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Much of the land is under cultivation, with bananas, coconuts, citrus fruits and cocoa as the main produce. The banana industry, which is the country's main export earner, was threatened in the late 1990s following a dispute between the European Union (which is the main market) and the USA over preferential access: the World Trade Organisation has ruled in favour of the USA and the consequences for Dominica may be very serious. This will give added urgency to the Government's efforts to diversify the country's economic base and improve the condition of the basic infrastructure whose inadequacies have so far only inhibited that plan. At present there is a little light industry producing vegetable oil, canned juices, cigarettes, soap and other consumer goods largely for domestic consumption. In the service sector, tourism developed rather more slowly in Dominica than elsewhere in the Caribbean (mostly because of the lack of an international airport) but has become a vital component of the economy. In recent years, the government has been trying to promote an offshore financial services industry. Dominica is a member of the Caribbean economic bloc CARICOM and of the Organisation of East Caribbean States. Substantial overseas aid is provided by the USA, the UK and the EU. The island's largest trading partners are the UK, the USA, Canada and Japan; Barbados and Guadeloupe are the largest within the Caribbean region.

The President is head of state and, in conjunction with a Cabinet, has executive power. The legislature is the unicameral House of Assembly, to which nine members are nominated and 21 elected by universal adult suffrage. Executive power is vested in the Prime Minister who is the leader of the majority in the House.