The Economy of the U.S. Virgin Islands
The Economy of the US Virgin Islands
The Virgin Islands are an archipelago and a United States territory in the Caribbean Sea. The territory's economy is dominated by the sectors of tourism, trade and other services which account for almost 60% of the island's GDP and nearly half of the region's total local employment. The US Virgin Islands is visited by about two million tourists every year. The government of the Virgin Islands is the number one source of employment in the region. Most of the territory's food is imported as its agricultural sector is small. Watch assembly, rum distilling, pharmaceuticals, and electronics are some of the primary fields in the manufacturing sector. The production of rum is a paramount activity in the Virgin Islands and around 8,136.6 million gallons were exported during the 2016 fiscal year.
Tourism
Tourism in the US Virgin Islands is the primary industry, which generates a sizeable amount of the GDP and income to the islands' employees. In 2013, almost 3 million tourists visit the US Virgin Islands most of who arrive on cruise ships. Around 93% of tourists come from other areas of the United States. The industry is projected to grow with the number of tourists increasing in 2017.
Manufacturing and Other Sectors
During the 1970s, the manufacturing industries in the US Virgin Islands were significantly established, particularly on the island of St. Croix. Most of the territory's industries rely on the financial advantages and tax concessions they get from being a United States territory. The Hovensa oil refinery was the biggest service employer. However, the refinery was closed down in February 2012. Before its closure, Hovensa produced about 495,000 barrels of oil on a daily basis. The closure had an enormous negative impact on the territory's economy as 2,200 people became unemployed. The overall economy and GDP decreased as of 2012, along with a 50% decrement in manufacturing employment. However, other sectors such as rum exports, services, and trade continue to hold the region's economy.
