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Summary of the Country Financing Roadmap for the SDGs: Saint Lucia

Core Content

This document outlines the Country Financing Roadmap (CFR) for the Sustainable Development Goals (SDGs) in Saint Lucia, a country-led initiative supported by the Sustainable Development Investment Partnership (SDIP), a joint project of the World Economic Forum and the OECD. The CFR aims to bridge the financing gap for national development priorities in line with the SDGs by promoting public-private collaboration, multistakeholder engagement, and innovative financing mechanisms.

The initiative was launched in 2020 in response to the economic and social impacts of the COVID-19 pandemic, which further worsened the already persistent challenges faced by Saint Lucia, including high debt levels, limited access to concessional finance, and vulnerability to climate change and natural disasters. With less than a decade remaining to achieve the SDGs, Saint Lucia recognizes the need for accelerated and scaled efforts to meet these developmental targets.

Main Points

1. Saint Lucia Overview

• Population (2020): 183,629
• GDP (2020): $1.703 billion
• GDP per capita (2020): $9,276
• Debt-to-GDP ratio (2020): 86.5%
• Unemployment (2020): 24.9%

Saint Lucia is a Small Island Developing State (SIDS), facing moderate progress in achieving the SDGs and currently at a critical juncture for sustainable development. Its economy is heavily dependent on tourism, which accounts for over 40% of GDP, and is vulnerable to external shocks and natural disasters.

2. Saint Lucia and the SDGs

Saint Lucia has committed to the 2030 Agenda for Sustainable Development, aligning its Medium-Term Development Strategy (MTDS) with several SDGs, including:

• SDG 3 (Good Health and Well-Being)
• SDG 4 (Quality Education)
• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)
• SDG 17 (Partnerships for the Goals)

Despite these commitments, Saint Lucia and other SIDS face systemic challenges in financing the SDGs, including:

• Limited access to concessional finance
• High debt-to-GDP ratios
• Vulnerability to climate change and natural disasters
• Over-reliance on imports
• Unrealized regional potential
• Low economic resilience

3. Country Financing Roadmap (CFR) for the SDGs

The CFR is a platform for collaboration between the government and private-sector actors, aimed at identifying and developing strategies to unlock greater sustainable financing. It is not a comprehensive roadmap, but rather focuses on selected sectors to initiate and establish a public-private, multistakeholder-led approach to SDG financing.

The CFR process includes three main stages:

1. Baseline Assessment: Identifies the starting point of SDG financing in Saint Lucia.
2. Diagnostic: Determines the priorities and constraints for unlocking public and private financing.
3. Action Plan: Outlines the types of financing available and the conditions needed to enable capital flow.

Key Barriers to SDG Financing

The following six barriers were identified as critical obstacles to SDG financing in Saint Lucia:

1. Vulnerability to climate change, natural disasters and external shocks
2. Low economic resilience
3. Limited access to concessional finance
4. Debt burden
5. Unrealized regional potential
6. Over-reliance on imports

1. Vulnerability to Climate Change, Natural Disasters and External Shocks

Saint Lucia is highly exposed to natural hazards due to its geographical location and economic structure. The country is 73% more vulnerable to natural disasters than other upper-middle-income countries, according to the OECD's vulnerability index. Natural disasters, such as Hurricanes Dean (2007) and Tomas (2010), have significantly impacted the economy, contributing to rising debt levels and limited fiscal space.

2. Low Economic Resilience

The economy is heavily reliant on tourism, which is susceptible to external shocks and market saturation. The sector has been a major contributor to GDP and employment, but its volatility has led to job and income losses during the pandemic, with employment dropping from 63,400 in 2019 to 41,600 in 2020.

3. Limited Access to Concessional Finance

As an upper-middle-income country, Saint Lucia has limited access to concessional finance, despite its inherent vulnerabilities. While the World Bank provides a "small island exception" to allow access to some concessional funding, ODA levels remain low, and remittances have become increasingly significant.

4. Debt Burden

Saint Lucia has been in an upward cycle of debt, driven by rebuilding costs after natural disasters and limited access to concessional finance. The debt-to-GDP ratio reached 86.5% in 2020, significantly limiting fiscal space for addressing new shocks.

5. Unrealized Regional Potential

Despite being a member of regional organizations, Saint Lucia has not fully realized the potential of regional integration and cooperation, which could help mobilize more investment and reduce dependency on external sources.

6. Over-reliance on Imports

Saint Lucia's economy is heavily dependent on imports, which hampers economic resilience and increases vulnerability to global market fluctuations.

Key Solutions to Improve SDG Financing

Stakeholders identified nine solutions, grouped into three categories:

1. Foundational Solutions

• Establishing a finance mobilization team
• Setting up investment data systems
• Enhancing connectivity infrastructure through digitalization

2. Economic Resilience

• Labour reskilling through private and donor funds
• Exploring the Blue Recovery Hub as a regional initiative
• Setting up a regional infrastructure fund using Citizenship by Investment Programme (CIP) proceeds as seed funding

3. Low-carbon Competitiveness

• Improving energy efficiency (e.g., phasing out incandescent light bulbs)
• Building up renewable energy portfolio to reduce fossil fuel dependence
• Focusing on sustainable transport (e.g., electric vehicles) to support green and blue economies

Next Steps

SDIP plans to work with the Government of Saint Lucia and regional organizations to host discussions on the three solutions with near-term momentum: labour reskilling, renewable energy, and the regional infrastructure fund. These discussions aim to:

• Inspire further alignment among stakeholders
• Reduce inefficiencies and create a supportive ecosystem
• Mobilize financing towards national SDG priorities

The CFR also serves as a reference point for investors, helping to enhance the enabling environment for investment and reduce risk perception in similar markets.

Conclusion

The CFR is a blueprint for sustainable development in Saint Lucia, focusing on strategic sectors and multistakeholder collaboration. It highlights the need for innovative financing mechanisms, public-private partnerships, and regional cooperation to address systemic challenges and achieve the SDGs. The initiative has the potential to replicate across the Caribbean and SIDS globally, offering a model for sustainable investment in vulnerable economies.

Appendix Highlights

• Appendix A: Details of the nine solutions identified at the second CFR roundtable in December 2020.
• Appendix B: Cost calculations for the solutions.
• Appendix C: Detailed methodology for cost calculations.
• Appendix D: Overview of the country-led and action-oriented nature of the CFR.
• References: Cite various sources and reports.
• Contributors: List of individuals and organizations involved in the CFR.
• Acknowledgements: Recognition of support from the European Union and Danida.
• Endnotes: Additional notes and explanations for the content.