Arubans - Economy

Subsistence and Tourism. Having scant natural resources of its own, Aruba has relied on oil refining and tourism as its main sources of income throughout the twentieth century. The government, the single largest employer on the island, has a payroll of approximately 5,000 persons. After the closure of the Lago refinery in 1985, the number of hotel rooms was more than doubled; a tripling is under way. The trade and construction sectors have expanded but are strongly dependent on tourism. The unemployment rate rose to nearly twenty percent after the closing of the refinery, but was less than 1 percent in the early 1990s. Of the total employed population of 29,220 persons in 1991, 10,604 worked in hotels, restaurants, and wholesale and retail companies. The construction and manufacturing sectors had 2,975 and 1,717 employees respectively.

The gross domestic product more than doubled between 1987 and 1992. Despite the economic recovery, serious concerns have arisen because of inflation and strains on the labor market, infrastructure, and the natural environment. Furthermore, the worsening competitive position in tourism, possible future claims on government guarantees of stalled hotel projects, and a recession in the United States add to the concern about future economic prospects.

Efforts to attract industry in the 1960s proved largely unsuccesful. After the closure of the Lago refinery in 1985, Coastal Oil Corporation renovated the remains of the old refinery and started operations in 1988. Oil transshipment is handled by Wickland Oil Company. Other industrial efforts are of minor importance. The construction sector, which largely depends on tourism and the need for housing and business offices, is booming.

Trade. Apart from oil refining and transshipment, trade is mainly directed toward tourism and local consumption. A free zone is becoming increasingly important because of revenues related to port charges and services. Some nine offshore companies have been established on Aruba.

Division of Labor. Labor participation of men and women between 20 and 54 is respectively 89.8 and 66.0 percent. All through the economy men possess the more important positions. An important division of labor is based on ethnicity. Naturalized citizens and permanent residents of Lebanese, Madeirean, Chinese, and Jewish descent focus mainly on trade. Post-1985 migrants from the Philippines, Colombia, and Venezuela, whose residency may be temporary, hold the lower positions in tourism. Women from Santo Domingo, Colombia, and Jamaica work as live-in maids with upper- and middle-class families. Young Dutch migrants work mostly in business, especially in bars and restaurants. Civil servants are drawn mostly from traditional Arubans and migrants who arrived during the oil-boom years.

Land Tenure. Since the decline of agriculture after the arrival of the oil industry in the 1920s, land tenure has been most important to the population for the construction of houses. Three types of land tenure occur: regular landed property, hereditary tenure or long lease, and the renting of government grounds. For economic purposes, especialy in the oil and tourism industries, government grounds are given in long, renewable leases of sixty years.