St Helena’s Sustainable Economic Development Plan 2018 – 2028

St Helena’s Sustainable Economic Development Plan 2018 - 2028 St Helena Government Final 2 Contents Introduction 3 The 10 Year Plan 4 Barriers to Achieving the SEDP Vision 7 Inputs and Outputs to St Helena’s Economy 5 Opportunities and Comparative Advantages 8 SEDP Vision and Goals 6 Threats and Comparative Disadvantages 9 Cross Cutting Themes 10 Common Issues 11 Exports 13 Barriers to Exports 14 Work From Home Jobs 24 Existing Export Sectors 15 Academia, Research and Conferences 25 Tourism 16 Liquor, Wines and Beers 26 Fisheries 18 Ship Registry and Sailing Qualifications 27 Coffee 20 Traditional Products 28 New or Expanding Export Sectors 22 Honey and Honey Bees 29 Satellite Ground Stations 23 Film Location 30 Import Substitution 31 Barriers to Import Substitution 32 Bricks, Blocks, Minerals and Rocks 38 Existing Import Substitution Sectors 33 New Import Substitution Sectors 40 Agriculture 34 Bottled Water 41 Timber 36 Summary and Success Factors 42 Summary of Barriers to Growth 43 Measuring Success 46 Potential to Reduce Trade Imbalance 44 Indicator Data 47 Opportunities for Entrepreneurs 45 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 3 St Helena is a British Overseas Territory in a unique location with a wealth of environmental resources, and there are many opportunities for businesses to flourish and the economy to grow. The previous Sustainable Economic Development Plan (SEDP) focused on tourism as the key growth sector. Since the previous SEDP was drafted, the airport has been built and opened, tourist attractions have seen improvement and there have been new restaurants and hotels opening providing greater choice for visitors. Tourism will continue to be a very im portant for economic growth going forward. This SEDP has been drafted thanks to inputs from many sectors, through one on one meetings, individual feedback, chamber of commerce feedback, a public survey in July-September 2017 and a public consultation in January-February 2018. This SEDP focuses on raising the standard of living and improving quality of life. Opening up a new shop on the Island isn’t a marker of a good economy if it just means that the same money is spread between more retailers. The key to eco nomic growth in St Helena is to grow industry which ensures that more money enters and is retained on St Helena. Part of this is ensuring our industries meet local demand in order to minimise the amount we buy from abroad. Another part of this is selling locally produced goods and services to people from abroad. In 2016/17, remittances into the Bank of St Helena from abroad were £16m (of which around £100k is exports), and re mittances out from St Helena were £37m. The reason for this is that St Helena does not export a considerable amount and most of the goods we consume are made overseas. As a result, the Island is still one of three British Overseas Terri tories, alongside Monserrat and Pitcairn Island, which still receive financial aid from the UK. In this SEDP, the focus is on developing all sectors which can help to increase exports and substitute imports in order to improve the trade deficit and balance of payments. However, St Helena suffers from challenges of scale and remoteness. Availability of land, availability of skilled labour, and absence of economies of scale are challenges. Therefore, it is imperative that St Helena focuses resources on sectors which produce high value niche products and services, or sectors which have a significant impact on import require ments. A sector analysis has been undertaken for this SEDP. This considers St Helena’s comparative advantages, poten tial sectors for growth and barriers to growth. Removing barriers in these sectors is key to achieving economic growth. Introduction https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 4 St Helena’s 10 Year Plan (St Helena Government, 2016) sets a goal to become ’Altogether Wealthier’; to develop St Helena Industry and promote sustainable growth. The 10 Year Plan objectives for the ‘Altogether Wealthier’ goal are: Because St Helena is a net importer, national wealth is at risk of gradually decreasing because more money goes out of the country than comes in. In order to meet the objectives in St Helena’s 10 Year Plan such as promoting quality of life, reducing poverty, and raising wages, St Helena needs to increase wealth by ensuring more money is earned by the island and circulates in the economy. Additionally, in order to afford infrastructure and sector support, the Government of St Helena needs to balance its budget. When businesses and the self employed are doing better, and wages increase, the Government generally collects more tax, which makes public services and investment by the public sector affordable. The 10 Year Plan  Reduce poverty and inequality  Promote quality of life  Commitment to sustainable growth  Continued commitment to agriculture and fisheries  Ensure the tax and benefits system benefit the most vulnerable  Raise the Minimum Wage and have a Living Wage  Review currency situation.  Develop training for Saints to take over internationally recruited roles  Review customs tariffs to benefit from tourism & green agenda  Encourage Saints to return to Island  Improve connectivity  Develop the supply of amenities and recreation  Introduce a St Helena card for recreation http://www.sainthelena.gov.sh/wp-content/uploads/2012/08/Draft-10-Year-Plan-27052016.pdf https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 5 The diagram below illustrates the cash flows in, out and around St Helena’s Economy. Money comes into St Helena when we export goods; we receive remittances from St Helenians or others living abroad; we receive investment from overseas; our pensioners receive overseas pensions; tourists spend money in St Helena and UK provides Grant in Aid funding. Money then flows within and around St Helena through the buying of local goods and services, wages, dividends, tax and public expenditure. Money flows out of St Helena when we pay for imported goods, we transfer money to overseas bank accounts, profit is repatriated overseas and we spend money on holidays abroad. Increasing St Helena’s wealth, and therefore being able to afford higher incomes, is dependant on increasing money flow ing in and reducing money flowing out. Inputs and Outputs to St Helena’s Economy St Helena’s Economy Inputs Spend by tourists in St Helena St Helena Export Revenue Remittances to St Helena (from St Helenians abroad) Remittances to St Helena (from investors abroad) UK Grant in Aid Outputs Spend on Holidays Abroad Imports and Freight Costs Foreign Profit Repatriation Remittances out of St Helena Subset of International Economy Profit from sale of goods and services to St Helena by international business Tax collected from these profits. https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 6 The SEDP vision is to achieve development which is economically, environmentally and socially sustainable by increas ing standards of living and quality of life; not relying on aid payments from the UK in the longer term; whilst affording to maintain the island’s infrastructure; achieve more money coming into St Helena than going out and sustain and improve St Helena’s natural resources for this generation and the next. The goals which will help achieve the vision are as follows: SEDP Vision and Goals 1. Increase Exports Selling goods made, grown or caught in St Helena to markets abroad and people from abroad increases the amount of money entering St Helena, which can help raise standards of living. 2. Substitute Imports Buying and consuming goods and services made, grown or caught in St Helena rather than buying and consuming imported goods and services reduces the amount of money leaving St Helena. 3. Attract Visitors and Increase Tourism Encouraging the provision of tourist infrastructure required for a variety of visitor needs from hotels, restaurants and attractions serviced by a skilled and customer focused workforce. 4. Mitigate impacts of inflation on the lowest income groups Avoiding reduction in purchasing power by the lowest income groups by regularly reviewing the Minimum Wage and Social Protection benefits. 5. Improve Land Productivity Making use of derelict or underused brownfield land and changing use of existing property to provide space for businesses to thrive. Supporting businesses to make the most productive use of land. 6. Sustain and improve our Natural Capital Maintaining and enhancing St Helena’s exceptional environment, landscape, heritage and cultural qualities for this generation and the next. 7. Improve Infrastructure Using tax revenue and other funding streams for investments to improve health, education, water, electricity, transport, risk management and other infrastructure. 8. Develop, Maintain and Attract a Skilled Workforce Ensuring that local people develop skills which will contribute to the growth of St Helena’s economy. Providing the wages and incentives for St Helenians to come back to St Helena and stay on St Helena. Supporting inward migration particularly in sectors where there are skills or labour shortages. 9. Develop the Digital Economy Open up St Helena to new economic markets by investing in broadband services and infrastructure, work towards delivering a fibre optic cable for the island. 10. Reduce Leakage of Income Provide investment opportunities for people living on St Helena to buy into, as an alternative to investing abroad. Ensure some of the returns on overseas investment is kept within St Helena. https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 7 This diagram illustrates some of the Infrastructure required challenges to achieving SEDP vision Raising standards of living and improving quality of life isn’t simple. It requires infrastructure investment and policy support in a very many ar eas from immigration to education. That’s why this SEDP goes hand in hand with other St Helena Government strategies. Barriers to Sustainable Economic Growth Real wage increases Employer/business affordability Higher business sales Higher population Electricity costs are high Cheaper energy sources More visitors Working age St Helenians re turn to St Helena from abroad Affordable accommodation Affordable air access High educational achievement Faster, cheaper internet Attractive wages New money comes into the economy through selling goods and services abroad See export sectors page 13 Inward migration Affordable homes Quicker and sim pler immigration processes More efficient electricity distribution Cheaper Im port costs Input costs Raising Standard of Living and Improving Quality of Life Targeted support for the vulnerable Government affordability Investment in technology and skilled staff Corporation tax PAYE tax Import duties Higher productivity Lower costs https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 8 Comparative advantages are the characteristics whereby St Helena can produce goods and services at a lower cost or higher quality than other economic actors. 1. Natural Resources and Geography St Helena’s sub tropical climate, heritage, natural beauty and endemic species are a draw for tourists to visit. St Helena is geographically safe as it does not suffer from storms, hurricanes or coastal surges. All year round sun and wind provide good opportunities for renewable energy. St Helena’s location between Africa and South America provides opportunities for some sectors. 2. British Overseas Territory St Helena is an English speaking country. There are very strong links between St Helena and the UK, and links to South Africa. 80% of the resident population have left St Helena at some point in their lifetime and 50% have worked overseas. St Helena’s time zone follows the Greenwich Mean Time. 3. Currency The currency in St Helena is the St Helenian Pound. Pound Sterling is accepted on St Helena, with a fixed exchange rate of £1 to £1. 4. Relatively Inexpensive Labour and Property Costs The minimum wage, average wage, and average property rental rates in St Helena are relatively low compared to many countries elsewhere. This translates to a relatively low variable cost for business. 5. Low Crime Crime is extremely low in St Helena; in 2016-17 a total of 153 crimes were recorded. St Helena upholds anti corruption laws, and does not tolerate bribery and extortion. The island community is centred around family and heritage which cre ates an enabling environment for initiative, growth and trust. Opportunities and Comparative Advantages https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 9 Comparative disadvantages are the characteristics which hold St Helena back from producing goods and services at a lower cost or quality than other economic actors. 1. Land Availability St Helena island is approximately 10 miles (16 km) by 5 miles (8 km), and 47 square miles (121 km²). Part of the land is designated for conservation, much of the land is steep and there is limited flat land. This makes using machinery for tradi tional agricultural techniques unviable in many cases, which causes diseconomies of scale. As a result, many primary produced goods cannot compete in international commodity markets unless the product is high value, niche and/or tar geted to tourism. 2. Demographics St Helena has a population of about 4,500 of which 63% are economically active. The overall age dependency ratio (the ratio of those above/below working age to those of working age) stands at 56 according to the 2016 Census, 2016, (compared to 0.52 in the UK, according to 2016 ONS data) placing St Helena amongst the very highest of aged depend ency in the world. Unemployment is very low, and recruitment can be challenging. In particular there is a shortage of pro ductive manual labourers and skilled professionals such as accountants, lawyers, surveyors and architects. Labour inten sive industries are more challenging to grow. 3. Logistics Goods travelling to or from the island incur freight costs and customs duty. Goods will travel every 4 weeks via the MV Helena, with the exception of goods travelling weekly by air. Low volume, high value goods are best suited to export by air freight, and import substitution is most beneficial for high volume goods, because freight is charged by the container not by value. 4. Scale Opportunities on St Helena are constrained the small size of the local market and the inability to benefit from economies of scale. This makes it difficult to compete with cheap goods from overseas. The economy would benefit from a larger population, as this translates to larger markets for goods and services. Threats and Comparative Disadvantages https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 10 CROSS CUTTING THEMES 11 Common Issues There are common issues across many of the sectors which need to be addressed to assist economic growth:  St Helena Government (SHG) needs to gain a credit rating so organisations operating in St Helena can raise international private finance.  Businesses in St Helena need access to a bank account which can pay and receive money online.  Non-residents need access to banking in St Helena to facilitate investment.  Priority is required to strategically allocate land for viable businesses in export and import substitution sectors.  Improving the speed and reducing the price of internet on St Helena is a catalyst for growth for a number of sectors.  Freight costs of exports should be reduced to the lowest amount sustainably possible to ensure not all containers are returned empty.  As per an Investment Strategy for St Helena, private investment should be facilitated to start-up and expand business (subject to labour and displacement impacts). Private sector funding sources need to be identified to support sectors to invest in cost saving infrastructure.  A service is desirable which supports business to market, sell and distribute goods and services abroad.  The buy local campaign should be restarted, with suppliers encouraged to use consistent labelling.  Interest rates paid by the Bank of St Helena (or SHG, if Bonds were issued) needs to exceed inflation rates for savings to increase value.  Regular Labour Surveys are required to understand labour and skills shortages in more detail.  Education (including apprenticeships), staff development and immigration policy needs to support growth of viable export and import sub stitution sectors where skilled labour is scarce.  Some industries require funding and facilitation of research through links with overseas partners such as universities.  Sufficient SHG resources are required to respond to investment related requests, namely Planning, Immigration, Agriculture, GIS and En vironmental Management.  Increasing the amount of renewable energy on island, reducing reliance on diesel and encouraging improvement of distribution networks is required to avoid significant increases in energy costs in the future.  Processes and ordinances that hinder export and import substitution should be reviewed and changed where agreed.  A circular economy approach, as set out in the Waste Management Strategy needs to be acted upon to make the best use of resources.  Funding is required for education, health and other public infrastructure to attract working age people with families to live in St Helena. https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 12 Common Issues (continued) The reason that these issues exist is usually because the corporation, business or person who has power over change is often not the corporation, business or person who needs the change to happen. There are different ways that the St Helena Government can support change when this is the case. The Economic Devel opment Committee can ensure issues are brought to the fore and can facilitate people to come together to negotiate change. SHG can lead by example, by making necessary change within government departments and influencing change in entities where SHG is a shareholder. SHG and Enterprise St Helena, the Government’s economic development agency, (ESH) can ensure finance and incentives are available if private finance is not forthcoming. And ESH can provide one on one support to make sure individual issues are tackled. In order to make sure that the actions presented within this plan are addressed, an implementation plan will identify respon sible parties and there will be annual reporting of action progress and indicator data. The next chapters explore each of the export and import substitution sectors in more detail, outlining sector specific barri ers, risks and actions. https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 13 EXPORTS 14 There are a number of reasons why export sectors are not flourishing currently. These depend on the cir cumstances of each sector, but there are some similar themes which have been identified below. The fol lowing pages go into more detail exploring barriers facing each sector alongside recommended Mitigation Actions to support export growth. Barriers to Exports Energy costs Affordable air access Faster, cheaper internet Fibre Optic Cable Infrastructure investment Finance from Bank of St Helena Private investment Land availability Skilled labour Strategic land allocation (masterplan) Sale of Crown land/buildings Incentivise sale of unproductive land/buildings Science/research Marketing Enterprise St Helena Education/upskilling Inward migration Apprenticeships Process/ordinance Tourism Coffee Fisheries Ship Registry and Sailing Qualifications Liquor, wines and beers Satellite Ground Stations Honey and Honey Bees Work from Home Jobs Academia, Research and Conferences Export Sectors Traditional Products Distribution networks Film Location Freight costs https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 15 Existing Export Sectors 16 Tourism is an existing growing market in St Helena. Visitor surveys have shown that tourists have had outstanding experi ences visiting St Helena, and have particularly enjoyed touring wildlife and heritage sites, diving with whale sharks, walk ing, birdwatching, and meeting friendly local people. There is continuous improvement to be made. Tourists prefer access to a choice of ‘walk in’ plus ‘dine in’ restaurants open after 5pm, extended shop opening hours on Sundays and Bank Holidays, more information on what to do provided online, more road signage, low cost accommodation, well stocked shops particularly selling local coffee, fish and liquor, online booking, mobile phone services (roaming) and access to unlimited internet. Continuous improvement is also re quired for our heritage sites and archives; more can be done to provide information on St Helena’s history regarding slav ery, the East India Company and the military. There are niche opportunities which could be provided by St Helena, such as French/Napoleon history tours; Boer Lega cy trips; diving photography; sports fishing; yoga, wellness and meditation retreats; walking, sailing, birdwatching or pho tography holidays. Provision of educational tourism could be developed, such as that linked to geography, marine and terrestrial conservation as well as teaching English as a foreign language. Health tourism is another area which may have potential, if it could help to finance healthcare services in St Helena. Tourism https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 17 Tourism The following risks and Mitigation Actions are relevant to the tourism sector: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Affordable Air Access: Attractive air packages may not be available Ensure that some packages combine St Helena and African destinations to enhance the offering. Offer additional flights when demand grows, particularly to alleviate difficulties faced by the hospitality sector, who struggle to stay afloat when there are low tourist numbers. 1 1 2 Skilled Labour: Difficulty recruiting skilled staff willing to work ‘out of hours’ Continue to train managers, chefs and hospitality staff. Offer customer care training. Provide public transport on evenings and weekends to help staff travel. Ensure youth are encouraged to enter the sector. Encourage immigration where there are skills gaps. 1 1 2 Marketing: Environment is not always pristine Ensure litter picking parties address litter at tourist attractions and post box walks. Undertake annual litter awareness campaigns and introduce fines for littering. Ensure public toilets are refurbished and cleaned. Demonstrate a local pride in Environment. 1 1 2 Marketing: Tourist destinations may not be accessible or invested in Ensure more attractions are open, particularly on Sunday. Ensure entry fees or donation boxes are located at tourist sites, and use funds to improve sites. Ensure upkeep and investment of heritage information signs. Encourage property owners in Jamestown to re-paint buildings. 2 1 3 Infrastructure Investment: Purchasing by tourists hindered Electronic payment processing and/or an ATM should be developed on island to make it easier for tourists to pay. Encourage the telecoms provider to provide tourist focused WIFI solutions. 2 2 4 Marketing: St Helena may not be marketed sufficiently Market in targeted magazines, and via journalists and tour operators. Ensure experiences, tours and accommodation are marketed and easily bookable online. 2 2 4 Marketing: Entrepreneurs may not seize opportunities Encourage entrepreneurs to develop activity based holidays e.g. wellness retreats, walking holidays, educational trips, bird watching trips. 2 2 4 Infrastructure Investment: Yachties do not stay or spend much ashore Support enterprising people to provide low price, no frills food, laundry, Wi-Fi and accommodation particularly to visiting yachties. 3 1 4 Land Availability: Land may not be available for tourist accommodation Strategically allocate land for tourist accommodation. Ensure a speedier planning process with time commitments. 3 2 5 Marketing: There could be negative reviews of St Helena Tourist Office to survey visitors and tour operators, and record and address issues systematically. Encourage providers to use TripAdvisor. 4 2 6 Process/Ordinance: Litigation risk Show business why it is important to use disclaimers and insure. 2 4 6 Research: Low risk sites for adventure sports must be identified Survey of the type of rocks that are suited for climbing/coasteering and identify key activity sites. 5 5 10 Infrastructure Investment: Health tourism isn’t catered for. Explore health tourism opportunities. Engage an investor or invest in infrastructure if viable and supported politically. 5 5 10 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 18 St Helena already has a fisheries sector which employs 55-60 people, lands on average 370 tonnes of fish per annum and provides around two thirds of St Helena’s export income (based on 2017 data). St Helena is a pole-and-line only fish ery and is committed to ensuring a sustainable catch. A good proportion of the fresh tuna caught in St Helena could be sashimi grade; of exceptional quality and ideal to be consumed as Sushi. In 2018, St Helena exported its first consignment of fresh tuna by air, and the infrastructure and pro cesses are being put in place for regular fresh exports. The standard of frozen fish arriving in export markets is not as good as it could be, due to the storage conditions and du ration of travel from St Helena. Investing in freezing infrastructure (e.g. which freezes to minus 60 Degree Celsius) would improve the value of frozen fish on international markets. Currently the biggest barrier to growth is getting access to funding for both cost saving and value added infrastructure, and bringing in sufficient throughput. The St Helena Fisheries Sector: Review & Strategy (2016-2025) document provides the context for sustainable fishing in St Helena. Fisheries https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 19 Fisheries The following Mitigation Actions would contribute to the growth of the fisheries sector: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Skilled Labour: Not enough crews to catch required throughput Tackle the shortage of fisherman through apprenticeships and ensure youth are encouraged to enter the sector. Immigration to favour those who would work in fisheries. Consider encouraging staff and/or vessels from overseas who share the commitment to one by one fishing to assist. 1 1 2 Energy Cost: High cost of energy in creases unit cost of fish The St Helena Fisheries Corporation (SHFC) should seek a renewable ener gy solution in order to reduce the operating cost of the business. 1 1 2 Infrastructure Investment: Financing unavailable Work to ensure sufficient investment financing is achieved (private or public). Focus funding to provide i) freezing/cooling infrastructure ii) cost reduction investments iii) replacement equipment iv) debt relief. 1 1 2 Distribution networks: A fair price paid requires securing a good sale price from customers Continue to engage with and sell to international customers who desire a high quality, sustainable, product. 1 1 2 Land availability: Relocation site may not be available Ensure a site is available for the relocation of the Fish Processing Plant, for a newer more efficient plant be built. 1 1 2 Marketing: St Helena may not be able to prove product differentiation The quality and sustainability of St Helena’s fish should be proven by gaining internationally recognised standards. Consistent branding should be estab lished. 2 2 4 Science: Unsustainable catch would affect value of product Scientific work should be undertaken to determine sustainable catches 3 2 5 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 20 Coffee provides around one third of St Helena’s export income (based on 2017 data). For decades, Coffee production has been seen as one area of great potential for St Helena; as far back as 1960, studies were undertaken by researchers to identify the conditions most appropriate for coffee growing, and the St Helena Government has repeatedly put incen tives forward for coffee planting. Lessons learned from these government programmes show that support should be fo cused on helping those experienced in producing good quality coffee to expand. Currently demand outstrips supply of both green bean and roasted coffee in both local and international markets. The long lead time (at least 3-4 years) between planting and first harvest means that producers who already own appropriate land, or producers who have the opportunity to buy land freehold or with a long lease are those who are most easily able to expand production. Roasting coffee has further advantages as a value added stage; exporting roasted coffee should be explored where it can further increase profits made abroad. It is imperative that the quality standards are carefully adhered to, if the current prestige of the St Helena product is to be maintained. Coffee https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 21 Coffee The following Mitigation Actions would contribute to the growth of the coffee industry: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Science/Research: Unroasted beans are less valuable than roasted coffee Expert support needs to be available, particularly to producers wishing to begin roasting. 1 2 3 Distribution networks: Coffee may not be available to buy on island Coffee should be available on St Helena to purchase by visitors interested in supporting St Helena coffee, which helps to in crease international demand going forward. 2 1 3 Marketing: New coffee exporters may compromise quality, which may harm existing reputation. Experienced producers could buy beans from new and small producers and quality check beans before onward sale. 2 2 4 Land Availability: Land may not be available to help increase coffee pro duction Offer crown land to experienced coffee producers where they identify land as a requirement for expansion. 2 2 4 Process/Ordinance: Exporting may be seen as costly Negotiate incentives for exporters which makes exporting more attractive 2 3 5 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 22 New or Expanding Export Sectors 23 Because of St Helena’s remote location between the African and South American continents, political stability, low risk of natural or manmade disasters and the rule of UK style law, St Helena is an attractive place to host a satellite ground sta tion when it attains improved internet bandwidth through St Helena’s Digital Strategy. The business case for a sub marine cable and improved internet is robust when part of that bandwidth can be sold to a significant user, so there is mutual benefit to the Island by encouraging satellite ground stations to develop on the Island. In order for ground stations to be possible, land will need to be ring-fenced for development. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Satellite Ground Stations Risk Mitigation Action Importance * Urgency * Priority score~ Faster cheaper internet: The sub-marine cable must be built Ensure that funding is in place for the sub-marine cable for a source of cheaper, faster internet. Ensure EDF funding milestones are met e.g. Connected St Helena, IT upskilling and telemedicine. 1 1 2 Infrastructure Investment: Satellite ground station pro viders are required to come forward Continue to communicate with those expressing an interest in developing a ground station on St Helena and develop associated Memorandum of Understanding when the time is right. 1 2 3 Land Availability: A flat plot of land with views to the horizon needs to be available for use by a satellite ground station. Strategically allocate potential plots of land for the satellite ground station well in advance. 1 4 5 Energy Cost: Large energy users are impacted by high energy costs. As per the Energy Strategy, ensure that the vast proportion of energy used is generated by renewables by 2022. Avoid significant price increases to consumers, and where viable reduce the government subsidy and pass on cost savings to consumers. 4 2 6 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 24 Internationally, many rural areas who have suffered from outward migration in the past are seeing a revival thanks to the ‘working from home’ industries. As flexible working is becoming more popular, and technology is improving it’s not unusu al to work on projects with colleagues across the world. Contingent on provision of improved and more economical inter net packages, those living in St Helena will have the opportunity to work online to sell their services abroad. This could be services such as IT, photography, editing, translation, transcription, tutoring, research, call centre work, marketing and sales. With affordable high speed internet, the island can become an attractive ‘lifestyle’ destination. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Work From Home Jobs Risk Mitigation Action Importance * Urgency * Priority score~ Faster cheaper internet: The sub-marine ca ble must be built Ensure that funding is in place for the sub-marine cable for a source of cheaper, faster internet. Ensure EDF funding milestones are met e.g. Connected St Helena, IT upskilling and telemedicine. 1 1 2 Energy Costs: Expensive electricity costs could make home working unviable. As per the Energy Strategy, ensure that the vast proportion of energy used is generated by renewables by 2022. Avoid significant price increases to consumers, and where viable reduce the government subsidy and pass on cost savings to consumers. 1 1 2 Skilled Labour: Many people may not be in a position to provide computer based services Ensure that there is a focus on I.T. in schools and training programmes. Expose young people to, and make available studies in programming, computer-aided design (CAD), Geographic Information Systems (GIS) and code writing. 2 2 4 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 25 Due to the St Helena commercial air service, it is now possible to host academic conferences more conveniently, enhance global academic links and invite researchers, archaeologists and conservationists to work in partnership. St Helena con tains a third of known endemic UK species and many native species. St Helena has a significant amount of environmental expertise already existing on island between the St Helena National Trust, St Helena Government’s Environment Manage ment Division, St Helena’s Landscape & Ecology Mitigation Programme, and the voluntary and charitable sector. The exist ing network of environmentalists, and abundance of endemics are factors which could encourage the introduction of a re search centre. Since bones belonging to slaves were uncovered at Rupert’s Valley, there have been further exploration of the history of slaves journeying the Middle Passage. There is the potential to invite researchers to St Helena to study these topics further. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Academia, Research and Conferences Risk Mitigation Action Importance * Urgency * Priority score~ Marketing and Research: Academics may not be aware of the opportunities available. Continue to work with Research Institutes to develop well mar keted conferences and research opportunities. 1 2 3 Faster cheaper internet: Expensive internet may dissuade academics from staying Ensure that funding is in place for the sub-marine cable for a source of cheaper, faster internet. 1 2 3 Infrastructure investment: Lack of space for aca demics to meet and work may discourage aca demics from returning Develop areas for academics to access internet, discuss and un dertake work or subsidise partner organisations who are able to host researchers. 3 1 4 Infrastructure investment: Lack of conference in frastructure Ensure there are suitable venues available to host conferences and provide conferencing infrastructure. 3 3 6 Process/Ordinance: Data difficult to obtain. Ensure all open data (e.g. GIS) is downloadable online and pro cess for obtaining other data is clear. 3 3 6 Process/Ordinance: Permits may be difficult to attain Ensure that there are enough staff resources to swiftly process work permits and environmental permits for researchers. 3 4 7 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 26 St Helena currently has one distillery; included in its offerings are Midnight Mist (a liquor made with local coffee), Tungi (a liquor made with local prickly pear), Lemon Valley (lemoncello), Jamestown Gin, White Lion spiced rum and wine. There is a potential to expand wine offering by experimenting with growing grapes on island, and to make beer, cider and perry using imported raw ingredients. Other small Island economies, such as Curaçao, have become very well known for their liquor offerings, which are sold as a tourist souvenir. Marketing locally made alcoholic drinks is key to increasing the de sirability of the product and attractiveness to overseas distributers. Plans to develop signature cocktails with local bars and hotels will increase visitor exposure to local liquor, and marketing liquor in airport shops will help to ensure tourists leave with gifts which provide added value to our export sectors. There is also more to do to encourage local liquor to be drunk in place of imports. For example, providing local liquors as house spirits at bars and restaurants. One of the major import costs are bottles. It would benefit the sector to keep liquor duties low. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Liquor, Wines and Beers Risk Mitigation Action Importance * Urgency * Priority score~ Marketing: Liquor made in St Hele na may not be marketed well to Sector to ensure liquor is marketed in hotels and gift shops and work with tour operators to ensure groups visit the distillery. 2 1 3 Process/Ordinance: Exporting may be seen as costly Negotiate incentives for exporters which makes exporting more attrac tive 2 3 5 Infrastructure Investment: Expen sive bottles must be imported Encourage the set up of a local bottling plant or alternative solution. 3 3 6 Infrastructure Investment: Produc tivity may not be able to diversify as a result of lack of infrastructure Work with BoSH and ESH to continue to ensure sufficient loan finance is provided to export sectors in St Helena. 5 5 10 Distribution: Liquor products may not be available internationally. Encourage suppliers to use online market places. Assist producers, where necessary, in making links with niche buyers abroad. 5 5 10 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 27 St Helena has around 600 visitors per annum arriving by yacht, peaking at between 100 and 200 in January during the Arc Rally. To capitalise on existing interest, St Helena could provide new sailing courses and market ship registry. The Red Ensign group ship registry is one of the most prestigious in the world and St Helena can currently register vessels of up to 150 gross tons and pleasure vessels of up to 400 gross tons. However, at present, St Helena does not have a resi dent surveyor and registry is not marketed. Similarly, putting the infrastructure in place to offer sailing lessons and qualifi cations could be an attraction to visitors, as well as necessary for important health and safety needs. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Ship Registry and Sailing Qualifications Risk Mitigation Action Importance * Urgency * Priority score~ Process/Ordinance: Ship registry is restrict ed to applicants from a small number of countries Update the Ship Registry Gazette to include a list of countries which is consistent with other countries in the Red Ensign Group 1 1 2 Skilled Labour: No surveyors available Utilise a surveyor overseas, until demand is ascertained, after which decide to invest in an on Island surveying capacity. 1 1 2 Marketing: The service is not marketed suf ficiently and no ships are registered or li cences are issued Ensure SHG communicates new services and markets services over seas. Target specialist publications. 1 2 3 Skilled Labour: No sailing instructors avail able Support training of those willing to set up a sailing school in St Hele na. Ensure youth are encouraged to enter the sector. Support immi gration where there are skills gaps. 2 2 4 Process/Ordinance: Registry and Licencing may be unorganised Create a Maritime and Coastguard Agency for St Helena 2 2 4 Land Availability: Land may not be availa ble Strategically allocate land to facilitate vessel surveying. Provide stor age and safe access for boats. 3 2 5 Skilled Labour: May not be staff to support maritime sector Work with new Maritime and Coastguard Agency to develop training. Support immigration where there are skills gaps. 4 4 8 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 28 Craftwork, particularly flax craftwork and lace making, has historically been a pastime enjoyed by many in St Helena. St Helena is also the home to creative jewellery makers, artists, and photographers. Both the Arts and Crafts shop in Jame stown and Shape in Sandy Bay sell locally produced craft goods which have expanded to include photographs, wooden boxes and photo frames, goods made from recycled paper and soaps. Using traditional approaches to create modern fash ionable items can increase saleability. With numbers of tourists expected to increase, the arts and crafts suppliers have the opportunity to see more small porta ble products which are attractive for visitors to buy and give as souvenirs or gifts. There are additional opportunities to sell locally produced arts and crafts online through websites and market places such as Etsy. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Traditional Products Risk Mitigation Action Importance * Urgency * Priority score~ Distribution networks: Selling arts and crafts abroad may be difficult due to postage times Seek overseas distributor. 2 2 4 Marketing: The market for St Helenian arts and crafts may be small Provide the opportunity to buy goods online by advertising goods on the website or online market places. Ensure that goods are marketable for modern tastes. 2 2 4 Process/Ordinance: Exporting may be seen as costly Negotiate incentives for exporters which makes exporting more attractive 2 2 4 Skilled Labour: Niche expertise may be needed Assist the sector by providing access to design and com mercial expertise, where required. 3 3 6 Skilled Labour: The knowledge of traditional craftwork may not be held by the younger generation. Ensure that traditional craftwork is taught in school or as part of out of school clubs. 4 4 8 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 29 Due to strict biosecurity restrictions in St Helena, local honey bees are free of the major diseases that cause significant damage to bee colonies as many other bee keeping Islands and countries experience. The genetic make-up or simply the disease free attribute of the St Helena bee may have value internationally and could provide export opportunities. Ad ditionally, the disease free nature of St Helena’s honey makes it one of the purest in the world. The honey making indus try already exists on St Helena and has developed over the last few years. However, the scale is small and production needs to increase to exceed local demand in order for exports to develop organically. In order for production to increase, there needs to be planting of non-invasive flowers for honey bees to feed from, and there needs to be better manage ment of more hives. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Honey and Honey Bees Risk Mitigation Action Importance * Urgency * Priority score~ Science: Research on bee DNA may not be undertaken. ESH to continue work with research centres to understand the value of bees. Bee DNA to be ascertained. 1 1 2 Science: Research not undertaken on which flowers to plant to support bees Research what plants are good for bees and non-invasive. 1 1 2 Infrastructure Investment: Significant plant ing of flowers required The public should be encouraged to grow non-invasive flowers which are good for bees. 1 2 3 Skilled Labour: Not enough beekeepers work on the Island. Continue up-skilling bee keepers and encouraging them to increase honey production through proper hive management. Ensure youth are encouraged to enter the sector. 1 2 3 Distribution Networks: There may not be networks in place to export honey. Encourage producers to use online market places or distributers to sell honey abroad. 2 2 4 Process/Ordinance: Exporting may be seen as costly Negotiate incentives for exporters which makes exporting more attrac tive 2 3 5 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 30 St Helena has ample landscapes free from modern housing or road development, which include lush green rolling hills, coastal cliffs, forts and batteries, dry dusty landscapes with cacti, canyons, land featuring Mars-like red earth, and a Geor gian high street. Despite having so much variety in Landscapes, St Helena is a small island and travel time between are as is minimal, whilst daylight hours and weather patterns are regular. Several film crews visit the island each year, but with commercial air access and good marketing, there is the possibility of expanding this market. Faster, cheaper, internet will also support the sector by reducing the cost of uploading footage. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Film Location Risk Mitigation Action Importance * Urgency * Priority score~ Marketing and Skilled Labour: Film crews may not be aware of potential locations available in St Helena Develop and market an online brochure outlining potential film locations alongside infrastructure information (road capacity, electricity, conservation restrictions and requirements). 1 1 2 Infrastructure: Film crews may require on island support Provide a Location Manager who can organise logistics. 1 2 3 Affordable Air Access: Film crew may find difficul ty in bringing equipment Focus marketing on smaller crews (£1m-£5m budgets) who have less equipment to transport. 1 2 3 Infrastructure: Electricity may not be available in remote, rural, locations Provide access to rent electricity generators on island. 2 3 5 Infrastructure: The road network may not be ca pable of taking large trucks Focus marketing on smaller crews (£1m-£5m budgets) who have less equipment to transport. 3 3 6 Marketing: St Helena may not be a price compet itive film location Develop and market incentives for sector growth. An on island studio would also be attractive. 3 4 7 Faster cheaper internet: Sending footage over the internet is difficult Ensure that funding is in place for the sub-marine cable for a source of cheaper, faster internet. 3 4 7 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 31 IMPORT SUBSTITUTION 32 There are many flourishing sectors in St Helena which are providing goods and services which would otherwise be im ported. Some of the areas which have been identified for growth include those below. The sectors face some barriers to growth; the following pages go into more detail exploring these barriers alongside recommended Mitigation Actions to support import substitution. Barriers to Import Substitution Energy cost Agriculture Bottled water Infrastructure investment Finance from Bank of St Helena Overseas investment Land availability Skilled labour Strategic land allocation (masterplan) Sale of Crown land/buildings Incentivise sale of unproductive land/buildings Science/research Marketing Enterprise St Helena Education/upskilling Inward migration Apprenticeships Import Substitution Sectors Timber Process/ordinance Distribution networks Bricks, Blocks, Minerals and Rocks https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 33 Existing Import Substitution Sectors 34 The more food we produce and sell locally, the larger the opportunity to reduce import costs, keep money within St Hele na and enhance food security. In recent years, there have been new or increased supply of local products coming to mar ket including herbs, eggs, and salad vegetables. The longer four week rotation of the MV Helena Ship compared to the three week rotation of the RMS St Helena provides further incentive for local businesses to supply fresh produce during interim periods. Issues in the sector are outlined in St Helena’s Agricultural Policy ‘Growing Forward’. In particular, agricultural output needs be organised productively to avoid glut and scarcity and producers should supply customer needs. Retailers should use futures contracts with local produces and reduce reliance on imports. Local produce should be stored by all main retailers in cooled units to increase shelf life. Cheap imports have prohibited the development of some products in St Helena. Whilst some products are too expensive or difficult to develop on island due to land availability and topography, there are still many products that there is local de mand for, such as fruit, 28 day aged beef, chicken meat, yoghurt and alternatives to UHT milk. Whilst large scale invest ment in these industries may not be financially lucrative, small scale production could meet the demand from customers who don’t mind paying a premium for local produce. There also may be a potential to diversify to supply a greater range of agricultural produce. Suggestions by consumers include chicken meat, mushrooms, sunflower products, edamame, soya beans and coconuts. A focus on high value products, such as Wagyu beef, could provide export opportunities. Re search and trials would need to be undertaken to understand the viability of any new product development. There is also a business opportunity to provide organic waste collection and composting services as per St Helena’s Waste Management Strategy, and to supply locally made animal feed. Agriculture https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 35 Agriculture The following Mitigation Actions would contribute to the growth of the sector: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Distribution: Shops prioritise imports Encourage shops to sign futures contracts with local producers. 1 1 2 Science/Research and Skilled Labour: Land productivity could be poor Use an agronomist to guide improved soils and crop management to improve land and crop productivity. Agronomist to provide training. 1 1 2 Process: Support may not be perceived to be available. Ensure there is sufficient resources for SHG engagement with the agricultural sec tor 1 1 2 Distribution Networks: Demand not met Continue to encourage a move towards using a single cooperative for vegetable planning and wholesale to help reduce wastage and to absorb risk. 2 2 4 Skilled Labour: Enough veterinary support may not be available Ensure veterinary service is staffed sufficiently to meet demand. 2 2 4 Infrastructure Investment: Retailers may store products poorly Work with retailers and suppliers to continue to encourage the purchase of (ideally solar powered) chilled units to ensure vegetables last longer. 2 2 4 Land: Spread of Invasive Species becomes unmanageable Continue to fund management of invasive species. Ensure compliance by lease holders with respect to land management 3 1 4 Infrastructure: Risk of drought Continue to support farmers to collect and store rain water. 2 2 4 Process: Bringing in new species are a risk to bio-security. Support the importation and growth of disease free species for sale to local farm ers and ensure facilities are in place to transport small animals by plane. 2 2 4 Infrastructure Investment: Trialling new prod ucts is financially risky Provide financial support to producers who are trialling growth of new agricultural products which could substitute imports or be exported. 2 2 4 Infrastructure Investment: Resources are un derutilised Support the development of infrastructure to collect and convert organic waste to compost. 2 3 5 Skilled Labour: Shortage of farmers/labourers Education to ensure availability of agricultural studies and youth are encouraged to enter the sector. Immigration to favour those who would work in agriculture. 2 3 5 Land Availability: Lease requirements may not be enforced Ensure that land leases are distributed to those who productively contribute to im port substitution and maintain lease terms. 3 2 5 Science: Data may not be reliable Encourage more suppliers to submit planting data and harvest data. 3 3 6 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 36 Tree species on St Helena include species such as Cape Yew, Chilean Pine, Norfolk Island Pine, Bermuda Red Cedar, Cyprus, English Oak, Silky Oak, Cork Oak, Eucalyptus, Wild Mango, Poison Peach and Jacaranda. Typically, timber used in construction is imported, and there is some work to do to ensure that local timber is easily acces sible and buying local becomes a habit. By updating the forestry inventory and advertising available timber directly to the carpenters as well as the saw mill, the supply of local timber can be made more convenient. The vision needs to be based on sustainability and a balance between timber harvesting and landscape value. Showcasing best practice use of local timber, encouraging local timber to be used as part of government construction pro jects (e.g. Chilean Pine for cladding), and prioritising the sale of Crown Land to projects which buy local could also help stimulate demand. Timber https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 37 Timber The following Mitigation Actions would contribute to the growth of the sector: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Distribution Network: Local timber avail ability could be uncertain Forestry department should periodically advertise timber directly to carpenters as well as the sawmill. 1 1 2 Land Availability/Science: Forestry may not be best utilised as a resource Update the inventory. Thin forests to encourage tree thick ness of valuable species. Research and document com mercial uses of species. Plan growth of valuable species. 1 1 2 Skilled Labour: Shortage of skilled car penters on island Community College to ensure that a carpentry apprentice ship/courses are available. Ensure youth are encouraged to enter the sector. Immigration to favour those who bring car pentry experience. 1 1 2 Skilled Labour: Workman may not usual ly work with local timber Encourage carpenters in St Helena to learn best practice from those who have successfully used local wood in con struction or furniture making. 1 1 2 Process: SHG could encourage local timber demand Mark up those bidding for SHG construction projects or Crown Land when they use local materials 2 2 4 Infrastructure Investment: Carpenters may benefit from their own sawmills Work with BoSH and ESH to encourage sufficient loan fi nance is provided to import substitution sectors in St Hele na. 3 3 6 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 38 Sourcing construction materials locally reduces the amount of money remitted abroad. The construction industry has developed significantly as a result of the Airport, Rupert’s Wharf and BFI contracts. Since these contracts have been winding down, there has been some sustained demand for construction on St Helena. However the sector still requires demand from large capital projects for the sector to persevere. Purchasing local blocks and bricks have been popular, and the type of local materials provided to construction projects on St Helena has in the last few years expanded to road base and subbase. It is important to ensure that these products con tinue to be available to the local construction market after the Airport and BFI contracts expire. Using recycled materials (such as glass) to manufacture eco-bricks will also be beneficial to reduce waste going to landfill. It is uncertain whether St Helena’s rocks and minerals could provide other inputs into construction and other industries; more could be done to research how local resources could be utilised for industry, so long as negative environmental im pacts are avoided. Additionally, more work should be done to understand demand in Ascension for construction materials from St Helena; some research should be undertaken to link buyers with suppliers if demand exists. Bricks, Blocks, Minerals and Rocks https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 39 Bricks, Blocks, Minerals and Rocks The following Mitigation Actions would contribute to the growth of the sector: *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Risk Mitigation Action Importance * Urgency * Priority score~ Science/Research: The integrity of St Helena’s construction products should be assured to avoid reputational risk Encourage producers to utilise a quality assurance process to demonstrate quality and integrity. 1 2 3 Infrastructure Investment: Ensure infra structure to produce local construction materials is still available after the Air port and BFI projects expire. Ensure that there is a positive legacy from the Airport and BFI projects; in particular to ensure that plant stays on is land where it would deliver cost savings and import substi tution. 1 2 3 Process: Ensure SHG encourages local brick/block demand. Ensure those who choose to use local materials are scored more positively when bidding for SHG construction pro jects, or to buy or lease Crown Land. For SHG construction projects, collate a database of local material costs and check that the bidder’s cost estimates mirror the cost of lo cal goods. 2 2 4 Science/Research: Revenues are sensi tive to SHG Capital Budget allocation. Investigate whether there is demand in Ascension for blocks and/or bricks from St Helena. Make links between buyers and suppliers. 3 4 7 Science/Research: Value of St Helena’s rocks and minerals are unknown. Research ways to maximise growth, sale and usage of lo cal rocks and minerals, within environmental limits. 4 4 8 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 40 New Import Substitution Sectors 41 Between June 2016-June 2017, St Helena spent £65,000 importing mineral waters. Plastic bottles make a large contribu tion to the amount of plastic which is landfilled each year in St Helena. As water resources found in the deep aquifers in St Helena are exploited, there is an opportunity to provide treated and bottled water to local people and operate a bottle deposit scheme. Should this sector grow, there could be an opportunity to export water, similar to what has been achieved by FIJI Water for example. There are also opportunities to diversify; St Helena has a high rate of diabetes and many people enjoy carbonated drinks, so a carbonated low sugar alternative could meet a gap in the local market. One of the major costs are bottles. A bottling plant or bottle return scheme would be required. This industry would be a new sector for St Helena and therefore development of this sector would be subject to viability testing. *Scores of 1 are the highest and 5 are the lowest ~Scores of 2 are the highest, 10 are the lowest. Bottled Water Risk Mitigation Action Importance * Urgency * Priority score~ Process/Ordinance: Water sampling needs to be done on island. Encourage Public Health to provide water testing services for the pri vate sector. 1 2 3 Infrastructure Investment: Finance may not be available Work with BoSH and ESH to ensure sufficient loan finance is available to viable projects in import substitution sectors. 1 2 3 Skilled Labour: No one may come forward to develop the plant. Encourage development within the private sector sphere. 1 2 3 Infrastructure Investment: Expensive bottles must be imported Encourage the set up of a local bottling plant. If glass bottles are too expensive, encourage an alternative. Reduce import duty on bottles, caps and cleaning machinery for the sector. 2 3 5 Distribution networks: Key shops should supply local water Encourage key retailers to supply locally produced bottled water and a deposit return scheme. 2 3 5 Marketing: Local water may not be viewed to be as good as imported. Sector should provide evidence to show that the local bottled water is as good quality as imported bottled water. 1 4 5 Infrastructure Investment: Water resources may be scarce during drought Ensure that provisions for demand by drinks-making businesses are included within Water Resource Management Planning. 2 3 5 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 42 SUMMARY AND SUCCESS FACTORS 43 Summary of Barriers to Growth Sector Distribution networks Marketing Infrastructure investment Science/ Research Faster cheaper internet Land availability Energy Cost Affordable Air Access Freight cost Labour Process Ordinance Tourism Fisheries Coffee Liquor, Wines and Beers Ship Registry and Sailing Qualifications Honey and Honey Bees Film Location Academia, Research and Conferences Satellite Ground Stations Work from Home Jobs Traditional Products Agriculture Timber Bricks, Blocks, Minerals and Rocks Bottled Water Key: Principal barrier to growth Secondary barrier to growth https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 44 Potential to Reduce Trade Imbalance More Potential To Improve Trade Balance Less Short term Time frame Longer Term Tourism Honey and Honey Bees Traditional products Bricks, Blocks, Minerals and Rocks Fisheries Coffee Liquor, wines and beers Academia, Research and Conferences Satellite Ground Stations Film Location Work from Home Jobs Agriculture Ship Registry and Sailing Qualifications Timber Bottled Water Export (a product or service sold to customers abroad) Import Substitute (replacement of an import with locally produced product or service) https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 45 Opportunities for Entrepreneurs The private (and civil society) sectors have been and will be a key driver of investment and economic growth in St Helena. As well as there being business opportunities within the sectors outlined, this Sustainable Economic Development Plan has identified a number of desired products and services which could be provided by entrepreneurs. These opportunities have been replicated here for ease of reference. This list is not exhaustive.  International wholesaler of St Helenian export products;  Green waste collection and composting service; recycling services and waste export.  Drinks making business; including bottled water, carbonated drinks, fruit juice, wines, beers and coffee.  Food processing business;  Bee hive rental/management services;  Sailing school;  Wellness or yoga retreat;  Niche tourism activities e.g. bird watching holidays; photography holidays; guided walking, climbing or cycling tours; coffee picking experi ences; St Helenian cooking classes; hosting of overseas school fieldtrips; military diving training; re-enactment centres, tours relating to the slave trade connection;  Low price, no frills food, laundry, Wi-Fi and accommodation marketed to visiting yachties and ‘adventure travellers’;  Refurbishment, enhancement and use of heritage sites for events and tourism;  Local production of foods such as eggs, fruit, 28 day aged beef, chicken meat, alternatives to UHT milk, yoghurt, mushrooms, coconut products, sunflower products, and soya products;  Aquaculture;  Health tourism services, such as residential care. The Investment Strategy is an associated document to the Sustainable Economic Development Plan (and will be published subsequently). The Investment Strategy outlines ESH and SHG’s plan to make it easier and more attractive to invest. https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 46 Measuring Success The following measures will help to track how well St Helena is doing meeting the SEDP’s vision and goals:  Changes in St Helena’s wealth will be tracked by considering annual remittance data from the Bank of St Helena.  Magnitude of imports and exports will be tracked annually through ASYCUDA data from Customs. Associated GDP and GNP data will be calculated by the Statistics Office using ASYCUDA data.  Average (median) employee income and business revenue by sector will be tracked annually by using data from PAYE and tax return forms through the Tax Office. Unemployment will be tracked by the Statistics Office.  Inflation will be tracked through Retail Price Index surveys by the Statistics Office.  Number of tourists and visitors arriving will be tracked by the Statistics Office. Number of beds in en-suite bedrooms hotels, guesthouses and self-catering establishments will be tracked by ESH.  Total local, diaspora and foreign private sector investment will be tracked by ESH.  Increase in number of individuals completing accredited training courses and achieving first year objectives will be tracked by St Helena Community College. Progress in these measures will be reported annually by SHG’s Corporate Planning and Performance Directorate. Signs that barriers have been overcome will be apparent when:  Community College offers courses or apprenticeships as identified in this Plan and individuals complete courses.  Ordinance changes are made as identified in this Plan.  Land is prioritised and released for use by sectors identified in this Plan.  Enterprise St Helena’s funding is prioritised to support export and import substitution sectors.  Internet speed improved and price is considerably reduced.  No increases in the unit cost of energy for Connect and its customers.  St Helena Government achieves a credit rating.  Increase in working age population (short term and long term) https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 47 Indicator data The following measures will be tracked to understand how well St Helena is doing meeting the SEDP’s vision and goals. Change compared to the baseline will be reported on annually and published on SHG’s website. Some data is lagged by a year or more due to methods of data collection. Indicator Reporting Baseline Data Data Year Annual payment data through Bank of St Helena Bank of St Helena £37.3m out of St Helena; £16.3m in to St Helena 2016/17 FY Annual imports and exports Statistics Office ASYCUDA £23.2m imported (2013/14) Provisional data for 2017: £31.5m imported. £95k exported (60% fish; 30% coffee). 2013/14 (imports) July 2016 to June 2017 (imports). 2017 (exports). Average employee income Statistics Office Tax Office £7,620 (2015/16) 2015/16 Revenue by sector (sectors related to SEDP) Statistics Office Tax Office Building materials suppliers £1.36m; Butchers £326k; Cafés, Restaurants and Distil ling £463k; Construction, Trades and Firewood Processing £4m; Crafts £13k; Div ing/Swimming £126k; Farming £232k; Fishing £531k; Hotels £260k; Photog raphy/Digital £52k; Rented Accommodation £586k; Seamstress/tailoring/upholstery £26k; Taxis and Car Hire £167k; Telecommunications and IT services support £4.3m; Tour Guides and Tourism/Travel Agents £58k; Other (including retail, com mercial and banking) £26m. (Note that revenue is not an indication of profit) 2016/17 FY (some grouping of sectors were un dertaken to ensure anonymity) Number of businesses oper ating Statistics Office Tax Office 54 companies and 660 businesses registered April 2016 GDP total, GDP per capita, Statistics Office £33.514m GDP £7,392 GDP per capita 2014/15 Annual Inflation Statistics Office 5.1% Annual Average 2017 Unemployment allowance claimants Statistics Office 12 claimants February 2018 https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 48 Indicator data (continued) Indicator Reporting Data Data Year Working Age Population Statistics Office 2,851 2016 Number of visitors arriving by all means of transport (of which are for tourism or holiday) Statistics Office 4,266 (1,131 tourism) 2017 Number of visitors arriving by air (of which are for tourism or holiday) Statistics Office 917 (300 tourism) (Note that the commercial air service started on 14 October 2017) 2017 Number of rooms for tourists ESH 122 rooms 2018 Number of local and foreign investors secured by ESH ESH 12 2015/16 Capital investment generated (£) by ESH (FDI and local private sector only) ESH £535,000 2015/16 Individuals completing accredited training courses in ex port/import substitution sector related fields and achiev ing first year objectives SHCC New data to be collected https://www.google.sh/url?url=https://en.wikipedia.org/wiki/Flag of Saint Helena&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwiJ6auZ76nMAhWHK8AKHZcYBwMQwW4IFTAA&usg=AFQjCNExei2grfE20nrgsJV8kz4 IX2HPw 49 IMPORT SUBSTITUTION 50 Photography St Helena Government, Nicole Shamier, Tony Leo, Rhys Hobbs, Solomons, St Helena Fisheries Corporation, Brick and Block Ventures Limited St Helena Government www.sainthelena.gov.sh https://www.facebook.com/StHelenaGovt/ https://twitter.com/StHelenaGovt https://www.facebook.com/StHelenaGovt/ https://twitter.com/StHelenaGovt