Dominica - Future trends

Dominica's immediate economic future depends to a large degree on the outcome of the dispute between the World Trade Organization and the EU over the question of banana exports into Europe. If the EU is forced to abandon its preferential treatment of suppliers such as Dominica, the island will face a dramatic and possibly traumatic period of economic hardship. Even if a reprieve occurs, it will have to accelerate its efforts to create a more diversified economy with less dependency on agriculture in general and bananas in particular. There will undoubtedly be some international aid available for facilitating the diversification process, but few alternative crops will be able to offer the security and regularity of income offered by bananas.

Dominica is hampered by its topography and lack of infrastructure in terms of developing its tourist industry. But a massive influx of tourists would, in any case, damage its eco-tourism credentials and lessen the island's appeal as an exclusive nature destination. In the coming years, Dominica will have to balance the need for tourism revenue against the necessity of restricting visitor numbers in the interest of the environment. It remains to be seen whether Dominica's bid to join the Caribbean's offshore financial centers will be successful, but initial signs are not entirely promising.

The island remains unusually vulnerable, not just to devastating hurricanes, but also to economic decisions and developments beyond its control. Even its small manufacturing sector will have to face increased competition from other regional producers as the Caribbean's trade becomes more and more liberalized. Given these uncertainties, it is unlikely that the island will be able to make major steps in reducing poverty, unemployment, or high levels of migration in the near future.

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