Economy of Saint Vincent and the Grenadines
The economy of Saint Vincent and the Grenadines is largely reliant on agriculture, particularly as the world's leading producer of arrowroot, alongside other exotic fruits, vegetables, and root crops. Bananas play a significant role, employing over 60% of the workforce and accounting for half of the nation's merchandise exports. This heavy dependence on a single crop makes the economy susceptible to external influences. Historically, banana farmers in Saint Vincent benefited from preferential access to the European market. However, with the European Union's planned reduction of this preferential treatment, economic diversification has become essential.
Tourism has developed into a crucial sector of the economy. By 1993, it had overtaken banana exports as the primary source of foreign currency. The Grenadines, in particular, have become popular with affluent yachting visitors, and this upward trend in tourism revenues is expected to continue. In 1996, new cruise ship and ferry terminals were introduced, leading to a marked rise in passenger numbers. By 1998, a total of 202,109 visitors were recorded, with only 2.7% from the United States, as the majority of tourists hailed from other Caribbean nations and the United Kingdom. By 2005, tourism's contribution to the economy had reached US$90 million.
Saint Vincent and the Grenadines also benefits from the U.S. Caribbean Basin Initiative and is a member of the Caribbean Community (CARICOM), which has established a framework agreement with the United States to encourage trade and investment within the region.