Relations with Latin American and Caribbean Countries
Barbados played a leading role in Caribbean affairs both before and after independence. Grantley Adams was an advocate of regional federation and served as the prime minister of the short-lived West Indies Federation. As noted earlier, his successor, Barrow, labored during the immediate preindependence period to pull together the Little Eight islands. This effort did not reach the stage of formal union, however, mainly because of the protracted nature of the negotiations. By the time Britain agreed to continue grant-in-aid monies, the momentum toward federation had been lost in acrimony. Barrow marched out of the last negotiating session in April 1965, taking with him the viability of potential union. Barbados declared its independence from Britain the following year.
Barrow did not abandon his belief in Caribbean integration after the collapse of the Little Eight negotiations. Instead, he helped to shift the regional approach to the concept. As the islands moved toward independence as separate entities, the notion of political association lost much of its appeal. The attraction of economic cooperation was strong, however, given the precarious economic status of these new ministates. Recognizing this, Barrow lobbied for the establishment of Carifta as a means of promoting regional economic viability and as a way of keeping the integration movement alive. The principle of foreign policy coordination among Commonwealth Caribbean countries, as advocated by Barrow, was achieved in theory with the advent of Caricom. Barbados also advocated the creation of such other regional institutions as the UWI, the CDB, and the West Indies Shipping Corporation (WISCO--see Appendix C).
By the time the BLP returned to power in 1976 under the leadership of Tom Adams, economic integration was an ongoing process, albeit not a particularly smooth or dynamic one. Adams maintained the Barbadian commitment to this process and made some limited efforts to expand beyond Caricom and establish new economic links with Latin America. Indeed, from 1976 until 1982 Barbadian foreign policy seemed to be driven primarily by economic imperatives, such as the promotion of trade (including tourism), the attraction of capital, and the expansion of domestic industry.
By 1982, however, it was clear that Adams's thinking on regional policy had begun to focus more on security concerns and less on political and economic issues. The motivation for this change in emphasis was the establishment in Grenada of the People's Revolutionary Government (PRG). From Adams's perspective, the PRG was a regional aberration that threatened to destabilize other island governments by its example and rhetoric if not by possible active support for subversive groups. Barbados' concern over Grenada surfaced pointedly in 1982 at the third Caricom heads of government meeting in Ocho Rios, Jamaica. It was there that Adams, supported by a number of like-minded leaders, pushed for the alteration of the Caricom treaty to commit members to the maintenance of parliamentary democracy and the defense of human rights. PRG leader Bishop, the target of this effort, argued for the incorporation of economic rights, such as employment, health care, and education, under the human rights rubric; he also gave private assurances to the prime minister of Trinidad and Tobago that Grenada would hold elections, although not necessarily under the Westminster system. Adams's amendment eventually was rejected in favor of a declaration affirming Caricom's support for ideological pluralism and the right of each state to select its own pattern of development. Although it appeared at the time to be a foreign policy victory for the PRG, the conference revealed the uneasiness and divisions within the Caribbean community over the course of events in Grenada; it also furthered an attitudinal split as to how best to deal with the situation. This drift was thrown into sharp relief by the events of October 1983.
Adams was a prime mover in the events that led up to the United States-Caribbean intervention in Grenada. The regional relationship most seriously affected by adverse reaction to the intervention was that of Barbados and Trinidad and Tobago. The flare-up between the two was marked by charges and countercharges over the issue of whether or not Adams had informed Port-of-Spain of the operation in advance of its execution. At the height of the dispute, the Trinidad and Tobago envoy to Barbados, who contradicted Adams's claim of prior notification, was expelled. In contrast to the debate provoked in other parts of the world by the intervention, the issue of notification seemed to be the real crux of the argument between these two states; disagreement over the inherent merit of the action in Grenada appeared to be a secondary consideration for both parties. The diplomatic dispute exacerbated already existing tensions based on Trinidad and Tobago trade restrictions. This rift, although not deep or irremediable, was not healed within Adams's lifetime and was employed as a campaign issue by Barrow and the DLP in their successful return to power in 1986.
Upon his return to the country's leadership, Barrow signaled his reservations over the previous government's approach to regional security issues. Despite some rhetorical salvos against the RSS, the United States, and some more conservative regional leaders such as Dominica's Mary Eugenia Charles, Barrow took no substantive action before his death to withdraw Barbados from the existing regional agreements. It is significant to note, however, that Grenadian prime minister Herbert Blaize did not request Barbados to send forces to Grenada in December 1986 to prevent possible unrest growing out of the verdict in the Bishop murder trial (see Grenada, National Security, this ch.).
Within the wider Caribbean, Barbados continued to maintain formal and correct relations with Cuba even after the Grenada intervention. Barbados, along with Guyana, Jamaica, and Trinidad and Tobago, had defied both the United States and the Organization of American States to establish relations with Cuba in 1972 in keeping with a general commitment to ideological pluralism. The relationship between Cuba and Barbados since that time, however, had been decidedly distant, the result perhaps of the competitive nature of both countries' major export (sugar) and their incompatible political systems.
Barbadian relations with Latin American countries traditionally had been limited. Nevertheless, Barbados was one of only two Commonwealth Caribbean beneficiaries of the 1980 San José Accord between Mexico and Venezuela (Jamaica being the other), whereby the two large producers agreed to provide oil at preferential rates to a number of Caribbean Basin states. Barbados had also benefited from low-interest loans for infrastructure and housing projects through another provision of the San José Accord. As of 1986, the DLP government was reported to be seeking new export markets in Latin America, particularly in Brazil, Colombia, and Venezuela, apparently perpetuating the efforts of the BLP government.
Along with the other nations of Caricom, Barbados supported the territorial integrity of Belize in the face of a long-standing claim by Guatemala. The Barbadian foreign minister held talks with Guatemala's ambassador to Venezuela in August 1986, presumably on the subject of Belize as well as the possibility of BarbadianGuatemalan commercial and diplomatic relations. Progress seemed to be anticipated by both sides after the 1986 assumption of power by a civilian government in Guatemala.
Thursday, January 10, 2008
Barbados
Barbados has acquired the nickname "Little England" because, through the centuries, it has remained the most British of the Caribbean islands. Since wind currents made it relatively difficult to reach under sail, it was not conquered and reconquered like most of its Caribbean neighbors. British control over Barbados lasted from 1625 until independence in 1966. About fifty male settlers, including some slaves captured en route, arrived in 1627 to settle the island, which was uninhabited and had no food-bearing plants. Twelve years later, in 1639, the House of Assembly was formed, the only representative legislature in the Caribbean to remain in existence for more than three centuries. Barbadians are proud of their colonial heritage and used a statement on individual rights and privileges from the 1652 Charter of Barbados as a basis for the Constitution of 1966.
Following the introduction of sugar by a Dutchman in the early 1640s, the island was deforested, and the economy became dominated by large plantations. As the plantation economy developed, the land became consolidated in the hands of a decreasing number of white familes, leading, between 1650 and 1680, to the emigration of some 30,000 landless Barbadians, who left the island for other Caribbean islands or North America. During the seventeenth and eighteenth centuries, slaves were imported from Africa by the thousands. In 1645 the black population was estimated at 5,680; by 1667 it was over 40,000. As the slave trade continued, Barbados became the most densely populated island in the Caribbean, a position that it still held in the late 1980s (see The Impact of the Conquest; The Colonial Period, ch. 1). Because labor was plentiful, few indentured servants were brought to Barbados even after emancipation in 1838.
During the eighteenth century, Barbados languished. The price of sugar fell sharply as abundant supplies were produced more cheaply in other islands. European wars and the American Revolution interfered with trade, and the British embargo on shipment of American goods to British colonies during the American Revolution also hurt Barbados severely. In the early months of the embargo, food and supplies fell so low that residents of Barbados would have faced starvation had not George III ordered special food shipments in 1778. Barbados also suffered several other calamities. Hurricanes devastated the island in 1780 and 1831. The 1780 hurricane killed over 4,000 people and destroyed most of the island's buildings and livestock; the 1831 hurricane ruined many buildings, including seven of the eleven churches on the island. In addition, a cholera epidemic killed over 20,000 people in 1854.
Throughout the nineteenth century, Barbados resisted change. Although free blacks were granted the vote in 1831 and slavery was commuted to an apprentice system in 1834, with emancipation following four years later, the ex-slaves stayed on the island and life remained essentially the same. As historian Ronald Tree has put it, the hurricane of 1831 was "followed by a hundred years of sleepy impoverishment, during which time the island was a source of constant annoyance to the Colonial Office." Barbados successfully resisted British efforts in the late eighteenth and nineteenth centuries to abolish its House of Assembly and install crown colony government (see Glossary). The British had found local assemblies to be intractable and cumbersome to manage from London. Under the system called crown colony government, which was installed in all of the Commonwealth Caribbean islands except Barbados, the British replaced these argumentative assemblies with a unicameral legislature, the majority of whose members were appointed by the governor, and in which the king theoretically represented the lower classes (see Political Traditions, ch. 1). As a result of multiple petitions, Barbados managed to retain its local House of Assembly, which functioned in addition to the governor's Legislative Council. Barbados was also successful in securing the repeal of the British sugar tax.
For almost 300 years, Barbados remained in the hands of a small, white, propertied minority who held the franchise. Reform finally came after World War I, however, as a result of ideas brought back by Clennell Wilsden Wickham of Barbados, Andrew Arthur Cipriani of Trinidad, and others who had served in the British forces abroad (see Precursors of Independence, ch. 1). Wickham returned home in 1919 fired by enthusiasm to make Barbados a more democratic place. His newspaper articles inspired Charles Duncan O'Neale to organize the Democratic League, a political party that espoused franchise reform, old-age pensions, compulsory education, scholarships, and trade union organization. The Democratic League succeeded in electing a few representatives to the House of Assembly between 1924 and 1932, but it is chiefly remembered for inspiring O'Neale's nephew, Errol Barrow, to found the Democratic Labour Party (DLP).
During the 1920s and 1930s, Barbados was confronted with a rapidly growing population, a rising cost of living, and a wage scale that was fixed at the equivalent of US$0.30 a day. Spontaneous rioting erupted throughout the Commonwealth Caribbean in the late 1930s as the region felt the effects of the worldwide depression. In Barbados, fourteen people were killed and forty- seven wounded in protests in 1937.
The rioting spurred Grantley Adams to found the Barbados Labour Party (BLP) in 1938. (The BLP was known briefly as the Barbados Progressive League.) Adams, a lawyer who had won the Barbados Scholarship to Oxford in 1918, became the most important figure in preindependence politics. He quickly rose to prominence through his testimony before the British Moyne Commission, which was charged with investigating the causes of the regional disturbances in the late 1930s (see Labor Organizations, ch. 1). Adams argued that the main cause of the riots was economic distress. Elected to the House of Assembly in 1940, Adams became president general of the Barbados Workers Union (BWU) on its formation in 1941. Under Barbadian governor Sir Grattan Bushe, the constitution was changed to effect a semiministerial form of government, and the franchise was progressively liberalized. During the 1942 House of Assembly session, Adams led a fight for reforms that broadened the franchise by reducing the cost of qualification, increased direct taxation, established a workmen's compensation program, and protected union leaders from liability in trade disputes.
Under the terms of the Bushe reforms, Adams became leader of the government in 1946. Between 1946 and 1951, he presided over uneasy coalitions in the House of Assembly as the BLP failed to win a clear majority. In 1951, in the first election conducted under universal adult suffrage with no property qualifications, the BLP captured sixteen of the twenty-four seats. Although the BLP had finally gained a majority in the House, Adams was unable to hold the party together. The BLP and BWU, which had formerly acted in unison, pulled apart in 1954 after Adams resigned as president of the BWU, became premier (the preindependence title for prime minister), under a new ministerial system of government, and neglected to include the new BWU president, Frank Walcott, in his cabinet. Meanwhile, a new member of the House, Barrow, emerged as leader of a discontented BLP left wing, which felt that Adams was too close to the governor and not close enough to labor. Barrow had served in the Royal Air Force in World War II and subsequently studied and passed the bar in London. After returning to Barbados in 1950, he joined the BLP and was elected to the House in 1951. In 1954 Barrow left the BLP and the following year founded the DLP, which he led for the next thirty-two years. In spite of Barrow's defection, Adams led the BLP to victory in the 1956 election.
Plans for a British Caribbean federation had been drawn up in London in 1953, and elections for a federative assembly were held in 1958. The BLP also swept these elections, capturing almost all of the seats allotted to Barbados; subsequently, Adams, who had been knighted in 1952, was elected prime minister of the West Indies Federation. He was the only individual ever to hold that office because the federation dissolved in 1962, when Jamaica and Trinidad and Tobago both opted for independence.
Adams's devotion to the cause of federation cost the BLP dearly. H.G. Cummins, who had become premier of Barbados when Adams was elected prime minister of the West Indies Federation, was unable to hold the party together. By the late 1950s, unemployment, always a persistent problem in Barbados, exceeded 20 percent. While Adams struggled with increasing problems in the federation, Barrow supported the sugar workers in their campaign for higher wages and in turn won their support for the DLP; as a result, the DLP won the 1961 elections by a large majority. Barrow became premier and continued to lead the government until 1971. Between 1961 and 1966, the DLP government replaced the governor's Legislative Council with a Senate appointed by the governor, increased workers' benefits, instituted a program of industrialization, and expanded free education. Barrow also explored the possibility of joining another federation of the so-called Little Eight islands (Antigua and Barbuda, Barbados, Dominica, Grenada, Montserrat, St. Christopher [hereafter, St. Kitts]-Nevis-Anguilla, St. Lucia, and St. Vincent and the Grenadines); this too came to naught, however, and the DLP espoused full independence with the concurrence of the opposition parties. The DLP won the election of November 2, 1966, capturing fourteen of the twenty-four House seats. On November 30, 1966, Barbados gained independence, and Barrow became its first prime minister.
Following the introduction of sugar by a Dutchman in the early 1640s, the island was deforested, and the economy became dominated by large plantations. As the plantation economy developed, the land became consolidated in the hands of a decreasing number of white familes, leading, between 1650 and 1680, to the emigration of some 30,000 landless Barbadians, who left the island for other Caribbean islands or North America. During the seventeenth and eighteenth centuries, slaves were imported from Africa by the thousands. In 1645 the black population was estimated at 5,680; by 1667 it was over 40,000. As the slave trade continued, Barbados became the most densely populated island in the Caribbean, a position that it still held in the late 1980s (see The Impact of the Conquest; The Colonial Period, ch. 1). Because labor was plentiful, few indentured servants were brought to Barbados even after emancipation in 1838.
During the eighteenth century, Barbados languished. The price of sugar fell sharply as abundant supplies were produced more cheaply in other islands. European wars and the American Revolution interfered with trade, and the British embargo on shipment of American goods to British colonies during the American Revolution also hurt Barbados severely. In the early months of the embargo, food and supplies fell so low that residents of Barbados would have faced starvation had not George III ordered special food shipments in 1778. Barbados also suffered several other calamities. Hurricanes devastated the island in 1780 and 1831. The 1780 hurricane killed over 4,000 people and destroyed most of the island's buildings and livestock; the 1831 hurricane ruined many buildings, including seven of the eleven churches on the island. In addition, a cholera epidemic killed over 20,000 people in 1854.
Throughout the nineteenth century, Barbados resisted change. Although free blacks were granted the vote in 1831 and slavery was commuted to an apprentice system in 1834, with emancipation following four years later, the ex-slaves stayed on the island and life remained essentially the same. As historian Ronald Tree has put it, the hurricane of 1831 was "followed by a hundred years of sleepy impoverishment, during which time the island was a source of constant annoyance to the Colonial Office." Barbados successfully resisted British efforts in the late eighteenth and nineteenth centuries to abolish its House of Assembly and install crown colony government (see Glossary). The British had found local assemblies to be intractable and cumbersome to manage from London. Under the system called crown colony government, which was installed in all of the Commonwealth Caribbean islands except Barbados, the British replaced these argumentative assemblies with a unicameral legislature, the majority of whose members were appointed by the governor, and in which the king theoretically represented the lower classes (see Political Traditions, ch. 1). As a result of multiple petitions, Barbados managed to retain its local House of Assembly, which functioned in addition to the governor's Legislative Council. Barbados was also successful in securing the repeal of the British sugar tax.
For almost 300 years, Barbados remained in the hands of a small, white, propertied minority who held the franchise. Reform finally came after World War I, however, as a result of ideas brought back by Clennell Wilsden Wickham of Barbados, Andrew Arthur Cipriani of Trinidad, and others who had served in the British forces abroad (see Precursors of Independence, ch. 1). Wickham returned home in 1919 fired by enthusiasm to make Barbados a more democratic place. His newspaper articles inspired Charles Duncan O'Neale to organize the Democratic League, a political party that espoused franchise reform, old-age pensions, compulsory education, scholarships, and trade union organization. The Democratic League succeeded in electing a few representatives to the House of Assembly between 1924 and 1932, but it is chiefly remembered for inspiring O'Neale's nephew, Errol Barrow, to found the Democratic Labour Party (DLP).
During the 1920s and 1930s, Barbados was confronted with a rapidly growing population, a rising cost of living, and a wage scale that was fixed at the equivalent of US$0.30 a day. Spontaneous rioting erupted throughout the Commonwealth Caribbean in the late 1930s as the region felt the effects of the worldwide depression. In Barbados, fourteen people were killed and forty- seven wounded in protests in 1937.
The rioting spurred Grantley Adams to found the Barbados Labour Party (BLP) in 1938. (The BLP was known briefly as the Barbados Progressive League.) Adams, a lawyer who had won the Barbados Scholarship to Oxford in 1918, became the most important figure in preindependence politics. He quickly rose to prominence through his testimony before the British Moyne Commission, which was charged with investigating the causes of the regional disturbances in the late 1930s (see Labor Organizations, ch. 1). Adams argued that the main cause of the riots was economic distress. Elected to the House of Assembly in 1940, Adams became president general of the Barbados Workers Union (BWU) on its formation in 1941. Under Barbadian governor Sir Grattan Bushe, the constitution was changed to effect a semiministerial form of government, and the franchise was progressively liberalized. During the 1942 House of Assembly session, Adams led a fight for reforms that broadened the franchise by reducing the cost of qualification, increased direct taxation, established a workmen's compensation program, and protected union leaders from liability in trade disputes.
Under the terms of the Bushe reforms, Adams became leader of the government in 1946. Between 1946 and 1951, he presided over uneasy coalitions in the House of Assembly as the BLP failed to win a clear majority. In 1951, in the first election conducted under universal adult suffrage with no property qualifications, the BLP captured sixteen of the twenty-four seats. Although the BLP had finally gained a majority in the House, Adams was unable to hold the party together. The BLP and BWU, which had formerly acted in unison, pulled apart in 1954 after Adams resigned as president of the BWU, became premier (the preindependence title for prime minister), under a new ministerial system of government, and neglected to include the new BWU president, Frank Walcott, in his cabinet. Meanwhile, a new member of the House, Barrow, emerged as leader of a discontented BLP left wing, which felt that Adams was too close to the governor and not close enough to labor. Barrow had served in the Royal Air Force in World War II and subsequently studied and passed the bar in London. After returning to Barbados in 1950, he joined the BLP and was elected to the House in 1951. In 1954 Barrow left the BLP and the following year founded the DLP, which he led for the next thirty-two years. In spite of Barrow's defection, Adams led the BLP to victory in the 1956 election.
Plans for a British Caribbean federation had been drawn up in London in 1953, and elections for a federative assembly were held in 1958. The BLP also swept these elections, capturing almost all of the seats allotted to Barbados; subsequently, Adams, who had been knighted in 1952, was elected prime minister of the West Indies Federation. He was the only individual ever to hold that office because the federation dissolved in 1962, when Jamaica and Trinidad and Tobago both opted for independence.
Adams's devotion to the cause of federation cost the BLP dearly. H.G. Cummins, who had become premier of Barbados when Adams was elected prime minister of the West Indies Federation, was unable to hold the party together. By the late 1950s, unemployment, always a persistent problem in Barbados, exceeded 20 percent. While Adams struggled with increasing problems in the federation, Barrow supported the sugar workers in their campaign for higher wages and in turn won their support for the DLP; as a result, the DLP won the 1961 elections by a large majority. Barrow became premier and continued to lead the government until 1971. Between 1961 and 1966, the DLP government replaced the governor's Legislative Council with a Senate appointed by the governor, increased workers' benefits, instituted a program of industrialization, and expanded free education. Barrow also explored the possibility of joining another federation of the so-called Little Eight islands (Antigua and Barbuda, Barbados, Dominica, Grenada, Montserrat, St. Christopher [hereafter, St. Kitts]-Nevis-Anguilla, St. Lucia, and St. Vincent and the Grenadines); this too came to naught, however, and the DLP espoused full independence with the concurrence of the opposition parties. The DLP won the election of November 2, 1966, capturing fourteen of the twenty-four House seats. On November 30, 1966, Barbados gained independence, and Barrow became its first prime minister.
Geography
Barbados is the easternmost island of the Lesser Antilles, situated 480 kilometers north of Guyana, 160 kilometers east of St. Vincent, and 965 kilometers southeast of Puerto Rico. This isolated pear-shaped island extends for 34 kilometers along a north-south axis and has a maximum breadth of 23 kilometers, giving it a total land area of 430 square kilometers (about the size of San Antonio, Texas, or half the size of New York City).
Barbados is fringed with coral reefs. The island itself is characterized by lowlands or gently sloping, terraced plains, separated by rolling hills that generally parallel the coasts. Elevations in the interior range from 180 to 240 meters above sea level. Mount Hillaby is the highest point at 340 meters above sea level. Farther south, at Christ Church Ridge, elevations range from sixty to ninety meters.
Eighty-five percent of the island's surface consists of coralline limestone twenty-four to thirty meters thick; Scotland District contains outcroppings of oceanic formations at the surface, however. Sugarcane is planted on almost 80 percent of the island's limestone surface. The soils vary in fertility; erosion is a problem, with crop loss resulting from landslides, washouts, and falling rocks. Most of the small streams are in Scotland District. The rest of the island has few surface streams; nevertheless, rainwater saturates the soil to produce underground channels such as the famous Coles Cave.
Barbados lies within the tropics. Its generally pleasant maritime climate is influenced by northeast trade winds, which moderate the tropical temperature. Cool, northeasterly trade winds are prevalent during the December to June dry season. The overall annual temperature ranges from 24°C to 28°C; slightly lower temperatures prevail at higher elevations. Humidity levels are between 71 percent and 76 percent year round. Rainfall occurs primarily between July and December and varies considerably with elevation. Rainfall may average 187.5 centimeters per year in the higher central area as compared with 127.5 centimeters in the coastal zone.
Barbados is fringed with coral reefs. The island itself is characterized by lowlands or gently sloping, terraced plains, separated by rolling hills that generally parallel the coasts. Elevations in the interior range from 180 to 240 meters above sea level. Mount Hillaby is the highest point at 340 meters above sea level. Farther south, at Christ Church Ridge, elevations range from sixty to ninety meters.
Eighty-five percent of the island's surface consists of coralline limestone twenty-four to thirty meters thick; Scotland District contains outcroppings of oceanic formations at the surface, however. Sugarcane is planted on almost 80 percent of the island's limestone surface. The soils vary in fertility; erosion is a problem, with crop loss resulting from landslides, washouts, and falling rocks. Most of the small streams are in Scotland District. The rest of the island has few surface streams; nevertheless, rainwater saturates the soil to produce underground channels such as the famous Coles Cave.
Barbados lies within the tropics. Its generally pleasant maritime climate is influenced by northeast trade winds, which moderate the tropical temperature. Cool, northeasterly trade winds are prevalent during the December to June dry season. The overall annual temperature ranges from 24°C to 28°C; slightly lower temperatures prevail at higher elevations. Humidity levels are between 71 percent and 76 percent year round. Rainfall occurs primarily between July and December and varies considerably with elevation. Rainfall may average 187.5 centimeters per year in the higher central area as compared with 127.5 centimeters in the coastal zone.
Population
Barbados had an estimated population of 255,500 in 1987. Population density was 593 persons per square kilometer; slightly over one-third of the populace lived in urban areas. Annual population growth remained relatively low in the 1980s, averaging between 0.2 and 0.8 percent. In 1987 it was 0.6 percent. In spite of this success, Barbados remained the most densely populated country in the Eastern Caribbean. The primary reason for Barbados' small population growth was the government's ability to implement a nationwide family planning program that served to maintain a crude birth rate of 17 per 1,000 inhabitants for the 1980-86 period.
In the past, emigration played a large role in stabilizing Barbados' population. From the end of World War II until the 1970s, Barbados exported its unemployed, as did the Windward Islands. Between 1946 and 1980, its rate of population growth was diminished by one-third because of emigration to Britain. The United States replaced Britain as the primary destination of emigrants in the 1960s because of Britain's restriction on West Indian immigration.
In spite of continued emigration, Barbados began to experience a net inflow of workers in 1970, most coming from other Eastern Caribbean islands. By 1980 demographic figures began to stabilize because migration to Barbados had lessened, probably for economic reasons, and a relatively small natural population growth rate had been achieved. By the mid-1980s, expected real growth rates, adjusted for migration, remained below 1 percent.
Ethnically, Barbados' population was dominated by descendants of African slaves. At emancipation in the late 1830s, the size of the slave population was approximately 83,000, three times that of the entire slave population in the Windward Islands. By the 1980s, distribution of ethnic groups was typical of the Eastern Caribbean; 90 percent of the population was black, 5 percent mulatto, and 5 percent white.
Race largely defined social position in Barbados. The majority of whites still held a disproportionate amount of economic wealth in the 1980s and significantly influenced national politics through their control of business enterprises. Blacks constituted both the middle and the lower classes.
In the 1980s, there was still a displaced social subgroup of extremely poor whites in Barbados who had not been fully assimilated into society. Descendants of the white labor class that had emigrated from Britain in the early colonial period, they had quickly been replaced as an economic group by African slaves, who had been brought to the New World as an inexpensive source of labor. Known as "Red Legs," the subgroup lived off the sea and subsistence agriculture and eventually became entrenched social outcasts, who had little expectation of becoming members of modern society.
Barbados inherited from the British a stratified society with a strong sense of class consciousness; Barbadian aspirations to reach the next rung of the social and economic ladder partially explain the industriousness of the population. Individual pride is clearly associated with economic status and has been cited as a reason for Barbados' early economic success, which surpassed that of the Windward Islands.
Religion in Barbados was also influenced by the British. The first colonizers established the Anglican Church in Barbados, where it quickly assumed a position of dominance. Alternative religions were subsequently provided by Moravian and Methodist groups. Although Anglicans were still the dominant religious group in the early 1980s, they constituted only 31 percent of the population. The Church of God and the Roman Catholic and Methodist churches each claimed to minister to between 3 and 4 percent of the population. The remainder belonged to other religions or professed no religious affiliation.
In the past, emigration played a large role in stabilizing Barbados' population. From the end of World War II until the 1970s, Barbados exported its unemployed, as did the Windward Islands. Between 1946 and 1980, its rate of population growth was diminished by one-third because of emigration to Britain. The United States replaced Britain as the primary destination of emigrants in the 1960s because of Britain's restriction on West Indian immigration.
In spite of continued emigration, Barbados began to experience a net inflow of workers in 1970, most coming from other Eastern Caribbean islands. By 1980 demographic figures began to stabilize because migration to Barbados had lessened, probably for economic reasons, and a relatively small natural population growth rate had been achieved. By the mid-1980s, expected real growth rates, adjusted for migration, remained below 1 percent.
Ethnically, Barbados' population was dominated by descendants of African slaves. At emancipation in the late 1830s, the size of the slave population was approximately 83,000, three times that of the entire slave population in the Windward Islands. By the 1980s, distribution of ethnic groups was typical of the Eastern Caribbean; 90 percent of the population was black, 5 percent mulatto, and 5 percent white.
Race largely defined social position in Barbados. The majority of whites still held a disproportionate amount of economic wealth in the 1980s and significantly influenced national politics through their control of business enterprises. Blacks constituted both the middle and the lower classes.
In the 1980s, there was still a displaced social subgroup of extremely poor whites in Barbados who had not been fully assimilated into society. Descendants of the white labor class that had emigrated from Britain in the early colonial period, they had quickly been replaced as an economic group by African slaves, who had been brought to the New World as an inexpensive source of labor. Known as "Red Legs," the subgroup lived off the sea and subsistence agriculture and eventually became entrenched social outcasts, who had little expectation of becoming members of modern society.
Barbados inherited from the British a stratified society with a strong sense of class consciousness; Barbadian aspirations to reach the next rung of the social and economic ladder partially explain the industriousness of the population. Individual pride is clearly associated with economic status and has been cited as a reason for Barbados' early economic success, which surpassed that of the Windward Islands.
Religion in Barbados was also influenced by the British. The first colonizers established the Anglican Church in Barbados, where it quickly assumed a position of dominance. Alternative religions were subsequently provided by Moravian and Methodist groups. Although Anglicans were still the dominant religious group in the early 1980s, they constituted only 31 percent of the population. The Church of God and the Roman Catholic and Methodist churches each claimed to minister to between 3 and 4 percent of the population. The remainder belonged to other religions or professed no religious affiliation.
Education
Barbados had one of the oldest and most advanced education systems in the Eastern Caribbean in the late 1980s. Education dated back to 1686, when private funds were used to build the first school. Throughout the eighteenth and nineteenth centuries, education was controlled by the Anglicans, who were later joined by other religious groups. By 1962 education was free for all nationals and administered primarily by the state. This trend continued, so that by 1984 only 4 percent of the primary and secondary schools were managed by churches.
Barbados' longstanding emphasis on education was evident in the values and goals of contemporary society. Education has traditionally been associated with success and upward mobility. In 1970 Barbados officially claimed to have achieved a 99-percent literacy rate, a figure that was questioned by some observers. Despite these doubts, observers generally agreed that in the 1980s literacy in Barbados exceeded the rates of other Caribbean societies.
In 1984 Barbados had 126 primary schools, 110 of which were administered by the state. Approximately 1,350 teachers were available to instruct the 35,000 students. There were sixty-four secondary schools, five of which prepared students for technical careers. A total of 6,000 students attended secondary-school programs.
Postsecondary education consisted of seven institutions that awarded degrees or certificates. Four schools offered specific vocational training: the Barbados Institute of Management and Productivity, the Erdiston Teacher's Training College, the Tercentenary School of Nursing, and the Samuel Jackman Prescod Polytecnic.
Academic programs at the university level were conducted at the Cave Hill Campus of the University of the West Indies (UWI) and the Barbados Community College, which offered vocational and technical classes as well. The UWI also included Codrington College, a local theological seminary.
In 1979 the government created the Skills Training Programme to augment existing education programs. It was designed to fulfill the need for short but intensive training in vocational subjects and to prepare students for careers in mechanics, electronics, horticulture, masonry, plumbing, and other technical and vocational occupations.
Although the educational infrastructure was designed to meet both the nation's academic and vocational needs, observers seriously questioned Barbados' ability to provide quality instruction in fields related to tourism, agriculture, and manufacturing, the major economic undertakings in the 1980s. Few courses were actually offered in agricultural science and commerce; as a result, an inadequate number of Barbadians were being prepared to take on the responsibilities inherent in a growing economy.
The education system was also criticized for being stratified along socioeconomic lines. In general, upper-class Barbadians prepared for university studies at the best primary and secondary schools, received a disproportionate number of scholarships, and had the best records for entering the professional disciplines. On balance, however, most Barbadians felt that the education system still afforded opportunities to achieve at least limited upward mobility. The government appeared to be attempting to address specific criticisms of its educational policy; its goals for Barbadian education in the 1980s included the promotion of equal educational opportunity and enhanced technical and vocational programs in all schools. In spite of its shortcomings, the Barbadian education system remained the best in the Eastern Caribbean in the 1980s.
Barbados' longstanding emphasis on education was evident in the values and goals of contemporary society. Education has traditionally been associated with success and upward mobility. In 1970 Barbados officially claimed to have achieved a 99-percent literacy rate, a figure that was questioned by some observers. Despite these doubts, observers generally agreed that in the 1980s literacy in Barbados exceeded the rates of other Caribbean societies.
In 1984 Barbados had 126 primary schools, 110 of which were administered by the state. Approximately 1,350 teachers were available to instruct the 35,000 students. There were sixty-four secondary schools, five of which prepared students for technical careers. A total of 6,000 students attended secondary-school programs.
Postsecondary education consisted of seven institutions that awarded degrees or certificates. Four schools offered specific vocational training: the Barbados Institute of Management and Productivity, the Erdiston Teacher's Training College, the Tercentenary School of Nursing, and the Samuel Jackman Prescod Polytecnic.
Academic programs at the university level were conducted at the Cave Hill Campus of the University of the West Indies (UWI) and the Barbados Community College, which offered vocational and technical classes as well. The UWI also included Codrington College, a local theological seminary.
In 1979 the government created the Skills Training Programme to augment existing education programs. It was designed to fulfill the need for short but intensive training in vocational subjects and to prepare students for careers in mechanics, electronics, horticulture, masonry, plumbing, and other technical and vocational occupations.
Although the educational infrastructure was designed to meet both the nation's academic and vocational needs, observers seriously questioned Barbados' ability to provide quality instruction in fields related to tourism, agriculture, and manufacturing, the major economic undertakings in the 1980s. Few courses were actually offered in agricultural science and commerce; as a result, an inadequate number of Barbadians were being prepared to take on the responsibilities inherent in a growing economy.
The education system was also criticized for being stratified along socioeconomic lines. In general, upper-class Barbadians prepared for university studies at the best primary and secondary schools, received a disproportionate number of scholarships, and had the best records for entering the professional disciplines. On balance, however, most Barbadians felt that the education system still afforded opportunities to achieve at least limited upward mobility. The government appeared to be attempting to address specific criticisms of its educational policy; its goals for Barbadian education in the 1980s included the promotion of equal educational opportunity and enhanced technical and vocational programs in all schools. In spite of its shortcomings, the Barbadian education system remained the best in the Eastern Caribbean in the 1980s.
Health and Welfare
In the mid-1980s, Barbadian health indicators showed that the overall health status of the country had improved substantially. In addition, by 1984 the government had taken major steps toward instituting a comprehensive health care service. As a result, Barbados compared favorably with its Eastern Caribbean neighbors in quality and delivery of health services.
Barbados achieved considerable success in reducing its crude birth rate in the 1980s (see Population, this section). Mortality rates, which had been steadily improving since 1974, deteriorated slightly in 1983. The death rate for the population rose in 1983 to 7.9 deaths per 1,000 inhabitants; much of the increase was attributed to a higher infant mortality rate, which rose 15 percent to 24.5 deaths per 1,000 live births. This increase was caused largely by problems arising shortly after birth, particularly pneumonia and respiratory ailments. Life expectancy at birth in Barbados in 1983 was seventy years. Morbidity indicators in the 1980s approximated those found elsewhere in the Caribbean. Only 2.3 percent of all deaths in 1982 were attributed to infectious and parasitic diseases. Statistics from that year indicated that twothirds of all children one year of age and younger were inoculated against diphtheria, pertussis, and tetanus and 53 percent against measles. As of mid-1987, Barbados reported fifteen cases of acquired immune deficiency syndrome.
Improved water and sewage disposal was credited with the decline of morbidity rates from 1974 to 1985. The entire population had access to potable water by 1984. In addition, the completion in 1982 of the sewage system in the capital city of Bridgetown dramatically improved the urban sanitation situation. The rest of the island depended on septic tanks for waste disposal; however, plans were underway in 1985 to extend modern sewage facilities throughout the southern and western coastal areas.
Barbados' consistently improving health conditions were the direct result of government efforts to enact a health care program. Between 1978 and 1983, Ministry of Health expenditures, including social security, represented an average of 14.5 percent of total government outlays. The government planned delivery of free health care to all Barbadians through two basic programs, the General Practitioner Service and the Barbados Drug Service. The former was designed to bring medical service to virtually all areas of the island, but it had not been fully implemented. The Barbados Drug Service began operations in 1980 and improved the delivery of prescription and over-the-counter drugs, providing increased efficiency and reduced costs.
In 1985 Barbados health care facilities included one general hospital (Queen Elizabeth's Hospital), one psychiatric facility (the Psychiatric Hospital), six district hospitals, seven polyclinics, and four health centers. Queen Elizabeth's Hospital and the Psychiatric Hospital each contained approximately 630 beds. District hospitals offered an additional 900 beds, and private hospitals were equipped with approximately 60 beds. The polyclinics delivered basic maternal and child care, family planning, and general health education services in rural areas. The health centers offered medical care in remote locations, but they were considered poorly equipped. There were 8.8 physicians and 30 nurses per 10,000 inhabitants in 1982. The Barbados Medical School, a part of the UWI system, was located at Queen Elizabeth's Hospital.
Despite substantial improvements in Barbadian health care, some problems persisted as of the late 1980s. Continued efforts were necessary to improve health care in rural areas. New measures were also needed to deal with alcohol abuse and diseases carried by rodents and wild dogs. Most noticeable noncommunicable health problems were heart disease, diabetes, and cancer. The government sought to respond to these health problems with expanded education programs, early diagnosis, and drugs.
Barbados achieved considerable success in reducing its crude birth rate in the 1980s (see Population, this section). Mortality rates, which had been steadily improving since 1974, deteriorated slightly in 1983. The death rate for the population rose in 1983 to 7.9 deaths per 1,000 inhabitants; much of the increase was attributed to a higher infant mortality rate, which rose 15 percent to 24.5 deaths per 1,000 live births. This increase was caused largely by problems arising shortly after birth, particularly pneumonia and respiratory ailments. Life expectancy at birth in Barbados in 1983 was seventy years. Morbidity indicators in the 1980s approximated those found elsewhere in the Caribbean. Only 2.3 percent of all deaths in 1982 were attributed to infectious and parasitic diseases. Statistics from that year indicated that twothirds of all children one year of age and younger were inoculated against diphtheria, pertussis, and tetanus and 53 percent against measles. As of mid-1987, Barbados reported fifteen cases of acquired immune deficiency syndrome.
Improved water and sewage disposal was credited with the decline of morbidity rates from 1974 to 1985. The entire population had access to potable water by 1984. In addition, the completion in 1982 of the sewage system in the capital city of Bridgetown dramatically improved the urban sanitation situation. The rest of the island depended on septic tanks for waste disposal; however, plans were underway in 1985 to extend modern sewage facilities throughout the southern and western coastal areas.
Barbados' consistently improving health conditions were the direct result of government efforts to enact a health care program. Between 1978 and 1983, Ministry of Health expenditures, including social security, represented an average of 14.5 percent of total government outlays. The government planned delivery of free health care to all Barbadians through two basic programs, the General Practitioner Service and the Barbados Drug Service. The former was designed to bring medical service to virtually all areas of the island, but it had not been fully implemented. The Barbados Drug Service began operations in 1980 and improved the delivery of prescription and over-the-counter drugs, providing increased efficiency and reduced costs.
In 1985 Barbados health care facilities included one general hospital (Queen Elizabeth's Hospital), one psychiatric facility (the Psychiatric Hospital), six district hospitals, seven polyclinics, and four health centers. Queen Elizabeth's Hospital and the Psychiatric Hospital each contained approximately 630 beds. District hospitals offered an additional 900 beds, and private hospitals were equipped with approximately 60 beds. The polyclinics delivered basic maternal and child care, family planning, and general health education services in rural areas. The health centers offered medical care in remote locations, but they were considered poorly equipped. There were 8.8 physicians and 30 nurses per 10,000 inhabitants in 1982. The Barbados Medical School, a part of the UWI system, was located at Queen Elizabeth's Hospital.
Despite substantial improvements in Barbadian health care, some problems persisted as of the late 1980s. Continued efforts were necessary to improve health care in rural areas. New measures were also needed to deal with alcohol abuse and diseases carried by rodents and wild dogs. Most noticeable noncommunicable health problems were heart disease, diabetes, and cancer. The government sought to respond to these health problems with expanded education programs, early diagnosis, and drugs.
Economy
Barbados experienced steady economic development and diversification following World War II, outperforming in many ways all of the Windward Islands. The economy was transformed from one dependent on agriculture, primarily sugar, for one-third of its gross domestic product (GDP--see Glossary) to one considered relatively diversified with the development of tourism and manufacturing sectors. By 1980 agriculture accounted for a mere 9 percent of GDP, whereas the wholesale and retail trade had grown to 17 percent, general services to 14 percent, manufacturing to 12 percent, and government services and tourism to 11 percent each. At the same time, Barbados standard of living had increased remarkably as the nation elevated itself from the ranks of the low-income countries to those of middle-income countries.
Barbados' economic success could be traced to many factors. The island had long been a model of social and political stability, which helped attract both public and private foreign investment. The government also assisted with the infrastructural development required of an expanding economy, including a sound education system.
In spite of a lengthy history of economic development, the economy floundered at times during the 1980s. In part the fluctuations were the result of the innate characteristics of a small Caribbean economy, which include a limited resource base and heavy dependence on external markets. To a large extent, however, the setbacks resulted from the worldwide recession in the 1981-83 period. In 1987, however, Barbados was still actively pursuing a policy of growth based on a diversified export market, with a prudent mixture of private and public management of economic resources.
Macro Economic Overview
Annual economic growth in the 1960s and 1970s averaged 5 percent. The 1980s, by contrast, saw little or no real growth in the economy. In addition to being affected by the global recession in the early 1980s, the 3.5-percent growth of GDP in 1984 was offset by near zero growth in 1985 because Barbados' leading export sectors all performed poorly. In 1985 the economy expanded slightly by 0.3 percent, but only because the nontrading sectors, such as mining, quarrying, utilities, construction, and government services, performed well. Otherwise, Barbados would have experienced a decline in GDP.
Among the most disturbing economic developments for the island in the 1980s was the use of protectionist policies by Trinidad and Tobago and Jamaica with respect to clothing and other goods that faced strong regional competition. The tourist sector also slumped in the early 1980s, falling victim to a strong Barbadian dollar, which greatly reduced the number of tourist visitors from Britain. Tourism lessened because of the deterioration in the exchange rate of the British pound that accompanied the strengthening of the United States dollar. The United States dollar is tied to the Barbadian dollar at a fixed exchange rate.
Preliminary statistics for 1986, however, suggested that the economy was improving dramatically, registering an annual growth rate of 5 percent. This improvement was primarily the result of enhanced performance by tourism, manufacturing, and agriculture, the three sectors generating foreign exchange earnings.
External factors also improved when the United States dollar began to depreciate in 1984. The depreciation of the United States dollar increased the foreign exchange rate of the British pound sterling in Barbados and led to a 25-percent rise in British visitors. Tourism for the first three-quarters of 1986 increased 3.2 percent; the manufacturing sector registered a 9-percent increase in production over the same period because of a recovery in chemicals and processed foods. Nonsugar agriculture also improved. The electronics industry, however, continued to decline because of strong Japanese competition, and textiles still faced regional trade restrictions.
The quick turnaround in Barbados' aggregate economic performance in 1986 graphically demonstrated its strong dependence on external markets. To a large extent, the economy's overall performance in the 1980s paralleled that of the leading export sectors; the economy, however, has been able to survive periods in which trade was sharply reduced.
The growth and diversification of the economy since World War II did not result in substantial new employment opportunities. The unemployment rate exceeded 10 percent throughout the 1980s; it averaged 18.7 percent in 1985 and 19 percent in 1986. There were three primary reasons for high unemployment. First, the decline of the agricultural sector in favor of tourism resulted in a less labor-intensive economy, causing a slow, yet inevitable, displacement of agricultural workers. Second, employment figures also reflected improved productivity across sectors. As productivity grew after World War II, fewer workers were needed even though the economy had expanded. Finally, Barbados' relatively large population also contributed to the development of an entrenched unemployment base.
In 1985 the services sector, including government workers, accounted for 35 percent of the work force. The second largest employer was restaurants and hotels, which had a combined contribution of 22.7 percent of the work force; this was followed by manufacturing (13.2 percent), agriculture and fishing (9.8 percent), and construction and quarrying (7.6 percent).
Because agriculture retained only a small percentage of the work force as the economy diversified, the manufacturing sector began to play a pivotal role in absorbing the unemployed. In the 1985-86 period, however, manufacturing experienced severe problems as a result of international competition and regional trade imbalances that directly affected employment levels. By 1986 it appeared unlikely that alternative jobs for the newly displaced manufacturing workers could be found.
Historically, Barbados has experienced periods of high inflation caused by both internal and external forces, but external causes have been responsible for the more acute inflationary periods. Domestic inflation has been fueled by government overspending financed by increasing the money supply, excess demand caused by import restrictions, and large real wage increases. Because of the open nature of the Barbadian economy and its heavy reliance on foreign markets, inflationary pressures also were exerted from abroad.
Since 1981, however, Barbados has experienced a steady decline in its inflation rate; the rate fell from a high of 14.6 percent in that year to less than 2 percent in 1986. The work force, as a whole, fared well during this period; wages rose faster than prices each year. Although wage hikes could not be justified based on productivity gains, they apparently did not have a significant impact on the general price level as evidenced by the decreasing inflation rate.
Banking and Finance
The Central Bank of Barbados (CBB) was created in 1972 to assist the government in stabilizing the economy by facilitating development and financial intermediation (see Glossary). Since 1972, Barbados has minted its own Barbadian dollar, which has been pegged to the United States dollar at a rate of B$2.00 to US$1.00.
The government created the CBB for numerous reasons, all related to gaining more control over domestic and international financial intermediation. Paramount to maintaining financial stability was Barbados' new-found control over its money supply. Unlike other Eastern Caribbean states, which were dependent on a regional financial institution for central governance of the monetary system, Barbados was capable of establishing its own monetary program to supplement fiscal policy in meeting national economic goals.
Financial priorities were also advanced by the Barbados Development Bank, which was created in 1963. It functioned as an independent corporation designed to facilitate development by encouraging domestic savings and investment and providing loans to development enterprises, cooperatives, and small businesses. It was also empowered to issue its own securities to ensure sufficient funding to meet development needs. In 1985 it reemphasized its effort to assist the small manufacturing sector, which had failed to expand significantly during the previous year.
In the mid-1980s, Barbados was also served by numerous local banks and seven foreign commercial institutions. In addition, it was the headquarters for the Caribbean Development Bank (CDB), which acted as a conduit for multilateral lending arrangements.
Role of Government
In general, the Barbadian government has taken a strong stand against government interference in the operation of the national economy. During his second term as prime minister, Barrow favored a minimal role for government in managing economic enterprises and emphasized the supportive nature of the government in promoting the development of the economy. Nevertheless, government spending has been a major tool of economic growth. The government has conducted its economic policy by employing fiscal and monetary measures and by supporting the social and productive sectors of society with public sector investment. Public sector investment, however, was also inextricably linked to outcomes of fiscal policy.
In fiscal year (FY--see Glossary) 1986, the government introduced fiscal policies aimed at enhancing the purchasing power of the private sector. Tax concessions to individuals and businesses were expected to stimulate the economy and minimize demand for wage increases, whereas increased consumption duties were designed to regulate consumer activity. Indirect taxation was to offset the loss of direct revenue from income and business tax concessions.
By late 1986, however, it was clear that the realigned tax structure would cause a large deficit. In December 1986, the CBB recorded a 118-percent increase in the national deficit compared with the previous year. The increase stemmed from the government's inability to control capital expenditures and public wage increases. Such control was a necessary precondition for the success of the new fiscal policy.
In the mid-1980s, analysts raised concerns about the potential effects of the Barbadian deficit. In spite of gains in aggregate productivity, the budget imbalance could not be corrected, and increased foreign borrowing appeared to be imminent. International concerns revolved around Barbados' ability to meet debt payments in the near future, as well as its ability to finance the public sector investment in the out years.
Although fiscal policy was a dominant economic tool of the government, monetary control played a relatively significant role when compared with operations of other Eastern Caribbean islands. The government coordinated economic policy with the CBB, rather than allowing it to develop a completely independent program. Their mutual goal was economic stability for the island, which implied controlling the money supply so that credit markets remained nonvolatile yet were sufficiently liquid to meet the demands of a developing economy.
Government influence over the economy was exercised more directly through public sector investment, which was developed and coordinated in conjunction with the five-year economic development plan. Historically, Barbados has concentrated public investment in three areas: economic infrastructure, such as roads and ports; social infrastructure, including health, education, and housing; and productive sectors, particularly agriculture and tourism. Funds for the 1986-88 period, which coincided with the last two years of the 1983 five-year economic development plan, were allocated mostly to transportation; the social sector received 26 percent of capital outlays, however, split mostly between health and education programs. Agriculture and tourism received a combined total of 30 percent of investment funds available from public sources.
Infrastructure constituted almost 36 percent of the total public sector investment for that period, which was reflected in the excellent communications and transportation networks that were available in the late 1980s. The Barbados Telephone Company operated an entirely automatic system of 75,000 telephones. Tropospheric-scatter links to Trinidad and Tobago and to St. Lucia and a satellite ground station operating with the International Telecommunications Satellite Corporation (INTELSAT) Atlantic Ocean satellite provided high-quality international service. The government-owned Caribbean Broadcasting Corporation broadcast from the capital on 900 kilohertz and had FM service at 98.1 megahertz. Two commercial stations also broadcast from St. George's, Grenada, on 790 kilohertz and 90.7 megahertz. Evening television service was available. The Nation and the Barbados Advocate were the local daily newspapers.
Transportation infrastructure was good and comprised almost 1,500 kilometers of paved roads, a major international airport, and a deep-water port. One highway circled Barbados, and numerous other roads crisscrossed the island; buses served most towns. Grantley Adams International Airport, on the southern tip of Barbados, handled direct flights to points in North America and Western Europe. Bridgetown boasted a manmade deep-water port, which was completed in 1961 and expanded in 1978. The island had no railroads or inland water transportation.
In 1986 informed observers estimated that the next five-year plan would allocate additional capital to productive sectors (tourism, agriculture, and manufacturing) in the form of direct credit. This would take place at the expense of reduced investment in physical infrastructure. Because many of the road projects were scheduled for completion within the decade, a reallocation toward sectors that would directly assist national economic development was considered necessary to enhance the overall performance of the economy.
Foreign sources of capital, which from 1982 to 1986 had included loans or grants from development banks and government agencies, composed 40 percent of the public sector investment budget. This figure was expected to increase to 50 percent for the 1986-88 period, a situation that could further exacerbate a growing foreign debt repayment problem.
Foreign Trade and Balance of Payments
Barbados had expected trade to achieve its goal of export-led economic growth by the mid-1980s. By 1985, however, Barbados had experienced significant declines in all sectors that traditionally accounted for the majority of its foreign exchange earnings. The poor performance was a result of constricting regional demand for Barbadian goods and tighter trade restrictions in the Caricom market.
Barbados' foreign exchange earnings were derived from numerous goods and services. Sugar and molasses accounted for nearly 80 percent of agricultural exports in 1985 and contributed 10 percent of total merchandise exports. This sector, however, accounted for only 4 percent of total foreign exchange earnings and has continued to decline in importance since the early 1960s.
The manufacturing sector provided Barbados with 85 percent of the total value of merchandise exports and 30 percent of total foreign exchange. In 1985 electronic components represented 60 percent of total manufactured goods; secondary exports included clothing, chemicals, and rum. Tourism was the greatest foreign exchange earner in 1985; receipts totaled 38 percent of exported goods and services.
Approximately 23 percent of Barbadian exports went to other Caricom countries in 1985. Guyana and Trinidad and Tobago absorbed 68 percent of regional exports, whereas St. Lucia, Jamaica, Grenada, and St. Vincent and the Grenadines together accounted for 21 percent. The other 11 percent went to numerous other regional trading partners. Preliminary figures for 1986, however, suggested that Caricom trade would fall significantly, perhaps by as much as 20 percent. The United States purchased most of Barbados' electronic components and accounted for 18.4 percent of total merchandise exports. Britain and Canada constituted 5.8 percent and 1.4 percent of the Barbadian export market, respectively; the remainder was sent to numerous other countries.
Overall, exports declined 10.1 percent in 1985 because of decreased demand for all items. Electronic components, sugar, and clothing fell 10 percent, 12.2 percent, and 30.6 percent, respectively. Barbados did not expect a significant change in market conditions in the near future and was developing a market strategy that focused on extraregional economies to absorb sugar and manufactured products.
In addition to declining demand for Barbadian exports, the island's foreign exchange position was also negatively affected by currency devaluations in Trinidad and Tobago and Jamaica, as well as by large wage increases given to workers in the Barbadian tourist and manufacturing sectors. These two problems had a combined effect of lowering the country's competitive position in the region. Because of wage increases and the relatively expensive Barbadian dollar, goods and services originating in Barbados were more expensive than those of the country's primary competitors.
In 1985 Barbados' primary imports were capital goods, food and beverages, fuels and chemicals, and miscellaneous durable goods; these represented 21.7, 15.3, 10, and 5 percent, respectively, of total imports. Other consumer and intermediate goods included textiles, animal feeds, and other unspecified goods. The United States provided 41 percent of total imports and was the trading partner causing the single largest deficit. It was followed by Caricom countries, which shipped 14.7 percent of total imports; the remaining 29.2 percent came from numerous other countries. Britain and Canada supplied 9.1 percent and 5.1 percent, respectively. Trinidad and Tobago furnished 70 percent of all Caricom goods imported by Barbados, and Jamaica supplied 21 percent; the remaining 9 percent represented less significant trade relationships with other regional partners.
Barbados' balance of payments position was relatively healthy at the close of 1985, in spite of trading problems. Exports of goods and services had exceeded imports, providing a current account surplus of US$40.3 million. The surplus occurred when there was a fall in both absolute exports and imports; however, strong tourist receipts narrowed the trade deficit.
The capital account experienced heavy outlays to repay private loans, and much of this debt was essentially replaced by public borrowing. There was a capital account surplus of US$46 million in 1985. When added to the current account and adjusted for errors and omissions, the overall balance of payments was US$22.4 million.
Informed observers suggested that Barbados might experience only slight growth in the late 1980s because of declining manufacturing trade. An increase in tourist receipts and an improved competitive position were expected to help the country adjust to a decline in foreign earnings, but it appeared that increased borrowing would be needed for at least the five-year economic planning period beginning in 1988. Such borrowing would cause Barbados' 1985 debt service ratio of 8 percent of exports to double by the early 1990s. Furthermore, it was expected that a deficit in the current account in later years would cause the overall balance of payments to become negative as well. The need to purchase more intermediate goods and increase borrowing to maintain development goals, as well as greater regional competition in the tourism and manufacturing markets, was the most likely reason for this adjustment.
Barbados' economic success could be traced to many factors. The island had long been a model of social and political stability, which helped attract both public and private foreign investment. The government also assisted with the infrastructural development required of an expanding economy, including a sound education system.
In spite of a lengthy history of economic development, the economy floundered at times during the 1980s. In part the fluctuations were the result of the innate characteristics of a small Caribbean economy, which include a limited resource base and heavy dependence on external markets. To a large extent, however, the setbacks resulted from the worldwide recession in the 1981-83 period. In 1987, however, Barbados was still actively pursuing a policy of growth based on a diversified export market, with a prudent mixture of private and public management of economic resources.
Macro Economic Overview
Annual economic growth in the 1960s and 1970s averaged 5 percent. The 1980s, by contrast, saw little or no real growth in the economy. In addition to being affected by the global recession in the early 1980s, the 3.5-percent growth of GDP in 1984 was offset by near zero growth in 1985 because Barbados' leading export sectors all performed poorly. In 1985 the economy expanded slightly by 0.3 percent, but only because the nontrading sectors, such as mining, quarrying, utilities, construction, and government services, performed well. Otherwise, Barbados would have experienced a decline in GDP.
Among the most disturbing economic developments for the island in the 1980s was the use of protectionist policies by Trinidad and Tobago and Jamaica with respect to clothing and other goods that faced strong regional competition. The tourist sector also slumped in the early 1980s, falling victim to a strong Barbadian dollar, which greatly reduced the number of tourist visitors from Britain. Tourism lessened because of the deterioration in the exchange rate of the British pound that accompanied the strengthening of the United States dollar. The United States dollar is tied to the Barbadian dollar at a fixed exchange rate.
Preliminary statistics for 1986, however, suggested that the economy was improving dramatically, registering an annual growth rate of 5 percent. This improvement was primarily the result of enhanced performance by tourism, manufacturing, and agriculture, the three sectors generating foreign exchange earnings.
External factors also improved when the United States dollar began to depreciate in 1984. The depreciation of the United States dollar increased the foreign exchange rate of the British pound sterling in Barbados and led to a 25-percent rise in British visitors. Tourism for the first three-quarters of 1986 increased 3.2 percent; the manufacturing sector registered a 9-percent increase in production over the same period because of a recovery in chemicals and processed foods. Nonsugar agriculture also improved. The electronics industry, however, continued to decline because of strong Japanese competition, and textiles still faced regional trade restrictions.
The quick turnaround in Barbados' aggregate economic performance in 1986 graphically demonstrated its strong dependence on external markets. To a large extent, the economy's overall performance in the 1980s paralleled that of the leading export sectors; the economy, however, has been able to survive periods in which trade was sharply reduced.
The growth and diversification of the economy since World War II did not result in substantial new employment opportunities. The unemployment rate exceeded 10 percent throughout the 1980s; it averaged 18.7 percent in 1985 and 19 percent in 1986. There were three primary reasons for high unemployment. First, the decline of the agricultural sector in favor of tourism resulted in a less labor-intensive economy, causing a slow, yet inevitable, displacement of agricultural workers. Second, employment figures also reflected improved productivity across sectors. As productivity grew after World War II, fewer workers were needed even though the economy had expanded. Finally, Barbados' relatively large population also contributed to the development of an entrenched unemployment base.
In 1985 the services sector, including government workers, accounted for 35 percent of the work force. The second largest employer was restaurants and hotels, which had a combined contribution of 22.7 percent of the work force; this was followed by manufacturing (13.2 percent), agriculture and fishing (9.8 percent), and construction and quarrying (7.6 percent).
Because agriculture retained only a small percentage of the work force as the economy diversified, the manufacturing sector began to play a pivotal role in absorbing the unemployed. In the 1985-86 period, however, manufacturing experienced severe problems as a result of international competition and regional trade imbalances that directly affected employment levels. By 1986 it appeared unlikely that alternative jobs for the newly displaced manufacturing workers could be found.
Historically, Barbados has experienced periods of high inflation caused by both internal and external forces, but external causes have been responsible for the more acute inflationary periods. Domestic inflation has been fueled by government overspending financed by increasing the money supply, excess demand caused by import restrictions, and large real wage increases. Because of the open nature of the Barbadian economy and its heavy reliance on foreign markets, inflationary pressures also were exerted from abroad.
Since 1981, however, Barbados has experienced a steady decline in its inflation rate; the rate fell from a high of 14.6 percent in that year to less than 2 percent in 1986. The work force, as a whole, fared well during this period; wages rose faster than prices each year. Although wage hikes could not be justified based on productivity gains, they apparently did not have a significant impact on the general price level as evidenced by the decreasing inflation rate.
Banking and Finance
The Central Bank of Barbados (CBB) was created in 1972 to assist the government in stabilizing the economy by facilitating development and financial intermediation (see Glossary). Since 1972, Barbados has minted its own Barbadian dollar, which has been pegged to the United States dollar at a rate of B$2.00 to US$1.00.
The government created the CBB for numerous reasons, all related to gaining more control over domestic and international financial intermediation. Paramount to maintaining financial stability was Barbados' new-found control over its money supply. Unlike other Eastern Caribbean states, which were dependent on a regional financial institution for central governance of the monetary system, Barbados was capable of establishing its own monetary program to supplement fiscal policy in meeting national economic goals.
Financial priorities were also advanced by the Barbados Development Bank, which was created in 1963. It functioned as an independent corporation designed to facilitate development by encouraging domestic savings and investment and providing loans to development enterprises, cooperatives, and small businesses. It was also empowered to issue its own securities to ensure sufficient funding to meet development needs. In 1985 it reemphasized its effort to assist the small manufacturing sector, which had failed to expand significantly during the previous year.
In the mid-1980s, Barbados was also served by numerous local banks and seven foreign commercial institutions. In addition, it was the headquarters for the Caribbean Development Bank (CDB), which acted as a conduit for multilateral lending arrangements.
Role of Government
In general, the Barbadian government has taken a strong stand against government interference in the operation of the national economy. During his second term as prime minister, Barrow favored a minimal role for government in managing economic enterprises and emphasized the supportive nature of the government in promoting the development of the economy. Nevertheless, government spending has been a major tool of economic growth. The government has conducted its economic policy by employing fiscal and monetary measures and by supporting the social and productive sectors of society with public sector investment. Public sector investment, however, was also inextricably linked to outcomes of fiscal policy.
In fiscal year (FY--see Glossary) 1986, the government introduced fiscal policies aimed at enhancing the purchasing power of the private sector. Tax concessions to individuals and businesses were expected to stimulate the economy and minimize demand for wage increases, whereas increased consumption duties were designed to regulate consumer activity. Indirect taxation was to offset the loss of direct revenue from income and business tax concessions.
By late 1986, however, it was clear that the realigned tax structure would cause a large deficit. In December 1986, the CBB recorded a 118-percent increase in the national deficit compared with the previous year. The increase stemmed from the government's inability to control capital expenditures and public wage increases. Such control was a necessary precondition for the success of the new fiscal policy.
In the mid-1980s, analysts raised concerns about the potential effects of the Barbadian deficit. In spite of gains in aggregate productivity, the budget imbalance could not be corrected, and increased foreign borrowing appeared to be imminent. International concerns revolved around Barbados' ability to meet debt payments in the near future, as well as its ability to finance the public sector investment in the out years.
Although fiscal policy was a dominant economic tool of the government, monetary control played a relatively significant role when compared with operations of other Eastern Caribbean islands. The government coordinated economic policy with the CBB, rather than allowing it to develop a completely independent program. Their mutual goal was economic stability for the island, which implied controlling the money supply so that credit markets remained nonvolatile yet were sufficiently liquid to meet the demands of a developing economy.
Government influence over the economy was exercised more directly through public sector investment, which was developed and coordinated in conjunction with the five-year economic development plan. Historically, Barbados has concentrated public investment in three areas: economic infrastructure, such as roads and ports; social infrastructure, including health, education, and housing; and productive sectors, particularly agriculture and tourism. Funds for the 1986-88 period, which coincided with the last two years of the 1983 five-year economic development plan, were allocated mostly to transportation; the social sector received 26 percent of capital outlays, however, split mostly between health and education programs. Agriculture and tourism received a combined total of 30 percent of investment funds available from public sources.
Infrastructure constituted almost 36 percent of the total public sector investment for that period, which was reflected in the excellent communications and transportation networks that were available in the late 1980s. The Barbados Telephone Company operated an entirely automatic system of 75,000 telephones. Tropospheric-scatter links to Trinidad and Tobago and to St. Lucia and a satellite ground station operating with the International Telecommunications Satellite Corporation (INTELSAT) Atlantic Ocean satellite provided high-quality international service. The government-owned Caribbean Broadcasting Corporation broadcast from the capital on 900 kilohertz and had FM service at 98.1 megahertz. Two commercial stations also broadcast from St. George's, Grenada, on 790 kilohertz and 90.7 megahertz. Evening television service was available. The Nation and the Barbados Advocate were the local daily newspapers.
Transportation infrastructure was good and comprised almost 1,500 kilometers of paved roads, a major international airport, and a deep-water port. One highway circled Barbados, and numerous other roads crisscrossed the island; buses served most towns. Grantley Adams International Airport, on the southern tip of Barbados, handled direct flights to points in North America and Western Europe. Bridgetown boasted a manmade deep-water port, which was completed in 1961 and expanded in 1978. The island had no railroads or inland water transportation.
In 1986 informed observers estimated that the next five-year plan would allocate additional capital to productive sectors (tourism, agriculture, and manufacturing) in the form of direct credit. This would take place at the expense of reduced investment in physical infrastructure. Because many of the road projects were scheduled for completion within the decade, a reallocation toward sectors that would directly assist national economic development was considered necessary to enhance the overall performance of the economy.
Foreign sources of capital, which from 1982 to 1986 had included loans or grants from development banks and government agencies, composed 40 percent of the public sector investment budget. This figure was expected to increase to 50 percent for the 1986-88 period, a situation that could further exacerbate a growing foreign debt repayment problem.
Foreign Trade and Balance of Payments
Barbados had expected trade to achieve its goal of export-led economic growth by the mid-1980s. By 1985, however, Barbados had experienced significant declines in all sectors that traditionally accounted for the majority of its foreign exchange earnings. The poor performance was a result of constricting regional demand for Barbadian goods and tighter trade restrictions in the Caricom market.
Barbados' foreign exchange earnings were derived from numerous goods and services. Sugar and molasses accounted for nearly 80 percent of agricultural exports in 1985 and contributed 10 percent of total merchandise exports. This sector, however, accounted for only 4 percent of total foreign exchange earnings and has continued to decline in importance since the early 1960s.
The manufacturing sector provided Barbados with 85 percent of the total value of merchandise exports and 30 percent of total foreign exchange. In 1985 electronic components represented 60 percent of total manufactured goods; secondary exports included clothing, chemicals, and rum. Tourism was the greatest foreign exchange earner in 1985; receipts totaled 38 percent of exported goods and services.
Approximately 23 percent of Barbadian exports went to other Caricom countries in 1985. Guyana and Trinidad and Tobago absorbed 68 percent of regional exports, whereas St. Lucia, Jamaica, Grenada, and St. Vincent and the Grenadines together accounted for 21 percent. The other 11 percent went to numerous other regional trading partners. Preliminary figures for 1986, however, suggested that Caricom trade would fall significantly, perhaps by as much as 20 percent. The United States purchased most of Barbados' electronic components and accounted for 18.4 percent of total merchandise exports. Britain and Canada constituted 5.8 percent and 1.4 percent of the Barbadian export market, respectively; the remainder was sent to numerous other countries.
Overall, exports declined 10.1 percent in 1985 because of decreased demand for all items. Electronic components, sugar, and clothing fell 10 percent, 12.2 percent, and 30.6 percent, respectively. Barbados did not expect a significant change in market conditions in the near future and was developing a market strategy that focused on extraregional economies to absorb sugar and manufactured products.
In addition to declining demand for Barbadian exports, the island's foreign exchange position was also negatively affected by currency devaluations in Trinidad and Tobago and Jamaica, as well as by large wage increases given to workers in the Barbadian tourist and manufacturing sectors. These two problems had a combined effect of lowering the country's competitive position in the region. Because of wage increases and the relatively expensive Barbadian dollar, goods and services originating in Barbados were more expensive than those of the country's primary competitors.
In 1985 Barbados' primary imports were capital goods, food and beverages, fuels and chemicals, and miscellaneous durable goods; these represented 21.7, 15.3, 10, and 5 percent, respectively, of total imports. Other consumer and intermediate goods included textiles, animal feeds, and other unspecified goods. The United States provided 41 percent of total imports and was the trading partner causing the single largest deficit. It was followed by Caricom countries, which shipped 14.7 percent of total imports; the remaining 29.2 percent came from numerous other countries. Britain and Canada supplied 9.1 percent and 5.1 percent, respectively. Trinidad and Tobago furnished 70 percent of all Caricom goods imported by Barbados, and Jamaica supplied 21 percent; the remaining 9 percent represented less significant trade relationships with other regional partners.
Barbados' balance of payments position was relatively healthy at the close of 1985, in spite of trading problems. Exports of goods and services had exceeded imports, providing a current account surplus of US$40.3 million. The surplus occurred when there was a fall in both absolute exports and imports; however, strong tourist receipts narrowed the trade deficit.
The capital account experienced heavy outlays to repay private loans, and much of this debt was essentially replaced by public borrowing. There was a capital account surplus of US$46 million in 1985. When added to the current account and adjusted for errors and omissions, the overall balance of payments was US$22.4 million.
Informed observers suggested that Barbados might experience only slight growth in the late 1980s because of declining manufacturing trade. An increase in tourist receipts and an improved competitive position were expected to help the country adjust to a decline in foreign earnings, but it appeared that increased borrowing would be needed for at least the five-year economic planning period beginning in 1988. Such borrowing would cause Barbados' 1985 debt service ratio of 8 percent of exports to double by the early 1990s. Furthermore, it was expected that a deficit in the current account in later years would cause the overall balance of payments to become negative as well. The need to purchase more intermediate goods and increase borrowing to maintain development goals, as well as greater regional competition in the tourism and manufacturing markets, was the most likely reason for this adjustment.
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