Economy of Barbados

Economy of Barbados

According to businesscarriers, the GDP of Barbados in 2002 was 2.5 billion, per capita – 9.3 thousand US dollars. The average annual growth of the economy for 1993-2000 was 3%, in 2001 the GDP fell by 2.6%, in 2002 by 0.4%. Inflation 0.2% (2002). The number of people employed in the national economy for 1992-2002 increased from 96.1 to 128.6 thousand people, unemployment from a maximum level of 26.2% in 1993 decreased in 2002 to 11.3%. The economy of Barbados, which has specialized in the supply of sugar to the world market for more than 300 years, is now oriented towards the development of the service sector. In 2001, the share of agriculture in GDP was 4.7% (sugar production – 1.2%), industry and energy – 10.3%, construction – 5.8%, while tourism – 11.2%, and financial services – 18.9%. 4.7% of the economically active population is employed in agriculture, 9.1% in manufacturing and energy, 10.4% in construction,

The industrial production index in 1998 was 144% of the 1982 level, since 1999 it has been declining. The volume of production in the energy sector for 1982-2001 increased by 2.5 times. Own oil production, started in 1973, provides 25% of the country’s needs. Natural gas production in 2002 amounted to 28.8 million m3. To stimulate industrial production since 1974 for industrial enterprises producing products for export outside the Caribbean region, exemption from taxation for up to 10 years and from the payment of import duties is provided. 10 industrial parks have been created, the rent for enterprises that place their production in them is subsidized by the state. Since the closure of the refinery in 1998, the only heavy industry operation is a cement plant owned by a Trinidadian company. The main manufacturing industries are sugar (18.8%), clothing (15%) and electronics (13.5%). The sugar industry is the most unprofitable in the world: losses in 2001 amounted to 38.8% of the cost of 1 ton of sugar. The volume of production is 36.3 thousand tons (2003). It was decided to leave one of the three existing plants after 2004.

The total area of agricultural land is 23.7 thousand hectares (2000), 8.6 thousand hectares are occupied by sugar cane, 2 thousand hectares are occupied by vegetables and root crops. For domestic consumption, yams, tomatoes, sweet potatoes, carrots, cucumbers, cabbage, and pumpkin are grown. Fruit growing provides for 60% of the needs, part of mangoes, cherries, grapefruits and guava is exported. Production for export of cotton (27 thousand tons in 2002) and flowers. Barbados provides itself with poultry meat and 3/4 – with milk due to imported feed. In the coastal zone – fishing, processing plants in Bridgetown and Oistins.

The length of motor roads is 1650 km, of which 1570 km are paved. Car park 82.2 thousand (2001). The ports are Bridgetown and Speighttown. Under the flag of Barbados, 41 large (over 1 thousand tons) foreign ships with a total carrying capacity of 1.1 million tons are registered. Adams International Airport with a landing strip of 3.35 km. Gas pipeline system for distribution of liquefied gas coming from Trinidad. Provision of telephone sets 67.2 pcs. per 100 people

The largest number of tourists visited Barbados in 2000 – 1078 thousand, of which 533 thousand were cruise tourists. In 2001, tourism revenues decreased by 5.9%, in 2002 – by 2.8%. The main part of the tourists came from the UK (39%), from the USA (25%), from the Caribbean countries (18%) (2002).

Privatization has become an important element of macroeconomic policy. Since 1992, state property has been sold for 61.7 million Barbados dollars, incl. telephone communications, flour, cement and dairy industries, hotels, Tourism Investment Corporation, large blocks of shares in oil companies, the Insurance Corporation and the National Bank. In 2001, the government adopted an emergency economic recovery program, and in 2002, a medium-term reform plan. Its central elements are bringing contributions to the pension system to 17.5% of the payroll, a gradual reduction in corporate tax from 40 to 25%, income tax from 40 to 20% by 2003/04. The goal of the plan is to reach a stable annual GDP growth of 3.0% in the middle of the decade.

The Central Bank is subordinate to the Ministry of Finance and pursues a policy of gradual liberalization of the banking system. There are 6 commercial banks. The monetary unit has been fixed at a ratio of 2:1 to the US dollar since 1975. In the 1990s. The offshore business is growing rapidly, with revenues peaking at B$150.4 million in 2000. St. 7.5 thousand offshore companies, of which 450 are engaged in insurance. The assets of 60 offshore banks exceeded $30 billion. A stock exchange was established in 1987, where the shares of 22 companies, as well as government bonds, are traded.

Tax revenues average 18% of GDP. In 1996, VAT was introduced, replacing 11 types of indirect taxes. The budget deficit, which in 1997 was 0.3% of GDP, increased to 6.3% in 2002. Government debt on the line. 2002/03 reached 72% of GDP.

Exports in 2001 amounted to 284.8 million, imports – 914.8 million US dollars. Main export commodities (%): sugar (12.5), rum (10.2), other food and flavor products (18.0), chemicals (12.3), electronic components (10.4), other manufactured goods (24.5). Imports are dominated (%) by: consumer goods (42.7), machinery and equipment (20.9), fuel (8.2), building materials (7.7). Main trading partners (2002,%): in terms of exports – CARICOM countries (44.9), Great Britain (12.0), USA (11.4); imports – USA (32.3), CARICOM countries (22.0), EU (21.1), incl. UK (7.1). The total external debt for 1998-2002 increased from 438 million to 1095 million US dollars, and its ratio to GDP – from 18.4 to 43.8%.

Per capita income, calculated at the purchasing power parity of the currency, in 2001 amounted to 14.5 thousand US dollars. The level of poverty is determined by the annual income of 5.5 thousand Barbados dollars per capita. Below it lives 35 thousand people, or 13% of Barbadians. The top 20% of households account for 44% of total income. Approx. 4/5 of the total population; per 100 people accounts for 28.6 personal car. According to the Human Development Index (27), Barbados consistently ranks 1st in Latin America.

Economy of Barbados