This article is on the economy

Economy

An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

 of the United States Virgin Islands

United States Virgin Islands

The Virgin Islands of the United States are a group of islands in the Caribbean that are an insular area of the United States. The islands are geographically part of the Virgin Islands archipelago and are located in the Leeward Islands of the Lesser Antilles.The U.S...

.

Economic history

During the slave days, the islands cultivated cash crop

Cash crop

In agriculture, a cash crop is a crop which is grown for profit.The term is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family...

s to earn money. When the African slave trade

African slave trade

Systems of servitude and slavery were common in many parts of Africa, as they were in much of the ancient world. In some African societies, the enslaved people were also indentured servants and fully integrated; in others, they were treated much worse...

 began in 1673, the difficult conditions and inhumane treatment slaves were subjected to bred discontent. In 1733, a long drought

Drought

A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...

 followed by a devastating hurricane pushed slaves in St. John

Saint John, U.S. Virgin Islands

Saint John is an island in the Caribbean Sea and a constituent district of the United States Virgin Islands , an unincorporated territory of the United States. St...

 to the breaking point. Members of the Akwamu

Akwamu

The Akwamu was a state set up by the Akan people in Ghana which existed in the 17th century and 18th century. Originally immigrating from Bono state, the founders settled in Twifo-Heman. The Akwamu created an expansionist empire in the 16th and 17th century...

 tribe from modern Ghana

Ghana

Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

 staged a massive rebellion, seizing control of the island for six months. The Danish, who controlled the island at that point, enlisted the help of French authorities from Martinique

Martinique

Martinique is an island in the eastern Caribbean Sea, with a land area of . Like Guadeloupe, it is an overseas region of France, consisting of a single overseas department. To the northwest lies Dominica, to the south St Lucia, and to the southeast Barbados...

 to regain control.

Another slave revolt in 1848 was more successful in the long run. The governor at the time, Peter von Scholten

Peter von Scholten

Peter Carl Frederik von Scholten was Governor-General of the Danish West Indies from 1827 to 1848. He was born in Vestervig, Thy, Denmark as the son of captain Casimir von Scholten and Catharina Elisabeth de Moldrup....

, felt enough sympathy for the slaves to grant them emancipation

Emancipation

Emancipation means the act of setting an individual or social group free or making equal to citizens in a political society.Emancipation may also refer to:* Emancipation , a champion Australian thoroughbred racehorse foaled in 1979...

, even though it was against the wishes of Danish Crown and devastated the economy of the islands. After the United States purchased the islands due to fear that if Denmark were conquered by Germany, Germany would attempt to take over Denmark's overseas dependencies. In 1917, a treaty was concluded in which the United States purchased the islands for $25,000,000.

The economy was boosted in the 1970s by two main developments: tourism and manufacturing.

The islands also receive cross-over subsidies

Cover-over subsidies

Cover-over subsidies are annual payments from the U.S. government to the U.S. Virgin Islands and Puerto Rico out of federal excise taxes. For example, when a bottle of rum is produced in either the Virgin Islands or Puerto Rico, and then sold in the United States, the federal excise tax on that...

, which generated approximately $100 million for the Virgin Islands in 2008.

Tourism

The tourism industry is the main industry, generating 80% of GDP and employment. The islands, every year, are visited by more than 1 million tourists, mainly by Americans and the most common way to get there is by sea. The tourism industry mostly employs those who have migrated to the U.S. Virgin Islands, as native Virgin Islanders are attracted to government jobs. In 2005, a record of 2.6 million visitors visited.

Manufacturing

This industry developed more in the 1970s especially on St. Croix. With the exception of rum

Rum

Rum is a distilled alcoholic beverage made from sugarcane by-products such as molasses, or directly from sugarcane juice, by a process of fermentation and distillation. The distillate, a clear liquid, is then usually aged in oak barrels...

 distilling from sugar, none of the industries owe their existence to the presence of natural resource

Natural resource

Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....

s. Instead, they depend of tax concessions and the financial advantages they derive from being a US territory. Near the airport is the site of a closed (December 2000) alumina factory which processed bauxite

Bauxite

Bauxite is an aluminium ore and is the main source of aluminium. This form of rock consists mostly of the minerals gibbsite Al3, boehmite γ-AlO, and diaspore α-AlO, in a mixture with the two iron oxides goethite and hematite, the clay mineral kaolinite, and small amounts of anatase TiO2...

 from Suriname

Suriname

Suriname , officially the Republic of Suriname , is a country in northern South America. It borders French Guiana to the east, Guyana to the west, Brazil to the south, and on the north by the Atlantic Ocean. Suriname was a former colony of the British and of the Dutch, and was previously known as...

 and West Africa

West Africa

West Africa or Western Africa is the westernmost region of the African continent. Geopolitically, the UN definition of Western Africa includes the following 16 countries and an area of approximately 5 million square km:-Flags of West Africa:...

. There is also an oil refinery

Oil refinery

An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...

 which produces 495000 oilbbl/d supplied by a fleet of tankers which take away all the refined products. There were a number of assembly plants, especially on St. Croix, which manufactured watches from overseas parts. However, this industry has significantly dwindled in recent years.

Economy overview

GDP:

GDP purchasing power parity: $1.577 billion (2004 est.)

GDP - real growth rate: 2% (2002 est.)

GDP - per capita (purchasing power parity): $14,500 (2004 est.)

GDP - composition by sector:

agriculture: 1%

industry: 19%

services: 80% (2003 est.)

Labor force:
49,820 (2007 est.)

Labor force - by occupation:

agriculture: 1%

industry: 19%

services: 80% (2003 est.)

Unemployment rate:
6.2% (2004)

Population below poverty line:
28.9% (2002)

Budget:

revenues: $837 million

expenditures: $837 million (FY08/09)

Inflation rate (consumer prices):
2.2% (2003)

Agriculture - products:
fruit

Fruit

In broad terms, a fruit is a structure of a plant that contains its seeds.The term has different meanings dependent on context. In non-technical usage, such as food preparation, fruit normally means the fleshy seed-associated structures of certain plants that are sweet and edible in the raw state,...

, vegetable

Vegetable

The noun vegetable usually means an edible plant or part of a plant other than a sweet fruit or seed. This typically means the leaf, stem, or root of a plant....

s, sorghum

Sorghum

Sorghum is a genus of numerous species of grasses, one of which is raised for grain and many of which are used as fodder plants either cultivated or as part of pasture. The plants are cultivated in warmer climates worldwide. Species are native to tropical and subtropical regions of all continents...

; Senepol cattle

Senepol

The Senepol breed of beef cattle were developed on the Caribbean Island of St. Croix from N'Dama cattle, imported in the late 19th century, by crossing with Red Poll cattle. The Senepol breed combines the N'Dama characteristics of heat tolerance and insect resistance with the docile nature, good...

Industries:
tourism, petroleum refining, watch assembly, rum distilling, construction, pharmaceuticals, textiles, electronics

Electricity

production: 776.4 million kWh (2007 est.)

consumption: 722 million kWh (2007 est.)

exports: 0 kWh (2005)

imports: 0 kWh (2005)

Electricity - production by source:

fossil fuel: 100%

hydro: 0%

nuclear: 0%

other: 0% (1998)

Oil

production: 16,870 bbl/day (2009 est.)

consumption: 16,870 bbl/day (2009 est.)

exports: 388,000 bbl/day (2007 est.)

imports: 480,600 bbl/day (2007 est.)

Exports:

dollar amount: $4.234 billion (2001)

commodities: refined petroleum products

partners: US, Puerto Rico (2006)

Imports:

dollar amount: $4.609 billion (2001)

commodities: crude oil, foodstuffs, consumer goods, building materials

partners: US, Puerto Rico (2006)

Debt - external:
$NA

Economic aid - recipient:
$NA

Currency:
1 United States dollar (US$) = 100 cents

Exchange rates:
US currency is used

Fiscal year:
1 October - 30 September