Economy of Dominica

From Wikipedia, the free encyclopedia

Agriculture, with bananas as the principal crop, is still Dominica's economic mainstay. Banana 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's announced phase-out of preferred access of bananas to its markets, agricultural diversification is a priority. Dominica has made some progress, with the export of small quantities of citrus fruits and vegetables and the introduction of coffee, patchouli, aloe vera, cut flowers, and exotic fruits such as mangoes, guavas, and papayas. 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 (ECCU). The Eastern Caribbean Central Bank (ECCB) issues a common currency (the East Caribbean Dollar) 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) and of the Organisation of Eastern Caribbean States (OECS).

Economy - overview: The economy depends on agriculture and is highly vulnerable to climatic conditions, notably tropical storms. Agriculture, primarily bananas, accounts for 21% of GDP and employs 40% of the labor force. Development of the tourist industry remains difficult because of the rugged coastline, lack of beaches, and the lack of an international airport. Hurricane Luis devastated the country's banana crop in September 1995; tropical storms had wiped out one-quarter of the crop in 1994 as well. The economy's recovery continued in 1998, fueled by increases in construction, soap production, and tourist arrivals. The government is attempting to develop an offshore financial industry in order to diversify the island's production base.

GDP: purchasing power parity - $384 million (2003 est.)

GDP - real growth rate: -1% (2003 est.)

GDP - per capita: purchasing power parity - $5 500 (2003 est.)

GDP - composition by sector:
agriculture: 18%
industry: 24%
services: 58% (2002 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 1% (1998)

Labor force: 25 000 (1999 estimate)

Labor force - by occupation: agriculture 40%, industry and commerce 32%, services 28%

Unemployment rate: 23% (2003 est.)

Budget:
revenues: $73,9 million
expenditures: $84,4 million, including capital expenditures of $NA (2001)

Industries: soap, coconut oil, tourism, copra, furniture, cement blocks, shoes

Industrial production growth rate: -10% (1997 est.)

Electricity - production: 69,98 GWh (2003)

Electricity - production by source:
fossil fuel: 50%
hydro: 50%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 65,09 GWh (2003)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: bananas, citrus, mangoes, root crops, coconuts, cocoa; forest and fishery potential not exploited

Exports: $74 million (2004)

Exports - commodities: bananas 50%, soap, bay oil, vegetables, grapefruit, oranges

Exports - partners: United Kingdom 21,3%, Jamaica 14,6%, Antigua and Barbuda 8,7%, Guyana 7,4%, Japan 5,3%, Trinidad and Tobago 4,7%, United States 4,2% (2004)

Imports: $234 million (2004)

Imports - commodities: manufactured goods, machinery and equipment, food, chemicals

Imports - partners: China 20,4%, United States 16,8%, Trinidad and Tobago 12,3%, United Kingdom 6,9%, South Korea 4,6%, Japan 4,3% (2004)

Debt - external: $161,5 million (2001)

Economic aid - recipient: $22,8 million (2003)

Currency: 1 East Caribbean dollar (EC$) = 100 cents

Exchange rates: East Caribbean dollars (EC$) per US$1 - 2.7000 (fixed rate since 1976)

Fiscal year: 1 July - 30 June

See also : Dominica