Economy on Saint Barthelemy : Discover

Discover : Economy of Saint-Barthelemy

Economy

Saint Barthelemy’s economy is based on top-of-the-range tourism, and is thus entirely different from that of Guadeloupe and the Caribbean region in general. It is a dry and barren little island, not ideal for agricultural and industrial activity. Saint Barth’s population had suffered centuries of isolation and poverty before the dawn of tourism, and is now experiencing a boom of salaries and quality of life unheard of in the history of the island.

Saint Barth’s regular customers are a wealthy clientele of mostly North American origin, who favour this island due to the beauty of its nature, its calmness, security and the harmonious development of urbanism. Large-scale tourism has missed out on Saint Barth, and tourist masses make their choice among the other islands of the Caribbean, as they offer easier access (intercontinental flights can not land on Saint Barth), and a significantly cheaper cost of living.

Developing tourism has substantially eased the inhabitants’ financial situation: local debts are much slighter than on Guadeloupe or Martinique, and unemployment levels are also extremely low. Welfare accommodation is practically non-existent, and the economic situation can be deemed a relatively good one compared to the rest of the region. Certain factors, however, must be taken into consideration when evoking the island’s economy and standard of living.

Cost of living is extremely high due to the island’s isolated location and the lack of agricultural activity, as most basic products must be imported. The critical deficiency of fresh water as well as soaring prices of construction add up to extremely high charges which local inhabitants must take into consideration. Differences in the cost of living of Saint Barthelemy and Guadeloupe are estimated around 25%.

A stable economic and social situation, oriented on tourism. Once an isolated population, Saint Bartheans have adjusted their way of life to their affluent clientele, mostly of North American origin, attracted by the island’s security and the harmonious development of urbanism.

Saint Barthelemy welcomes 70,000 tourists per year in its wide range of hotels and villas, and 130,000 visitors per year who choose to arrive by boat. The American clientele accounts for as high as 70% of total visitors in the high season.

The island boasts high-quality infrastructure. The airport of Saint Jean, Gustave III has been modernised and adapted to receiving larger aeroplanes. The airport’s total traffic adds up to 200,000 passengers per year.

Over 60% of all firms implanted on Saint Barthelemy involve in tertiary-sector activities. The island’s hotels are essentially luxury category, complemented by 400 villas to rent, run by specialised agencies. Top-of-the-range tourism comes hand in hand with luxury commerce, with more than 200 duty-free retail outlets. The island’s economic activity is essentially seasonal, and dependent on the effects of currency exchange rates and the situation of the dollar.

Construction and public sectors also hold an important status in the economy, as American citizens tend to invest in constructing habitations of high standing, destined for personal use or rent. Nevertheless, turnover in these sectors is at a decline, which can be explained by the market’s relatively tiny size and the municipality’s wish to preserve the environment.

Unemployment is scarce on Saint Barthelemy (with no more than 190 registered unemployed persons on the 1st November, 2004, accounting for 4.2% of the population), and the island increasingly opens its doors to foreign labour, originating from Portugal or Brazil.

Environment protection above all. Positioning the island as luxury tourism provider has endowed it with a relatively good resistance to change of the global economic climate. Preserving the environment remains one of its most important aims, in order to sustain the growth of high-standard tourism.

A natural reserve has been created in this objective on Fourche Island, in cooperation with the Ministry of Environment.

Fiscal system

Without going into detail concerning the panoply of laws applied to the specific status of “Non-Metropolitan” geographical entities, we can state that French fiscal administration does not levy customs or indirect taxes on Saint Barthelemy. A unique interpretation of this right -a result of the island’s historic attainments (obligations subdued by the Swedish on the retrocession of the island)- acquits citizens from paying income taxes as well as company taxes, which remains overtly opposed by the fiscal system, these latter obligations being of the nature of direct taxes, and thus in no connection whatsoever with the island’s historic accomplishments.