The Caribbean Islands are diverse in culture and economic fortunes. A look at the islands’ economies reveals that some of them rely on commodity exports, while others rely on tourism. The Caribbean is home to some of the world’s tourist destinations. It boasts stunning scenery and vibrant cultures. The ocean resources, known as the “blue economy,” offer potential for the growth and development of services.
Metrics used to measure economic growth are the Gross Domestic Product (GDP) and the Gross National Income (GNI). The GDP and GNI of the islands vary widely. For instance, it is mind-blowing to know that the Dominican Republic obtained independence from Haiti. Since then, it has gone on to surpass its colonial masters in economic development. The GDP of the Dominican Republic is almost ten times that of Haiti.
With a Gross Domestic Product (GDP) of $868, Haiti is the poorest country in the Western hemisphere. It is vulnerable to natural disasters. More than 90% of the population is at risk. Hurricane Matthew struck the south of Haiti in October 2016. This has been the most devastating natural disaster experienced in the area in a long while.
Recent occurrences of institutional and political instability have obstructed Haiti’s economic and social development. The annual GDP has averaged 1.3% for the past 20 years. It is estimated that the GDP contracted by 1.4% in 2019.
The coronavirus pandemic worsened the situation of the economy. While the number of Coronavirus cases in Haiti remains low compared to other neighboring countries, the number has been rising steadily. This means that the country is still very vulnerable.
Haiti was once a popular destination for tourists. Choice tourism locations include places like Amiga Island, Abaka bay resort, Magdoos, amongst others.
Until recently, Jamaica was only known for its Reggae music, beaches, and a distinct accent. However, the Island made the headlines when Bloomberg reported that the Jamaican Stock Exchange (JSE) was the best performing stock market in the world in 2015. This came as the economy was recovering.
The Jamaican economy relies heavily on agriculture and mining. Jamaica owns the largest bauxite reserves. In 2014, it was the eighth largest producer of bauxite. Some of the good Jamaica exports include cassava, coffee beans, raw sugar, and so on. Jamaica produces one of the most popular types of coffee, known as Jamaican Blue Mountain Coffee.
Jamaica is a heavily indebted nation, and its economy has been slowly bouncing back from a recession since 2014.
After 2009, the economy of Cuba did not recover. The United States sanctioned Cuba, and it affected its economy. Mostly, it has remained at a 2% growth rate. The Cuban population is shrinking rapidly and aging. This is not good news because productivity and economic growth require a population in their prime to be in the workforce. This is far from the case in Cuba.
Also, Cuba is closing schools and opening care homes for the elderly instead. However, the Cuban economic picture is not all bleak. The life expectancy in Cuba is about what you would expect in North America and western Europe. The education level is okay. This means there is access to sports facilities and good quality health care. Also, basic nutritional needs are met. These are the things that contribute to the well-being of citizens and visitors as well.
This island is often mixed up with the Dominican Republic. They are different. Dominica has legislation in place that enhances the creation of offshore corporations and trusts. It provides tax-friendly banking services.
Dominica is a place referred to as a tax haven. It imposes no income taxes or corporate taxes. There is also no capital gains tax on income that is earned from abroad. Also, there is no withholding taxes, inheritance taxes, or gift taxes. Tax havens are not entirely free. However, they charge lower rates than other countries. The benefit to the individuals is the privilege of privacy. They offer a legal way to avoid paying high taxes charged by most developed countries.
Again, offshore companies do not need to pay stamp duties on the transfer of assets. People are not restricted as any nationality can form offshore corporations in Dominica. Privacy laws in Dominica shield the identities of owners and directors of offshore companies incorporated in Dominica.
Dominica is a pure tax haven that imposes no income taxes, no corporate taxes, and no capital gains tax on income earned abroad. There are also no withholding taxes and no estate taxes, including inheritance taxes or gift taxes. Offshore companies and trusts do not have to pay any stamp duty on transfers of assets. People of any nationality may form offshore corporations in Dominica.
9. St. Vincent and Grenadines
The economy of this Island depends heavily on agriculture. It is the world’s leading producer of exotic fruits, vegetables, and root crops. 60% of the workforce on the island work on Banana plantations, while 50% are employed in merchandise exports.
The economy relies heavily on a single crop. This makes the economy vulnerable to external factors. The island’s banana growers benefit from having preferential access to European markets.
As one of the smallest of the Caribbean Islands, it is vulnerable to natural disasters. It is also susceptible to the effects of changes in climate, such as rising sea levels. Unfortunately, St. Vincent does not have the necessary buffers to accommodate these shocks.
The Island depends on tourism as a primary driver of growth and employment. The tourism industry focuses on its blue and ocean environments. Therefore, it is a preferred tourism destination.
8. The Dominican Republic
In addition to having the largest economy in Latin America, the Dominican Republic has the largest GDP among the Nations that constitute the Caribbean Islands. In 2014, the Caribbean Islands’ growth rate stood at 7.3%. This was an increase from 4.8% realized the previous year.
Strong trading relationships and large remittances have helped to contribute to the economy of the island. Remittances accounted for a huge part of the Island’s foreign exchange.
7. St. Lucia
St. Lucia has a large and well-established tourism industry. Although it has a relatively small land area, it is still a choice destination for tourists. One of the most popular destinations is Ladera Resort.
Ladera Resort is located on a volcano ridgeline. It offers luxurious views. The resort is on the grounds of one of Soufriere’s oldest cocoa plantations. It has 37 rooms and suites. Each room is well heated and decorated with local arts.
The island is also known for some of the warmest beaches with beautiful scenes. Most of the beaches are covered in black volcanic sand.
The economy of Grenada is largely based on tourism. In the space of 20 years, the economy of the island has shifted from agriculture to services. Tourism is the leading sector that has earned foreign exchange for Grenada. The country’s major export crops are nutmeg and mace. Others include cocoa, citrus, and banana. The manufacturing industry operates majorly on small-scale producing textiles, beverages, and other foodstuffs.
The island is rich in new musical tones. The genres range from Jazz to Reggae. Musicians worldwide travel to Grenada to attend festivals, and there are lots of performances from famous artists all around the world. In fact, many tourists choose to visit the island at the time of the festivals.
5. Trinidad and Tobago
Trinidad’s main revenue source is not tourism, as many believe. The economy mainly depends on petrochemical and liquefied natural gas exports. They have large oil and natural gas reserves. As a Caribbean Community (CARICOM) member, Trinidad benefits from trade agreements with other Caribbean Islands.
4. Antigua and Barbuda
Anguilla is part of the overseas territory of Britain. It has become a respected tax haven. There is no tax levied on income generated outside the jurisdiction by companies that operate offshore.
Again, offshore entities that were incorporated in Anguilla are exempted from paying stamp duty. Financial legislation protects the identity of owners of offshore bank accounts and business entities. There are no exchange controls for asset transfers.
Barbados offers a thriving financial sector. It provides offshore banking, incorporation of offshore corporations, and exempt insurance. Barbados is unique among the Caribbean Islands.
It is not a pure tax haven, but it is a low tax environment for offshore corporations incorporated in Barbados. Taxes range between 0% to 5.5%. Offshore companies also enjoy not paying import duty when they import machinery or business equipment.
There are no withholding taxes, and there are double taxation treaties with a number of other countries such as the U.S. and Canada.
2. St. Kitts and Nevis:
Saint Kitts and Nevis is a dual island nation. It is located between the Atlantic and the Caribbean Sea. The island was popular for sugar cane plantations in the past. The economy of the Caribbean Islands was majorly dependent on the growing and processing of Sugar cane. However, decreasing prices around the world have affected the industry.
In recent times, tourism, manufacturing, and offshore banking have become prominent. The government has developed programs aimed at reviving the sugar sector. Hurricane Georges in 1998 caused a major loss in the sector.
The tourism industry on this island is unique. It relies on both long-term and short-term visitors. Short-term visitors come through cruises. They are usually Americans, Canadians, and other CARICOM countries.
1. The Bahamas
In the 1990s, the Bahamas became popular as a tax haven. It passed legislation that allowed the incorporation of Offshore companies and corporations. It is still a preferred tax haven for the United States residents and other European countries. It gives offshore banking, registration of companies, ships, and more.
The nation was the first in the Caribbean region to adopt strict banking confidentiality laws. Information about offshore bank account holders can only be revealed by an order from the Bahamian Supreme Court. There is no tax liability for offshore companies or bank account holders on income they earned outside the jurisdiction.
In general, Bahamians are friendly and welcoming to tourists. The biggest event in the Bahamian calendar is called “Junkanoo.” It is a street parade held on Boxing day and new years’ day. Groups rush through the streets in costumes of crepe paper and playing distinctive music.