Economic and Social Problems in the Caribbean


Globalization has contributed significantly to unemployment in the Caribbean. With the removal trade barriers, some industries have not been able to compete globally. The lack adequate skills that are required for the new industrial paradigm for example, information technology skills have also contributed to the problem of unemployment.

A high level of unemployment among the young people of the Caribbean may   results in various social problems, as survival may depend on illegal activities.

Reasons for unemployment

-firms e.g. multinationals closing down

-lack of investment to create new businesses

-lack of skills training

Population density

Population density Refers to the average number of people living on every square kilo meter in a country. The formula used for calculating population density is:

Density of population
=  Total population

Area (sq. km.)

Very high population densities can indicate overpopulation.  This occurs when the facilities in a location, are not able to serve the number of persons in that location. This will cause heavy competition for jobs, schools, health facilities etc.


Caribbean people migrate to first world countries in search of opportunities such as employment and education.  When skilled and professional workers migrate, Caribbean countries may experience shortages in critical areas such as health care. Loss of skilled workers from industry will also retard growth and development. Social problems may arise when children are left in the care of grandparents and other relatives who have challenges to discipline them.

Debt burden

Many Caribbean countries have high debt- to-GDP ratios.  This ratio is the   amount of national debt of a country as a percentage of its Gross Domestic Product.  High debt-to-GDP can stifle an economy as a large portion of its GDP is consumed in debt payment and very little is left for investment in the economy. A very low debt- to- GDP ratio is desirable for economic growth and development.

Sourcing Capital and raw materials

While the Caribbean might be rich in certain natural resources such as bauxite, oil and gold the region lacks other very important resources such as capital and entrepreneurial skills. Capital is important as it increases production through the use of machinery, equipment and money invested. The spirit of entrepreneurship is necessary for the creation of new business ideas and entrepreneurship skills are important for the successful running of the businesses.

Economic dualism in the region

Economic dualism occurs in countries where there exist two opposite economic sectors. One sector is characterized by development, capital intensive industries, large scale farming and technological advancement, and the other sector is characterized by subsistence farming, labour intensive industries, handicraft industries and simple trading means of survival.

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