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Economy of Aruba

Aruba is located in the southern Caribbean, 15 miles from Venezuela’s coast. It is 18.6 miles long and it is a constituent state of the Kingdom of the Netherlands. Its inhabitants are estimated to be 103,400 and are referred to as Arubans or Dutch. The capital and largest city of the island is Oranjestad, where an estimated 34,980 inhabitants live.

Economy

The currency circulating in the country is the Aruban guilder, which is tied to $1.79. GDP was estimated at $2,516 billion in 2009 and the estimated GDP per capita was $25,300 in 2011. The country has a small open economy dominated by the services sector. Tourism, finance, hospitality, business and oil bunkers are among the most important service industries. The services sector contributes over 60% to Aruba’s economy. Industry and agriculture are estimated to contribute 33.3% and 0.4% of GDP respectively. Aruba’s unemployment rate is estimated at 6.9%.

Tourism Sector

Aruba first flourished economically because of the oil refinery industry. This was the location of the Lago refinery, which was one of the largest oil refineries in the world until its closure in 1985. The island government then decided to use the country’s strategic position on the beach to establish a tourism sector. The country has a tropical, semi-dry climate, which results in too much sunshine throughout the year. In 1959, Aruba’s first luxury hotel was built, setting the pace for luxury real estate. Recently, the island has seen rapid growth in the furnishing of hotels and facilities that have attracted an increasing number of ship arrivals and flights. More than 1 million tourists arrive in Aruba every year, most of them from North and South America. Although the growth of the tourism sector has been impressive, the government is trying to promote growth in other areas, including communications and finance, to reduce dependence on tourism.

Exports and Imports

Aruba is more an importer than an exporter, especially of capital and consumer goods. In 2014, the country imported goods worth $1,528 billion compared to $312.7 million in exports. The main exports are transportation and electrical equipment, art and collectibles, animal products, machinery and live animals. The main export partners are the Caribbean Netherlands, the Netherlands, Colombia, Venezuela, the USA and Canada. Food, electrical appliances, chemicals, refined oil and machinery make up the bulk of imports. The United States accounts for 50.8% of the island’s imports, followed by the Netherlands for 12.1% and Great Britain for 7.5%.

Future Trends

As it looks, tourism accounts for 30% of state income. The government has tried to reduce this dependence through measures such as the introduction of a moratorium on the construction of new hotels. It is expected that the island’s economy will be diversified to reduce the impact of future tourism downturns. Companies focusing on diversification include technology, communications and finance. The government wants to make Aruba more independent and it is predicted that the island is well on its way to becoming one of the most prosperous Caribbean islands.