Fifteen Caribbean countries are members of the World Bank Group:
- Bahamas, The
- Dominican Republic, The
- Organisation of Eastern Caribbean States
- Antigua and Barbuda
- Saint Kitts and Nevis
- Saint Lucia
- Saint Vincent and the Grenadines.
- Trinidad and Tobago
It also has an educated, multilingual labor force, sophisticated financial systems and is close to large markets including the United States and Mexico. The region has strong potential to further develop its services, logistics, agriculture, creative and digital sectors.
Rich ocean resources drive the “Blue Economy” in these small economies. Their small size also makes them nimble and agile as they respond to opportunities for innovation and competitiveness.
However, the region’s greatest threat is its vulnerability to climate change and exposure to natural disasters, unleashing damage that, in the case of some small nations, can be larger than their annual Gross Domestic Product (GDP). Such natural disasters have cost the region an estimated US$8.6 billion between 1996 and 2015. Major hurricanes including Irma, Maria, Ivan and Matthew caused unprecedented damages in recent years. Recognizing these challenges and building resilience is a key priority for the region.
Many small economies in the Caribbean have been growing faster in the last three years than they were right after the financial crisis, particularly the tourism-dependent economies. Real GDP growth rose in service-oriented economies: excluding the Dominican Republic, their GDP growth rates in 2016 averaged 1.7 percent. The Dominican Republic did even better, growing by 6.6 percent.
Others did not fare so well, however. Lower prices for oil and other commodities dragged down growth in a number of Caribbean countries including Belize, Suriname, and Trinidad and Tobago.
A small, upper-middle income country with a population of about 367,000 and a per capita gross national income of US$4,410 (current) in 2016, Belize has undergone significant economic transformation over the last two decades, mainly due to the growing tourism industry and the commercial oil discovery in 2005. Tourism and agriculture are the main sources of income and employment. The country also hosts the largest living coral reef in the world and is a paradise for divers and marine wildlife. Its small-size economy, high dependence on exports and imports, and exposure to natural disasters make the country particularly vulnerable to terms-of-trade shocks and volatility. Belize’s economy contracted by 0.8 percent in 2016, due to declining agricultural and fisheries output, widespread productivity challenges, large fiscal and external imbalances, and the impact of Hurricane Earl in August 2016. In 2017, Belize’s economy is showing signs of recovery with GDP growth in the first half of 2017 at 1.6 percent, thanks to rebounding agriculture and tourism sector performance.
Guyana is a middle-income country, with a per capita income of US$4,250 (2016, Atlas method). Guyana is well endowed with natural resources, fertile agricultural lands, bauxite, gold and extensive tropical forests covering more than 80 percent of the country. Agriculture and natural resources are important sources of economic activity in Guyana. In 2016, agriculture, forestry, fishing and mining accounted for 31 percent of total GDP. Bauxite, sugar, rice, gold and timber made up 84 percent of merchandise exports (Ministry of Finance, 2017). These sectors are also a large source of jobs, with most of the poor working in mining and agriculture.
The economy is expected to grow by around 3.5 percent on average in 2017–19. Services will remain the main contributor to growth, followed by the industrial sector, supported by growing mining output. The discovery of oil off Guyana’s coast holds the promise of increased revenue to finance the country’s development needs—but brings with it new challenges that will require careful management of economic, governance and environmental risks.
The Organisation of Eastern Caribbean States
The Organisation of Eastern Caribbean States (OECS) includes a diverse set of small and open island countries that are highly prone to natural disasters, including Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. These small countries have limited economies of scale and tend to specialize in a few products and services. They rely extensively on tourism and, to a lesser extent, agriculture, and are dependent on external markets for food and fuel imports. The countries also receive high worker remittances inflows. As a result, they are subject to excessive terms of trade volatility. Despite high human development indices, OECS have not succeeded in reducing poverty to levels compatible with their level of per capita income. Unemployment, especially among women and youth, remains high, which also contributes to high emigration rates.
Economic performance varies among members. Grenada had 3.9 percent GDP growth in 2016; St Vincent and the Grenadines also saw a rebound with the construction of the newly completed international airport, and GDP growth expanded to 1.8 percent.
The smallest country in South America, Suriname, is an upper middle-income country and was one of the Caribbean’s best performing economies over the last decade, largely due to its rich endowment in natural resources. Suriname’s economy is characterized by strong dependence on exports of extractives and a large public sector. Alumina, bauxite, gold and oil have historically made up three-quarters of total exports and have accounted for a large share of the government’s revenue. The economy grew by 4.3 percent per year on average between 2004 and 2014, bringing the per capita income to US$9,360 (Atlas method). With the end of the commodity boom, the economy contracted in 2015, and the crisis deepened in 2016 as the country continued to feel the effects of a sluggish rebound in international commodity prices, rapid currency depreciation and high rates of inflation. The World Bank and other international financial institutions are supporting the government’s economic reform program to stabilize the economy. Recent investments in large oil and gold operations are expected to help halt GDP contraction in 2017, and return the economy to expansion over the medium term.
Trinidad and Tobago
The twin island state of Trinidad and Tobago is a small but high-income country. With a population of 1.3 million people and rich in natural resources, it has one of the highest gross national income per capita in Latin America and the Caribbean (US$16,240 in 2016, Atlas method). The economy is largely based on oil and gas production, with the petroleum industry accounting for more than 40 percent of GDP during the period 2006-2014, although declining to approximately 22 percent of GDP in 2015-2016 in the aftermath of the international oil price drop. The country has also become a major financial center in the Caribbean. Economic growth averaged slightly over 8 percent per year between 2000 and 2007, significantly above the average of 3.7 percent for the LAC and Caribbean region during the same period. However, GDP growth cooled since then due to the sharp fall in oil and gas prices. The economy contracted by 0.6 percent in 2014-15, before a sharper deterioration in 2016 when real GDP growth registered a -2.3 percent decline. Since the end of the commodities super cycle, the country has faced significant challenges in adjusting to a low energy prices environment. The collapse of energy prices caused job losses and had negative effects on tax revenues. On the upside, over the medium-term Trinidad and Tobago is expected to see an economic rebound due to a low level of public indebtedness, adequate financial buffers, solid human capital and overall political stability.
Last Updated: Oct 02, 2017