Activity: Case study The economy of St. Kitts and Nevis uses scares resources to produce valuable commodities.
People on these islands produce goods and services which are then distributed to customers
through retail and other outlets. The good and services that are produced and distributed help to
satisfy many of the territory’s inhabitants.
Traditionally the main activity in the economy of St Kitts and Nevis revolved around the sugar
cane industry. Sugar cane was cultivated and harvested. It was then refined to sugar. Much of
this sugar was exported to other countries. However, as a result of falling world sugar prices, the
industry became less important.
In recent years the government of St Kitts and Nevis has sought to diversify the economy. New
industries that have been successful include offshore banking and tourism. Offshore banks are
places where people can keep their money without paying the they would need to pay at home.
To encourage tourism, hotels and restaurants have been developed on the islands as well as
watersports activity centers. the resources that are used in this industry include natural resources
such as sandy beaches and the ocean, physical resources such as buildings or watersports
equipment and human resources( the people who work in hotels and restaurants).
Hurricane have had a devasting effect on the economy of St Kitts and Nevis at different times.
Hurricanes affect the ability of the economic system to produce and distribute goods. They can
destroy wealth in the form of roads, buildings and people’s home.
QUESTIONS
1. Give two examples of resources that will be used in the offshore banking industry in St
Kitts and Nevis.
2. St Kitts and Nevis is described as an economy. What do you understand by this term?