Overview

  • Sixteen 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.
    • Sint Maarten
    • Suriname
    • Trinidad and Tobago

     

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    The Caribbean is still recovering from the unprecedent 2017 hurricane season. Yet, it has great economic potential and growth opportunities. With its stunning scenery and vibrant cultures drawing visitors from across the globe, it is one of the world’s top tourist destinations.

    It 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, which can pose substantive challenges, 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, causing damage that, for 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. Since then, major hurricanes including Irma and Maria have caused unprecedented damages. Recognizing these challenges and building resilience is a key priority for the region.

    Economic outlook

    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.

    Belize

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    A small, upper-middle income country with a population of about 367,000 and a per capita income of US$4,360 (2016, Atlas Method), 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.

    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 experienced a mild recovery in 2017 with real GDP growing an estimated 1.2 percent and contributing to the decline in unemployment to 9.3 percent in 2017 (from 9.5 percent in 2016). Increased tourism supported by improved airlift services resulted in service sector expansion, notably in retail trade and transport. In the medium term, economic expansion is projected to accelerate to around 2 percent per year.

    Guyana

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    Guyana is a middle-income country, with a per capita income of US$4,693 (2017, 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 about one third of GDP. Gold mining was growing rapidly and accounted for 48 percent of exports. Bauxite, sugar, rice, shrimp and timber are also important export sectors.

    The economy is expected to grow by around 3.4 percent in 2018 accelerating to 4.8 percent in 2019. Services will remain the main contributor to growth, followed by the industrial sector, supported by a growing mining output. The discovery of oil off Guyana’s coast holds the promise of rapidly increase GDP growth starting in 2020 and increase 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 Organization of Eastern Caribbean States

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    The Organization of Eastern Caribbean States (OECS) includes a diverse set of small and open 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 remittances inflows. As a result, they are subject to excessive terms of trade volatility. OECS service-oriented economies, largely tourism-based, are in the so-called hurricane belt and subject to major losses of infrastructure and livelihoods. Dominica, for example, had damage and loss estimates that exceeded 200 percent of its annual GDP during the 2017 hurricane season.

    Public debt is high across OECS and limits fiscal space available for other types of spending. OECS countries have made limited progress in reducing poverty despite their high human development indices and level of per capita income. Unemployment, especially among women and youth, remains high, which contributes to high emigration rates.

    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 driven by the extractives sector 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 4.7 percent per year on average between 2001 and 2013, bringing the Gross National Income (GNI) to US$10,933 in 2014 (Atlas method). With the end of the commodity boom, the economy contracted in 2015 and 2016.

    With the closing of the bauxite sector, the economy fell into a crisis. Recent investments in large oil and gold operations helped halt the GDP contraction in 2017. A modest expansion is projected to continue over the medium term.

    Trinidad and Tobago 

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    With a per capita income of US$16,175 (2017, Atlas Method), this twin-island state enjoys one of the highest average incomes in Latin America and the Caribbean.

    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 2006–14, although declining to approximately 22 percent of GDP in 2015–16 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. GDP contracted by 6 percent in 2016 and 2 percent in 2017 but modest growth is projected to resume in 2018.

    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 significant fiscal buffers managed by its sovereign Heritage Fund, adequate financial sector buffers, solid human capital and overall political stability.

    Last Updated: Sep 19, 2018

  • The World Bank Group (WBG), together with its Caribbean partners, is providing a wide range of financing, knowledge and convening services to strengthen macroeconomic management, support growth-enhancing reforms, promote opportunities for all, and help build resilience to climate change to put the region back on a path towards sustainable and inclusive growth.

    As part of the WBG’s overall engagement with CARICOM countries, ongoing support reached nearly US$2 billion portfolio in the region focused on strengthening resilience and financial protection against disasters – of which more than one billion in concessional financing from the World Bank’s International Development Association (IDA).

    Under the three-year IDA18 cycle, the allocation has more than tripled and US$615 million will be available to six eligible CARICOM countries: Dominica, Grenada, Guyana, Haiti, Saint Lucia, and Saint Vincent and the Grenadines.

    Belize

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    The WBG Country Partnership Framework (2018–22) supports the country’s efforts for reducing poverty and boosting prosperity and will focus on building climate resilience and promoting financial inclusion and social resilience.

     

    • On climate resilience and environment sustainability, the WBG will contribute to strengthening 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 several programs. The WBG will also help improve access to finance for the private sector, including micro, small and medium-sized businesses, thereby expanding the prospects to further leverage private investments.

    Guyana

    The Guyana Country Engagement Note (CEN) covers the period 2016–18 and 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 for Guyana is channeled through the International Development Association (IDA), the World Bank’s fund for the poorest countries, and through a series of trust funds managed by the Bank.

    OECS

    The OECS Regional Partnership Strategy (RPS) for the period 2015–19 focuses on laying the foundations for sustainable inclusive growth. A Performance and Learning Review, approved in mid-2018, reviewed the strategy to accommodate the significant increase in IDA for four of the countries, as well as WBG’s contribution in the recovery efforts following last year’s hurricane season. The revised strategy has now been extended through 2020.

    In line with the OECS national and regional development strategies and in coordination with bilateral and multilateral partners, the WBG program has been refocused towards two key pillars or areas of engagement:

    • Fostering conditions for growth and competitiveness; and
    • Strengthening resilience.

    The IFC and MIGA are expected to contribute to the RPS objectives through selective investment support, depending on opportunities.

    Suriname

    The Country Partnership Strategy (CPS) for the period 2015–19 proposes to support Suriname’s efforts in leveraging and sustaining its economic growth through greater social inclusiveness and economic diversification.

    Guided by 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:

    • Creating a conducive investment climate for economic growth; and
    • Reducing vulnerability to climate change-related floods.

    Trinidad and Tobago

    The World Bank is providing technical and advisory services 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 to Trinidad and Tobago. These services help the country achieve its long-term development objectives. 

    Last Updated: Sep 19, 2018

  • 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 on making infrastructure more adapted to extreme weather events and natural hazards and improving government capacity to handle disaster risks. Following Hurricane Irma, the World Bank Group has fast-tracked its response by providing a financial package of more than US$100 million for Dominica, including accessing the IDA crisis response window.

    Securing access to financial resources before a disaster strikes is also important. In response to Hurricane Irma, the World Bank Group has also expedited preparation for a contingency line of credit to the Dominican Republic.

    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 Caribbean Catastrophe Risk Insurance Facility (CCRIF) was created. It is the world’s first pooling mechanism to help countries access affordable insurance coverage against hurricanes, earthquakes, and excessive rainfall to reduce their financial vulnerability.

    Following last year’s Hurricanes Irma and Maria, several Caribbean countries received payouts for a total of over US$50 million, less than 15 days after the devastating events. This regional insurance mechanism allows more than 20 Caribbean countries to access low cost, high quality sovereign catastrophe risk insurance. 

    The Blue Economy

    Harnessing marine resources while preserving the Caribbean Sea can help countries address key challenges such as high unemployment, low growth, food security, poverty and resilience to climate change.

    The 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 (including mainland Caribbean coastal countries). The World Bank Group is accelerating progress in this area by supporting five countries of the Organization of the Eastern Caribbean States (OECS), in preserving and strengthening resilience of coastal and marine resources and advising governments on concrete actions to generate sustainable blue growth.

    Macroeconomic and Fiscal Sustainability

    The WBG 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 wake of the global economic downturn, the WBG provided Development Policy Financing to Jamaica, Guyana, Grenada, and the Dominican Republic to support pro-growth reforms, to improve investment climate and to 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.

    The WBG 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. 

    In Grenada, the WBG provided a series of budget support operations to help private investment, improve public resource management, strengthen the banking sector, and boost resilience against natural disasters, among other things.

    Growth

    The Jamaican business climate received a boost to strengthen competitiveness and facilitate growth of new and existing Jamaican businesses. The project is providing technical assistance 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, while aiming to more fully integrate Jamaica’s small and medium enterprises (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 WBG 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 the use of commercial-scale solar photovoltaics (PV) on rooftops in Saint Lucia, Grenada, and Saint Vincent and the Grenadines. 

    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 (EPIC) has provided tailored business development support and training to more than 2,100 entrepreneurs across sectors including digital and climate technologies; and facilitated more than USD $4 million in investments raised by Caribbean entrepreneurs.

    In Jamaica, the Youth Employment in Digital & Animation Industries Project will benefit youth with training, 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 for 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 WBG 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.

    To help improve student learning in pre-university education, the WBG’s Support to the National Education Pact project in the Dominican Republic will help recruit and train primary and secondary school teachers; better assess student learning at the primary and secondary level; strengthen early childhood development services; and decentralize public school management.

    In Guyana, the WBG has had a long-standing support in the area of education spanning from early childhood, to primary, secondary education all the way to the University of Guyana. Curricula reforms and research program have included significant contributions from the main indigenous groups. New students are being educated to acquire skills addressing new market demands arising with the Green State Development Strategy, as well as the emerging oil and gas sector.

    Last Updated: Sep 19, 2018

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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