The most southerly of the Windward Islands, Grenada also includes the southern Grenadine islands of Carriacou and Petite Martinique. It is the world's second-largest nutmeg producer. One of the seven members of the OECS, Grenada became a focus of international attention in 1983 when the USA, with token backing from several Caribbean states, mounted an invasion to sever its growing links with Castro's Cuba.

Most Grenadians are descendants of Africans brought over to work sugar plantations in the 16th to 19th centuries. Intermarriage between this group and the small numbers of Europeans and indigenous Amerindians has meant that there is little racial tension. As in other Caribbean states, extended families with absentee fathers are not uncommon.

Strengths

Second-largest producer of nutmeg after Indonesia. Important sectors are tourism, cocoa, bananas, construction, and financial services.

Weaknesses

Weak tax base, lack of diversification. Poor infrastructure. Low productivity. Large avoidance of customs duties. Smuggling.

The past 25 years have seen Grenada move from a position of political isolation toward integration with the rest of the region. The late Sir Eric Gairy, when prime minister, was as well known for his eccentric requests to the UN Security Council – he once asked it to investigate UFOs on the island – as for his intimidation of political opponents by means of organized gangs. Gairy was overthrown in 1979 by armed militants of the New Jewel Movement led by Maurice Bishop, a charismatic socialist who in turn was deposed and executed by former allies in 1983. This coup was the pretext for the US invasion, the primary motive of which was to end the perceived Cuban influence in Grenada.

A new government was elected in 1984, and the USA provided large amounts of aid. Politics has since been center-right, and there is little to choose ideologically between the parties. The NNP, led by Keith Mitchell, gained power in 1995, and went on to achieve an unparalleled victory over a divided opposition in the early general election held in January 1999, taking all 15 seats. Mitchell promised "explosive" growth and lower unemployment.

Priorities are the relations with the rest of the Windward Islands group, access to the EU for bananas, and strategies with Indonesia aimed at steadying world nutmeg prices. Since 1983, it has supported US policy in the Caribbean.

The People's Revolutionary Army, created by Maurice Bishop in the wake of his 1979 coup, was replaced in 1983 by a paramilitary defense unit trained by the USA and the UK.

Grenada has no strategic resources and has to import most of its energy. The major asset is Grenadian nutmeg, which is highly prized for its quality, but production levels fluctuate.

Tourism threatens some key environmental sites, including a remnant of rainforest. Resort projects have caused serious beach erosion, in turn requiring costly coastal defenses. An environmental levy on visitors is opposed by cruise companies.

Roads in the interior are poor. Catamarans provide the fastest link between Grenada and Carriacou.

After 1979, Cuban physicians provided a basic health care system. There are free weekly clinics in each district, and treatment in subsidized state hospitals now matches the Caribbean average. In 1999 Cuba began its promised expansion of the general hospital.

Education follows the former British selective 11-plus system. Many students go on to the University of the West Indies, or to college in the USA.

The doubling of poverty during the 1990s and high unemployment have contributed to a rising crime rate. Narcotics trafficking is also a growing problem. However, while there is street crime, the level of violence is low.

Wealth disparities in Grenada are less marked than in most Caribbean states, but poverty is growing. The wealthiest groups are those in control of the nutmeg trade.

Tourism has developed since the 1984 completion of the international airport, though there has been a concurrent decline in the arrival of cruise ships; the Crown Dynasty company folded in 1999, with a major impact on tourist numbers.

A French colony from 1650, Grenada was captured by the British in 1762.

• 1951 Universal suffrage introduced.
• 1967–1974 Internal self-government. Full independence from the UK.
• 1979 Coup. Maurice Bishop prime minister. Growing links with Cuba.
• 1983 US invasion establishes pro-US administration.
• 1999 NNP reelected, taking all 15 seats in House of Representatives.