Barbados was CDB’s largest borrower and had relatively high levels of income, education, and social stability. The context for the CDB program in Barbados over the last 10 years had nevertheless been very challenging, in two main areas. First, the economic trends were adverse for most of the period and a crisis was reached by 2018. Second, there was a major constraint in terms of absorptive capacity for taking forward investment projects – an implementation gap. The Barbados economy was hit by a difficult world economic situation after the 2008 financial crisis. It experienced deteriorating fiscal and external deficits, with long-term erosion of both competitiveness and income growth. This culminated in a crisis point when urgent reforms were required. When this Country Strategy and Programme Evaluation (CSPE) was carried out, Barbados had restructured its domestic debt and reduced its fiscal deficit. It remained in selective default (to external creditors). Finding sources of renewed economic growth and a rebound in private sector investment were critical issues.
This was the first country strategy evaluation of Barbados commissioned by the Office of Independent Evaluation. It covers two strategies: the 2010-13 Country Assistance Strategy (CAS) and the 2015-18 Country Strategy Paper (CSP). It also comments on the developments in the first year after the new government formed in May 2018, going slightly beyond the CSP period (by an additional 6 months) since these were highly relevant to the issues covered.