Barbados' Economy

Tourism is the Main Factor in Barbados’ Economic Prosperity

When the island of Barbados became an independent country in the 1960s, it transformed itself from a nation that was dependent on harvesting and selling sugar into a very prosperous country that currently receives most of its money from the tourism industry. Now, Barbados is not just a prosperous country, but it’s one of the most well-off countries in the Caribbean region. Barbados’ economy has been steadily growing since 1993 when it came out of a recession. In 2003, the economy received another boost when people began traveling and vacationing again on a regular basis (since the drastic drop-off in travel after September 11, 2001).

What Affects the Barbados’ Economy?

The most prevalent factor in Barbados’ economy is the “services” category. Services, including tourism, make up about 83 percent of the country’s gross domestic product. Other categories that play a role in the economy are agriculture, the manufacturing and construction industries, and natural resources including fishing and natural gas.

Exports and Imports

In regards to trade, about 15 percent of Barbados’ exports go to the United States. Twenty-four percent of their exports go collectively to Trinidad and Tobago, the United Kingdom, and Jamaica. The countries which provide Barbados with most of its imports are the United States, Trinidad and Tobago, The United Kingdom and Japan.

Pre-Independence

When the British settled in Barbados over 380 years ago, they were able to sustain their economy primarily with agriculture. The harvesting of sugar was successful for the country and allowed its economy to boom for hundreds of years.

Post-Independence

In 1966, when Barbados became independent, the country was still relying on the production and selling of sugar as its main source of income. However, a huge influx of vacationers to the country allowed Barbados to focus more on the tourism industry. In the 1980s and 1990s, Barbados became more of a manufacturing country, party due to the country’s focus on education. Many computer companies began to outsource manufacturing work to Barbados. In the late 1990s, the computer companies that were sending manufacturing work to Barbados began sending a bulk of the work to Asian countries where labor was cheaper. This is when tourism began to be the chief economic factor for the country. Because the country relies so heavily on the tourism industry for its economic livelihood, its economy is susceptible to rapid declines. A good example of this occurred in 2001 when the September 11 terrorist attacks happened in the United States. The world-wide tourism industry suffered and Barbados was no exception to the decline in vacationers. In order to combat the potential for a year with fewer visitors than expected, the government of Barbados has committed to hosting at least one major sporting event each year on the island. It is believed that hosting a huge yearly event will ensure that travelers will visit Barbados no matter what. In addition to hosing a major sporting event each year, the Barbadian government has also struck deals with many large cruise lines so that travelers must fly to Barbados and board ships from Barbadian ports. This is another way that Barbados ensures that tourists will spend time and money in their country. The economy in Barbados, like the country’s educational system, is very advanced. The country expects that it will be the smallest developed country in the world by the year 2018.