Economy of Antigua and Barbuda
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| Economy of Antigua and Barbuda | |
| Currency | East Caribbean dollar (XCD) |
|---|---|
| Fiscal year | 1 April - 31 March |
| Trade organisations | WTO, CARICOM |
| Statistics | |
| GDP (PPP) | $750 million (2002 est.) (204th) |
| GDP growth | 3% (2002 est.) |
| GDP per capita | $11,000 (2002 est.) |
| GDP by sector | agriculture: 3.9%, industry: 19.2%, services: 76.8% (2002) |
| Inflation (CPI) | 0.4% (2000 est.) |
| Population below poverty line |
no data |
| Labour force | 30,000 |
| Labour force by occupation |
agriculture: 7%, industry: 11%, services: 82% (1983) |
| Unemployment | 11% (2001 est.) |
| Main industries | tourism, construction, light manufacturing (clothing, alcohol, household appliances) |
| External | |
| Exports | $214 million (2004 est.) |
| Export goods | petroleum products 48%, manufactures 23%, machinery and transport equipment 17%, food and live animals 4%, other 8% |
| Main export partners | Spain 29.9%, Germany 18.2%, Poland 13.9%, Italy 6.4%, Singapore 5.1%, UK 4.4% (2005) |
| Imports | $735 million (2004 est.) |
| Import goods | food and live animals, machinery and transport equipment, manufactures, chemicals, oil |
| Main import partners | US 20.3%, China 15.7%, Singapore 12.2%, Germany 10.9%, Spain 6.3% (2005) |
| Public finances | |
| Public debt | $231 million (1999) |
| Revenues | $123.7 million (2000) |
| Expenses | $145.9 million (2000) |
| Economic aid | recipient: $2.3 million (1995) |
| Main data source: CIA World Factbook All values, unless otherwise stated, are in US dollars |
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Antigua and Barbuda's economy is service-based, with tourism and government services representing the key sources of employment and income. Tourism accounts directly or indirectly for more than half of GDP and is also the principal earner of foreign exchange in Antigua and Barbuda. However, a series of violent hurricanes since 1995 resulted in serious damage to tourist infrastructure and periods of sharp reductions in visitor numbers. In 1999 the budding offshore financial sector was seriously hurt by financial sanctions imposed by the United States and United Kingdom as a result of the loosening of its money-laundering controls. The government has made efforts to comply with international demands in order to get the sanctions lifted. The dual island nation's agricultural production is mainly directed to the domestic market; the sector is constrained by the limited water supply and labor shortages that reflect the pull of higher wages in tourism and construction. Manufacturing comprises enclave-type assembly for export with major products being bedding, handicrafts, and electronic components. Prospects for economic growth in the medium term will continue to depend on income growth in the industrialized world, especially in the US, which accounts for about one-third of all tourist arrivals. Estimated overall economic growth for 2000 was 2.5%. Inflation has trended down going from above 2 percent in the 1995-99 period and estimated at 0 percent in 2000.
To lessen its vulnerability to natural disasters, Antigua has been diversifying its economy. Transportation, communications and financial services are becoming important.
Antigua is a member of the Eastern Caribbean Currency Union (ECCU). The Eastern Caribbean Central Bank (ECCB) issues a common currency (the East Caribbean dollar) for all members of the ECCU. The ECCB also manages monetary policy, and regulates and supervises commercial banking activities in its member countries.
Antigua and Barbuda is a beneficiary of the U.S. Caribbean Basin Initiative. Its 1998 exports to the U.S. were valued at about US $3 million and its U.S. imports totaled about US $84 million. It also belongs to the predominantly English-speaking Caribbean Community (CARICOM).
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[edit] Economic History
Prior to colonization, several Amerindian groups inhabited Antigua and Barbuda, all of which relied on a subsistence lifestyle. British colonists established settlements in the islands in 1632. After fighting off the Caribs, Dutch, and French to stabilize their colonies, settlers grew tobacco, indigo, cotton, and ginger as cash crops. As on many other Caribbean islands, sugar cultivation became the most profitable enterprise, quickly surpassing other crops in economic importance. Due to the vast tracts of land needed for large-scale sugar production, rainforests on the islands were decimated. Timber from the rainforests was used in shipbuilding and repair.
With the shift to a plantation economy, slaves were imported from Africa. Even after the abolition of slavery in 1834, former slaves continued working in servitude due to laws designed to keep providing plantations with cheap labor. As the sugar industry began to wane, the plantation economy came to an end.
[edit] Primary industries
[edit] Agriculture
Some 30% of land on Antigua is under crops or potentially arable, with 18% in use. Sea-island cotton is a profitable export crop. A modest amount of sugar is harvested each year, and there are plans for production of ethanol from sugarcane. Vegetables, including beans, carrots, cabbage, cucumbers, plantains, squash, tomatoes, and yams, are grown mostly on small family plots for local markets. Over the past 30 years, agriculture's contribution to the GDP has fallen from over 40% to 12%. The decline in the sugar industry left 60% of the country's 66,000 acres under government control, and the Ministry of Agriculture is encouraging self-sufficiency in certain foods in order to curtail the need to import food, which accounts for about 25% by value of all imports. Crops suffer from droughts and insect pests, and cotton and sugar plantings suffer from soil depletion and the unwillingness of the population to work in the fields. Mango production in 1999 was 1,000 tons.
[edit] Animal husbandry
Livestock estimates in 1999 counted 16,000 head of cattle, 12,000 sheep, and 12,000 goats; there were some 2,000 hogs in the same year. Most livestock is owned by individual households. Milk production in 1999 was an estimated 6,000 tons. The government has sought to increase grazing space and to improve stock, breeding Nelthropp cattle and Black Belly sheep. There is a growing poultry industry. In 1992, the European Development Bank provided US$5 million to the government to help develop the livestock industry.
[edit] Fishing
Most fishing is for local consumption, although there is a growing export of the lobster catch to the United States and of some fish to Guadeloupe and Martinique. Antiguans annually consume more fish per capita (46 kg/101.4 lb) per year live weight than any other nation or territory in the Caribbean. The main fishing waters are near shore or between Antigua and Barbuda. There are shrimp and lobster farms operating, and the Smithsonian Institution has a Caribbean king crab farming facility for the local market. The government has encouraged modern fishing methods and supported mechanization and the building of new boats. Fish landings in 2000 were 1,481 tons; the lobster catch, 42 tons. Exports of fish commodities in 2000 were valued at US$1.5 million.
[edit] Forestry
About 11% of the land is forested, mainly by plantings of red cedar, mahogany, white cedar, and acacia. A reforestation program was begun in 1963, linked with efforts to improve soil and water conservation.
[edit] Mining
Few of the islands' mineral resources, which included limestone, building stone, clay, and barite, were exploited until recently. Limestone and volcanic stone have been extracted from Antigua for local construction purposes, and the manufacture of bricks and tiles from local clay has begun on a small scale. Barbuda produced a small amount of salt, while phosphate has been collected from Redonda.
[edit] Secondary industries
Industrial activity has shifted from the processing of local agriculture produce to consumer and export industries using imported raw materials. Industrial products include rum, refined petroleum, paints, garments, furniture, and electrical components. The government encourages investment in manufacturing establishments, and most industries have some government participation.
Industry accounted for 19% of GDP in 2001. Manufacturing—which accounts for approximately 5% of GDP—comprises enclave-type assembly for export with major products being bedding, handicrafts, and electronic components. Prospects for economic growth depend on income growth in the industrialized world, especially in the US, which accounts for about half of all tourist arrivals. The industrial park, located in the Coolidge Area, produces a range of products such as paints, furniture, garments, and galvanized sheets, mainly for export.
[edit] Tertiary industries
[edit] Tourism
Tourism is the mainstay of the economy of Antigua and Barbuda and is the leading sector in terms of providing employment and creating foreign exchange. In 1999 it contributed 60 percent of GDP and more than half of all jobs. According to the Americas Review 1998, tourism contributed 15 percent directly and around 40 percent indirectly to the GDP in 1998. Real growth in this sector has moved from an average of 7 percent for the period 1985-89 to 8.24 percent for the period 1990-95. There was slow growth between 1995 and 1998.
Figures released by the East Caribbean Central Bank (ECCB) in 2000 show that total visitor arrivals increased steadily from 470,975 in 1995 to 613,990 in 1998. In 1999 total visitor arrivals declined by about 4.1 percent to 588,866, yet the number of visitors staying at least 1 night or more increased by 1.9 percent over 1998 to total 207,862. Arrivals via cruise ships in 1999 dropped to 325,195, a fall of 3.4 percent over 1998. The fall-off in cruise passengers was mainly the result of one of the larger cruise ships being out of service for a brief period. Most of the tourists in 1999 came from the United Kingdom and the United States. Visitor expenditures have increased steadily since 1990, with total expenditures of EC$782.9 million.
To combat increasing competition from other Caribbean destinations, the government and the Antigua Hotel and Tourist Association have established a joint fund to market the country's appeal as a tourist destination. The Association has agreed to match the proceeds from a 2 percent hotel guest levy introduced by the government.
At the start of March 2001, the Antigua Workers Union (AWU), the trade union which represents close to 7,000 workers in the tourism industry, described tourism as an industry in crisis. The AWU claimed the industry is on the decline because some airlines are pulling out of the country, and government was not spending enough money to promote tourism. While the government has conceded that it was not spending enough on marketing because of cash flow problems, it has rejected the AWU's contention that the industry is in crisis.
[edit] Financial services
Antigua and Barbuda is advertised as "an attractive offshore jurisdiction." The country was the first to sign the United Nations' anti-money laundering pact. This agreement came out of a conference in 1999 which urged worldwide offshore financial centers to introduce laws to tighten their policing of money laundering activities. The United Kingdom exerted considerable pressure on Antigua and Barbuda to reform laws to combat money laundering, even issuing an advisory in April 1999 to British financial institutions that Antigua and Barbuda's anti-money laundering laws were wanting. Antigua and Barbuda responded to this concern, and a subsequent joint United States and United Kingdom review reported they were satisfied that the country had taken positive steps to check illegal activity in this sector. In September 2000 the government of Antigua and Barbuda announced that it had strengthened its surveillance of money laundering and drug trafficking.
[edit] Retail
The retail sector is dominated by the sale of food and beverages, clothing and textiles, and vegetables. The main markets are located in the capital, St. John's. There are many street vendors and duty-free shops. The government has been taking steps to improve this sector. A US$43.5 million vendors' mall and market has been built to provide better facilities for retailers in the capital. In addition, a US$27 million fisheries complex now provides improved facilities for fish processing and retailing. A growing area of computer business on Antigua is Internet casinos.
[edit] Statistics
GDP: purchasing power parity - $1.189 billion (2007 est.)
GDP - real growth rate: 3.8% (2007 est.)
GDP - per capita: purchasing power parity - $10,900 (2005 est.)
GDP - composition by sector: agriculture: 3.8% industry: 22% services: 74.3% (2002 est.)
Inflation rate (consumer prices): 2.8% (2007 est.)
Labor force: 30,000 (1991)
Unemployment rate: 11% (2001 est.)
Budget: revenues: $123.7 million
expenditures: $145.9 million (2000 est.)
Industries: tourism, construction, light manufacturing (clothing, alcohol, household appliances)
Electricity - production: 105 million kWh (2005)
Electricity - consumption: 97.65 million kWh (2005)
Electricity - exports: 0 kWh (2005)
Electricity - imports: 0 kWh (2005)
Oil - production: 0 bbl/day (2005)
Oil - consumption: 4,000 bbl/day (2005 est.)
Oil - exports: 177.7 bbl/day (2004)
Oil - imports: 4,215 bbl/day (2004)
Oil - proved reserves: 0 bbl (1 January 2006 est.)
Natural gas - production: 0 cu m (2005 est.)
Natural gas - consumption: 0 cu m (2005 est.)
Natural gas - exports: 0 cu m (2005 est.)
Natural gas - imports: 0 cu m (2005)
Natural gas - proved reserves: 0 cu m (1 January 2006 est.)
Agriculture - products: cotton, fruits, vegetables, bananas, coconuts, cucumbers, mangoes, sugarcane; livestock
Exports: $84.3 million (2007 est.)
Exports - commodities: petroleum products 48%, manufactures 23%, machinery and transport equipment 17%, food and live animals 4%, other 8%
Exports - partners: Spain 34%, Germany 20.7%, Italy 7.7%, Singapore 5.8%, UK 4.9% (2006)
Imports: $522.8 million (2007 est.)
Imports - commodities: food and live animals, machinery and transport equipment, manufactures, chemicals, oil
Imports - partners: US 21.1%, China 16.4%, Germany 13.3%, Singapore 12.7%, Spain 6.5% (2006)
Debt - external: $359.8 million (June 2006)
Economic aid - recipient: $7.23 million (2005)
Currency: 1 East Caribbean dollar (EC$) = 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 April - 31 March
[edit] References
- This article contains material from the CIA World Factbook which, as a U.S. government publication, is in the public domain.
- This article contains material from the US Department of State's Background Notes which, as a US government publication, is in the public domain.
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