Overview

  • Fifteen Caribbean countries are members of the World Bank Group:

    • Bahamas, The
    • Barbados
    • Belize
    • Dominican Republic, The
    • Guyana
    • Haiti
    • Jamaica
    • Organisation of Eastern Caribbean States
      • Antigua and Barbuda
      • Dominica
      • Grenada
      • Saint Kitts and Nevis
      • Saint Lucia
      • Saint Vincent and the Grenadines.
    • Suriname
    • Trinidad and Tobago

     

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    The Caribbean is blessed with great economic potential and growth opportunities. It is one of the world’s top tourist destinations, with its stunning scenery and vibrant cultures drawing visitors from across the globe.

    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. 

    Economic outlook

    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.

    Belize

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    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

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    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

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    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.

    Suriname

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    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 

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    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

  • As the World Bank Group, we are providing a wide range of financing, knowledge and convening services. Together with our Caribbean partners, we are working on strengthening macroeconomic management, supporting growth-enhancing reforms, promoting opportunities for all, and building resilience to climate change to put the region back on a path towards sustainable and inclusive growth. As part of the World Bank Group’s overall engagement with CARICOM countries, ongoing support reached more than $2 billion in the region by September 2017 -- of which almost $1 billion is in concessional financing from the World Bank’s International Development Association (IDA). Under the three year IDA18 cycle, US$630 million will be available to six eligible CARICOM countries: Dominica, Grenada, Guyana, Haiti, Saint Lucia, and Saint Vincent and the Grenadines. This is complemented by substantive analytic and knowledge support.

    Belize

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    The Country Partnership Framework (2018-2022) supports the country’s efforts for reducing poverty and boosting prosperity and will focus on two main areas: building climate resilience and promoting financial inclusion and social resilience.

    ·       On climate resilience and environment sustainability, the WBG will contribute to strengthening roads and electricity distribution infrastructure to be better equipped for extreme weather events, as well as protecting and improving the management of forest and marine ecosystems in coastal areas. 

    ·       On financial inclusion and social resilience, the WBG will support measures for enhancing financial sector infrastructure, increasing access to finance, as well as improving youth employability through targeted skills training and support to at-risk youth

    Together with the World Bank, the International Finance Corporation (IFC) will provide analytical and technical assistance on financial sector infrastructure under the IFC’s Caribbean Credit Bureau Program and the Caribbean Collateral Registries Program, and the Bank’s Payment and Settlement Systems Program. WBG’s advisory support will assist in establishing the institutional framework to improve access to finance for the private sector, including micro, small and medium-sized businesses, thereby expanding the prospects to further leverage private investments.

    The World Bank currently has a portfolio of six projects including IBRD financing and trust funds.

     Guyana

    The Guyana Country Engagement Note (CEN) was endorsed by the Board on April 2016, and covers the period 2016-2018. It focuses on:

    ·       Enhancing resilience of selected infrastructure and building disaster risk management capacities;

    ·       Setting up the foundations for high quality education;

    ·       Laying the ground for private sector development.

    Financing to Guyana is channeled through the International Development Association (IDA), the World Bank’s fund providing interest-free loans and grants to low-income countries, and through a series of trust funds managed by the Bank.

    OECS

    The OECS Regional Partnership Strategy (RPS) for the period 2015-2019 focuses on laying the foundations for sustainable inclusive growth.

    In line with the OECS national and regional development strategies and in coordination with bilateral and multilateral partners, the three main areas of engagement are:

    ·       Enhancing productivity, competitiveness and employment;

    ·       Modernizing the public sector;

    ·       Building social and climate resilience.

    Constrained in general by the small size of investments in the OECS, the IFC and MIGA are expected to contribute to the RPS objectives through selective investment support, depending on opportunities.

    Suriname

    The Country partnership strategy for the period FY15-19 proposes a lending program to support Suriname’s efforts in leveraging and sustaining its economic growth through greater social inclusiveness and economic diversification.

    Guided by the priorities of the government’s National Development Plan, the overarching goal of the CPS program is to support Suriname’s efforts to promote a more sustainable, inclusive, and diversified growth model through two areas of engagements:

    •            Creating a conducive environment for private sector development; and

    •            Reducing vulnerability to climate change-related floods.

    The country’s economic downturn has led the Government of Suriname to request for support from the International Monetary Fund, the World Bank, the Inter-American Development Bank, and the Caribbean Development Bank to provide the financing and technical support needed to place the economy on a sustainable path.

    Trinidad and Tobago

    Trinidad and Tobago has no current lending program with the World Bank. However, technical and advisory services have been provided with a focus on promoting a better investment climate, economic diversification and increased competitiveness, strengthening institutional capacity and building a modern and efficient public sector, with a view to promote the achievement of the country’s long-term development objectives. 

    Last Updated: Apr 10, 2017

  • Resilience to Climate Change and Natural Disasters

    Hurricanes Irma and Maria were a stark reminder that growing exposure to natural disasters represents a real threat to development prospects in the Caribbean. The World Bank initiated projects to support climate resilience and enhance disaster preparedness and emergency response in the islands of Dominica, Grenada, Saint Lucia, and Saint Vincent and the Grenadines. The focus is mainly on making infrastructure more adapted to extreme weather events and natural hazards and improving government capacity to monitor, prepare for, and finance climate risks. Securing access to financial resources before a disaster strikes is also important. In response to Hurricane Irma, the World Bang Group has also expedited preparation for a contingency line of credit like the Catastrophe Deferred Drawdown Option for the Dominican Republic, and other countries are discussing the option. Following hurricane Irma, a fast track emergency recovery project is also being prepared for Antigua and Barbuda.

    Nine countries in Central America and the Caribbean experienced natural disasters with economic impact that exceeded 50 percent of annual GDP in the past three decades. To address the problem, the CARICOM requested assistance from the World Bank to create the world’s first pooling mechanism to help countries access affordable insurance coverage against hurricanes, earthquakes, and excessive rainfall in order to reduce their financial vulnerability. The initiative resulted in the creation of the Caribbean Catastrophe Risk Insurance Facility (CCRIF), funded by donors including Canada and the United States. Following recent hurricanes Irma and Maria, seven Caribbean countries, Antigua & Barbuda, Anguilla, Dominica, Haiti, Saint Kitts & Nevis, The Bahamas, and Turks & Caicos Islands, will be receiving payouts amounting to US$ 48.6 million, less than 15 days after the devastating events. This regional insurance mechanism takes advantage of risk pooling to provide liquidity to respond quickly to disasters. More than 20 Caribbean countries can now access low cost, high quality sovereign catastrophe risk insurance. 

    The Blue Economy

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    Harnessing marine resources while preserving the Caribbean Sea’s health can help countries address key challenges such as high unemployment, low growth, food security, poverty and resilience to climate change. World Bank report “Toward a Blue Economy: A Promise for Sustainable Growth in the Caribbean” estimates that the Caribbean Sea generated $407 billion in 2012, representing almost 18 percent of Caribbean GDP, including mainland Caribbean coastal countries. The World Bank Group is accelerating progress in this area by supporting the implementation of the Eastern Caribbean Regional Oceanscape Policy (ECROP) endorsed by all 11 heads of state of the Organization of the Eastern Caribbean States (OECS), and advising governments on concrete actions to generate sustainable blue growth.

    Macroeconomic and Fiscal Sustainability

    Fiscal gaps and elevated public debt pose key threats to macroeconomic stability, growth, and social protection across the Caribbean. The World Bank has worked with regional partners to help Caribbean countries better manage public spending and reduce debt to sustainable levels while also protecting poor and vulnerable populations. In the context of global economic downturn, the Bank provided Development Policy Financing to Jamaica, Grenada, and the Dominican Republic to support pro-growth reforms and help create fiscal space.

    Jamaica has embarked on a set of ambitious reforms to fill in the large infrastructure gap, reduce the high cost of electricity and dependence on oil, while putting its fiscal house in order. These efforts have started restoring confidence in the Jamaican economy. To strengthen support for reforms, the World Bank Group has approved a series of Development Policy Loans aimed at improving the investment climate and competitiveness, and public financial management.

    The World Bank provided budget support to the Dominican Republic to help the government strengthen its management of public expenditures, and enhance the transparency and monitoring of government operations. 

    As a small and middle income island economy, Grenada was hit hard by the 2008 global financial crisis. Grenada’s economic recovery accelerated in 2014, driven by a strong performance of tourism and agriculture. To support the government’s reforms, the World Bank provided a series of budget support operations to help create sustainable conditions for private investment, improve public resource management, strengthen the banking sector, and boost resilience against natural disasters.

    Growth

    Launched in 2012 in partnership with the Caribbean Development Bank, the Inter-American Development Bank, and other partners, the Caribbean Growth Forum has evolved into a region-wide social compact that engages governments, businesses, and civil society to craft and deliver pro-growth reforms. To date, some 2,500 people have contributed to Forum discussions, and 12 participating countries have passed over 100 reforms to boost skills and productivity, strengthen logistics and connectivity, and improve the business climate.

    Examples of successful reforms include: a one stop shop for entrepreneurs in the Dominican Republic that cut the time to register a business from 45 to seven days, and a new commercial court in St Lucia which helps expedite and resolve commercial disputes. 

    To strengthen competitiveness and facilitate growth of new and existing Jamaican businesses, the World Bank launched the Foundations for Competitiveness and Growth Project. The project is providing technical assistance to undertake due diligence for public private partnerships, ranging from airport, ports, economic zones, water generation, waste water and sewage, schools and renewable energy. It is mobilizing private capital for strategic investments such as the Logistics Hub Initiative, while aiming to more fully integrate Jamaica’s SMEs into global value chains. It is also supporting the design of an urban plan to redevelop Downtown Kingston. 

    To reduce the high cost of energy and ease Caribbean countries’ dependence on oil and fossil fuels, the World Bank is supporting diversification of the region’s power sector by increasing production of renewables and other clean energy sources. In the Eastern Caribbean, this involves working with Saint Lucia, Grenada, and Saint Vincent and the Grenadines to demonstrate the use of commercial-scale solar photovoltaics (PV) on rooftops. 

    Cultivating an ecosystem of entrepreneurship and innovation is key to boosting growth and job-creation in the region. To this end, with support from the government of Canada, the Entrepreneurship Program for Innovation in the Caribbean has provided tailored training and finance to 260 entrepreneurs in the high-growth sectors of digital innovation and climate technology, while the Women Innovators Network in the Caribbean has connected and offered capacitybuilding services to more than 350 promising women entrepreneurs. In Jamaica, the Youth Employment in Digital & Animation Industries Project will benefit youth with training, digital work opportunities, and seed investments in the digital and animation industries. 

    Inclusion and opportunities for all

    Quality education, affordable health care, and equitable social safety nets are key ingredients in building inclusive societies. In the Caribbean, several countries have launched innovative efforts to provide the most vulnerable, including children, with the knowledge, skills, and health they need to excel.

    Jamaica’s comprehensive National Strategic Plan on early childhood development is the first of its kind in the region. Jamaica is one of the few countries in the region that guarantees free preprimary education and has the highest proportion of children enrolled in preschool. The World Bank supports the scaling-up of early childhood development services to help improve parenting, care and school readiness for children from zero to six; and provide diagnosis and early stimulation for children at risk. Early years support is essential to help every child be better prepared for school and better equipped to fulfill their full potential.

    In the Dominican Republic, the government recently established a National Pact for Education to improve the quality of pre-university education. To help improve student learning in pre-university education, the World Bank’s Support to the National Education Pact project supports the recruitment and training of primary and secondary school teachers; better assessment of student learning at the primary and secondary level; strengthening of early childhood development services; and the decentralization of public school management.

    In response to the international public health emergency of Zika, the World Bank Group developed a Rapid Needs Assessment tool to assess countries’ level of readiness for an emergency health response, identify key gaps, and develop cost estimates of the resources that would be needed for a scaled-up response.  Guyana was one of the first countries in the region to complete the Rapid Needs Assessment and is receiving assistance to address the gaps identified in equipment and procedures. 

    Last Updated: Oct 02, 2017

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In Depth

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Brochure: Inside the Caribbean

Learn about our work in the Caribbean

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Towards a Blue Economy

A promise for sustainable growth in the Caribbean

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Haiti Country Partnership Framework

Country partnership framework for the period FY16-FY19

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Open and Nimble

Finding Stable Growth in Small Economies

Additional Resources

Country Office Contacts

USA
Christelle Chapoy
1818 H Street NW
Washington
DC 20433
+1 202-458-2656
cchapoy@worldbank.org
Dominican Republic
Alejandra de la Paz
Ave. Lope de Vega No. 29
Torre Novo-Centro, Piso 10,
Ensanche Naco, Santo Domingo
+809 872 7300
adelapaz@worldbank.org