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The Economy of Curacao

Unlike many islands in the Caribbean, Curacao's economy relies on oil, not tourism


The Economy of Curaçao
 

Curacao maintains a small economy that has very close bonds with other places in the world. The island imports most if its consumer and capital goods from the United States and Venezuela, creating ties that are crucial for Curacao's economic success.

Past Economics

The first Europeans to land on Curaao thought that the island was worthless because it had very little gold or fresh water. The scarcity of fresh water meant that establishing large scale plantations and farms would be quite difficult. Thus, settling on Curacao would not generate the kind of profits that were being made on other Caribbean islands. The Spanish explorers who arrived on Curacao around the early 16th century eventually abandoned the island, and the Dutch West India Company laid claim to it in 1634.

After the Dutch forces established control over Curacao, Governor Peter Stuyvesant started building plantations and landhuizens, which accommodated several forms of agriculture including fruits, maize, and peanuts. But the colonists soon discovered that salt mining was more profitable and began drying salt from the island's saline ponds.

In the following years, commerce became the primary activity of Curacao's economy. The Dutch merchants turned Curacao into one of the most important trading centers in the Caribbean. The island's favorable location and excellent harbors, which were open to all commerce, made Curacao a superb place for merchant ships to come ashore and conduct their business. With trade and shipping booming, Curacao's economy soared for a while. But when slavery on the island ended around 1863, the island's economy suffered drastic hardships and experienced a slow period in commercial activity.

Present Economics

Curacao's economic fortune changed when oil was discovered off of the coast of Venezuela in 1920. The island became one of the centers for distilling crude oil. The industrial development of Curacao took off with Royal Dutch Shell Refinery, which became the island's biggest employer and business. Migrant workers from all over the world, some from as far away as Asia, came to work at Curacao's oil refinery.

Curacao's present economy relies on the transshipment of petroleum, tourism, and offshore finances. Curacao has become more modern in recent years, and the island has expanded its infrastructure. The country's oil refining company is still a major business, and represents about 90 percent of Curacao's exports. When a significant drop in the price of oil hit the island's economy hard in the 1980s, Curacao leased the oil refinery to a Venezuelan oil company. As an added bonus, the Venezuelan company provides the island with fresh water, which helps out with agriculture.

Curacao's capital city, Willemsted, has experienced tremendous growth since World War II. The tourism industry on Curacao continues to grow. The island's cruise ship tourism has seen increasing traffic. The first modern cruise ship called on Curacao's port around 1901, and passengers flocked to the island's great prices. Since then it has become a popular destination among cruise lines. About 200 cruise ships visit the island's port of call yearly, and approximately 240,000 tourists vacation on Curacao each year.

 

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