The purpose of this Country Support Strategy is to provide a framework for EU assistance to Barbados under the 10th EDF. It outlines the current status of the bilateral relations, gives a detailed country diagnosis, summarises the Government’s development agenda, reviews the past and present EC cooperation and the activities of other major donors and concludes with the proposed EU response strategy and the corresponding indicative work programme.

Barbados is a parliamentary democracy, independent since 1966, and is a member of the Commonwealth. The British monarch, represented by the Governor-General, is the Head of State. Executive power is exercised by the Prime Minister and his Cabinet. Over the period September 1994 to January 2008 the Government was formed by the Barbados Labour Party administration. From January 15, 2008, the Democratic Labour Party formed the new Government with the Honourable David Thompson as the new Prime Minister. Over the forty years since independence, Barbados has transformed itself from a low-income economy dependent on sugar production into an upper-middle-income economy, which relies heavily on tourism and financial services, but has been resilient in the face of external shocks. With a GDP of US$3.4 billion (at current market prices) in 2007, a population of about 275.000 and a per capita income of US$10.100 (at current market prices), poverty rates are the lowest in the Caribbean. Barbados has also received investment grade rating. After a deep recession in 1990, the Barbadian economy grew steadily at 3% to 5% during the 1990s before contracting again in 2001. Growth picked up again in 2003 at 2%, and the economy grew by 4.8% in 2004, 4.1% in 2005, 3.9% in 2006 and 4.3% in 2007 (Barbados Economic and Social Report 2007), despite the low rates of private investment and the sluggish performance of manufactured and agricultural exports.

Social indicators in Barbados are very good by Caribbean standards. Ever since the 1940s, successive governments have placed high emphasis on social development and have built up a strong legislative and institutional framework to plan and implement social policy. The 2007-2008 UNDP Human Development Report ranks Barbados 31st among all countries. The new administration sees Barbados becoming a “fully developed society that is prosperous, socially just and globally competitive” by the end of the first quarter of this century. Overall, the Plan outlines the framework for comprehensive economic diversification and restructuring that should in turn lead to enhanced competitiveness, flexibility and resilience of the economy, better governance and social cohesion. In addition, the Barbados Adaptation Strategy 2006–2014 targets transformation of sugar production into a sugarcane industry (including a fuel cane project) and diversification of the economy as a whole by means of human resources development, entrepreneurship, cultural industries and other measures. EC assistance focused on human resource development under the 7th and 8th EDF, while 9th EDF funds targeted the health sector in the form of sectoral budget support. Barbados is also a beneficiary of the EU/ACP Sugar Protocol.

The EC and the Government propose to allocate approximately 85% of the A envelope under the 10th EDF to a Skills Development Sectoral Support Programme. The specific objective is to strengthen skills and improve the employability of Barbadians in order to reduce vulnerability among the youth and to improve the economy’s competitiveness, while taking into account its needs for environmental management. This focal sector is also in line with the EPA negotiations and implementation. The choice of a sectoral budget support scheme is supported by the Government’s tight fiscal policy stance that continues to underpin macroeconomic adjustment efforts. There is also a precedent under the 9th EDF. 10% of the A envelope of the 10th EDF will be reserved for a Technical Cooperation Facility (TCF), particularly to support non-State actors (NSAs) and to provide trade-related technical assistance (TRTA). The remaining 5% will go to technical assistance to the NAO.

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