The Caribbean

Australia-Caribbean Relations

Australia has friendly relations with the countries of the Caribbean that are largely based on shared historical, sporting, social and political ties, pursuit of common interest issues including effective action on climate change, as well as joint membership of the Commonwealth. Sporting ties include a shared love of cricket and netball, as well as participation in events such as the Commonwealth Games.  Economic relations are expanding from a modest base.

Australia maintains a diplomatic mission in the Caribbean in Port of Spain, Trinidad and Tobago.  Australia's High Commissioner to Trinidad and Tobago is also the Australian Ambassador to the Caribbean Community (CARICOM), and is accredited to Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines and Suriname.  The Australian High Commission also has consular responsibilities for Anguilla, Aruba, British Virgin Islands, Cayman Islands, French Guiana, Guadeloupe, Martinique, Montserrat, Netherlands Antilles and the Turks and Caicos Islands.  The Australian Embassy in Mexico City is responsible for Cuba and the Dominican Republic.

Regional Overview

The Caribbean region is approximately the size of eastern Australia and is generally taken to include the islands of the Greater Antilles (including Cuba, Haiti, Dominican Republic and Jamaica), the Lesser Antilles and Windward Islands (including Dominica, Grenada, St Kitts and Nevis, St Lucia, St Vincent and Grenadines, Antigua and Barbuda, Barbuda, Barbados and Trinidad and Tobago), Suriname and Guyana on the South American mainland, and Belize on the isthmus of Central America.  The islands are linked by a similar culture and history.  Guyana and Suriname are often included as part of the region as their outlook tends to be more Caribbean than Latin American, particularly with Guyana's cricket and Commonwealth links.  They are also members of CARICOM – the key regional institution.  Former colonial influences are reflected in the main languages: English, French, Spanish and Dutch and various Creoles of each.

Whilst the Caribbean countries vary considerably in their degree of economic development, many in the region also face similar challenges: susceptibility to natural disasters and extreme climate events, vulnerability to global economic changes, and in some places, poverty and high crime rates.

Regional Organisations at a Glance

The Caribbean states have made significant efforts to integrate their economies and increase their collective voting power in multilateral organisations.

The Caribbean Community (CARICOM) is the peak regional organisation.  It comprises 15 members and is predominately the English-speaking Caribbean plus Suriname and Haiti. CARICOM focuses on enhancing greater regional integration and establishment of a comprehensive single market economy.

Other key regional institutions include the Association of Caribbean States (ACS), and the Organisation of Eastern Caribbean States (OECS).  The ACS represents 25 members of the Greater Caribbean, including some Central and South American countries. It has broad aims of promoting regional cooperation and addressing regional issues such as sustainable tourism including preservation of the Caribbean Sea, disaster management, transport and trade.  The OECS is a sub-regional grouping of six eastern Caribbean countries and three UK dependent territories and is dedicated to economic integration and greater foreign policy harmonisation among members, protection of human and legal rights, and the promotion of good governance. 

Many Caribbean countries are also members of the network of Small Island Developing States, an initiative of the United Nations Development Program that helps to provide technical assistance and advice in areas including climate change adaptation and management of natural resources.

Economic overview

The economies of the Caribbean are strikingly diverse.  The GDP of several of the smaller islands (Dominica, Grenada, St Kitts & Nevis and St. Vincent & the Grenadines) is in the range of US$400 - US$900 million (2012).  The largest Caribbean economy, the Dominican Republic, has a population of approximately 10 million and a GDP around US$60 billion (2012).  Trinidad and Tobago, with a population of 1.3 million, is the leading Caribbean producer of oil and gas and has a GDP of approximately US$23 billion (2012).  In contrast, Haiti, which is ranked 158th in the world according to the Human Development Index (United Nations Development Programme, 2012), has a population of 10 million and a GDP around US$8 billion (2012).

More broadly, many Caribbean countries have experienced low or periodically negative Gross Domestic Product (GDP) growth since 2000, with more severe downturns concurrent with the global economic recessions in 2001-2 and 2009.  This economic environment, together with recurring extreme weather events and modest national incomes, has had a particularly adverse impact on some Caribbean economies.

Economic and Trade Policy Directions

Whilst the agriculture sector and tourism have traditionally accounted for significant employment and GDP growth, financial services and mining and resources investment have increasingly become leading contributors to economic growth as Caribbean countries respond to the need of diversifying their economies.  This has in part been in an effort to offset the vulnerabilities of small island states to fluxes in global economic activity and subsequent tourism flows.

CARICOM member states - with the exception of Haiti and the Bahamas – are party to the CARICOM Single Market and Economy (CSME), which is designed to strengthen foreign investment and enhance export opportunities for participating countries.  Key intended outcomes of the CSME include the free movement of goods, services, capital and people and a common trade policy.  It is also mandated to assist in the harmonisation of company and intellectual property laws as well as managing macro-economic issues including the coordination of exchange rate and interest rate policies.  These objectives are intended to stimulate long term economic development and improve living standards. 

There has been some media comment that taking forward the CSME has slowed in recent years.  Whilst the CARICOM Secretariat continues to progress the Single Market, Secretary-General Irwin LaRocque stated that despite this, 'implementation has not been at a pace some would have hoped to see'.  Notwithstanding, the CSME has been working to overcome the challenge of integrating 'Less Developed Countries' in the region, including OECS countries and Belize. At the 34th CARICOM meeting of the Council for Trade and Economic Development (COTED) in March 2012, the Council included an examination of factors currently restricting the full integration of Belize and the OECS into the CSME.

A separate but important dimension of the Caribbean's broad economic position is its membership of Petro-Caribe - with the exception of Barbados and Trinidad & Tobago. Established in 2005, Petro-Caribe is an alliance between Venezuela and 18 Caribbean and Central American states to purchase oil on conditions of preferential or deferred payment.  Where many Caribbean countries are small island economies and are net fuel imports, the Petro-Caribe scheme plays an important role in their energy security.   

Bilateral Relationship

Consistent with the Australian Government's commitment to strengthening relations with the Caribbean, the Government formally established relations with CARICOM through a Memorandum of Understanding signed by then Prime Minister Rudd, on 29 November 2009.  A centrepiece of the Government's enhanced ties with the region is a A$60 million, four year Development Assistance Partnership (2010 – 2014).  The MOU builds on areas of mutual interest including climate change and disaster risk reduction, economic resilience, and people-to-people and institutional linkages.

Australia's current aid engagement in the Caribbean offers a combination of region-wide benefits as well as some direct bilateral aid programs, totalling 37 initiatives in 15 countries. Aid implementation is primarily carried out through regional, CARICOM-endorsed organisations. Australia has also funded 48 development scholarships, 38 fellowships, 4 volunteers and training for 49 diplomats.

More information on Australia's development assistance to the Caribbean

The former Minister for Foreign Affairs and Trade, the Hon Stephen Smith MP, visited Dominica in May 2010 to address the thirteenth CARICOM meeting of Council for Foreign and Community Relations (COFCOR).  This was the first visit by an Australian Minister to Dominica and the first time an Australian Minister addressed the CARICOM COFCOR meeting.  Former Minister for Foreign Affairs, the Hon Kevin Rudd MP, continued this high-level engagement by attending the COFCOR meeting in St Kitts and Nevis in 2011.  Parliamentary Secretary for Pacific Island Affairs and Foreign Affairs, the Hon Richard Marles MP, visited the Caribbean region in January/February 2012 as well as Haiti in September 2012 and separately attended the COFCOR meeting in Suriname in May 2012.

In addition to Australian engagement at COFCOR, former Foreign Minister Rudd hosted Australia-CARICOM and Commonwealth and Small Island Developing States meeting, in the margins of CHOGM in Perth, in October 2011.  Australia's Global Ambassador for Women and Girls, Ms Penny Williams, visited Trinidad and Tobago in October 2012.

Economic and trade relationship

Whilst Australia-Caribbean two way trade is relatively low, with the balance generally in Australia's favour, it is growing modestly.  In 2011-12, Australia's total merchandise trade with member countries of the Caribbean Community (CARICOM) was valued at around A$59 million.  Australia's major exports to the Caribbean include meat (excluding beef) and cheese.  Australia's imports from the Caribbean include essential oils and perfumes and alcoholic beverages.  Trinidad and Tobago is Australia's major trading partner in the Caribbean with two-way merchandise trade around A$24 million in 2012 (exports A$18 million, imports A$6 million). Further information can be found at individual country fact sheets.

The Caribbean region is growing as a destination for Australian foreign direct investment.  While investment in the oil and gas sector by companies such as BHP Billiton accounts for a large proportion of the traditional direct investment, there is growing investment in other sectors such as aluminium-hulled fast sea vessels, patrol boats, mining sector services and manufacturing.

Export opportunities

Possible niche trade opportunities for Australian exporters include:

Mining and related services

Opportunities exist in the Bahamas, Barbados, Belize, Dominican Republic, Guyana, Haiti, Trinidad and Tobago and Suriname including in the offshore oil and gas sectors.

Fast ferries

There is scope for developing fast ferry services within the region, especially in the Eastern Caribbean as an alternative to expensive inter-island air transport.  The tourist sector generates a requirement for light water craft, including for leisure activities.

Tourism and related infrastructure

The economic backbone of many small Caribbean countries is tourism.  This creates opportunities for Australian companies in the area of resort development and management.  Tourist industry services, such as hospitality training, are another area of potential investment.

Food and beverage

The region imports processed food both for the domestic market and to cater for tourists visiting the region.  This generates demand for good quality international items such as cheese, meat and wine.

New technologies

These include construction, computers and computer accessories.  Deregulation of telecommunications sectors in the region and the upgrading of facilities offer opportunities in telecommunications hardware and software.

Power generation

The cost of traditional sources of power generation (ie petroleum products) is a major burden for Caribbean economies.  With an abundance of sun and wind, many of these countries enjoy something of a comparative advantage where alternative technologies for power generation are concerned.


There is a demand for education services, particularly tertiary education, outside the region which is currently largely met by the US and Canada.  Australian institutions are in a strong position to compete in this market.

Updated January 2013