a brief overview i will only cite a few critical events which are germane to the theme of this presentation. adult suffrage was granted to the oecs countries in 1952. this created the environment for the advancement of the demand for dominion status which revolved around the establishment of the west indian federation, as the islands were considered too small to attain such status on an individual island basis. the islands were in fact governed at this time as two federations, namely, the leeward and windward island federations. these were dismantled and each island entered the federal arrangements as separate entities. this, in fact, was the first act of disintegration in the federal saga. the federation failed, one can say, for many reasons but three are important for this narrative : i. jamaica ’ s determination to protect its nascent industrial development ; ii. trinidad and tobago ’ s resistance to freedom of movement of people ; and iii. the perception by both countries that the smaller islands would be a major impediment to their economic progress. following the demise of the federation another attempt was made to link barbados and the smaller islands together in an arrangement referred to as the “ little eight ”. this too failed as barbados would not proceed without assurances from the british on the financing of the new entity. barbados went on to its own independence in 1966 and the islands were virtually left in constitutional limbo. they then began searching for a way out of the situation with discussions on the nature of the relationships with the british and with each other. in 1967, the west indies associate states was established with countries sharing some common services which were meant to lower the cost of government and to foster closer working relationships amongst themselves in preparation for independence. the british posed two options to the islands, they could jointly declare their independence and write their own constitutions, or they could negotiate bilaterally with britain for single state independence. they chose the latter and between 1974 and 1983 the islands achieved their independence. in 1981 the organisation of eastern caribbean states was established with the signing of the treaty of basseterre and in 1983 the eastern caribbean central bank was established by agreement among the countries. this led to the next stage of our history which presented tremendous challenges to the newly independent states. the period was characterized by the continuing impact of the oil crises of 1973 and 1979 as well as several disastrous hurricanes, recessions in our main trading partners, the gradual removal of trade preferences by the british and the europeans, and the graduation of the

##s. for us in the oecs, it is always interesting to compare our basic statistics among ourselves, and with other small, medium - sized and large countries. another interesting factor has been the comparison of our basic resource endowments with our expectations. this poses a particular dilemma for us in the caribbean because of our system of liberal democracy and our geographical position in the western hemisphere. being in the western hemisphere, our choice of a standard of living is more aligned with that of north america and not sub - saharan africa or bangladesh. our liberal democratic systems lead to governments having to make very generous gestures to remain in power, as opposition parties raise the bar with new promises in order to unseat them. a certain dynamic is then unleashed which could and has in many cases led to a certain level of instability in the public finances and the economy. i now speak in a generic way about all oecs economies of which st kitts and nevis is very representative. the structural issues of small size lead to a concentration of resource use, high unit cost and diseconomies of scale, high levels of risk and low negotiating capabilities with third parties or groups of countries. the point can be illustrated by using a number of very real examples. however, one which is most revealing, is an analysis of the population in relation to the capacity to supply critical services for itself. if you take the total population and subtract all of those who are under seventeen ( 17 ) and over ( 60 ) you will arrive at the potential labour force. further subtractions can be made for the sick and those who are incarcerated. there is usually a certain level of unemployment and in some cases substantial underemployment. having arrived at a proxy for the active labour force, one then has to evaluate the education and skill levels of that group. the numbers we arrive at from a population total of 42, 000 in st kitts and nevis and even 150, 000, as is the case in st lucia is very small. this labour force is responsible for the total output of the country. the country is able to enjoy a certain lifestyle based on what it produces. the conclusion from this analysis is that the smaller the population, the more highly skilled it needs to be, as well as technologically advanced in order to have very high levels of output. since the domestic market is so small, then most output has to be exported. the structure of our trade patterns ends up being extremely sk