St Helena, a UK Overseas Territory, which also comprises Ascension and Tristan da Cunha, is a remote volcanic island in the South Atlantic Ocean, 1200 miles off the coast of Namibia. With a total area of 121km2 and a population of around 4,500, much of the island consists of steep rocky terrain with little flat land and limited economically viable natural resources.
The remoteness of the island, which limits accessibility to a wider global market, small population and its unique political situation, has severely impeded its economic growth.
Decades of aid dependency and lack of any significant industry since the collapse of the flax trade in the latter half of 1960s has had detrimental effects on the private sector. The island has been in economic decline for over 40 years and its population shrank by 20% from 1976 to 2008, a trend that has seen slight improvement in the past decade.
BERF work in St Helena
BERF has completed two projects. The evidence and learning note considered Business Environment Reform in a range of Small Island States. This was followed by an investment climate review for the Island.
BERF St Helena Projects
Establishment of a commercial air service to St Helena Airport: The UK is helping boost annual visitor numbers; generating increased revenues for their economy; and providing social benefits e.g. through better access to health care.
Increase contributions from the government to meeting the costs of public services, with the aim of helping a transition to self-sufficiency and reducing reliance on aid.
St Helena has the largest population amongst the 14 Overseas Territories which are important strategic assets to the UK. They constitute an estimated 90% of the UK’s biodiversity. DFID’s spending in the OTs helps fulfil the UK Government’s UN obligations to promote the development and wellbeing of the people living in the most vulnerable OTs. Since the 1970s, UK policy commits DFID to meeting the reasonable assistance needs of St Helena amongst three ODA eligible OTs as a first call on the aid budget. The UK’s long term goal is to enable OTs to be self-sufficient. A number of OTs have graduated from aid. Without economic development, the chronic budget deficit means St Helena is eligible for aid and will be dependent on UK aid indefinitely. St Helena is largely self-governing and legal liability rests primarily with the St Helena Government. The UK Government is, however, held responsible by Parliament, the press and the UK public for the actions of the OTs’ governments and their people.