Montserrat Survey of Living Conditions (MSLC) Executive Summary

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Montserrat Survey of Living ConditionsExecutive SummaryAverage household size was 2.4 persons in 2008/09 which, while low by Caribbean standards, is slightlyhigher than after the eruption when it dropped to 2.1 persons. The proportion of households withspouses/ partners has increased to 38%, much higher than in 2001 when it was only 29% while theproportion of single person households had decreased from almost 50% in 2001 to 35%. Around 40% ofhouseholds are female-headed, similar to the 1991 proportion. All these indicators reinforce the view thatthe population structure of the island is gradually stabilising from its post-eruption structure when a largenumber of households fragmented.In 2008/09, 29% of household heads were foreign-born but a substantial proportion of these hadachieved belonger status. If this group is excluded, the proportion of non-national heads on the island isaround 15%.2.3 The EconomyThe economy of Montserrat today is the result of an array of unique factors and developments followingboth Hurricane Hugo and the volcanic eruptions in which social and economic structures and the island’sinfrastructure were decimated; large parts of the island were made (and remain to this day) uninhabitable.As a British Overseas Territory, Montserrat has been able to access loans and grants from the UnitedKingdom to rebuild and Montserratians were able to leave their homes for jobs and family in the UK,thereby decreasing pressure on the post-eruption economy. In consequence, the recovering economy isbased mainly on services (especially government) and construction, with little value added in the traditionalsectors of tourism and agriculture (Figure ES2).Through grants, loans and support from Montserratians living overseas, Montserratians have been able tomaintain a reasonable material lifestyle 3 , as measured by GDP per capita. In 2004, Montserratian GDP percapita in 2006 at around EC$22,000 was 50% higher than the ECCB average and 3 rd highest of the eightmember states.Nevertheless, the current weakness of the economy is evident. In 2006, in constant dollars, GDP was only53% of the level achieved in its pre-Hugo (1987) level (Figure ES3). Were it not for the fact that manyMontserratians left the island following the volcanic activity, per capita economic activity would be muchlower. The recent sluggish performance is largely the result of some large public sector projects beingcompleted with only the mining and quarrying sector showing growth as a result of exports of volcanicsand. In 2008, the economy grew by around 4% but inflation almost reached 5% resulting in a decline inreal GDP 4 . ECCB forecasts that the economy will continue to remain flat in the near term; risinginternational oil prices and the North American recession will further increase consumer prices. TheGovernment of Montserrat is forecasting GDP growth of 3% in both 2008 and 2009 based on the startupof construction projects at Little Bay and Government Headquarters, among others.3 In 2008/09: 53% of households had a motor vehicle; over 85% had fridges, TVs and telephones (landline or cell);40% had computers with most of these having internet access.4 GOM, Budget Speech, 2009.Montserrat Country Poverty Assessment, Final ReportHalcrow Group Limited, July 2012.ES4
()EC$ x millionMontserrat Survey of Living ConditionsExecutive SummaryFigure ES2 : Montserrat, GDP by Sector,2006Figure ES3. Montserrat: GDP in constant EC$ millions,1987-2006Fig. 3 GDP in Constant Dollars(EC$ x million)180.0160.0140.0120.0100.080.060.040.020.00.01987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006The Government SectorFigure ES4: Government Expenditures and RevenuesEC$millions100806040200-20-40-602002 2003 2004 2005 2006-80Current Revenue Current Expendiiture Current Balance before GrantsSource: 2006 Annual Economic and Financial Review, ECCBGovernment activity is the main driverof the Montserrat economy. Giventhe natural disasters of the past 25years, the contraction of economicactivity and the need to rebuildinfrastructure,governmentexpenditures are greater than revenueinflows (Figure ES4). The resultingnegative balance is expected tocontinue over the short to mediumterms.Tax revenues (duties and levies, licensefees, consumption tax, etc.) accountfor about 45% of Governmentrevenue. On the expenditure side,personal emoluments 5 and pensionsfor government employees account forabout 55% of Governmentexpenditures.5 These will include teachers and health workers as well administrative officers.Montserrat Country Poverty Assessment, Final ReportHalcrow Group Limited, July 2012.ES5
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