Dominica is a fully independent member of the British Commonwealth. The single chamber House of Assembly has 31 members: 21 elected by the constituencies, nine Senators appointed by the President on the advice of the Prime Minister and Leader of the Opposition, and the Attorney-General. The Prime Minister and Leader of the Opposition also nominate the President, currently Vernon Shaw, who holds office for five years.
Owing to the difficulty of the terrain, only about a quarter of the island is cultivated. Nevertheless, it is self-sufficient in fruit and vegetables and agriculture contributes about 20% to gross domestic product. The main products are bananas (the principal export), coconuts (most of which are used in soap and cooking oil production), grapefruit, limes and other citrus fruits. Bananas were badly hit by Hurricane Hugo in 1989 when over 70% of the crop was damaged and by Hurricane Luis in 1995 when 95% of the crop was lost. The opening up of the European market in 1992 affected Dominica’s banana industry. Together with the other Windward Islands producers it has to compete with the large exporters from the US dollar areas, mainly in Latin America. Prices paid to local farmers have fallen because they are unable to match the economies of scale found in Latin America. The number of banana farmers has fallen from 4,366 in 1995 to 2,534 in 1999 while banana exports declined from 28,602 tonnes in 1998 to 27,264 tonnes in 1999. Other crops are under development, such as coffee, cocoa, mango, citrus and root crops such as dasheen, which are being promoted to diversify away from bananas. There is a very successful aqua culture project, prawn farming.
Manufacturing industry is small but takes advantage of locally-generated hydroelectricity. Under pressure to purchase Caribbean products for their cruise ships, Royal Caribbean Cruise Lines buys 3 mn bars of soap a year from Dominica Coconut Products (DCP), Dominica’s largest business. In 1995, Colgate Palmolive, the US transnational company, acquired a controlling interest in DCP. Labour intensive electronic assembly plants and clothing manufacturing are being encouraged for their foreign exchange earnings potential, while data processing is also growing. There is a large pool of labour for garment production which attracts manufacturers, but they often move on to other areas when their duty-free concessions expire, usually after 10 years.
Tourism is being promoted with the emphasis officially on nature tourism. After a sluggish start in the early 1990s because of the world slowdown, arrivals jumped by 7.3% in 1993, 11.3% in 1994 and 5.4% in 1995 to reach a total of 68,838 in that year. Since then total stayover visitor arrivals have remained steady at around 74,000. The authorities claim they do not wish to jeopardize the ‘Nature Island’ image, but concern has been expressed by conservationists over damage to the environment. In 1997 the government entered an agreement with Green Globe, the environmental division of the World Travel and Tourism Council, to develop Dominica as a ‘model ecotourism destination’. The three-year programme will provide technical expertise in environmental management and promote Dominica through an international network of environmentally responsive travel companies. The aim is for the development of sustainable long-term tourism projects. Meanwhile, the island’s hotel capacity continues to expand. Several new hotels and expansions of existing facilities are planned, to raise visitor numbers to 148,000 by 2004, with investments from Canada, Sweden and other foreign sources. A jetty for cruise ships, with related facilities, has been built at Prince Rupert Bay and in 1995, 267 cruise ship calls were made, compared with 40 in 1990, having shown steady growth each year. In Phase Two of the Roseau Seawall and Bay Front Development Project, a dedicated cruise ship berth was finished in 1995, which has further increased passenger numbers. A jetty for the high speed ferries between Dominica, Martinique and Guadeloupe (French funding) was built in 1995, damaged by the hurricane and since repaired. Also completed in 1996 on the bayfront is a fish landing and processing plant (Japanese funding). Construction is also under way to strengthen sea defences north and south of Roseau.
There is controversy over the Government’s decision in 1992 to grant economic citizenship to investors; the first to be granted passports all came from Taiwan. By the end of 1994 615 people had been granted economic citizenship; they paid US$7.1 mn into an escrow account, of which US$5.4 mn was withdrawn to buy shares in a linked hotel company. Since then there has been a surge of interest from Eastern Europe, and in 1999 it was reported that 300 Russians had bought passports, for US$50,000 each. The US State Department expressed concern about money laundering and Canada arrested a group of Chinese-Dominicans on suspicion of running a smuggling operation.
The mining industry also became a controversial issue in 1996, when the House of Assembly passed a bill vesting all mineral rights in the government, whether on public or privately owned land. Soon afterwards, BHP Minerals International of Australia, began drilling in northeast Dominica to establish the extent of copper deposits there. The Dominica Conservation Association demanded an environmental impact study before any commercial mining took place and effectively halted proceedings.
In 1997 the first offshore banks were registered in a bid to increase fee income from abroad. Legislation was prepared for international shipping registration, offshore trust companies and exempt insurance companies. Six internet gambling companies were also granted operating licences. International Business Companies (IBC) can be formed over the internet and the Government has chosen to follow the British Virgin Islands model for registration because it does not require such demanding regulatory work or supervision as the Barbados model, which needs a double taxation treaty.