Development and Underperformance in the Barbados Economy, 1946-2018

Abstract

In the years since World War II Barbados was transformed from a desperately poor society, with only a tiny middle class, to today's economy of mostly middle-income earners, which is ranked by the UNDP among the highest level of human development globally. In this chapter we discover that the transformation took place, for the most part, in the 1950s and 1960s. Thereafter, economic development gains were modest, and the economy has performed well below its economic potential. The chapter tells the story of the changeover from sugar to tourism as the mainstay of the economy, and the factors that affected investment and growth. The phases of growth, the pressures on the balance of payments and the economic crises that have occurred are analysed, and the impact of Government policies on growth and economic stability is explored in depth. The chapter concludes with thoughts on the way forward for Barbados and the Caribbean.

Keywords: Barbados, Caribbean, Economic development, Economic policy

JEL Classification: O54