Collapse
A catastrophic eruption of Soufrière Hills in June 1997 closed the W. H. Bramble Airport and seaport at Plymouth, causing further economic and social dislocation. Two-thirds of the inhabitants fled the island. Some began to return in 1998, but lack of housing limited the number.
The agriculture sector continued to be affected by the lack of suitable land for farming and the destruction of crops. Prospects for the economy depend largely on developments in relation to the volcano and on public sector construction activity. The UK launched a three-year $122.8 million aid program to help reconstruct the economy. Half of the island was expected to remain uninhabitable for another decade.
Today, Montserrat’s main economic activity is in construction and government services which together accounted for about 50 percent of GDP in 2000 when it was EC$76 million. In contrast, banking and insurance together accounted for less than 10 percent of GDP. The unemployment rate in 1998 was estimated at 6 percent. Montserrat’s domestic financial sector is very small and has seen a reduction in offshore finance in recent years with only 11 offshore banks remaining. Real GDP declined from EC$122 million in 1995 to about EC$60 million in 1999, with the rate of decline peaking at -21.5 percent for 1996. The decline in economic activity reflected in large part the completion of major projects in both the private and public sectors. However, the rate of decline slowed markedly since 2000 and 2001, when GDP contracted by less than 3 percent. In 2002, the GDP growth rate reverted to a positive 4.6 percent reversing the declining trend over the past six years and maybe more.
| Year | Real GDP (factor cost) | % Change |
|---|---|---|
| 1996 | 95.9 | -21.5 |
| 1997 | 76.7 | -20.0 |
| 1998 | 68.9 | -8.6 |
| 1999 | 60.3 | -12.5 |
| 2000 | 58.6 | -2.8 |
| 2001 | 56.9 | -2.9 |
| 2002 | 59.5 | -4.6 |
| 2002 | 79.9 (2000 constant prices) | +3.3 |
| 2003 | 78.9 | -0.9 |
| 2004 | 82.4 | +4.5 |
| 2005 | 83.7 | +1.5 |
Read more about this topic: Economy Of Montserrat
Famous quotes containing the word collapse:
“The Roman world is in collapse but we do not bend our neck.”
—Jerome (c. 340–420)
“At the crash of economic collapse of which the rumblings can already be heard, the sleeping soldiers of the proletariat will awake as at the fanfare of the Last Judgment and the corpses of the victims of the struggle will arise and demand an accounting from those who are loaded down with curses.”
—Karl Liebknecht (1871–1919)
“I confidently predict the collapse of capitalism and the beginning of history. Something will go wrong in the machinery that converts money into money, the banking system will collapse totally, and we will be left having to barter to stay alive. Those who can dig in their garden will have a better chance than the rest. I’ll be all right; I’ve got a few veg.”
—Margaret Drabble (b. 1939)