ECONOMY OF SAINT HELENA

JAMESTOWN
SATELITE IMAGE ISLAND
Much of the data for the following text has been sourced from the Government of St Helena Sustainable Development Plan. The public sector dominates the economy accounting for about half of GDP. Quoted at constant 2002 prices, the latter fell from £12.4 million in 1999/2000 to £11.2 million in 2005/6. Imports are mainly from the UK and South Africa and amounted to £6.4 million in 2004/5 (quoted on an FOB basis). Exports are much smaller, amounting to £0.24 million in 2004/5. Exports mainly comprise fish and coffee. Philatelic sales were £0.06 million that year. The limited number of visiting tourists spent about £0.43 million in 2004/05, representing a contribution to GDP of 3.1%.

Public expenditure rose from £10.2 million in 2001/02 to £12.3 million in 2005/06. The contribution of UK budgetary aid to total SHG government expenditure rose from £4.6 million in to £6.4 million over the same period. Wages and salaries represent about 38% of recurrent expenditure. The population has steadily declined since the late 1980s and has dropped from 5,157 at the 1998 census to 4,255 in 2008. In the past emigration was characterised by young unaccompanied persons leaving to work on long-term contracts on Ascension and the Falkland Islands, but since Saints were re-awarded UK citizenship in 2002, emigration to the UK by a wider range of wage-earners has accelerated due to the prospect of higher wages and better progression prospects.

Unemployment levels are low (50 in 2004 compared with 342 in 1998). The economy is dominated by the public sector, the number of government positions only falling slightly from 1,163 in 2002 to 1,142 in 2006. Public sector employment is characterised by high turnover rates, mainly due to outmigration. St Helena’s private sector employs approximately 45 per cent of the employed labour force and is largely dominated by small and micro businesses with 218 private businesses employing 886 in 2004.

Three hotels operate on the island but since the arrival of tourists is directly linked to the arrival and departure schedule of the RMS, occupancy levels are very low at about 10%. Some 1,180 short and long-term visitors arrived on the island in 2005. Household survey results suggest that the percentage of households who spend less than £20 per week on a per capita basis fell from 27% to 8% between 2000 and 2004, implying a decline in income poverty. Nevertheless, 22% of the population claimed social security benefit in 2006/7, although most of these are aged over 60 – this sector represents 20% of the population.

Inflation was running at 3.6% in 2005 but is thought to be much higher today, reflecting recent increases in the cost of fuel, power and all imported goods. The island had a monocrop economy until 1966, based on the cultivation and processing of New Zealand flax for rope and string. St Helena's economy is now very weak, and the island is almost entirely sustained by aid from London.

The Saint Helena tourist industry is heavily based around the promotion of Napoleon's imprisonment. A golf course also exists and the possibility for sportfishing tourism is great. Saint Helena also produces what is said to be the most expensive coffee in the world. Ascension Island, Tristan da Cunha and Saint Helena all issue their own postage stamps which provide a significant income.

Saint Helena also produces and exports Tungi Spirit, made from the fruit of the prickly or cactus pears, Opuntia ficus-indica. Tungi is the local St Helenian name for the prickly or cactus pear. The Saint Helena pound is the local currency, and is on a par with the Pound Sterling. The government of Saint Helena produces its own coinage and banknotes. In 1821, Saul Solomon issued a token copper currency of 70,560 halfpennies Payable at St Helena by Solomon, Dickson and Taylor—presumably London partners—which circulated alongside the East India Company's local coinage until the Crown took over the Island in 1836. The coin remains readily available to collectors. The territory has its own bank, the Bank of St. Helena, which has two branches in Jamestown on Saint Helena, and Georgetown, Ascension Island.