The economy of the Bahamas remains dependent on tourists, especially from the United States, and is therefore vulnerable to downturns in the prosperity of Americans. The government has started efforts to diversify the economy and the success of these initiatives will determine how badly the islands may suffer from future problems with the U.S. economy. The nation's dependency on tourism makes it vulnerable to competition from other destinations. The development and expansion of the tourist trade elsewhere in the Caribbean stands to have a negative effect on tourism in the Bahamas. The islands are also subject to disruption from hurricanes and other weather-related disasters.
Efforts to develop a free trade area in the region will require a dramatic restructuring of the Bahamian economy since most of the government's revenue come from tariffs and duties on imported goods. Yet, the establishment of a free trade area could well attract more foreign businesses to the islands, since they would be able to use the Bahamas as a strategic base for economic interaction with the United States. The Bahamas would also be able to expand its international financial services sector as other islands in the Caribbean have done.