Barbados has a market-based economy with both the private and public sectors actively involved in determining the goods and services made available to consumers.
The Barbadian economy has historically been dependent on sugar cane but in more recent years, the emphasis has been redirected into tourism and industry. Today, the economy is driven primarily by tourism, business, financial and general services, agriculture and manufacturing. The Government of Barbados has focused on the expansion of direct foreign investment - with the international business sector generating substantial foreign exchange earnings through financial, information and manufacturing services.
Tourism
Tourism is paramount to the island providing employment and construction opportunities. These trickle down into sub-sectors and service providers. In a concerted effort to ensure the stabilization of tourist arrivals, the government stated that one major sporting event will continue to be held in the island each year. In 2006, the Sandy Lane Hotel will play host to the World Golf Championships. In 2007 several final Cricket World Cup matches will be held in Barbados. In addition, 'home-porting' agreements have been established with several cruise-lines in which tourists are encouraged to fly to Barbados and are transferred to the Deep Water Harbour in order to meet their respective cruise ship and begin their Caribbean cruise holiday.
International Business
International business bloomed in the 1990's and the financial services sector became the highest income earner for the island, superseding that of the sugar cane industry. The global recession of 2001, however, had a strong affect on Barbados' international business sector and as a result, the Travel Industry replaced this area as the chief/major income earner. Legislation was changed to encourage investment and new hotel developments were constructed.
International business has developed and continues to grow, encouraging Financial and Information Service providers to establish companies in Barbados. A significant income earner, it is important to note that there is also a light Manufacturing Sector.
Construction
The late 1990's saw a marked increase in the Construction Industry. Hotels, villa complexes, private residences, offices and condos are actively being developed throughout most areas of the island. Included in this Construction Boom is the creation of the new Barbados Kensington Oval, which will host several matches of the 2007 Cricket World Cup.
The Future
Future growth in economic activity should be led mainly by the non-traded sectors. As both the private and public sectors prepare for the 2007 World Cup, real economic activity is expected within the construction industry, stimulating growth in the wholesale and retail trade and business and other services.
The Barbadian government continues to focus on the reduction of the unemployment rate, encourages the privatization of remaining state-owned enterprises, direct foreign investment, e-commerce, financial and information services, tourism, health, educational and cultural services.
To combat the increase in oil and gas prices Barbados is exploring innovative ways in which to utilize the natural resources for energy and fuel. Emphasis is being placed on developing technology to enable the harnessing of wind power for energy and transforming the unused sugar cane into Ethanol fuel energy, similar to that in Brazil.
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