Economy, Trade and Industries

Barbados embodies an open, small, free enterprise economy. A Value Added Tax on consumption, implemented in 1997, has enabled the country to reduce its dependence on import tariffs and duties as a source of revenue, and also to improve compliance with WTO rules.

In 2003, the country's Gross Domestic Product (excluding net indirect taxes) was approximately BDS$4.4 billion. That same year, exports amounted to BDS$500 million, while imports totalled BDS$2.39 billion. Domestic exports consist mainly of sugar and its by-products: rum and molasses, chemicals, clothing, furniture, electrical components and cement.

Consumer goods, mostly food and beverages, account for the majority of the island's imports - BDS$915 million in 2003. That same year, intermediate goods and capital goods such as machinery for use in agriculture and manufacturing, accounted for BDS$2.26 billion of the island's import bill.

Based primarily on sugar until the 1970s, the island's economy now has four key productive industries: tourism, agriculture, manufacturing and international business.

Tourism

Tourism continues to play a key role in the economy and has a positive "spin-off" impact on virtually all other business sectors. Currently, this industry accounts for about 11% of the employed labour force and is the country's principal foreign exchange earner. For example, in 2003, the gross annual earnings from tourism were approximately BDS$1.46 billion. The island attracts approximately one million visitors each year, with an almost equal split between long stay visitors and cruise ship passengers.

Manufacturing

The manufacturing sector in Barbados accounts for approximately 7% of the island's employed labour force and includes food and beverages (especially sugar and rum), electronics, hardwood furniture, garments and chemicals.

The country continues to welcome investment in the manufacturing sector, especialy for the production of higher value-added, skills-intensive products that use modern technology. Electronics, medical equipment and information processing are areas of particular interest. In recent years, the island has been attracting a growing number of call centres.

Agriculture

While the production of sugar is still important to the island's ability to earn foreign exchange, the Government's policy in agriculture has been to reduce dependence on this commodity and to encourage diversification, especially in vegetables, poultry, livestock and fishing. The island is virtualy self-sufficient in pork, poultry, fresh milk and vegetables.

International Business

This sector, which has steadily developed since 1977, now contributes significantly to the island's foreign exchange earnings and provides employment for approximately 3,000 Barbadians. Some unofficial estimates put the sector's contribution to the island's GDP at about 7.5%.

Primary Resources

Other than substantial limestone deposits that are mined and used to produce cement and other lime-based products, Barbados does not have an abundance of natural resources. However, the country does have some oil and natural gas deposits that have been accessed to reduce dependence on outside sources. In 2003, approximately 22.4 million cubic metres of natural gas were sold, and 371,000 barrels of crude oil produced. Local crude oil production meets about half the domestic requirements.