Openness to Trade
Strong regional and international ties have benefitted the Caribbean economy substantially. Because of the sheer expanse of several islands, it is nearly difficult for any Caribbean nation to provide all of life’s essentials for its residents and factories. The British Independent Nation of Montserrat has a lot of building going on.
However, it is primarily reliant on the trade of islands in the U.S. to supply consumer demands for vegetables and fruit. Trade is so important to the Caribbean country’s economic existence that it has spawned a slew of labor unions in the area, all of which attempt to eliminate trade obstacles amongst member governments, including taxes and tariffs.
Two of the most well-known co-operatives on the West Coast of Africa are the Caribbean Union and Internal Market (CARICOM) and the Association of Eastern Caribbean States (OECS). Many territories have also forged preferential trade deals with Canada and European Union countries. 4 This opens up a larger market for these emerging economies.
Limited Natural Resources
Due to the lack of enough resources available to these countries, this might become an issue over time. The acquisition of foreign cash is a national endeavor. A government with significant foreign exchange reserves can grow its home economy by investing in high-quality infrastructural development overseas and therefore strengthening domestic welfare care.
Caribbean countries may strive to generate more foreign cash through exporting to improve their standard of living, putting a larger strain on their scarce natural resources. This might result in a total depletion of their scarce resources.
Caribbean countries may try to generate more foreign cash through exporting to improve their standard of living, putting a larger strain on their scarce natural resources. This could result in a total depletion of their scarce resources.
Natural Disasters Pose a Threat
Natural catastrophes have had a significant impact on the Caribbean’s economic growth on numerous occasions. Almost the whole Caribbean economy is subject to destructive natural forces owing to the nation’s geographical position. Hurricanes affect these little nations between June and November.
Furthermore, a super volcano or quake without a large signal is always a reasonable chance. To put it another way, both industry and government must be prepared for unanticipated occurrences that might result in the loss of critical infrastructure, major financial resources, and irreplaceable lifestyles.
When a catastrophic tragedy hits the Caribbean, the authority is compelled to use its limited funds to fix the mess and restore the economy. As a result, several natural disasters will result in increased spending and have an impact on long-term growth in the economy.
Furthermore, the tremendous act of God will result in a reduction in funding devoted to social services such as education and healthcare, lowering the country’s growth rate. In 2004, Hurricane Ivan, for instance, wreaked havoc on Jamaica’s infrastructure, costing the country more than $360 million.