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Caribbean Islands Macroeconomic Overview
Economic growth in the early 1980s slowed after the relatively
rapid expansion of the 1970s. This retardation was the result of
several factors: recession in the industrial countries, trade
problems within the Caribbean Community and Common Market (Caricom-
-see Appendix C), and a severe drought that reduced agricultural
output in 1984. Increased tourism brought a slight recovery in
1985, as the gross domestic product (GDP--see Glossary) reached
US$180.3 million, or US$2,273 per capita. In 1986 GDP fell again,
however, to US$109 million, or US$1,346 per capita. This
represented a decline of 16 percent from the 1982 GDP of US$129.5
million and a 20-percent drop from the 1982 per capita GDP of
US$1,682.
Antigua and Barbuda faced a debt situation in the mid-1980s;
this was partly the result of the recession of the early 1980s,
which did not support the national outlays on infrastructure and
other items. In 1983 the current account deficit of the central
government reached 3.8 percent of GDP, with a gross external debt
of 16.3 percent of GDP. By the end of 1984, debt had reached close
to US$100 million. Servicing the debt cost more than US$7.4 million
per year, which represented 16 percent of government revenues.
Import expenses were expected to fall in the late 1980s, and
tourism revenues were expected to increase, thereby helping to
narrow the balance of payments gap. The central government was
reducing public expenditures and state investment because of the
fiscal difficulties created by the debt problem.
The Barbudan economy differed slightly from that of Antigua
proper in the late 1980s because tourism was relatively less
important to the smaller island's economy. Barbuda's largest source
of income was remittances from relatives working in the United
States or Britain. The second largest source was a subsidy from the
Antiguan government, budgeted and distributed by the warden of
Barbuda, the person selected to administer Barbudan economic
matters. Economic activity and employment were concentrated in
fishing, followed by agriculture (especially the raising of
livestock) and tourism. Other sources of income included charcoal
manufacturing and salt mining. Development of peanut farming and
the exploitation of the island's coconut trees offered potential.
The labor force in Antigua and Barbuda consisted of 31,500
workers in 1984. In the mid-1980s, these workers were divided
fairly equally among three trade unions: the ATLU, the Antigua
Workers Union (AWU), and the Antigua Public Service Association.
The first two were affiliated with the two main political parties,
the ALP and the Progressive Labour Movement (PLM), respectively.
Workers were free to choose the union to which they wanted to
belong. Hence, each industry employed members of two or three labor
unions. The labor union represented by the simple majority (50
percent plus one) of workers was designated to represent all of the
workers in that industry during contract negotiations. Wage
contracts normally were valid for three years.
Foreign nationals were allowed work permits only if there were
no local applicants qualified for a specific position. Work permits
generally were granted, however, for those who were involved either
directly or via their companies in an investment project considered
to be important to the country. Citizens of the United States,
Canada, and Britain did not need visas.
Communications on Antigua were modern and adequately served all
parts of the island. On Barbuda, however, communications consisted
of only a few telephones, mostly in the village of Codrington. The
telephone system was well maintained, fully automatic, and had over
6,700 telephones. Radio-relay links from Antigua to Saba and
Guadeloupe, a submarine cable, and a ground satellite station all
provided excellent international service to both islands. Antigua
had three AM radio stations broadcasting on medium wave: the
government-owned Antigua Broadcasting Service on 620 kilohertz, a
commercial station on 1100 kilohertz, and the religious Caribbean
Radio Lighthouse on 1165 kilohertz. Two shortwave stations reached
points throughout the Western Hemisphere from transmitters on the
island; the British Broadcasting Corporation and Deutsche Welle of
the Federal Republic of Germany (West Germany) shared one
transmitter, and the other relayed programs from the Voice of
America. St. John's also had two small FM transmitters on 99.0 and
90.0 megahertz and television service on Channel 10. The
Workers' Voice and the Outlet were the two main local
newspapers. The Herald was a new third newspaper.
The transportation system was well developed on Antigua but
practically nonexistent on Barbuda. About 240 kilometers of paved
or gravel roads connected all areas of Antigua. V.C. Bird
International Airport, east of St. John's, had a paved runway and
handled international flights. A small, unpaved strip at the
southern tip of Barbuda could accommodate only small aircraft. St.
John's was the main port for the islands, but smaller vessels could
also dock at English Harbour on the south side of Antigua. More
than seventy-five kilometers of narrow-gauge railroad track
extended south and east from St. John's. These lines, however, were
used almost exclusively to transport sugarcane. Neither island had
significant inland waterways.
Data as of November 1987
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