Transcript IS BARBADOS DEVELOPING?

IS BARBADOS DEVELOPING?
Barbados as a model nation for the Caribbean
Some Perspective
World Bank Measure
of Economy



Barbados: Uppermiddle income
Jamaica, Guyana, and
Dominican Republic:
Lower-middle income
Haiti: Lower income
(according to 1998 GNP per
capita)
• ICT At a Glance—
Barbados (2000)
*GDP Growth %Barbados—3.6
Latin America and the
Caribbean—2.5
*International Telecommunication
(outgoing traffic—min/subscriber)
Barbados—391
Latin America and the
Caribbean--106
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)
Our Indicators of Development
in Barbados
1.
2.
3.
4.
5.
6.
Economy
Health
Education
Unemployment Insurance
Public Transportation
Housing Conditions
Economic Development
The Diversification of Barbados’
Industry
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 SAP’s 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%.
Sectoral Distribution of GDP 1975-1998 %
Sector
1975
1980
1985
1990
1995
1998
Agriculture: Sugar
Non-sugar
9.5
3.8
7.18
3.12
5.39
4.19
3.35
4.04
1.93
4.29
2.13
3.46
Mining and Quarrying
0.2
0.53
0.93
0.74
0.86
0.96
Manufacturing
10.3
11.82
10.39
9.98
9.87
9.82
Electricity, Gas, Water
1.5
2.09
2.72
2.99
3.54
3.55
Construction
6.6
7.03
6.34
6.82
6.69
7.84
Wholesale/Retail Trade
18.2
19.52
19.58
19.52
29.22
20.21
Tourism
9.3
13.83
11.51
14.42
15.19
14.96
Transport/Storage/Communication
7.2
6.19
7.46
7.14
8.17
8.14
Business/General Services
14.2
15.96
17.89
17.19
17.16
16.85
Government Services
15.0
12.71
13.58
13.67
13.18
12.06
100.0
100.00
100.00
100.00
100.00
100.00
Other
Total
Agriculture
1)
2)
Decrease in Sugar Cane
production—in 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
Manufacturing
Diversification of Products
Government encouraged the growth of the
manufacturing sector to promote economic
diversity
This would reduce the country’s
vulnerability to external shocks
Manufacturing Cont’d
There are 13 major industries in Barbados
In the 60s, the sector’s 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 sector’s
contribution to GDP was at 9.6% compared with
12.8% during its peak years
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
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
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
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 country’s goods
and services
The BIDC also manages the government
incentive program for industry
Tourism
600000
500000
400000
300000
200000
100000
1995
1985
1975
0
1966
Opening up their
country to tourists
while still maintaining
control…
Tourism in Barbados
was originally a
luxury export owned
by foreign luxury
hotels
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
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
Labor Force Characteristics, 1965-1998
Adult population
2000
Labour force
2000
participation
rate (%)
unemployment
rate (%)
Year
Both
Both
Male
Male
Female
Female
No
%
No
%
No
%
Both
Male
Female
Both
Male
Female
86.2
49.2
13.0
9.0
18.0
63.1
77.2
57.2
18.0
13.0
16.3
65.9
77.5
56.0
14.5
5.7
8.8
63.7
73.7
55.2
18.7
14.2
24.0
1965
143.2
61.7
81.4
93.3
100
53.2
51.0
40.1
42.9
65.2
1970
149.8
69.1
80.7
89.8
100
53.9
60.0
35.9
39.9
59.9
1975*
164.5
75.7
88.8
1980
174.2
80.1
94.1
114.8
100
62.1
1985
177.7
82.2
95.5
113.3
100
60.6
1990
184.1
85.1
98.9
123.9
100
64.3
51.9
59.6
48.1
67.4
75.5
60.3
15.0
10.1
20.3
1995
200.7
92.8
107.9
136.8
100
69.1
50.5
67.6
49.4
68.2
74.5
62.7
19.7
16.5
22.9
1998
201.4p
n.a.
n.a.
136.3
100
70.3
51.8
66.0
48.4
67.7
74.0
62.0
12.3
8.4
16.4
54.1
52.7
45.9
52.7
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)
Social Development
Selected Health Indicators for
Barbados 1966 & 1998
Indicator
1966
1998
Life Expectancy
69.9
72.9(m)/77.4
(f)
Infant Mortality Rate (per 1,000
Births)
47.7
14.0
Child Death Rate (1-4) (per
1,000)
2.4
0.43
Birth Rate
25.9
13.6
Crude Death Rate
8.2
9.3
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 US$15.5
million loan to Barbados
towards HIV/AIDS
prevention program
ante-natal & pre-natal
services at polyclinics
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
Unemployment Insurance
Introduced in 1981, it provides compensation to
employees who b/c of total unemployment, layoff 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
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
Housing Conditions
Housing
Condition
1970
1980
1990
Water
60.4
82.4
92.6
Toilet: Pit
Water-borne
n.a
n.a
52.2
43.6
32.1
66.3
Fuel: Gas
Kerosene
Wood
n.a
n.a
n.a
66.4
27.2
0.6
84.6
8.0
0.2
Telephone
n.a
n.a
68.2
Television
n.a
n.a
84.8
Outer Wall: Wood
Wood & Concrete
Concrete
Other/N.S
75.3
4.4
19.3
1.0
57.3
11.7
26.2
4.8
39.8
20.3
39.7
0.2
The Human Development Index
The Human Development Index
Human Development Index 2000

US (6)

Barbados (31)

Jamaica (86)
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Dominican Republic (94)
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Guyana (103)

Haiti (146)
http://hdr.undp.org/reports/global/2002/en/indicator/indicator.cfm?File=indic
_283_1_1.html
Why has Barbados been
developing?
Relationship with Britain
No political unrest
NGO’s
Barbados can be distinguished from other
CARICOM countries, as having a corrupt
free government
Why has Barbados been
developing? Cont’d
Terrain
Why has Barbados been
developing? Cont’d
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
DISCUSSION QUESTION
In looking at what you’ve learned
about your own countries what do
you see as factors contributing to its
relative lack of development? Is
Barbados truly a model?
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.htm
Lewis-Bynoe, Denny, Jennifer Griffith and Winston Moore.
“Trade Liberalization and the Manufacturing Sector: the
case of the small developing country.” Contemporary
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Access: October 31, 2002. Randolph-Macon Woman’s
College: Expanded Academic ASAP
Bibliography
“Caribbean: World Bank Approves $155 million to Support
Programs to Fight HIV/AIDS Loans approved for
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<http://lnweb18.worldbank.org/news/pressrelease.nsf/673fa6c
5a2d50a67852565e200692a79…>
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Bibliography
Downes, Andrew S. “The Impact of Structural Adjustment
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http://www.iacd.oas.org/La%20Educa%20116/downes.htm
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http://econ.worldbank.org/files/450_wps1544.pdf
King, Kurleigh D. “Economic Growth for the 1990’s.
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Bibliography
“AIDS cases in 1995 lower than expected in
Barbados.” AIDS Weekly Plus. March 25, 1996.
P 23.
Duggan, Patrice. “Sun-drenched capital. (Stockexchanges in the Caribbean).” Forbes.
September 3, 1990. V146, n5. P. 84.
Bulvinic, Mayra. “The costs of adolescent
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Bibliography
Griffith, Jennifer, Denny Lewis-Bynoe and
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manufacturing sector: the case of the small
developing country.” Contemporary Economic
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