The Barbados economy is primarily driven by tourism, with smaller contributions from International business, manufacturing, and agriculture, including fisheries.
Tourism by itself contributes about 15% of Barbados’ Gross Domestic Product (GDP) – the cumulative value of all the goods and services a country produces.
Provisional Barbados Central Bank figures indicate that in 2007, tourism earned about $172 million out of GDP that was estimated at $1.15 billion. By comparison, manufacturing accounted for about $64 million and agriculture, including sugar, about $50 million.
With the recent world economic slowdown, extended stay and cruise visitors to Barbados in 2008 both declined, with the sector’s overall value added falling by 1.7 percent compared with 3.1 percent growth the year before, according to the Barbados Central bank.
The International business and financial sector, set up four decades ago, with an attractive regime of significant concessions, has shown some growth.
Preliminary 2008 data indicate that 371 new IBC licenses were issued in the first nine months of last year, 37 more than for the corresponding period of 2007. No doubt reflective of the global financial climate, only one new offshore bank was registered in the first three quarters of 2008, compared with five in the first nine months of 2007.
Development of the international business and financial services sector began in earnest around 1969, and today it contributes significantly to the island’s foreign exchange earnings.
Low tax rates, double taxation agreements, and exchange of information treaties have provided Barbados with an ideal environment for attracting international investors to set up IBC’s, offshore banks and captive insurance companies.
Before tourism and International business took over, sugar was the mainstay of Barbados economic development for generations. In 2007 sugar production rose marginally (0.6%) to 33,900 tonnes, most of it exported to the European Community where it fetches a guaranteed price.
Production in 2008 declined 6.9 percent (primarily due to a late start to harvesting), but the value of added from nonsugar agriculture rose 3.7 percent, mostly as a result of a 36.2 percent rise in fish catches.
As to the future, the Barbados Government is looking to develop a new class of high tech, small, young food farmers, and distributors. To underpin this, the administration of Prime Minister David Thompson has committed itself to guarantee $15 million in loans to two Barbados state-run agricultural agencies in the 2008-2009 fiscal year.
The money is ultimately earmarked for providing an additional 10 acres of greenhouse, shade house, tunnels and irrigation systems for modern agriculture and for packing houses and orders, cooling rooms and vehicles for transporting produce.
The idea is to stimulate agricultural activity by providing new facilities for those interested and trained in modern agriculture.
Author: Brett Callaghan