Anguilla Investment Climate
Anguilla has few natural resources, and the economy depends heavily on luxury tourism, offshore banking, lobster fishing, and remittances from emigrants. Increased activity in the tourism industry has spurred the growth of the construction sector, contributing to economic growth. Anguillan officials have put substantial effort into developing the offshore financial sector, which is small, but growing. In the medium term, prospects for the economy will depend largely on the tourism sector and, therefore, on revived income growth in the industrialized nations as well as on favorable weather conditions. Current Exchange Rate for Anguilla
Bahamas Investment Climate
The Bahamas is one of the wealthiest Caribbean countries with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Steady growth in tourism receipts and a boom in construction of new hotels, resorts, and residences had led to solid GDP growth in recent years, but tourist arrivals have been on the decline since 2006.
Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 36% of GDP. However, since December 2000, when the government enacted new regulations on the financial sector, many international businesses have left The Bahamas.
Manufacturing and agriculture combined contribute approximately a tenth of GDP and show little growth, despite government incentives aimed at those sectors. Overall growth prospects in the short run rest heavily on the fortunes of the tourism sector. Tourism, in turn, depends on growth in the US, the source of more than 80% of the visitors. Current Exchange Rate for the Bahamas
Belize Investment Climate
In this small, essentially private-enterprise economy, tourism is the number one foreign exchange earner followed by exports of marine products, citrus, cane sugar, bananas, and garments. The government's expansionary monetary and fiscal policies, initiated in September 1998, led to sturdy GDP growth averaging nearly 4% in 1999-2007. Oil discoveries in 2006 bolstered the economic growth in 2006 and 2007. Major concerns continue to be the sizable trade deficit and unsustainable foreign debt. In February 2007, the government restructured nearly all of its public external commercial debt, which will reduce interest payments and relieve liquidity concerns. A key short-term objective remains the reduction of poverty with the help of international donors. Current Exchange Rate for Belize
British Virgin Islands Investment Climate
The economy, one of the most stable and prosperous in the Caribbean, is highly dependent on tourism, generating an estimated 45% of the national income. An estimated 820,000 tourists, mainly from the US, visited the islands in 2005. In the mid-1980s, the government began offering offshore registration to companies wishing to incorporate in the islands, and incorporation fees now generate substantial revenues.
Roughly 400,000 companies were on the offshore registry by yearend 2000. The adoption of a comprehensive insurance law in late 1994, which provides a blanket of confidentiality with regulated statutory gateways for investigation of criminal offenses, made the British Virgin Islands even more attractive to international business.
Livestock raising is the most important agricultural activity; poor soils limit the islands' ability to meet domestic food requirements. Because of traditionally close links with the US Virgin Islands, the British Virgin Islands has used the US dollar as its currency since 1959. Current Exchange Rate for the British Virgin Islands
Caribbean Investment Climate
Each of the countries we have included in our analysis is reported on individually as a unique geographical and political entity. But it would be a mistake not to take a macro look at the Caribbean and its Latin American partners. This section includes links to relevent white papers and economic forecasts of the Caribbean area.
Cayman Islands Investment Climate
With no direct taxation, the islands are a thriving offshore financial center. More than 68,000 companies were registered in the Cayman Islands as of 2003, including almost 500 banks, 800 insurers, and 5,000 mutual funds. A stock exchange was opened in 1997. Tourism is also a mainstay, accounting for about 70% of GDP and 75% of foreign currency earnings.
The tourist industry is aimed at the luxury market and caters mainly to visitors from North America. Total tourist arrivals exceeded 2.1 million in 2003, with about half from the US. About 90% of the islands' food and consumer goods must be imported. The Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world. Current Exchange Rate for the Cayman Islands
Costa Rica Investment Climate
Costa Rica's basically stable economy depends on tourism, agriculture, and electronics exports. Poverty has remained around 20% for nearly 20 years, and the strong social safety net that had been put into place by the government has eroded due to increased financial constraints on government expenditures. Immigration from Nicaragua has increasingly become a concern for the government. The estimated 300,000-500,000 Nicaraguans estimated to be in Costa Rica legally and illegally are an important source of (mostly unskilled) labor, but also place heavy demands on the social welfare system. Foreign investors remain attracted by the country's political stability and high education levels, as well as the fiscal incentives offered in the free-trade zones. Exports have become more diversified in the past 10 years due to the growth of the high-tech manufacturing sector, which is dominated by the microprocessor industry. Tourism continues to bring in foreign exchange, as Costa Rica's impressive biodiversity makes it a key destination for ecotourism. The government continues to grapple with its large internal and external deficits and sizable internal debt. Reducing inflation remains a difficult problem because of rising import prices, labor market rigidities, and fiscal deficits. Tax and public expenditure reforms will be necessary to close the budget gap. In October 2007, a national referendum voted in favor of the US-Central American Free Trade Agreement (CAFTA). Current Exchange Rate for Costa Rica.
Cuba Investment Climate
The government continues to balance the need for economic loosening against a desire for firm political control. It has rolled back limited reforms undertaken in the 1990s to increase enterprise efficiency and alleviate serious shortages of food, consumer goods, and services. The average Cuban's standard of living remains at a lower level than before the downturn of the 1990s, which was caused by the loss of Soviet aid and domestic inefficiencies. Since late 2000, Venezuela has been providing oil on preferential terms, and it currently supplies about 100,000 barrels per day of petroleum products. Cuba has been paying for the oil, in part, with the services of Cuban personnel in Venezuela including some 30,000 medical professionals.
Dominica Investment Climate
The Dominican economy depends on agriculture, primarily bananas, and remains highly vulnerable to climatic conditions and international economic developments. Tourism has increased as the government seeks to promote Dominica as an "ecotourism" destination and has developed a new tourism development plan with assistance from the EU. Hurricane Dean struck the island in August 2007 causing damages equivalent to 20% of GDP. In 2003, the government began a comprehensive restructuring of the economy - including elimination of price controls, privatization of the state banana company, and tax increases - to address Dominica's economic and financial crisis of 2001-02 and to meet IMF targets. This restructuring paved the way for the current economic recovery - real growth for 2006 reached a two-decade high - and will help to reduce the debt burden, which remains at about 100% of GDP. In order to diversify the island's production base, the government is attempting to develop an offshore financial sector and has signed an agreement with the EU to develop geothermal energy resources.
Dominican Republic Investment Climate
The Dominican Republic has enjoyed strong GDP growth since 2005, with double digit growth in 2006. In 2007, exports were bolstered by the nearly 50% increase in nickel prices; however, prices are expected to fall in 2008, contributing to a slowdown in GDP growth for the year. Although the country has long been viewed primarily as an exporter of sugar, coffee, and tobacco, in recent years the service sector has overtaken agriculture as the economy's largest employer due to growth in tourism and free trade zones. The economy is highly dependent upon the US, the source of nearly three-fourths of exports, and remittances represent about a tenth of GDP, equivalent to almost half of exports and three-quarters of tourism receipts. With the help of strict fiscal targets agreed to in the 2004 renegotiation of an IMF standby loan, President FERNANDEZ has stabilized the country's financial situation, lowering inflation to less than 6%. A fiscal expansion is expected for 2008 prior to the elections in May and for Tropical Storm Noel reconstruction. Although the economy is growing at a respectable rate, high unemployment and underemployment remains an important challenge. The country suffers from marked income inequality; the poorest half of the population receives less than one-fifth of GNP, while the richest 10% enjoys nearly 40% of national income. The Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) came into force in March 2007, which should boost investment and exports and diminishs losses to the Asian garment industry. Current Exchange Rate for The Dominican Republic.
Jamaica Investment Climate
The Jamaican economy is heavily dependent on services, which now account for more than 60% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina.
Remittances account for nearly 20% of GDP and are equivalent to tourism revenues. Jamaica's economy, already saddled with a record of sluggish growth, will suffer an economic setback from damages caused by Hurricane Dean in August 2007.
The economy faces serious long-term problems: high but declining interest rates, increased foreign competition, exchange rate instability, a sizable merchandise trade deficit, large-scale unemployment and underemployment, and a debt-to-GDP ratio of 135%. Jamaica's onerous debt burden - the fourth highest per capita - is the result of government bailouts to ailing sectors of the economy, most notably the financial sector in the mid-to-late 1990s. Inflation also has declined, standing at about 7% at the end of 2007. High unemployment exacerbates the serious crime problem, including gang violence that is fueled by the drug trade.
The GOLDING administration faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments while simultaneously attacking a serious and growing crime problem that is hampering economic growth. Current Exchange Rate for Jamaica
Mexico Investment Climate
Mexico has a free market economy in the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is one-fourth that of the US; income distribution remains highly unequal. Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Mexico has 12 free trade agreements with over 40 countries including, Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan, putting more than 90% of trade under free trade agreements. In 2007, during his first year in office, the Felipe CALDERON administration was able to garner support from the opposition to successfully pass a pension and a fiscal reform.
The administration continues to face many economic challenges including the need to upgrade infrastructure, modernize labor laws, and allow private investment in the energy sector. CALDERON has stated that his top economic priorities remain reducing poverty and creating jobs. Current Exchange Rate for Mexico
Netherlands Antilles Investment Climate
Tourism, petroleum refining, and offshore finance are the mainstays of this small economy, which is closely tied to the outside world. Although GDP has declined or grown slightly in each of the past eight years, the islands enjoy a high per capita income and a well-developed infrastructure compared with other countries in the region.
Most of the oil Netherlands Antilles imports for its refineries come from Venezuela. Almost all consumer and capital goods are imported, the US, Italy, and Mexico being the major suppliers. Poor soils and inadequate water supplies hamper the development of agriculture. Budgetary problems hamper reform of the health and pension systems of an aging population. The Netherlands provides financial aid to support the economy. Current Exchange Rate for the Netherland Antilles.
Panama Investment Climate
Panama's dollarized economy rests primarily on a well-developed services sector that accounts for two-thirds of GDP. Services include operating the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, and tourism. Economic growth will be bolstered by the Panama Canal expansion project that began in 2007 and should be completed by 2014 at a cost of $5.3 billion (about 30% of current GDP). The expansion project will more than double the Canal's capacity, enabling it to accommodate ships that are now too large to transverse the transoceanic crossway and should help to reduce the high unemployment rate. The government has implemented tax reforms, as well as social security reforms, and backs regional trade agreements and development of tourism. Not a CAFTA signatory, Panama in December 2006 independently negotiated a free trade agreement with the US, which, when implemented, will help promote the country's economic growth. Current Exchange Rate For Panama.
Puerto Rico Investment Climate
Puerto Rico has one of the most dynamic economies in the Caribbean region. A diverse industrial sector has far surpassed agriculture as the primary locus of economic activity and income. Encouraged by duty-free access to the US and by tax incentives, US firms have invested heavily in Puerto Rico since the 1950s. US minimum wage laws apply. Sugar production has lost out to dairy production and other livestock products as the main source of income in the agricultural sector. Tourism has traditionally been an important source of income, with estimated arrivals of nearly 5 million tourists in 2004. Growth fell off in 2001-03, largely due to the slowdown in the US economy, recovered in 2004-05, but declined again in 2006-07.
Saint Barts Investment Climate
The economy of Saint Barthelemy is based upon high-end tourism and duty-free luxury commerce, serving visitors primarily from North America. The luxury hotels and villas host 70,000 visitors each year with another 130,000 arriving by boat. The relative isolation and high cost of living inhibits mass tourism. The construction and public sectors also enjoy significant investment in support of tourism. With limited fresh water resources, all food must be imported, as must all energy resources and most manufactured goods. Employment is strong and attracts labor from Brazil and Portugal. Current Exchange Rate for Saint Barts
Saint Kitts and Nevis Investment Climate
The economy of Saint Kitts and Nevis is heavily dependent upon tourism revenues, which has replaced sugar, the traditional mainstay of the economy until the 1970s. Following the 2005 harvest, the government closed the sugar industry after decades of losses of 3-4% of GDP annually. To compensate for employment losses, the government has embarked on a program to diversify the agricultural sector and to stimulate other sectors of the economy, such as tourism, export-oriented manufacturing, and offshore banking. Economic growth was above average for Latin America from 2004 to 2006, but has since slowed. Like other tourist destinations in the Caribbean, the St. Kitts and Nevis is vulnerable to damage from natural disasters and shifts in tourism demand. The current government is constrained by a high public debt burden equivalent to nearly 185% of GDP by the end of 2006, largely attributable to public enterprise losses.
Saint Lucia Investment Climate
The island nation has been able to attract foreign business and investment, especially in its offshore banking and tourism industries, with a surge in foreign direct investment in 2006, attributed to the construction of several tourism projects. Tourism is the main source of foreign exchange, with almost 900,000 arrivals in 2007. The manufacturing sector is the most diverse in the Eastern Caribbean area, and the government is trying to revitalize the banana industry. Saint Lucia is vulnerable to a variety of external shocks including declines in European Union banana preferences, volatile tourism receipts, natural disasters, and dependence on foreign oil. High debt servicing obligations constrain the KING administration's ability to respond to adverse external shocks. Economic fundamentals remain solid, even though unemployment needs to be reduced. Current Exchange Rate for Saint Lucia.
Saint Martin Investment Climate
The economy of Saint Martin centers around tourism with 85% of the labor force engaged in this sector. Over one million visitors come to the island each year with most arriving through the Princess Juliana International Airport in Sint Maarten. No significant agriculture and limited local fishing means that almost all food must be imported. Energy resources and manufactured goods are also imported, primarily from Mexico and the United States. Saint Martin is reported to have the highest per capita income in the Caribbean. Current Exchange Rate for Saint Martin
South Florida Investment Climate
The Florida economy, and specifically the real estate market, has been in a downturn since the boom years of 2003 to 2005. The Florida Keys, and the coastal properties of southwest and southeast Florida have been effected particularily hard. While there is still significant pressure on prices, sale volume has started to increase in late 2008.
Florida Investment Climate will include both legal considerations of investing in Florida as well as articles on specific aspects of the market and economy.
Turks and Caicos Investment Climate
The Turks and Caicos economy is based on tourism, offshore financial services, and fishing. Most capital goods and food for domestic consumption are imported. The US is the leading source of tourists, accounting for more than three-quarters of the 175,000 visitors that arrived in 2004.
Major sources of government revenue also include fees from offshore financial activities and customs receipts. Current Exchange Rate for the Turks and Caicos.
US Virgin Islands Investment Climate
Tourism is the primary economic activity, accounting for 80% of GDP and employment. The islands hosted 2.6 million visitors in 2005.
The manufacturing sector consists of petroleum refining, textiles, electronics, pharmaceuticals, and watch assembly. One of the world's largest petroleum refineries is at Saint Croix. The agricultural sector is small, with most food being imported. International business and financial services are small but growing components of the economy. The islands are vulnerable to substantial damage from storms.
The government is working to improve fiscal discipline, to support construction projects in the private sector, to expand tourist facilities, to reduce crime, and to protect the environment. Current Exchange Rate for the US Virgin Islands