Back

Country Reports

Saint Lucia Country Report

Content provided by
IHS Markit Logo

Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

The United Workers Party (UWP) government of Prime Minister Allen Chastanet is relatively stable, holding 11 of the 17 seats in the House of Assembly. In January 2019, the ruling administration was strengthened when Prime Minister Chastanet easily survived a motion of no confidence introduced by the opposition St Lucia Labour Party (SLP) leader Philip Pierre. Despite the motion’s failure, the SLP is likely to stage protests against government policy, particularly over the economy and healthcare, ahead of general elections scheduled for February 2020. Protests are likely to be peaceful, for example as when thousands protested in September 2018 in an anti-government march led by the SLP. Economic activity is strongly supported by large infrastructure and tourism-related investment, including hotel expansion projects and increased flight and cruise capacity. IHS Markit forecasts economic growth of around 2.3% in 2019. Reducing St Lucia’s debt burden, which stood at close to 70% of GDP in fiscal year 2016/17, is a key priority for the Chastanet administration. Driven mainly by higher capital expenditure in infrastructure investment, public debt is likely to deteriorate moderately in 2019 and reach close to 75% of GDP in 2020-21. Weather-related risks would add further pressures on the government’s fiscal accounts in the shorter term. Violent crime continues to be a risk in St Lucia, with 43 reported homicide victims in 2018 for a rate of 24 per 100,000, which is just above the average of around 21 for the Eastern Caribbean islands. This followed a 94% surge in homicides in 2017 to 60, from 31 in 2016. Nonetheless, the primary security risk for foreign visitors is theft. Those resisting robberies and mugging face higher death and injury risks.
Last update: April 25, 2019

Operational Outlook

The operational environment presents no major obstacles to foreign investment. Risks arise from natural hazards, especially hurricanes, and the island's infrastructure, which would benefit from upgrades and expansion. Companies operating in St Lucia are likely to face tax-related reputational risks if the EU, which is urging tax transparency, blacklists the country as a tax haven in 2019. To open a business, companies need five procedures and an average of 11 days, according to the World Bank 2018 Doing Business report.

Last update: April 25, 2019

Terrorism

There are no domestic terrorist groups with the intention or capability to conduct terrorist attacks in St Lucia. 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 low. The island is not considered a target for international terrorist organisations. Property damage risks against commercial assets are low.

Last update: June 21, 2019

War Risks

St Lucia's foreign relations initiatives predominantly relate to economic development and aid. A minor territorial dispute over Bird Rock/Isla de Aves exists with Venezuela, but is likely to be resolved through diplomatic channels. St Lucia faces little in the way of external threats and there is a low interstate war risk. In July 2017, St Lucia signed maritime boundary agreements with Barbados and Saint Vincent and the Grenadines during the Caribbean Community (CARICOM) meeting held in Grenada, thereby further reducing the risk of local disputes.

Last update: April 25, 2019

Social Stability

The National Workers Union and civil servants have staged strikes, although these are largely peaceful. The opposition Saint Lucia Labour Party (SLP) is likely to stage protests against government policy ahead of a general election scheduled for February 2020. In September 2018, the SLP attracted thousands of protestors to demand early general elections in the country's apparent largest ever protest; the main risk of such protests tends to be traffic disruption as violence is not usually promoted.

Last update: April 25, 2019