The economy of Montserrat was severely disrupted by volcanic activity which began in July 1995. Prior to this date, the small island country of 12,000 had an export economy based on agriculture, clothing, electronic parts and plants, with a per capita gross national product of US$3,000 to 8,000. Montserrat had an international reputation as a tourist getaway, and the record producer

George Martin Sir George Henry Martin (3 January 1926 – 8 March 2016) was an English record producer, arranger, composer, conductor, and musician. He was commonly referred to as the " Fifth Beatle" because of his extensive involvement in each of the ...

established an important recording studio there,

Associated Independent Recording Associated Independent Recording (AIR) is an independent recording company founded in London in 1965 by record producer Sir George Martin and his business partner John Burgess, after their departure from Parlophone. The studio complex was founded ...

. Destroyed by Hurricane Hugo in 1989, the studio was never reestablished; however, Martin subsequently helped found the Montserrat Cultural Centre, which was opened in 2007. Some of the funds were raised in a London concert called " Music for Montserrat" (September 15, 1997).

Collapse

A catastrophic eruption of

Soufrière Hills The Soufrière Hills are an active, complex stratovolcano with many lava domes forming its summit on the Caribbean island of Montserrat. After a long period of dormancy, the Soufrière Hills volcano became active in 1995 and has continued to ...

in June 1997 closed the

W. H. Bramble Airport W.H. Bramble Airport, also known as Blackburne Airport, was an international airport on the east coast of the island of Montserrat, a British Overseas Territory in the Caribbean. It was named after Montserrat Chief Minister William Henry Bram ...

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 The primary sector of the economy includes any industry involved in the extraction and production of raw materials, such as farming, logging, fishing, forestry and mining. The primary sector tends to make up a larger portion of the economy in d ...

continued to be affected by the lack of suitable land for

farming Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled peopl ...

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."''Montserrat – Overseas Territory of the United Kingdom: Assessment of the Supervision and Regulation of the Financial Sector''" International Monetary Fund, November 2003 Soufriere Hills

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 bank An offshore bank is a bank regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and ...

s 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.

New Town

The Montserrat Development Corporation was an entity founded by the

Government of Montserrat Politics of Montserrat takes place in a framework of a parliamentary representative democratic dependency, whereby the Premier is the head of government, and of a multi-party system. Montserrat is an internally self-governing overseas territor ...

and the Department for International Development in 2008. The company's primary mandate was to help foster private sector investment and development on the island. The company had announced plans to develop the new town of

Little Bay Little Bay is a suburb in south-eastern Sydney, in the state of New South Wales, Australia. Little Bay is located 14 kilometres south-east of the Sydney central business district and is part of the local government area of the City of Randwic ...

on the northwest coast of Montserrat between Brades and

Davy Hill Davy Hill is a town in the north of the Caribbean island of Montserrat, located close to the west coast near the narrowest point of the island on a saddle between the main bulk of the island's Centre Hills, and the peak of Silver Hill close to ...

, however an internal audit of the company in 2015 led to the company's

dissolution Dissolution may refer to: Arts and entertainment Books * ''Dissolution'' (''Forgotten Realms'' novel), a 2002 fantasy novel by Richard Lee Byers * ''Dissolution'' (Sansom novel), a 2003 historical novel by C. J. Sansom Music * Dissolution, in mu ...

. The audit revealed that the company was not being prudent with the government's funds. Slated for completion by 2020, the new town will be the new focus of tourism, trade and housing and will also house the seat of government.Montserrat Development Corporation
New Town Development

References

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