Saint Kitts and Nevis Country Report
Boosting economic activity, reducing crime, and renovating infrastructure, especially following hurricanes in September 2017, are priorities for the government. The diversification of the economy beyond tourism – including the expansion of non-sugar agriculture, manufacturing, and financial services – is also a major challenge for the incumbent coalition government of Prime Minister Timothy Harris. He 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 and the Sustainable Growth Fund to further boost investment in the nation.
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, especially within the tourism sector, to promote economic growth. That said, certain operational risks persist, including a fairly low-skilled workforce, and the islands' susceptibility to hurricanes and other natural disasters. The country received foreign aid to help with recovery efforts following the USD150 million in damages caused by hurricanes Irma and Maria in September 2017.
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 the United States increase the risks of the tourism sector being targeted, but such risks are nonetheless low. There has been no evidence to suggest that any terrorist group has the intention of conducting attacks on the islands. The government is planning on bringing into effect a bill to strengthen the legal system against the financing of terrorism and money laundering.
Crime poses a relatively low risk to investors in St Kitts and Nevis. Extended police powers were granted to the armed forces from August 2018 to February 2019 in response to rising violent crime since 2016. Despite the total number of murders falling by 26% from 2016 to 2017 from 31 to 23 cases, the murder rate is still extremely high considering the size of the country, at 33 per 100,000 people. The main risk for foreigners on the islands is petty crime, particularly street-level theft. Violent crime tends to be linked to drug trafficking and criminal gangs, and is not specifically directed at foreign nationals or businesspeople.
Despite occasional heightened secessionist rhetoric on Nevis, the risk of a violent split from St Kitts is negligible. Counter-narcotics operations occasionally 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 the continued reparations to damages caused as a result of Hurricanes Irma and Maria increase protest risks in coming months, although these are low and are highly unlikely to destabilise government or target foreign-owned assets. There remains a secessionist movement on Nevis. However, the high-profile roles given to Nevisian politicians as part of the Team Unity government elected in 2015 should lead to a decrease in demands for Nevis to secede from the current federation.