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Barbados Country Brief - January 2008

Overview

Australia and Barbados enjoy friendly relations, based on various historical, sporting, social and political ties. From January 1994 to June 2004, Australia's diplomatic representation in the Caribbean was based in Bridgetown, Barbados. The Australian High Commissioner resident in Port of Spain, Trinidad and Tobago, now holds non-resident accreditation to Barbados. Barbados is the only Caribbean country to maintain formal diplomatic relations with Australia through a High Commissioner resident in Ottawa.

Barbados has an activist foreign policy, recognising that its small size and limited resources oblige it to engage with other countries. Reflecting this, Barbados is a founding member of the Caribbean Community (CARICOM), the region's main political grouping, and is committed to regional integration. It hosts the headquarters of a number of regional bodies, including the Caribbean Examinations Council (CXC), Caribbean Development Bank (CDB), Caribbean Conference of Churches (CCC), and the Caribbean Tourism Organisation (CTO). Barbados has been at the forefront of efforts by CARICOM countries to create a Caribbean Single Market (CSM). Barbados is one of only two CARICOM countries (Guyana being the other) that recognises the Caribbean Court of Justice in its original jurisdiction (as a disputes mechanism for the CSM) and appellate jurisdiction (as the country’s court of last resort replacing the UK Privy Council).

Maintaining good relations with the United States is an important foreign policy focus for the Barbados, and relations with other regional and global players are strengthening. However Barbados has been unwilling to sign an agreement exempting United States military and civilian personnel from action by the International Criminal Court. As a consequence, US military assistance to Barbados has been withheld since 2003. But cooperation with the US continues in other key areas, such as drug trafficking and counter-terrorism. An agreement was recently reached between Barbados and China, whereby China will provide US$1.5m in assistance for the defence force.

In the international arena, Barbados is a member of the United Nations and its specialised agencies, the Organization of American States (OAS) and other agencies of the Inter-American system, the Commonwealth, the group of African, Caribbean and Pacific states (ACP) and the Non-Aligned Movement.

Barbados trades strongly with its CARICOM partners, and Prime Minister Arthur has been at the forefront of efforts to promote the Caribbean Single Market. 

Along with Jamaica, Belize, Guyana, Suriname and Trinidad and Tobago, Barbados formally joined the Caribbean Single Market (CSM), on 1 January 2006.  The CSM is intended to enhance export opportunities and attract foreign investment, by creating a single market among the participating member states. The main objectives are to achieve full use of labour (full employment) and full exploitation of the other factors of production (natural resources and capital), competitive production leading to greater variety and quantity of products and services to trade with other countries. This is intended to improve standards of living and work, and promote sustainable economic development.

Political Overview

Barbados is politically, economically and socially stable. The Barbados Labour Party (BLP) Government of Prime Minister Owen Arthur was re-elected in 2003 for a third consecutive term, and with a commanding parliamentary majority (23 seats in the 30-member House of Assembly), remains firmly in control. The Government has promised a referendum on replacing the British monarch as Head of State with a ceremonial President; however a date for the referendum is yet to be set. Mr Arthur is expected to hand over the party leadership before the next election (which is due by September 2008).

Barbados is a parliamentary democracy. The Head of State is Queen Elizabeth II, represented by the Governor-General. It has a bicameral parliament comprising a 30-member House of Assembly and a 21-member Senate. The Prime Minister is the leader of the party with the most members in the House of Assembly. House of Assembly members are directly elected to represent single-member constituencies for a term of five years. Senators are appointed by the Governor-General: 12 on the advice of the Prime Minister, two on the advice of the Leader of the Opposition and seven by the Governor-General acting alone.

Economic Overview

Barbados is experiencing sound economic growth, with GDP growth reaching 4.2 per cent in 2007, according to the country’s Central Bank. Growth has been above 3 per cent for each quarter since July-September 2004 and is being driven by the construction and retail sectors, along with tourism and manufacturing. Inflation was around 4.2 per cent and unemployment around 8 per cent in 2007.

Bilateral relationship

The Commonwealth provides the principal link between Australia and Barbados, and both countries are members of the Commonwealth Parliamentary Association. Sport, predominately cricket, is also a major link in the bilateral relationship. Barbados was one of 17 countries whose athletes competed at the 2006 Commonwealth Games in Melbourne. Barbados was one of the Caribbean host countries for the 2007 Cricket World Cup, including the final, which was won by Australia.

Both Australia and Barbados are members of the United Nations and many of its specialist agencies. We cooperate on a range of multilateral issues, including candidatures for multilateral bodies and we have liaised bilaterally on matters such as sharing information on taxation.

Bilateral economic and trade relationship

Trade between Australia and Barbados is modest yet growing steadily, with the balance of trade in Australia's favour. In 2006-07 Australian merchandise exports totalled A$3.9 million, whilst imports from Barbados totalled A$835,000. Australia’s main exports to Barbados include coated flat steel, milk and cream and alcoholic beverages. Australian imports from Barbados include alcoholic beverages, plastic articles, perfumes and cosmetics. 

Export Opportunities

Possible opportunities exist for increased Australian trade and investment in Barbados. Food is a major import commodity for the country and opportunities exist in both the domestic and tourist markets. Processed food, beef, lamb, wine and dairy products are some of the sectors where opportunities might be pursued. 

The tourism industry, in particular, provides a steady market for imports, much of which is currently filled by the United States. Over one million cruise ship passengers are expected to arrive annually in Barbados over the next five to 10 years. As most tourists are from Europe and the UK, there is already brand identification for Australian products. Australian exporters could also consider exporting to Barbados via distribution networks located elsewhere in the Caribbean. Australian know-how and expertise in hotel and resort development is another area with potential. It is estimated that Barbados needs a further 300-700 rooms to meet current tourist demand. The provision of telecommunications services could also represent an area of opportunity following earlier deregulation of the sector.

There may be potential for providing a fast, inter or intra-island ferry service. The possible introduction of Australian-built fast ferries elsewhere in the region would be a major step towards Australian boat builders gaining access to markets throughout the Caribbean.