Washington, D.C. February 11, 2025 - The World Bank Group endorsed a new Country Engagement Note for Barbados, formally marking a new phase of engagement with Barbados and the country's return to the International Bank for Reconstruction and Development.
Barbados, a Caribbean island with a population of approximately 300,000, reached the income threshold for graduation from the International Bank for Reconstruction and Development - the World Bank Group's lending arm that provides financing and policy support to middle-income and creditworthy low-income countries - in 1994. However, the country has experienced economic challenges that have hindered its development since then. While the country enjoyed steady growth for over a decade after its graduation, the 2008-2009 Global Financial Crisis hit the country's small and tourism-dependent economy hard, leading to a prolonged recession. Public debt increased from 77 to 158 percent of GDP.
These challenges were exacerbated by the shock of the COVID-19 pandemic, followed by natural disasters, including volcanic ashfall from St. Vincent and Hurricane Elsa in 2021. An even more severe blow occurred in June 2024 when Hurricane Beryl caused significant damage to vital port and fisheries infrastructure, severely disrupting the tourism sector.
Barbados' overarching medium-term development challenge is implementing a sustainable path to equitable and inclusive growth, developing climate resilience, and building on past social gains in an environment of fiscal constraints and limited access to external financing for its development programs. The new Country Engagement Note is aligned with the plan to address these challenges and serves as a framework for selectively addressing Barbados' development needs, economic resilience, and climate action efforts, marking the first World Bank Group strategy prepared for Barbados in more than 30 years.
The new Country Engagement Note will focus on knowledge and analytics, pipeline programs, and partnerships on two key objectives: 1) strengthening climate resilience through disaster mitigation and greening the energy and water sectors; 2) improving conditions for growth by attracting more private investments and improving education and skills.
In addition, Barbados can rely on the advantages and close cooperation between World Bank Group institutions: the International Bank for Reconstruction and Development, the International Finance Corporation, and the Multilateral Investment Guarantee Agency. The World Bank Group will also work with a range of development partners to enhance impact, draw on existing knowledge and avoid costly duplication.
The World Bank Board of Directors also recently approved the Beryl Emergency Response and Recovery Project. The project will support reconstruction efforts following Hurricane Beryl and enhance the country's resilience against future disasters and climate change.
Learn more about our work in the Caribbean:
Website: www.worldbank.org/caribbean
Subscribe to our monthly newsletter: http://wrld.bg/GMc050TliRv
