The Economy of Grenada

The economy on Grenada is recovering from troubled times


Grenada's Economy
 

Although Grenada is home to a largely agricultural economy, the island has recently made efforts to branch out into tourism. Unfortunately, this caused many problems for the island in the wake of several devastating hurricanes in the region.

Agricultural Past

Though the first crop grown on Grenada was sugarcane, a forward-thinking adviser to King George III changed the course of this small country's history by suggesting the introduction of nutmeg and other spices after sugarcane crop failures.

Nutmeg immediately brought importance to this tiny trio of islands, and their economy has been based on agriculture ever since. Nutmeg and cocoa are the two most important island crops, but mace, bananas, and other fruits and vegetables are also popular. Banana production has declined in recent years.

Maps

The islands' production of nutmeg was particularly important because of its proximity to Europe. Grenada became the closest producer of nutmeg to Europe, diverting much of the imports that had come from the Dutch East Indies. Even now, Grenada is one of the world's top producers of this popular spice.

Branching Out

Grenada had a brief flirtation with Communism in the late 1970s and early 1980s, but began exploring other options for revenue when the Caribbean's popularity as a vacation destination began to rise. Education and tourism are both growing in importance on Grenada.

Tourism has also brought increase in construction employment as workers build hotels and restaurants. This economic diversification proved important in helping the islands survive a hit from Hurricane Ivan in 2004. Many non-agricultural workers were able to find employment in reconstructing such locations after the devastation.

A chocolate factory was also recently built on Grenada. This factory makes use of cocoa on site, and provides a different type of employment for islanders. These changes are especially important as external pressure caused the island to decrease its banana exportation.

It has been very important for Grenada that they are a part of both CARICOM (Caribbean Community and Common Market) and the Eastern Caribbean Currency Union (ECCU), meaning that the island uses the Eastern Caribbean Dollar. Much of the islands' trade is with other CARICOM members. Grenada also trades with the U.S., the UK, Germany, and the Netherlands.

Though Grenada has experienced setbacks in recent years, its economy is growing overall. The country's expansion from an agricultural economy to one focused on service is important to its economic future.

 

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