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Caribbean Islands
Index
In general, the Barbadian government has taken a strong stand
against government interference in the operation of the national
economy. During his second term as prime minister, Barrow favored
a minimal role for government in managing economic enterprises and
emphasized the supportive nature of the government in promoting the
development of the economy. Nevertheless, government spending has
been a major tool of economic growth. The government has conducted
its economic policy by employing fiscal and monetary measures and
by supporting the social and productive sectors of society with
public sector investment. Public sector investment, however, was
also inextricably linked to outcomes of fiscal policy.
In fiscal year (FY--see Glossary) 1986, the government
introduced fiscal policies aimed at enhancing the purchasing power
of the private sector. Tax concessions to individuals and
businesses were expected to stimulate the economy and minimize
demand for wage increases, whereas increased consumption duties
were designed to regulate consumer activity. Indirect taxation was
to offset the loss of direct revenue from income and business tax
concessions.
By late 1986, however, it was clear that the realigned tax
structure would cause a large deficit. In December 1986, the CBB
recorded a 118-percent increase in the national deficit compared
with the previous year. The increase stemmed from the government's
inability to control capital expenditures and public wage
increases. Such control was a necessary precondition for the
success of the new fiscal policy.
In the mid-1980s, analysts raised concerns about the potential
effects of the Barbadian deficit. In spite of gains in aggregate
productivity, the budget imbalance could not be corrected, and
increased foreign borrowing appeared to be imminent. International
concerns revolved around Barbados' ability to meet debt payments in
the near future, as well as its ability to finance the public
sector investment in the out years.
Although fiscal policy was a dominant economic tool of the
government, monetary control played a relatively significant role
when compared with operations of other Eastern Caribbean islands.
The government coordinated economic policy with the CBB, rather
than allowing it to develop a completely independent program. Their
mutual goal was economic stability for the island, which implied
controlling the money supply so that credit markets remained
nonvolatile yet were sufficiently liquid to meet the demands of a
developing economy.
Government influence over the economy was exercised more
directly through public sector investment, which was developed and
coordinated in conjunction with the five-year economic development
plan. Historically, Barbados has concentrated public investment in
three areas: economic infrastructure, such as roads and ports;
social infrastructure, including health, education, and housing;
and productive sectors, particularly agriculture and tourism. Funds
for the 1986-88 period, which coincided with the last two years of
the 1983 five-year economic development plan, were allocated mostly
to transportation; the social sector received 26 percent of capital
outlays, however, split mostly between health and education
programs. Agriculture and tourism received a combined total of 30
percent of investment funds available from public sources.
Infrastructure constituted almost 36 percent of the total
public sector investment for that period, which was reflected in
the excellent communications and transportation networks that were
available in the late 1980s. The Barbados Telephone Company
operated an entirely automatic system of 75,000 telephones.
Tropospheric-scatter links to Trinidad and Tobago and to St. Lucia
and a satellite ground station operating with the International
Telecommunications Satellite Corporation (INTELSAT) Atlantic Ocean
satellite provided high-quality international service. The
government-owned Caribbean Broadcasting Corporation broadcast from
the capital on 900 kilohertz and had FM service at 98.1 megahertz.
Two commercial stations also broadcast from St. George's, Grenada,
on 790 kilohertz and 90.7 megahertz. Evening television service was
available. The Nation and the Barbados Advocate were
the local daily newspapers.
Transportation infrastructure was good and comprised almost
1,500 kilometers of paved roads, a major international airport, and
a deep-water port. One highway circled Barbados, and numerous other
roads crisscrossed the island; buses served most towns. Grantley
Adams International Airport, on the southern tip of Barbados,
handled direct flights to points in North America and Western
Europe. Bridgetown boasted a manmade deep-water port, which was
completed in 1961 and expanded in 1978. The island had no railroads
or inland water transportation.
In 1986 informed observers estimated that the next five-year
plan would allocate additional capital to productive sectors
(tourism, agriculture, and manufacturing) in the form of direct
credit. This would take place at the expense of reduced investment
in physical infrastructure. Because many of the road projects were
scheduled for completion within the decade, a reallocation toward
sectors that would directly assist national economic development
was considered necessary to enhance the overall performance of the
economy.
Foreign sources of capital, which from 1982 to 1986 had
included loans or grants from development banks and government
agencies, composed 40 percent of the public sector investment
budget. This figure was expected to increase to 50 percent for the
1986-88 period, a situation that could further exacerbate a growing
foreign debt repayment problem.
Data as of November 1987
- Caribbean Islands-Historical Background
- Caribbean Islands-Prosperity and Government Centralization, 1974-81
- Caribbean Islands-Economy
- Caribbean Islands-Agriculture
- Caribbean Islands-Government and Politics
- Caribbean Islands-Tourism
- Caribbean Islands-Political Dynamics
- Caribbean Islands-COUNTRY PROFILE: Turks and Caicos Islands
- Caribbean Islands-Chapter 7 - Strategic and Regional Security Perspectives
- Caribbean Islands-Role of Government
- Caribbean Islands-Labor Force and Industrial Relations
- Caribbean Islands-Role of Government
- Caribbean Islands-Growth and Structure of the Economy
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Economy
- Caribbean Islands-Political Dynamics
- Caribbean Islands-A Regional Security System
- Caribbean Islands-Tourism
- Caribbean Islands-Other Third World Relations
- Caribbean Islands-SOCIAL AND CULTURAL CHARACTERISTICS
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Balance of Payments and Debt
- Caribbean Islands-HEALTH AND WELFARE
- Caribbean Islands-ACKNOWLEDGMENTS
- Caribbean Islands-Role of Government
- Caribbean Islands-FOREIGN RELATIONS
- Caribbean Islands-Education
- Caribbean Islands-Manufacturing
- Caribbean Islands-Relations with the Commonwealth and Others
- Caribbean Islands-Foreign Relations
- Caribbean Islands-COUNTRY PROFILE: St - Christopher and Nevis ST - CHRISTOPHER AND NEVIS
- Caribbean Islands-The Penal System
- Caribbean Islands-The Soviet Presence
- Caribbean Islands-Colonial Heritage HISTORICAL SETTING
- Caribbean Islands-National Security
- Caribbean Islands-COUNTRY PROFILE: Antigua and Barbuda ANTIGUA AND BARBUDA
- Caribbean Islands-The Public Security Forces
- Caribbean Islands-Political Systems
- Caribbean Islands-EDUCATION
- Caribbean Islands-Relations with Latin American and Caribbean Countries
- Caribbean Islands-Changes in the Social Base of Political Power POLITICAL INDEPENDENCE
- Caribbean Islands-POPULATION
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Relations with the United States
- Caribbean Islands-Livestock, Fishing, and Forestry
- Caribbean Islands-National Security
- Caribbean Islands-Population
- Caribbean Islands-Education
- Caribbean Islands-ECONOMY
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Population
- Caribbean Islands-NATIONAL SECURITY
- Caribbean Islands-Agricultural Sector
- Caribbean Islands-The Barbados Defence Force
- Caribbean Islands-Government and Politics
- Caribbean Islands-Geography
- Caribbean Islands-Economy
- Caribbean Islands-The Police
- Caribbean Islands-The Robinson Government
- Caribbean Islands-United States Preeminence
- Caribbean Islands-External Sector
- Caribbean Islands-Energy
- Caribbean Islands-Education
- Caribbean Islands-POLITICAL TRADITIONS
- Caribbean Islands-THE STRATEGIC SETTING
- Caribbean Islands-Education
- Caribbean Islands-Role of Government
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Geography
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Government and Politics
- Caribbean Islands-Livestock, Fishing, and Forestry
- Caribbean Islands-Industrial Sector
- Caribbean Islands-Relations with the Commonwealth and Others
- Caribbean Islands-THE COLONIAL PERIOD
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Relations with Communist Countries
- Caribbean Islands-Role of Government
- Caribbean Islands-GEOGRAPHIC SETTING
- Caribbean Islands-Government and Politics
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-National Security
- Caribbean Islands-Natural Gas
- Caribbean Islands-Geography
- Caribbean Islands-Incidence of Crime
- Caribbean Islands-Economy
- Caribbean Islands-COUNTRY PROFILE: Barbados BARBADOS
- Caribbean Islands-The Road to Independence
- Caribbean Islands-PREFACE
- Caribbean Islands -CHAPTER 3 - TRINIDAD AND TOBAGO
- Caribbean Islands-Services
- Caribbean Islands-National Security
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-World War II
- Caribbean Islands-External Sector
- Caribbean Islands-EDUCATION
- Caribbean Islands-Foreword
- Caribbean Islands-Health and Welfare
- Caribbean Islands-The Postwar Strategic Vacuum
- Caribbean Islands-Education
- Caribbean Islands-Regional Security Threats, 1970-81
- Caribbean Islands-Controversial Security Issues
- Caribbean Islands-HEALTH AND WELFARE
- Caribbean Islands-Foreign Assistance
- Caribbean Islands-Chapter 4 - The Windward Islands and Barbados
- Caribbean Islands-ECONOMY
- Caribbean Islands-Population
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Banking, Financial Services, and Currency
- Caribbean Islands-HISTORICAL SETTING
- Caribbean Islands-Education SOCIAL AND ECONOMIC DEVELOPMENTS, 1800-1960
- Caribbean Islands-The Post-Williams Era, 1981-86
- Caribbean Islands-The Armed Forces
- Caribbean Islands-Chapter 6 - The Northern Islands
- Caribbean Islands-Relations with the United States
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Population
- Caribbean Islands-Finance and Banking
- Caribbean Islands-COUNTRY PROFILE: CAYMAN ISLANDS BRITISH DEPENDENCIES: THE CAYMAN ISLANDS AND THE TURKS AND CAICOS ISLANDS
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Services
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Education
- Caribbean Islands-Land Tenure and Use
- Caribbean Islands-COUNTRY PROFILE: MONTSERRAT
- Caribbean Islands-Growth and Structure of the Economy
- Caribbean Islands-Population
- Caribbean Islands-Transportation, Communications, and Electricity
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Government and Politics
- Caribbean Islands-Petroleum and Asphalt
- Caribbean Islands-Economy
- Caribbean Islands-Foreign Relations
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-The Pre-European Population HISTORICAL AND CULTURAL SETTING
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-National Security
- Caribbean Islands-COUNTRY PROFILE: The Bahamas THE BAHAMAS
- Caribbean Islands-Health and Welfare
- Caribbean Islands
- Caribbean Islands-Crops
- Caribbean Islands-National Income and Public Finance
- Caribbean Islands-COUNTRY PROFILE: Dominica DOMINICA
- Caribbean Islands-National Security
- Caribbean Islands-Population
- Caribbean Islands-Political Dynamics
- Caribbean Islands-Trade and Finance
- Caribbean Islands-Chapter 1 - Regional Overview
- Caribbean Islands-Economy
- Caribbean Islands-Labor Organizations
- Caribbean Islands-Revenues
- Caribbean Islands-THE REGIONAL SECURITY SETTING
- Caribbean Islands-Construction
- Caribbean Islands-Manufacturing
- Caribbean Islands-Agriculture
- Caribbean Islands
- Caribbean Islands-ISLANDS OF THE COMMONWEALTH CARIBBEAN
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Political Dynamics
- Caribbean Islands
- Caribbean Islands-Relations with Latin American and Caribbean Countries
- Caribbean Islands-National Security
- Caribbean Islands
- Caribbean Islands-COUNTRY PROFILE: ANGUILLA
- Caribbean Islands-NATIONAL SECURITY
- Caribbean Islands-Economy
- Caribbean Islands-THE EUROPEAN SETTLEMENTS
- Caribbean Islands-Balance of Payments and Debt
- Caribbean Islands-INTRODUCTION
- Caribbean Islands-Foreign Relations
- Caribbean Islands
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Current Strategic Considerations
- Caribbean Islands
- Caribbean Islands-Narcotics Crime
- Caribbean Islands-Economy
- Caribbean Islands-Petrochemicals
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-POPULATION
- Caribbean Islands
- Caribbean Islands-The Post-Emancipation Societies
- Caribbean Islands-The West Indies Federation, 1957-62
- Caribbean Islands-Relations with the United States, Britain, and Canada FOREIGN RELATIONS
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Geography
- Caribbean Islands-Crops
- Caribbean Islands-National Income and Public Finance
- Caribbean Islands-Sectoral Performance
- Caribbean Islands-Precursors of Independence
- Caribbean Islands
- Caribbean Islands-Education
- Caribbean Islands-The Criminal Justice System
- Caribbean Islands-GEOGRAPHY
- Caribbean Islands-Role of Government
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Economic Policy and Management
- Caribbean Islands-Foreign Trade and Balance of Payments
- Caribbean Islands-Political Unrest and Economic Troubles, 1970-73
- Caribbean Islands-Education
- Caribbean Islands-Labor Force and Industrial Relations
- Caribbean Islands-Chapter 5 - The Leeward Islands
- Caribbean Islands -Chapter 2 - Jamaica
- Caribbean Islands-Health and Welfare
- Caribbean Islands-The Governmental System GOVERNMENT AND POLITICS
- Caribbean Islands-The Sugar Revolutions and Slavery
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-The Cuban Presence
- Caribbean Islands-Geography
- Caribbean Islands-Population
- Caribbean Islands-Land Tenure and Use
- Caribbean Islands-Macroeconomic Overview
- Caribbean Islands-Role of Government
- Caribbean Islands
- Caribbean Islands-Government and Politics
- Caribbean Islands-The Governmental System GOVERNMENT AND POLITICS
- Caribbean Islands-Economy
- Caribbean Islands-Industry
- Caribbean Islands
- Caribbean Islands-The Increased Role of the United States
- Caribbean Islands-Population
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Transportation and Communications
- Caribbean Islands-Country profile: Grenada GRENADA
- Caribbean Islands-Iron and Steel
- Caribbean Islands-Geography
- Caribbean Islands
- Caribbean Islands-Banking and Finance
- Caribbean Islands-Postwar Federation Efforts
- Caribbean Islands-Health and Welfare
- Caribbean Islands-Government and Politics
- Caribbean Islands
- Caribbean Islands-Population
- Caribbean Islands-GEOGRAPHY
- Caribbean Islands-Industry
- Caribbean Islands-Consolidation and Economic Hardship, 1962-69
- Caribbean Islands-Patterns of Development
- Caribbean Islands-Geography
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