Economy of the United States Virgin Islands

This article is on the economy of the United States Virgin Islands.

Economic history

During the slave days, the islands cultivated cash crops to earn money. When the African slave trade began in 1673, the difficult conditions and inhumane treatment slaves were subjected to bred discontent. In 1733, a long drought followed by a devastating hurricane pushed slaves in St. John to the breaking point. Members of the Akwamu tribe from modern Ghana staged a massive rebellion, seizing control of the island for six months. The Danish, who controlled the island at that point, enlisted the help of French authorities from Martinique to regain control.

Another slave revolt in 1848 was more successful in the long run. The governor at the time, Peter von Scholten, felt enough sympathy for the slaves to grant them emancipation, even though it was against the wishes of Danish Crown and devastated the economy of the islands. After the United States purchased the islands due to fear that if Denmark were conquered by Germany, Germany would attempt to take over Denmark's overseas dependencies. In 1917, a treaty was concluded in which the United States purchased the islands for $25,000,000.

The economy was boosted in the 1970s by two main developments: tourism and manufacturing.

The islands also receive cross-over subsidies, which generated approximately $100 million for the Virgin Islands in 2008.

Tourism

The tourism industry is the main industry, generating 80% of GDP and employment. The islands, every year, are visited by more than 1 million tourists, mainly by Americans and the most common way to get there is by sea. The tourism industry mostly employs those who have migrated to the U.S. Virgin Islands, as native Virgin Islanders are attracted to government jobs.^{[citation needed]} In 2005, a record of 2.6 million visitors visited.

Manufacturing

This industry developed more in the 1970s especially on St. Croix. With the exception of rum distilling from sugar, none of the industries owe their existence to the presence of natural resources. Instead, they depend of tax concessions and the financial advantages they derive from being a US territory. Near the airport is the site of a closed (December 2000) alumina factory which processed bauxite from Suriname and West Africa. There is also an oil refinery which produces 495,000 barrels per day (78,700 m³/d) supplied by a fleet of tankers which take away all the refined products. There were a number of assembly plants, especially on St. Croix, which manufactured watches from overseas parts. However, this industry has significantly dwindled in recent years.

Economy overview

GDP:

GDP purchasing power parity: $1.577 billion (2004 est.)

GDP - real growth rate: 2% (2002 est.)

GDP - per capita (purchasing power parity): $14,500 (2004 est.)

GDP - composition by sector:

agriculture: 1%

industry: 19%

services: 80% (2003 est.)

Labor force: 49,820 (2007 est.)

Labor force - by occupation:

agriculture: 1%

industry: 19%

services: 80% (2003 est.)

Unemployment rate: 6.2% (2004)

Population below poverty line: 28.9% (2002)

Budget:

revenues: $837 million

expenditures: $837 million (FY08/09)

Inflation rate (consumer prices): 2.2% (2003)

Agriculture - products: fruit, vegetables, sorghum; Senepol cattle

Industries: tourism, petroleum refining, watch assembly, rum distilling, construction, pharmaceuticals, textiles, electronics

Electricity

production: 776.4 million kWh (2007 est.)

consumption: 722 million kWh (2007 est.)

exports: 0 kWh (2005)

imports: 0 kWh (2005)

Electricity - production by source:

fossil fuel: 100%

hydro: 0%

nuclear: 0%

other: 0% (1998)

Oil

production: 16,870 bbl/day (2009 est.)

consumption: 16,870 bbl/day (2009 est.)

exports: 388,000 bbl/day (2007 est.)

imports: 480,600 bbl/day (2007 est.)

Exports:

dollar amount: $4.234 billion (2001)

commodities: refined petroleum products

partners: US, Puerto Rico (2006)

Imports:

dollar amount: $4.609 billion (2001)

commodities: crude oil, foodstuffs, consumer goods, building materials

partners: US, Puerto Rico (2006)

Debt - external: $NA

Economic aid - recipient: $NA

Currency: 1 United States dollar (US$) = 100 cents

Exchange rates: US currency is used

Fiscal year: 1 October - 30 September