THE HERZFELD CARIBBEAN BASIN FUND, INC.

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The Herzfeld Caribbean Basin Fund, Inc.
Annual Report
June 30, 2000

THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
PO Box 161465
Miami, FL 33116
(305) 271-1900

INVESTMENT ADVISOR
HERZFELD / CUBA
a division of Thomas J. Herzfeld Advisors, Inc.
PO Box 161465
Miami, FL 33116
(305) 271-1900

TRANSFER AGENT & REGISTRAR
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
(617) 443-6870

CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, 5th Floor
Boston, MA 02116

COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Kaufman, Rossin & Co.
2699 South Bayshore Drive
Miami, FL 33133

The Herzfeld Caribbean Basin Fund's investment objective is long-term capital appreciation. To achieve its objective, the Fund invests in issuers that are likely, in the Advisor's view, to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin, which consist of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela. The fund invests at least 65% of its total assets in a broad range of securities of issuers including U.S.-based companies, which engage in substantial trade with and derive substantial revenue from operations in the
Caribbean Basin Countries.

Listed NASDAQ SmallCap Market
Symbol: CUBA

LETTER TO SHAREHOLDERS

August 10, 2000

Dear Fellow Shareholders:

For the fiscal year ended June 30, 2000, our net asset value and share price
declined 17.98% and 15.63%, respectively.

Most of the loss occurred in the period between March and June of 2000 as the
market in Mexico, the country in which we have our largest foreign investment,
moved lower. The Bolsa in Mexico, however, hit a yearly low in May, reversed
directions and rallied further after presidential elections at the beginning of
July.

Performance was also negatively affected by the sell-off in two of our larger
U.S. positions: Royal Caribbean Cruises Ltd. (RCL) and Carnival Corp. (CCL).
Cruise operators, in an effort to keep market share, over-built capacity. In an
attempt to fill berths, they were forced to discount fares, putting pressure on
profit margins. On the positive side, we are encouraged by what appears to be a
gradual but perceptible change in the U.S. government's attitude regarding Cuba.
We can make a better case now than we could last year that the restrictions on
travel are coming closer to being eased or eliminated. If travel restrictions
are changed, both RCL and CCL will be strong beneficiaries.

One of our smaller holdings, Trailer Bridge, Inc. (TRBR), is also eyeing
potential business in Cuba. The company, based in Jacksonville, Florida, is an
integrated trucking and marine freight carrier. Their vessels, which have
shallow drafts, are very suitable for operation in Cuban waters. We increased
our position in TRBR during the year.

PREMIUM/DISCOUNT

As in every year since the formation of the fund, our shares have traded at both
premiums and discounts to net asset value. The following is a chart of our
premium/discount from inception.



LARGEST ALLOCATIONS

The following tables present our largest investments and geographic allocations
as of June 30, 2000.

Daily net asset values and press releases on the Fund are available on the
internet at www.herzfeld.com.

I would like to take this time to thank the members of the Board of Directors
for their hard work and guidance and also to thank my fellow shareholders for
their continued support and suggestions.

Sincerely,


Thomas J. Herzfeld
Chairman of the Board and President


SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2000

Shares or
Principal Amount                             Description                                                                   Value

COMMON STOCKS - 100.01% of net assets

Banking and finance - 5.20%

Communications - 8.34%

Conglomerates - 3.70%

Construction and related - 6.09%

Consumer products and related manufacturing - 15.80%

Investment companies - 13.28%

Leisure - 7.66%

Medical - 1.70%

Railroad and landholdings - 28.10%

Retail - 0.10%

Trucking and marine freight - 3.36%

Utilities - 4.99%

Other - 1.69%

BONDS - 0% of net assets

See accompanying notes.

-----------------------------------
* Non-income producing

STATEMENT OF ASSETS AND LIABILITIES AS OF JUNE 30, 2000

Net assets consist of the following:

See accompanying notes.



STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2000

See accompanying notes.


STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2000 AND 1999

See accompanying notes.


FINANCIAL HIGHLIGHTS
YEARS ENDED JUNE 30, 1996 THROUGH 2000

See accompanying notes.


NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Related Matters
--------------------------------

The Herzfeld Caribbean Basin Fund, Inc. (the Fund) is a non-diversified,
closed-end management investment company incorporated under the laws of the
State of Maryland on March 10, 1992, and registered under the Investment Company
Act of 1940. The Fund commenced investing activities in January 1994. The Fund
is listed on the NASDAQ SmallCap Market and trades under the symbol "CUBA".

The Fund's investment objective is to obtain long-term capital appreciation. The
Fund pursues its objective by investing primarily in equity and equity-linked
securities of public and private companies, including U.S.-based companies, (i)
whose securities are traded principally on a stock exchange in a Caribbean Basin
Country or (ii) that have at least 50% of the value of their assets in a
Caribbean Basin Country or (iii) that derive at least 50% of their total revenue
from operations in a Caribbean Basin Country. The Fund's investment objective is
fundamental and may not be changed without the approval of a majority of the
Fund's outstanding voting securities.

The Fund's custodian and transfer agent is Investors Bank & Trust Company, based
in Boston, Massachusetts.

Security Valuation
------------------

Investments in securities traded on a national securities exchange (or reported
on the NASDAQ national market) are stated at the last reported sales price on
the day of valuation; other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are stated at the
last quoted bid price. Short-term notes are stated at amortized cost, which is
equivalent to value. Restricted securities and other securities for which
quotations are not readily available are valued at fair value as determined by
the Board of Directors.

Income Recognition
------------------

Security transactions are recorded on the trade date. Gains and losses on
securities sold are determined on the basis of identified cost. Dividend income
is recognized on the ex-dividend date, and interest income is recognized on an
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.

Deposits with Financial Institutions
------------------------------------

The Fund may, during the course of its operations, maintain account balances
with financial institutions in excess of federally insured limits.

Use of Estimates in the Preparation of Financial Statements
-----------------------------------------------------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Income Taxes
------------

The Fund qualifies as a "regulated investment company" and as such (and by
complying with the applicable provisions of the Internal Revenue Code of 1986,
as amended) is not subject to federal income tax on taxable income (including
realized capital gains) that is distributed to shareholders.

The Fund has adopted a June 30 year-end for federal income tax purposes.

Distributions to Shareholders
-----------------------------

Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.

NOTE 2. NON-MARKETABLE SECURITES OWNED

Investment in securities includes the following securities for which readily
ascertainable market values were not available:

$165,000 principal, 4.5%, 1977 Republic of Cuba bonds purchased for $63,038. The
bonds are listed on the New York Stock Exchange and had been trading in default
since 1960. A "regulatory halt" on trading was imposed by the New York Stock
Exchange in July, 1995. As of June 30, 2000 the position was valued at -0- by
the Board of Directors, which believes approximates the bonds' fair value.

1,918 shares of Buenos Aires Embotelladora S.A., an Argentine bottling company,
which were issued (at no cost) as part of a settlement for a class action suit
against Pepsi Cola Puerto Rico. Buenos Aires Embotelladora S.A. shares were
delisted from the New York Stock Exchange in May 1997. As of June 30, 2000, the
position was valued at $0.10 per share by the Board of Directors, which believes
approximates fair value.

NOTE 3. TRANSACTIONS WITH AFFILIATES

HERZFELD / CUBA (the Advisor), a division of Thomas J. Herzfeld Advisors, Inc.,
is the Fund's investment advisor and charges a monthly fee at the annual rate of
1.45% of the Fund's average monthly net assets.

During the year ended June 30, 2000, the Fund paid $8,128 of brokerage
commissions to Thomas J. Herzfeld & Co., Inc., an affiliate of the Advisor.

NOTE 4. INVESTMENT TRANSACTIONS

During the fiscal year ended June 30, 2000, purchases and sales of investment
securities were $1,032,424 and $943,036, respectively.

At June 30, 2000, the Fund's investment portfolio had gross unrealized gains of
$2,124,738 and gross unrealized losses of $1,629,340, resulting in a net
unrealized gain of $495,398.

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
The Herzfeld Caribbean Basin Fund, Inc.

We have audited the accompanying statement of assets and liabilities of The
Herzfeld Caribbean Basin Fund, Inc., including the schedule of investments, as
of June 30, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 2000, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of The
Herzfeld Caribbean Basin Fund, Inc. as of June 30, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.

Kaufman, Rossin & Co.

Miami, Florida
August 9, 2000

OFFICERS AND DIRECTORS

THOMAS J. HERZFELD
Chairman of the Board, President
and Portfolio Manager

CECILIA L. GONDOR-MORALES
Secretary, Treasurer and Director

ANN S. LIEFF
Director

KENNETH A.B. TRIPPE
Director

ALBERT L. WEINTRAUB
Director
 
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