Dominica - Economy

Economy

In 2008, Dominica had one of the lowest per capita gross domestic product (GDP) rates of Eastern Caribbean states. The country nearly had a financial crisis in 2003 and 2004, but Dominica's economy grew by 3.5% in 2005 and 4.0% in 2006, following a decade of poor performance. Growth in 2006 was attributed to gains in tourism, construction, offshore and other services, and some sub-sectors of the banana industry. The International Monetary Fund (IMF) recently praised the Government of Dominica for its successful macroeconomic reforms. The IMF also pointed out remaining challenges, including the need for further reductions in public debt, increased financial sector regulation, and market diversification.

Bananas and other agriculture dominate Dominica's economy, and nearly one-third of the labour force works in agriculture. This sector, however, is highly vulnerable to weather conditions and to external events affecting commodity prices. In 2007, Hurricane Dean caused significant damage to the agricultural sector as well as the country's infrastructure, especially roads. In response to reduced European Union (EU) banana trade preferences, the government has diversified the agricultural sector by promoting the production of coffee, patchouli, aloe vera, cut flowers, and exotic fruits such as mango, guava, and papaya. Dominica has also had some success in increasing its manufactured exports, primarily soap.

Dominica is mostly volcanic and has few beaches; therefore, tourism has developed more slowly than on neighboring islands. Nevertheless, Dominica's mountains, rainforests, freshwater lakes, hot springs, waterfalls, and diving spots make it an attractive eco-tourism destination. Cruise ship stopovers have increased following the development of modern docking and waterfront facilities in Roseau, the capital. Out of 22 Caribbean islands tracked, Dominica had the fewest visitors in 2008 (55,800 or 0.3% of the total). This was about half as many as visited Haiti.

Dominica's currency is the East Caribbean Dollar.

Dominica is a beneficiary of the Caribbean Basin Initiative (CBI) that grants duty-free entry into the United States for many goods. Dominica also belongs to the predominantly English-speaking Caribbean Community (CARICOM), the CARICOM Single Market and Economy (CSME), and the Organisation of Eastern Caribbean States (OECS).

Dominica supposedly offers tax-free status to companies locating from abroad. It is not known how many companies benefit from the tax-free status because of the strict confidentiality the government enforces, although it is known many Internet businesses utilise Dominica for this reason. However, on 12 July 2012 Dominca signed an agreement with Poland to exchange tax information.

The Commonwealth of Dominica offers an official and legally mandated economic citizenship to those seeking a valid second passport. The nationality law of Dominica authorizes the government to waive the normal requirement of seven years of legal residence to acquire citizenship in exchange for a cash contribution. Total costs including all fees for a single applicant come to about $105,000, with an additional $25,000 specified for a spouse and up to two children under 18. The Dominican passport holders can travel without a visa, or obtain a visa upon entry, to nearly 90 countries and territories. Applying for Dominica citizenship requires interacting with official Government Approved Economic Citizenship Agents.