Discover : Economy of Guadeloupe

Discover : Economy of Guadeloupe

Economy

On evoking the economy of Guadeloupe, it is necessary to take into consideration its colonial past, essentially centred on agricultural activity. The agricultural sector of the island is in a paradox situation today: agriculture is extremely visible in terms of workforce and exploited surface, as well as of typical products of the region (sugar, rum, banana), yet agriculture accounts for only a feeble 4% of the island’s GDP. This antinomy is due to an important period of transition begun in the early 80s: international competition left its mark on the exploitation of the island’s foodstuffs, and Guadeloupe, not being able to face up to cheap foreign produce, has turned towards other segments of activity. Secondary and tertiary sectors account for 89% of the island’s GDP today (31% of which is the sector of administration), and the local market shows a faster pace of economic growth than the agricultural sector.

As a general rule, the DOM (French Overseas Departments) are endowed by a great number of derogations, and undergo highly complex legal arrangements. Guadeloupe holds a department status, yet is regarded as ”export territory” in terms of commercial exchange. A metropolitan company selling goods to Guadeloupe is considered an exporter, and is thus exempt from paying VAT. Guyana, Saint-Maarten and Saint-Barthelemy do not levy VAT, on Guadeloupe its rate is between 2.2 and 8.5%. All goods entering Guadeloupe fall into the tax category of “sea toll”, which constitutes an important source of income for the community.

The amount of this toll is stated by the Regional Council depending on the category of the products concerned, though it only rarely surmounts 30%. The collected sum is distributed among the communities (accounting for about 40% of their fiscal income). The sea toll is complemented by another tax: the additional due (between 1 and 2.5%), conditions of which remain dependent on the Regional Council, which is its direct beneficiary.

Politics

Contrarily to Metropolitan France, where a region consists of several departments, the overseas regions are “monodepartmental”: the same territory functions as a region and a department at the same time. In this way, Guadeloupe disposes of a General Council (presided by Jacques Gillot since 2001) as well as of a Regional Council (presided by Victorin Lurel since 2004).

The population of the overseas departments was asked to state their opinion on the regionalisation they preferred by the government of 1971.
Three departments of the West Indies showed considerable divergence of opinion, so the government eventually decided to enact its power of decision, and instituted the system of monodepartmental regions in the area.

French West Indian electors were consulted on the 7th December, 2003 to state their views on the future of their institutions. Martinique and Guadeloupe were proposed to set up a unique territorial community, and Saint Maarten and Saint Barth were offered a status of Overseas Community (COM), according to the decentralisation laws of the 28th March, 2003. In case of common accord, the current Overseas Departments would have been further split into categories of Overseas Departments (DOM) and Overseas Communities (COM).

This change in status, originally claimed by French West Indian communities in Paris, would have moved the islands towards a greater autonomy of, for example, adapting Metropolitan laws according to specific criteria, to be set within the framework of the above mentioned reforms. To a general surprise, though, the population of Martinique and Guadeloupe voted ‘no’ to this proposal. The context of this referendum, however, was similar to that on the European Constitution: several political factors (such as the Corsican ‘no’, controversies around Nicolas Sarkozy, etc.) made it difficult for the average citizen to decipher what exactly he was voting for or against. Similarly, as conditions and criteria were to be set after the referendum, public opinion remained distrustful towards the government.

It is important to mention, though, that on this point, Saint Maarten and Saint Barth had wholly different desires to fulfil. As a matter of fact, these islands had openly complained of their differences with Guadeloupe for a long time, yet remained hereto dependent on the island. The institutional reform was thus welcomed with open arms, Saint Barth’s “yes” was overpowering and Saint Maarten’s also without doubt. These two islands have therefore confirmed the process of their transformation into Overseas Communities (COM), taking advantage of the new framework and at the same time permitted to keep their previously acquired fiscal advantages.