Saint Kitts and Nevis Country Report
Boosting economic activity, cutting a high per-capita murder rate and gang-related crime, and co-ordinating recovery efforts from Hurricanes Irma and Maria are the main challenges for St Kitts and Nevis in 2018. The diversification of the economy beyond tourism – including the expansion of non-sugar agriculture, manufacturing, and financial services – is a key challenge for the incumbent coalition government of Prime Minister Timothy Harris. Harris has also taken steps to restructure the country's "Citizenship by Investment" programme as part of broader efforts to boost growth, which have included a third investment option to finance the USD52 million in hurricane damages. GDP growth slowed in 2017 due to hurricane damages, but the government is projecting 3.5% growth for2018.
St Kitts and Nevis welcomes foreign investment into its economy. That said, some operational risks exist, including a fairly low-skilled workforce, and the islands' susceptibility to hurricanes and other natural disasters. Strikes have not been a major operational constraint over the past decade and corruption does not pose a significant risk to foreign investment. The administration of Prime Minister Timothy Harris has sought to prioritise infrastructure spending, in particular within the lucrative tourism sector, as a way of promoting economic growth.
There is no history of terrorist attacks or groups on the islands, and the risk of future terrorist incidents is low. The country's relatively close relations with the United Kingdom and United States could potentially make the tourism sector a target, but such risks are also low. There has been no evidence to suggest that any terrorist group has the intention of conducting attacks on the islands. In 2018, the government plans to bring into effect a bill to strengthen the legal system against the financing of terrorism and money laundering.
Despite occasional heightened secessionist rhetoric on Nevis, the risk of a violent split from St Kitts is negligible. Counter-narcotics operations could potentially result in vessels facing inspections, but overall vessel seizure risks are low.
The economy's vulnerability to external shocks, fiscal austerity measures, and high levels of unemployment are typical drivers of unrest. Prolonged delays in repairing the USD52 million in damages to homes and businesses as a result of Hurricanes Irma and Maria could also spark protests over the coming months. However, any resulting protest would be unlikely to destabilise the government. Foreign-owned assets would also be unlikely to be targeted.