The Caribbean is a diverse region with robust economic potential and growth opportunities. It consists of small island economies with Gross National Income (GNI) per capita that ranges from US$800 to over US$30,000. These countries are major players in a wide range of global industries. Some of these economies rely on commodity exports, while others depend heavily on tourism. According to the World Bank, the region’s countries are split into the following distinctive groups, according to their main source of export earnings: Services Dependent, Light Manufacturing Dependent, Agriculture and Food Dependent and Natural Resources Dependent.
- Services dependent: Antigua and Barbuda; The Bahamas; Barbados; Dominica; Grenada; Jamaica; St. Kitts and Nevis; Dominican Republic; Haiti
- Light manufacturing dependent: Dominican Republic; Haiti
- Agriculture and food dependent: Guyana; Belize
- Natural resources dependent: Suriname; Trinidad and Tobago
The region’s main natural resources include petroleum, fish, and natural gas, while the key industries are tourism, sugar, light manufacturing, and component assembly for export. Tourism accounted for 13.9% of the Caribbean’s GDP in 2019 and 15.2% of total employment. This is the region with the highest contribution from tourism globally, but for some countries, the role of tourism is much higher than for others. For example, for the Eastern Caribbean States and the Bahamas, Belize and Jamaica, tourism and travel make up more than 25% of GDP. The pandemic greatly affected the region’s countries, although to a varying degree due to their high dependence on travel and tourism, which collapsed because of border closures and other restrictions imposed to curb the spread of the virus. With tourism coming to a standstill and main markets in advanced economies dipping into recession, the region’s economic activity is greatly affected by the pandemic due to dependence on travel and tourism, likely with a likely sharp and protracted economic contraction. It is estimated that it will take years before Cross-border tourism returns to levels where it was before. Also, the significant drop in oil prices negatively impacts commodity exporters in the region through a loss in exports and fiscal revenues. Finally, Caribbean countries face longer-term challenges, including the adverse impacts of climate change, natural hazards and extreme weather events. The principal exports are sugar and molasses, rum, other foods and beverages, chemicals, electrical components, and clothing. Although the tourism sector plays a significant role in economic activity, investments are diversified across major Caribbean economies, with inflows of capital from all over the world.Click here to learn more.