The first known settlers of the islands were the Caiquetios, a tribe of peaceful Arawak Indians. They survived principally on fish and shellfish and collected salt from the Charoma saltpan to barter with their mainland neighbours for supplements to their diet. There are remains of Indian villages on Curaçao at Westpunt, San Juan, de Savaan and Santa Barbara, and on Aruba near Hooiberg. The Arawaks in this area had escaped attack by the Caribs but soon after the arrival of the Spaniards most were transported from Curaçao to work on Hispaniola. Although some were later repatriated, more fled when the Dutch arrived. The remainder were absorbed into the black or white population, so that by 1795, only five full-blooded Indians were to be found on Curaçao. On Aruba and Bonaire the Indians maintained their identity until about the end of the 19th century, but there were no full-blooded Indians left by the 20th century.
The islands were encountered in 1499 by a Spaniard, Alonso de Ojeda, accompanied by the Italian, Amerigo Vespucci and the Spanish cartographer Juan de la Cosa. The Spanish retained control over the islands throughout the 16th century, but because there was no gold, they were declared ‘useless islands’. After 1621, the Dutch became frequent visitors looking for wood and salt and later for a military foothold. Curaçao’s strategic position between Pernambuco and New Amsterdam within the Caribbean setting made it a prime target. In 1634, a Dutch fleet took Curaçao, then in 1636 they took Bonaire, which was inhabited by a few cattle and six Indians, and Aruba which the Spanish and Indians evacuated. Curaçao became important as a trading post and as a base for excursions against the Spanish. After 1654, Dutch refugees from Brazil brought sugar technology, but the crop was abandoned by 1688 because of the dry climate. About this time citrus fruits were introduced, and salt remained a valuable commodity. Much of Curaçao’s wealth came from the slave trade. From 1639-1778 thousands of slaves were brought to Willemstad, and sold to the mainland and other colonies. The Dutch brought half a million slaves to the Caribbean, most of which went through Curaçao.
Wars between England and the Netherlands in the second half of the 17th century led to skirmishes and conquests in the Caribbean. The Peace of Nijmegen in 1678 gave the Dutch Aruba, Curaçao, Bonaire and the three smaller islands in the Leeward group, St Eustatius, Saba and half of St Martin. Further conflicts in Europe and the Americas in the 18th century led to Curaçao becoming a meeting place for pirates, American rebels, Dutch merchants, Spaniards and Creoles from the mainland. In 1800 the English took Curaçao but withdrew in 1803. They occupied it again from 1807 until 1816 (when Dutch rule was restored), during which time it was declared a free port. From 1828 to 1845, all Dutch West Indian colonies were governed from Surinam. In 1845 the Dutch Leeward Islands were joined to Willemstad in one colonial unit called Curaçao and Dependencies. The economy was still based on commerce, much of it with Venezuela, and there was a ship building industry, some phosphate mining and the salt pans.
In the 20th century oil was discovered in Venezuela and the Dutch-British Shell Oil Company set up a refinery on Curaçao because of its political stability, its port facilities and its better climate. The Second World War was another turning point as demand for oil soared and British, French and later US forces were stationed on the islands. The German invasion of Holland encouraged Dutch companies to transfer their assets to the Netherlands Antilles leading to the birth of the offshore financial centre.
Bonaire’s economy is heavily dependent on tourism, with small operations for solar salt mining, oil trans-shipment and radio communications industry. Cargill Corporation, the world’s largest private company, operates the salt industry, which benefits so greatly from the constant sunshine (with air temperatures averaging 27°C and water 26°C), scant rainfall, and refreshing trade winds. A shrimp farm started operations in 1999; Sea Hatch Bonaire is near Sorobon and offers tours.
Tourism is specialized and most visitors are divers. The USA is the largest single market, followed by the Netherlands, Venezuela and Germany. Accommodation for tourists is split fairly evenly between hotels and condominiums or villas, amounting to about 1,100 rooms and still growing. Financial assistance for the development of tourism has been provided by the EU and Holland, which have financed the expansion of the airport and development of other infrastructure.
Curaçao has a more diversified economy than the other islands, yet even so, it suffered severe recession in the 1980s and unemployment is around 13% of the labour force. The major industry is the oil refinery dating back to 1917, now one of the largest in the world, to which the island’s fortunes and prosperity are tied. Imports of crude oil and petroleum products make up two-thirds of total imports, while exports of the same are 95% of total exports. That prosperity was placed under threat when Shell pulled out of the refinery in 1985, but the operation was saved when the island government purchased the plant, and leased it to Venezuela for US$11 mn a year. Despite the need for a US$270 mn reconstruction, principally to reduce pollution, the Venezuelan company, PDVSA, signed a 20-year lease agreement which came into effect in 1995, ending its previous system of short-term operating leases. Bunkering has also become an important segment of the economy, and the terminal at Bullenbaai is one of the largest bunkering ports in the world. The island’s extensive trade makes it a port of call for a great many shipping lines.
Coral reefs surrounding the island, constant sunshine, a mean temperature of 27°C (81°F), lure visitors. Curaçao used to be a destination for tourists from Venezuela, but a devaluation of the bolívar in 1983 caused numbers to drop by 70% in just one year. A restructuring of the industry has led to a change of emphasis towards attracting US and European tourists, as well as South Americans, and numbers have now increased. Cruise visitor numbers have been boosted by the arrival of the megaship Rhapsody of the Seas, which carries 2,000 and calls 26 times a year. The single largest market for visitors to Curaçao is Holland, with 30% of stayover arrivals, followed by the USA with 15% and Venezuela with 14%. Diving has been promoted and Curaçao now registers about 10,000 visiting divers a year.A major foreign currency earner, the offshore financial sector, is seeking new areas of business, including captive insurance and mutual funds, in a highly competitive market.
Gold was discovered in 1825, but the mine ceased to be economic in 1916. In 1929, black gold brought real prosperity to Aruba when Lago Oil and Transport Co, a subsidiary of Exxon, built a refinery at San Nicolas at the east end of the island. At that time it was the largest refinery in the world, employing over 8,000 people. In March 1985 Exxon closed the refinery, a serious shock for the Aruban economy, and one which the Government has striven to overcome. In 1989, Coastal Oil of Texas signed an agreement with the Government to reopen part of the refinery by 1991, with an initial capacity of 150,000 barrels a day, but despite plans to increase it, present capacity is only about 140,000 b/d.
The economic crisis of 1985 forced the Government to turn to the IMF for help. The fund recommended that Aruba promote tourism and increase the number of hotel rooms by 50%. The Government decided, however, to triple hotel capacity to 6,000 rooms, which it was estimated would provide employment for 20% of the population. In 1995 the opening of the Marriott raised the total to 6,626 rooms in hotels, a figure which had risen to 7,103 by 1996. Total employment in tourism absorbs 35% of the workforce. The economy is dependent on tourism for income and in 2000 combined stayover and cruise ship passengers exceeded 1 million for the first time with more than 25 cruise lines visiting each month and even more airlines adding Aruba to their routes from the USA.
Efforts are being made to diversify away from a single source of revenues into areas such as re-exporting through the free trade zone, and offshore finance. Aruba is still dependent on the Netherlands for budget support and aims to reduce financial assistance.
Unemployment is rare on Aruba and labour is imported for large projects such as the refinery and construction work. The Government is encouraging skilled Arubans to return from Holland but is hampered by a housing shortage.