Barbados - Current economic position and prospects

Report No. 506a-BB Current Economic Position :7 and Prospects of Barbados t X July 21, 1975 Latin America and Caribbean Regional Office Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report wds prepared for official use only by the Bank Group. It may not be published, quoted or cited without Barnk Group authorization. The Bank Group does not accept responsibility tor the accuracy or completeness of the report.  CURRENCY BQUIVALENT 1/ Currency Unit: Until November, 1973: Eastern Caribbean Dollar (EC$) Since December, 1973: Barbados Dollar (BDS $) Exchange Rates Effective December 31, 1973 US$ 1.00 = BDS $ 2.066 BDS$ 1.00 - US $ 0.484 Average Exchange Rates 1972 1973 US$ 1 = EC $ 1.920 BDS $ 1.951 BDS$ 1 = US $ 0.521 US $ 0.513 1/ The EC$ and the BDS$ float in line with the pound sterling at the rate of t 1 = BDS$4.80 = EC$4.80.  This report is based on the findings of an economic mission to Barbados during October-November 1973, copposed of L. Landau (Chief); H. Moon (General Economist); H. Busz (Fiscal Economist); D. Calvo (Tourism Economist); E. Johnson-Sirleaf (Investment Program Advisor); D. Velasco (Statistical Assist- ant) and J. Grady (Secretary).   TABLE, OF COMENTS ?aRe No. JOUJNTRY DATA K4AP SUMMARY AND CONCLUSIONS i - xii I. GBNERMA BACKGROUND 1 A. Population and Resources 1 B. Historical 1- 3 C. Regional Cooperation and Trade 3 - L D. Government and Politics 4 - 5 II. ECONOMIC STRUCTURE AND CONSTRAINTS ON 6 DEVELOa1ENT A. Recent Economic Performance and Structural Change 6 - 9 B. Balance of Payments Performance 9 - 13 C. Financial Management 13 - 22 D. Manpower Constraints 22 - 29 7II. SECTORAL PROBLEMS AND ISSUES 30 A. Agriculture 30 - 43 B. Manufacturing h3 - 52 C. Tourism 53 - 64 D. Sectoral Public Investment Programs 65 - 72 IV. NEAR AND YIEDIUM-TERM DEVELO1PNET PROSPECTS 73 A. Stabilizing the Economy 73 - 79 B. Medium-Term Growth Prospects, 1975-PO 79 - 90 C. Public Investment and Its Financing, 1975-80 91 - STATISTICAL APPENDIX   Page 1 of 2 pages COUNTRY DATA - BARBADOS AREA 2/ POPUIATION DENSITY 431 kel 0.236 million (mid-1970) 548 per kmV Rate of Growth: (from 1960 to 1970) per 2/of arable land POPULATION CHARACTERISTICS (l97 HEALTH (1969) Crude Birth Rate (per 1,000) 21 Population per physician 1,890 Crude Death Rate (per 1,000) 9 Population per hospital bed 110 Infant Mortality (per 1,000 live births) 45 INCOME DISTRIBUTION (1970) DISTRIBUTION OF ILAND OWNERSHIP (197p) 7. of national income, highest quintile 43.6 % owned by top 10% of owners 95.0 lowest quintile 5.0 % owned by smallest 10% of owners 0.5 ACCESS TO PIPED WATER (1970) ACCESS TO ELECTRIClTY (190) 7. of population - urban 90 % of population - urban 85.o - rural 60 - rural 40.0 NUTRITION EDUCATION (1970) Calorie intake as % of requirements Adult literacy rate % 97.0 Per capita protein intake Primary school enrollment % 100.0 1/ GNP PER CAPITA in 190 : US $ 570 GROSS NATIONAL PRODUICT IN 1973 ANNUAL RATE OF GROWTH (%, constant prices) US $ Mln. % 1966-72 1972-73 CNP at Market Prices 244 100.0 5.9 2.5 Gross Domestic Investment 49 20.0 5.7 -6.6 Gross National Savinig -11 -h.5 _ _ Current Account Balance 56 23.0 8.9 5.7 Exports of Goods, NFS 138 56.6 6.5 2.4 Imports of Goods, NFS 198 81.1 7.1 3.5 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1972' Value Added (Factor Cost) Labor Force2 V. A. Per worker USM Mln. "% Mln. % US $ % Agricultture 17 11.4 .014 17.1 1,214 67.7 Industry 30 20.6 .024 29.3 1,250 69.7 Services 100 68.0 .044 53.6 2,273 126.8 Unallocated . Total/Average 147 100.0 .082 100.0 1,793 100.0 GOVERNMENT FINANCE 3 GOE N FGeneral Government Central Government (.nE$ Mln.) .% of GDP (PBS $ Mln.) 7. of GDP 1972/73 1972/73 1972/73 1972/73 Current Receipts 116.8 34.7 110.1 32.7 Current Expenditure 115.8 :0.4 108.5 32.2 Current Surplus l.O 1. 0.5 Capital Expenditures 21.5 6.4 21.5 6.4 External Assistance (net) 7.0 2.1 7.0 2.1 1/ The Per Capita GNP estimate is at 1970 market prices, calculated by the same conversion technique as the 1972 World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailir.g during the period covered. 2/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seeking their first job. Figures are for 1970. 3/ Does not include National Insurance Fund. not available not applicable  Page 2 of 2 pages COUNTRY DATA - BARBADOS MONEY, CREDIT and PRICES 1968 1969 1970 1971 1972 t973 (Million BDS$ outstanding end period) Money and Quasi Money 11t.1 174.1 198.14 222.1 287.5 296.6 Bank Credit to Central Government 11.2 13.7 25.3 33.9 141.1 30.2 Bank Credit to4Private Sector 83.3 132.3 165.9 189.6 215.9 259.h (Percentages or Index Numbers) Money and Quasi Money as 7% of GDP 56.3 61 .5 59.6 60.2 70.1 60.7 General Price Index (1966 - 100) 111.1, 117.3 126.1 135.9 151.9 181.7 Anntial percentage changes in: Retail Price Index 7.5 5.3 7.8 7.5 11.8 19.6 Bank credit to Central Government 22.3 814.6 34.0 21 .2 -26.5 Bank credit to Private Sector 58.8 25.14 14.3 13.9 20.1 1/ bALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1970-72) 1966 1972 1973 US $ Mln % (Millions US $) Exports of Coods, NFS 57.9 120.5 138.0 Sugar and Molasses 15.8 53.6 Imports of Goods, NFS 76.9 162.4 198.0 Other Agriculture 1.3 4.14 Resource Gap (deficit = -) . -U7T9 -O Rum 2.0 6.8 Apparel 2.3 7.8 Interest Payments (net) -.2 -.7 -1 .4 All other conmmodities 8.1 27.4 Workers' Remittances (net) 3.5 5.3 6.o Total 29.5 l00,0 Other Factor Paynments (net) -.1 -14.4 -4.9 Net Transfers 3.8 i.6 4.5 EXTERNAL DEBT, DECEMBER 31, 1973 Balance on Current Account -19.6 -1o.1 -55.8 Direct Foreign Investment 7.5 10.0 11.0 Net liLT Borrowing -0.1 2.3 14.7 Public Debt, incl. guaranteed 27.8 Disbursements 0.1 2.6 15.1 Non-Guaranteed Private Debt Akmrtizacion -0.2 -0. -0.14 Total outstanding & Disbursed 27.8 Subtotal -12.2 -25.5 -15-. 2/ Capital Grants - - DEBT SERVICE RATIO for 1973 Other Capital (net) 8.9 20.2 4.6 e/ Other items n.e.i Increase in Reserves (+) -3.3 -5.3 -10.8 Public Debt, incl. guaranteed 1.8 Non-Guaranteed Private Debt Total outstanding & Disbursed1. Net Reserves (end year) 25.9 25.0 114.2 RATE OF EXCHANGE IBRD/IDA LENDING, August 19714 (Million US $)t December - 1971 IBRD IDA US $ 1.00 = EC $ 1.975 EC $ 1.00 = us $ 0.506 Outstanding & Disbursed 31 Undisbursed -Averae - 1973 Outstanding incl. Undisbursed US $ l.00 BDS$ 1.951 BDS$.1.00 = US $ 0.513 1/ Domestic Exports 2/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. 3/ The BDS$, created in December, 1973, floats in line with the pound sterling. not available not applicable August 15, 19714 Latin America and Caribbean Programs II  IBRD 11044 C 80, 70- MAY 1974 North Polnt .s ATLANTIC .s7 CEAN N 0 400 Li ~~~~~~~~~KMS. CRABHILL > 9 - -C c - . o ;0 400 ) //---. \ -20 DOMINICAN MILES 20 _~~~~~~~RP 20 / ., PIE CORNER HA1TI - PUERTO RICO (ST. LU C Y v JAMAICA I fo _-i 6 Coribbeon Sea o BARBADOS PANAMA SO U T H AMERICA flO bo.-do,. d,w to hlo ,o db oot SPEIGHTS- T E T E R MILL BELLEPLAINE . , _ b (h. TOWNW-Bk 1hm I tILLABY CATTLEWA BATHSHEBA