Project Overview
OVERVIEW
The St. Lucia economy is heavily dependent on tourism. Tourism sector and overall economic growth were significantly impacted by the 2007-08 financial crisis and extreme weather events. St. Lucia’s growth has remained subdued, averaging 0.9 percent over the period 2008–2018 compared to 2.4 percent in the previous decade. Unemployment is approaching 21%, and youth unemployment is higher at 38.5%.
For increased resilience, St Lucia needs to develop the export capacity of other sectors and invest in diversification within the tourism sector - including by introducing new products that increase local content in the tourism supply chain. St Lucia’s Medium-Term Development Plan identifies tourism, agriculture and infrastructure as priorities for accelerating inclusive growth and the Government has initiated efforts to develop village tourism. Reforms are, however, needed to improve the business and investment climate, and access to credit remains a major challenge. According to the IMF 2019 Article IV Consultation, total bank credit to the private sector has been shrinking for six consecutive years.
The project is cofinanced by the Government of St Lucia and the CDF and develops St Lucia's community-based tourism product in 7 communities with a population of over 150,000; and increases the participation of, and income earned by, the communities in the delivery of tourism services. Phase I commences with 3 communities (Anse La Raye, Grost Ilet, and Soufriere). Phase II expands the community tourism programme into 4 additional communities (Dennery, Castries, Micaud, and Vieux Forte).
Phase I includes:
• Operationalising St Lucia Community Tourism Agency.
• Upgrade of 4 physical assets critical to delivering tourism services in 2 of the 7 targeted communities - Anse La Raye (3) and Gros Ilet (1).
• Rollout of a community tourism Quality Assurance System.
• Delivery of training to ensure service excellence and brand compliance by participating SMEs.
• Communications and marketing management to support the development of St Lucia’s community tourism brand.
• A US$2.7 m CDF line of credit, which will provide approximately 135 SMEs in participating communities with financing to enhance their service delivery capacity.
