Discovered and claimed for Spain in 1499, Aruba was acquired by the Dutch in 1636. The island's economy has been dominated by three main industries. A 19th century gold rush was followed by prosperity brought on by the opening in 1924 of an oil refinery. The last decades of the 20th century saw a boom in the tourism industry. Aruba seceded from the Netherlands Antilles in 1986 and became a separate, autonomous member of the Kingdom of the Netherlands. Movement toward full independence was halted at Aruba's request in 1990.
Aruba is one of the Leeward Islands of the Lesser Antilles island chain in the Caribbean. It lies some 32 km from the northern coast of Venezuela. The island is 31 km long and 8 km wide, with a landmass of 180 km2. The climate is arid, with a mean temperature of 28u C (82u F), and rainfall averages 500 mm a year (falling mainly between October and January).
Aruba maintains strong economic, cultural, and political ties with its partners in the Kingdom of the Netherlands. Aruba was part of the Netherlands Antilles until 1986, when it became an autonomous country within the Kingdom of the Netherlands. The Queen of the Netherlands appoints the Governor of Aruba as her representative for a six-year term. The Aruba constitution provides for the election of 21 members of Parliament, headed by the Prime Minister. The Prime Minister’s Cabinet has six members. There are eight administrative districts, with the capital in Oranjestad.
In 2009, the real gross domestic product (GDP) was US$ 1.62 million. The per capita GDP (in purchasing power parity [PPP]) in 2009 was US$ 15,181 compared to US$ 16,657 in 2008. Aruba is characterized by an open economy, dependent on imports from and exports to other countries, as well as tourism, banking, and transportation (3). In 2010, the services sector, especially the tourism industry, represented the main economic activity (51.4% of GDP). Earnings from tourism amounted to US$ 1.2 billion in 2010, significantly contributing to the country’s social and economic development. Aruba experienced an economic recession in 2008 and 2009, triggered by the international economic crisis and the closing of the local oil refinery. The Aruban economy rebounded in 2011, with investment projects such as hotel construction and improvements in infrastructure, including the renovation of the hospital and the reopening of the refinery. Aruba has several providers of fixed, mobile, and Internet telecommunications. In 2010, 42% of the population used the Internet.
Tourism, petroleum bunkering, hospitality, and financial and business services are the mainstays of the small open Aruban economy. Tourism accounts for a majority of economic activity. As of 2014, over 1.7 million tourists visited Aruba annually, with the large majority of those from the US. The rapid growth of the tourism sector has resulted in a substantial expansion of other activities. Construction continues to boom, especially in the hotel sector.
Aruba is heavily dependent on imports and is making efforts to expand exports to achieve a more desirable trade balance. Almost all consumer and capital goods are imported, with the US, the Netherlands, and Panama being the major suppliers. In 2016, Citgo Petroleum Corporation, an indirect wholly owned subsidiary of Petroleos de Venezuela SA, and the government of Aruba signed an agreement to restart Valero Energy Corp.'s former 235,000-b/d refinery. Tourism and related industries have continued to grow, and the Aruban government is working to attract more diverse industries. Aruba's banking sector continues to be a strong sector; unemployment has significantly decreased.
It was agreed in 1999 that the Netherlands would gradually reduce the level of development aid paid to Aruba. The two countries further agreed that Aruba would become financially independent after a ten-year period. Until 2010, both countries deposited money into the Aruba Development Fund or FDA (Fondo Desaroyo Aruba). The Netherlands deposited almost EUR 100 million in the fund, and Aruba paid the comparable sum of AFL 180 million (1 euro = 2.3085 Aruban guilders). The final deposit was made in instalments. The Dutch deposit decreased every year, while the Aruban deposit increased annually.
The FDA paid for projects meant to improve government, education, law enforcement and government finances on Aruba. Various long-range programs have been set up for this purpose. The two countries concluded framework agreements on the long-range programmes at political level. The FDA’s board takes decisions on projects being carried out under the programmes, at the request of the Aruban government. The Netherlands is therefore not involved in the project details.
The Netherlands has ceased making payments into the FDA. In June 2010, the Netherlands and Aruba agreed that the money in the fund may be spent on a new long-range program. Until 2014, Aruba continued depositing funds in order to ensure that the original projects are implemented.
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