Economy of Barbados
Overview
Since achieving independence in 1966, the is-
land nation of Barbados has transformed it-
self from a low-income economy dependent
upon sugar production, into an upper-middle-
income economy based on tourism and the
offshore sector. Barbados went into a deep
recession in the 1990s after 3 years of steady
decline brought on by fundamental macroe-
conomic imbalances. After a painful readjust-
ment process, the economy began to grow
again in 1993. Growth rates have averaged
between 3%-5% since then. Barbados’ eco-
nomy is today is mainly dependent upon tour-
ism, the offshore sector, and foreign direct-
investment.
History
Pre-independence
Since the first settlement by the British in
1625, through history the economy of Bar-
bados was primarily dependent on agricul-
ture. It had been recorded that minus the
marshes and gully regions, during the 1630s
much of the desirable land had been defores-
ted across the entire island. Quickly Barba-
dos was then divided into large estate-planta-
tions and using indentured labour mainly
from the British Isles for the cultivation of
both the crops Tobacco and Cotton were first
introduced. The island, facing a large amount
of competition from the North American
colonies and the neighbouring West indian is-
lands, switched to the crop of sugar cane.
Cultivation of sugar cane was quickly intro-
duced by the exiled Jewish community which
immigrated into Barbados from Dutch Brazil
during the mid-1600s. The introduction of
sugar cane became the single best move for
the Barbados economy at the time, the eco-
nomy boomed and Barbados had become
populated with so many windmills that the is-
land had the second highest density of wind-
mills per square mile in the world, second
only to the Netherlands [1]. For about the
next 100 years Barbados remained the
richest of all the European colonies in the
Caribbean region due to sugar. The prosper-
ity in the colony of Barbados remained re-
gionally unmatched until sugar cane produc-
tion caught up in geographically