The ratings on Barbados reflect political stability and consensus policymaking, as demonstrated by the long-standing fixed-exchange-rate regime. The government has played a central role in shifting the economic focus from manufacturing and agriculture toward services and recently took important steps to reform the pension system, improve the tourism infrastructure, and liberalize telecommunications. Despite a substantial rebound in the tourism sector, medium-term growth prospects are diluted by struggling agricultural and manufacturing sectors and by the clouded outlook for the offshore sector, the prospects of which are threatened by pressure from the Organization of Economic Cooperation and Development (OECD) to equalize onshore and offshore tax rates. As a result, growth is expected to be lower than the 3.5% average of the 1990s.
