America Should Re-Colonize the Caribbean
America's best economic opportunity sits 90 minutes south, and we're ignoring it so we don't offend anyone.
By any sensible estimate, Singapore should not exist. When it gained independence in 1965—first from Britain, then from Malaysia in a messy divorce—it wasn't much of a country at all. Three million people crammed onto one swampy corner of an island. A city-state, at best, with no natural resources, surrounded by larger neighbors who ranged from unhelpful to hostile. By every conventional measure, Singapore was doomed to irrelevance from the outset. Instead, it became one of the world's wealthiest nations—the kind of place where serious money goes to stay, a manufacturing powerhouse that propelled its citizens to a level of prosperity that would make most Americans envious. That transformation wasn't magic or luck. It was a calculated bet on three things: attracting capital, enforcing competent governance, and becoming indispensable. Singapore invited investment, hardened its infrastructure, and made itself the one place in Southeast Asia where contracts actually meant something. And, it worked spectacularly.
But it wasn't just Singapore betting on itself—America was betting on Singapore too. This was 1965, the depth of the Cold War, with dominoes supposedly falling across Southeast Asia. Washington desperately needed a capitalist success story in the region, something to prove that free markets could deliver prosperity faster than Mao's little red book. So we made Singapore a deal: naval access for us, defense guarantees for them, and most crucially, a direct pipeline to American markets and manufacturers. Companies like Hewlett-Packard and Texas Instruments didn't just stumble onto that swampy island—they were nudged there by a State Department that understood economic power better than it understood the Viet Cong. This wasn't colonialism in any traditional sense, but it wasn't charity either. It was strategic partnership disguised as economic development, and it worked because both sides got what they wanted.
Closer to home, it was a different story. The Caribbean faced the same Cold War pressures—Castro had already proven that Moscow's reach extended well into our backyard, complete with nuclear missiles. But America didn't need another capitalist showcase in the Western Hemisphere; we were the showcase. We just needed the region nuclear (and Soviet) free, so we focused on military bases and CIA operations rather than development partnerships and industrial policy. Meanwhile, Caribbean nations emerging from colonialism made their own choices—electing populists who promised socialist-style transformation without the capital or state capacity to even temporarily deliver it. The combination was lethal: American neglect met Caribbean socialism, scaring away investment while destroying local economic incentives. A complete and totally tragic waste, because the Caribbean's fundamentals were spectacular.
The region sits next to the largest consumer market in history. Its ports command the Panama Canal and Gulf Stream routes—the very arteries of global trade. Its islands speak English, French, and Spanish, making them culturally proximate to the United States and politically aligned with the West. On paper, the Caribbean had more natural advantages than Singapore ever possessed. It could have been the Singapore of the Americas, only better. Instead, it got fifty years of stagnant growth, brain drain, and persistent dependence on remittances.
Why didn’t the Caribbean develop as Singapore did? The familiar explanation is colonialism, slavery, and racial trauma. That's not wrong. These were extractive plantation economies designed to funnel sugar, coffee, and gold into European ports. Wealth was owned abroad. Institutions were thin. Elites were insulated and self-serving. But a bad inheritance is not unique. India was a colony. Brazil was a colony. Singapore itself was a colony. America was a colony. Colonialism explains the bad starting hand. It does not explain why some countries overcame it while others are still justifying economic failure half a century later. This from a region that overthrew their colonial rulers, and proudly seized independence for themselves. Kudos to them.
The real story is policy—and debt. Many Caribbean nations started independence already saddled with obligations to pay their former colonizers for the privilege of emancipation, a particularly disgusting form of extraction that continued well after formal independence. Facing extreme inequality and economic dependency inherited from plantation systems, post-independence governments turned to socialism and import substitution—understandable responses to genuinely desperate circumstances, but ultimately unaffordable experiments. They borrowed even more heavily in the 1970s when money was cheap, then collapsed into debt crises when interest rates spiked in the 1980s. Capital fled. The best-educated did too. When liberalization finally came in the 1990s, the wave of global industrialization had already moved on, but the debt stayed behind. The Caribbean missed the 1960s window and retreated into the only two models that remained: hotels and hedge funds. Neither builds a diversified economy or a middle class.
While it’s oversimplistic to discuss “the Caribbean” in monolithic terms—a region with a great diversity of cultures, histories, and ambitions—what they share is much more important: fantastic fundamentals for industrialization. Fundamentals which never actually went away. Caribbean labor is cheap relative to the United States. Transit times to Miami and New York are measured in days, not weeks, and the Panama Canal links not only to Los Angeles, but to all of East Asia. Corporate tax rates are already minimal or nonexistent. Deep-water ports dot the islands. All the geography that made Singapore viable is present in the Caribbean—arguably in better form. What's missing is the single variable investors actually price: risk premiums. Hurricanes, weak courts, and political volatility keep the Caribbean's cost of capital in the twelve to sixteen percent range. The exact same project in Panama or Singapore finances at seven to nine. That spread kills investor returns, and it kills investment. It isn't culture or history or colonial legacy holding the region back. It's the cost of capital—it is too expensive to finance these otherwise lucrative projects.
The fix is almost obvious. We just de-risk private investment. We can build hurricane-proof special economic zones with Cat-5-rated shells, modular microgrids, and on-site desalination. There's no invention needed. What we really need is standardization, so insurers and reinsurers can price them like domestic aircraft hangars rather than despotic passion projects. Layer on a parametric insurance pool that pays out within days after a storm. Bolt on U.S.-equivalent contract enforcement and regulatory pre-clearance so exporters can sell into North American markets without friction. Suddenly the risk premium collapses. The cost of capital drops. Projects that never penciled suddenly throw mid-teens returns. The geography hasn’t changed. The history hasn’t changed. The math has. That's all it takes.
Call it "neo-colonialism" if you like, but the model isn't exploitative—it's partnership. The U.S. provides legal credibility, capital, and market access. Caribbean states provide geography, labor, and port facilities. Returns are distributed, not extracted. The Caribbean finally gets a sponsor with both money and long-term commitment. America gets near-shored supply chains and strategic leverage in its own hemisphere. Monroe gets his doctrine. Investors get their yield. Everyone wins.
This isn't theory. We already know the playbook: hardened SEZs, normalized insurance pools, regulatory equivalence agreements. Singapore proved it works. What's been missing is treating the Caribbean as a strategic partner rather than a charity case. Washington sees a 1980s security concern—keep the Soviets out, mission accomplished. Wall Street sees vacation resorts and tax havens. Meanwhile, a structural arbitrage sits untapped: world-class geography with third-world financing. The fundamentals are all there—competitive labor, strategic ports, favorable tax treatment—but stranded by risk calculation. De-risk the investment, and the returns flow for everyone.
The payoff can't be overstated. Caribbean workers would get stable, modern, industrial jobs instead of seasonal service gigs. Caribbean governments would diversify their revenue base beyond hotel occupancy taxes and offshore registries. The U.S. would secure resilient supply chains with our neighbors, two to four days by sea from Miami, instead of three weeks from our adversaries in Shenzhen. Migration pressures would ease as locals found viable careers and genuine economic opportunity at home. Investors would capture high returns on geography that has been mispriced for half a century. Local governments would develop a tax-base that can begin to afford its promises. And strategically, the United States would plant a “Singapore of the Americas” right on the Panama Canal corridor.
The optics will be messy. Critics will call it colonization, as though the word itself is a totem against mutual profit. But colonialism was coercive. This is the opposite. Colonialism took resources out and left instability behind. This model brings capital in, stabilizes institutions, and creates durable economic, and social, returns for both sides. It is not about control. It’s about capital allocation. And the truth is: if America doesn’t do it, China eventually will. The Belt and Road model has already shown Beijing’s appetite for debt traps structured as port deals, special zones, and long-horizon infrastructure in underdeveloped states. The only reason they haven’t made the Caribbean a priority is because Washington still claims dominion in its backyard. But backyards only matter if you actually take care of them.
Singapore should not exist, but it does—because we took a bet that credible institutions plus geography could compound into global significance. The Caribbean would be even better. The math works. The only question is whether America is willing to treat it as an investment partner, instead of a vacation spot.