"This Island's Small Open Caribbean Economy"
As a visitor to the island you are
likely concerned about whether the Barbados economy is a stable one.
Well not only is it a stable one but it is also a thriving
Barbados has one of the most
economies in the Caribbean region. It has traditionally relied upon the
production of Barbados
sugar, rum and molasses. However tourism has now
become the main source of income for this island. Offshore banking and
financial services have also grown in importance as sources of foreign
exchange and have significantly benefited the economy of Barbados.
Other industries which currently contribute to the economy in Barbados
include light manufacturing and component assembly.
The 1970s saw a period of economic growth but the late 1980s and early
1990s was a time of recession caused by problems in the Barbados
sugar industry and a downturn in tourism. The government
of Barbados had to approach the International Monetary Fund
for assistance in 1992. Since that time the situation has
improved and the economy has grown steadily.
There was a brief shrinking of the
in the wake of 9/11 and the associated global decline in tourism in
2001. This is due to the fact that Barbados
Barbadian dollar, is tied to the US dollar. However economic
growth returned in 2004.
Inflation in Barbados is around 5%,
unemployment rate is approximately 10% and this country has a
relatively high per-capita income.
Due to the island's size and small number of natural resources,
Barbados is heavily dependent on imports for the supply of essential
goods. Nearly half the land is agricultural and we grow sugar
cane, vegetables and cotton, but everything else must be imported. With
being the case the Barbados economy is a Small Open Economy
meaning that we are unable to influence the prices we must pay to do
trade with other
The Tourism Industry in Barbados
Tourism is absolutely crucial
Barbadian economy with the service sector as a whole representing
approximately 80% of GDP and around 10% of the working population being
employed in the tourism industry.
There is a wide range of tourist establishments ranging from basic self
catering to luxury all inclusive resorts on the island.
to Barbados generally travel from the USA, Canada and Continental
Europe but the Barbados
Tourism Board is actively undertaking world wide promotion of the
island as a unique Caribbean destination. The island also
receives a large number of visitors from Caribbean cruise
ships as the
deep water port in the capital,Bridgetown, is home to our cruise ship
terminal. Much of the
entertainment tourist facilities are heavily concentrated on the south
coast with the
west coast being home to many luxury Barbados vacation resorts and
Visitors fly in to our only
airport, Grantley Adams International
Airport. This airport is located 13km to the east of
Bridgetown at the southern tip of the island and has direct services to
the USA, Canada, South America and Europe.
airport is also a major hub for the Eastern
Caribbean. It is equipped to deal with large aircraft such as Boeing
747s, and was once a destination for the now retired Concorde. This
airport handles around 2.3 million passengers every year and is
undergoing a $100 million upgrade project.
The prospects for the tourism
industry in Barbados
improved with the construction of the Port Charles Marina in
Speightstown. This marina is home to exclusive lagoonfront and
beachfront luxury villas with docks for luxury yachts. The
recent Cricket World Cup of
also attracted many
visitors and helped improve the Barbados economy and growth figures of
the tourism sector, construction, communications and utilities.
The Sugar Industry in Barbados
Although it no
longer makes such a large contribution to the economy, Barbados
sugar production is still the most important agricultural
activity in Barbados.
Tobacco and cotton crops were replaced in the 1600s when colonists
planted fields of sugar cane and brought in slaves to work on the
The industry grew rapidly and exports of sugar increased so large
plantations were cultivated to keep up with demand. The owners of the
large plantations made vast fortunes as absentee landlords, whilst
slaves worked their land to harvest and process the sugar cane. At one
time there were over 700 landowning families and 80,000 working slaves.
The sugar industry had its most successful period during the 1650s, but
continued as the backbone of the Barbados economy until
around the time of the Second World War when the industry went into
The sugar industry still exists, but only continues to survive due to
the favourable quotas granted by the EU which unfortunately are
decreasing over time.
Economic Growth and The Future of The Barbados Economy
The island of Barbados continues to be a prosperous nation with good
standards of living and an excellent infrastructure.
The main sectors of economic activity on the island apart from sugar
and tourism are offshore financial services, construction,
manufacturing and IT Services.
The government actively encourages foreign investment in tourism and
industry by offering financial incentives and tax
This country suffers from a huge trade imbalance as it imports around 4
times more than it exports, however, this is partially offset by
tourism revenue. Our main trading partners are the USA, Canada, the UK
and other members of CARICOM, Caribbean Community and Common Market.
It is essential that the tourism industry remains competitive,
therefore the government is very positive about expansion and
development in this Barbados economy sector.