Dominica´s Economy Sees the Writing on the Wall

Dominica will not survive in the global economy if the Caribbean island´s annual growth rate does not double, a Cabinet minister said Tuesday.

From 2001 to 2003, Dominica´s negative annual growth rate averaged about 5 percent. Last year, the economy grew 3.49 percent and is expected to grow 3.7 percent this year.

But Dominica´s economy must grow at 7 percent annually, Trade Minister Charles Savarin said. "This is the only way that our generation will be able to pass on to the next generation of Dominicans a standard of living to which we believe that they are entitled," Savarin said.

In 1988, the economy grew 7.38 percent, mainly through banana production. The European Union has been forced to scale back on preferential prices for bananas from former colonies, and a similar growth rate cannot be achieved by similar means today, Savarin said.

Large-scale tourism, an important source of revenue for other Caribbean islands, is virtually impossible to develop since Dominica´s mountainous terrain precludes building a runway long enough for jets carrying hundreds of tourists.

In June 2002, amid the decline of agriculture and tourism, Dominica began implementing International Monetary Fund austerity measures that included cutting public spending 15 percent and introducing new taxes.

Dominica has a population of about 70,000 people. About 16 percent of the work force is unemployed. The island became independent from Britain in 1978.