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The decline in the US economy could have far reaching effects on the Caribbean.
One area that's most likely to feel the pinch is remittances: money sent home by Caribbean immigrants working in the United States .
The dollar’s steady decline means that they are working longer hours and having to dig deeper into their wallets.
Last year US immigrant workers, including those from the Caribbean, sent home just over 42 billion dollars, the most from any country.
Tough times ahead
However, some experts fear that a nationwide housing slump in the United States will further slow growth and push the dollar to new lows, making it even harder for US based workers to continue extending their lifeline to family members abroad.
Dr Clairemont Kirton, Head of Economics at the University of the West Indies at Mona in Jamaica, says the Caribbean is experiencing mixed fortunes as a result of the weakening dollar.
“In countries like Trinidad, Guyana and Jamaica where their exchange rates are flexible and there’s a tendency for devaluation against the US dollar, then for a time they’ll be getting more local currency.”
This, he said, was unlike the situation in the countries of the Organisation of Eastern Caribbean States (OECS) and Barbados, whose currency is tied to the dollar.
He however reminded that the rate of local inflation could also have an effect.
Jamaica not yet feeling the pinch
Jamaica is the largest recipient of remittances in the English-speaking Caribbean.
Up to November 2007 it received 1.8 billion dollars, accounting for 75 percent of all remittances in CARICOM last year.
Dr Kirton says the US economic slump has not yet impacted on the remittances being sent to Jamaica.
He said this is due to people already committing to sending money home.
"Even if there’s a problem, we are not yet seeing it in the Jamaican data.”
Estimates put global remittances at about 300 billion dollars, three times the amount of that rich nations give in aid to developing countries.
But economists say the real amount is almost certainly higher and impossible to calculate, since migrant workers often send money through informal channels to cut costs.
bbc.com
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