materials - especially pumice - for use in the building and block making industry, in road construction and rehabilitation works and in other projects. Project include establishment of: 1. Quarries; and 2. Grinding and blending plants for production of portland - pozzolana cement. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount 7% Local Costs , Foreign Costs - 1,800 1, Total Costs - Amount 500 2,500 3, %

114 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,810 Total - Amount ,131 - z IX. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. A small pumice development is presently being financed from local sources. CFTC is providing technical assistance for development of local construction materials (3 minmonths) X. TERMS OF FINANCING: Usual CDB terms; Unknown XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Self-liquidating XIII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Yes Project Evaluation: Yes. Including full feasibility study Project Implementation: Training in operation and maintenance of plant may be required.

115 ST. LUCIA FY83/84-85/86 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: 7,000 IV. EXTERNAL FINANCING REQUIRED: 5,600 V. LENDING AGENCY: Unknown VI. DESCRIPTION: Construction and equipment of five new primary and 11 secondary schools annually and replacement of existing schools as they deteriorate below acceptable standards. 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 on double shift system in an efffort to cope with the shortfall. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs 1,400 1,400 2, ]Foreign Costs - 4,200 4, Total Costs - Amount 1,400 5,600 7,000 - Z

116 VIII. STATUS OF PREPARATION: Project is at idea stage; cost estimates are preliminary. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementation: Technical Assistance not required Technical Assistance not required Technical Assistance not required

117 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Windward Island Agricultural College II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture III. TOTAL ESTIMATED COST: 1,250 IV. EXTERNAL FINANCING REQUIRED: 1,000 V. LENDING AGENCY: EEC VI. DESCRIPTION: Establishment of a college to train future farmers and technicians from the Windward Islands. The college, comprising a campus and a farm, will be built on 150 acres and will have an annual intake of approximately 50 students. Comprehensive training facilities are essential for agricultural training. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs Foreign Costs - 1,000 1, Total Costs - Amount 250 1,OOO 1, %

118 VIII. STATUS OF PREPARATION: A revised version of the project document has been submitted to EDF; site hams been identified (Dennery). IX. TERMS OF FINANCING: Concessional X. PROJECT IMPLEMFNTATION: Operating and Haintenance Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQIJIRED: Project Formulation: Project Evaluation: Project Implementation: No Yes; Assistance required for detailed designs Project is likely to be executed by contract.

119 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Regional Hotel Trade School II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture III. TOTAL ESTIMATED COST: 500 IV. EXTERNAL FINANCING REQUIRED: 325 V. LENDING AGENCY: EEC VI. DESCRIPTION: Establishment of a Regional Hotel Trade School at the Halcyon Days Hotel (government-owned). VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount _ Local Costs Foreign Costs Total Costs - Amount Z

120 VIII. DISBURSEMENT PERIOD: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources Total - Amount X IX. STATUS OF PREPARATION: Project document has been submitted to EDF; additional information has been requested. Preliminary cost estimates. X. TERMS OF FINANCING: Concessional XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Project Implementatior: No Yes Most likely

121 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Cultural Infrastructure Development I, II II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture III. TOTAL ESTIMATED COST: 3,000 IV. EXTERNAL FINANCING REQUIRED: 1,800 V. LENDING AGENCY: Unknown VI. DESCRIPTION: Phase I comprises construction of the National Cultural Center in Castries; Phase II, the establishment of multipurpose community centers throughout the island, so as to ensure and encourage preservation of the national cultural heritage and foster community integration. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Local Costs 1,200-1, Foreign Costs - 1,800 1, Total Costs - Amount 1,200 1,800 3, %

122 VIII. STATUS OF PREPARATION: Project is at idea stage. Basic components are identified; site for National Center has been selected. Preliminary cost estimates. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY83/84-85/86 XI. TECHNICAL ASSISTANCE1 REQUIRED: Project Formulation: No Project Evaluation: Detailed Designs Required. Project Implementation: No

123 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Education (US$ '000) I. NAME OF PROJECT: Tertiary Education Development II. EXECUTING GOVERNMENT AGENCY: Ministry of Education and Culture III. TOTAL ESTIMATED COST: 1,000 IV. EXTERNAL FINANCING REQUIRED: 700 V. LENDING AGENCY: Unknown VI. DESCRIPTION: Establishment of 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. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs Foreign Costs Total Costs - Amount ,000 - z

124 VIII. STATUS OF PREPARATION: Project is at idea stage; preliminary cost estimates. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: Project Evaluation: Required at all stages Project Implementation:

125 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Health and Sewerage (US$ '000) I. NAME OF PROJECT: Island-Wide Sewerage System II. EXECUTING GOVERNMENT AGENCY: Ministry of Health III. TOTAL ESTIMATED COST: 3,333 IV. EXTERNAL FINANCING REQUIRED: 3,000 V. LENDING AGENCY: CDB, Unknown VI. DESCRIPTION: Development of proper sewerage facilities throughout the island, particularly in areas unsuitable for septic tank installation. Phase I; Castries; Phase II; Vieux Fort; Phase III; Dennery. The existing collection, treatment and disposal of sewerage poses potential health problems for the population. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount Local Costs , Foreign Costs - 2,333 2, Total Costs - Amount 333 3,000 3,333 - X

126 VIII. STATUS OF PREPARATION: Project is at idea stage!; preliminary cost estimates. The Castries sewerage system was expanded in mid-70's with CDB assistance but would require further expansicin to serve the needs of the city. IX. TERMS OF FINANCING: Usual CDB terms; Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: No Project Evaluation: Project Implementation: Yes Yes, assistance of sanitary engineer to install the equipment. Training in plant operation and maintenance required.

127 - ll - ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Health (US$ and Sewerage '000) I. NAME OF PROJECT: Victoria Hospital Improvement II. EXECUTING GOVERNMENT AGENCY: Ministry of Health III. TOTAL ESTIMATED COST: 2,000 IV. EXTERNAL FINANCING REQUIRED: 1,600 V. LENDING AGENCY: Unknown VI. DESCRIPTION: The project includes: 1. Upgrading of existing wards and laboratory building; 2. Construction of a new wing; 3. Access roads and sewerage facilities; and 4. Completion of work in progress. Present facilities are obsolete and inqdequate. VII. OOST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs Foreign Costs - 1,200 1, Total Costs - Amount 400 1,600 2, z

128 VIII. STATUS OF PREPARATION: Project is at idea stages. Basic components are identified. Preliminary cost estimates. IX. TERMS OF FINANCING: Unknown X. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None during period FY 83/84-85/86 XI. TECHNICAL ASSISTANCE REQIJIRED: Project Formulation: Yes Project Evaluation: Yes. Detailed drawing and designs required Project Implementation: Project will most likely be executed by private contractor.

129 ST. LUCIA FY83/84-85/86 Project List - Individual Project Description Housing (US$ '000) I. NAME OF PROJECT: Housing Development II. EXECUTING GOVERNMENT AGENCY: St. Lucia Housing Authority III. TOTAL ESTIMATED COST: 7,000 IV. EXTERNAL FINANCING REQUIRED: 4,200 V. LENDING AGENCY: CDB, Venezuela, Unknown VI. DESCRIPTION: 1. Development of low-income housing schemes; and 2. Rehabilitation of existing dwellings. The housing sector in St. Lucia is generally aged and deteriorated and has sustained very substantial damage as a result of Hurricane Allen. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount % Local Costs 2,800-2, Foreign Costs - 4,200 4, Total Costs - Amount 2,800 4,200 7, %

130 VIII. STATUS OF PREPARATION: The UK, US, EEC, Venezuela, Trinidad and Tobago and UNDP have provided assistance for rehabilitation of Hurricane Allen - damaged housing (amdunting to approx. 1,200). The Government has applied to Venezuela for financing of construction of 140 houses, at a total cost of 1,000. IX. TERMS OF FINANCING: Usual CDB terms; Unknown. K. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: None XI. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: lot determined Project Evaluation: lot determined Project Implementation: Not determined

131 ST. LUCIA FY83/84-85/86 Project Liseti-Individua1 Project Description Housing (US$ '000) I. NAME OF PROJECT: Housing and Mortgage Finance II. EXECUTING GOVERNMENT AGENCY: St. Lucia Housing Authority III. TOTAL ESTIMATED COST: 6,000 IV. EXTERNAL FINANCING REQUItED: 6,000 V. LENDING AGENCY: CDB VI. DESCRIPTION: Provision of line of credit to SLDB for onlending to low and middle income class people for: 1. Pruchase of service sites, core houses and completed units throughout the country; and 2. Improvement of housing stock. VII. COST COMPONENTS AND FINANCING: Source of Financing Total Local External Amount X Local Costs - 3,000 3, Foreign Costs - 2,400 2, Total Costs - Amount 6,000 6, z

132 VIII. DISBURSEMENT PERIOD:: Post FY83/84 84/85 85/86 Total 85/86 Local Sources External Sources ,707 Total - Amount ,707 - % IX. STATUS OF PREPARATION: Continuation of ongoing scheme. X. TERMS OF FINANCING: Usual CDB terms XI. PROJECT IMPLEMENTATION: Operating and Maintenance Costs: Not applicable XII. TECHNICAL ASSISTANCE REQUIRED: Project Formulation: CDB will prepare the project document. Project Evaluation: CDB will appraise the project Project Implementation: None

133 STATISTICAL APPENDIX Table of Contents Table Number Page No. I. POPULATION AND LABOR FORCE 1.1 Population Trends Labor Force II. NATIONAL ACCOUNTS 2.1 GDP at Current Factor Cost by Sectorial Origin GDP at Constant Factor Cost by Sectorial Origin GDP Deflator By Sector National Accounts Actual and Projected GDB by Sectors (Factor Cost) Actual and Projected National Accounts III. BALANCE OF PAYMENTS 3.1 Balance of Payments Merchandise Exports Merchandise Imports by SITC Sections Direction of Trade... *..... * Selected Tourism Statistics Effective Exchange Rates Actual and Projected Exports Actual and Projected Imports Actual and Projected Balance of Payments IV. EXTERNAL PUBLIC DEBT 4.1 External Assistance Structure of External Debt Actual and Projected Debt Service Projected Capital Inflows to the Public Sector V. PUBLIC SECTOR FINANCES 5.1 Operations of the Public Sector Central Government Current Expenditures Central Government Revenue and Grants Actual and Projected Public Sector Savings Public Sector Investment Program and its Financing Public Sector Investment Program, FY83/84-84/

134 Table Number (Cont'd) Page No. VI. MONEY AND BANKING 6.1 East Caribbean Currency Authority Commercial Bank Operations Comercial Bank Loans and Advances to Private Sector VII. AGRICULTURE, INDUSTRY AND TOURISM 7.1 Production of Major Agricultural Crops Quantum Index of Manufacturing Production Accommodation Capacity: * Room Occupancy by Category of Hotels VIII. PRICES 8.0 Retail Price Index,

135 Table 1.1: ST. LUCIA - POPULATON TRENDS Not. get. got Midyear Population Estimates 113, , , , , Annual Percentage Growth Rate (midyear) Crude Birth Rate of Midyear Estimated Population (per thousand) n.a. n.a. Crude Death Rate of Midyear Estimated Population (per thousand) n.a. n.a. Rate of Natural Increase of Midyear Estimated Population (per thousand) n.a. n.a. Total Births 3,920 4,127 3,936 3,732 3,695 n.a. n.a. Total Deaths n.a. n.a. Natural Population Increase 3,037 3,311 3,146 2,884 2,850 n.a. n.a. Net Migration 1,230 1,250 1,271 1,293 1,315 n.a. n.a. Net Population Increase 1,807 2,061 1,875 1,591 1,535 n.a. n.a. Sources: Government Statistical Office; and ECCf Secretariat.

136 Table 1.2: ST. LUCIA - LABOR FORCE AND EMPLOYMENT Census Est. Est. Est (In thousands) Total Population Labor Force Employed Agriculture and 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 (As percent of total population) Labor Force (As percent of employed) Agriculture and Mining Manufacturing Construction Tourism Other Services (As percent of labor force) Unemployed Sources: Government Statistical Office; ECCM Secretariat, and IMF estimates.

137 Table 2.1: ST. LUCIA - GDP AT CURRENT FACTOR COST BY SECTORIAL ORIGIN Estimates (In millions of East Caribbean dollars) GDP Agriculture Mining Manufacturing Utilities Construct ion Transport and Communications Wholesale and Retail Trade Hotels and Restaurants Banking and Finance Government Services Other Services (In percent of GDP) Agriculture Mining Manufacturing Utilities Construction Transport and Communications Wholesale and Retail Trade Hotels and Restaurants Banking and Finance Government Services Other Services Source: Statistical Department, IMF, and mission estimates.

138 Table 2.2: ST. LUCIA - GDE' AT CONSTANT FACTOt COST BY SECTORIAL (RIGIN Estimates _ (In millions of East Caribbean dollars at 1977 prices) GDP Agriculture Mining Manufacturing Utilities Construction Transport and Communications Wholesale and Retail Trade Hotels and Restaurants Banking and Finance Government Services Other Services (Percent of GDP) GDP Agriculture Mining Manufacturing Utilities Construction Transport and Communications Wholesale and Retail Trade Hotels and Restaurants Banking and Finance Government Services Other Services Sources: Statistical Department, and IMF estimates.

139 Table 2.3: ST. LUCIA - GDP 3FLATOI BY SECTOR Estimates ( ) GDP Deflator Agriculture Mining Manufacturing Utilities Construction Transport and Coouanications Wholesale and Retail Hotels and Restaurants Banking and Finance Government Services Other Services (Percentage Change) GDP Deflator Agriculture Mining Manufacturing Utilities Construction Transport and Co-inications Wholesale and Retail Hotels and Restaurants Banking and Finance Government Services Other Services Sources: Tables 2.1 and 2.2

140 Table 2.4: ST. LUCIA - NATIONAL ACCOUNTS Estimates _ (In millions of East Caribbean dollars) Consumption Central Government Private Investment Public Sector *55*7 31 "7 Central Government (16.6) (20.3) (22.0) (18.9) (22.5) Private Sector Hess Company (53.7) (66.7) (80.1) (94.8) (50.8).es t (49.1) (62.8) (67.9) (70.6) (67.8) Gross Domestic Expenditure Excluding Hess Imports Exports of Goods and Nonfactor Services Imports of Goods and Nonfactor Services GDP at Market Price Net Indirect Taxes GDI_ at Factor Cost GNP (In percetnt of GDP at Market Price) Consumption* Central Government Private Investment Public Sector Central Government (7.4) (7.3) (7.2) (5.5) (6.2) Private Sector Hess Company (24.0) (23.9) (26.2) (27.6) (14.0) Rest (21.9) (22.5) (22.2) (20.6) (18.7) Gross Domestic Expenditure Excluding Hess Imports Exports of Goods and Nonfactor Services Imports of Goods and Nonfactor Services GDP at Market Prices Sources: Statistical Department, and IMF estimates.

141 Table 2.5: ST. LUCIA - ACTUAL AND PROJECTED GDP BY SECTORS (FACTOR COST) (1981 EC$ million) Actual Estimted P R 0 J E C T E D Agriculture Manufacturing Construction Services Total GDP Growth Source: Mission estiuates.

142 Table 2.6s ST. LUCIA - ACTUAL AND P20JbCT8D N&TIONAL ACOCOUTS (1981 SCS million) ACTuAL ESTIIAD P R o J 8 C T 8 D U l CDP Exports Export-capacity to Import Imports Term of Trade * 1jzt= S sl ! Gross Domestic Income , Total Kxpenitures Investment , Public Private Caomumption PublLc Private Domtctc Savnir Transfars NMn-factor Service Income National Savings Publie Private Source: Statistical Department, * snd mission e timates.

143 Table 3.1: ST. LUCIA - BALANCE OF PAYMENTS (US$ million) Esatimates Domestic Exports Re-exports Total Merchandise Exports f.o.b Non Factor Services Exports of Goods and NFS Merchandise Imports, cif Non Factor Services Imports of Goods and NFS Resource Gap Factor Service Income Interest Payments Interest Services Others Transfers Current Account Deficit (Excluding Hess Investments) (-11.3) (-12.5) (-13.0) (15.8) (-24.5) Net Public Capital Disbursements Grants Loan Disbursements Amortization Net Private Hess Company Others a/ Change in Reserves (increase -) Financing Borrowing from ECCA (net) IM Leading Government Foreign Assets (increase-) a/ Includes commercial banks, change in EC$ circulation and errors and omissions. Source: Statistical Department, IMF, mission estimates.

144 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) Total Domestic Exports 24,820 27,943 33,740 36,793 37,703 Bananas Value 12,113 13,520 10,511 14,602 15,633 Volume (metric tons) 47,820 48,241 32,826 42,706 41,697 Unit Price Coconut Oil (Unrefined) Value 971 1,627 1,258 1, Volume (000 liters) 1,602 2,370 1,579 1, Unit Price Coconut Oil (Refined) Value 1,033 1,044 1,686 1,434 2,627 Volume (000 liters) 1, , ,320 Unit Price Fruits and Vegetables Vfalue Volume 2,352 2,034 1, Unit Price Beer and Ale Value 1,131 1,590 1,219 1,714 2,098 Volume (000 gallons) lunit Price Paper and Paperboard Value 2,882 1,923 2,596 5,578 5,257 Volume 5,136 3,033 3,490 7,197 5,752 Unit Price Clothing Value 2,211 1,765 2,836 3,824 4,116 Volume Unit Price Other Value 4,039 5,945 13,235 a/ 8,166 7,188 a/ This includes the exports of a foreign assembly plant of toys and electrical equipment, which operated orly one year in St. Lucia. Source: Statistical Department.

145 Table 3.3: ST. LUCIA - MERCHANDISE IMPORTS BY SITC SECTIONS (In millions of U.S. dollars) Total Imports, c.i.f Food Beverages and Tobacco Crude Materials Fuels Oils and Fats Chemicals Manufactures Goods Machinery and Transport Equipment Miscellaneous Manufactured Goods Miscellaneous Source: Statistical Department.

146 Table 3.4: ST. LUCIA - DIRECTION OF TRADE (As percent of total) a/ Domestic Exports, f.o.b United Kingdom Canada United States West Indies Barbados (9.0) (6.1) (4.9) (7.2) (5.6) Guyana (0.6) (1.8) (0.8) (0.5) (0.6) Jamaica (6.2) (7.2) (12.4) (14.4) (11.5) Trinidad and Tobago (8.8) (8.5) (7.1) (3.2) (2.0) Other (19.3) (16.9) (12.9) (21.3) (20.7) France Nethierlands Rest: of World Total Imports, c.i.f Unilted Kingdom Canada United States Weset Indies Barbados (2.5) (2.7) (3.2) (3.6) (2.5) GuLyana (1.6) (1.2) (2.0) (1.4) (0.8) Jamaica (1.6) (2.3) (1.8) (2.1) (1.7) Trinidad and Tobago (9.8) (12.5) (12.3) (11.0) (11.3) Other (1.5) (1.4) (2.4) (2.9) (2.9) Wesit Germany Franice Netherlands Venezuela Honduras Japan China Resit of World a/ January-September Souiree: Statistical Department.

147 Table 3.5: ST. LUCIA - SELECTED TOURISM STATISTICS (Number of Visitors) Total Visitors 145, , ,261 89, ,137 Cruises 76,400 64,000 59,042 18,934 33,812 Other (Stayover) 69,300 76,500 81,219 70,674 72,325 By Air (66,500)(73,700) (79,694) (70,254) (71,535) By Sea (2,800) (2,800) (1,525) (420) (790) United States (16,200)(17,500) (13,018) (11,196) (11,641) United Kingdom (13,000) (15,000) (15,158) (14,337) (13,821) Canada (15,000)(17,500) (14,111) (12,077) (14,054) Germany (...) (...) (9,054) (6,987) (6,074) Caribbean Countries (14,600)(15,000) (12,406) (11,819) (12,321) South America (2,800) (2,000) (1,215) (1,675) (2,000) All Others (7,700) (9,500) (16,257) (12,583) (12,414) (In millions of U.S. dollars) - Total Expenditures a/ Cruise Visitors Other Visitors (Stayover) (Annual percentage change) Total Visitors Cruises Other Total Expenditure Memorandum Items Average Expenditure per Stayover Visitor (in U.S. dollars b/ Average Length of Stay of Noncruise Visitors Hotel Occupancy Rate (in percent) Number of Beds 3,103 3,103 3,103 3,191 3,421 a/ Expenditure for stopover visitors - number of visitors x average stay x 0.92 (:guest nights) x daily spending. It is assumed that 8 percent of stopover visitors stay with relative or friends, thus only 92 percent stay in hotel or guest houses. Average daily expenditure, as derived from a survey in 1978, has been extrapolated with the change in hotel prices and retail prices. b/ Excludes visitors staying with relatives or friends. Sources: Statistical Department, Tourism Board, Economic Consultants Limited, and IMF estimtes.

148 Table 3.6: ST. LUCIA - EFFECTIVE EXCHANGE RATES Trade Weighted Effective Rate a/ Annual _ Units per EC$ (December 1976 Average SDR US$ Pound 100) (Est.) a/ A decline in the index implies an appreciation of the East Caribbean dollar in relation to other currencies. Sources: IMF, Internationa:L Financial Statistics, and IMF estimates.

149 Table 3.7: ST. LUCIA - ACTUAL AND PROJECTED EXPORTS (US$ million) A C T U A L EST. P R O J E C T E D In Constant 1981 Prices Bananas Coconuts Other Total Merchandise Non-factor Services Total Price Index Bananas Coconuts Other Total Merchandise Non-factor Services Total In Current Prices Bananas Coconuts Other Total Merchandise Non-factor Services Total Source: DtF, mission estimates

150 Table 3.8: ST. LUCIA - ACTUAL AND PROJECTED IMPORTS (USS million) A CT U A L EST. RO E C T E D In Constant 1981 Prices Food n.a. n.e. n.a Fuels n.a. n.a. n.s luports of eoss Co. n.&. n.m. n.e O Other n.a. n.-. n.a Total Merchandise n.a. n.a. n.e t S Noj-factOr Services n.a. n.a. n.e Total Price index Food n.a. n.a. n.s Fuel n.a. n.a. n.e Imports of Hess Co. n.e. n.s. n.a Other n.e. n.m. n.a Total Kerchandise n.a. n.m. n.a Non-factor Services n.a. n.m. n.e Total In Current Prices Food Fuel Imports of Ness Co Other Total Merchandise Non-factor Services Total Source: IMF, mission eatlates.

151 Table 3.9: ST. LUCIA - ACrUAL AND PROJECTeD BALANCE OF PATUNTS (USS million) A C T U A L EST. P FtO J0 C T 8 D i-i bxpotts - Total Goods Non-fector Service I*ports - Total Good Non-factor Sarvicaa aaoure C ap Factor Service 7noo Interest PaymutO lternt Recived OtIur Tranfer* Current Account Balance Not Public Diebu_einnte Grente Loan Deburaenots Amortization Not Private Non-Umse Bea chop In REarve Currant Account Deficit/GDP (S) Total Deficit * Deficit Ixcluding Imports of B"s Compan Source: Il, wisgion eatiebtee.

152 Table 4.1: ST. LUCIA - EXTERNAL ASSISTANCE (US$ Million) Grants/Total Year Grants Loans a/ Total (%) a/ Gross disbursements. Source: Mission estimates.

153 Table 4.2: ST. LUCIA - STRUCTURE OF PUBLIC EXTERNAL DEST */ Beginning Authorized Interest of Dis- Amount Rate Period of Currency of bursement (Thousand EC$) Percent Repayment Repayment Purpose _... Central Gocernment Bonded Debt Debentures / Water and Road , / ECS Water and Road Development Land and Road , / ECs Land and Road De-elopment D-evlopment ECS Development Projects Treasury Bills C/ Central Bank of Barbados ECS Budgetary Support Central Bank of the Bahamas , ECS Budgetary Support Central Bank of Trinidad and Tobago , ECS Budgetary Support Central Bank of Trinidad and Tobago , ECS Budgetary Support National Commercial Bank, Jawaica ECS Budgetary Support Caribbean Food Corporation B-1/ ECs Budgetary Support National Insurance Board, Barbados ECS Budgetary Support Central Government Loans Emergency Fund , ECS d/ Caribbean Development Bank I/ Castries Port Development TTS Deepwater Port Castries Port Development , US1 Deepwater Port Castri-s Port Development (additional) USS Deepwater Port St. Lucia Port Authority Dl Cold Storage Facilities Vigie Air Terminal C$/EC4 Air TermInal Buildings Feeder Roads , CS Road Works Feeder Roads (CCP) TTS Road Works-Counterpart Funds Feeder Roads (Second Loan) , US$ Road Works Feeder Roads (Phird Loan) , years f/ US$ Road Works Bridge Reconstruction Stg. Bridges Bridge Reconstruction (additional) Stg. Bridges Bridge Reconstruction (CCF) TTS Bridges-counterpart Funds Water Supplies CSIEC$ Water Supplies Water Supplies TT$ Water S.pplles-co.nterp.rt FPnda Water Supplies (Second Loan) , years f/ Pool 8/ Water Supplies Castries Sewerage Project DO Castries Sewerage Systen Castries Sewerage Project (CCF) TTS Castries Sewerage-counterpart fund Hewanorra Improvement years f/ US$ Airport Improvements Mortgage Finance (SLDR) / Pool R/ Mousing Developments Mortgage Finance (Additional) , /2-7-1/ years h/ US/1TT$ Housing Developments Second Power Project ,290 8 Electricity Expansion Agricultural Development (SLDB) CS Agricultural Credits Student Loans I (SLDB) Stg/Bs Scholarships Student Loans IS (SLDB) , Pool g/ Scholarships Student Loans III (SLDB) ,080 4 Scholarships Rural Electrification Program yeara US$ Rural Electrification Consolidated Line of Credit (SLDB) , Agricultural and Industrial Projects Industrial Estates (NDC) ,568 4 Industrial Estates CIDA ,035 free CS Vieun Fort Water Supplies EiB Geotheral IExploration Government-Guaranteed Loans Caribbean Development Bank NDC - IndustrLal Estates US$ Sm al Factory Buildings NOC - Industrial Estates US$ Large Factory Buildings NDC - Industrial Estates , US1 Vieu. Fort Estate NSC - Industrial Estates (Counterpart Contributions) TTS VF Estate Counterpart Funds NOC - Industrial Estate (Fourth Loan) , USS Industrial Estates SLDB - Industrial Credit B$/Stg. Industrial Credits SLDB - SIC US$ Small Industry Credit SLDB - SIC (Counterpart Contributions) TTS SIC Counterpart Funds SLDB - SIC IS years f/ uss Small Industry Credit SLDB - SIC (Counterpart Contributions) years TT$ SIC Counterpart Funds SLOB - Agricultural Production Credit , USS Small Farmers' Credit NDB - FIC CS Farm Improvement Credit NUB - FIC (Second Loan) CS Farm lmprovement Credit NDB - FIC (Third Loan) CS Farm Improvement Credit Port Authority - Central Sank of Venezuela , / BS Deepseater Port SLDB - Colonial Life Insurance E/ ECS Civil Servants' Insurance a/ Excludes ECCA and ItF. b/ Authorized amount is amount outstanding at the end of the year and exludes debentures issued domstically. Total debentures issued were EC$2.069 million, ECS4,131 million, and ECS3.041 million, respectively. Repayment of arrangements for water end road debentures are being renegotiated. c/ Foreign held portion of three-month and one-year East Caribben dollar Treasury bills issued on a rollover basis. dl Loan from various donors and administered by CDB and ECCA and used to pay arrears on comon regional services. el Most of these loans have been disbursed directly by the corresponding agencies and have not been recorded as budgetary operations. Tey represent, however, a direct liability of the Central Government and the budget estimates include funds for servicing some of these loans. f/ Starting five years after first disbursesent. / The loan was disbursed in a mix of currencies, the exact combination of which not readily identifiable. h/ The CDB portion is repayable two years after first disbursement, the IBRD portion ts repayable from i/ Repayment period being rescheduled. Sources: Ministry of Finance and Planning, National Development Corporatton and National Development Bank.

154 Table 4.3: ST. LUCIA - ACTUAL AND PROJECTED PUBLIC DEBT SERVICE (US$ million) Year Interest Anortization Debt Debt Service RService Ratio (%) Projected Source: Mission estimates.

155 Table 4.4: ST. LUCIA - PROJECTED CAPITAL INFLOWS TO THE PUBLIC SECTOR (US$ million) In the pipeline To be Obtained (Grants + Conc. Concessional Non-Conc. Concessional Non conc. Loans) / Total Year Grants Loans Loans Grants Loans Loans Total (Z) Source: Mission estimates.

156 Page l of 2 Table 5.1: ST. LUCIA - OPERATIONS OF THE PUBLIC SECTOR (ECS million) Estimated Outturn 1978/ / / / /83 I. Consolidated Public Sector Total Revenue and Grants Current Revenue Current Grants Capital Grants Total Expenditure and Net Lending Currenit Expenditure Capital Expenditure and Net Lending Current Account Surplus (excluding grants) Overall Deficit (-) Change in Payment Arrears Overall Deficit on Cash Basis C-) F'inancing Foreign Assets Net Borrowing from ECCA (includes counterpart of purchases from IMF) Other Net Foreign Borrowing Net Domestic Bank Borrowing Other Domestic Borrowing including residual II. Central Government Total Revenue and Grants Current Revenue Current Grants Capital Grants Total Expenditure and Net Lending Current Expenditure Capital Expenditure and Net Lending i Current Surplus or Deficit (-) (excluding grants) Overall Deficit (-) Change in Payment Arrears (increase +) Overall Surplus or Deficit (-) on cash basis Financing Foreign Assets Net Borrowing from ECCA (including counterpart of purchases from IMF) Other Net Foreign Borrowing Net Domestic Bank Borrowing Other Domestic Borrowing Residual

157 Page 2 of 2 Table 5.1: ST. LUCIA - OPERATIONS OF THE PUBLIC SECTOR (ECS million) Estimated Outturn 1978/ / / / /83 III. Rest of General Government a/ Revenue and Grants Of which: from Central Government Expenditure Current Expenditure Capital Expenditure Current Surplus Overall Surplus Financing ,70 Central Government Rest of Public Sector Commercial Banks Other Domestic IV. Selected Public Enterprises b/ Total Receipts and Grants Current Receipts Operating Receipts c/ (58.55) (63.67) (65.10) (86.20) (91.66) Central Government Transfers d/ (0.33) (0.65) (1.51) (0.85) (0.79) Other (0.02) (0.02) (1.12) (3.38) (0.09) Capital Grants Total Expenditure Current Expenditure , Operating Expenditure (54.37) (61.04) (64.85) (86.87) (88.22) Other (0.69) (0.78) (0.85) (0.77) (0.58) Capital Expenditure Current Account Surplus Overall Surplus or Deficit (-) Financing Banks Net Foreign Borrowing Central Government Other Domestic a/ Comprises the Castries City Council and the National Insurance Scheme. b/ Comprises seven enterprises (the Port Authority, the Central Water Authority, the National Development Corporation, the Electricity Services, the Marketing Board, the Banana Growers' Association, and the Government Fund Scheme). For the purpose of consolidation, accounts have been adjusted to a cash basis and have also been adjusted to the Central Government's fiscal year (by averaging methods). c/ Includes Central Government subsidies. d/ Excludes Central Government subsidies. Source: IMF.

158 Table 5.2: ST. LUCIA - CENTRAL GOVERUNENT CURRENT EXPENDITURES (EC$ million) Fiscal Year Ended March 31 Estimated Outrun Current Expenditure Wages and Salaries Of Which: Retroactive Component (.) (.) (0.74) (0.67) (8.86) Goofls and Services Interest Payments Subsidies Public Sector (0.91) (1.31) (2.36) (2.32) (2.58) Other (0.58) (0.65) (1.10) (1.61) (1.33) Other Current Transfers Retirement Benefits (1.60) (3.08) (4.03) (3.68) (4.08) Public Sector (1.76) (1.99) (3.95) (3.16) (3.73) Other Domestic (0.58) (1.16) (1.98) (2.90) (2.60) Abroad (2.13) (2.85) (2.90) (3.90) (4.62) Source: Ministry of Firlance and IMF estimates.

159 Table 5.3: ST. LUCIA - CENTRAL GOVERNMENT REVENUE AND GRANTS (EC$ million) Fiscal Year Ended March 31 Estimated Outturn Total Revenue and Grants Current Grants Capital Grants Total Revenue (Excluding Grants) Tax Revenue Taxes on Income Taxes on Property Taxes on Goods and Services Consumption Taxes (8.46) (11.26) (12.30) (13.39) (14.18) Excise Taxes (0.63) (0.65) (0.91) (0.96) (0.92) Hotel Occupancy Tax (1.81) (2.71) (2.23) (2.30) (2.20) Licenses (1.01) (1.11) (1.39) (1.45) (1.60) Insurance Premium Tax (0.05) (0.44) (0.48) Other (0.11) (0.11) (0.12) (0.11) (0.11) Taxes on International Trade and Transactions Import Duties (14.08) (20.38) (19.74) (20.49) (20.50) Stamp Duty on Imports (5.93) (8.79) (10.75) (12.05) (11.10) Export Duties (0.29) (0.28) (0.15) (0.23) (0.32) Hess Company Taxes (0.80) Foreign Exchange Tax (1.61) Airpot Tax (0.60) (0.61) (0.63) (0.55) (0.60) Travel Tax (0.12) Other Taxes Stamp Duties (1.55) (1.35) (1.07) (1.21) (1.60) Miscellaneous Refunds (-.13) (-.09) (-.31) (-0.25) (-.40) Nontax Revenue Operating Surpluses of Departmental Enterprises ECCA Profits Interest and Rent Fees, Fines, Nonindustrial Sales and Other Receipts Source: Ministry of Finance and Planning, and IMF estimates.

160 Table 5.4: ST. LUCIA - ACTUAL AND PROJECTED PUBLIC SECTOR SAVINGS Actual Estimated Projected 1981/ / / / / / /88 Central Government Current Revenues Taxes on Income Taxes on Goods and Services Taxes on International,1 _a a RI 1 I In.fl -'.AI Y fr_ IC If t% '"TO7 f% Trade nu OLters 46 U.J 42 U uifv 70 Current Expenditures Wages and Salaries of which: Retroactive Component (0.7) (8.9) (-) (-) (-) (-) (-) Goods and Services Other b/ Central Government Savings Rest of Public Sector Total Public Sector Savings a/ Includes non-tax revenues. b/ Includes interest payments and current transfers. Source: Mission estimates.

161 Table 5.5: PUBLIC SECTOR INVESTMENT PROGRAM AND ITS FINANCING (EC$ millions) Actual Estimated Proj ected 1981/ / / / / / /88 Total Total (X) USES Capital Expenditures 33.6 Amortization of External Debt TOTAL SOURCES External Capital Inflows (Gross) Grants > Loans - Project-Related Loans - Non-Project Related I/ Public Sector Savings Other b/ TOTAL a/ Renewal of Treasury bills sold in neighboring countries. h/ Includes commercial bank borrowing. Source: Mission estimates.

162 Page 1 of 3 Table 5.6: ST. WCIA PUBLIC SECSOR INVESTMENT PROGRAK, FY83/84-84/86 (ec$ '000) P183/84 Ff84185 R 85/86 O0lO0I! PROJECTS Total Esternal Local Total External Local Total External Local FIXED INVESTKEITS A4riculture. Forestry & FiLheries Structural Adjustm_nt Program 6,200 5, ,180 8,180-5,000 5,000 - Extension Project Delcer Irrigation Micro Irrigation Projects aeau Resettlent (NDC) 1,500 1,500-3,000 2, ,500 3,500 us u"jour Livestock Development (NDC) Tree Crop Diversification I Irput Revolving Fund-Bananes (BGA) ,200 1, , Banana Development Program IV, V (BGA) _ Forestry Kfnagement Assistance Catries Fisheries Complex 3,640 3, ,890 2, Wind Powered Cbillroom lua tr Industrial E.tates V (NDC) 1,500 1, Tranportation Rd Rehabilitation Program 7,500 7, ,100 4, Read Resurfacing ,000-1,000 2,300 2, Hsaanorra Airport Development Power Supply Electricity Expansion II (LUCELEC) 2,750 2, ,333 2, ,043 2, Rural Electricity I (Luce Lec) Water Supply Improvement Water Supply (CWA) 1,344 1, Bducation School Rehabilitation Program 5,600 5, ,800 2, School Improvement Program St. Aloysiua Boys School School Reconstruction (Roof Sealing) Other Self Relp Coinity Development Ission Administered Funds _ TOTAL ,217 2,584 29,950 26,824 3,126 16,311 15,058 1,253 ODEMR INVESTMMNTS Lines of Credit Student Loans II, II add. (SLDB) Mortgage Finance II (SLDB) Consolidated Lin of Credit (SLDB) ,450-2,950 2,950 - _ - _ TOTAL 3,046 3,046-3,370 3, TOTAL ONCOINC PRJECTS 38,847 36,263 2,584 33,320 30,194 3,126 16,311 15,058 1,253 1/ Asset acqulsitions and capital tranuifers are not included.

163 Page 2 of 3 Table 5.6: ST. LUCIA - PUBLIC SECTOR INVESTMENT PROGRAM, FY83/84-84/86 (ECS '000) FY83/84 FY84T85 _ FYJ5-8. PROPOSED PROJECTS Total External Local Total External Local Total External Locaf FIXED INVESTMENTS Agriculture, Forestry & Fisheries Agricultural Production and Marketing ,900 1, ,550 2, Coconut Input Supply Scheme 1,100 1, ,250 2, ,450 2, Industry Agro-Processing Industry Development ,200 1, ,800 1, Industrial Estates VI ,500 1, Tourism Point S.traphine Tourist Facilities I ,522 2, ,273 2, Transportation Agriculture Feeder Roads IV 1,250 1, ,200 3, ,050 2, Power Supply Rural Electrification V ,180 1, ,800 1, Water Supply Integrated Water Development 1,111 1, ,200 2, ,169 3, Other Supporting Infrastructure Building Materials Development ,346 1, Education Regionail Hlotel Trade School , Administration Police Radios Other Reserved 1/ 7,100 5,100 2,000 7,178 2,984 4,194 18,902 3,257 15,375 TOTAL 11,274 8,758 2,516 21,702 16,216 5,486 41,260 23,261 17,999 OTHER INVESTMENTS 2/ Lines of Credit Agricultural Sector Credt Industry Sector Credit ,000 1,000 Tourism Sector Credit Housing & Mortgage Finance _ TOTAL ,480 3,480 - TOTAL PROPOSED PROJECTS 11,274 8,758 2,516 21,702 16,216 5,486 44,740 26,741 17, T.is category includes disbursements on projects which are fully locally financed and disbursements on e.tternally financed projects which are to be defined at a later stage. 2/ Aiset acquisitions and capital transfers are not included.

164 Page 3 of 3 Table 5.6: ST. LUCIA - PUBLIC SECTOR INVESTMENT PROGRAM, FY83/84-84/86 (EC$ '000) FY83/84 FY84/85 FY85/86 SUMMARY Total External Local Total External Local Total External Local TOTAL FIXED INVESTMENTS , ; j j ,252 fln@nlno 35,8R / ') I r na I15 Proposed 11,274 8,758 2,516 21,702 16,216 5,486 41,260 23,261 17,999 TOTAL OTHER INVESTMENTS 3,046 3,046-3,370 3,370-3,480 3,480 _ Ongoing 3,046 3,046-3,370 3, H Proposed ,480 3,480 - c TOTAL CAPITAL EXPENDITURE 50,121 45,021 5,100 55,022 46,410 8,612 61,056 41,799 19,252 Ongoing 38,847 36,263 2,584 33,320 30,194 3,126 16,311 15,058 1,253 Proposed 11,274 8,758 2,516 21,702 16,216 5,486 41,260 23,261 17,999

165 Table 6.1: ST. LUCIA - EAST CARIBBEAN CURRENCY AUTHORITY (EC$ million) December Net International Reserves Assets Current Assets and Money at Call (117.6) (139.3) (93.9) (81.5) (15.9) Regular Notes in Process of Redemption (1.7) (5.7) (6.2) (2.8) (3.2) Other Securities (56.9) (65.6) (112.2) (97.1) (114.7) a/ Liabilities Balances Due to Banks Abroad b/ (-37.1) (-43.2) (-67.1) (-32.6) (--) Net Position with Banks in ECCA Area Assets Bankers' Balances cl (0.8) (6.5) (4.2) (4.8) (8.6) Balances with Banks in Area d/ (2.0) (2.2) (2.3) (2.4) (2.6) Liabilities Currency Notes and Coins (-17.7) (-24.0) (-26.5) (-23.5) (-28.4) St. Lucia /-3.9/ /-4.6/ /-4.7/ /-4.0/ /-5.9/ Other / /-19.4/ /-21.8/ /-19.5/ /-22.5/ Deposits (-60.8) (-73.9) (-41.6) (-39.3) (-29.1) Demand /-7.1/ /-7.9/ /-12.9/ /-13.1/ /-17.8/ Fixed /-53.7/ /-66.0/ /-28.7/ /-26.2/ /-11.3/ Net Domestic Assets Central Government (Net) St. Lucia Treasury Bills (5.0) (5.8) (7.2) (8.2) (8.7) Other Treasury Bills (7.9) (13.6) (16.1) (18.3) (25.9) St. Lucia Debentures (0.9) (3.3) (4.2) (4.2) (3.7) Other Debentures (14.9) (10.8) (12.8) (15.2) (14.9) Liabilities to Nonmonetary International Organizations Net Unclassified Assets Assets (2.7) (1.9) (4.0) (3.7) (8.5) e/ Liabilities (-18.4) (-21.7) (-22.7) (-28.7) (-36.0) Currency in Circulation In St. Lucia Estimate of Notes and Coins Issued (21.6) (26.7) (29.3) (31.8) (33.9) Less: Commercial Banks' Cash Holdings (-3.9) (-4.6) (-4.7) (-4.0) (-5.9) In Other ECCA Countries Estimate of Notes and Coins Issued (69.5) (86.2) (92.1) (100.7) (103.7) Less: Commercial Banks' Cash Holdings (-13.8) (-19.4) (-21.8) (-19.5) (-22.5) Coins in Former Member Countries a/ Includes credit balance with CMCF in 1982, b/ 'Abroad' meaning outside ECCA area. Includes debit balances with CMCF. cl Foreign currency loans to area commercial banks. dl Domestic currency loans to area commercial banks. e/ Includes October 1982 special issue of St. Lucia Treasury bills in the amount of EC$1.4 million. Source: East Caribbean Currency Authority, and Ministry of Finance and Planning.

166 Table 6.2: ST. LUCIA - COMMERCIAL BANK OPERATIONS a/ (EC$ million) December Net Foreign Assets Assets Foreign Currency Holdings (2.7) (3.7) (4.1) (2.8) Claims on ECCA (9.0) (8.9) (4.5) (6.8) Of which: Currency Holdings /4.6/ /4.7/ /4.1/ /5.9/ Claims on ECCA Area Banks (2.1) (10.7) (0.5) (3.5) Claims on Banks Abroad (9.5) (3.5) (11.2) (13.3) Other (4.1) (3.5) (2.6) (2.5) Liabilities Balance due to ECCA (0.6) (0.8) (-) (0.4) Balance due to ECCA Area Banks (7.9) (9.0) (3.7) (5.7) Balance due to Banks Abroad. (11.3) (19.0) (12.3) (10.7) Nonresident Deposits (19.8) (22.6) (23.8) (25.4) Demand /4.7/ /5.3/ /5.5/ /9.2/ Savings /7.7/ /9.9/ /10.1/ /8.9/ Time /7.4/ /7.4/ /8.2/ /7.3/ Net Domestic Assets Net Credit to Central Government Treasury Bills (2.6) (2.5). (0.3) (1.5) Debentures (1.2) (2.4) (2.3) (2.4) Loans and Advances including Overdraft (15.5) (11.7) (9.8) (12.1) Special Deposit Requirement (--) (7.7) (13.4) (14.7) Government Deposits (-), (-3.1) (-5.8) (-6.4) (-7.8) Net Credit to Other Public Sector Credit (5.2) (2.0) (5.7) (4.6) Deposit (-) (-11.3) (-12.5) (-11.9) (-16.0) Net Credit to Nonbank Financial Intermediaries Credit (0.8) (0.2) (0.7) (0.9) Deposit (-) (-3.1) (-3.2) (-13.0) (-14.3) Credit to Private Sector Of which: Commercial Bills Discounted (2.7) (1.8) (0.6) (1.1) Interbank Float Claims (19.7) (20.6) (23.9) (20.4) Liabilities (-20.6) (-25.6) (-26.2) (-23.0) Net Unclassified Assets tb/ Assets (12.7) (14.6) (14.6) (14.8) Liabilities (-24.3) (-31.5) (-33.8) (-38.0) Liabilities to Private Sector Demand Deposits Savings Deposits Time Deposits a/ 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 b/ Includes counterpart of ECCA currency holdings. Sources: Ministry of Finance! and Planning; and East Caribbean Currency Authority.

167 Table 6.3: ST. LUCIA - COMMERCIAL BANK LOANS AND ADVANCES TO PRIVATE SECTOR a/ December (In millions of East Caribbean dollars) Total Agriculture Manufacturing Distributive Trade Tourism Transport Construction Public Utilities Personal and Other Advances (As percent of total) Total Agriculture Manufacturing Distributive Trade Tourism Transport Construction Public Utilities Personal and Other Advances a/ Includes loans and advances to some of the statutory bodies and public enterprises. Sources: East Caribbean Currency Authority, and Ministry of Finance and Planning.

168 Table 7.1: ST. LUCIA - PRODUCTION OF MAJOR AGRICULTURAL CROPS (In thousand pounds) Bananas Export 88, , , , , ,177.9 Local 29,602.3 l7, , , , ,392.6 Coconuts Copra 11, , , , , ,271.4 Cocoa Sweet Potatoes YamEs 1, , , , , ,425.0 Tatnnia Tomatoes Cabbage Cucumbers Carrots Sweet Pepper Ochra Melons Pumipkins Ginger Linmes Oranges Grapefruits Avocados Dasheen Plantains 3, , ,557;1 2, , ,392.7 Lettuce Source: Statistical Department.

169 Table 7.2: ST. LUCIA - QUANTUM INDEX OF MANUFACTURING PRODUCTION (Base year 1975 = 100) ISIC Industry Code Total Food Manufacturing Beverage Making Tobacco Products Wearing Apparel Furniture Paper and Paperboard 3, Electrical Appliances Other Source: Statistical Department.

170 Table 7.3: ST. LUCIA - ACCOMKODATION CAPACITY: No. of Rooms Type of Accommodation Hotels 1,120 1,140 1,146 1,043 Apartments Guest Houses Total 1,205 1,230 1,245 1,384 Source: Statistical Department and St. Lucia Hotel Association.

171 Table 7.4: ST. LUCIA - ROOM OCCUPANCY BY CATEGORY OF HOTELS a/ Total Group A Group B Group C Month TOTAL January February March April May June July August September October November December a/ Nine establishments with accommodation capacity of 1,043 rooms reported; 11 other establishments with accommodation capacity of 162 rooms failed to report. Source: St. Lucia Hotel Association.

172 Table 8.0: ST. LUCIA - RETAIL PRICE INDEX, Alcoholic Household Drinks Fuel and Mis- Clothing and and cellaneous and Items Food Tobacco Housing Light Items Footwear Services (April 1964 = 100) Weights 1, Period average e End of Peri.od (Percentage change) Period average End of period Source. Statistical Department.

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