A University of the West Indies professor says Barbados’ economic growth has been trending downwards since the 1960s and is subject to high volatility.
According to economics Professor Andrew Downes, the “golden age” was in the 1960s when economic growth averaged around six per cent.
Delivering the inaugural Caribbean Institute Of Certified Management Consultants Lecture last Monday night, Downes said that period was followed by general decline where, in the 1970s, growth averaged about three per cent and one per cent in the 1980s.
In an hour-long address at the Lloyd Erskine Sandiford Centre, Two Mile Hill, St Michael, Downes said real gross domestic product went from $316 million in 1960 to just over $1 billion in 2011, which was “a substantial increase over time”.
However, he said that this resulted in an average annual growth rate of 2.4 per cent per annum over the period which was “relatively low”.
“If one adjusts it for population growth, which is in the order of 0.3 per cent over the period, we have a per capita income growth in the region of 2.1 per cent which, in many cases, is not as high as one would really like.”
The pro-vice chancellor of planning and development said this suggested that “something is wrong”.
“You can be an economic statistician and say the economy has moved towards services and there are problems associated with managing services as distinct from managing agricultural products.
“That might have some weight but not a strong weight, in my view,” he said.
Downes suggested that Barbados was caught in a middle-income trap where economies move from low income to middle income but find it challenging to graduate to high-income levels.
“There are very few countries that are able to do that and break that barrier.
“My calculations suggest that we’re actually in the trap although the paradox we have is that the international profile of Barbados says that we are high income.
“The growth process and the calculations say that we are somewhere in the middle,” Downes said.
