St Kitts and Nevis Final - Running Head SAINT KITTS AND...

Running Head: SAINT KITTS AND NEVIS
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Case Analysis – Adapting to Market Conditions
Saint Kitts and Nevis
Jackie Raynor
Argosy University

SAINT KITTS AND NEVIS 2
Executive Summary
Saint Kitts and Nevis make up an island country in the Caribbean Sea. In the
early 1620s the British began to settle on both islands. The French, however, also began
to settle on St. Christopher’s Island, whose name was shortened to St. Kitts. The 1783
Treaty of Paris recognized Britain’s jurisdiction over both islands. In 1967, Saint Kitts,
Nevis, and Anguilla all became a self-governing state in affiliation with Great Britain.
Anguilla withdrew from the treaty later that year and to this day, remains a British
territory. Saint Kitts and Nevis became knows as The Federation of Saint Kitts and Nevis
in 1983 and achieved their full independence. The alliance between both Saint Kitts and
Nevis has not been an easy one since they claimed their independence. In 1998, Nevis
chose to vote to separate itself from St. Kitts, but fell short of the majority votes needed
(Countrywatch, 2015).
The sugar-plantation economy started a long and irreversible decline early in the 19th
century, as the growth of production outpaced that of demand and trade regimes began to shift
from a policy of pref- erential markets for colonial planters toward competitive sales allowing
buyers to seek the lowest available price. Throughout the British Empire, the slave trade was
banned in 1808 and slavery abol- ished altogether in 1834. Thereafter, St. Kitts and Nevis became
backwaters in the English colonial system, with little activity besides sugar growing but scant
remuneration from that crop. As the popu- lation increased, poverty worsened for many
inhabitants, and a pattern of emigration, mostly to larger and somewhat more prosperous
Caribbean islands, set in.

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Macroeconomic Condition
Saint Kitts and Nevis’s economy of is solely dependent on tourism, which has
replaced the traditional sugar industry, which folded in July 2005 after decades of losses.
The macroeconomic environment in Saint Kitts and Nevis is broadly stable: inflation is
relatively low, there are no restrictions on capital flows, and exchange-rate uncertainty is
limited.