Aruba

Aruba occupies an unusual ecological niche for the Caribbean: an arid island. While most of the region experiences humid tropical climates, Aruba has desert conditions with just 17 inches of annual rainfall—less than evaporates. This xeric landscape, maintained by constant northeast trade winds, sets Aruba apart from its neighbors. More importantly, it lies outside the hurricane belt, giving the island a competitive advantage in an era of intensifying Caribbean storms.

This geographic differentiation enabled Aruba to build one of the Caribbean's most successful tourism economies. Over 2 million visitors arrive annually—80-85% from the United States—drawn to Eagle Beach (repeatedly voted world's best) and year-round temperatures stable at 82°F. Tourism dominates the economy, driving GDP growth of 13.7% in 2023 and 8.5% in 2024, though expansion is projected to slow to 1.3% in 2025.

Aruba's economic history shows boom-bust patterns beyond tourism. Oil refining was the primary industry until the mid-1980s, when the refinery closed. It has since reopened and shut repeatedly—most recently with a 2016 Citgo agreement to restart operations. The island also exports aloe, cultivated in its dry conditions. As one of four countries in the Kingdom of the Netherlands, Aruba maintains high living standards and low unemployment.

Diversification efforts now target cannabis/hemp cultivation, circular economy initiatives, technology, and financial services. With 108,880 residents (one-third of the Dutch Caribbean's population), Aruba tests whether a small island can sustain prosperity without the diversity that typically buffers against economic shocks. The hurricane-free position offers natural protection; the tourism monoculture does not.