Recent developments in St Lucia, Seychelles and Vanuatu

Abstract

The global financial crisis of 2008 and 2009 and resulting global recession have impacted most economies, including those of small states, which are characterised by a high degree of economic openness. All three small island states that were profiled in the previous chapters were adversely affected but not with the same intensity, with Vanuatu still registering positive growth in 2009, whereas St Lucia and Seychelles are estimated to have experienced negative growth rates (IMF, 201 Oe). Recent evidence would seem to suggest that the major effects on these small states were not mostly felt on the financial sector, due to the fact that the banking industry in these states did not indulge in excessively risky business, but on aggregate demand, especially on exports of goods and services. This chapter will briefly describe recent changes in the economies of these three small island states, with information derived mostly from IMF surveys.