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Country Reports

Saint Vincent and the Grenadines Country Report

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Risk Level

Low
Moderate
Elevated
High
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Severe
Extreme

Overview

Executive Summary

The Unity Labour Party (ULP), headed by Prime Minister Ralph Gonsalves, holds eight of the 15 elected seats in the House of Assembly. The opposition New Democratic Party (NDP) has legally challenged the 2015 election results, seeking elections before those next scheduled in 2020. This is increasingly unlikely, however, as the lower court ruled in March 2019 dismissing the case (albeit allowing for subsequent appeals). In the case of government change, an NDP government would likely favour mainland China over Taiwan, a current ally of Gonsalves. NDP also has pledged to introduce a citizenship by investment scheme, which Gonsalves has rejected. IHS Markit’s GDP growth projection for 2019 is 2.4%, despite the risks posed by frequent regional natural disasters. The opening of the new Argyle International Airport in 2017 has boosted visitor rates and tourism-related services. St Vincent is a shareholder of regional airline Liat and is supporting its restructuring plans.The 2019 budget projects expenditure of USD394 million, a 7.4% increase over 2018. The government introduced tax increases on products including gasoline and diesel. Management of public finances has not improved significantly, however, with the country’s debt-to-GDP ratio increasing from 67.74% in 2014 to 72% in 2018, according to the World Bank. The removal of tax exemptions for companies incorporated in the country since January 2019 presents fiscal risks for international firms with a presence in the territory. However, the Financial Services Authority is seeking to limit the application of taxation to locally sourced income only and thereby insulate the offshore sector.
Last update: July 17, 2019

Operational Outlook

The government welcomes investment, and companies can easily set up operations. The investment promotion agency Invest SVG provides guidelines for investors. However, ongoing constraints include partially deficient infrastructure and the continued threat of natural hazards (mainly hurricanes). The recently opened Argyle International Airport is likely to boost inbound tourism. In February 2019, the IMF stressed the importance of advancing structural reforms to promote economic growth. Prime Minister Ralph Gonsalves opposes granting citizenship for attracting inward investment, an initiative implemented by other Caribbean countries.

Last update: April 27, 2019

Terrorism

There are no domestic terrorist groups with the intention or capability to undertake attacks against the population and/or commercial or government-owned property. The country is not considered a target for international terrorist organisations.

Last update: June 21, 2019

Crime

In common with other Caribbean countries, St Vincent and the Grenadines' crime rates have been escalating in recent years, mainly due to the growth of the drugs trade and the greater availability of firearms. The majority of victims are locals and there was a total of 34 homicides in 2018. Although crime levels do not pose a serious risk to foreign investment, visitors face theft risks outside hotel areas after nightfall.

Last update: April 30, 2019

War Risks

The likelihood of interstate conflict involving St. Vincent and the Grenadines is very low. St. Vincent disputes Venezuela’s claim to Bird Island, but relations between both countries are friendly under the current administrations. Prime Minister Gonsalves has ideological sympathy for the governments of Cuba and Venezuela and has refused to support the US by recognising Juan Guaidó as Venezuela’s interim president. The country works alongside US and European security forces, particularly in regional anti-drug trafficking efforts. In 2017, St. Vincent and the Grenadines signed maritime boundary agreements with Barbados and St. Lucia, reducing the risk of diplomatic disputes.

Last update: April 27, 2019

Social Stability

Protests and strikes in the country are generally peaceful and do not pose a threat to the stability of the government. Strikes generally affect the education sector, carried out by the St Vincent and the Grenadines Teachers’ Union (SVGTU), or transport sector. Protesters generally stage marches, hold placards, but rarely engage in violence.

Last update: April 27, 2019