MANAGEMENT IN CONFIDENCE
•
-2-
5. Although the new Government talks of independence, this is unlikely to become a core issue for some years, until the economy shows real signs of improvement. But the prospect of it is being used by Ministers as a lever to persuade HMG to provide additional grant-in- aid to "prepare for independence" at an unspecified date, and to devolve to the local government most of the Governor's remaining spec- ial responsibilities. Without a firm commitment to independence by the local Government, these concessions cannot be granted, but pressure for them will continue to be exerted on the Governor and the UK Government. On the one hand, the territory cannot be viable in the foreseeable future and must have British aid, which is why Montserrat continues to remain a Dependent Territory. On the other, such economic dependence is hateful locally and colours all relations bet- ween Governor and Ministers.
6. There are 440 established posts in the Civil Service, including UK based expatriates. The Service is reasonably efficient, but has to some extent become disaffected and less independent than it should be due to political interference over the past years.
Resources Controlled by the Territory
7. The main sectors of the economy are agriculture, tourism, light manufacturing industries, banking of the dubious variety and real estate development to serve persons retiring in the territory.
8. There has been a modest revival of economic activity over the past two years.
The construction industry recovered from its mid-70's slump with a minor revival in house building and public sector devel- opment. Despite the presence of a Government sponsored and financed marketing organization, agricultural activity continues to be stifled by problems of post-harvesting marketing, and stock piling of large quantities of unsaleable cash crops, but at least domestic needs are being met. Efforts are being made to encourage overseas investors to establish processing plants. There has been no further capital invest- ment in tourism, but there has been a steady increase in business from 11,200 visitors in 1976 to 14,200 in 1978. Improved air communications now on the way should give tourism a boost.
9.
Government's development thrust is concentrated at present in the sphere of light manufacturing with the objectives of improvement and diversification of the economy and job creation for the 13% of the population who are unemployed. These efforts have been modestly suc- cessful with other manufacturing prospects in the pipeline, notably the manufacture of home grown, sea island cotton products.
10. This modest upturn in the economy has not been sufficient to permit wages to keep pace with local price inflation, running at about 8% per annum. Consequently both the public and private sector are exper- iencing lower real wages, with discontent beginning to become apparent.
MANAGEMENT IN CONFIDENOW
/ 11. The