ABSTRACT
The generally adverse economic conditions prevailing in the Caribbean had their recent origin in the recession which gripped the advanced countries at the beginning of the decade. The colonial economic model in the Caribbean is also characterized by the coexistence of a modern export sector—on the larger islands, complemented by import substitution industries—with a highly fragmented domestic-oriented sector. In 1974 a large balance of payments deficit instigated by the oil price hike and a fall in exports marked the beginning of its history of severe economic difficulties. The relative performance of Caribbean economies depends on the composition and fate of their export sector as well as on government economic policies. The chapter examines in more detail the specific sectoral trends contributing to the economic crisis. Cuba was thus partly shielded from the adverse international economic conditions of the early 1980s. Cuba and Puerto Rico differ in significant ways from the other Caribbean countries with respect to their external debt.
