Economy of Dominica
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Dominica Dominica ( or ; Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It is geographically ...
is reliant upon
agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to ...
, particularly bananas, with the financial services industry and passport sales becoming increasingly the island's largest source of income.
Banana A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large herbaceous flowering plants in the genus ''Musa''. In some countries, bananas used for cooking may be called "plantains", distinguis ...
production employs, directly or indirectly, upwards of one-third of the work force. This sector is highly vulnerable to weather conditions and to external events affecting commodity prices. The value of banana exports fell to less than 25% of merchandise trade earnings in 1998 compared to about 44% in 1994. In view of the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
's announced phase-out of preferred access of bananas to its markets,
agricultural diversification In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and labour to other products and, particularly in richer countries, to non-farming act ...
is a priority.
Dominica Dominica ( or ; Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It is geographically ...
has made some progress, with the export of small quantities of citrus fruits and vegetables and the introduction of
coffee Coffee is a drink prepared from roasted coffee beans. Darkly colored, bitter, and slightly acidic, coffee has a stimulant, stimulating effect on humans, primarily due to its caffeine content. It is the most popular hot drink in the world. S ...
,
patchouli PatchouliAlso spelled ''patchouly'' or ''pachouli''. (; ''Pogostemon cablin'') is a species of flowering plant in the family Lamiaceae, commonly called the mint or deadnettle family. The plant grows as a bushy perennial herb, with erect stems r ...
,
aloe vera ''Aloe vera'' () is a succulent plant species of the genus ''Aloe''. It is widely distributed, and is considered an invasive species in many world regions. An evergreen perennial, it originates from the Arabian Peninsula, but grows wild in tro ...
,
cut flowers Cut flowers are flowers or flower buds (often with some stem and leaf) that have been cut from the plant bearing it. It is usually removed from the plant for decorative use. Typical uses are in vase displays, wreaths and garlands. Many gardene ...
, and exotic fruits such as
mango A mango is an edible stone fruit produced by the tropical tree ''Mangifera indica''. It is believed to have originated in the region between northwestern Myanmar, Bangladesh, and northeastern India. ''M. indica'' has been cultivated in South a ...
es,
guava Guava () is a common tropical fruit cultivated in many tropical and subtropical regions. The common guava ''Psidium guajava'' (lemon guava, apple guava) is a small tree in the myrtle family ( Myrtaceae), native to Mexico, Central America, the ...
s, and
papaya The papaya (, ), papaw, () or pawpaw () is the plant species ''Carica papaya'', one of the 21 accepted species in the genus ''Carica'' of the family Caricaceae. It was first domesticated in Mesoamerica, within modern-day southern Mexico and ...
s. Dominica has also had some success in increasing its manufactured exports, with soap as the primary product. Dominica also recently entered the offshore financial services market. Because Dominica is mostly volcanic and has few beaches, development of tourism has been slow compared with that on neighboring islands. Nevertheless, Dominica's high, rugged mountains, rainforests, freshwater lakes, hot springs, waterfalls, and diving spots make it an attractive destination. Cruise ship stopovers have increased following the development of modern docking and waterfront facilities in the capital. Eco-tourism also is a growing industry on the island. Dominica is a member of the
Eastern Caribbean Currency Union The Eastern Caribbean Currency Union (ECCU) is a development of the Organization of Eastern Caribbean States. This organization is composed of Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. ...
(ECCU). The
Eastern Caribbean Central Bank The Eastern Caribbean Central Bank (ECCB) is the central bank for the Eastern Caribbean Dollar, Eastern Caribbean dollar and is the monetary authority for the members of the Organisation of Eastern Caribbean States (OECS), with the exception of ...
(ECCB) issues a common currency (the
East Caribbean dollar The Eastern Caribbean dollar (symbol: EC$; code: XCD) is the currency of all seven full members and one associate member of the Organisation of Eastern Caribbean States (OECS). The successor to the British West Indies dollar, it has existed sinc ...
) to all eight members of the ECCU. The ECCB also manages monetary policy, and regulates and supervises commercial banking activities in its member countries. Dominica is a beneficiary of the U.S. Caribbean Basin Initiative (CBI). Its 1996 exports to the U.S. were $7.7 million, and its U.S. imports were $34 million. Dominica is also a member of the 15-member
Caribbean Community (CARICOM) The Caribbean Community (CARICOM or CC) is an intergovernmental organisation that is a political and economic union of 15 member states (14 nation-states and one dependency) throughout the Caribbean. They have primary objectives to promote eco ...
and of the
Organisation of Eastern Caribbean States The Organisation of Eastern Caribbean States (OECS; French: ''Organisation des États de la Caraïbe orientale'', OECO) is an inter-governmental organisation dedicated to economic harmonisation and integration, protection of human and legal ri ...
(OECS).


Primary industries


Financial Services

The Commonwealth of Dominica has become in recent years a major international financial hub, and is quickly becoming one of the largest banking centres in the world, and offshore services are also becoming its main source of income. There are a number of service providers. These include global financial institutions including
Scotiabank The Bank of Nova Scotia (french: link=no, Banque de Nouvelle-Écosse), operating as Scotiabank (french: link=no, Banque Scotia), is a Canadian multinational banking and financial services company headquartered in Toronto, Ontario. One of Canada ...
,
Royal Bank of Canada Royal Bank of Canada (RBC; french: Banque royale du Canada) is a Canadian multinational financial services company and the largest bank in Canada by market capitalization. The bank serves over 17 million clients and has more than 89,000& ...
,
First Caribbean International Bank CIBC FirstCaribbean International Bank (FCIB) is a financial services company based in Barbados and the Caribbean subsidiary of the Canadian Imperial Bank of Commerce (CIBC). The bank was founded in 2002 as FirstCaribbean International Bank th ...
; The largest Financial sectors are "
offshore banking An offshore bank is a bank regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and ...
,
payment processing A payment processor is a system that enables financial transactions, commonly employed by a merchant, to handle transactions with customers from various channels such as credit cards and debit cards or bank accounts. They are usually broken do ...
companies, and general corporate activities". Regulation and supervision of the
financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...
industry is the responsibility of the
Financial Service Unit of the Commonwealth of Dominica The Financial Service Unit of the Commonwealth of Dominica or (FSU) is the main financial regulatory authority in the Island of Dominica, it is one of the most stringent financial authorities in the Caribbean and is a major participant in the ...
(FSU) under the supervision of the Ministry of Finance. Starting in the mid-late 1990s,
offshore financial centres An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy." "Offshore" does not refer ...
, such as the Commonwealth of Dominica, came under increasing pressure from the
OECD The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
for their allegedly harmful tax regimes, where the OECD wished to prevent low-tax regimes from having an advantage in the global marketplace. The OECD threatened to place the Commonwealth of Dominica and other
financial centres A financial centre ( BE), financial center ( AE), or financial hub, is a location with a concentration of participants in banking, asset management, insurance or financial markets with venues and supporting services for these activities to ta ...
on a "black list" and impose sanctions against them. However, the Commonwealth of Dominica successfully avoided being placed on the OECD blacklist by committing to regulatory reform to improve transparency and begin information exchange with OECD member countries about their citizens.


Agriculture

About 22.6% of the total land area is arable. Agricultural production was on the decline even before the 1979 hurricane disaster. The main crop of Dominica is bananas, the output of which had fallen to 29,700 tons in 1978. As a result of Hurricane David, production hit a low of 15,700 tons in 1979. Agriculture suffered a further blow from Hurricane Allen in August 1980. However, after outside financial support began to rehabilitate the sector, production rose to 27,800 tons in 1981 and totaled 30,000 tons in 1999. Additionally, there are other products like citrus, coconuts, cocoa, herbal oils and extracts. Agriculture accounts for about 20% of GDP and employs about 40% of the labor force. Agricultural exports amounted to $19.1 million in 2001. Most crops are produced on small farms, the 9,000 owners of which are banded together in about 10 cooperatives; there are also several large farms that produce mostly bananas for export. Other major crops are coconuts and citrus fruits which are grown in commercial quantities. Production for 1999 included coconuts, 11,000 tons; grapefruit, 21,000 tons; lemons and limes, 1,000 tons; and oranges, 8,000 tons. Fruits and vegetables are produced mostly for local consumption.


Animal husbandry

There are about of pasture land, comprising 2.7% of the total land area. The island does not produce sufficient meat, poultry, or eggs for local consumption so there are large imports of animal products. In 2001 there were an estimated 540 head of cattle, 9,700 goats, 7,600 sheep, and 5,000 hogs. In 2001, production of meat totaled 1,300 tons; and milk, 6,100 tons.


Fishing

Before Hurricane David, some 2,000 persons earned a living fishing in coastal waters, producing about 1,000 tons of fish a year and meeting only about one-third of the local demand. The hurricane destroyed almost all of the island's 470 fishing boats; afterward, only about a dozen vessels could be reconstructed for use. In 2000, the catch was 1,150 tons, up from 552 tons in 1991. There is a relatively large fishing industry in Dominica, but it is not modernized and almost exclusively serves the domestic market. A successful experiment in fresh-water prawn farming, supported by Taiwanese aid, has produced substantial amounts of prawns for the domestic and local markets. Japan has provided support for a fish landing and processing plant in Roseau.


Forestry

Dominica has the potential for a lumber industry. Some are classified as forest, representing 61% of the total land area. In 1962, Canadian experts produced a study indicating that over a 40-year period the island could produce a yearly output of 22,000 cu m (800,000 cu ft) of lumber. Before Hurricane David, annual output had reached about 7,500 cu m (265,000 cu ft). There are some of government land allocated to commercial forestry and about of forestland in private hands. Commercially valuable woods include
mahogany Mahogany is a straight-grained, reddish-brown timber of three tropical hardwood species of the genus ''Swietenia'', indigenous to the AmericasBridgewater, Samuel (2012). ''A Natural History of Belize: Inside the Maya Forest''. Austin: Unive ...
, blue and red mahoe, and
teak Teak (''Tectona grandis'') is a tropical hardwood tree species in the family Lamiaceae. It is a large, deciduous tree that occurs in mixed hardwood forests. ''Tectona grandis'' has small, fragrant white flowers arranged in dense clusters (panicl ...
. Total imports of forest products in 2000 amounted to $10.3 million.


Mining

Dominica's mining sector played a minor role in its economy. Pumice was the major commodity extracted from the island for export, and Dominica produced clay, limestone, volcanic ash, and sand and gravel, primarily for the construction industry. There is some mining potential in Dominica, especially in the island's northeast where there are believed to be deposits of copper.


Secondary industries

Dominica's small manufacturing sector is almost entirely dependent on agriculture, and the island has built up a handful of successful industries specializing in soaps and other agricultural byproducts. The largest manufacturer is Dominica Coconut Products, controlled by Colgate-Palmolive, which produces soap from coconuts. The factory has an agreement to sell an estimated 3 million bars of soap each year to Royal Caribbean Cruise Lines. Dominican soap is also exported throughout the region, but has recently encountered intensified competition from other regional producers, especially in the important export markets of Jamaica and Trinidad and Tobago. There are four plants to process limes and other citrus fruits; two bottling plants; two distilleries; four small apparel plants; and four small furniture factories. Dominica exports water to its Caribbean neighbors; shoes, cement blocks, furniture, and soap and toiletries are also exported. Home industries produce some leather work, ceramics, and straw products. Since the 1990s, the small manufacturing sector has been expanding at a modest pace, including electronic assembly, rum, candles, and paints. The Trafalgar Hydro Electric Power Station is now operational, making the island virtually energy self-sufficient. Industry accounted for 23% of GDP in 2001. Dominica has not yet been able to attract significant numbers of foreign manufacturers, partly because its wage rates are relatively high and partly because its infrastructure is not suited to high-volume manufacturing. Like other islands, it seeks to attract investors with tax concessions and other financial inducements, but several offshore manufacturing plants have closed after their duty-free concessions expired, normally a 10-year span.


Tertiary industries


Tourism

Tourism in Dominica is mostly centered around Eco Tourism. It consists of hiking, bird watching, canyoning, kayaking etc. Being the Nature Isle of the Caribbean, it stands true to its name as there are numerous outdoor activities based in nature. With the impact of COVID-19, the island has halted its Carnival and Independence Celebrations since mid 2020, which are two of its largest financial contributors in the tourism sector.


Financial services

Dominica has tried to expand its base by building up offshore financial services. So far, a relatively small number of
offshore bank An offshore bank is a bank regulated under international banking license (often called offshore license), which usually prohibits the bank from establishing any business activities in the jurisdiction of establishment. Due to less regulation and ...
s and other international business companies have registered in Dominica, but the government is trying to attract more by making registration economical and easy. A Dominica-based
International Business Company An international business company or international business corporation (IBC) is an offshore company formed under the laws of some jurisdictions as a tax neutral company which is usually limited in terms of the activities it may conduct in, but ...
(IBC) can, for instance, be formed over the Internet, and the government has also granted operating licenses to several Internet gambling companies.


Facts at a glance

GDP: purchasing power parity - $485 million (2006 est.) GDP - real growth rate: 3.2% (2007 est.) GDP - per capita: purchasing power parity - $3,800 (2005 est.) GDP - composition by sector:
''agriculture:'' 17.7%
''industry:'' 32.8%
''services:'' 49.5% (2004 est.) Population below poverty line: 29% (2009 est.) Household income or consumption by percentage share:
''lowest 10%:'' NA%
''highest 10%:'' NA% Inflation rate (consumer prices): -0.1% (2005 est.) Labor force: 25,000 (2000 est.) Labor force - by occupation:
''agriculture:'' 40%
''industry:'' 32%
''services:'' 28% (2000 est.) Unemployment rate: 23% (2003 est.) Budget:
''revenues:'' $73.9 million
''expenditures:'' $84.4 million (2001) Industries: soap,
coconut The coconut tree (''Cocos nucifera'') is a member of the palm tree family ( Arecaceae) and the only living species of the genus ''Cocos''. The term "coconut" (or the archaic "cocoanut") can refer to the whole coconut palm, the seed, or the ...
oil, tourism,
copra Copra (from ) is the dried, white flesh of the coconut from which coconut oil is extracted. Traditionally, the coconuts are sun-dried, especially for export, before the oil, also known as copra oil, is pressed out. The oil extracted from copr ...
, furniture, cement blocks, shoes Industrial production growth rate: -10% (1997 est.) Electricity - production: 80 million kWh (2005) Electricity - production by source:
''fossil fuel:'' 50%
''hydro:'' 50%
''nuclear:'' 0%
''other:'' 0% (1998) Electricity - consumption: 74.4 million kWh (2005) Electricity - exports: 0 kWh (2005) Electricity - imports: 0 kWh (2005) Agriculture - products:
banana A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large herbaceous flowering plants in the genus ''Musa''. In some countries, bananas used for cooking may be called "plantains", distinguis ...
s, citrus,
mango A mango is an edible stone fruit produced by the tropical tree ''Mangifera indica''. It is believed to have originated in the region between northwestern Myanmar, Bangladesh, and northeastern India. ''M. indica'' has been cultivated in South a ...
es, root crops,
coconut The coconut tree (''Cocos nucifera'') is a member of the palm tree family ( Arecaceae) and the only living species of the genus ''Cocos''. The term "coconut" (or the archaic "cocoanut") can refer to the whole coconut palm, the seed, or the ...
s,
cocoa Cocoa may refer to: Chocolate * Chocolate * ''Theobroma cacao'', the cocoa tree * Cocoa bean, seed of ''Theobroma cacao'' * Chocolate liquor, or cocoa liquor, pure, liquid chocolate extracted from the cocoa bean, including both cocoa butter and ...
; forest and fishery potential not exploited Exports: $94 million f.o.b. (2006) Exports - commodities:
banana A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large herbaceous flowering plants in the genus ''Musa''. In some countries, bananas used for cooking may be called "plantains", distinguis ...
s 50%, soap, bay oil, vegetables,
grapefruit The grapefruit (''Citrus'' × ''paradisi'') is a subtropical citrus tree known for its relatively large, sour to semi-sweet, somewhat bitter fruit. The interior flesh is segmented and varies in color from pale yellow to dark pink. Grapefruit is ...
,
orange Orange most often refers to: *Orange (fruit), the fruit of the tree species '' Citrus'' × ''sinensis'' ** Orange blossom, its fragrant flower *Orange (colour), from the color of an orange, occurs between red and yellow in the visible spectrum * ...
s Exports - partners: United Kingdom 24.8%,
Jamaica Jamaica (; ) is an island country situated in the Caribbean Sea. Spanning in area, it is the third-largest island of the Greater Antilles and the Caribbean (after Cuba and Hispaniola). Jamaica lies about south of Cuba, and west of His ...
12.3%,
Antigua and Barbuda Antigua and Barbuda (, ) is a sovereign country in the West Indies. It lies at the juncture of the Caribbean Sea and the Atlantic Ocean in the Leeward Islands part of the Lesser Antilles, at 17°N latitude. The country consists of two maj ...
9.8%,
Guyana Guyana ( or ), officially the Cooperative Republic of Guyana, is a country on the northern mainland of South America. Guyana is an indigenous word which means "Land of Many Waters". The capital city is Georgetown. Guyana is bordered by the ...
8.3%, China 7.9%,
Trinidad and Tobago Trinidad and Tobago (, ), officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean. Consisting of the main islands Trinidad and Tobago, and numerous much smaller islands, it is situated south of ...
5.4%,
Saint Lucia Saint Lucia ( acf, Sent Lisi, french: Sainte-Lucie) is an island country of the West Indies in the eastern Caribbean. The island was previously called Iouanalao and later Hewanorra, names given by the native Arawaks and Caribs, two Amerindian ...
4.5% (2006) Imports: $296 million f.o.b. (2006) Imports - commodities: manufactured goods, machinery and equipment, food, chemicals Imports - partners:
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
25.3%, China 22.7%,
Trinidad and Tobago Trinidad and Tobago (, ), officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean. Consisting of the main islands Trinidad and Tobago, and numerous much smaller islands, it is situated south of ...
13.8%,
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
4.8% (2006) Debt - external: $213 million (2004) Economic aid - recipient: $15.17 million (2005 est.) Currency: 1 East Caribbean dollar (EC$) = 100 cents Exchange rates: East Caribbean dollars per US dollar - 2.7 (2007), 2.7 (2006), 2.7 (2005), 2.7 (2004), 2.7 (2003) Fiscal year: 1 July - 30 June


See also

*
List of medical schools in the Caribbean This is a list of medical schools in the Caribbean. Schools are listed in alphabetical order by country or territory, then by name. The list includes medical schools recognized by their local governments that award the Doctor of Medicine (MD) and/ ...


References

{{Americas topic, Economy of
Dominica Dominica ( or ; Kalinago: ; french: Dominique; Dominican Creole French: ), officially the Commonwealth of Dominica, is an island country in the Caribbean. The capital, Roseau, is located on the western side of the island. It is geographically ...