Chapter 5.5, Problem 1RQ

To determine

The other economic sectors that have emerged in the region as the Caribbean has shifted out of the dependence on agriculture.

Answer to Problem 1RQ

The islands such as Puerto Rico have promoted the industry through the establishment of free-trade zones and assembly plants. The Bahamas and the Cayman islands have focused on the off-shore banking and the St. Kitts and Antigua promote online gambling. For the countries, such as Cuba, Jamaica, the Bahamas, and the Dominican Republic, tourism remain as a significant industry.

Explanation of Solution

The economic life of the Caribbean was dominated once by agriculture. However, the unstable prices of crop that extended over the decades and the decline in special trade agreements with former colonial states produce more hardship than prosperity.

The Caribbean has become an increasingly attractive location for assembling goods for the consumers from North America by the establishment of free trade zones. It includes duty-free industrial parks for foreign corporations that are exempted from tax.

In the 1920s, the rise of offshore banking in the Caribbean began with the Bahamas. By offering specialized services that are confidential and tax exempt, offshore banking centers appeal to foreign banks and corporations. Through registration fees, those offshore banks make money. For developing this sector, the Bahamas was successful and by 1976, the country became the third largest banking center in the world.

For the microstates of the Caribbean, online gambling is the newest industry. Legal online gambling services began in 1999 and Antigua and St. Kitts were the leaders of the region. Later, and many other states followed this.

The tourism in the Caribbean was supported by the convergence of various environmental, locational and economic factors.