Report No. 6500-CRG St. Christopher and Nevis Updating Economic Memorandum December 23, 1986 Latin America and the Caribbean Regional Office FOR OFFICIAL USE ONLY Document of the World Bank This document ha a restricted distributioh and may be used by recipients only in the perfomance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit: East Caribbean Dollar (EC$) Since its creation in 1965, the East Caribbean dollar was tied to the pound sterling at a rate of t1.00 - EC$4.8. In July 1976 the link with sterling .was broken asud the EC$ was pegged to the US dollar at the rate of US$ 1.00 - EC$2.70. Since Jul7 1976 EC$1.00 = US$0.37 or US$1.00 = EC$2.70 FOR OFFICUIL USE ONLY PREFACE AND ABSTRACT This report reviews recent economic developments and the main policy insues in St. Christopher and Nevis. (A more detailed analysis of the development issues is contained in St. Kitts and Nevis - Economic Memorandum," Report No. 5477-CRG, April 10, 1985). The economy of St. Christopher and Nevis performed weaker than expected in 1985, with GDP at factor cost growing by 1X. Adverse weather conditions brought about a drop in sugarcane production of over 10%, while manufacturing output declined also by 10X. The financial situation of the public sector deteriorated sharply in 1985, with the current deficit of the Federal Government increasing from 31 of GDP in 1984 to nearly 7% of GDP in 1985, and it is not likely to improve in 1986. In particular, the domestic debt of the Federal Government would double to nearly EC$120 million this year, and interest payments on both domestic and foreign debt would absorb about 25% of current revenues. Therefore, the Government should take drastic measures to adjust its finances, while continuing to rely on highly concessional capital flows for most of its investment program. The rehabilitation of the sugar industry and the development of the Southeast Peninsula for tourism are crucial for future economic growth. With these projects, and a sustained program of policy reforms and adjustment measures, a growth rate of up to 4% per year is feasible for the economy in the medium term. This document has a restricted distribution and may be used by fecipients only in the performance |of their offcial duties. Its contents may not otherwise be disclosed without World Bank authorization.| This report is based upon the mork of an IBRD mission to St. Christopher and Nevis in Augput 1986 led by Mr. D. Yuravlivker. The mission included Mr. 0. Byam (AIM), Mr. P. Ramlogan (CDB) and Ms. J. Curry (consultant). UNDP (Barbados) contributed to the preparation of the Technical Cooperation Program included ia this report. ST. CHRISTOPHER AND NEVIS TABLE OF CONTENTS Pa*. COUNTRY DATA SUMMARY AND MAIN ISSUES .................................. a * * . *-ii I. RECENT ECONOMIC DEVELOPMENTS .................... ... 1 II. PUBLIC SECTORFINANCE ISSUES ............................. 2 III. BALANCE OF PAYMENTS AND EXTERNAL DEBT .................... 4 tV. SECTOR POLICY ISSUES ................ ..................... 5 V. PUBLIC SECTOR INVESTMENT PROGRAM (PSIP}. 1986-88 ......... 9 VI. TECHNICAL COOPERATION PROGRAM ............................ 11 VII. HEDIUM-TERM POLICIES AND PROSPECTS ....................... 11 ANNEX Is DEVELOPMENT POLICY ISSUES ..... .... .... 14 ANNEX II: PUBLIC SECTOR INVESTMENT PROGRAM AND TECHNICAL ASSISTANCE PROGRAM................................. 17 ANNEX III MACROECONOMIC PROJECTIONS .......................... 25 STATISTICAL APPENDIX.. *................ ...... 29 MAP C UNTRY OATA - ST. CHRISTOPHER AND NEVIS AREA POPULATION 6JENSITY 29km2 42,759 (ed 1085) 183 p.r km2 Rat. of Qo.wth:-0.4X (from 1980-8S) 293 per km2 of Arabl LEand POPULATION CHARACTERISTICS 191115 HEALTH 1982 27rude Birth Me (por lPime 28 Jopuiation per Physician 1980 Crude Death Rate (per 1,OW) 10.2 Population pcr Hospital Bad 120 Infant Mortality (per 1,000 live births) 30.2 INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP (1971) % of Natlonal Income, Highost Quint)ile .. Ownd by Top 10% of .wners Lowest Quintile .. X Owned by Lowest 10% of Owners ACCESS TO PIPED WATER 1982 ACCESS TO ELECTRICITY (1980) % of Population - Urban 100.0 X of House,holc 67.6 - Rural 86.0 NUTRITION (1882) EDUCATION (1981 ailoris Intake a X of Requirments 144.0 Adult LitracyRto at 80 .0 Per Capita Protein Intake (gr./day) 99.0 Primary School Enrollment X 99.6 OW PER CAPITA IN 1986: US81620 GROSS DOMESTIC PRODUCT IN 1986 ANNUAL RATE OF GROWTH (X, constant prices) US$ Min. % 1980-84 198S GDP at Market Prices 11i7 100l 0 1.3 2.1 Gross Domestic Investment 8.6 12.4 -20.6 71.4 Cross Donestic Saving -3.2 -4.7 Current Account Balance (deficit) -11.7 -17.0 Export of Coods, NFS 42.1 81.3 4.7 7.9 Imports of Coods, NFS 63.0 91.7 8.3 4.4 OUTPUT 1986 Value Added us$ irn ~ Agriculture 8.9 12.0 Industry 8.1 14.1 Services 42.8 73.9 Total 57.6 1'O 0 GOVERNMENT FINANCE Consolidated Public Sector Central Government EC8 million) X of GD million) X-of GDP 1984 1985 1984 1986 1984 1'86 1984 1985 Current Receipts 65.1 69.8 38.1 32.0 42.2 40.8 24.0 22.0 Current Expenditures 56.6 e8.4 31.7 36.8 43.9 53.7 26.0 29.0 Current Surplus +23 -7.1 1.4 -3.8 -1.7 -12.9 -1.0 -7.0 Capital Expenditures 12.8 28.4 7.0 16.3 8.7 20.8 6.0 11.2 External Assittance (not) 18.4 7.8 7.8 4.2 12.9 6.8 7.4 3.1 not availasle not applicable - It - COUNTRY DATA - ST. CHRISTOPHER AND NEVIS MONEY. CREDIT AND PRICES 1981 1982 19088 1984 1985 LiabilItie. to Privet, Sector S/ ?.# 61.1 69.7 79.8 197.0 Bonk Credit to Public Sector 58.0 7.6 10.7 -8.4 -18.4 Sank Credit to Private Sector j 51.9 "0.2 69.$ 81.2 89.1 (Percentag of Index Members) Liabilltie* , Private Sector as X of GOP 84.4 88.4 48.4 45.4 57.7 Retail Price Index (Jonuory 1978 a 100) 162.8 161.4 16S.9 169.6 178.8 Annual Percentage Changes ins Retall Price Index 10.6 6.0 2.2 2.7 2.2 Bonk Credit ts Puablic Sector . 56.0 87.2 Bank Credit to Privtoe Sector 8.8 16.O 15.1 17.2 9.7 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1988-85& 1982 1988 1984 1985 pS II ;[Fr USSI MIA. X Export. of Goods, NFS 84.2 81.7 80.5 42.1 Sugar 10.0 46.1 IUporta of Goode, NFS 68.0 57.6 69.6 63.0 Manutacture. 7.2 38.2 Resource Gap -18.6 -25.9 -21.1 -20.9 All other commoditloe 4.6 20.7 Factor Payment (net) 0.7 1.0 8.1 -1.4 Total Merchandise Net Transfer* 8.6 7.6 9.5 10.8 Exports 21.7 100.0 Balance on Current Account -El -1771 -ltT -IT7 EXTERNAL DEBT. DECEMBER 81. 1985 USS MIn. Private capita 1.6. 18.9 4.6 6.2 1Public Debt, 1n’1. Guaranteed 19.8 Public Capital 8.0 8.5 7.2 5.5 Non-guaranteed Private Debt - Total Outstanding A Disburred is. Change In Governmnt 0.7 -0.1 -0.8 -.° Asseet DEBT SERVICE RATIO FOR 1985 /S Pubilc Debt, Incl. guaranteed El Non-guaranteed Privae Debt Total Outstanding & Dlubured . RATE OF EXCHANCE Since July 1976 US81.00 * ECS2.70 1.00 a USSW.37 */ Ratio of Debt Service to ExporOt of Goods and NWsifactor Servicoe. V Operations of the commercial banks. .. not availiablo .not applicable SUMMARY AND MAIN ISSUES I. The performance of the economy of St. Christopher and Nevis in 1985 was weaker than projected by the last Country Economic Memorandum (CEH)3 real GDP at factor cost grew by 12 instead of the projected 32, following a decline of nearly 22 in 1983 and an increase of 3.4X in 1984. This amounts to an average annual growth rate of less than 12 in 1983-85, compared to more than 52 in 1980-82. The main reasons for the lower growth in the last three years were bad weather, that affected both sugar and non- sugar agriculture, and a slowdown in construction, In the transport and telecommunications sectors and in government services. The very high variability in the growth rates of agriculture and manufacturing in the last six years reveal the problems of a small economy, which is heavily dependent on external trade and extremely vulnerable to adverse weather conditions. ii. The financial situation of the public sector deteriorated sharply in 1985, and it is not likely to improve in 1986. The current deficit of the Federal Government doubled from an average 3.3% of GDP in 1982-84 to 6.72 of GDP in 1985, while its overall deficit reached nearly 19% of GDP last year. This resulted mainly from a steep increase in current as well as capital expenditures by the Federal Government, reversing their downward trend, relative to GDP, of the previous four years. Current expenditure is expected to increase significantly in 1986 because of the 20-25Z wage increase granted to civil servants and because of higher interest payments. Revenues will not match this increase, and the current deficit of the Federal Government could further deteriorate to about 10% of GDP this year. This is an unsustainable situation, and the lack of a firmer fiscal policy stance could undermine the prospects for future economic growth. iii. The main issues of public finance are the narrow revenue base of the Federal Government and its huge domestic debt. Current revenues declined from nearly 332 of GDP in 1981 to 252 of GDP in 1985. Personal income taxes were abolished in 1980 and the sugar levy in 1982, with a larger share of the burden shifting to taxes on domestic production and consumption. To widen the tax base, the new budget introduces a social services levy of 42 on wages. However, this measure would add less than 102 to tax revenues. Therefore, it is essential to improve tax collection and to look for additional sources of revenue which, together with a tighter control of current expenditures, will help Government cut its deficits and prevent further increases in the public debt. The domestic debt of the Federal Government was over EC$60 million at the end of 1985, 252 of which resulted from the purchase of sugar lands. This debt nearly doubled to EC$120 million (652 of GDP) in 1986 when the Government assumed the debt of the National Agricultural Corporation (NACO), following the consolidation of the sugar industry. At the same time, its external debt rose from US$12 million in 1983 to US$20 million (about 302 of GDP) by the end of 1985. Consequently, the interest payments of the FedAral Government on both domestic and foreign debt will rise from EC$7.7 million in 1985 to about EC$12 million this year, absorbing roughly 252 of its current revenues. Thus, the capacity of the Government for contracting additional debt, unless at very concessional terms, has been drastically reduced. iv. The balance of payments deteriorated sharply in 1981-83, improved substantially in 1984 and did not chango much in 1985. The main issue of the external accounts in the past five years is the decline of sugar, and its substitution by tourism, as the main provider of foreign exchange. This suggests that the external position of the country in the medium term - As - depends heavily -n the growth of the tour4sm sector, a fact that has to be considered when tasignlng the general development strategy of the economy and the Public Sactor Investment Program (PSIP). v. The sirar industry is the backbone of the agricultural sector and, to some extent, of the economy. Further, sugar is likely to maintain its dominant role in the economy in the foreseeable future. The main problems of the industry are declining yields and increasing labor costs, which result in large operating losses. The reasons for the drop in yields are dry seasons, management problems and deteriorating harvesti.ng practices. Irrigation can greatly Improve yields, but its economic viability has yet to be determined. Since the quantities that can be sold at preferential prices in the US and UK are limited by quota restrictions, there is an urgent need to find ways of reducing fixed as well as operating costs in order to eliminato losses at the current production levels. In that respect, the recent consolidation of the industry under a single management is a step In the right direction. Moreover, there is little certainty that the current US quota will be maintained in coming years, which stresses the importance of promoting and expanding agricultural diversification. However, in order to proceed with the diversification effort, irrigation hAs to be expanded and the land tenure problem has to be solved. The Government has just made an additional payment to the former land owners, reaching the EC$14 million mark at which they are to transfer land titles. Once the Government secures these titles, it can lease parcels to farmers for the production of various crops and other agricultural products. vi. Tourism is the key sector for further econom±c growth in St. Christopher and Nevis. The sector expanded dramatically in the last two years, with revenues doubling from US$10 million in 1983 to over US$20 million in 1985. Hotel capacity grew by about 25X in the last year, and there are plans for further expansion. The Government provides substantial incentives for the construction of large hotels, including exemption from all duties on imports for projects of 250 rooms or more. However, there are several hotels in Frigate Bay which are currently at one-third or one- half of the size of their original plans. For rapid expansion, it could be more practical to support the completion of these hotels rather than attract brand new developments. The main priorities of the tourism sector are finalixing Its development plan to ensure coordinated growth and proceeding with the development of the Southeast Peninsula. The peninsula has the greatest tourism potential of the country, and its development is crucial for the future of the sector. Therefore, it is extremely important to begin construction of the penetration road, scheduled to start in early 1987, and proceed with complementary infrastructure projects, which will open up the peninsula for tourism development. viii. Exponditures on the PSIP nearly doubled in 1985 to almost EC$20 million, while the estimated PSIP for 1986-1988 amounts to EC$97 million. Expenditures are expected to increase steeply in 1987 and 1988 largely as a result of the implementation of the Frigate Bay Sewerage project and several infrastructure projects associated with the development of the Southest Peninsula. Relative to 1985, the 1986-88 PSIP reflects a shift towards the productive sectors and infraatructureo, which will jointly account for nearly 80S of the PSIP. However, the share of education will double to neotly 10X; O*raXl, the inter-sectQsz Us.ocation of resources in the PSIP si _ t'o be £r ate and oDs(i "With a development strategy that emphasizes tourism as the leading sector In future growth. - iii - lx. The Government expects to mobilize about 852 of the financina for the PUIP from external sources. In turn, 852 of the external financitig requirements have already been identified. Major projects for which financing is still required include water and electricity supply for the Southeast Peninsula, which could be Implemented simultaneously with the construction of the new road, and the rehabilitation of the Sugar Manufacturing Corporation. x. The medium-term economic outlook for St. Christopher and Nevis is uncertain. The difficult situation of the public sector, particularly its growing debt service burden, casts doubt on its ability to implement the PSIP and overshadows the prospects of future economic growth. As mentioned above, tourism would be the leading sector in that growth, but its expansion depends heavily on the development of the Southeast Peninsula. In agriculture, sugar will maintain its dominant role, although diversification into other crops, through a concentrated effort by the Government, could become increasingly Important. Assuming that a sustained program of policy reforms and adjustment measures is undertaken and that the major development projects are actually implemented, GDP is projected to grow at a rate of 2.52 in 1986, 3.52 in 1987 and 42 per year in 1988-91. The higher growth rates in 1987-88 would result from the substantial increase in the PSIP, while the development of the poninsula itself, with an Increasing share of private investment, would gather steam in 1989-91. xi. Exports of goods and nonfactor services are projected to increase, largely because of higher tourism receipts. However, since the tourism industry requires a large import component, imports would rise accordingly, and the current account deficit of the balance of payments would stay roughly constant, as a fraction of GDP, through 1990. External grants are projected to increase through 1988, following the substantial incresse in the PSIP, and to decrease thereafter. External debt as a percentage of GDP vould thon increase gradually, from 292 in 1985 to an average of about 322 in 1990-95, and debt service payments would absorb on average 4% of total exports in the early 1990s. It is important to point out, though, that the export projections are highly dependent on tourism revenues, which could turn out to be lower than expected. xii. For the public sector, aidentified finance for 1986 stood in mid- year at EC$28 million due to particularly high amortization payments and to the larg public sector deficit. Consequently, the public sector's overdraft at the National Bank is likely to increase sharply this year. The projections of public sector savings assume that the Government will have to focus on the worsening situation of its finances and take drastic moasure to correct these imbalances, including an adjustment program to be Implemented next year. With such a program in place, unidentified financing of the public sector, mostly for PSIP purposes, will average about EC$35 million per year in 1990-95. If no adjustment takes place, public soctor savlngs will remain negative at roughly the 1987 level and the finance requizements would tend to be higher. Howevor, the size of future deficits wlll be bounded by the volume of external capital flows and by the capacity of the Government to continue borrowing from the Social Security Scheme and other domestic sources. With these constraints, the Government will have to adjust in any case. Therefore, it is highly preferable to plan this adjustment as soon as possible and prevent a finncial crisis in the public sector that would undermine the prospects for future economic growth. 1. RECENT ICONOMIC DEVELOPHENTS 1. The performance of the economy of St. Christopher and Nevis in 1985 was weaker than projected by the lat Country Economic Memorandum (CEM): real GDP at factor cost grow by 1% Instead of the projected 32. A drought brought about a drop in sugarcane production of more than 102, while difficulties In CARICOM trado that affected mainly the garments and shoo industries resulted in a marked decline of manufacturing output. These negative offects were partially offset by substantial growth in construction, tourism, and the distributive trades (Table 1). The low GDP growth rate in 1985 follows a decline of nearly 22 in 1983 and an increase of 3.42 in 1984. This amounts to an average annual growth rate of loes than 12 in 1983-85 compared to more than 52 in 1980-82. The main reasons for the lower growth in the last three years were bad weather, that affected both sugar and non-sugar agriculture, and a slowdown in construction, in the transport aasd telecommunicztions sectors and in government services. The very high variability in the growth rates of agriculture and manufacturing in the past six years reveal the problems of a small economy, which is heavily dependent on external trace and extremely vulnerable to adverse weather conditions. Table l SELECTED ECONOMIC INDICATORS (Annual percentage changes) Prel. 1980 1981 1982 1983 1984 1985 Real GDP at Factor Cost 4.0 5.0 6.3 -1.9 3.4 1.0 Of whicht Agriculture -10.12 5.2 0.0 -18.4 4.3 -2.5 Hotels & Restaurants -7.1 11.5 -13 7 0.0 16.0 13.8 Wholesale & Retail Trade 13.3 -2.1 10.9 7.8 11.8 5.7 Manufacturing 2.3 -10.3 8.2 -11.3 12.0 -9.2 Construction 26.2 3.9 18.8 9.5 -16.3 12.6 Government Services 5.4 -5.2 7.4 0.0 0.6 -6.8 GDP Deflator 13.3 11.1 6.5 1.1 5.4 3.4 Exports of Goods and NFS 35.3 20.1 -14.6 -4.2 21.4 9.3 Imports of Goods and NFS 38.6 18.1 -2.0 8.7 3.5 5.7 Sources Statistical Appendix Tables 2.1, 2.2, 2.3. 2. The Consumer Price Index (CPI) rose by an estimated 22 in 1985, slightly less than in the previous two yeors. Given the openness of the economy, the low increase in prices reflects the slowdown in world inflation as well as the appreciation of the US dollar, to which the EC dollar is pegged. At the same time, there are price controls on about 50 goods, mainly imports, with most of their prices fixed at 10-15X over landed cost. The Government is also the sole importer of soveral basic foods, seeking to ensure their low and stable prices to protect the purchasing powor of wages. However, real wages in the agricultural sector have declined slightly since 1980, while they have increased substantially in manufacturing. Wages of civil servants, which have not been increased since 1981, were raised by 20-252 in 1986, roughly compensating for the CPI Increase of the last 5 years. - 2 - II. PUB&BIC SECTOR FINANCE ISSUES 3. The financial situation of the public sector deteriorated sharply in 1985. The current deficit of the Federal Government doubled from an average 3.3X of GDP in 1982-84 to 6.72 of GDP in 1985, while its overall deficit reached nearly 192 of GDP last year (Table 2). This resulted mainly from a steep increase in current as well as capital expenditures by the Federal Government, reversing their downward trend, relative to GDP, of the previous four years. Interest payments doubled to nearly EC$8 million in 1985 (172 of current revenues), while fixed investments increasad by 602 to nearly EC$14 million. Total capital expenditures increased even wore following the payment of over EC$8 million, obtained from an external commercial bank loan, to the former sugar estate owners for the purchae of land. Current expenditure is expected to incroase further in 1986 because of the wage rise granted to civil servants and because of higher interest payments. Table 2: PUBLIC SECTOR PERFORMANCE (Percent of GDP) Prel 1981 1982 1983 1984 1985 Consolidated Federal Government Current Revenue 32.6 28.9 27.6 26.7 25.0 Current Expenditure 33.8 32.3 30.9 29.8 31.8 Current Balance -1.2 -3.4 -3.3 -3.1 -6.7 Central Government -1.2 -3.4 -2.7 -1.0 -6.9 Nevis Administration n.a. a/ n.a. -0.6 -2.1 0.2 Social Security - Current Balance 5.1 4.4 5.5 5.2 5.4 Public Enterprises - Current Balance -9.0 3.3 -6.7 -0.7 -2.5 Current Balance Public Sector -5.1 4.3 -4.5 1.4 -3.8 Capital Revenue 0.9 3.2 3.1 2.1 1.2 Capital Expenditure 9.4 8.8 8.4 7.0 15.3 o.w. Purchase of Land - - 1.2 1.0 5.1 Capital Balance -8.5 -5.6 -5.3 -4.9 -14.1 Overall Balance Public Sector -13.6 -1.3 -9.8 -3.5 -17.9 o.w. Federal Government -8.4 -9.9 -8.9 -8.1 -18.7 Financing 13.6 1.3 9.8 3.5 17.9 Exteprnal Grants 2.9 3.9 4.5 2.8 4.6 External Borrowing (Aet) 0.1 -0.6 0.1 5.0 -0.4 Domestic Borrowing 10.6 -2.0 5.2 -4.2 13.7 ECCB (net) 0.0 1.6 0.3 4.3 1.1 Commercial Banks 10.3 -3.2 4.1 -9.3 8.3 o.w. National Bank 5.0 -5.4 2.1 -6.8 8.7 Other 0.3 -0.4 0.8 0.7 4.3 Memo: GDP at market prices (EC$ mil.) 151.0 159.3 160.7 175.6 185.4 a/ Not available. Source: Statistical Appendix Table 5.6. - 3 - 4. The fiscal situation is not likely to improve In 1986. The ircrease in government revenues will not match the increase in expenditures, and the current deficit of the Federal Government could further deteriorate to about 102 of GDP this year. This is an unsustainable situation, and the lack of a firmer fiscal policy stance could undermine the prospects for future economic growth. 5. The two main issues of public fineance in St. Christopher and Nevis are the narrow revenue base of the Government and its large domestic debt. The current revenues of the Federal Government declined from nearly 33Z or GDP in 1981 to 25% of GDP In 1985. Personal income taxes were abolished in 1980, while the Fiscal Incentives Act granted benefits to approved enterprises in the form of tax holidays, export allowances and exemptions from import duties. The sugar 'evy, which contributed 20% of all current revenues in 1981, was abolished In 1982 when the situation of the sugar industry deteriorated, and a larger share of the burden shifted to taxes on domestic production and consumption. To widen the tax base, the 1986 budget introduced a social services levy of 41 on wages, to be paid half by the employer and half by the employee, which was estimated to produce additional revenues of EC$4 million (about 101 of tax revenues). However, since the Federal Government does not pay the levy, revenues will probably reach only about EC$2.5 million. Therefore, it is extremely important to improve revenue collection and to look for additional sources of government revenue. For example, a higher tax rate on land transactions in the Southeast Peninsula has been just introduced. In addition to that, a windfall capital gains tax on the sale of land in the peninsula, where prices have increased twenty fold in the last six years, could greatly help the Government in its difficult financial situation. This effort on the revenue side should be complemented by a tighter control of current expenditures, which could be achieved by a reorganization of the Federal Government to streamline operations and increase itq efficiency. Implementing these measures will not be easy, but it would show the Government's comnitment to a comprehensive adjustment program. 6. In 1986, the domestic debt of the Federal Government would amount to roughly EC$120 million (twice the amount registered in 1985), which represents nearly three times its current revenue or about 651 of GDP. This debt comprises the debt of the National Agricultural Corporation - NACO- (EC$53 million), which was assumed by the Government in February 1986, overdraft at the National Bank (EC$28 million), debentures (EC$10 million), loans from Social Security (EC$5 million) and from commercial banks (EC$4 million), debt to the former land owners (EC$8 million), and outstanding Treasury B'111 (EC$12 million). NACO accumulated its debt, which was In fact a huge overdraft at the National Bank, during several years of operating deficits. The Government now intends to get a direct loan from Social Security to repay NACO's debt to the National Bank, with SSMC contributing part of the interest payments, and it plans to pay back Social Security with proceeds from the sale of state lands. However, it is not clear yet what lands will be sold and whether the proceeds from the sale will suffice. In mid-1986, the Government ssumed also the EC$2.2 million commercial debt of the Fort Thomas Hotel, where it had majority shareholding. The doubling of the outstanding domestic debt of the Federal Government will sharply increase its debt service obligations. In particular, interest payments on both domestic and foreign debt will rise from EC$7.7 mill2.-n in 1985 to about EC$12 million this year, absorbing roughly 251 of the current revenues of the Federal Government. 7. Electricity and water are provided by departments of Government in St. Christopher and Nevis. Consequently, their expenditure provisions are part of the general line Item estimates, bearing no relationship to their revenue collections, which go to the general pool of fiscal revenues. Moreover, these departments are given specific allocations for each item, and have little flexibility over the reallocation of this expenditure. Efficiency could improve substantially if separate and independent units for the provision of these two services were established, as was suggestcd several times in the past.1 The authorities were reluctant to follow these suggestions, maintaining that they have a direct responsibility to provide these basic services. Alternatively, the Government could try to improve efficiency in the operation c.: the utilities by strengthening management, giving it more freedom of action, and by improving accounting and collection practices. However, if these efficiency objectives are not achieved, it is recommended th..t the Government reconsider the establishment of different, more independent institutional structures for the ptovision of these services. In fact, the Nevis Administration is now seriously considering a movement In that direction. A similar situation existed in telephones until the Government sold the sy,stem to a private company, creating the St. Kitts and Nevis Telecommunications Company (SKANTEL). The Government has 202 of the equity and appoints three of the eight Board members. The new company will invest EC$40 million in a modern telephone system over the next 5 years, with its first stage expected to be ready by the end of 1987. The Government now pays for telephone service, but it will get in turn 20% of dividends plus 2% of net revenues plus the corresponding corporation tax. Moreover, the staff of the new company has increased substantially since its establishment, and rates have increased only moderately. III. BALANCE OF PAYMENTS AND EXTERNAL DEBT 8. The balance of payments deteriorated sharply in 1981-83, improved substantially 4n 1984 and did not change much in 1985. The deterioration of the early 1980s resulted mainly from the decline in sugar exports because of a 252 drop in prices in 1982 and a 20% drop in volume in 1983. Imports increased somewhat during that period, and the deficit in the current account of the balance of payments tripled to US$17 million - nearly 30% of GDP - in 1983 (Table 3). The current account deficit declined by one-third in 1984, as tourism revenues increased by 50%. The growth in the tourism sector continued in 1985, offsetting the negative impact of another steep decline in sugar exports. 9. The main issue of the external accounts in the past five years is the decline of sugar, and its substitution by tourism, as the main provider of foreign exchange. The share of sugar in total exports of goods and nonfactor services dropped from neirly 40% in 1981 to about 20% in 1985, while the share of tourism doubled in the same period to nearly 50%. This suggests that the external position of the country in the medium term depends heavily on the growth of the tourism sector, a fact that has to be considered when designing the general development strategy of the economy and the Public Sector Investment Program (PSIP). 1/ Under the existing arrangement, the Government does not have to pay for its own consumption of water nor electricity (for the latter, the bill would have been about EC$750,000 last year). Table 3: BALANCE OF PAYMENTS SUMMARY (US$ Millions) 1981 1982 1983 1984 1985 Exports of Goods & NFS 38.8 34.2 31.7 38.5 42.1 of which: Sugar 14.7 12.2 10.0 11.3 8.8 Tourism 9.9 9.8 10.4 15.4 20.3 Imports of Goods & NFS 54.6 53.0 51.6 59.6 63.0 Resource Balance -15.8 -19.9 -25.9 -21.1 -20.9 Factor Services and Transfers 9.6 9.5 8.6 9.6 9.2 Current Account Balance -6.2 -6.4 -17.3 -11.5 -11.7 Official Grants 1.6 2.3 2.7 1.8 3.1 Public Borrowing (net) 0.9 0.7 0.8 5.4 2.4 Commercial Banks 3.5 -1.2 1.2 -4.0 -0.2 Private Investment and Other a/ 5.0 4.8 13.9 10.1 8.3 Overall Balance 4.8 -3.8 1.2 1.8 1.9 a/ Includes errors and omissions. Source: Statistical Appendix, Table 3.1. 10. The external debt was fairly constant between 1981 and 1983, averaging 20% of GDP du.ing that period, but it rose significantly in the following two years, reaching 30% of GDP by the end of 1985. Project- related borrowing plus the US$3 million commercial bank loan obtained to pay for the sugar lands accounted for most of the increase. Approximately 802 of the debt at the end of 1985 was on concessionary terms, carrying an interest rate of 5% or less, while the average maturity period was 13 years. Accordingly, after rising slowly between 1981 and 1983, debt service payments increased substantially in 1984 and 1985. The 1984 increase was due mainly to a more-than-doubling of amortization payments, while the 1985 increase was due to a doubling of interest payments resulting from the rise in interest rates. Despite these increases, external debt service payments remained relatively low, at less than 4% of total exports or 9% of current revenue in 1985. One cannot, however, consider external debt servicing independently of domestic debt servicing, and the discussion in para. 6 suggests that the capacity of the Government for contracting additional external debt, unless at very concessional terms, has been drastically reduced. IV. SECTOR POLICY ISSUES 11. Agriculture. Agricultural production fell by nearly 20% in real terms in 1983, mainly as a result of a decline in sugarcane production, and remained fairly constant in 1984 and 1985. Agriculture in St. Christopher and Nevis is dominated by sugar, which occupies about 75% of all arable land and contributes 50% of the total value added of the sector. The other 50% is comprised by crops, livestock and fishing. The main issues in the agricultural sector are: a) the situation and prospects of the sugar - 6 - industry, including resolution of the land tenure problem; b) irrlgation; and c) the prospects for diversification of production. 12. The sutar industrv is the backbone of the agricultural sector and, to some extent, of the economy.. Moreover, although there is potential for a g.owing diversification in the sector, this can be only a gradual process, and therefore sugar is likely to maintain its dominant role in the economy in the foreseeable future. In February 1986, the Government undertook a major step to reorganize the industry by merging NACO, which managed the sugar field operations, Into the St. Kitts Sugar Manufacturing Corporation (SSMC), which processed the sugarcane and marketed the sugar. This was a step in the right direction, putting the complete cycle from planting to processing and marketing under a single management to streamlire the operation of the industry and improve its efficiency. 13. Sugarcane output has been declining almost continuously after peaking in 1979. Since the harvested area remained fairly constant (at about 10,500 acres) during these years, this decline reflects a drop in the yield per acre from an average of 34 tons in 1980-82 to about 26 tons in 1985-86. The reasons for this drop in yields were dry seasons, management problems and deteriorating harvesting practices. Irrigation can greatly improve yields: the 100 acres that are currently irrigated produce 40-45 tons of cane per acre. The Government is considering expanding the irrigated areas initially to 400 acres and then to 800 acres. However, the economic viability of these projects would have to be evaluated taking into account their cost, the cost of water and the expected price of sugar. Management problems can be add-essed more effectively following the merger of all operations into SSMC, although the merger itself will not sutomati ally solve these problems and a thorough review of all levels of operation is still required. Addressing the management issue at the field level will also contribute to the improvement of harvesting practices. These are lacking in the excessive cane left in the fields and in the extension of the harvesting period because of high worker absenteeism. At the same time, the wage bill of the industry increased by about 802 from 1979 to 1985, and it was the main factor behind the steep increase in production costs. These higher costs could be addressed through the introduction of mechanization to harvesting and through a wage-bonus system which would tie wage increases to productivity. For example, wage bonusses could be paid weekly or monthly upon achieving targets defined in terms of area-h.4rvested and production levels. Well designed wage schemes could be crucial in cutting labor costs and providing incentives to reverse the downward trend of sugarcane production. 14. A key issue of the sugar industry is that, while its break-even point is a production of roughly 32,000 tons per year, the country can sell only about 29,000 tons at the current protected price of about USJ18/lb. This is because of the current quota allotments - 15,000 long tons to the UK and 11,160 long tons to the US. Adding exports to CARICOM tons and domestic consumption brings up the total that can be sold at preferential prices to nearly 29,000 tons. Since the 12-month quota period is different in the UK and the US, SSMC can spread out the marketing of one year's crop over two quota years. However, it is clear that, under the existing conditions, over a period of five or ten years the average quantity of sugar sold will be lower than the break-even point by about 102 and consequently the industry will continue to generate losses. Therefore, there is an urgent need to find ways of reducing fixed as well as operating costs in order to eliminate losses at the current production levels. For example, reducing the harvest period could eliminate the periodic shutoffs at the factory, which amounted to a total of 800 hours in the 1986 season; the factory itself could modernize its equipment, a process that will actually start with a UK-financed project in 1988; and improvement in working practices at all levels of production can contribute to improving the industry's finances. Moreover, there is little certainty that the current US quota will be maintained in coming years, which stresses the importance of promoting and expanding the diversification efforts in agriculture. 15. Irrigation is the key for the diversification of agricultural production. Results from ongoing research indicate that there is potential for a substantial expansion of crops, fruits and vegetables, replacing about one-third of food imports over the next four to five years. However, this expansion depends heavily on a plan for the irrigation of an additional 500 acres at a cost of about US$4 million, for which funding has yet not been found. An acute water problem exists in Nevis; to deal with the problem, a project for the development of water sources in the island is nearly completed, tnd the construction of three new reservoirs that will increase capacity by two-thirds has recently started. To complement these projects, the Nevis Administration intends now to improve the water distribution system. 16. The land tenure problem has to be solved in order to proceed with the diversification effort. This implies carrying out the agreement reached between the Government and most sugar landowners in 1984, whereby the Government would buy their land for EC$22 million. In August 1986, the Government borrowed another US$1.5 million abroad and made an additional payment of EC$4.6 million to the land owners, reaching the EC$14 million mark at which they are to transfer the land titles. Once the Government secures these titles, it can lease parcels to farmers to grow various crops or produce other agricultural products. The St. Kitts Development Bank would accept long leases as collateral for loans, and this could open up new possibilities for the diversification of agriculture. 17. The tourism sector expanded dramatically in the last two years, with the industry's revenues doubling from US$10 million in 1983 to over US$20 million in 1985. Cruise ship visitors tripled in 1982-84, while the number of stopover visitors increased by 202 per year in 1984 and 1985. These are impressive achievements, which resulted from concentrated efforts by both thet Government and the private sector. The main reasons for this growth were increased marketing and promotion, particularly the opening of a tourism office in Toronto last year, and the Jack Tar operation, which arranges for all-included package deals to the island. About 150 hotel rooms were added in the last 12 months, bringing the total number of available rooms up to nearly 800, about 600 in St. Kitts and 200 in Nevis. There are plans for further expansion of the hotel capacity, including a new 250-room hotel in Major Bay, a 200-room hotel on Pinneys Beach in Nevis and several smaller projects. The Government provides substantial incentives for the construction of large hotels, including exemption from all duties on imports for projects of 250 rooms or more. However, there are several hotels in Frigate Bay which are currently at one-third or one- half of the size of their original plans. For quick expansion, it could be -8- more practical to support the completion of thase hotels rather than attract brand new developments. 18. The main priorities of the tourism sector are finalizing its development plan and proceeding with the development of the Southeast Peninsula. The development plan is needed to evaluate the potential and constraints of the industry, define its targets and ensure coordinated gr3wth. In particular, the plan would direct marketing and promotion efforts to desigtated target markets, and will also coordinate the expansion of hotel capacity with efforts to increase the number of carrier flights to the country. The Southeast Peninsula has the greatest tourism potential of the country and its development is crucial for future economic growth. Construction of the penetration road that will open up the peninsula for development is scheduled to start in early 1987, after being delayed several times in the past. The Government has just signed an agreement to finance the road mostly with a hi;hly concessional loan, but financing for other infrastructure projects in the peninsula has not been finalized yet. 19. The manufacturing sector in St. Christopher and Nevis did not expand in 1985-86. In the last 12 months, three new plants opened up but three closed down, and the net effect of this turnover might have been slightly negative. Most of the manufacturing is export oriented, particularly garments and electronics. The main issues in this sector are the marketing difficulties that the garments industry encounters within CARICOM and in the US, and, in the electronics industry, keeping up with the rapidly changing technology. Factory space is not a constraintt about 6,000 square feet are now empty, and another 20,000 square feet will be finished by the end of the year. As in other sectors in the economy, manufacturing also needs a clear strategy to induce domestic and attract foreign investment. The new Foundation for National Development is a small scale operation for technical and credit assistance to small domestic firms, but it is a step in the right direction. The Government is now considering the establishment of an industrial development unit, which could be very helpful in screening potential foreign investors and providing them with a one-stop facility for information and help. 20. The Social Sector. The 1986 budget maintains the current expenditure allocation for the Ministry of Education, Health and Community Affairs at nearly 30Z of total current expenditure, a similar share as in the last three years. In education, the emphasis is shifting from the pre- primary level to technical and vocational education and to the post- secondary level. Two new multi-purpose workshops will be established this year as part of the education project for the OECS countries. To cut costs, a new College of Further Education, affiliated with the University of the West Indies, will allow students to finish their first and eventually their second year before going to the campus countries to complete their degrees. At the primary and secondary levels, the emphasis will continue to be the training of teachers. In the area of health, the emphasis is on primary care, bringing the service to the people by means of very accessible health centers. There are 11 health centers in St. Christopher and 6 in Nevis, about three miles apart, and one of the priorities of the sector is to upgrade these centers over a period of five years. Another priority is to renovate the General Hospital in Basseterre and expand its capacity from 164 to 220 beds. V. PUBLIC SECTOR INVESTMENT PROG1AM (PSIP), 1986-88 21. Expenditures on the PSIP nearly doubled in 1985 to almost EC$20 million, because of the implementation of housing projects and the rapid disbursements of lines of credit onlent to small farmers and businessmen. Expenditure on social services increased from EC$2.1 million in 1984 to EC$6.9 million in 1985 or from 20X to 351 of total capital expenditures. Construction of low income houses, financed by the National Bank w.ftth funds borrowed from the Government of Taiwan, began during the year. Disbursements from CDB's line of credit to the St. Kitts Development Bank grew threefold in 1985 in order to meet the demands of the local private sector for investment funds. Local sources financed 301 of capital spending in 1985, up from 152 in 1984. This increase was due mainly to the aforementioned onlending of Taiwanese project funds by the National Commercial Bank. The share of agriculture in total capital expenditures declined from 21% in 1984 to 91 in 1985, after the first phase of the UK- financed tick eradication program was completed. The energy sector's share of capital expenditures nearly doubled to 7% with the purchase on suppliers' credit of a diesel-generating set in Nevis. The UK-financed power project, which entailed the commissioning of a 850 kw diesel- generating set in 1984, was hampered by equipment failure in 1985 and consequently additional expenses were incurred. Projects in the transportation sector performed well during the year. The construction of CDB-financed feeder roads was completed in 1985, and the implementation of the CIDA-financed shed and maintenance garage for the deepwater port progressed smoothly and was completed in early 1986. 22. The estimated PSIP for 1986-1988 amounts to EC$97 millions EC$21.6 million in 1986, EC$34.7 million in 1987 and EC$40.6 million in 1988.1 These estimates include projects for which financing has been secured and projects which have been developod but require financing (financing requirements are discussed below and in Section VII). Expenditures are expected to increase steeply in 1987 and 1988, largely as a result of the implementation of the Frigate Bay Sewerage project and several infrastructure projects associated with the development of the Southeast Peninsula. Failure to implement these projects in a timely manner will result in significantly lower investment growth in 1987 and a decline in the level of the public investment in 1988, since there will not be enough time to prepare substitute projects. in either case, there is need for a project monitoring system to ensure timely development and implementation of projects in the PSIP. 23. In terms of priorities, the 1986-88 PSIP reflects, relative to 1985, a shift towards the productive sectors and infrastructure, which will jointly account for nearly 80% of the PSIP; Water and sewerage projects, mostly in the Frigate Bay tourism area, will absorb 22Z of all capital expenditures between 1986 and 1988, while the transportation sector will account for 17% (Table 4). The Goverrnent intends to promote private investment by focussing on improvements and expansion of the country's infrastructure, which is also essential for the development of tourism. L/ The Government waa working on its Five Year Development Plan at the time of the mission's visit. Consequently, the PSIP discussed herein should be viewed as preliminary. - 10 - Expenditures in the social sectors will decrease mainly because of the completion of the housing project. However, the share of education in the PSIP will double to nearly 10X in 1986-88. Overall, the inter-sectoral allocation of resources in the PSIP seems to be appropriate and consistent with a development strategy that emphasizes tourism as the leading sector in future growth. Table 4t PUBLIC SECTOR INVESTMENT PROGRAM AND FINANCE 1985 1986-88 EC$'000 X EC$'000 Z Economic Sectors 12,674 64.6 75,643 78.1 Agriculture 1,705 8.7 10,454 10.8 Energy 1,307 6.7 11,153 11.5 Manufacturing 605 3.1 6,391 6.6 Transportation 3,677 18.7 16,551 17.1 Water and Sewerage 2,000 10.2 21,667 22.4 Other Economic Sectors 3,380 17.2 9,428 9.7 Social Sectors 6,950 35.4 21,233 21.9 Education 861 4.4 9,159 9.5 Health & Community Services 1,191 6.1 1,100 1.1 Housing 3,778 19.3 2,781 2.9 Public Safety 523 2.7 693 0.7 Other 598 3.0 7,500 7.7 TOTAL 19,624 100.0 96.876 100.0 Financina External Grants 8,200 41.8 50,800 52.4 External Loans 5,450 27.8 21,175 21.9 Local 5,975 30.4 14,550 15.0 Unknown 0 0 10,351 10.7 Sourcess Annex II. 24. The Government expects to mobilize about 85% of the financIng for the PSIP from external sources. In turn, 85% of the external financing requirements have already been identified. Nearly 901 of the projects by the Federal Government will be financed with external grants, while for the rest of the public sector all financing comes from external loans. Major projects for which financing is required include water and electricity supply for the Southeast Peninsula, which could be implemented simultaneously with the construction of the new road, and the rehabilitation of the Sugar Manufacturing Corporation. Domestic financing requi.-sments amouit to 15% of the program. Given the reductions in public sector savings in 1985 and 1986, some reduction in the local financing of capital etoenditures is projected for 1986 and 1987. However, the construction of the Frigate Bay sewerage pipeline and treatment plant the following year, and their local counterpart requirement, is expected to nearly double the local financing of capital expenditures in 1988. - 11 - VI. TECHNICAL COOPERATION PROGRAM 25. The Government, with the assistance of the United Nations Development Program (UNDP), has prepared a technical cooperation program (TCP) for the period 1987 through 1991. The program consists of ongoing technical assistance projects, at a total cost of over EC$16 million, and a list of proposed projects with an estimated cost of about EC$15 million. The program reflects the PSIP's sectoral priorities, concentrating on the agriculture and water sectors as well as on education. In agriculture, the TCP supports the development of a comprehensive plan for the sector and the expansion of forestry. The largest project of the program is the Water Resource Management and Soil Conservation project, at a cost of EC$5.5 million - about one third of the total ongoing TCP. Projects in education total EC$4.6 million, 301 of which are directed to student loans. The proposed TCP maintains the emphasis on agriculture and education, but does not include additional projects in the water sector. In agriculture, the focus is on research and development projects. The TCP is useful in providing a survey of the Government's manpower requirements with respect to both the implementation of major projects in the PSIP and to the ongoing provision of essential services. The Government needs to closely coordinate the TCP and ensure that it continues to reflect its development priorities. VII. MEDIUM-TERM POLICIES AND PROSPECTS 26. The medium-term economic outlook for St. Christopher and Nevis is uncertain. The difficult situation of the public sector, particularly its growing debt service burden, casts doubt on its ability to implement the PSIP and overshadows the prospects for future economic growth. Tourism would be the leading sector in that growth, but its expansion depends heavily on the development of the Southeast Peninsula. In agriculture, sugar will maintain its dominant role in the foreseeable future, although diversification into other crops, through a concentrated effort by the Government, could become increasingly important. Therefore, production in this sector depends largely on improvements in the sugar industry and on the success of the diversification efforts, as well as on the weather factor. Assuming that a sustained program of policy reforms and adjustment measures is undertaken and that the major development projects are actually implemented, the mission projects that, following a growth of 2.5% in 1986, GDP would grow at a rate of 3.5% in 1987 and 42 per year in 1988-91 (Table 5). The higher growth rates in 1987-88 would result from the substantial increase in the PSIP during the construction of the Frigate Bay sewage system and the Southeast Peninsula road, while the development of the peninsula itself, with an increasing share of private investment, wvould gather steam thereafter. 27. Exports of goods and non-factor services are projected to increase largely because of higher tourism receipts. However, since the tourism industry requires a large import component, imports would rise accordingly, and the current account deficit of the balance of payments would stay roughly constant, as a fra:tion of GDP, through 1990. This deficit would be financed by a combination of grants, foreign investment and external borrowing. External grants are assumed to increase through 1988, following - 12 - Table 5: SELECTED MACROECONOMIC PROJECTIONS Actual Prelim. 1984 1985 1986 .987 1988 1989 1990-95 GDP Growth Rate 3.8 2.1 2.5 3.5 4.0 4.0 3.4 2 of GDP Investment 7.5 12.0 12.8 18.3 20.5 20.4 20.0 Public 6.0 10.4 10.8 15.0 17.1 14.6 12.1 Private 1.5 1.6 2.0 2.3 3.4 5.8 7.9 Gross Domestic Savings -25.1 -19.5 -9.2 -8.9 -7.1 -6.3 -4.1 Public Sector Savings -3.1 -7.1 -9.7 -9.0 -5.1 -3.1 0.0 Exports GNFS 59.2 61.3 72.0 71.1 71.7 72.5 76.7 Imports GNFS 91.6 91.7 93.9 98.2 99.2 99.1 100.7 Resource Balance -32.4 -30.4 -21.9 -27.1 -27.5 -26.6 -24.0 Current Account BOP -17.7 -17.0 -12.4 -18.1 -18.3 -17.5 -15.1 External Grants 2.8 4.5 5.7 8.2 9.0 5.2 2.4 External Debt 26.3 28.8 28.1 29.5 29.4 30.8 32.3 Debt Service 1.7 2.3 6.2 1.7 3.6 2.3 3.1 Debt Service/Exports GNFS 2.9 3.7 8.6 2.4 5.0 3.2 4.1 Debt Service/Curr. Rev. a/ 6.5 9.1 24.8 6.9 14.0 9.0 13.4 a/ Refers to external debt service and to the current revenues of the Federal Goverment. Sourcess Mission Estimates (Annex III). the substantial increase of the PSIP in 1987 and 1988, and to decrease thereafter. Foreign investment is projected to increase in 1989-91, as the development of the Southeast Peninsula picks up. The remaining gap would have to be closed with new borrowing, and it is assumed that its terms would be an interest rate of 5X and a repayment period of 12 years, with 4 years grace. As a result of this new borrowing, external debt as a percentage of GDP would increase gradually, from 292 in 1985 to an average of about 322 in 1990-95, and debt service payments will absorb on average 42 of total exports in the early 1990s. It is important to point out, though, that the export projections are highly dependent on tourism revenues, the single most important source of foreign exchange. If merchandise exports and tourism revenues turn out to be lower than expected, the ratio of debt service to exports will be higher. As Table 5 shows, the debt service ratio is also very sensitive to repayments of principal: it increases sharply in 1986, when the Government pays back the US$3 million loan contracted in 1984 to pay for suga- lands, and it will jump again in 1988, when it repays the US$1.5 million loan contracted this year for the same purpose. 28. For the public sector, unidentified finance for 1986 stood in mid- year at EC$28 million (Table 6). Since most of the PSIP is covered by alroady identified grants and loans, this large financing gap is a result of particularly high debt service payments in 1986 and of the large public sector deficit. Consequently, the public sector's overdraft at the National Bank is likely to incroase sharply this year. The projections of public sector savings assume that the Government will have to focus on the - 13 - worsening situation of its finances and take drastic measures to correct these imbalances, including an adjustment program to be implemented in 1987. The short te:. object of such a program would be to slash the current deficit in order to check the growth of domestic debt. Therefore, it will have to include tight controls on current expenditure as well as measures to improve revenue collection. Moreover, new sources of revenue will have to be considered, as discussed in para. S. In the medium term, the program would aim at producing positive public ssvings to finance part of the PSIP. With such a program in place, unidentified financing of the public sector, mostly for PSIP purposes, would average about EC$35 million per year in 1990-95. If no adjustment takes place, public sector savings will remain negative at roughly the 1987 level and the finance requirements would tend to be higher. However, the size of future deficits will be bounded by the volume of external capital flows as well as by the capacity of the Government to continue borrowing from the Social Security Scheme and other domestic sources. Table 6: PUBLIC SECTOR FINANCE REQUIREMENTS (EC$ Millions) 1986 1987 1988 1990 1995 Public Sector Capital Expenditure 21.6 34.7 40.6 37.0 47.0 Debt Service 12.4 3.8 8.3 7.6 15.4 Amortization 9.7 1.6 5.9 3.5 8.9 Interest 2.7 2.2 2.4 4.1 6.5 Financing Reguirements 34.0 38.5 48.9 44.6 62.4 Sources: Public Sector Savings -12.0 -9.0 0 10.0 25.0 Identified external 17.8 28.4 26.2 0 0 Unidentified 28.2 19.1 22.7 34.6 37.4 Source: Mission estimates. 29. Two types of uncertainties overshadow the economic pr.ospects of St. Christopher and Neviss a) factors beyond domestic control, such as weather conditions and shocks in external markets; and b) the nature and implementation of adjustment measures and their overall effect. Regarding external conditions, there could be, for example, major changes in the price of sugar or events affecting the volume of tourism to the islands. While these factors are exogenous to the economy, they emphasize the need to diversify production and exports, in order to make the country less vulnerable to these type of shocks, As to the Government's adjustment measures, they should be thorough and implemented in full, particularly those related to current revenues and expenditures. Annex I which follows sets out the key development policy issues in St. Christopher and Nevis and specifies additional measures required. The effect of these measures should be monitored closely, and fiscal performance, in particular, has to be evaluated continuously. The Government has to act swiftly to reverse current trends and prevent a financial crisis in the public sector that would undermine the prospects for future economic growth. - 14 - ANNEX I: DEVELOPMENT POLICY ISSUES - s- Sr. OftsTOPNg AND NEVI O6VOLOP454 POLICY ISSl A. TPublic Sect 1. Fderal Government Contain the Growth of currnt CMMle4idatich of tn "so?r TWO Government intende to lEponditures and Debt expenditures In ordet to Industry to lepovwo Its enduct c eurvey of the civil roduce the current deflit, effiie*ncy cnd top the drain eervieo to ease" it manpower which more thnn doubled to an public rouree. However, reulesernt. There Is ned t.71 of OP In 1908. Chec the deOetic debt of the to streamlino the operaftoen th oroth of both deedtie Federal Government, which of the governmnt adminiotra- and external debt. esmmed NCO'c debt, hwe tion and pareattals. A1 a doubled In 19W. first stop to deal with th growing dometio debt. Its volume ehould be froen and govemrnenO expenditure reduced accordingly. 2. Feernl owerneent Tho revenue bas Is narrow. A weial Services levy of 45 Need to impreve revenuo Roevnues Current revenues of the on wae" was introduced this oolletion erd develop other Federal (overnment declined year. plus It for eeqerac revenue sources. Consider a from Su of MP in 1901 to 253 pay. Consumption tax on windfll capital gsins tx on of CDP In 1985. Several luxury its" ee lInds In the Southest (S1 Increased. A higher ax rate Peninsula. on land traeOctione In the Southeast Pen inuln he just been Introduced. S. Public interprise and a) olectriclty and water arc NDADO as merg Into S1C to The merger has to be followld Uti I Iies provided by Departments of consolidate the sur industor by a thorouh reorganization Gkvornsnt under a sinjl senegeat. otf MSC to Improve management b) Poor perforeance of the s at all lovels eo oporation. gar Industry. Rfklney in the oporations of the electricity *nd water departOnto heo to be Improved by strengthening mangent end better accounting and collection practices. Alternatively, a more Independent Institutional structure for thes Departnts ehowld be conoidred. 3. jgpjgjvZnO Rate of unempleyat io The developent of the Toes further aetion to estimated at 20-255. The Southeat Penisula, incrse private investoent. neOative net migration has particuNry Infrastructure Procee with the develoment brouoht about a decrease in projects, will incras, the of infratructur, which Is a total population of 6.01 in genrxtlon of new jobs. Iabor-intesive activity. 190824, alleviating the Proced with diversification problem of agriculture by leasing lends to indepene farmers. - is C. aISancS of Puvmnte Exports of sugar, the main Consolidation of sugar Strese improvemont of source of foreign exchange for industry to iaprove efficiency efficiency in sugar induatry. many year., have betn and increase production. Expand effort. for declining for several years. Empha-ize development of divereification of agriculture sugar quotas to the US and EEC touriem, which has substituted to Incres., export- and reduce might be reduced in the sugar *a the mejor source of food imports. future. foreign exchange. Pursue development of tourism sector, 0. tMin Secteral Issues 1. Agricul ure a) the production of sugar On sugar, see above. Pursue loosing of land to has been declining since Government completed poyment farmers end diversification 1979, of EC$14 million to former effort, On water, improve and b) diversification of lond owners. Once title io expand the diotribution agricultural production. rocoived, it can leoma lands system. c) water shortage, mainly in to farmer. to puraue Novis. Need to expand diversification of production. irrigation. On water, the main oopthorie d) land tenure issue. hao beaa developing resources (woll drilIing) and increas;ni reservoir cpc i ty. 2. Tourism a) Need a sector development The Oovernswnt is working now The Government has to finalize plan; on a master plan for development plan. Arrange b) Development of the SE development of tourism. has financing for infrastruc+.,re Peninsula, ehich has the just aigned an agreement for development in SE Peninsula. largest potential for construction of SE Penineula Coneider givingl incentives tourism; road. Incentive, for large alsz for the conetruction of C) focus on marketing and nea hotels, smallor hotel., including promiotin; complotion of sxiating eitee. 3. Mtnufacturing Several plants have shut down The new Founcldtion 7or There is noed for an shortly after opening due to National Development offers industrial devolopment unit to bad planning. Crmoent and technical and credit help foreign investore operate shoo industries have been assistance to small local in the country, providing damaged by Import restrictions firmo. About 20,000 equate information and cutting red imposed within CRICON. Need feet of factory space will be tapo, as Well as domestic to attract more foreign finiehed by the end of the producers market abroad. The investment. year. electronic. induotry hoe to keep up with the Ilteot technologies. - 17 - ANNEX II: PUBLIC SECTOR INVESTMENT PROGRAM AND TECHNICAL ASSISTANCE PROGRAM St. Christopher/Nevis - PSIP Major Ongoing Proj oct and Source of Funding TOTAL EXTERNAL FINANCING SOURCE TERMS AID CONDITION DATION COST OF PROJECT (ECS'00) (ECS'08) X FtNDS Int.Rat. Amort.Pr.4race P.r. Com. Cospl. FEDERAL GOVERNMENT Agriculture Spring Hill Da - Nevis 201 0 OX NCM-Taiwan .. .. .. 1984 1908 New River Pilot Irrigation Projoct 178 178 1081 ODD .. .. .. 1984 198S St. Kitta/Novis Resourco Management 045 346 10X UAID .. .. .. 18 187 Hinptlld Citrus Projct 172 172 W1i PDD .. .. .. 1964 1966 Abbatoir 1260 1260 100X CIDA .. .. .. 1066 1987 Agricultural Equipment 46 O Olt NC-Taiwan .. .. .. 1065 166 Input Supply/Sm Il Farm Equipmt Pool 1161 1308 s1o CDB 4.AX 15 6 1066 1987 Education Molyneoux Primary s8e 808 101 COdB/BNTF .. .. .. 1986 1986 NM School- - St. Johnston's Primry 1700 1700 101: E .. .. 1986 1907 St. John's Primry - Nsvts 700 700 IO CD8/CNTF .. .. .. 1986 1906 Cay"n High School 929 O2n 108X CDB7/NTF .. .. .. 1905 1966 Sandy Point High School 580 gm 1O CDO/UNTF .. .. .. 198C 1906 N""is Power Project 2664 2564 1008 .. .. 1984 1986 Electricity Supply Expansion 3012 8012 1 EDF .. .. .. 1066 10t6 Health and Community Services NeKnight Coemunity Centor 275 276 1081 CD9SBNTF .. .. .. 196" 1066 Improvements to Grove Park 9b0 a ox Local .. .. .. 165 10s" Pogeon HOspitol 271 271 100X COO/BNTF .. .. .. 1/65 1086 Houslns Low Income Housing - Taiwan 4060 0 0X NCR-Taiwan .. .. .. 1906 1986 Pubi c Safoty Special Services Unit Building S6e 60 1OOl US .. .. .. 1985 1966 Polloe Radios 422 422 108t ODD .. .. .. 1986 1906 Water and Sewerage Exploratory Drilling 6M28 6028 1081 CIDA .. .. .. 1904 1907 Other Purchase and Dev. of Industrial S;tes Nevis 1096 0 oX Local .. .. .. 1984 1906 St. Christopher/Nevis - PSIP Major Ongoing Projects and Source of Funding TOTAL EXTERNAL FINANCING SOURCE TERMS AMD CONDITIONS DURATION COST OF PROJECT (ECS'000) (ECS'00V ) % FUNDS Int.Rate Amort.Per.Crace Per. Comm. Compl. REST OF PUBLIC SECTOR Education Student Loans II 678 678 100X CDB 4.0% 15 S 1983 1988 Student Loans III 948 948 100% CDO 4.0% 1S 5 1984 1987 Industry Industrial Estates III 2448 1958 80% CDB 4.0% 10 6 1983 1988 Industrial Estates IV 7818 6253 80% CDB 4.0% 10 5 1988 1987 Transportation Transit Shed and Maintenance Garage 2500 2600 100% CIDA .. .. .. 1984 1986 Other Consolidated Line of Credit 4097 4097 100% CDB 4.0O 15 5 1984 l986 Strengthening of St. Kitts/Nevis Dev. Bank 1914 1914 100% E1 .. .. .. 1984 1988 Consolidated Line of Credit II 8620 7020 82% CBD 4.0% 16 S 1988 1989 TOTAL: 62651 62083 St. Christopher/Novis - PSIP Major New Projects and Source of Funding TOTAL EXTERNAL FINANCING SOURCE TERMS AMD CONDITIONS DURATION COST OF PROJECT (ECS'000) (EC'000) X FUNDS Int.Rate Amort.Por.Graco Per. Comm. Compl. FEDERAL GOVERNMENT Agriculture Development of Grazing Pastures 136 135 100% W.Cer 1987 1987 Education Now Schools - Trinity and Basseterre Primaries 3423 3423 100% EDF 1987 1988 Regional Vocational & Technical Education Project 4326 3587 82% CDB/IBRD 0.75/4.0X 40/1S 10/5 1988 198 Energy Second Generator - Nevis 1885 1386 100% BDO 1987 1987 SE Peninsula Electricity 3000 3000 100X Unknown 1988 1989 Electricity Distribution - Nevis 8S0 860 lOX BDD 1S8B 198B Electriocity Supply Expansion 8846 8846 100% UK 0.0X 18 7 1988 1987 Transportation SE Peninsula Road 22000 22000 100% USAID 1987 1988 Water and Sewerage Irrigation 11000 11900 100% Unknown 1989 1990 Frigate Bay Reservoir 2700 2700 100% Unknown 1987 1987 SE Peninsula Water 4000 4000 100% Unknown ..88 1989 Sewage - Frigate Bay 22276 16275 73% CIDA 1987 1989 REST OF PUBLIC SECTOR Agriculture Sugar Manufacturing Corporation - Rehab. 4050 4060 100 Unknown 1988 1988 TOTAL: 82788 78010 TECHNICAL ASSISTANCE PROGRAM 0ngoing Projects 1987-19?1 Part t. Projects Scheduled to terninate during the new Country Programe which are related to its objectives Project Title Source of Funds CP Objective Initial approval Scheduled Total Budget to which it relates Date Termination Budget During new CP Justificatiom Date Land Settlement Adviser BDO Agric. Diversification June 84 Kay I1 77000 12000 Consultacy Resour OAS Agric. iversification I Aug. 86 July '87 4800 25000 Nffana!elmet Planning Pilot Forestry Development CAS Agric. Diversification Jan. '96 Dec. I7 282000 140000 Soil Conservation USAID Agric. Diversification Jan. '8 Dec. 87 2000000 1030000 Tourism Promotion GAS Tourism Development Jae. 86 Dc. 17 250O 12000 Strengthening of Govt. OAS - Jan. 86 Dec. 87 196000 100000 Institutional capacity Electrical Engineer CFTC - Feb. '86 Ja. 8e 62000 30000 Project Nanager DD - Feb. '86 Jan. 8 62000 30000 Elpctrical Co. Development of Coroperative OAS - Jan. '86 Dec. 87 3300 6600 Part 11. ProJEcts Schedle to terminate durig the nw Country Proram O*ich wre not relited to its objctive Part Ill. Projects to b exted b the nw lountry Program whicb re related to its objetive 8 NIbti-lsland Educatioa MP Additional Areas of Jan. '84 eC. 88 106000 50000 Soial X Ecmneic Sector Leal Draftsman UNW Improvemt & Rision v. 13 Dec. Be 42U5 150000 Extension required to of Legislatio finalize draftieq of legislation and to fKilitate efforts to fill the Leal Draftsma post with a national Total 1615000 Proposed Projects 1987-1991 Part 1. Proposed Projects for which assistance is requested frog the actual resources of the CP CP ObJective Estiaated Project Title to which it relates Estimated Duration External Status of Project Preparation Assistance Budget Agricultural Development Programme (NOP) Agric. Diversification 3 years 000000 Project to be prepared Small Farmers Livestock Development (UNDP) Agric. Diversification 2 years 100000 Project to be prepared Irriqation De-elopment[FAOITCP) Agric. Diversification I year 7000* Project to be prepared Preparation for Agric. Census & Survey (FADITCP) Agric. Diversification I Year 50000 Project to be prepared Establishment of Fodder Oank (FAC/TCP) Agric. Diversification I year 60000* Increase production white potatoes (FAO/TCP) Agric. Diversification 3 months 11000* Pest NanagementJPlant Propagation 4FAO/TCP) Agric. Diversification I year 150000 Cottage Industry Developeent (UNIFEN/USAID) Industrial developaent 2 years 150000* Proposals to be developed Tourism Development (0DDiOASICIDAJ Touriss Development 2 years 92000* Proposals to be developed Recruitmnt of UN' UNDP) Additional areas of 100000 Project to be prepared social & economic sector Total £520000 ' l mmIa - 24 - lreakdown of Resources by Objectives 1987-1991 Nell project propoball Objective Ongoing projects Program Reserve Subtotals Prcatap $ S $ X A. Agricultural Diversification 1177000 1178000 2355000 1t B. Cottage Industry Development - 150000 150000 S C. Tourisa Developmet 12000 92000 104000 3 D. lsproveent & Revision of Legislation 150000 - 150000 5 E. Additional Areas Social & Econaoic Sector 276000 100000 376000 11 Uhprogramd Reserve 100000 S -- ------------ --- --- 1615000 15 0 3 0 _0-- _--0---- 1OIAI lZ1S000 1520000 3235000 too -- - - -- - - - - - -- - - - - - -- - - - - - - -- - - -- - - - -- - - - -- - - -- - - - -- -- -- ____ - 25 - ANNEX III s MACROECONOMIC PROJECTIONS - 26 - Table 2.5s ST. CHRISTOPHER AND NEVIS - ACTUAL AND PROJECTED NATIONAL ACCOUNTS (1984 EC5 u llionl Actual Est. PROJECTEO 1984 1985 1986 1987 1989 1989 1990 1991 1992 1913 1994 1995 Gross domestic product at m.p. 175.6 179.3 183.7 190.2 197.8 205.7 213.9 222.5 230.3 237.2 244.3 251.6 Terms of trade adjustment 0.0 -3.2 9.2 8.0 11.6 15.7 21.5 21.1 20.3 19.6 18.9 10.2 Gross domestic income 175.6 176.1 192.9 198.2 209.4 221.4 235.5 243.6 250.6 256.8 263.2 269.8 Isports of 6NFS 161.1 164.6 172.9 186.9 196.3 204.1 215.3 227.8 235.8 240.6 243.6 246.6 Exports of GNFS -104.0 -109.9 -132.3 -'35.2 -141.7 -149.2 -159.9 -169.4 -177.2 -193.6 -199.5 -194.5 Resource gap 57.1 54.7 40.4 51.7 54.6 54.9 55.3 58.4 58.6 56.9 54.1 52.1 Total resources 232.7 230.8 233.3 249.9 264.0 276.3 290.8 302.0 309.2 313.7 317.3 321.9 Consumption 219.6 209.3 209.8 215.1 223.4 234.3 246.8 257.0 263.2 266.? 269.3 272.9 Investment 13.1 21.5 23.6 34.8 40.6 42.0 44.0 45.0 46.0 47.0 48.0 49.0 Private 2.6 2.9 3.7 4.4 6.7 12.0 16.0 17.0 19.0 19.0 20.0 21.0 Governsent 10.5 18.6 19.q 30.4 33.9 30.0 28.0 29.0 28.0 28.0 28.0 28.0 6ross domestic savinqs -44.0 -33.3 -16.9 -16.9 -14.0 -12.9 -11.3 -13.4 -12.6 -9.9 -6.1 -3.1 Private -38.6 -20.5 0.9 0.6 -4.7 -8.0 -8.2 -11.5 -11.8 -9.8 -6.7 -4.4 Governsent -5.4 -12.7 -17.8 -17.5 -9.3 -4.9 -3.1 -1.8 -0.8 -0.2 0.6 1.3 Net factor payments 0.3 -3.8 -2.4 -1.8 -2.1 -2.9 -3.3 -3.5 -3.7 -4.0 -4.3 -4.5 Transfers 25.7 28.4 19.0 18.4 20.5 22.4 24.4 25.7 26.9 28.0 29.0 29.9 Gross national savinqs -18.1 -8.6 -0.2 -0.3 4.4 6.7 9.8 8.8 10.6 14.1 18.6 22.2 Gross national product 201.5 204.0 200.4 206.8 216.1 225.2 235.0 244.6 253.5 261.2 268.9 276.9 Gross national income 201.5 200.8 209.6 214.8 227.7 240.9 256.6 265.7 273.8 280.8 287.9 295.1 GOP deflator 100.0 103.4 108.6 114.0 119.7 125.7 132.0 138.6 145.5 152.8 16).4 168.5 GDP in current prices 175.6 185.4 199.5 216.8 236.8 258.6 282.4 308.3 335.1 362.4 3s1.9 423.9 6rowth rates 6P at sarket prices 2.1 2.5 3.5 4.0 4.0 4.0 4.0 3.5 3.0 3.0 3.0 Total resources -0.8 1.1 7.1 5.6 4.7 5.3 3.8 2.4 1.4 1.1 1.4 Investment 63.8 9.9 47.7 16.6 3.5 4.8 2.3 2.2 2.2 2.1 2.1 Consumption -4.7 0.2 2.5 3.8 4.9 5.4 4.1 2.4 1.3 1.0 1.3 Agriculture -2.5 7.0 1.0 3.0 3.0 3.0 3.0 2.0 2.0 2.0 2.0 Nanufacturing -9.2 2.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Government 4.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Services 7.5 2.0 4.0 5.0 6.0 6.0 6.0 5.0 4.0 4.0 4.0 Percentages InvestsentJ6DP 7.5 12.0 12.8 18.3 20.5 20.4 20.6 20.2 20.0 19.8 19.6 19.5 6DS/6DP -25.1 -18.6 -9.2 -8.9 -7.1 -6.3 -5.3 -6.0 -5.5 -4.2 -2.5 -1.2 GNS/6IP -10.3 -4.8 -0.1 -0.1 2.2 3.2 4.6 4.0 4.6 5.9 7.6 8.8 Consumption/6P 125.1 116.8 114.2 113.1 112.9 113.9 115.4 115.5 114.3 112.4 110.2 108.5 Current revenue/GDP 26.7 25.0 25.0 25.0 28.9 30.5 30.8 30.8 30.8 30.8 30.9 30.8 Current expenditure/GDP 29.8 31.8 34.8 34.0 33.9 33.6 32.6 31.8 30.8 30.3 29.9 29.4 Current acct. balance/GDP -3.1 -6.7 -9.8 -9.0 -5.1 -3.1 -1.8 -1.0 0.0 0.6 1.0 1.4 Source: Mission estimates. - 27 - Table 2.6: sT. CHRISTOPHER AND NEVIS - ACTUAL AND PROJECTED TRADE 6ROdTH RATES AND PRICE INDICES Actual Est. P R O J E C t E D 1984 1985 1986 IPS7 1988 1989 1990 1991 1992 1993 1994 1S#5 ------------- - -. - -------- - - Exports 6routh Rates Sugar -11.4 6.0 -3.0 2.0 2.0 2.0 2.0 0.0 0.0 0.0 0.0 "olasses 70.6 3.0 5.0 0.0 2.0 2.0 2.0 2.0 0.0 0.0 0.0 Manufacturing -4.6 0.0 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Other 24.1 I5.0 12.0 10.0 8.0 9.0 8.0 8.0 8.0 8.0 8.0 Stamps -0.7 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Re-exports 112.8 15.0 10.0 8.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 Total erchandise exports -3.0 4.6 0.4 3.1 2.9 3.0 3.0 2.1 2.1 2.1 2.2 Non-factor services 2S.1 8.0 8.0 9.0 10.0 12.0 12.0 10.0 8.0 7.0 6.0 Total exports 12.0 6.4 4.6 5.9 7.0 9.3 8.5 7.1 5.9 5.4 4.8 Price Index 11984 c 100) Su==r 1. 89 28 4 11 16 1. 1. 1. 9 Sugar 100.0 87.9 122.8 124.6 141.4 156.6 178.2 180.9 193.7 186.6 189.6 192.7 Nolasses 100.0 87.9 122.8 124.6 141.4 156.6 172.2 160.9 183.7 136.6 189.6 192.8 Oanufacturing a/ !00.0 100.7 113.8 117.3 118.8 120.4 122.0 126.2 130.6 135.2 139.9 144.8 Sther ap 100.0 100.7 113.8 117.3 118.8 120.4 122.0 126.2 130.6 135.2 139.9 144.8 StaR ps a/ 100.0 100.7 113.8 117.3 118.8 120.4 122.0 126.2 130.6 135.2 139.9 144.8 Re-exports a/ 100.0 100.7 113.8 117.3 118.8 120.4 122.0 126.2 130.6 135.2 139.9 144.8 Nerchandise exports 100.0 94.1 118.6 121.0 130.2 138.5 149.8 153.0 156.1 159.4 162.8 166.4 Non-factor services al 100.0 100.7 113.8 117.3 118.8 120.4 122.0 126.2 130.6 135.2 139.9 144.8 Total exports 100.0 97.6 116.0 118.9 123.7 127.8 132.8 136.1 139.6 143.4 147.4 151.7 Imports in 1984 Prices Fuel 5.7 5.5 5.8 6.4 6.9 7.4 8.0 8.5 8.8 9.2 9.6 9.9 Chemicals 10.2 10.5 11.4 12.3 13.3 14.3 15.8 17.0 18.0 18.8 19.3 19.9 Food and beverages 4.3 4.1 4.2 4.3 4.4 4.6 4.7 4.9 5.0 5.2 5.3 5.5 Nanufactured Products 18.0 19.1 19.8 21.0 22.7 24.5 27.0 29.1 30.9 32.1 33.1 34.1 Consuner goods 10.3 9.5 9.9 11.9 13.1 14.1 15.5 16.5 17.1 17.7 18.0 18.4 Other imports 3.4 4.8 5.2 5.8 6.3 7.0 7.7 8.3 8.9 9.1 9.5 9.9 Nerchandise imports 51.9 53.4 56.3 61.6 66.7 72.0 78.7 84.3 88.7 92.0 94.8 97.6 Non-factor services 7.7 9.3 8.0 8.8 9.5 10.3 11.2 12.1 12.3 12.4 12.3 12.2 Total imports 59.6 62.8 64.3 70.4 76.3 82.2 89.9 96.3 101.0 104.4 107.1 109.8 Ilport price index - 6NFS 100.0 100.4 109.0 112.0 114.0 115.4 116.9 121.3 125.7 130.3 135.0 140.0 Import grouth rates Nerchandisa imports 2.9 5.5 9.4 8.2 7.9 9.3 7.1 5.2 3.8 3.0 3.0 Non-factor services 21.2 -14.8 10.2 8.9 7.8 9.3 7.3 2.0 0.4 -0.5 -0.6 Total imports 5.3 2.4 9.5 8.3 7.8 9.3 7.1 4.8 3.3 2.6 2.6 Teres of trade indices Export price index 100.0 94.1 118.6 121.0 130.2 138.5 149.8 153.0 156.1 159.4 162.9 166.4 Import price index 100.0 100.4 108.0 112.0 114.0 115.4 116.9 121.3 125.7 130.3 135.0 140.0 Terms of trade index 100.0 93.7 109.8 108.1 114.2 120.0 128.1 126.2 124.2 122.3 120.6 118.9 ail Source of price projections is Economic Projection Department Source: fission estiumtes. - 28 - Table 2.7: ST. CHRISTOPHER AND NEVIS - ACTUAL AND PR0JECTED 3AIANCE OF PAYNENTS IUSS million) Actual Est. P R O J E C T E O 1984 1985 1996 1987 1988 1999 1990 1991 1992 1993 1994 1995 Exports of GNFS 39.5 42.1 53.2 57.1 62.8 69.5 70.2 97.0 95.5 103.9 112.6 121.4 laports of BNFS 59.6 63.0 69.4 78.8 87.0 94.9 105.1 116.9 127.0 136.0 144.6 153.7 Resource Balance -21.1 -20.9 -16.2 -21.8 -24.1 -25.5 -27.0 -29.9 -31.5 -32.1 -32.0 -32.3 Net current transfers 9.5 10.6 9.0 9.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 Net factor payments 0.1 -1.4 -1.0 -0.8 -0.9 -1.3 -1.5 -1.6 -1.8 -2.0 -2.2 -2.4 Interest -0.5 -1.0 -1.0 -0.8 -0.9 -1.3 -1.5 -1.6 -1.9 -2.0 -2.2 -2.4 Other NFS 0.6 -0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Current account balance -11.5 -11.7 -9.2 -14.5 -16.0 -16.7 -17.4 -19.5 -20.2 -20.1 -19.2 -18.8 _- - - - - - -- - - -- -- --- - -- -- -- - -- -- -- -- ---- -- -- -- -- -- -- -- -- ------___ Direct foreign investment 10.1 9.3 4.0 5.0 6.0 8.0 11.0 14.0 13.0 12.0 12.5 13.0 6rants 1.8 3.1 4.2 6.6 7.9 5.0 3.0 3.0 3.0 3.0 3.0 3.0 1< public debt (net) 5.5 2.4 1.0 2.9 2.1 3.7 3.5 2.5 4.2 5.0 3.9 2.8 Disbursement 6.1 3.0 4.6 3.5 4.3 4.7 4.7 4.1 6.2 7.4 6.5 6.0 Amortization 0.6 0.6 3.6 0.6 2.2 1.0 1.3 1.6 2.0 2.4 2.7 3.3 Arrears - - - - - - - - - - - - Errors & omissions -4.1 0.0 - - - - - - - - - - Change in reserves -1.9 -2.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (- t increase) Memo: Debt service as I of exports of GNFS 2.9 3.7 8.6 2.4 5.0 3.2 3.5 3.7 4.0 4.2 4.4 4.7 Debt service as Z of GDP 1.7 2.3 6.2 1.7 3.6 2.3 2.6 2.9 3.0 3.3 3.4 3.6 Debt service as 1 of current revenue (Fed. Gov't) 6.5 9.1 24.8 6.9 14.0 9.0 9.8 10.8 11.5 12.3 12.9 13.6 DOD as l of exports of 6NFS 44.4 47.0 39.1 41.5 41.1 42.5 42.2 40.8 41.5 43.0 43.0 42.2 DOD as X of GDP 26.3 28.8 29.1 29.5 29.4 30.8 31.5 31.1 32.0 33.3 33.4 32.6 Source: Mission estimates. - 29 - ST. CHRISTOPHER AND NEVIS STATISTICAL APPENDIX TABLE OF CONTENTS Table No. .Pate 1.1 Population Trends ................................ ... . 30 2.1 GDP at Current Factor Cost............................ 31 2.2 GDP at Constant Factor Cost ............... ........... 32 2.3 Expenditure on GDP at Current Prices ................... 33 2.4 Expenditure on GDP at Constant Prices.................. 34 33.1 Balance of Payment .................................. . 35 3.2 Composition of Merchandise Exports ..................... 36 3.3 Composition of Merchandise Imports ..................... 37 4.1 Summary of External Public Debt Operations............. 38 5.1 Summary Operations of Federal Government................ 39 5.2 Federal Government Revenue............................ 40 5.3 Federal Government Expenditure ........................ 43 5.6 Summary Operations of Consolidated Public Sector....... 45 5.7 Operations of Selected Non-financial Public 6.1 Commercial Bank Operations ............................. 53 7.1 Selected Tourism Data .............................. . ... 54 8.1 Consumer Price Index................................... 55 - 30 - Table 1.1i ST. CHRISTOPHER AND NEVIS - POPULATION TRENDS 1970 1976 1990 1991 1992 1993 1994 1995 ---------------------------..--------------------------------------__--------__---------------- Total Population (end of year) 44884 43535 43963 44923 45262 44130 43205 42290 Total Population (mid-year) .. .. 43834 44443 45093 44696 43668 42748 Crude Birth Rate (per 1000) 25.9 26.9 26.8 25.9 29.1 24.1 25.3 23.7 Crude Death Rate (per 1000) 10.9 9.7 11.3 10.2 11.2 10.6 10.9 10.2 Rate o4 Natural Increase 14.9 18.9 15.5 15.6 17.9 13.6 14.4 13.5 Births 1156 1320 1170 1137 1307 1093 1115 1026 Deaths 489 476 493 450 503 478 491 441 Natural Increase 667 844 677 687 804 615 634 585 Net Migration .. -534 -418 273 -465 -1747 -1559 -1500 Net Population Increase .. 310 259 960 339 -1132 -925 -915 S__urces______Statisti_____________ce______lannin__________t___and__________Secret____riat.__ GSurcest Statistics Office, Planning Unit, and ECCM Secretariat. - 31 - Table 2.1t ST. CHRISTOPH4ER ANO NEVIS: GDP AT CURRENT FACTOR COST (EC$ Billion) Prel 1979 1990 1991 1992 1993 1984 1985 Agriculture 13.6 16.5 13.8 20.3 16.2 19.7 18.5 Crops 2.3 2.2 2.5 2.3 1.7 1.4 1.6 Sugarcane 7.3 9.9 5.3 11.4 7.5 11.4 9.4 Livestock 2.5 2.6 3.4 3.5 3.S 2.9 3.1 Fishing 1.5 1.8 2.5 3.0 3.4 3.9 4.2 Forestry 0.1 0.1 0.1 0.1 0.1 0.1 0.2 mining 0.2 0.3 0.3 0.4 0.4 0.4 0.5 tanufatturing 12.8 15.7 17.9 18.7 17.6 22.6 21.9 Construction 9.1 10.6 10.9 13.6 15.0 12.8 14.9 Electricity and Water 0.8 0.9 1.1 1.4 1.4 1.4 1.5 Wholesale and Retail Trade 9.9 13.0 14.1 16.5 19.3 20.7 22.4 Hotels and Restaurants 4.8 4.5 5.4 4.3 4.4 5.2 6.1 Transport and Communications 7.8 10.0 15.0 17.0 17.9 18.8 21.0 Banking and Insurance 4.6 5.3 5.8 8.6 8.2 11.1 12.0 Real Estate and Housing 6.5 6.7 7.5 7.9 8.1 9.5 9.0 Sovernment Services 17.9 18.8 26.2 28.1 28.2 28.2 28.5 Other Services 4.0 5.2 6.6 7.3 7.8 8.4 9.0 Less Imputed Service Charges -3.5 -4.4 -4.0 -6.2 -7.1 -8.9 -9.7 Gross Domestic Product at f.c. 97.5 103.1 120.5 137.8 136.2 149.9 155.6 Sourcast Statistical Office, Planning Unit, and mission estimates. - 32 - Table 2.2: ST. CHRISTOPHER AND NEVIS1 SOP AT CONSTANT FACTOR COST (ECS sillions at 1977 Prices) Prel. 1979 1990 1961 1982 1983 1984 1995 Agriculture 14.9 13.4 14.1 14.1 11.5 12.0 11.7 Crops 2.1 2.0 2.1 1.7 1.3 1.2 1.3 Sugarcane 9.1 8.0 8.0 9.3 6.5 7.0 6.2 Livestock 2.4 2.2 2.5 2.5 2.1 2.1 2.4 Fishing 1.2 1.1 1.5 1.5 1.5 1.6 1.7 Forestry 0.1 0.1 0.1 0.1 0.1 0.1 0.1 hining 0.2 0.2 0.2 0.3 0.3 0.3 0.3 Manufacturing 13.3 13.6 12.2 13.2 11.7 13.1 11.9 Construction 6.1 7.7 8.0 9.5 10.4 8.7 9.8 Electricity and Water 0.7 0.9 0.9 1.0 1.0 1.1 1.1 Wholosale and Retail Trade 8.3 9.4 9.2 10.2 11.0 12.3 13.0 Hotels and Restaurants 2.9 2.6 2.9 2.5 2.5 2.9 3.3 Transport and Communications 6.3 6.9 9.3 9.4 9.6 10.0 10.9 Banking and Insurance 4.1 4.3 4.2 5.0 5.0 5.6 5.8 Real Estate and Housing 5.4 5.5 5.6 5.6 5.7 5.8 6.0 Government Services 14.7 15.5 16.3 17.5 17.5 17.6 16.4 Other Services 3.4 3.8 4.3 4.5 4.7 5.0 5.2 Less Imputed Service Charges -3.1 -3.6 -3.1 -3.3 -3.3 -3.6 -3.8 Gross Domestic Product at f.c. 77.0 80.1 64.1 89.4 87.8 90.7 91.6 GOP Growth .. 4.0 5.0 6.3 -1.9 3.4 1.0 Sources: Statistical Office, Planning Unit, and sission estimates. - 33 - Table 2.3, ST. CHRISTOPHER AND NEVIJ - EXPENDITURE ON GDP AT CURRENT PRICES (ECS Gillioa) Pr.l. 1980 1981 1982 1983 1984 1985 ----------_- ------------ ---_ -------____._.__a------ a… no------------ of"_____. a___-- Total Consumption 127.6 177.3 196.2 216.2 219.5 218.9 Public 29.3 34.4 34.8 38.3 40.6 42.9 Private 98.3 142.9 161.4 177.9 178.9 176.0 Bross Domestic Investment 40.7 16.4 16.8 14.4 13.1 22.9 Public 38.6 13.3 14.1 12.1 10.5 18.9 Private 2.1 3.1 2.7 2.3 2.6 4.0 Inventory change 0.0 0.0 0.0 0.0 0.0 0.0 Resource Balance -37.5 -42.7 -53.7 -69.9 -57.0 456.4 Exports, B&NFS 87.2 104.8 89.4 85.6 104.0 113.7 lmports, S&NFS 124.7 147.4 143.1 155.5 160.9 170.1 Bross Domestic Product at o.p. 130.8 151.0 159.3 160.7 175.6 185.4 Ninus: Indirect Taxes Net 27.7 30.5 21.5 24.5 26.7 29.6 of Subsidies Gross Domestic Product at f.c. 103.1 120.5 137.8 136.2 148.9 155.6 Bross Domestic Savings 3.2 -26.3 -36.9 -55.5 -43.9 -33.5 Net Factor Income 0.5 2.4 1.9 2.7 0.3 -3.9 Net Current Transfers 30.5 23.5 23.8 20.5 25.7 28.4 Bross National Savings 34.2 -0.3 -11.3 -32.3 -18.0 -8.7 Sources Statistics Oifice and mission estimates. - 34 - Table 2.4: ST. CHRISTOPHER AND NEVIS - EXPENDITURE ON SDP AT CONSTANT PRICES (EC$ millions at 1977 Prices) e-- - - n-------- --- ----- … ------------ 0-------- Est. 1990 1991 1982 1993 1984 1985 __________________--------------------ee-e--------------------------______________ Total Consumption 97.1 122.1 129.3 143.6 139.5 134.2 Public 20.0 21.3 20.3 21.9 22.6 23.3 Private 77.1 100.8 108.9 121.7 116.9 110.9 Gross Domestic Investment 28.8 11.2 11.4 9.9 9.1 15.6 Public 27.3 9.1 9.6 9.3 7.3 12.9 Private 1.5 2.1 1.9 1.6 1.8 2.7 Inventory change 0.0 0.0 0.0 0.0 0.0 0.0 Resource Balance -26.9 -30.3 -38.7 -51.8 -43.0 -42.0 Exports, G&NFS 62.3 74.5 64.4 63.4 78.4 84.6 Imports, 6&NFS 89.2 104.9 103.2 115.1 121.4 126.7 Gross Domestic Product at m.p. 99.0 103.0 102.0 101.7 105.6 107.8 Hinus: Indirect Taxes Net 18.9 19.9 12.5 14.0 14.8 16.2 of Subsidies Bross Domestic Product at f.c. 80.1 84.1 99.4 87.8 90.7 91.6 ,____________________________ ----- ----- ----- ----- _____ Gross Domestic Savings 1.9 -19.1 -27.3 -41.8 -33.9 -26.4 =-------------------- - ----- ----- ----- ----- Net Factor Income 0.4 1.7 1.4 2.0 0.2 -2.9 Net Current Transfers 21.8 16.7 17.1 15.2 19.3 21.3 Gross National Savings 24.1 -0.7 -9.8 -24.7 -14.3 -7.9 ______________________----- ----- ----- ---_ __ _ ----- _ _ - …__________________________________________________________________________________ Source: Statistics Office and mission estimates. - 35 - Table 3.1t ST CHRISTOPHER AND NEVIS BALANCE OF PAYtENTS (US$ millions) Prel. 1991 1992 1993 1984 1985 Exports of Goods and NFS 39.9 34.2 31.7 38.5 42.1 Nerchandise Exports 25.3 21.0 18.7 20.5 18.7 Non-Factor Services 13.5 13.2 13.0 19.0 23.4 Imports of Goods and NFS 54.6 53.0 57.6 59.6 63.0 NerLhandise Imports 47.6 44.3 51.4 51.9 53.6 Non-factor Services 7.0 8.7 6.2 7.7 9.4 Resource Balance -15.8 -19.8 -25.9 -21.1 -20.9 Factor Services & Transfers 9.6 9.5 8.6 9.6 9.2 Net Factor Service Payments 0.9 0.7 1.0 0.1 -1.4 o1w Interest -0.3 -0.4 -0.4 -0.5 -1.0 Net Private Transfers 9.7 8.9 7.6 9.5 10.6 Current Account Balance -6.2 -9.3 -17.3 -11.5 -11.7 Official Transfers 1.6 2.3 2.7 1.8 3.1 Public Borrowing (Not) 0.9 0.7 0.8 5.4 2.4 Commercial Banks 3.5 -1.2 1.2 -4.0 -0.2 Private Direct Investment and Other a/ 5.0 3.7 13.9 10.1 8.3 Overall Balance 4.8 -3.8 1.2 1.8 1.9 Financing -4.8 3.9 -1.2 -1.8 -1.9 Changes in Imputed Reserves -4.7 3.1 -1.1 -1.5 -1.9 Change in Foreign Assets -0.1 0.7 -0.1 -0.3 0.0 a/ Includes'errors and omissions. Sources: Ministry of Finance, Statistical Office, and staff estimates. - 36 - Table 3.2s ST. CHRISTOPHER AND NEVIS - CONPOSITION OF NERCHANDISE EXPORTS _________ Prcl. 1961 1982 1983 1984 1985 (In Nhllions of U.S. Dollars) Total Nerchandise Exports 25.3 21.0 18.7 20.5 18.7 ~~t ---… -m ft ee fteent sentf ---- -- - --- f Re-exports 1.9 1.6 1.0 0.7 1.5 Domestic Exports 23.4 19.4 17.7 19.8 17.2 Sugar 14.7 12.2 10.0 11.3 9.8 "olasses 0.3 0.5 0.4 0.2 0.3 Manufactures 6.6 4.7 6.6 7.6 7.3 Deverages 0.3 0.5 1.0 1.0 1.2 Clothing 1.7 1.6 1.7 2.1 2.2 Footwear 2.4 0.9 1.6 1.3 1.0 Electrical Nachinery and Appliances 1.6 1.6 1.5 2.1 2.0 Other Nanufactured G00ds 0.6 0.1 0.9 1.1 0.9 Other Domestic Exports a/ 0.6 0.9 0.4 0.4 0.5 Philatelic Stanps 1.0 1.1 0.3 0.3 0.3 (In Percent of Total Exports) Sugar bf 59.3 60.5 55.6 56.1 48.7 Nanufactures 26.1 22.4 35.3 37.1 39.0 Other c/ 14.6 17.1 9.1 6.9 12.3 (Annual Percentage Change) Domestic Exports -1.3 -17.1 -9.8 11.9 -13.1 Sugar bi -0.6 -15.3 -18.1 10.6 -20.9 Nanufactures -19.5 -29.8 40.4 15.2 -3.9 Others C/ 157.1 11.1 -65.0 0.0 14.3 a/ Includes groundnuts, copra, lobsters, cotton, etc. bl Includes molasses. c/ Includes philatelic stamps. Sources. Statistical O4fice, Planning Unit, and mission estimates. - 37 - Table 3.3i ST. CHRISTOPHER AND NEVIS - CONPOSITION OF MERCH4ANDISE IMPORTS Prel. 1981 1982 1983 1984 1995 s------------------------ ----------- _____----- "---_ _ --- ------------- tin sillions of US dollars) Total Merchandise Imports 47.6 44.3 51.4 51.9 53.6 By SITC Food 9.3 9.2 9.4 10.2 10.6 Beverages and tobacco 1.2 1.4 1.4 1.4 1.6 Crude materials 0.8 1.1 1.0 1.1 1.5 Fuel 5.2 4.9 5.2 5.7 5.3 Animal & veg. oils & fats 0.3 0.3 0.7 0.9 1.1 Chemicals 4.2 4.1 4.4 4.3 4.1 Manufactured goods 9.6 9.0 11.8 9.8 11.7 hachinery & transport eqpt. 9.9 8.3 10.0 10.3 9.6 Misc.manufactured articles 6.9 5.6 7.4 8.2 7.5 Miscellaneous 0.3 0.4 0.1 0.0 0.6 By Broad Economic Classification Consumer goods 20.9 19.1 22.3 21.7 23.1 Of whichs passenger cars 1.4 1.2 1.4 1.8 2.1 Intermediate goods 22.0 20.9 24.8 22.8 24.7 Capital goods 4.7 3.8 4.8 5.2 5.8 (In percent of total imports) Consumer goods 43,9 43.1 43.4 41.8 43.1 Intermediate goods 46.2 47.0 48.2 43.9 46.1 Capital goods 9.9 8.6 9.3 10.0 10.8 (annual percentage change) Total imports 6.0 -6.9 16.0 1.0 3.3 Consumer goods 20.1 -8.6 16.8 -2.7 6.5 Intermediate goods -4.8 -5.5 19.2 -8.1 8.3 Capital goods 6.8 -19.1 26.3 9.3 11.5 Sourcesa Statistical Office, Planning Unit, and mission estimates. - 38 - Table 4.1s ST. CHRISTOPHER AND NEVIS - SUMNARY OF EXTERNAL PUBLIC --------- AND PUBLICLY GUARANTEED DEBT OPERATIONS a/ -----------------------_---------------------------------------__--------- Prol. t981 1982 1983 1984 1985 e_____________________________- a___ ------ a- -.--------------------------- (In thousands of US dollars) Total outstanding debt at _________________________ end of period 11379.4 11437.7 11994.0 17091.7 19838.6 Consolidated Federal Governnen 4357.7 4516.0 4551.3 8275.0 9731.9 Drawings 352.7 357.8 240.0 4002.0 760.0 Amortizations (-) -229.8 -199.5 -195.8 -274.9 -237.1 Valuation adjustment 0.0 0.0 -8.9 -3.4 -66.0 Pubiicly guaranteed debt 7021.7 6921.7 7442.7 8816.7 11106.7 Drawings 820.9 590.0 842.0 2090.0 2231.0 Asortizations (-) -47.7 -85.0 -64.0 -357.0 -332.0 Valuation adjustment 46.7 -605.0 -257.0 -359.0 391.0 Debt service payments 619.5 679.1 663.6 1084.9 1521.2 Amortizations 277.5 284.5 259.8 631.9 569.1 Consolidated Federal Bov t 229.8 199.5 195.8 274.9 237.1 Publicly guaranteed debt 47.7 85.0 64.0 357.0 332.0 Interest 342.0 393.6 403.8 453.0 952.1 Consolidated Federal Bov't 98.4 110.7 123.1 146.4 573.7 Publicly guaranteed debt 243.6 282.9 280.7 306.6 378.4 Total debt outstanding/SDP 20.3 19.4 20.2 26.3 28.9 Debt Service/XSNFS & Private Transfers 1.3 1.6 1.7 2.3 2.9 Amortization/X8NFS & Private Transfers 0.6 0.7 0.7 1.3 1.1 Interest/XBNFS & Private Transfers 0.7 0.9 1.0 0.9 1.8 Debt Service/Public Current Revenue 2.9 2.9 3.3 5.0 6.9 Amorti2ation/Public Current Revenue 1.3 1.2 1.3 2.9 2.6 Interest/Public Current Revenu 1.6 1.7 2.0 2.1 4.3 Average Interest Rate b/ 3.3 3.5 3.5 3.8 5.6 ---------------------------------------------------------------------__--- a/ Nedium- and long-term debt. Excludes debt held by ECCB. b/ Ratio of interest payments to debt at beginning of period. Bourcets inistry of Finance and staff estimates. - 39 - Table 5.1o ST. CHRISTOPHER AND NEVISi SUNNARY OPERATIONS OF ---- THE CONSOLIDATED FEDERAL BOVERNNENT (EC sillion) ---_-----------------------------------------------------------__---------- Prel. 1981 1982 1983 1984 1985 …---------._-------------------------------------------------------__---.-- Total Revenue 49.4 46.2 46.7 49.4 47.4 Currnnt Revenue 49.2 46.1 44.4 46.9 46.4 Capital Revenue 0.2 0.1 2.3 1.5 1.0 Total Expenditure 62.2 62.0 61.0 62.6 82.0 Current Expenditure 51.1 51.5 49.7 52.3 58.9 Capital Expenditure 11.1 10.5 11.3 10.3 23.1 Fixed Invoetoents 11.1 10.5 9.3 8.6 13.7 Purchase of Land 0.0 0.0 2.0 1.7 9.4 Current Account Balance -1.9 -5.4 -5.3 -5.4 -12.5 Overall Balance -12.8 -15.8 -14.3 -14.2 -34.6 Financing 12.8 15.8 14.3 14.2 34.6 ,________-- - --- ____-- ---- External 0.1 2.3 -0.3 9.3 1.4 Capital Grants 4.4 5.9 5.8 4.7 6.1 Concessionary Loans (Net) 0.4 0.5 -0.5 2.2 1.6 Commorcial Banks (Net) 0.0 0.0 0.6 7.9 -0.2 Other 0.0 0.0 0.0 0.0 0.0 Change in foreign assets -0.3 1.8 -0.4 -0.8 0.0 Domestic 12.7 13.5 14.6 4.9 33.2 ECCI Borrowing (Not) 0.0 2.6 0.5 7.6 2.0 Commercial Banks (Net) 8.2 5.2 8.1 -8.5 16.1 o/w National Dank 0.0 2.0 4.8 -4.2 16.7 Social Security Scheme -0.1 2.3 -0.1 -0.2 3.4 Public enterprises 0.0 -1.2 -0.8 0.2 -0.2 Other 4.6 4.6 6.9 5.8 11.9 Total Revenue and Srants/SDP 32.7 29.0 29.1 27.6 25.6 Current Revenue/SOP 32.6 29.9 27.6 26.7 25.0 Capital RovenuelSBP 0.1 0.1 1.4 0.9 0.5 Capital Brants/SDP 2.9 3.6 3.6 2.7 3.3 Total Expenditure/SP 41.2 38.9 38.0 35.6 44.2 Current Expenditure/SDP 33.8 32.3 30.9 29.8 31.8 Capital Expenditure/GOP 7.3 6.6 7.0 5.9 12.5 Curront Account Balance/SDP -1.3 -3.4 -3.3 -3.1 -6.7 Overall Balanco/SDP -8.5 -9.9 -9.9 -9.1 -18.7 External Financing/BDP 3.0 5.1 3.4 8.0 4.0 Domestic Financing/SOP 5.5 4.C 5.5 0.1 14.6 Sources: Ministry of Finance, Planning and Development and mission estimates. - 40 - Pageof3 Table 5.2a ST CHRISTOPHER AND NEVIS - CONSOLIDATED FEDERAL --- GOVERNMENT REVENUE (EC$ Gillion) 1981 1982 1983 t984 1995 Total Revonue 53.8 52.0 52.5 53.1 53.5 ____.________ ----- _.__.... ..... ... _... ....... __ Current revenue 49.2 44.1 44.4 46.9 46.4 _______________ ..... .. . .. _. ----- ---- Tax revenue 38.6 32.0 30.5 35.1 37.3 Taxes on income 4.0 5.2 4.4 5.5 6.2 Incose Tax 4.0 5.1 4.2 5.4 6.1 Alien enploysent levy 0.0 0.1 0.2 0.1 0.1 Taxes on property 0.1 0.1 0.2 0.4 0.7 House tax 0.1 0.1 0.2 0.4 0.7 Land tax 0.0 0.0 0.0 0.0 0.0 Taxes on domestic production and consumption 12.0 11.9 11.9 14.8 15.4 Consumption tax 9.6 9.6 9.2 10.4 10.4 Excise duties 0.0 0.0 0.1 0.0 0.0 dheel tax 0.4 0.5 0.5 0.6 0.9 Entertainment tax 0.1 0.0 0.0 0.0 0.0 Traders tax 0.1 0.1 0.1 0.1 0.2 Hotel room tax 0.4 0.4 0.4 1.0 1.0 Gasoline levy 0.0 0.0 0.1 0.2 0.2 Stamp duties 1.1 0.9 1.1 1.9 1.9 Licenses 0.3 0.4 0.4 0.4 1.0 Taxes on international transactions 22.9 15.2 14.1 14.3 14.9 Sugar levy 10.0 1.6 0.2 0.0 0.0 loport duties 10.5 10.9 11.0 11.8 12.3 Export duties 0.3 0.4 0.3 0.3 0.3 Stamp tax 0.0 0.0 0.1 1.3 1.3 Withholding tax 0.2 0.2 0.2 0.5 0.3 Foreign currency tax 1.? 1.8 2.0 0.0 0.0 Travel tax 0.2 0.3 0.3 0.4 0.5 Other 0.0 0.0 0.0 0.0 0.2 Minust tax rofunds -0.4 -0.4 -0.1 -0.1 -0.1 Non-tax revenue 10.6 11.0 10.5 11.4 8.3 Surpluses of departmental enterprises 2.9 2.7 1.4 1.6 0.8 Port, harbor, and wharf dues 0.5 0.4 0.3 0.2 0.1 Fees, fines, and forfeitures 0.1 0.1 0.2 0.2 0.1 Government departments and services 3.3 3.7 4.0 6.4 5.3 Rent of government property 0.1 0.2 0.2 0.2 0.8 Interest on advnces and deposits 0.1 0.1 0.0 0.1 0.3 Currency profits 3.3 3.6 4.3 2.3 0.9 Dividends 0.3 0.0 0.0 0.2 0.2 Peasant development 0.0 0.2 0.1 0.2 0.0 Surplus of trust funds 0.0 3.1 3.4 0.4 0.8 ___.__-- -- -- -- ---- . ..... _ ___ _ ____ ---- ................... .___ _.__ Capital revenue 0.2 0.1 2.3 1.5 1.0 _________________ ---- .... ---- _ _ Land sales 0.1 0.1 0.1 0.2 0.0 Other 0.1 0.0 2.2 1.3 1.0 Total grants 4.4 5.8 5.08 4.7 6.1 ______.____._ ---n ---- ---- ---- ---- Budgetary grants 0.1 0.1 0.1 0.1 0.1 Capital grants 4.3 5.7 5.7 4.6 6.0 …_--..-------_-------------_.---.-_-__-_---_-----.._-------_---_-----__--- - 41 - P49Q 2 of 3 Table 5.2a ST CHRISTOPHER ANP NEVIS - CONSOLIAITED FEDERAL ......... GOVERNMENT REYENUE (EC$ aillilon) 198) 1982 1993 1984 1985 1. Contrdl Boverneont Total Revenue 53.8 52.0 51.2 47.3 47.1 Current revenue 49.2 46.1 43.1 42.2 40.8 Tax revenue 38.6 32.0 29.6 31.5 32.9 Taxes on incooo 4.0 5.2 4.4 5.4 Z i Incooe Tox 4.0 5.1 4.2 5.3 6.0 Alien eoployment levy 0.0 0.1 0o2 0.1 0.1 Taxe* an property 0.1 0.1 0.2 0.5 0.6 House tax 0.1 0.1 0.2 0.5 0.6 Land tax 0.0 0.0 0.0 0.0 0.0 Taxes on docestic production and consumption 12.0 11.9 11.5 13.0 13.4 Consumption tax 9.6 9.6 8.9 9.4 9.4 Excise duties 0.0 0.0 0.1 0.0 0.0 wheel tax 0.4 0.5 0.5 0.5 0.7 Entertainment tax 0.1 0.0 0.0 0.0 0.0 Tradero tax 0.1 0.1 0.1 0.1 0.2 Hotel room tax 0.4 0.4 0.4 0.7 0.9 Gasoline levy 0.0 0.0 0.1 0.2 0.2 Stamp duties 1.1 0.9 1.0 1.6 1.4 Licenses 0.3 0.4 0.4 0.5 0.7 Taxes on international transactions 22.9 15.2 13.6 12.7 12.9 Sugar levy 0l.o 1.6 0.2 0.0 0.0 tsport duties 10.5 10.9 10.5 1O.4 10.7 Export duties 0.3 0.4 0.3 0.3 0.3 Stamp tax 0.0 0.0 0.1 1.2 1.2 Withholding tax 0.2 0.2 0.2 0.5 0.3 Foreign currency tax 1.7 1.8 2.0 0.0 0.0 TravOl tax 0.2 0.3 0.3 0.3 0.4 Other 0.0 0.0 0.0 0.0 0.2 linus: tax refunds -0.4 -0.4 -0.I -0.1 -0.1 Non-tax revenue 10.6 11.0 10.1 10.3 7.1 Surpluses of departmental enterprises 2.9 2.7 1.2 1.6 0.7 Port, harbor, and *harf duen 0.5 0.4 0.3 0.1 0.0 Fees, fines, and forfeitures 0.1 0.1 0.2 0.2 0.1 6overneent departments and services 3.3 3.7 3.9 5.6 4.3 Rent of government property 0.1 0.2 0.2 0.2 0.6 Interest on advances and - deposits 0.1 0.1 0.0 0.1 0.3 Currency profits 3.3 3.6 4.3 2.3 0.9 Dividend% 0,3 0.0 0o0 0.2 0.2 Peasant development 0.0 0.2 0.1 0.0 0.0 Surplus of trust funds 0.0 3.1 3.4 0.4 0.a Capital revenue 0.2 0.1 2.3 1.5 1.0 Land sales 0.1 0.1 0.1 0.2 0.0 Other 0.1 0.0 2.2 1.3 1.0 Total grants 4.4 5.9 5.8 3.6 5.3 Budgetary grants 0.1 0.1 0.1 0.1 0.1 Capital grants 4.3 5.7 5.7 3.5 5.2 -------_. -_ -----------_- ------------------------ ------------------- _ -- - 42 - Page 3 of 3 Table 5.2, ST CHRISTOPHER AND NEVIS - CONSOLIDATED FEDERAL --------- GOVERNNENT REVENUE (ECS million) 1981 1982 1983 1984 1985 --------------------------------------------_----------------------__----- It. Nevis Island Administration e/ Total Revenue 1.3 5.8 10.4 Current revenue 1.3 4.7 9.6 Tax rovenue 0.9 3.6 4.2 Taxes on income 0.0 0.1 0.1 Income Tax 0.0 0.1 0.1 Alien employment levy 0.0 0.0 0.0 Taxes on property 0.0 0.1 0.1 House tax 0.0 0.1 0.1 Land tax 0.0 0°0 0.0 Taxes on domestic production and consueption 0.4 1.8 2.2 Consumption tax 0.3 1.0 1.0 wheel tax 0.0 0.1 0.2 Hotel Room tax 0.0 0.3 0.2 Stamp duties 0.1 0.3 0.5 Licences 0.0 0.1 0.3 Taxes on international transactions 0.5 1.6 1.8 Import duties 0.5 1.4 1.6 Stamp tax 0.0 0.1 0.1 Travel tax 0.0 0.1 0.1 Non-tax revenue 0.4 1.1 5.4 Surpluses of departeental enterprises 0.2 0.0 0.1 Port, harbor, and wharf dues 0.0 0.1 0.1 Government departments and services 0.2 0.8 1.0 Peasant development 0.0 0.2 0.0 Transfer from Federal 6overnment 0.0 0.0 4.2 Capital revenue 0.0 0.0 0.0 Total grants 0.0 1.1 0.8 Capital grants 0.0 1.1 0.8 a/ Covers period from September 19 to December 31 for 1983. Sources: Ninistry 'f Finance, Federation of St. Christopher and Nevisl and "evs Island Administration. - 43 - Page Iof 2 Table 5.3. ST. CHRISTOPHER AND NEVIS - CONSOLIDATED FEDERAL --------- BOVERNNENT EXPEND1TURE (EC$ million) ---------------__--------------------_--------------_--_---,-_--__--------- 1991 1982 1963 1984 1985 -------------------------------.-----------------------------------__----- Total Expenditure 62.2 62.0 61.0 62.6 92.0 Current Expenditure 51.1 51.5 49.7 52.3 59.9 Personal emoluments 22.4 23.6 24.6 25.1 27.2 Goods and Services 12.0 11.2 13.7 15.5 15.7 Interest Payments 1.7 2.3 2.9 3.9 7.7 Domestic 1.2 1.6 2.4 3.2 5.5 External 0.5 0.7 0.5 0.6 2.2 Transfers 15.0 14.4 9.5 7.9 8.3 Departmental enterprises 5.6 6.5 2.4 2.0 0.7 Tourist Board 1.9 1.0 1.0 0.9 0.9 Sugar industry workers 3.1 1.3 0.0 0.0 0.0 Retirement benefits 2.8 3.2 3.3 2.9 3.4 Abroad 1.4 2.0 1.7 2.0 1.9 Other 0.3 0.4 0.1 0.1 0.0 Development Bank 0.0 0.0 0.0 0.0 1.5 Capital Expenditure 11.1 10.5 11.3 10.3 23.1 Capital expenditure 11.1 10.5 9.3 8.6 13.7 Land purchase 0.0 0.0 2.0 1.7 9.4 I. Central Government Total Expenditure 62.2 62.0 5e.8 52.6 74.5 Current Expenditure 51.1 51.5 47.5 43.9 53.7 Personal emoluments 22.4 23.6 23.4 21.0 21.6 Boods and services 12.0 11.2 13.0 12.1 12.4 Interest 1.7 2.3 2.9 3.8 7.7 Domestic 1.2 1.6 2.4 3.2 5.5 External 0.5 0.7 0.5 0.6 2.2 Transfers 15.0 14.4 8.2 7.0 12.0 Departmental enterprises 5.6 6.5 2.1 1.1 0.2 Tourist Board 1.9 1.0 1.0 0.9 0.9 Sugar industry workers 3.1 1.3 0.0 0.0 0.0 Retirement benefits 2.8 3.2 3.3 2.9 3.4 Abroad 1.4 2.0 1.7 2.0 1.9 Other 0.3 0.4 0.1 0.1 0.0 Nevis Administration 0.0 0.0 0.0 0.0 4.2 Development Bank 0.0 0.0 0.0 0.0 1.5 Capital expenditure 11.1 10.5 11.3 8.7 20.8 Fixed investment 11.1 10.5 9.3 7.0 11.4 Purchase of land a/ 0.0 0.0 2.0 1.7 9.4 …-- - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - 44 - Page 2 of 2 Table 5.3: ST. CHRISTOPHER AND NEVIS - CONSOLIDATED FEDERAL --------- DOVERNMENT EXPENDITURE (EC$ mill1ion) 1981 1982 1983 1984 1965 IX. Nevis Island Administration b/ Total Expenditure 2.2 10.0 11.7 Current expenditure 2.2 8.4 9.4 Personal emoluments 1.2 4.1 5.6 Goods and services 0.7 3.4 3.3 Interest 0.0 0.0 0.0 Transfers 0.3 0.9 0.5 Departmental enterprise-s 0.3 0.9 0.5 Retirement benefits 0.0 0.0 0.0 Capital expenditure and __________________-__ net lending 0.0 1.6 2.3 Capital expenditure 0.0 1.6 2.3 a/ These payments represent compensation to the former owners of the sugar lands which were nationalized by the Government in 1975. b/ Covers period from Se'&ember 19 to December 31 for 1993. Sources: Ministry of Finance, Federation of St. Christopher and Nevis, and Nevis Island Administration. - 45 - Page 1 of 6 Table 5.6i ST. CHRISTOPHER AND NEVIS - SUMMARY OPERATIONS OF en ann -n THE CONSOLIDATED PUBLIC SECTOR (EC$ million) 1981 1982 1983 1984 1985 _________w______n_na_nn___------------------e-----n-------nnn---------n- I* Consolidated Public Sector Total Revenue 59.1 68.8 58.9 61.7 61.b Current Revenue 577 63.7 53.9 58.1 59.3 Capital Revenue 1.4 5.1 5.0 3.6 2.3 Total Expenditure 79.5 70.7 74.7 67.9 94.8 Current Expenditure 65.3 56.7 61.2 55. 66.4 Capital expenditure 14.2 14.0 13.5 12.3 28.4 Fixed Assets 13.3 14.1 12.1 10.5 18.9 Purchase of Land 0.0 0.0 2.0 1.7 9.4 Change in Stocks 0.7 -0.4 -0.6 -0.3 -0.3 Net Lending 0.2 0.3 0.0 0.4 0.4 Current Account Balance -7.6 7.0 -7.3 2.5 -7.1 _________ _____ _____ _____ _____ ___-_ Consolidated Federal Government -1.9 -5.4 -5.3 -5.4 -12.5 Social Security Scheme 7.7 7.0 9.8 9.1 10.1 Public Enterprises -13.7 5.2 -10.8 -1.3 -4.7 Overall Balance -20.4 -1.9 -15.8 -6.2 -33.2 Consolidated Federal Soverneent -12.8 -15.8 -14.3 -14.2 -34.6 Social Security Scheme 7.7 7.0 8.8 9.1 10.1 Public Enterprises -15.6 6.7 -10.3 -1.2 -8.7 Financing 20.4 1.9 15.8 6.2 33.2 External 4.5 4.8 5.9 13.4 7.8 Captital rants 4.4 6.2 7.3 4.9 8.5 Loans (net) 0.1 -1.4 -1.4 8.5 -0.7 Domestic 15.9 -2.9 9.9 -7.2 25.4 Net ECCU Borrowing 0.0 2.6 0.5 7.6 2.0 Commercial Banks 15.4 -5.3 6.6 -16.3 15.4 o/w National Bank 7.6 -8.6 3.4 -12.0 16.1 Other 0.5 -0.2 2.9 1.5 8.0 ana- n - 46 - Page 2 of 6 Table 5.63 ST. CHRISTOPHER AND NEVIS - SUMMARY OPERATIONS OF ---------- THE CONSOLIDATED PUBLIC SECTOR (ECS million) 1981 1982 1983 1984 1985 e_______________________________ _--------------------- ------------------ II. Consolidated Federal Boverneent …________________________ _____ Total Revenue 49.4 46.2 46.7 48.4 47.4 _____________ ----- ----- ----- ----- ----- Current Revenue 49.2 46.1 44.4 46.9 46.4 Capital Revenue 0.2 0.1 2.3 1.5 1.0 Total Expenditure 62.2 62.0 61.0 62.6 82.0 e________________ ----- ----- ----- ----- ____ Current Expenditure 51.1 51.5 49.7 52.3 58.9 Capital Expenditure 11.1 10.5 11.3 10.3 23.1 Fixed Investments 11.1 10.5 9.3 8.6 13.7 Purchase of Land 0.0 0.0 2.0 1.7 9.4 Current Account Balance -1.9 -5.4 -5.3 -5.4 -12.5 Overall Balance -12.8 -15.8 -14.3 -14.2 -34.6 Financing 12.9 15.9 14.3 14.2 34.6 _________ --mee ----- ----- ----- ----- External 4.5 8.1 5.5 14.0 7.5 Capital Grants 4.4 5.8 5.9 4.7 6.1 Concessionary Loans (Net) 0.4 0.5 -0.5 2.2 1.6 Commercial Banks (Net) 0.0 0.0 0.6 7.9 -0.2 Other 0.0 0.0 0.0 0.0 0.0 Change in foreign assets -0.3 1.9 -0.4 -0.8 0.0 Domestic 5.3 7.7 8.8 0.2 27.1 ECCB Borrowing (Net) 0.0 2.6 0.5 7.6 2.0 Commercial Banks (Net) 8.2 5.2 9.1 -8.5 16.1 o/w National Bank 0.0 2.0 4.8 -4.2 16.7 Social Security Scheme -0.1 2.3 -0.1 -0.2 3.4 Public enterprises 0.0 -1.2 -0.9 0.2 -0.2 Other 0.2 -1.2 1.1 1.1 5.8 --------------------------------------------------------------------- _--- - 47 - Page 3 of 6 Table 5.6: ST. CHRISTOPHER AND NEVIS - SUMMARY OPERATIONS OF --------- THE CONSOLIDATED PUBLIC SECTOR (EC$ million) ------------_--------------------------------------------------__--------- 1981 1982 1983 1984 1985 -------------------------------------------------------------------__----- 1I-a. Central Government __________________________ Total revenue 49.4 46.2 45.4 43.7 41.8 Current revenue 49.2 46.1 43.1 42.2 40.8 Capital revenue 0.2 0.1 2.3 1.5 1.0 Total expenditure 62.2 62.0 58.8 52.6 74.5 Current expenditure 51.1 51.5 47.5 43.9 53.7 Capital expenditure 11.1 10.5 11.3 8.7 20.8 Fixed investment 11.1 10.5 9.3 7 0 11.4 Purchase of land 0.0 0.0 2.0 1.7 9.4 Current Account Balance -1.9 -5.4 -4.4 -1.7 -12.9 Overall Balance -12.8 -15.8 -13.4 -8.9 -32.7 Financing 12.8 15.8 13.4 8.9 32.7 External 4.5 8.1 5.5 12.9 5.8 Capital grants 4.4 5.8 5.8 3.6 5.3 Concessionary loans (net) 0.4 0.5 -0.5 2.2 0.7 Commercial banks 0.0 0.0 0.6 7.9 -0.2 Other 0.0 0.0 0.0 0.0 0.0 Change in foreign assets -0.3 1.8 -0.4 -0.8 0.0 Domestic 8.3 13.5 13.7 -0.4 32.2 Net ECCB borrowing 0.0 2.6 0.5 7.6 2.0 Commercial banks (net) 8.2 5.2 7.1 -12.7 16.1 Of which: National Bank 0.0 2.0 3.8 -9.4 16.7 Social Security Scheme -0.1 2.3 -0.2 -0.2 2.7 Public enterprises 0.0 -1.2 -0.8 0.2 -0.2 Other 0.2 4.6 7.1 4.7 11.6 - 48 - Page 4 of 6 Table 5.6: ST. CHRISTOPHER AND NEVIS - SUMMARY OPERATIONS OF --------- THE CONSOLIDATED PUBLIC SECTOR (EC$ million) ---------------------------------------------------------------__--------- 1981 1982 1983 1984 1985 -------------------------------------------------------------------__----- II-b. Nevis Island Administration --------------------------------- Total revenue 1.3 4.7 9.6 Current revenue 1.3 4.7 9.6 Capital revenue 0.0 0.0 0.0 Total expenditure 2.2 10.0 11.7 Current expenditure 2.2 8.4 9.4 Capital expenditure 0.0 1.6 2.3 Current Account Balance -0.9 -3.7 0.2 Overall balance -0.9 -5.3 -2.1 Financing 0.9 5.3 2.1 External 0.0 1.1 1.7 Capital grants 0.0 1.1 0.8 Concessionary loans (net) 0.0 0.0 0.9 Change in foreign assets 0.0 0.0 0.0 Domestic 0.9 4.2 0.4 Commercial banks (net) 1.0 4.2 0.0 Of whiche National Bank 1.0 4.2 0.0 Social Security Scheme 0.1 0.0 0.7 Public enterprises 0.0 0.0 0.0 Other -0.2 0.0 -0.3 …-------------------------------------------------------------------__---- - 49 - Page 5 of 6 Table 5.6t ST. CHRISTOPHER AND NEvIS - SUMMARY OPERATIONS OF -------- THE CONSOLIDATED PUBLIC SECTOR (EC$ million) ---_--------------------------------------------_--------------__--------- 1981 1992 1983 1984 1985 -------------------------------------------------------------------__----- 111. Social Security Scheme a/ ________________________ Total Revenue 9.4 8.9 10.7 11.5 13.1 Current Revenue 9.4 8.9 10.7 11.5 13.1 Capital Revenue 0.0 0.0 0.0 0.0 0.0 Total Expenditure 1.7 1.9 1.9 2.4 3.0 Current Expenditure 1.7 1.9 1.9 2.4 3.0 Capital Expenditure 0.0 0.0 0.0 0.0 0.0 Current Balance 7.7 7.0 8.8 9.1 10.1 Overall Balance 7.7 7.0 8.8 9.1 10.1 Financing -7.7 -7.0 -8.8 -9.1 -10.1 External -0.1 -0.1 -0.2 -0.2 -0.2 Domestic -7.6 -6.9 -8.6 -8.9 -9.9 Government 0.1 -2.3 -0.1 0.2 -3.4 National Bank -7.0 -5.1 -8.9 -9.1 -6.9 Other Banks -0.3 0.0 0.0 0.0 0.0 Public Enterprises -0.1 0.0 0.1 0.0 0.0 Other -0.3 0.5 0.3 0.0 0.4 Memorandum items ________________ Public Sector Contributions 4.1 4.0 4.4 4.8 4.8 o/w: Consolidated Federal Sove'nment 2.3 2.4 2.5 2.6 2.7 Fixed Deposits at the National Bank 28.3 33.0 42.3 51.5 58.4 -------------------------------------------------------------------__----- - 50 - Page 6 of 6 Table 5.6s ST. CHRISTOPHER AND NEVIS - SUMMARY OPERATIONS OF --------- THE CONSOLIDATED PUBLIC SECTOR (EC$ million) -----------------------------------------------------------_---__---.------ 1991 1982 1983 1994 1985 -------------------------------------------------------------------___----- IV. Consolidated Public Enterprises _______________________________ Total Receipts 58.0 64.1 47.6 61.8 56.9 Current Receipts 56.9 59.1 44.9 59.7 5.6 o/w transfers 0.9 0.1 0.0 0.8 0.0 Capital Receipts 1.2 5.0 2.7 2.1 1.3 Total Expenditure 73.6 57.4 57.9 63.0 65.6 Current Expenditure 70.5 53.9 55.7 61.0 60.3 o/w transfers 11.1 1.2 3.6 3.2 2.1 interest 2.6 5.0 4.4 4.4 5.2 Capital Expenditure 3.1 3.5 2.2 2.0 5.3 Fixed Assets 2.2 3.6 2.8 1.9 5.2 Change in Stocks 0.7 -0.4 -0.6 -0.3 -0.3 Net Lending 0.2 0.3 0.0 0.4 0.4 Current Account Balance -13.7 5.2 -10.8 -1.3 -4.7 NACO -10.4 -3.2 -6.3 -2.1 -8.5 SSNC -2.4 9.2 -4.0 0.8 2.0 CEMACO -0.2 0.2 0.0 0.1 0.3 Frigate Bay -0.7 0.4 0.0 -0.2 0.2 Port Authority 0.0 -1.4 -0.5 0.1 1.3 Development Bank 0.0 0.0 0.0 0.0 0.0 Overall Balance -15.6 6.7 -10.3 -1.2 -8.7 Financing 15.6 -6.7 10.3 1.2 8.7 External 0.1 -3.2 0.6 -0.4 0.5 Capital Brants 0.0 0.4 1.5 0.2 2.4 Domestic 15.5 -3.5 9.7 1.6 8.2 Government 0.0 1.2 0.8 -0.2 0.2 National Bank 14.6 -5.5 7.5 1.3 6.3 Other Commercial Banks -0.1 0.1 -0.1 0.0 -0.1 Social Security Scheme 0.1 0.0 -0.1 0.0 0.0 Other 0.9 0.7 1.6 0.5 1.8 …--------------------------------------------------------------------__---- Sources: Ministry of Finance, Planning and Development and Mission estimates. - 51 - Page I of 2 Table 5.71 ST CWRISTOPHER AND NEVIS - OPERATIONS OF SELECTED --------- NONFINANCIAL PUBLIC ENTERPRISES a/ (ECS million) n_____._______n___ __________----- __ __-----------__------------------_ 1981 1982 1983 1984 1985 1. National Agricultural Corporation (NACD) a* e/ Total receipts 15.3 19.3 14.1 19.9 14.1 ------------- ~---- ----- --- - --- -----l Current receipts 15.3 19.3 14.1 19.9 14.1 Of which, transfers 0.9 0.1 0.0 0.8 0.0 Total expenditure 26.6 22.8 19.6 21.7 22.2 Current expenditure 25.7 22.5 20.4 22.0 22.6 Of which: interest 1.9 3.0 3.2 3.4 4.1 Capital expenditure 0.9 0.3 -0.9 -0.3 -0.4 Fixed assets 0.3 0.7 0.0 0.0 0.0 Change in stocks 0.6 -0.4 -0.9 -0.3 -0.4 Current account balance -10.4 -3.2 -6.3 -2.1 -8.5 Overall balance -11.3 -3.5 -5.5 -1.8 -9.1 Financing 11.3 3.5 5.5 1.8 8.1 External -0.7 -0.1 -0.1 -0.1 -0.1 Domestic 12.0 3.6 5.6 1.9 8.2 6overnment 0.0 0.0 0.0 0.0 0.0 National Bank 11.9 3.5 5.5 2.0 8.4 Other commercial banks 0.0 0.0 0.0 0.0 0.0 Social Security Scheme 0.0 0.0 0.0 0.0 0.0 Other 0.1 0.1 0.1 -0.1 -0.2 Memorandum item -____________ Bank overdraft 32.6 36.1 41.6 43.6 50.8 -------------------------------------------------------------------__----- 2/ Fiscal year corresponds to calender year. The Nevis Island Administration commenced operations in 1993. e/ NACO was dissolved in early 1996 and its operations have been taken over by SSMC. The Central Government has assumed its operational debt with the NAtional Dank on the order of EC$53 million as of 6/30/86. - 52 - Page 2 of 2 Table 5.71 ST CHRISTOPHER AND NEVIS - OPERATIONS OF SELECTED ----a ne-a NONFINANCIAL PUBLIC ENTERPRISES a/ (EC$ million) ________________________________________________________a_________________ 1981 1982 1983 1984 1985 …___________________________________ ____________________________________ II. St. Kitts Sugar Manufacturing Corporation (SSMC) b/ ------------------------------------------------ Total receipts 38.5 35.2 26.4--- 33.4 32.0 __________e ___ ----- ----- ----- ----- ----- Current receipts 38 5 35.2 26.4 33.4 32.0 Total expenditure 42.0 27.8 30.6 33.4 31.0 Current expenditure 40.9 26.0 30.4 32.6 30.0 Of which: transfers 11.1 1.2 3.6 3.2 2.1 interest 0o1 0.1 0.1 0.1 0.0 Capital expenditure 1.1 1.8 0.2 0.8 1.0 Fixed assets 1.1 1.8 0.2 0.8 1.0 Change in stocks 0.0 0.0 0.0 0.0 0.0 Current account balance -2.4 9.2 -4.0 0.8 2.0 Overall balance -3.5 7.4 -4.2 0.0 1.0 Financing 3.5 -7.4 4.2 0.0 -1.0 External 0.0 0.0 0.0 0.0 0.0 Domestic 3.5 -7.4 4.2 0.0 -1.0 Government 0.0 0.0 0.0 0.0 0.0 National Bank 3.1 -7.7 4.4 -0.5 -1.1 Other commercial banks 0.0 0.0 0.0 0.0 0.0 Social Security Scheme 0.0 0.0 0.0 0.0 0.0 Other 0.4 0.3 -0.2 0.5 0.1 b/ Fiscal year ending AUgust 31 of year indicated. - 53 - Table 6.1: ST C;iRISTOPHER AND NEVIS - COMMERCIAL BANKS OPERATIONS a/ (EC$ million) December 31 ----..-.-.--__--.-.-__.-------_-_---_----_ 1981 1982 1993 1984 1985 Net foreign assets -0.2 3.0 -0.2 10.6 11.2 Assets 39.1 30.7 64.5 56.4 72.3 Foreign currency holdings 1.3 1.3 1.5 1.6 1.7 Clais on ECC8 area banks 5.1 5.6 4.7 1.2 4.9 Claims on banks abroad 10,1 9.3 37.7 22.4 43.9 Other 22.6 15.5 20.6 31.2 21.8 Liabilities 39.3 27.7 64.7 45.8 61.1 Balance due to ECCB area banks 11.9 7.1 22.5 10.8 11.2 Balance due to banks abroad 11.4 4.3 24.1 18.9 27.8 Nonresident deposits 16.1 16.3 19.1 16.2 22.1 Demand 1.2 1.5 2.9 2.3 3.9 Savings 9.6 11.3 11.3 9.4 10.3 Time 5.3 3.5 4.0 4.5 8.0 Net position with ECC3 9.8 3.2 6.3 16.8 25.2 Claims on ECC8 13.0 5.6 9.0 17.0 25,8 Currency holdings 3.6 3.6 3.1 3.8 5.5 Statutory reserves b/ 0.0 0.0 0.0 7.7 8.1 Statutory deposits b/ 0.0 0.0 0.0 0.0 0.0 Current deposits 0.2 0.0 4.1 3.5 4.2 Fixed deposits 9.2 2.0 1.8 2.0 8.0 Liabilities to ECCD (- 3.2 2.4 2.7 0.2 0.6 Net domestic assets 42.4 54.9 63.6 56.7 77.3 Net credit to Central 6overneent 2.8 9.0 16.1 7.6 23.7 Securities 4.1 5.S 6.3 6.3 6.3 Special reserve deposits b/ 5.7 6.8 7.9 0.0 0.0 Loans & advances c/ 1.9 8.8 17.0 21.7 30.4 Proceeds from Taiwanese loans d/ 0.0 0.0 0.0 4.3 6.7 Deposits (-) -8.9 -13.4 -15.1 -24.7 -19.7 Net credit to statutory bodies 2.2 -0.2 -5.4 -11.0 -10.3 Loans and advances 32.6 35.8 41.6 43.6 54.5 Deposits (-1 -30.4 -36.0 -47.0 -54.6 -64.8 Net credit to other financial institutions -6.3 -5.1 -4.6 -6.1 -5.4 Loans, advances and investments 0.3 0.3 0.3 0.3 0.3 Deposits 1-) -6.6 -5.4 -4.9 -6.4 -5.7 Credit to private sector 51.9 60.2 69.3 91.2 89.1 Interbank float 8,3 8,9 9.1 9.6 7.8 Claims 12.1 14.2 12.6 10.1 10.9 Liabilities 3.8 5.3 3.5 0.5 3.1 Net unclassified assets -16.5 -16.9 -20.9 -24.6 -27.6 Medium- and long-term foreign ______________________________ liabilities d/ 0.0 0.0 0.0 -4.3 -6.7 Liabilities to private sector e/ 52.0 61.1 69.7 79.8 107.0 Demand deposits 11.0 10.2 11.9 12.1 16.7 Time deposits 14.3 14.9 17.9 23.9 42.2 Savings deposits 26.7 36.1 39.9 43.8 49.1 a/ The St. Kitts-Novis-Anguilla National Bank, Barclays Bank, the Bank of Nova Scotia, and the Royal Bank of Canada. b/ From March 15, 1984, required reserves have been held with the ECC8. c/ Includes outstanding balance of an ECS2 millton loan from Barclays Bank to the Central Housing Authority in 1993. d/ This represents outstanding balances of a US$l million loan to St. Kitts- Nevis-Anguilla National Bank from Eximbank of Taiwan received in May 1994 and USt1.5 million from Bank of Taiwan for on-lending to the Central Government. e/ Includes resideqt deposits in foreign currencies. Sourcess Eastern Caribbean Central Bank; commercial banks; and mission estimates. - 54 - Table 7.1: ST. CHRISTOPHER AND NEVIS - SELECTED TOURISM DATA 1991 1982 1983 1984 1985 -------------------------------------------------------------------__--------__----- Total Number of Visitors 46326 45721 57109 73928 79109 Cruise-ship 10950 11146 22835 32872 30164 Excursionist 1034 891 969 1190 1398 Stopover 34442 33684 33305 39866 47547 Hotel 14199 12685 9817 16446 24277 Private homes and others 16660 18115 19882 20404 22217 Business 3583 2884 3606 3016 1053 Average period of stay (days) ____________________________ Hotel 5.4 5.6 6.0 6.5 7.0 Private homes and others 12.2 12.4 12.5 12.5 12.5 Business 4.8 4.9 5.0 5.0 5.0 Average expenditure/day (US$) _______________________ Cruise-ship 14.3 15.0 16.0 17.5 20.0 Excursionist 28.6 30.0 31.0 33.0 33.0 Hotel 71.4 72.0 76.0 84.5 94.5 Private homes 14.3 15.0 16.0 17.5 17.5 Business 76.2 80.0 84.0 98.2 90.0 (in Millions of U.S. Dollars) Total expenditure 9.98 9.81 10.36 15.44 20.34 Cruise-ship 0.16 0.17 0.37 0.58 0.60 Excursionist 0.03 0.03 0.03 0.04 0.05 Hotel 5.47 5.11 4.49 9.03 14.36 Private homes 2.91 3.37 3.98 4.46 4.86 Business 1.31 1.13 1.51 1.33 0.47 Memorandum iteus: Stayover Visitor. by ____________________ Country of Residence (Z) 100.0 100.0 100.0 100.0 100.0 United States 34.8 31.4 28.8 35.5 32.3 Canada 5.8 7.1 6.0 6.1 15.9 United Kingdom 7.2 7.8 8.3 7.5 6.9 CARICOM Countries 15.3 16.6 16.9 15.1 13.2 Other a/ 36.9 37.1 40.0 35.8 31.8 …------------------------------------------------------------------__--------__----- a/ Mainly Virgin Islands and Netherlands Antilles. Sourcess Statistical Office, Planning Unit, and staff estimates. - 55 - Table 8.1s ST CHRISTOPHER AND NEVIS - CONSUMER PRICE INDEX (January 1979 = 100) ----------------------------------------------------------------------__-----__----- 1980 1981 1982 1983 1984 1985 I. Period Averages All items 137.8 152.3 161.4 165.0 169.5 173.3 Food 133.2 147.9 153.7 156.8 161.3 161.8 Tobacco and alcohol 137.4 153.0 169.2 173.0 175.9 183.4 Housing 121.4 124.7 128.5 128.7 142.4 180.4 Fuel and light 152.9 162.0 168.5 174.9 180.1 182.2 Clothing and Footwear 130.9 148.6 159.0 163.9 160.9 155.7 Furniture & appliances 145.5 174.2 173.7 177.7 191.4 201.7 Household supplies 147.6 169.4 192.3 197.9 197.8 195.9 Transportion 171.8 189.1 198.7 205.0 205.6 208.4 Other services 147.0 157.8 181.0 184.9 188.9 190.0 (Percentage changes) All items 10.5 6.0 2.2 2.7 2.2 Food 11.0 3.9 2.0 2.9 0.3 Tobacco and alcohol 11.4 10.6 2.2 1.7 4.3 Housing 2.7 3.0 0.2 10.6 26.7 Fuel and light 6.0 4.0 3.8 3.0 1.2 Clothing and Footwear 13.5 7.0 3.1 -1.8 -3.2 Furniture & appliances 19.7 -0.3 2.3 7.7 5.4 Household supplies 14.8 13.5 2.9 -0.1 -1.0 Transportion 10.1 5.1 3.2 0.3 1.4 Other services 7.3 14.7 2.2 2.2 0.6 I. End of Period All items 144.7 157.2 162.5 166.7 171.2 174.2 Food 141.0 152.4 153.6 158.1 161.0 160.4 Tobacco and alcohol 140.4 158.5 172.1 173.1 181.2 185.0 Housing 122.2 126.2 128.9 128.6 176.0 180.6 Fuel and light 158.3 163.4 177.0 176.3 183.2 183.1 Clothing and Footwear 132.3 161.1 157.7 170.0 146.9 160.2 Furniture & appliances 160.3 181.8 171.6 186.6 190.7 203.2 Household supplies 153.4 181.9 196.7 194.3 196.6 193.6 Transportion 188.2 189.5 205.0 205.6 205.6 238.0 Other services 154.3 159.7 181.6 188.4 188.6 189.0 (Percentage changes) All items 8.6 3.4 2.6 2.7 1.8 Food 8.1 0.8 2.9 1.8 -0.4 Tobacco and alcohol 12.9 8.6 0.6 4.7 2.1 Housing 3.3 2.1 -0.2 36.9 2.6 Fuel and light 3.2 8.3 -0.4 3.9 -0.1 Clothinq and Footwear 21.8 -2.1 7.8 -13.6 9.1 Furniture & appliances 13.4 -5.6 8.7 2.2 6.6 Household supplies 18.6 8.1 -1.2 1.2 -1.5 Transportion 0.7 8.2 0.3 0.0 15.8 Other services 3.5 13.7 3.7 0.1 0.2 Source: Statistical Offire. Plannino Unit. IBRD 19241 62'60' 62L40' Na,ppa bay ry w"~~~~~~~JI' ST. CHRISTOPHER S~~~~~~ T -^ H N 0 / $ 5od T _ ANNEHRg v -,C H U R C H; 5 T l t. Maio Roods \ ST + | M AtR Y \ t Airports -17-20' H O M A S'-' ~\;,rPoh ond ---Parish Boundories tbtlid+Old Rodo \ T AET ER \~ ' T GYszo /OLDEN ROCK 0 2 4, 0* ,0 } 2 3 4, /~~~~~~~~~~~~~~~~~~~~~~~~~ 9 c 02w^0~~iiI.i. a,0 f°6qots Bay >li* D00MNCAN w, ftT0R.cR YN $ N E V I JAMAICA sr.CHRISTOPANaXA -TH __'MA-S S 2 GE O R GE ST4CHR ISTJOPH AN ;I JAMAIC AMEICAITSEN02-0 K,j.s*iet* ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ SPEME 1985 o I 2 3 4 oo C LETOM MARTHDL ITHMA ST AIItGPIEn AN100 T OH ,I SOUTHIAMERICA 6 -20 I - I I - I~~~~~~~~~~~~- - S w~~~~~~~ IDEMO ~ ~ ~ ~ ~ ~ ~ r-TMER18