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 Unites States purchased the islands for $25,000,000.

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

Tourism

The tourism industry is the main industry, 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. A high percentage of locals are in tourism which include hotel workers, taxi drivers, restaurateurs, etc. Some people are worried that tourism is attracting young people to do agriclutural activities. In 2005, a record of 2.6 million visitors visited. Now the island has been seen on B.E.T..

The USVI participates in the Powerball lottery game, in addition to 29 states and the District of Columbia. Also, unlike almost all of the US, the legal drinking age is 18.

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 located 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 convert|495000|oilbbl/d|m3/d supplied by a fleet of tankers which take away all the refined products. Elsewhere, there are a number of assembly plants which make watches from parts made in Japan. These, together, with woolen textiles and light industrial products, are sold on the American mainland. 19 % of the labor force is engaged in this industry.

Economy - overview:

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.)

Population below poverty line:28.9% (2002)

Household income or consumption by percentage share:
"lowest 10%:"NA%
"highest 10%:"NA%

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

Labor force:43,980 (2004 est.)

Labor force - by occupation:agriculture 1%, industry 19%, services 80% (2003 est.)

Unemployment rate:6.2% (2004)

Budget:
"revenues:"$364.4 million
"expenditures:"$749 million, including capital expenditures of $NA (2006 est.)

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

Industrial production growth rate:NA%

Electricity - production:996.1 million kWh (2005)

Electricity - production by source:
"fossil fuel:"100%
"hydro:"0%
"nuclear:"0%
"other:"0% (1998)

Electricity - consumption:926.4 million kWh (2005)

Electricity - exports:0 kWh (2005)

Electricity - imports:0 kWh (2005)

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

Exports:$4.234 billion (2001)

Exports - commodities:refined petroleum products

Exports - partners:US, Puerto Rico (2006)

Imports:$4.609 billion (2001)

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

Imports - 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