2014 Index of Economic Freedom

Saint Vincent and the Grenadines

overall score67.0
world rank52
Rule of Law

Property Rights70.0

Freedom From Corruption61.1

Limited Government

Government Spending72.4

Fiscal Freedom73.7

Regulatory Efficiency

Business Freedom76.3

Labor Freedom78.7

Monetary Freedom79.8

Open Markets

Trade Freedom67.6

Investment Freedom50.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 0.1 million
  • GDP (PPP):
    • $1.3 billion
    • 0.5% growth
    • -0.8% 5-year compound annual growth
    • $11,776 per capita
  • Unemployment:
    • 15.0%
  • Inflation (CPI):
    • 2.6%
  • FDI Inflow:
    • $125.5 million
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Background

Prime Minister Ralph Gonsalves’ Unity Labour Party has governed since 2001 and retained a slim majority in the December 2010 parliamentary elections. Saint Vincent and the Grenadines is a parliamentary democracy and part of the British Commonwealth. It is also a member of the Caribbean Community (CARICOM) and the Organization of Eastern Caribbean States. The economy is supported by the U.S. Caribbean Basin Initiative, which allows goods to enter the United States duty-free. Agriculture and tourism employ a significant portion of the workforce, but high formal-sector unemployment has caused many to emigrate. The economy is vulnerable to global price fluctuations and natural disasters. Tourism has not recovered from the 2009 recession, and nearly one-third of all revenue is directed toward servicing the high government debt.

Rule of LawView Methodology

Property Rights 70.0 Create a Graph using this measurement

Freedom From Corruption 61.1 Create a Graph using this measurement

Compared to some neighboring countries, the rule of law remains strong, and corruption is not pervasive. There have been some allegations of money laundering through Saint Vincent banks and drug-related corruption within the government and police, but the government has taken action to prosecute such crimes. The relatively independent and efficient judicial system is based on British common law.

Limited GovernmentView Methodology

The top individual income tax rate is 32.5 percent, and the top corporate tax rate has risen to 33 percent. Other taxes include a property tax and a value-added tax (VAT). The overall tax burden amounts to 22 percent of the total domestic economy. Public expenditures equal 30 percent of GDP. Government debt equates to about 70 percent of gross domestic income.

Regulatory EfficiencyView Methodology

It takes seven procedures and about 10 days on average to incorporate a business, and no minimum capital is required. However, modern bankruptcy procedures are not in place. Labor regulations are relatively flexible, but their application is uneven. Several subsidy programs benefit agricultural products such as bananas and state-owned enterprises such as a coconut-water bottling plant.

Open MarketsView Methodology

The average tariff rate in Saint Vincent and the Grenadines is 11.2 percent. Non-tariff barriers to trade are relatively low. A license for foreign investment is required if foreign ownership levels will exceed 50 percent. Foreign investment in land is regulated. The developing financial system is dominated by banks. Capital markets are underdeveloped, and local entrepreneurs lack adequate access to a wide variety of financing instruments.

Country's Score Over Time

Bar Graph of Saint Vincent and the Grenadines Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Saint Vincent and the Grenadines to other economic country groups

Regional Ranking

rank country overall change
1Chile78.7-0.3
2Saint Lucia70.70.3
3Colombia70.71.1
4The Bahamas69.8-0.3
5Uruguay 69.3-0.4
6Barbados68.3-1.0
7Peru67.4-0.8
8Saint Vincent and the Grenadines670.3
9Costa Rica 66.9-0.1
10Jamaica 66.7-0.1
11El Salvador 66.2-0.5
12Dominica65.21.3
13Panama 63.40.9
14Trinidad and Tobago62.70.4
15Paraguay 620.9
16Dominican Republic61.31.6
17Guatemala 61.21.2
18Nicaragua 58.41.8
19Honduras 57.1-1.3
20Brazil56.9-0.8
21Belize56.7-0.6
22Guyana55.71.9
23Suriname54.22.2
24Haiti48.90.8
25Bolivia48.40.5
26Ecuador481.1
27Argentina44.6-2.1
28Venezuela 36.30.2
29Cuba28.70.2
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