Economic Activity

Economic Activity

Economic activity is simply anything that generates income for the country or a person and can be separated into 3 groups at the CSEC level, those are, primary, secondary and tertiary.

1. Primary Economic Activity

Primary economic activities involve extracting raw materials from the Earth, for example, mining for mineral ores, extracting and planting crops. Caribbean countries have various primary economic activities such as:

• Oil and gas extraction in Trinidad and Tobago for decades and recently established in Guyana.
• Fishing in Belize on a commercial scale and all Caribbean countries on a smaller scale.
• Forestry across the Caribbean with the most in Guyana.
• Bauxite extraction in Jamaica and Guyana.
• Agriculture across the Caribbean with the most being sugarcane production in Guyana. There is also banana production on some islands such as St. Vincent and St. Lucia.

2. Secondary Economic Activity

Secondary economic activities involve taking raw materials extracted in primary economic activities and refining them or manufacturing them into a new product adding value and use, for example, refining oil into petrol for cars or bottling water.

Some examples of secondary economic activities includes:

• Rum distillation, fermenting sugar cane molasses, in Guyana (Demerara Distillers Limited), Trinidad and Tobago (Trinidad Distillers Limited), Jamaica (Appleton Estate and Hampden Estate) and Barbados (West Indies Rum Distillery)
• Textile manufacturing in Jamaica and Trinidad & Tobago.
• Chemical production in Trinidad & Tobago and Jamaica.
• Food Processing in Trinidad & Tobago, for example, Kiss Baking Company, Sunshine Snacks, SM Jaleel & Company Limited.
• Cement Manufacturing in Trinidad & Tobago, Trinidad Cement Limited.

3. Tertiary Economic Activity

Tertiary economic activities refers to activities that offer services, for example, transportation, education, healthcare, etc. Examples of tertiary economic activities in the Caribbean include:

• Banking and Insurance services in all Caribbean countries
• Tourism is a major part of the economy of Caribbean islands such as Barbados, St. Lucia, Jamaica and more, offering various hospitality services like hotels, restaurants, entertainment and more.
• Educational services in all Caribbean countries, primary schools, secondary schools and universities such as, University of the West Indies with campuses in Mona - Jamaica, St. Augustine - Trinidad & Tobago, Cave Hill - Barbados, Five Islands - Antigua & Barbuda. Also international universities like St. George’s University in Grenada.

Factors Affecting the Location of Primary & Secondary resources in the Caribbean.

• Raw Materials - Transport cost vary by weight and distance therefore it makes more sense to locate primary and secondary industries near to their raw materials.

• Capital - Capital is required in terms of money as well as equipment to open up industries. Capital may come in the form of investments from financial institutions or government therefore some countries would be preferred locations to invest in.

• Accessibility - Products need to be transported therefore flat areas and river valleys form natural routes that make it easy to provide transport.

• Market - Just like raw materials, transport is involved in markets therefore the size and location of markets need to be factored in when choosing the location for setting up industries, to reduce transport cost of the product.

• Economies of scale - some locations may not be financially viable to set up Industries as larger areas can produce more in bulk and thus profit more.

• Labour - depending on the nature of the industry it may need to be located where there is a large amount of people available to work or a large amount of persons with specific skills for that industry.

• Government policy - Government provides subsidies and policies for setting up industries such as industrial estates allowing certain areas of land to be earmarked specifically for industrial activities, for example, Point Lisas Industrial Estate, located in central Trinidad.

Role of Economic Activity in the Caribbean

• Create Employment
• Generate income
• Generates foreign exchange
• Commerce/trade
• Adds to Gross Domestic Product

Location of Secondary Economic Activity

Below is a map showing the location of some secondary economic activities  in Trinidad. The syllabus requires you to be able to draw a sketch of one Caribbean country and locate at least 3 economic activities. The use of Trinidad below is just an example.

Spot an error? Fill out this form to inform us!