Economy in the 21st Century

Caribbean economy

The mainstay of the Caribbean economy, sugar, has declined since the beginning of the 20th century, although it is still a major crop in the region. Caribbean sugar production became relatively expensive in comparison to other parts of the world, making it difficult for Caribbean sugar products to compete. Caribbean economic diversification into new activities became essential to the islands.

By the beginning of the 20th century, the Caribbean islands enjoyed greater political stability. Large-scale violence was no longer a threat after the end of slavery in the islands. The British-controlled islands in particular benefited from investments in the infrastructure of colonies. 

This investment improved the quality of life for the inhabitants and also made the islands a more attractive destination for visitors. Tourists began to visit in larger numbers by the beginning of the 20th century. The most popular early destinations were Jamaica and the Bahamas; the Bahamas remains today the most popular tourist destination in the Caribbean. Post-independence economic needs led to a boom in the development of the tourism industry in the 1980s and large luxury hotels and resorts have been built on many of the islands. Cruise ships are also regular visitors to the Caribbean.

The development of offshore banking services began during the 1920s. The close proximity of the Caribbean islands to the United States has made them an attractive location for branches of foreign banks. Clients from the United States take advantage of offshore banking services to avoid U.S. taxation. The Bahamas entered the financial services industry first, and continues to be at the forefront of financial services in the region. The Cayman Islands, the British Virgin Islands, and the Netherlands Antilles have also developed competitive financial services industries.

Ports both large and small were built throughout the Caribbean during the colonial era. The export of sugar on a large scale made the Caribbean one of the centres of world shipping and it remains so today.