When the Spanish first discovered Aruba, they thought it was worthless - a small island off the coast of Venezuela that was mostly desert and didn't appear to have any significant natural resources. Later, the Dutch would find that appearances can be deceiving, as Aruba's economy is flourishing today.
It wasn't until 1824, long after the Dutch had taken control of the island, that gold was discovered and then mined vigorously. This caused Aruba's economy to skyrocket, and the boom lasted until 1916, when the gold supply dwindled and mining ceased to be prosperous.
The slump was short-lived, however, due to Aruba's proximity to oil-rich Venezuela. In 1929, the promise of black gold replaced the prosperity of yellow gold when Exxon completed what was then the largest oil refinery and storage facility in the world near the town of San Nicolas: the Lago Oil and Transport Company. Shortly after, the Eagle Oil Refinery was completed on the western side of the island, and oil drove Aruba's economy for the next several decades. Tourism began to play a minor role in the late 1950's when the Capital City of Oranjestad became a port of call for Caribbean cruise ships, just in time for the dismantling of the Eagle Oil Refinery. The tourism industry was first limited to cruise ship visits but sprang up quickly, and in 1959 the first luxury hotel opened in Aruba.
Aruba's economy prospered as tourism began to grow and the oil industry continued to produce through the Lago Refinery. In 1985, Exxon closed the refinery due to a reduced worldwide demand for oil, and Aruba quickly made the decision to direct its economy toward tourism. In 1986, decades of resentment - due to its place beneath the authority of Curaçao in the Netherlands Antilles - came to a head when Aruba separated from the other five islands and became a singular entity within the Kingdom of the Netherlands. The governing body has supported the creation of hotels and many other tourist-oriented industries, offering fiscal incentives to those looking to start tourist-oriented businesses. The transition has been successful, and over the last 15 years Aruba has seen steady and rapid growth in the tourism industry. Hotel capacity on the island is now five times what it was in 1985. This, in turn, has had a tremendously beneficial affect on the construction and food service industries.
In 1991, the Coastal Oil Company bought the Lago Oil Refinery facility and reopened it on a smaller scale, bringing oil back into play in Aruba's economy. At one time, there were plans in the works for Aruba to achieve complete independence, but setbacks due to the closing of gold mines and oil refineries, among other things, caused problems with autonomy; in 1996 those plans were finally put to rest. Aruba's economy took another hit after September 11, 2001, when terrorist attacks damaged the economy of the U.S. - and subsequently the world - and discouraged air travel.
Tourism is still the mainstay of the Aruban economy today, accounting for 30 percent of the island's income. Oil refining and storage and offshore banking are also important industries. Most of the island's employment is in wholesale and retail trade and repair, followed by jobs in hotels, restaurants, and oil refining. Poor soil quality and low rainfall limit agricultural productivity to the cultivation of aloes, some livestock, and fishing. At one time, Aruba provided a large percentage of the world's supply of aloe. The export commodities of live animals, animal products, arts and collectibles, machinery, and electrical and transport equipment contribute to Aruba's economy to a lesser degree. The island's relatively small labor force has an unemployment rate of less than one percent, which has led to a large number of unfilled jobs, despite steep rises in wage rates in recent years. Despite the job vacancies, tourism and related industries have continued to grow at a breathtaking pace; so rapidly, in fact, that the government has recently instituted a one-year moratorium on the construction of new hotels and the establishment of new tourism corporations. During that time, the government will work to attract new businesses in fields such as technology, finance, and communications in an effort to round out Aruba's economy and make it more resilient to possible future slumps in tourism. The government of Aruba is constantly looking for ways to make the island more prosperous and self-reliant, and it shows in the dynamic way Aruba has ridden the waves of change and prospered through many different economic climates.
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