It is my pleasure as Minister for Finance, Economic Affairs and National Development to deliver a few brief remarks on the occasion of the last Government of Saint Lucia bond issue on the Regional Government Securities Market. Once again, First Citizens Investment Services Ltd. has been instrumental in successfully marketing and underwriting the October and November 2010 bond issue to the tune of $116 million. This represents a significant milestone resulting in total bond issues to date of $592 million by First Citizens Investment Services Ltd. on behalf of the Government of Saint Lucia.
Let me take this opportunity to express my gratitude to First Citizens Investment Services Ltd. for their professional approach and high level of dedication in facilitating government's financing needs by issuing government securities on the capital market. The high level of subscription of such instruments, particularly in this current environment, is testimony to the level of confidence investors have in Saint Lucia's economy and the Government's management of the economy. This was evident by the latest CariCris triple "B" plus credit rating issued in May 2011 for Saint Lucia, which remained unchanged from last year. This is a remarkable achievement as Saint Lucia was one of the few Caribbean countries whose credit rating has not been downgraded in recent times.
As all of you are aware, Saint Lucia is still recovering from the effects of the most devastating hurricane to hit the island in over 30 years, resulting in total damage and losses estimated by the UN-ECLAC of about EC$900 million or 34 percent of GDP. The hurricane struck during a period when our economy was showing signs of recovery from the effects of a severe drought earlier in the year and the adverse impact of the global financial crisis. Notwithstanding these setbacks, Saint Lucia's economy demonstrated considerable resilience growing by 4.4 percent in 2010. We believe that with the support of institutions such as First Citizens Investment Services Ltd., support from other domestic, regional and international partners, Saint Lucia can achieve full recovery from these external shocks and that the economy can be placed on a sound growth path in the medium and long term.
Government is committed to maintaining its track record of prudent financial management while ensuring that the appropriate policies to support the continued growth in the economy. As a major contributor to economic activity, Government will do its part to sustain the economic recovery in a manner that is fiscally responsible without jeopardizing future generations with unsustainable public debt.
We all witness on our television screens the vivid images of the economic and social unrest in Greece as a result of the austerity measures that the government has to undertake in dealing with their debt crisis. Today we learned of the grave concern by European countries regarding the possibility of Italy, the third largest EU economy, defaulting on its debt payments. Even the United States is burdened by crippling debt of $14.3 trillion and failure to agree on an appropriate legal debt ceiling could have serious implications for both the US and world economy.
This should be an important lesson for countries such as Saint Lucia to manage their fiscal affairs in order to avoid accumulating unsustainable levels of public debt.
In keeping with the objective of prudent debt management, Saint Lucia and the other member countries of the Eastern Caribbean Currency Union (ECCU) have committed to reducing the debt levels to 60 percent of GDP by 2020. This will be achieved by establishing annual fiscal and debt targets that will be monitored by the Monetary Council of the ECCU. The annual targets are to be made public and countries are required to pursue credible fiscal policies in keeping with the fiscal and debt targets that they themselves have established.
The achievement of the targets will be more difficult if there is little economic growth. It is therefore critical that Saint Lucia's economy continues to grow and to provide opportunities for our people.
During the first 4 months of 2011, the number of stay-over visitors increased by 2.1 percent reflecting growth in arrivals from the UK and other European countries. While 2011 will be a challenging year for the tourism industry, as the number of scheduled flights has been reduced, we are confident of reversing the decline and should see increases in arrivals later in the year.
The construction sector is holding its own despite delays in commencement of some major projects. However, the construction of the national and St Jude hospitals, work on the hypermart building and hurricane Tomas rehabilitation projects are some of the activities that are expected to sustain growth in the construction sector in 2011.
Ladies and Gentlemen, Saint Lucia's economy has demonstrated tremendous resilience in the face of multiple natural and man-made shocks. The Government of Saint Lucia is committed to strengthening the resilience of our economy to withstand future shocks by implementing the appropriate policies to grow the economy while pursuing prudent fiscal policies. We are confident that with the appropriate policies and with the goodwill of the domestic and external investors that continue to invest in Government securities, we will achieve the level of growth that is required to provide opportunities to our people, while ensuring that you the investors enjoy a reasonable return on your investment.
Once again I thank First Citizens Investment Services Ltd for working in partnership with the Government and people of Saint Lucia as we look forward to continuing the work of developing our country.