IS BARBADOS DEVELOPING?

1
IS BARBADOS DEVELOPING?
Barbados as a model nation for the Caribbean
2
Some Perspective

• World Bank Measure of Economy
• Barbados Upper-middle income
• Jamaica, Guyana, and Dominican Republic
  Lower-middle income
• Haiti Lower income
• (according to 1998 GNP per capita)

• ICT At a GlanceBarbados (2000)
• GDP Growth -
• Barbados3.6
• Latin America and the Caribbean2.5
• International Telecommunication
• (outgoing trafficmin/subscriber)
• Barbados391
• Latin America and the Caribbean--106

3
Seers Model of Development Indicators

• Development takes into account economic criteria
• Poverty
• Unemployment
• Inequality
• In order to successfully measure development,
• It might be argued that some numbers called
  national income series are at least available,
  whereas data on poverty, unemployment and
  inequality are very scrappy. This is, however,
  the result not so much of basic differences in
  estimation possibilities as of the attitudes of
  development. The type of data collected reflects
  priorities. What work is done by a statistical
  office depends in practice partly on what its own
  government demands, partly on the advice it
  receives from carious U.N. agencies, especially
  the U.N. Statistical Office. As a realization of
  the importance of social problems spreads,
  statistical offices will put less weight on
  nation income estimation, more on preparing
  appropriate social indicators. Seers (27)

4
Our Indicators of Development in Barbados

1. Economy
2. Health
3. Education
4. Unemployment Insurance
5. Public Transportation
6. Housing Conditions

5
Economic Development

• The Diversification of Barbados Industry

6
Structural Adjustment Programs

• History of the Structural Adjustment Program
• Began structural adjustments under the IMF and
  World Bank in the early 1990s.
• The program called for cuts in wages, increases
  in taxes and user fees, and trade and tariff
  reform.
• The adjustment initially worked as Barbados was
  able to provide the highly trained and skilled
  workers to man the expanding manufacturing and
  service sectors.
• -Eventually the SAPs called for cuts in the
  education and service programs and those skilled
  laborers began to disappear.
• When the domestic market opened up to regional
  competition and the addition of an external
  tariff as part of CARICOM common market efforts,
  the manufacturing sector declined, dropping from
  comprising 12.8 of the GDP to 9.6.

7
Sectoral Distribution of GDP 1975-1998
8
Agriculture

• Decrease in Sugar Cane productionin the 1950s
  sugar production took place in 34 factories,
  today there are only 3 factories in operation
• The government has given support to the sugar
  industry despite its inefficiency for two
  reasons
• The sugar industry employs 4000 workers
• Sugar exports are also an important source of
  foreign exchange

• Increasing of livestock, vegetable, and other
  food crops
• Self-sufficiency in milk, onions, carrots,
  potatoes, poultry

9
Manufacturing

• Diversification of Products
• Government encouraged the growth of the
  manufacturing sector to promote economic
  diversity
• This would reduce the countrys vulnerability to
  external shocks

10
Manufacturing Contd

• There are 13 major industries in Barbados
• In the 60s, the sectors contribution to total
  value added was only 5.8 but this number almost
  doubled in the 70s, exceeding the growth rate of
  the economy as a whole
• By the end of the 80s, the sector had lost most
  of its vitality
• By the end of the 90s, the manufacturing sectors
  contribution to GDP was at 9.6 compared with
  12.8 during its peak years

11
More Manufacturing

• The sector employs 9 of Barbadians or 9700
  persons concentrated in food processing,
  apparel, paper products and beverages and tobacco
  industries
• This sector is the 2nd largest contributor to
  foreign exchange earnings in Barbados- 2nd only
  to Tourism
• Most of the firms in this sector are import
  substituting firms

12
Services

• Government actively promoted country as center
  for est. of international financial business
  services
• Relationships with International corporations
• 1998, an estimated 6199 offshore companies were
  licensed in Barbados, 91 using IBCs
  (international financial and business services)
  FSCs (foreign sales corporations)
• Data processing software development also
  expanded in 1990s

13
Services Why so much progress?

• Barbados Investment Development Corporation- BIDC
• Mission statement- To be a world-class business
  development agency, the most effective in the
  Caribbean region, noted for excellent service
• An industrial development agency of the Barbados
  government

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Barbados Investment Development Corporation

• Mainly responsible for promoting and enabling the
  establishment and expansion of business
  enterprises in Barbados, and for export promotion
  of the countrys goods and services
• The BIDC also manages the government incentive
  program for industry

15
Tourism

• Opening up their country to tourists while still
  maintaining control
• Tourism in Barbados was originally a luxury
  export owned by foreign luxury hotels

16
Tourism Continued

• Barbados has made a successful transition from an
  economy dependent on sugar to one more focused on
  tourism services
• Principal foreign exchange-generating sector with
  earnings greater than US.5billion- contribution
  to GDP is approximately 12
• By the 80s, the small hotels owned mostly by
  Barbadians provided 80 of the hotel beds
• This allowed retention of earnings and created
  local employment

17
Tourism

• Domestic agriculture has also benefited as
  tourists love local foods
• The excellent relationship between tourists and
  locals, the stable social and political climate,
  and having a reputation of not being hostile to
  tourists has made Barbados favorable to tourism
  expansion and repeat visitors

18
Labor Force Characteristics, 1965-1998
19
Summary of Economic Development

• Barbados has made the transition from an
  agricultural-based economy (i.e. sugar
  production) to a services-based economy (i.e.
  tourism, financial and business services)

20
Social Development
21
Selected Health Indicators for Barbados 1966
1998
22
Health

• 15 of Government expenditure
• Impact of 1950s Health centers
• Protection of water supplies food for sale,
  sewage waste disposal
• Possible that a better literacy rate aided in
  facilitated health education promotion

• Teenage Pregnancy
• The spread of AIDS
• The world bank has approved a US15.5 million
  loan to Barbados towards HIV/AIDS prevention
  program
• ante-natal pre-natal services at polyclinics

23
Education

• The principle factor in the HDI ranking is
  education Barbados has one of the only systems
  in the world where education is free up to and
  including the tertiary level for all of its
  nationals
• Free public education
• Private media

24
Unemployment Insurance

• Introduced in 1981, it provides compensation to
  employees who b/c of total unemployment, lay-off
  or short-time suffer loss of earnings.
• Financed by way of contributions shared equally
  between employee and employer contributions
  currently fixed at 1.5 of insurable earnings.
• Max of 26 weeks
• Only country in the region with such an
  unemployment benefit scheme

25
Public Transportation

• Has the most extensive road network in Caribbean
• Highway system
• Physically possible to travel from any point in
  the island to another in less than an hour.
• Public transportation from 5am to midnight,
  elderly travel free and subsidized fare for
  students in uniform.
• International Airport can accommodate any size
  aircraft one of the few countries in the
  hemisphere with regular Concorde service

26
Housing Conditions
27
The Human Development Index
28
The Human Development Index

• Human Development Index 2000
• US (6)
• Barbados (31)
• Jamaica (86)
• Dominican Republic (94)
• Guyana (103)
• Haiti (146)
• http//hdr.undp.org/reports/global/2002/en/indicat
  or/indicator.cfm?Fileindic_283_1_1.html

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Why has Barbados been developing?

• Relationship with Britain
• No political unrest
• NGOs
• Barbados can be distinguished from other CARICOM
  countries, as having a corrupt free government

30
Why has Barbados been developing? Contd

• Terrain

31
Why has Barbados been developing? Contd

• During a recession from 1990-1992, trade unions
  entered into an alliance with the Barbadian govt.
  and supported its austerity measures
• This alliance enabled the govt. to avoid
  devaluing the currency, which the IMF had
  instructed them to do

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DISCUSSION QUESTION

• In looking at what youve learned about your own
  countries what do you see as factors contributing
  to its relative lack of development? Is Barbados
  truly a model?

33
Bibliography

• About BIDC. Barbados Investment and Development
  Corporation. Date of Access October 31, 2002.
• http//www.bidc.com/aboutus.htm
• Griffith, Winston H. A Tale of four CARICOM
  countries. Journal of Economic Issues, March
  2002 v36 il p79 (28). Date of Access November 3,
  2002.
• http//faculty.rmwc.edu/bbullock/335pdf/griffith.h
  tm
• Lewis-Bynoe, Denny, Jennifer Griffith and Winston
  Moore. Trade Liberalization and the
  Manufacturing Sector the case of the small
  developing country. Contemporary Economic
  Policy, July 2002 v20 i3 p272 (16). Date of
  Access October 31, 2002. Randolph-Macon Womans
  College Expanded Academic ASAP
•  

34
Bibliography

• Caribbean World Bank Approves 155 million to
  Support Programs to Fight HIV/AIDS Loans approved
  for Dominican Republic, Barbados. The World Bank
  Group, June 28, 2001. Date of Access November 3,
  2002.
• lthttp//lnweb18.worldbank.org/news/pressrelease.ns
  f/673fa6c5a2d50a67852565e200692a79gt
• ICT At a Glance Tables Barbados. Development
  Data Group World Bank. 2001. http//www.worldban
  k.org/cgi-bin/sendoff.cgi?page2Fdata2Fcountryda
  ta2Fict2Fbrb_ict.pdfsubmitGo

35
Bibliography

• Downes, Andrew S. The Impact of Structural
  Adjustment Policies on the Educational System in
  the Caribbean. Inter-American Agency for
  Cooperation and Development, Organization of
  American States, 2002. http//www.iacd.oas.org/La
  20Educa20116/downes.htm
• Economic Performance in Small, Open Economies
  The Caribbean Experience, 1980-1992.
  http//econ.worldbank.org/files/450_wps1544.pdf
• King, Kurleigh D. Economic Growth for the
  1990s. (Barbados). Nations Business, April
  1990 v78 n4, 84.

36
Bibliography

• AIDS cases in 1995 lower than expected in
  Barbados. AIDS Weekly Plus. March 25, 1996. P
  23.
• Duggan, Patrice. Sun-drenched capital.
  (Stock-exchanges in the Caribbean). Forbes.
  September 3, 1990. V146, n5. P. 84.
• Bulvinic, Mayra. The costs of adolescent
  childbearing evidence from Chile, Barbados,
  Guatemala, and Mexico. (Adolescent Reproductive
  Behavior in the Developing World). Studies in
  Family Planning. June 1998. V29, n2. P. 201.

37
Bibliography

• Griffith, Jennifer, Denny Lewis-Bynoe and Winston
  Moore. Trade liberalization and the
  manufacturing sector the case of the small
  developing country. Contemporary Economic
  Policy. July 2002. V20, i3. P. 272.
• Gmelch, George. Double Passage The Lives of
  Caribbean Migrants Abroad and Back Home. The
  University of Michigan, 1992.