The Bahamas is one of the largest countries in the Caribbean area of the world. It lies to the south-east of North America (with Florida being the closest state to it) and to the north of the country of Cuba. It has 29 islands that make up its nation (as well as 661 cays and over 2,000 islets), covers an area of over 5,000 square miles and is home to around 330,000 people. The country has its own currency, the Bahamian Dollar, which is tied to the US Dollar at a rate of US$1 to $B1. The Bahamas economy is quite stable yet reliant on the economic conditions of other countries (in particular the United States of America) due to the nature of its major economic industries.
Past and Present of Bahamas economy
The Bahamas economy, in history, was one that was based on the import and exports of goods. Christopher Columbus landed in The Bahamas in the 15th century and began trading goods with the Lucayans that inhabited the islands. They then became a great base for pirates and privateers during the 17th and 18th centuries as there were plenty of hiding spots for passing ships to be plundered. It was not until American colonists arrived on the islands in the 19th century that useful skills and expertise were apparent and began to be used to build the islands' economy.
Today, The Bahamas economy is more or less kept afloat by two main sectors. The first of these is the tourism industry which accounts for at least 60% of its GDP (Gross Domestic Product). The most visited islands of the chain are New Providence (which is home to the capital, Nassau) and Grand Bahama, attracting approximately 4 million tourists each year. Being located so close to the United States of America, approximately 85% of these visitors come from North America, the rest coming from the other parts of the world.
With tourism being a mainstay of the Bahamas economy, it is apparent that this sector has room for growth in the future years, thus still remaining a prominent feature in its economic arena. Indeed, currently the tourism niche employs half of the work force in the Bahamas, which is around a whopping 95,000 people. There are new hotels, guesthouses, activities and attractions being developed in the Bahamas and so this also contributes to the construction and manufacturing sectors.
Growth of Finance and Agriculture
The second of the primary industries that keep The Bahamas economy afloat is financial services. The country is steadily growing in this sector with it currently accounting for around 17% of the country's GDP. In its early years the financial services sector did face problems, but with the addition of legislation and new business laws being introduced by the government of The Bahamas, this sector is growing in both terms of confidence and clients.
Agriculture and fishing account for as little as 5% of the country's economic output. This is partly due to the terrain which makes it impossible to farm a lot of arable land and most of the produce is consumed domestically. Whilst The Bahamas exports lobster and some fish, it relies heavily on imports of food from other countries (as much as 80% of food is imported into the country). Other industries such as manufacturing are also small with the likes of chemicals, rum, salt and mineral products being exported to partners including Germany, Singapore and Spain.
With the Bahamas economy being very dependent on tourism and financial services, it is likely to remain in a fairly stable position. The government is also looking carefully at ways it can make improvements and incentivise the other industries on the islands to ensure that they grow in the near future, thus only helping to strengthen the economy of the country.