Economic Transformation of the Caribbean

Important Reminders and Economic Transformation of the Caribbean

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Primarily based on sugar, but also coffee, bananas, and other agricultural exports.
Recovery of the sugar economy in the 1940s and 1950s compared to the Great Depression (1930s-40s).

Cuba, Puerto Rico, and the Dominican Republic secured a ready-made market in the United States due to demand and reduced sugar production elsewhere.
While the US opened up markets for Caribbean sugar, it was at a controlled, low price.
Post-war, sugar production continued to improve until the mid-1950s, remaining essential for Cuba, Puerto Rico, and the Dominican Republic.

During the war, the British Caribbean economy suffered due to separation from British markets and high prices.
Post-war, Britain relied on resources from its empire, including the Caribbean, especially for sugar.

Small islands like Barbados, Antigua, and St. Kitts, and larger islands like Trinidad and Tobago, ended official sugar production in the 1960s and 1970s.
Private ownership of sugar states became unprofitable despite the Commonwealth Sugar Act.
New governments in the newly independent Caribbean nations nationalized the sugar industry to protect jobs.
Massive sugar production by Brazil, India, Mexico, and other major producers crashed the global sugar market by the mid-1970s.
Caribbean sugar production could not compete, leading to shutdowns, such as in Trinidad and Tobago and Antigua.
The sugar plantation economy came to an end in many places.
Rump production continues with imported sugar or molasses from Mexico.

Expanded sugar production into the 1950s, but reduced dramatically by the 1970s.
Competition with Cuban sugar, Dominican sugar, and beet sugar from the United States contributed to crashing prices.
Government policy shift after 1947: Operation Bootstrap.
- Attract industries from the US mainland with tax breaks.
- Create a new industrial economy.
From 1947 for the next 40 years, this became the dominant economic policy, becoming a model for the rest of the Caribbean to escape the plantation economy.
Attracting businesses to create industries and employ local people.
Specialty pharmaceutical companies came in to avoid mainland taxes.

Industries did not employ enough Puerto Ricans.
Post-war period saw a major population increase due to improved health and high birth rates.
Industrial development did not keep pace with population growth.
Operation Bootstrap provided hope, but the economy was saved by migration to the US mainland.
Remittances from the US became a significant part of Puerto Rico's national income, around 15%.
In the 1980s, the US changed the tax code, ending tax breaks for companies in Puerto Rico.
The US opened its market to the Caribbean through the Caribbean Basin Initiative in 1981, diminishing Puerto Rico's advantages.

Before the revolution (1958-1959), Cuba had access to the US market and was subsidized by the Soviet Union.
The US cut off trade with Cuba, leading Cuba to seek a replacement market.
The Soviet Union became the primary buyer of Cuban sugar, a guaranteed market.
The Soviet Union paid in goods rather than cash.
The plantation model continued from the 1960s to 1990 with high global sugar prices in the late 1960s and 1970s.
Cuba aimed to maximize sugar production, reaching nearly 9 million tons.
Collapse of the Soviet Union in 1989 caused the market to crash, resulting in a period of readjustment in the 1990s.
Venezuela provided subsidized oil in exchange for doctors, a successful relationship market price and for a long time.
Liberalization: Allowing families private enterprises to live.
The economy was opened up to tourism.
Tourism was reconstructed after being shut down for over 40 year.
Mass migration in recent years indicates high unemployment and underemployment.

Relatively good economic situation in the 1950s and 1960s due to bauxite and tourism.

Britain aimed to orchestrate decolonization through the creation of the British West Indies.
The federation was published in 1958.
The federal defense was written ineffectively due to lack of planning.
The idea wasn't properly sold to the colonies.
The idea of a collective connection fails.

Climate change disproportionately affects poorer countries, including the Caribbean.
Caribbean economies are sensitive to climate change.