Bonaire's economy: a tourist island paid in dollars

What Bonaire lived on before the divers came

For most of its recorded history Bonaire earned from salt, livestock and a few dryland crops. The government plantation that ran the island until 1868 produced salt, goat meat, chalk and wood, and the private owners who bought the land at auction added aloe, charcoal and divi-divi pods for leather tanning. Britannica describes farming on the island as feeding local consumption only, and the last exports of aloe and goats left in 1973 and 1970. Of the fourteen large lots the government sold in 1868 and 1870, nine were for salt, and the Wikipedia article notes that only salt was ever economically attractive on the island.

Salt survived. Production resumed in 1966, when the Antilles International Salt Company expanded and modernised the old southern pans, and the works are now run by Cargill. Seawater is let into a chain of shallow ponds in the flat south and evaporated by sun and wind into crystals, which are washed, piled in white pyramids and loaded at the company's own pier for buyers in North America, Europe and the western Pacific, most of it for industrial use. The salt works covered 3,700 hectares in 2018.

Oil came in 1975, when the Bonaire Petroleum Corporation opened a storage and transshipment terminal. The Wikipedia article describes it as wholly owned by the Venezuelan state oil company PDVSA, storing crude and refined oil from Venezuela and from the refineries on Curaçao and Aruba. A fire at the terminal in 2010 is believed to have damaged the neighbouring Goto Lake and at least one other lagoon. The article gives the main pier room for tankers of up to 500,000 deadweight tonnes.

How tourism became Bonaire's main business

A report in 1956 suggested tourism could become Bonaire's main source of income, and the island's first hotel had already opened in the former internment barracks after the war. What made the trade was the reef. It starts at the shore along the sheltered west coast, so divers can walk into it, and the whole coastline has been a marine park since 1979. The Wikipedia article reports 89 named dive sites in STINAPA's own count, and licence plates on the island carry the words Diver's Paradise.

Statistics Netherlands counted 131,000 tourists arriving on Bonaire by air in 2013 and 157,800 in 2019. The pandemic cut the figure to 66,000 in 2020, and it recovered to 173,200 in 2022 and 171,100 in 2023. The Tourism Corporation Bonaire reported 182,181 stay-over visitors in 2024, of whom 45% came from the Netherlands, 25% from the United States and 13% from Curaçao, staying an average of 9.8 nights. Repeat visitors made up 56% of arrivals, and visitors spent an estimated 1.76 million nights on the island in 2024. December 2024 brought 19,522 arrivals, the most of any month that year, after JetBlue began flying to Bonaire from New York in November.

Cruise ships add day visitors: 457,800 passengers in 2019, 176,100 in 2020, 56,700 in 2021 and 392,100 in 2023. Statistics Netherlands notes that the major cruise lines do not call at Sint Eustatius or Saba, and tourism by air on those two islands is small: 5,800 visitors to Sint Eustatius and 5,700 to Saba in 2023, both still below their numbers of 2019.

How much of the economy that makes depends on the definition. The Chamber of Commerce cites the Statistics Netherlands study Trends in the Caribbean Netherlands 2019 for a tourism share of about 38.4% of the economy, and in the chamber's own survey of 2020, 42% of businesses said they worked in tourism. In the narrower national accounts for 2021, a pandemic year, accommodation and food services made 8.9% of value added. Since July 2022 visitors have paid a visitor entry tax per person, collected by the public body of Bonaire, which replaced the old room tax and car rental tax.

What the official figures show for the three islands

Statistics Netherlands has been responsible for the islands' statistics since the reform of 2010. In 2021 Bonaire's gross domestic product was 583 million US dollars, Sint Eustatius's 107 million and Saba's 46 million. Per inhabitant that was 26,300 dollars on Bonaire, 33,400 on Sint Eustatius and 24,000 on Saba in 2021, figures the agency warns are not corrected for differences in what a dollar buys.

The growth paths split after 2013. Taking 2013 as 100, Bonaire's volume of output stood at 152.2 in 2022, Saba's at 106.7 and Sint Eustatius's at 65.2. Bonaire's economy contracted by 8.4% in 2020 and grew by 11.7% in 2021 and 8.8% in 2022, driven in that last year by hotels, restaurants and recreation as tourists returned and by a 5.3% rise in the island's population.

The table shows what tourism leaves in other columns. Statistics Netherlands notes that it lifts business services through car hire and travel agents, and trade through shops and supermarkets, which did well in 2022 as visitor numbers and population rose together. Real estate added 17.5% in volume in 2022 as many building lots were sold. Construction fell back by 6.9% that year, but its value added was still more than 50% above the level of 2017, and public administration grew by 17.1% as the government took on more staff.

Why Sint Eustatius and Saba earn differently

Sint Eustatius depends on a few large, wholly foreign-owned businesses whose output is exported and tied to demand for oil storage in the region; the Wikipedia article names the oil terminal of GTI Statia as the island's largest private employer, after the government. Statistics Netherlands puts the fall in the island's output from 2017 to 2022 at 35%, from 142 million to 92 million dollars in 2017 prices, and lists the reasons in order: damage from Hurricane Irma, weaker demand for oil storage from 2019, the pandemic in 2020 and a further drop in foreign demand in 2022. Because the terminal's profits go abroad, they count in the island's GDP but barely in its national income; what stays is wages.

Saba's economy is smaller and steadier. Its growth in 2022, 1.5%, came mostly from public administration, which added jobs, while tourism by air, 4,900 visitors that year, remained well below the 8,800 of 2019. The Saba University School of Medicine, a for-profit school in The Bottom founded by American expatriates in coordination with the Dutch government, adds more than 400 residents by the Wikipedia count to an island that had 2,158 people on 1 January 2025. Saba lace, a drawn-thread needlework made by the island's women since the late 19th century, is still sold.

Where the islands get their power and water

Each island makes its own electricity, and each has moved part of it from diesel to renewables. Bonaire's twelve wind turbines on the northeast coast began operating in 2010, and the Wikipedia article credits them with 40 to 45% of the island's electricity. Drinking water on Bonaire comes from a government desalination plant.

Sint Eustatius produced all its electricity with diesel generators until 2016. A solar park opened in March 2016 and was extended in November 2017 to 4.1 megawatts with 5.9 megawatt-hours of batteries, and on sunny days the generators are switched off from 9 in the morning to 8 at night. Saba opened solar parks at Hell's Gate and The Bottom in 2019, which with their batteries can carry the whole island for up to ten hours a day; its diesel plant still supplied about 60% of demand in the Wikipedia account. Fuel on all three islands is imported, so the cost of electricity follows the world oil price.

How the dollar and the tax system work

Until 1 January 2011 all three islands used the Netherlands Antillean guilder, pegged for decades at 1.79 to the US dollar. They then switched to the dollar, not the euro used in the European Netherlands, because, in the Wikipedia account, tourism and trade in the region run largely in dollars. Statistics Netherlands records that prices rose relatively fast in the years after the change, which it attributes in part to the many systems replaced in a short time, tax, customs, health care and social security among them, and in part to the switch of currency; oil and food prices and unrest in Venezuela also played a part.

Taking 2011 as 100, consumer prices on Bonaire stood at 129.1 in 2024, against 126.1 on Sint Eustatius and 129.3 on Saba. Inflation on Bonaire reached 10% in 2022, against around 2% in most years. The Chamber of Commerce summarises the separate tax regime for businesses as a profit tax of 0%, a dividend tax of 5% and a wage tax of 30.4%, with a property tax on top, all set by Dutch law for the Caribbean Netherlands and different from the European Dutch rates.

Why work does not lift everyone out of poverty

Bonaire has jobs. Unemployment fell from 6% in 2012 to 2% in 2024, and net labour force participation was 73% in 2022, slightly above the European Dutch rate. Incomes have not kept pace with prices. The median standardised disposable income on Bonaire was 19,500 dollars in 2022, and the 20% of households with the highest incomes in the Caribbean Netherlands received seven to nine times as much as the lowest 20%, against 4.1 times in the European Netherlands. A quarter of children on Bonaire were at risk of poverty in 2022, and 20% of residents said in 2021 that they had difficulty making ends meet.

Housing and food are where it shows. The historian Anne van Mourik writes that wealthier arrivals from the Netherlands have pushed up house prices since 2010, and that food is expensive because most of it is imported, much of it from the Netherlands. Statistics Netherlands counted 16.5% of Bonaire's residents in 2024 as born in the European Netherlands, up from 11.3% in 2011.

In October 2023 the House of Representatives voted by a large majority to introduce a social minimum on the three islands from 1 July 2024. A commission and the budget institute Nibud had found that a single parent with two children on Bonaire fell about two-thirds short of the income needed to live, and that most people in poverty were in work. The members who moved the vote said about 11,000 of some 30,000 islanders lived in poverty. The minimum wage rose in 2024, and from 1 January 2025 it was 10.35 dollars an hour on Bonaire, with a full state pension of 1,525 dollars a month and child benefit of 231 dollars per child, according to the National Office for the Caribbean Netherlands. Employers on Bonaire had argued for a smaller rise, saying a large one would hurt businesses.