St.Kitts and Nevis economy: Minor hiccups.

Like most of its Caribbean counterparts, the Island of St. Kitts and Nevis is a tourist destination providing all the standard amenities expected of a first rate tourist center.

Tourism earns top dollar for the nation, while providing employment to a substantial number of the workforce. Star hotels, golf courses, beaches, cruise ship piers, et al are available and well maintained to cater to tourists, especially the upper end customers.

The Government has taken several steps to make the islands a preferred destination, not only for tourists , but also for investors. Free trade zones, export processing zones and industrial sites are strategically located and provide all sorts of inducements to the investors to set up shop here.

Exemptions from excise duties and income tax, provision for foreign currency account maintenance, and special labor agreements are some of the attractions that draw the foreign investors to the Islands. St. Kitts and Nevis has a unique system of Ordinances to provide relief to investors in the shape of the Hotel Aids Ordinance that gives relief from customs duties and pier fees.

The Income Tax Ordinance gives special tax relief and benefits for hotel owners. The St. Kitts and Nevis Investment Promotion Agency (SKIPA) has played a prominent role in promoting investment in the Islands. St. Kitts and Nevis is also a beneficiary of the Caribbean Basin Initiative that allows 95% of its goods duty free entry into the U.S. This is an important benefit that companies seeking entry to the U.S. markets can take advantage of, by setting up shop on the Island.

According to the IMF, St. Kitts and Nevis is likely to suffer in the short term on account of global downturn and heavy debt burden, but medium and long term growth prospects are bright.

Antigua and Barbuda economy: Temporary setback.

The twin-island nation of Antigua and Barbuda is part of the beautiful chain of Islands in the Caribbean that are synonymous with first class tourism. With beautiful beaches , clean and green, and special packages for honeymooners and water sports of the highest quality, they are a must visit on the itinerary of the globe trotters.

Tourism and financial services have now become the economic mainstay of the Islands. Low taxes and a liberal corporate regime have made the Islands a tax haven, and in fact, have got them into trouble on account of money laundering laws that are being taken more seriously nowadays.

Apart from these two major activities, the Government is diversifying into manufacturing, fishing and even agriculture. Gaming and gambling are also gaining in importance as revenue spinners catering to foreign tourists.

Sugarcane, cotton, fruits, and vegetables are the major agricultural produce, while tourism, construction, financial services, and light manufacturing are the industrial activities. Over 80% of the workforce is engaged in services, followed by 11% in industry, and 7% in agriculture. The GDP per ca pita of the Island in 2008 was around USD 19000.00. The Islands export electronic components, foodstuffs, handicrafts and petroleum products, and import machinery and equipment, chemicals, oil, livestock, etc.

The Islands have signed an Economic Partnership Agreement with the EU. They receive aid from the EU under its Economic Development Fund. The Islands also benefit from the U.S. Caribbean Basin Initiative that gives access to U.S. markets for many goods. Another source of revenues to the Islands are American Military bases located on the Islands.

Antigua and Barbuda are prosperous Islands that have enjoyed good growth for several years until the global economic crisis arrived on the scene. There is enough scope for these Islands to regain their earlier growth rates in future.

Guyanese economy: Need to consolidate.

The former British colony of Guyana has to contend with two major issues. Political instability and economic downturn. Political instability is a result of the ethnic tensions between the descendents of African slaves, and those of indentured Indian laborers who form two distinct groups in the Guyanese population, and are often at loggerheads. And economic downturn is a result of the dependence of the country on commodities like gold, bauxite, timber, rice, sugar, and shrimp that are prone to price variations on the international markets.

In addition to this, Guyana has border disputes with its neighbors, Suriname and Venezuela that tend to divert the attention of the Government from more pressing issues. The present global downturn has had its effect on the economy of the country dragging it down with a fall in the commodity prices.

The GDP growth rate of Guyana for the year 2008 was around 3.2% and inflation about 8%. External debt is well over 100% of the GDP, and Guyana has had to accept aid from agencies like the Inter-American Development Bank to tide over a crisis like situation. Indebtedness is a constant problem that Guyana has to tackle. The situation began improving once the Government started divesting its share in businesses and brought in private participation. The Economic Recovery Program was fairly successful.

The Guyanese Government has to now take steps to consolidate its economic activities and achievements, and improve its relations with its neighbors to take forward the process of economic consolidation and further progress. The construction of the bride over the River Takutu linking it with Brazil is a step in the right direction.

Improvement in infrastructure, especially energy and power, will help Guyana market its products more competitively, and help it retain its market share. The way forward for Guyana is to first consolidate its present position economically.

Grenada economy: Diversifying to survive.

The Caribbean Island nation of Grenada is making steady progress in diversifying its economy that relies heavily on tourism, apart from educational services to foreign students. The GDP of the country that is growing at more than 3.5% is composed of services to the extent of 77%, industry at 18%, and the rest in agriculture.

Cocoa and nutmeg are the important agricultural products, apart from bananas, citrus, avocados, corn, sugarcane, and vegetables. In fact, Grenada is one of the world’s largest producers of nutmeg. Industrial activity includes textiles, beverages, tourism, and construction that is growing rapidly. Grenada exports nutmeg, cocoa, bananas, and clothing, and imports foodstuffs, chemicals, machinery, fuels, etc. Jamaica, Trinidad and Tobago, the U.S. are the major trading partners of Grenada. The country is also a member of the CARICOM (Caribbean Community and Common Market), and the ECCU (Eastern Caribbean Currency Union).

The economic problems faced by Grenada include declining tourist revenues, destruction of agricultural activities on account of natural disasters periodically, and the effect of the ongoing global crisis, declining FDI, and increasing unemployment. Grenada is certainly feeling the pinch of the economic slowdown, and has accepted aid from the IMF under the special Poverty Reduction and Growth Facility.

The IMF has in fact, praised the Grenadian Government for focusing on the macroeconomic issues, and taking the right steps to mitigate the problems. Some of the areas where Grenada is said to have done well are capital spending, restraining wage growth, increasing efficiency in spending on goods and services, and in addressing the needs of the vulnerable sections of society.

The Banking sector in Grenada came in for special mention from the IMF for its resilience and good performance. Grenada appears to have acted wisely in the face of the ongoing economic problems, and should reap the rewards in the years to come.

Puerto Rican economy: The downslide continues.

Puerto Rico, the autonomous region, or self-governing territory of the United States, is in deep trouble, and it is getting worse by the day.

Known as the ‘Rum capital of the world’, Puerto Rico is cutting jobs in the Government sector that is the largest employer, on account of the economic recession, and Big Brother America does not seem to be doing much to alleviate its suffering. Though the United States has extended assistance to Puerto Rico in the form of public projects, it has not helped in pulling the Island out of trouble.

As against the original demand of USD 22.00 billion aid sought by Puerto Rico for a stimulus program, only USD 6.50 billion was approved by the U.S. The major economic activity of the Island is manufacturing, tourism, and realty. The major part of the tourist industry is supported by mainland America. The major industries of Puerto Rico, apart from rum manufacturing are pharmaceuticals, electronics, apparel, food products, etc. It exports rum, chemicals, electronics, beverages, etc., and imports chemicals, machinery, equipment, clothing, food, petroleum products, etc. Inflation is running at 6.5%, and unemployment is 16.2%, and increasing by the day. The GDP growth rate for this fiscal is expected to be a negative 2.5%.

One of the major objectives of the Puerto Rican local Government is to cut down on the bloated public sector, and create more jobs in the private one. The recent job losses are roughly equal to those created through the stimulus program. The Government has taken several steps to push for growth by investing in infrastructure, and providing cheap finance to business and industry, but nothing seems to be working in favor of the Island, at least for the present.

Unless Uncle Sam does something on a big scale, Puerto Rico appears to be in for a long spell of economic and other kinds of uncertainty.

Bahamas economy hit by the downturn.

The Bahamas Islands, still among the wealthiest in the Caribbean, however, is struggling to keep its economy above the water, in the face of the global economic crisis.

The two areas that are badly hit by the recession namely, tourism, and financial services, are the two most important industries of the Bahamas. America, that is the epicenter of the global economic crisis is contributing lesser and lesser tourist dollars to the Bahamas every month, and offshore banking has become a dirty word practically, because of the unhealthy and unethical practices that have become the rule in this business.

As a result, the Bahamas is experiencing a mighty squeeze on its revenues. Fiscal 209 is going to see a negative growth of -1.70% in GDP as reported officially. Unemployment is running at 14%, and inflation is inching towards the 3% mark. With problems mounting by the month, the otherwise idyllic setting of the Islands resents a sombre mood today.

The financial services industry that is the second major revenue contributor after tourism, has not been able to absorb the hits emanating from the U.S. Banking crisis, and this has combined with the slowdown in tourism to deal a below-the-belt blow to the economy.

The Bahamas Islands also exports certain minerals, chemicals, fruits, vegetables, etc., and imports include foodstuffs, machinery, transport equipment, etc. Among the major manufacturing industries are plastics, pharma, liquor, etc.

Even though the present Government has adopted investor-friendly policies, it may not have the desired effect very soon. Unless the U.S. recovers from the recession, and its economy moves forward, the Bahamas Islands may not have much of a chance to wriggle out of the present situation.