Aruba has once again secured first place as the most attractive investment climate in the Caribbean, marking its third consecutive year since the start of the Caribbean Investment Climate Index in 2021. Among the Caribbean countries assessed, Aruba stands out with the most robust recovery within the region. The 2022 ranking heavily reflected the impact of the COVID-19 crisis on investment climates. However, the 2023 ranking focuses on recovery and clearly identifies the countries that have rebounded strongly from the crisis and those that are lagging. Aruba’s remarkable recovery surpasses that of all other countries in the index, a testament to its exceptional performance.
By 2022, Aruba had successfully restored its gross domestic product (GDP) to pre-pandemic levels (2019), with a projected steady growth trajectory in the upcoming years. Aruba’s economic resilience is attributed to its open economy, while its strong institutional foundation provides a solid structural basis. Furthermore, Aruba’s relatively high debt-to-GDP ratio is swiftly declining, driven by robust growth and lower borrowing rates compared to other Caribbean nations. Aruba can further enhance its investment climate and strengthen its ranking by implementing proposed reforms to the business environment outlined in the ‘Landenpakket’. Additionally, reducing public debt and enhancing the functionality of the local capital market would further strengthen the island’s investment climate.
The Caribbean Investment Climate Index (CICI)
Since 2021, the Economisch Bureau Amsterdam (EBA) has been publishing the Caribbean Investment Climate Index (CICI). This index evaluates the investment attractiveness of countries across the Caribbean region. Attracting foreign investors is crucial due to the relatively small size of most Caribbean economies, limited access to international capital, and the import dependence of many Caribbean nations. The CICI comprises 18 indicators encompassing institutional, economic, and financial factors that influence a Caribbean country’s appeal to investors. Examples of these indicators include the rule of law, regulatory quality, openness of the economy, economic growth, interest rates, and government debt.