Many of North America's poorest countries are highly vulnerable to natural disasters such as hurricanes, volcanos, and extreme weather (droughts, floods)—which climate change models predict will occur more frequently as global warming increases. These events can create significant economic turmoil by demolishing infrastructure and public works, disrupting industries including tourism and agriculture (vital pillars of many Caribbean and Central American countries' economies), and straining public aid services to their breaking point.
The economic dependence of most Caribbean and Central American countries upon tourism and agriculture also made the COVID-19 pandemic tremendously disruptive. In most countries, pandemic-related lockdowns effectively eliminated tourism for months, and in many cases further prevented agricultural workers from harvesting and selling their crops. As a result, unemployment and poverty skyrocketed in many countries—often among population groups that were already struggling to remain above the poverty line.
Profiles of North America's poorest countries
1. Haiti
The poorest country in North America, Haiti is experiencing rapid population growth, which is outpacing the country's ability to provide for its current population. In January of 2010, Haiti was hit by a devastating earthquake, the biggest natural disaster in the country’s history, and the recovery is ongoing. Haiti has had a long history of slavery, revolution, deforestation, corruption, debt, and violence—all factors that have contributed to its political instability, poverty, and lack of infrastructure. The country ranked 170th out of 189 countries on the 2020 Human Development Index (HDI), and its growth is currently hindered by political instability and violence.
2. Nicaragua
Rural poverty is dominant in Nicaragua, the second-poorest country in North America. Factors contributing to the country’s high rate of poverty include natural disasters, political instability, and the lack of educational options. Frequent earthquakes, floods, and hurricanes often wipe out livestock, crops, schools, and homes, leaving families with nothing. However, the under-developed economy is seeing growth in areas including mining, manufacturing, and tourism, so the potential exists for Nicaragua to emerge from its poverty and provide a better quality of life for its citizens.
3. Honduras
More than 50% (and possibly as much as 66%) of Honduras’s roughly 10 million people live in poverty. Income inequality is also a significant hindrance, as is an ongoing lack of proper educational and health care systems. According to the World Bank, a Honduran child will grow to be only 48% as productive as they could be if they had enjoyed complete education and full health. However, the Honduran economy is growing rapidly—its GDP quadrupled between 2000 and 2019, posting the second-highest rate of growth among Latin American countries, so there is reason to believe that conditions in Honduras can improve.
4. El Salvador
The smallest country in Central America, El Salvador has a small elite population that became wealthy through the country’s coffee and sugar production. While a significant percentage of the population falls below the poverty line, that number gradually dropped from 39% in 2007 to 22.3% in 2019. Factors contributing to the country’s poverty include gangs and violence, a weak education system, and a high vulnerability to natural disasters (volcanos, earthquakes, floods, droughts, tropical storms)—however, the homicide rate fell from 103 per 100,000 people in 2015 to 20 per 100k in 2020, and additional government programs could greatly improve El Salvador's situation.
5. Belize
The GDP of this small Central American country more than doubled from 2000 to 2019—however, a rapidly growing tourism industry played a huge role in that growth, which led to a crushing economic contraction when the COVID-19 pandemic of 2020 shut down tourism for several months. While the tourism sector looks to recover quickly in the coming years, massive income inequality and the country's significant foreign debt remain areas of concern.
6. Guatemala
Guatemala has the largest economy in Central America, but nearly half of its 18 million citizens live below the poverty line and the country has the fourth-highest rate of chronic malnutrition in the world. Guatemala’s poverty has formed a sort of feedback loop in which the people are so poor that the government cannot collect enough revenue through taxes to improve infrastructure, public health and educational facilities, and other basic services (such as clean water). This, in turn, hinders economic growth that would help lift the people out of their poverty and increase tax revenues. Guatemala is, however, expected to recover quickly from the COVID-19 pandemic, and continued investment in its citizens could improve its future outlook.
7. Jamaica
The largest and most populous English-speaking country in the Caribbean, Jamaica is also one of the poorest countries in North America despite being considered an upper-middle-income country by the World Bank. Jamaica’s economy is unstable, slow, and weakened by low economic growth, high levels of public debt, and vulnerability to natural disasters such as hurricanes and flooding, which can wreak havoc with several sectors of the economy (tourism, agriculture) and public services.
Jamaica is also plagued with gang violence, high inflation rates, and high unemployment rates. The country also spends about half of its income on imported goods for basic necessities such as gasoline and food, increasing its deficit. However, an ambitious budget reform program launched in 2013 has seen massive reductions in both public debt and unemployment.
8. Dominican Republic
The Dominican Republic is in a much better financial state than its neighbor Haiti, with which it shares an island—although, as the 8th poorest country in North America, it clearly still has some distance to go. The Dominican Republic has seen significant economic growth over the past two decades, with a GDP that improved from 24 billion USD in 2000 to nearly 89 billion in 2019.
At that time, the DR was on track to become a [high-income country] by 2030, thanks to sound fiscal policies and strong growth in areas including tourism, mining, and telecommunications. However, the pandemic triggered a significant contraction in the country's economy, reversing much of its progress. Moving forward, the DR must work to manage its debt while also expanding public services, mitigating climate change, addressing population growth, and propping up a long-neglected agricultural sector.
9. Dominica
This diminutive island country continues to feel the impact of 2017's Hurricane Maria, which wiped out nearly 90% of Dominica's infrastructure. The cost of rebuilding the electrical grid, public water services, and other utilities is straining the country's public resources budget, leaving little to spend on enhancements to the medical and educational sectors. Dominica's economy is heavily dependent upon the export of bananas, its only major crop, which leaves the country particularly vulnerable to fluctuations in growing conditions and/or the banana trade.
10. Saint Vincent and the Grenadines
This Caribbean island country has high rates of poverty, as well as high rates of unemployment and underemployment due to trade difficulty. Like Dominica, Saint Vincent and the Grenadines has an economy which is primarily reliant on teh growth and export of bananas. As such, diversification and expansion of the economy would greatly help stabilize the country's economy and cash flow.
In addition to weathering the COVID-19 pandemic, Saint Vincent had to endure the April 2021 eruption of La Soufrière volcano, which devastated the island's infrastructure and banana groves, causing damage equal to 23% of the country's 2021 GDP. The blast also displaced more than 20,000 people, some of whom lived in shelters for months.
11. Mexico
The third-largest country in North America, Mexico boasts an area of nearly two million square kilometers (approx. 760,000 square miles) and a 2022 population of more than 131 million people. Mexico's economy is vast but has been stagnant for some time, managing only minimal growth despite Mexico being one of the NAFTA (North American Free Trade Agreement) countries since 1994.
However, World Bank believes the country has an opportunity to improve its economic standing by supporting new businesses, striving to assist and include women and migrants—two groups that are frequently marginalized in the current economy—and establishing protections against climate change and natural disasters.
12. Saint Lucia
Saint Lucia’s poor infrastructure leaves many people without electricity, safe water, and usable roads. This constrains people’s access to education, health care, and other communities, which in turn limits the industries in which they can find employment. One industry upon which the country is quite reliant, tourism, was very negatively impacted by the COVID-19 pandemic, a setback from which the country is not projected to fully recover until 2024-25.
Saint Lucia is also ill-prepared to guard against natural disasters, which tend to have a disproportionately harmful impact upon the poor. Moreover, the Saint Lucian government's own financial difficulties often render it unable to provide proper resources for those facing poverty. Economic expansion is the key to alleviating poverty in Saint Lucia, specifically growing the agriculture and light manufacturing industries.
13. Grenada
With an economy based largely upon tourism, the three-island Caribbean country of Grenada is yet another nation whose GDP fell precipitously during the pandemic-related lockdowns of 2020. Grenada's second major industry, agriculture, is highly vulnerable to the effects of climate change, such as drought, pests, changing growing conditions, and natural disasters. In more positive news, the country has managed to pay down a good portion of its national debt in recent years. The COVID-19 pandemic proved devastating to Grenada, with some sources estimating that the country would reach 48% unemployment during the height of the pandemic.
