St Lucia is an independent member of the Commonwealth and the British monarch is the Head of State, represented by a Governor General (Dr Pearlette Louisy, the first woman to hold the post). The 17-member House of Assembly is elected every five years, while the 11 members of the Senate are appointed by the Governor General, six on the advice of the Prime Minister, three on the advice of the Leader of the Opposition and two of his own choice.
St Lucia’s economy has historically been based on agriculture, originally sugar, but since the 1920s particularly on bananas and also cocoa and coconuts. It has the largest banana crop in the Windward Islands. Banana exports rose from 99,000 tonnes in 1991 to 135,000 tonnes in 1992 but fell back to 108,830 tonnes in 1993, were drastically cut by storm damage in 1994 and after recovery in 1995-96, slumped to 71,395 tonnes in 1997. The industry has suffered because of low prices; strikes by farmers have caused further damage, and in 1994 the St Lucia Banana Growers Association (SLBGA) was put into receivership with debts of EC$44mn. The SLBGA was returned to the control of growers in 1996 with changes in the composition and accountability of its board. The association sought assistance from several financial institutions and aid agencies but the SLP government elected in 1997 pledged to pay off its debts and transform the SLBGA into a company, owned and managed by farmers. Privatization of the SLBGA was completed in 1998 and it is now known as the St Lucia Banana Corporation. Greater competition in the European banana market, particularly after EC unification in 1992, is leading to diversification away from bananas; dairy farming, flowers and fisheries are being encouraged.
There is also some industry, with data processing and a diversified manufacturing sector producing clothing, toys, sportswear and diving gear, and 14 percent of the workforce is now engaged in manufacturing. However, unemployment in the manufacturing sector rose sharply in 1996 with the closure of three foreign-owned garment factories, which had been operating for nearly 10 years, the period during which tax-free concessions are granted. The island is promoted as a location for industrial development within the US Caribbean Basin Initiative. An oil transshipment terminal has been built and the Government has set up several industrial estates. There are plans to establish a free zone at Vieux Fort, where a new deep water container port was opened in 1993. Public sector investment in large scale infrastructure projects includes electricity expansion and road construction.
Tourism is now a major foreign exchange earner, and in 1997 248,401 visitors stayed on the island, an increase of 4.5 percent over 1996. St Lucia is one of the few Caribbean islands to show consistent, although slowing, growth in tourism. Europeans, who stay longer than Americans, are now the largest and fastest growing segment of the market, making nearly 40 percent of the total compared with 36 percent North Americans. There are over 3,000 hotel rooms, of which the eight all-inclusive resorts of the 12 major hotels account for almost half. Further expansion is taking place with a new Hyatt hotel being built in the north of the island and a 350-room hotel and marina to be built by the Jamaican Superclubs chain, is planned for the south, near Hewanorra airport. Small hotels and restaurants have suffered a reported 75 percent drop in business since the growth of all-inclusives. The Atlantic Rally for Cruisers was changed from Barbados, its original venue, to Rodney Bay, St Lucia in 1990 and this brings revenue of about US$2mn to the tourist industry.
Cruise ship passengers have also shown steady increases. Although the number of calls has fallen, larger ships accounted for the rise.