A British dependent territory, Montserrat has a representative government with a ministerial system. Queen Elizabeth II is Head of State and is represented by a resident Governor (Mr Tony Abbott was appointed Governor in 1997). The Government consists of a Legislative and an Executive Council, with elections being held every five years for membership in the former.
The head of Government is called the Chief Minister; a Speaker presides over the seven-member Council of Representatives. As executive authority and head of the civil service, the Governor is responsible for defence, internal security and external affairs. A constitutional reform in 1989 added financial services to the Governor’s powers and recognized Montserrat’s right to self-determination. Montserratians have frequently discussed the pros and cons of opting for independence, but the official position is that economic independence must precede political independence, so with the current volcanic uncertainties colonial status may remain for many years to come.
Tourism used to contribute about 30% of gdp, it was the largest supplier of foreign exchange and the Government actively encouraged investment in tourism projects. The influx of foreign residents in the 1980s saw a sharp rise in real estate deals and building construction with a parallel dependence on imports of capital and consumer goods. Gross domestic product grew rapidly at the end of the 1980s, expanding by 12.8% in 1988, although a slower rate was recorded in 1989 because of the devastation wreaked by Hurricane Hugo. Ninety-five percent of the housing stock was totally or partially destroyed; production and exports were disrupted, infrastructure was severely damaged; public sector finances were hit by reduced income and greater expenditure demands; tourism slumped. Similar economic disruption occurred as a result of the volcanic eruption in 1995-1997 (see box) when the south had to be evacuated to the north. Most ex-pats left the island and tourists stayed away. The island now depends on aid from the UK but is beginning to recover, with new construction and hotels opening up again.