Barbados - Economy

Economy

Barbados is the 51st richest country in the world in terms of GDP (Gross Domestic Product) per capita, has a well-developed mixed economy, and a moderately high standard of living. According to the World Bank, Barbados is classified as being in its 66 top high income economies of the world. A 2012 self-study in conjunction with the Caribbean Development Bank revealed 20% of Barbadians live in poverty, and nearly 10% cannot meet their basic daily food needs.

Historically, the economy of Barbados had been dependent on sugarcane cultivation and related activities, but in the late 1970s and early 1980s it has diversified into the manufacturing and tourism sectors. Offshore finance and information services have become important foreign exchange earners, and there is a healthy light manufacturing sector. Since the 1990s the Barbados Government has been seen as business-friendly and economically sound. The island has seen a construction boom, with the development and redevelopment of hotels, office complexes, and homes.

Recent government administrations have continued efforts to reduce unemployment, encourage foreign direct investment, and privatise remaining state-owned enterprises. Unemployment has been reduced to 10.7 in 2003.

The economy contracted in 2001 and 2002 due to slowdowns in tourism, consumer spending and the impact of the 11 September 2001 attacks, but rebounded in 2003 and has shown growth since 2004. Traditional trading partners include Canada, the Caribbean Community (especially Trinidad and Tobago), the United Kingdom and the United States.

Business links and investment flows have become substantial: as of 2003 the island saw from Canada CA$ 25 billion in investment holdings, placing it as one of Canada's top five destinations for Canadian foreign direct investment (FDI). Businessman Eugene Melnyk of Toronto, Canada, is said to be Barbados' richest permanent resident.

It has been reported that the year 2006 would have been one of the busiest years for building construction ever in Barbados, as the building-boom on the island entered the final stages for several multi-million dollar commercial projects.

The European Union is presently assisting Barbados with a €10 million programme of modernisation of the country's International Business and Financial Services Sector.

Barbados maintains the third largest stock exchange in the Caribbean region. At present, officials at the stock exchange are investigating the possibility of augmenting the local exchange with an International Securities Market (ISM) venture.