Sixteen Caribbean countries are members of the World Bank Group:
- Bahamas, The
- Dominican Republic, The
- Organization of Eastern Caribbean States
- Antigua and Barbuda
- Saint Kitts and Nevis
- Saint Lucia
- Saint Vincent and the Grenadines.
- Sint Maarten
- Trinidad and Tobago
The Caribbean has an educated, multilingual workforce and sophisticated financial systems, and is a short hop to the United States, Mexico and other large markets. The region has big potential to further develop its services, logistics, agriculture, creative and digital sectors.
Rich ocean resources drive the “blue economy” in these markets. While the small size of these countries can prove challenging, it also means they can respond quickly to opportunities for innovation and to improve their competitiveness.
The region, however, is extremely vulnerable to climate change and natural disasters, and the damages can surpass the annual gross domestic product (GDP) of some nations. Indeed, natural disasters cost the region an estimated US$8.6 billion between 1996 and 2015. Since then, major hurricanes including Irma and Maria in 2017 caused even more damages. Investing to prepare for climate change and natural disasters will be critical for the region’s resilience and the reduction of human and economic costs.
Many small economies in the Caribbean, particularly the tourism-dependent economies, have been growing faster in the last three years. GDP growth rates in 2017 averaged 1.7 percent in service-oriented economies. The Dominican Republic did even better, growing by an estimated 4.6 percent.
Others did not fare so well. Belize, Suriname, and Trinidad and Tobago continue to face the aftershocks of the 2014 drop in world prices for oil and other commodities.
A small, upper-middle income country with a population of about 367,000 and a per-capita income of US$4,971, Belize has undergone significant economic transformation since the 1990s, mainly due to its growing tourism industry and the commercial discovery of oil in 2005.
The country also is home to the largest living coral reef in the world, making it a paradise for divers and marine wildlife. But its small economy, high dependence on exports and imports, and exposure to natural disasters make the country particularly vulnerable to terms-of-trade volatility and shocks.
Belize’s economy is expected to grow to a modest 2.3 percent in 2019, led by services and private consumption. Unemployment declined to 9.2 percent in 2018 from 9.3 percent in 2017 — but was up from 7.9 percent in 2016. A rise in tourism, supported by growth in the number of cruise ship visitors, has led to a pickup in economic activity, most notably in the retail and transport sectors. In the medium term, the economy is forecast to accelerate to around 2 percent annual growth.
Guyana is a middle-income country with a per-capita income of US$5,194. Guyana is well endowed with natural resources, fertile agricultural lands, bauxite, gold, and extensive tropical forests that cover more than 80 percent of the country.
These natural resources are drivers of economic activity in Guyana. In 2016, agriculture, forestry, fishing, and mining accounted for around one third of GDP. Gold mining grew rapidly and accounted for 48 percent of exports that year. Bauxite, sugar, rice, shrimp, and timber are other leading exports. That said, the country’s exposure to adverse weather events means it will need comprehensive measures for climate change resilience.
The economy is expected to grow 4.6 percent in 2019 and over 30 percent in 2020, boosted by oil output. Guyana could be among the world's largest per-capita oil producers by 2025.This poses new challenges for the country that will require a careful management of economic, governance, and environmental risks.
The Organization of Eastern Caribbean States
The Organisation of Eastern Caribbean States (OECS) is a diverse set of small island countries that are highly prone to natural disasters.
Antigua and Barbuda, Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines have limited economies of scale and tend to specialize in a few products and services. They rely extensively on tourism and agriculture, and are heavily dependent on imports for food, fuel, and goods.
The countries also receive high inflows of remittances. As a result, they are subject to excessive terms-of-trade volatility. The OECS service-oriented economies, which are largely based on tourism, lie in the so-called hurricane belt and are subject to major losses of infrastructure and livelihoods. Dominica, for example, suffered damages and losses estimated at 226 percent of its annual GDP during the 2017 hurricane season.
In 2017, the OECS posted 3.3 percent growth from 2016, and the economy is expected to continue expanding in the medium term. Public debt is high across the OECS, putting a limit on state spending in other areas. OECS countries have made limited progress in reducing poverty despite their high human development indices and per-capita incomes. Unemployment, especially among women and youth, remains high, and this contributes to high emigration rates.
The smallest country in South America, Suriname, is an upper middle-income country with a per-capita income of US$6,504. It has been one of the Caribbean’s best performing economies over the last decade, largely thanks to its wealth of natural resources. Suriname’s economy is driven by the extractive industry, and agriculture exports to some extent.
Bauxite, gold and oil have historically accounted for 30 percent of GDP and as much as 90 percent of total exports. The economy grew by an average of 3.3 percent per year between 2001 and 2016, well above the 2.1 percent average for the Caribbean’s small states.
While the economy contracted in 2016, recent investments in large gold operations have helped return the country to growth. A modest expansion is forecast to continue over the medium term, supported by a positive outlook in the extractive sector.
Trinidad and Tobago
With a per-capita income of US$17,002, this twin-island state enjoys one of the highest average incomes in Latin America and the Caribbean.
The economy is based largely on oil and natural gas production, with the petroleum industry accounting for more than 40 percent of GDP between 2006 and 2014. The share, however, tumbled to approximately 22 percent of GDP in 2015 and 2016 after a sharp drop in international oil prices. The country has become a major financial center in the Caribbean as well.
Economic growth averaged slightly more than 8 percent per year between 2000 and 2007, significantly higher than the 3.8 percent average for the LAC region over the same period. However, GDP growth has cooled since due to the sharp decline in oil and gas prices. GDP contracted by 2 percent in 2017 and 1 percent in 2018,and is expected to contract by 0.5 percent 2019. The economy is expected to recover at a modest pace between 2019 and 2021. Since the end of the 2000-14 commodities super cycle, the country has faced significant challenges. On the upside, the economy is expected to rebound in the medium term, helped by significant fiscal buffers managed by its sovereign Heritage Fund as well as adequate financial sector buffers, solid human capital, and overall political stability.
Last Updated: Apr 01, 2019