A successful emancipation
The organic law of February 21, 2007 created two new collectivities: Saint-Martin and Saint-Barthélemy, which until that date had been communes of the department of Guadeloupe (since the law of March 19, 1946 on departmentalization). Each collectivity now replaces the department. This institution has its own autonomy and legislative regime, with exceptions based on legislative speciality. Prior to 2007, Saint-Barth had the political status of a French commune. Following a referendum held on December 7, 2003, the island overwhelmingly confirmed (95.51%, with 21.92% abstentions) the bill to transform it into a fully-fledged Overseas Collectivity (COM), while retaining its tax advantages. Saint-Barthélemy now has all the powers previously devolved to the communes, department and region of Guadeloupe, as well as those transferred to it by the State. This new status enables the island to adapt, if necessary, the laws and provisions applied in mainland France. This does not apply to areas such as security, defense, foreign affairs, currency and justice, which will remain the responsibility of the French state. It has been able to adapt the laws and regulations in force locally, and set rules in certain areas such as taxation, road traffic, roads and tourism.
Tourism: the mainstay of St. Barts' economy!
Primarily geared towards upscale tourism with a focus on safety and calm, its tourism positioning differs from that of Guadeloupe and the rest of the Caribbean. As a small, arid island, it cannot support agricultural crops or industry. Long isolated and poor, the Saints-Barths have found an unexpected source of income over the last twenty years with the development of tourism. Unlike the vast majority of other Caribbean islands, which have attracted mass tourism, its difficult access (no long-haul aircraft can land there) has attracted a very affluent clientele. Even if tourism is now tending to become more democratic. The first hotel to pave the way was theEden Rock, the result of Rémy de Haënen's love affair with the site.
Seduced by the site's beauty, tranquility, security and harmonious urban development (which was beginning to change dangerously), a wealthy clientele eager to find a certain tranquility has been coming faithfully to Saint-Barth since the 1950s.
As a result, tourism spin-offs have considerably improved the economic situation of the island's inhabitants (witness the GDP/capita of €38,994 in 2014, up from €35,893 in 2011, representing average annual growth of 2.8%). Tourist numbers were on the rise until the passage of Irma (cyclone in September 2017), which slowed the flow considerably. There are no cases of overindebtedness in Saint-Barth, as is common in Guadeloupe, Martinique or Saint-Martin. Similarly, unemployment seems to have spared the island, and the local authority is pleased to note that there is no need for social housing.
In 2020, the number of tourists increased by 20% compared to 2016. The estimated supply is currently 2,100 rooms in villas and 550 in hotels. The quantity of tourists is currently pleasant, balanced and sufficient to support the community's current economy. The health crisis has disrupted this economy, but visitor numbers are gradually returning to normal levels.
Behind the scenes: paradise for locals?
It's not easy to live, work and, above all, find accommodation on this dream island! The local authorities are sorely lacking in housing for locals, and many of them are forced to opt for shared accommodation (which has become even more common since Irma). The island's biggest problem is the difficulty for seasonal workers and locals to find housing, as construction priority has long been given to investors and developers of luxury villas. However, we hope to see a slowdown in new construction for the wealthy, in favor of the local population. At the time of our visit, the difficulty of finding accommodation remained unchanged, and many people can move up to 4 times a year, often in shared flats. The difficulties faced by St. Barths due to their insularity are real. The cost of living is higher than on an island like Guadeloupe, due to its remoteness and the need to import products. Certain constraints specific to Saint-Barth (lack of drinking water, high construction costs, etc.) also contribute to the higher costs borne by residents. The cost-of-living differential between Saint-Barthélemy and Guadeloupe is estimated at around 25% (remember that Guadeloupe is already 30% more expensive than mainland France).
Real estate: a very lucrative manna that has its limits
We could almost compare the management of Saint-Barth to the management of a business. Of course, the local authorities pride themselves on their island's financial equilibrium, especially as they receive no financial aid from France. There are around 5,000 businesses for less than 10,000 inhabitants (many of them micro-businesses). But one of the island's most lucrative activities is undoubtedly real estate. The scarcity of building land also explains its price (1,000 to 5,000 euros per square meter). By way of example, a well-located villa can be negotiated for between 5 and 10 million euros! In 2017, the authorities voted to significantly increase the capital gains tax on real estate. The tax increases to 35% if the seller has occupied the property for less than five years, instead of 20% if the property was previously occupied. It's worth noting that most residences are only marginally occupied by their owners: they are purely an investment or a way to save tax. Many owners entrust their properties to rental agencies such as the renowned Sibarth Villa Rentals.
