Working Paper Series: Special Edition of 2016 to 2018 Interns

1.0 Introduction Sustainable, inclusive and quality employment remains a key policy objective of the global policy agenda. Like many developing economies Saint Lucia has struggled with unemployment, this is particularly attributed to the structural nature of the economy being a mono sector economy. Saint Lucia is a small open economy with an estimated nominal GDP of EC$3.8 62 billion as at December 2015, it is also the largest economy in the Eastern Caribbean Currency Union. It has an estimated population of 174,257 (Central Statistics Office, 2015 mid-year estimate) and a labour force 63 of 101,608 (CSO, 2015). Like many of its Caribbean counterparts, unemployment is regarded as one of the most challenging economic problems facing the government today with a lasting solution eluding the domestic situation. Over the last two decades Saint Lucia’s economy has been under a transition, from agricultural activities to the services sector. Up until the late 1990’s, the economy was largely agriculture based, with the labour intensive sector contributing about 15.0 per cent of GDP at its peak and accounting for the largest share of total employment. Following the decline of the agriculture sector due to changes in the international trading environment, in particular the loss of the EU’s preferential trading arrangement for bananas in 1999, the economy experienced a transition to services, particularly tourism. The transition of the economy displaced many persons employed in the agricultural sector. Many shifted to hotel and restaurant services, construction, real estate activities and business services. However this was not enough to soak up the excess labour left over from the agricultural sector. The global recession of 2008 exposed the vulnerability of the economy. Since the crisis, the major growth sectors experienced severe downturns reeling from declining competitiveness and weak external demand (Gimenez, St. Catherine, Karver, Odawara, 2015). Employment was yet again significantly and adversely impacted. Consequently, the rate of unemployment rose by an average of 21.8 per cent post 2008. In addition, youth unemployment became disparagingly high averaging above 30.0 per cent and reaching its highest at 41.8 per cent in 2014. In the seven years following the great recession of 2008, the economy contracted five of the seven years growing modestly in

62 Ministry of Finance estimate 63 Labour Force is defined as the portion of the population 15 years and over either employed or looking for work

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