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Economy
Economy
Aruba enjoys one of the highest standards of living in the Caribbean region; the low unemployment rate is also positive for Aruba.
About three quarters of the Aruban gross national product is earned through tourism or related activities.
Most of the tourists are from Venezuela and the United States (predominately from eastern and southern states), Aruba's largest trading partner.
Before the "Status Aparte", (a separate completely autonomous country/state within the Kingdom), oil processing was the dominant industry in Aruba despite expansion of the tourism sector.
Today, the influence of the oil processing business is minimal.
The size of the agriculture and manufacturing sectors also remains minimal.
The G.D.P.
per capita for Aruba is calculated to be $23,831 in 2007; among the highest in the Caribbean and the Americas.
Deficit spending has been a staple in Aruba's history, and modestly high inflation has been present as well.
Recent efforts at tightening monetary policy are correcting this and will have its first balanced budget in 2009.
Aruba receives some development aid from the Dutch government each year, which will cease in 2009 as part of a deal (signed as "Aruba's Financial Independence") in which the Netherlands gradually reduces its financial help to the island each successive year.
The Aruban florin is pegged to the United States dollar, with a fixed exchange rate where 1.79 Florin equals 1 U.S.
dollar.
In most stores near Oranjestad, the exchange rate is 1.75 florin equals U.S 1 dollar .
In 2006 the Aruban government has also changed several tax laws in order to further reduce the deficit.
Direct taxes have been converted to indirect taxes as proposed by the IMF.
A 3% tax has been introduced on sales and services, while income taxes have been lowered and revenue taxes for business reduced with 20%.
The government compensated workers with 3.1% for the effect that the B.B.O.
would have on the inflation for 2007.
The inflation on Aruba in 2007 was 8,7%.
Aruba has the third largest seawater desalinization plant in the world after Saudi Arabia and Curaçao.[citation needed] .
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Source: CIA Factbook, Wikipedia
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