· Booming tourism and Citizenship by Investment credited for growth
A new report by the Economic Commission for Latin America and the Caribbean (ECLAC) from the United Nations has found the Commonwealth of Dominica to be the fastest growing economy in the entire Latin America and the Caribbean region in 2019.
The island’s gross domestic product (GDP) is said to have jumped up by nine per cent, attributed to Citizenship by Investment (CBI), soaring tourism numbers and public sector construction. Foreign investors sought to obtain second citizenship from Dominica through the CBI Programme, choosing to either make a minimum US$100,000 contribution to a government fund or invest in pre-approved real estate, such as luxury resorts and boutique hotels.
Some reasons driving investors’ trust are linked to them seeking to belong to a stable democracy with great diplomatic relations, a trustworthy business environment and a promising economic future.
“The robust performance of the tourism sector, as well as the Citizenship by Investment (CBI) programmes and public sector-fuelled construction activity, were primary drivers of ECCU-wide GDP growth in 2019.”ECLAC
Importantly, Dominica’s CBI Programme is considered the best in the world. It employs reliable due diligence that particularly attracts global individuals and families with indisputable integrity.
Dominica is leading the macroeconomic expansion in the Eastern Caribbean Currency Union (ECCU). According to the ECLAC report, “construction activity increased across all ECCU economies” but it was especially notable in Dominica.
“The robust performance of the tourism sector, as well as the Citizenship by Investment (CBI) programmes and public sector-fuelled construction activity, were primary drivers of ECCU-wide GDP growth in 2019,” the report notes.
The real estate option under CBI forms the foundation of a promising eco-tourism sector, able to compete on the international market. Stopovers in Dominica increased threefold, the ECLAC report found, with cruise ship arrivals specifically increasing sevenfold.
This is an even more impressive achievement considering the fact that island had suffered a loss worth 226 per cent of GDP after Hurricane Maria in September 2017.
Dominica with nine per cent growth in 2019 is followed in the region by followed by Antigua and Barbuda (6.2 per cent), the Dominican Republic (4.8 per cent) and Guyana (4.5 per cent). In contrast, the report showed that Venezuela will experience the greatest setback, with a contraction of -25.5 per cent, followed by Nicaragua (-5.3 per cent), Argentina (-3.0 per cent) and Haiti (-0.7 per cent). Central America will grow 2.4 per cent, the Caribbean 1.4 per cent and South America will contract -0.1 per cent.
For 2020, ECLAC’s projections indicate that Caribbean nations will continue leading regional growth (with a sub-regional average of 5.6 per cent), led by Guyana (85.6 per cent, due to oil production starting in 2020), Antigua and Barbuda (6.5 per cent), Dominica (4.9 per cent) and the Dominican Republic (4.7 per cent).
On the low end of the spectrum, Venezuela, Nicaragua and Argentina will have more moderate economic contraction rates (with -14 per cent, -1.4 per cent and -1.3 per cent, respectively). Meanwhile, Central America will expand 2.6 per cent and South America 1.2 per cent.
According to the report, despite the difficulties and limitations that policy spaces currently face, in contrast to prior periods, the majority of the region’s countries find themselves today in situations of historically low inflation levels (a 2.6 per cent regional average, without taking into account Venezuela, Argentina and Haiti), relatively high international reserves, the economies generally preserve access to international financial markets, and international interest rates are at low levels.
ECLAC reports that these conditions favour the capacity to implement macroeconomic policies that would tend to reverse the current low-growth scenario.