Annex 1: Country Profile ST. LUCIA

Transcription

1 Annex 1: Country Profile ST. LUCIA Population: 161,000 (2003) GNI per capita: US$4,300 (2004 est. Atlas methodology) 1. Profile. St. Lucia is the most densely populated of the four Windward Islands. The interior of the island is mountainous, but there is more flat land than in Dominica, Grenada or St. Vincent and the Grenadines. The soil is generally fertile and the banana industry (and other agriculture products) makes St. Lucia the biggest exporter of agricultural products among the OECS member countries. The pleasant climate and the sandy beaches have encouraged the development of tourism, particularly in the honeymoon sector which has become the main foreign exchange earner in the economy. Despite relatively strong social indicators, the UNDP Human Development Index classifies St. Lucia as 71st out of 174 countries. Twentyfive percent of the population is estimated to live below the locally defined poverty line, and 19 percent is estimated to be unemployed. 2. Political Context. Independence: 1979 Last elections: 2001 The current administration, representing the St. Lucia Labour Party (SLP) was returned to office for a second term in December 2001, gaining 14 of the 17 contested seats. The remaining seats were taken by the former ruling United Workers Party. Elections are expected before the end of next year. 3. Economic Developments and Prospects. Like the other OECS countries, St. Lucia experienced a marked decline in economic growth during the early 2000s, with average real GDP growth declining from an annual average of 2.5 percent in the 1990s to 1.3 percent during This marked slowdown was the result of exogenous shocks (the September 11 events and the global economic slowdown), the erosion of EU trade preferences for traditional banana exports, as well as increased competition from lower priced tourism destinations. The contraction and slowdown in growth was accompanied by an expansionary fiscal stance resulting in worsening primary balances (from 0.2 percent of GDP in FY2000/01 to -5.1 percent in FY2002/03) and rising public sector debt (from 44 percent of GDP in 2000 to 64 percent in 2002). The economy rebounded in FY2003/04 and FY2004/05, with a growth rate of 3.1 and 3.7 percent, respectively, sustained by strong performance in the tourism sector. There was significant fiscal tightening in FY2003/04 resulting in a primary balance of -1.0 percent of GDP, due to higher revenue collection, reduced capital expenditure and a pick-up in economic activity. However, the primary deficit is estimated to have deteriorated slightly in FY2004/05 (-1.3 percent of GDP), due to rising capital expenditure. While the lowest in the OECS, in 2004 public debt stood at 73 percent of GDP. External debt represents 63 percent of total debt. The Government has been able to access the regional capital markets on increasingly favorable terms; this has allowed it to replace foreign with EC dollar-denominated debt with new issues at declining spreads over US treasury bills. Spending pressures in anticipation of the next elections may jeopardize progress towards fiscal consolidation and debt reduction. The attached table presents an active policy macroeconomic scenario with medium-term growth at 3 percent per year and fiscal adjustment over the medium-term leading to the central government primary balance moving from a deficit of 1.3 percent of GDP in FY2004/05 to a surplus of about 4.5 percent of GDP in FY2009/10. In this scenario, the debt stock would decline gradually to about 63 percent of GDP by However, a continuation of current fiscal policies would lead to an unsustainable level of debt, and crowdout expenditures for social and economic goals. Under this scenario, the central government primary balance would be in the range of -2 to -8 percent of GDP and public debt would rise to 119 percent of GDP by This scenario is also subject to further downside risks interest rate or natural disaster shocks which would limit the government s flexibility at high levels of debt. Although St. Lucia is the most budget reform-minded of the OECS countries, with the most up-to-date legal framework for public financial management, the expansionary fiscal policy conducted by the country has not led to strong growth. Fiscal adjustment could be achieved by containing capital expenditures, reducing tax concessions, introduction of a broad based consumption tax, and containment of the public sector wage bill. Structural reforms to invigorate growth are also needed, particularly to reduce input costs and raise labor productivity. 111

2 Annex A2: Country at a Glance St. Lucia at a glance 7/26/05 Latin Upper- POVERTY and SOCIAL America middle- St. Lucia & Carib. income 2003 Population, mid-year (millions) GNI per capita (Atlas method, US$) 4,030 3,260 5,340 GNI (Atlas method, US$ billions) ,741 1,788 Average annual growth, Population (%) Labor force (%) Most recent estimate (latest year available, ) Poverty (% of population below national poverty line) Urban population (% of total population) Life expectancy at birth (years) Infant mortality (per 1,000 live births) Child malnutrition (% of children under 5) Access to an improved water source (% of population) Illiteracy (% of population age 15+) Gross primary enrollment (% of school-age population) Male Female KEY ECONOMIC RATIOS and LONG-TERM TRENDS GDP (US$ billions) Gross domestic investment/gdp Exports of goods and services/gdp Gross domestic savings/gdp Development diamond* GNI per capita Life expectancy Access to improved water source St. Lucia Economic ratios* Upper-middle-income group Trade Gross primary enrollment Current account balance/gdp Interest payments/gdp Total debt/gdp Total debt service/exports Domestic savings Investment (average annual growth) GDP GDP per capita Exports of goods and services Indebtedness St. Lucia Upper-middle-income group STRUCTURE of the ECONOMY (% of GDP) Agriculture Industry Manufacturing Services Imports of goods and services Growth of investment and GDP (%) GDI GDP (average annual growth) Agriculture Industry Manufacturing Services Private consumption General government consumption Gross domestic investment Imports of goods and services Growth of exports and imports (%) Exports Imports Note: 2003 data are preliminary estimates. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 112

3 Annex A2: Country at a Glance St. Lucia PRICES and GOVERNMENT FINANCE Domestic prices (% change) Consumer prices Implicit GDP deflator Government finance (% of GDP, includes current grants) Current revenue Current budget balance Overall surplus/deficit TRADE (US$ millions) Total exports (fob) Bananas Fruits and vegetables Manufactures Total imports (cif) Food Fuel and energy Capital goods Export price index (1995=100) Import price index (1995=100) Terms of trade (1995=100) BALANCE of PAYMENTS (US$ millions) Exports of goods and services Imports of goods and services Resource balance Net income Net current transfers Current account balance Financing items (net) Changes in net reserves Memo: Reserves including gold (US$ millions) Conversion rate (DEC, local/us$) EXTERNAL DEBT and RESOURCE FLOWS (US$ millions) Total debt outstanding and disbursed IBRD IDA Total debt service IBRD IDA Composition of net resource flows Official grants Official creditors Private creditors Portfolio equity Inflation (%) Export and import levels (US$ mill.) Current account balance to GDP (%) GDP deflator Exports CPI Imports Composition of 2003 debt (US$ mill.) F: 93 G: 133 E: 19 A: 10B: 23 -D: 278 World Bank program Commitments Disbursements Principal repayments Net flows Interest payments Net transfers A - IBRD B - IDA C - IMF D - Other multilateral E - Bilateral F - Private G - Short-term 113

4 Annex B2: Selected Indicators of Bank Performance and Management CAS Annex B2 - Selected Indicators* of Bank Portfolio Performance and Management As Of Date 07/28/2005 Indicator Portfolio Assessment Number of Projects Under Implementation a Average Implementation Period (years) b Percent of Problem Projects by Number a, c Percent of Problem Projects by Amount a, c Percent of Projects at Risk by Number a, d Percent of Projects at Risk by Amount a, d Disbursement Ratio (%) e Portfolio Management CPPR during the year (yes/no) Supervision Resources (total US$) Average Supervision (US$/project) Memorandum Item Since FY 80 Last Five FYs Proj Eval by OED by Number 5 2 Proj Eval by OED by Amt (US$ millions) % of OED Projects Rated U or HU by Number % of OED Projects Rated U or HU by Amt a. As shown in the Annual Report on Portfolio Performance (except for current FY). b. Average age of projects in the Bank's country portfolio. c. Percent of projects rated U or HU on development objectives (DO) and/or implementation progress (IP). d. As defined under the Portfolio Improvement Program. e. Ratio of disbursements during the year to the undisbursed balance of the Bank's portfolio at the beginning of the year: Investment projects only. * All indicators are for projects active in the Portfolio, with the exception of Disbursement Ratio, which includes all active projects as well as projects which exited during the fiscal year. 114

5 Annex B3: IBRD/IDA Program Summary CAS Annex B3 - IBRD/IDA Program Summary As Of Date 07/28/2005 St. Lucia Proposed IBRD/IDA Base-Case Lending Program a Fiscal year Proj ID US$(M) Strategic Rewards b (H/M/L) Implementation b Risks (H/M/L) 2007 OECS (LC) Social Protection Pilot 3.0 Result LC Public Sector Modernization 3.0 Result 3.0 Overall Result

6 St. Lucia Social Indicators Latest single year Annex B5: Poverty and Social Indicators Same region/income group Latin Upper- America middle & Carib. income POPULATION Total population, mid-year (millions) Growth rate (% annual average for period) Urban population (% of population) Total fertility rate (births per woman) POVERTY (% of population) National headcount index Urban headcount index Rural headcount index INCOME GNI per capita (US$).. 1,450 4,030 3,260 5,340 Consumer price index (1995=100) Food price index (1995=100) INCOME/CONSUMPTION DISTRIBUTION Gini index Lowest quintile (% of income or consumption) Highest quintile (% of income or consumption) SOCIAL INDICATORS Public expenditure Health (% of GDP) Education (% of GNI) Social security and welfare (% of GDP) Net primary school enrollment rate (% of age group) Total Male Female Access to an improved water source (% of population) Total Urban Rural Immunization rate (% of children ages months) Measles DPT Child malnutrition (% under 5 years) Life expectancy at birth (years) Total Male Female Mortality Infant (per 1,000 live births) Under 5 (per 1,000) Adult (15-59) Male (per 1,000 population) Female (per 1,000 population) Maternal (per 100,000 live births) Births attended by skilled health staff (%) CAS Annex B5. This table was produced from the CMU LDB system. 04/13/05 Note: 0 or 0.0 means zero or less than half the unit shown. Net enrollment rate: break in series between 1997 and 1998 due to change from ISCED76 to ISCED97. Immunization: refers to children ages months who received vaccinations before one year of age. 116

7 St. Lucia - Key Economic Indicators Annex B6: Key Economic Indicators Actual Estimate Projected Indicator National accounts (as % of GDP) Gross domestic product a Agriculture Industry Services Total Consumption Gross domestic investment Government investment Private investment Exports (GNFS) b Imports (GNFS) Gross domestic savings Gross national savings c Memorandum items Gross domestic product (US$ million at current prices) GNI per capita (US$, Atlas method) Real annual growth rates (%) g Gross domestic product at factor cost Real annual per capita growth rates (%) Gross domestic product at market prices Balance of Payments (US$ millions) Trade Balance Exports (GNFS) b Merchandise FOB Imports (GNFS) b Merchandise FOB Resource balance Net current transfers Current account balance Net private foreign direct investment Change in reserves d (Continued) 117

8 St. Lucia - Key Economic Indicators (Continued) Annex B6: Key Economic Indicators Actual Estimate Projected Indicator Public finance (as % of GDP at market prices) e Current revenue Current expenditure Current balance Capital expenditure Primary balance Monetary indicators M2/GDP Growth of M2 (%) Consumer price index (%, eop) a. GDP at factor cost b. "GNFS" denotes "goods and nonfactor services." c. Includes net unrequited transfers excluding official capital grants. d. Includes use of IMF resources. e. Consolidated central government. Data presented on a fiscal year basis (April - March). f. "LCU" denotes "local currency units." An increase in US$/LCU denotes appreciation. g. Data presented on a fiscal year basis (April - March) 118

9 St. Lucia - Key Exposure Indicators Annex B7: Key Exposure Indicators Actual Estimate Projected Indicator Total debt outstanding and disbursed (TDO) (US$m) f External debt (% GDP) Debt and debt service indicators (%) TDO/XGSb TDO/GDP f External debt service/xgs IBRD exposure indicators (%) IBRD DS/XGS IBRD TDO (US$m) d IDA TDO (US$m)d IDA DS/XGS IFC (US$m) Loans Equity and quasi-equity /c MIGA MIGA guarantees (US$m) a. Includes public and publicly guaranteed debt, private nonguaranteed, use of IMF credits and net shortterm capital. b. "XGS" denotes exports of goods and services, including workers' remittances. c. Preferred creditors are defined as IBRD, IDA, the regional multilateral development banks, the IMF, and the Bank for International Settlements. d. Includes present value of guarantees. e. Includes equity and quasi-equity types of both loan and equity instruments. f. Data presented on a fiscal year basis (April - March). 119

10 Annex B8: Operations Portfolio (IBRD/IDA and Grants) Closed Projects 5 IBRD/IDA * Total Disbursed (Active) of which has been repaid Total Disbursed (Closed) of which has been repaid Total Disbursed (Active + Closed) of which has been repaid Total Undisbursed (Active) Total Undisbursed (Closed) Total Undisbursed (Active + Closed) CAS Annex B8 - St. Lucia Operations Portfolio (IBRD/IDA and Grants) As Of Date 07/28/2005 Active Projects Difference Between Last PSR Expected and Actual Supervision Rating Original Amount in US$ Millions Disbursements a/ Project ID Project Name Development Objectives Implementation Progress Fiscal Year IBRD IDA GRANT Cancel. Undisb. Orig. P O LC Education (APL01) MU MU P LC Disaster Management Project II S S P LC HIV/AIDS PREVENTION & CONTROL S S P LC Water Sector Reform Tech Assist S S P LC Water Supply Infrastr. Improvement # # P St. Lucia Emergency Recovery Project S S Overall Result Frm Rev'd 120