Barbados’ economic freedom ranking improves Barbados’ improves

by SHAWN CUMBERBATCH

shawncumberbatch@nationnews.com

THE HERITAGE FOUNDATION, the conservative think tank behind the controversial Project 2025 governance blueprint for the general election candidacy of now United States President Donald Trump, says economic freedom in Barbados has improved after previously declining.

Barbados is ranked number one in the Caribbean, fifth in the Americas and 36 in the world for economic freedom, with the 2025 Index Of Economic Freedom placing the island in the “moderately free” category – the same as in 2024. Barbados was ranked 41st on the 2024 index.

Economic freedom as defined by The Heritage Foundation is “the fundamental right of every human to control his or her own labour and property”. As with the other 183 countries ranked, the 2025 index was based on economic policies and conditions in Barbados from July 1, 2023 to June 30, 2024, “Barbados’s economic freedom score is 68.9, making its economy the 36th freest in the 2025 Index of Economic Freedom. Its rating has increased by 2.1 points from last year, and Barbados is ranked fifth out of 32 countries in the Americas region,” the Heritage Foundation said recently as it released the 31st edition of the Index Of Economic Freedom.

“The country’s economic freedom score is higher than the world and regional averages. Barbados’s economy is considered moderately according to the 2025 Index.”

It added: “A middle-income country with a diversified economy built on tourism and offshore banking, Barbados has one of the Caribbean’s highest incomes per capita. “Relatively strong foundations of economic freedom are supported by transparency and efficiency, but the government’s economic policies are focused on attracting international companies.”

“The overall business and investment framework is relatively clear. However, the fiscal deficit has caused government debt to become larger than the size of the economy. Tourism has rebounded, but Barbados still faces challenges to medium-term growth,” the report on Barbados stated.

Barbados’ economic freedom score was assessed in several areas – rule of law (property rights, government integrity, judicial effectiveness), government size(government spending, tax burden, fiscal health); regulatory efficiency (business freedom, labour freedom, monetary freedom), and open markets (trade freedom, investment freedom, financial freedom).

“Each of the twelve economic freedoms within these categories is graded on a scale of 0 to 100. A country’s overall score is derived by averaging these twelve economic freedoms, with equal weight being given to each,” the report explained.

Regarding the rule of law in Barbados, The Heritage Foundation said: “The overall rule of law is well respected in Barbados. The country’s property rights score is above the world average; its judicial effectiveness score is above the world average; and its government integrity score is above the world average.”

“The top individual income tax rate is 28.5 per cent, and the top corporate tax rate is nine per cent. The tax burden equals 27.3 per cent of GDP. Three year government spending and budget balance averages are, of region,” recently the freedom free country Caribbean’s supported relatively has become economy. score rule government health); monetary freedom, by explained. Foundation respectively, 29.4 per cent and – 2.6 per cent of gross domestic product (GDP). Public debt amounts to 110.8 per cent of GDP.”

The report also stated that Barbados’s overall regulatory environment “is relatively well institutionalised but lacks efficiency”.

“The country’s business freedom score is above the world average; its labour freedom score is above the world average; and its monetary freedom score is well above the world average,” it noted.

On the openness of Barbados’ market, it stated: “The trade-weighted average tariff rate is 22.1 per cent, and more than 100 non tariff measures are in effect. There are no limits on foreign investment, but some sectors require a Government licence. The banking sector provides a wide range of services for investors.”

Caribbean ranking

In addition to Barbados global ranking of 36, other Caribbean Community countries ranked were Jamaica (38), St Lucia (47), Belize (66), Trinidad and Tobago (69), the Bahamas (72), St Vincent and the Grenadines (87), Guyana (99), Dominica (116), Suriname (144), and Haiti (163).

This year’s index was topped by Singapore, followed by Switzerland, Ireland, Taiwan and Luxembourg. The US was ranked at 26 out of the 184 countries.

“Within the top ten rankings, a notable reshuffling has taken place. Singapore continues to be the world’s freest economy, demonstrating a consistently high level of economic resilience and prosperity,” the Heritage Foundation said.

“Switzerland is the world’s second freest economy, followed by Ireland. Taiwan has maintained its fourth highest ranking, the highest the country has ever achieved in the Index of Economic Freedom.”

Kevin Roberts, President of The Heritage Foundation, who has been described as a key figure behind Project 2025, asserted that as his organisation showed every year in its flagship Index of Economic Freedom, “countries that support free markets, rule of law, private property, and limited government experience more prosperity, better education, and healthier environments”.

“These countries also tend to produce better jobs, better goods and services, and better societies. The imperative to advance economic freedom and revitalise vibrant entrepreneurial growth is stronger than ever,” he argued.

“But markets and freedom don’t exist in a vacuum, and the measure of societal greatness involves more than merely economic factors. We should recognise that our most important task today is rebuilding the wellfunctioning and healthy institutions of civil society that we need and deserve.

“The free market is a vital part of that process but must always be in service to our values and not the other way around.”

The Heritage Foundation listed a number of key findings from The 2025 Index Of Economic Freedom, including the following.

The world economy remains mostly unfree. The global average economic freedom score has increased by 1.1 points to 59.7 from the previous year’s 58.6.

Globally, fiscal soundness has deteriorated significantly. Rising deficits and mounting public debt in many countries have undermined and likely will further undercut their overall productivity growth and lead ultimately to economic sluggishness rather than vibrant growth.

There continues to be a clear relationship between improving economic freedom and achieving higher economic dynamism and greater overall well-being.

The standard of living, measured by incomes per capita, is much higher in economically freer countries.

The Heritage Foundation also said that “as documented once again in the 2025 Index, economic freedom also correlates significantly with overall well-being, which includes such factors as health, education, the environment, innovation, societal progress, and democratic governance.

The report said further that only three countries – Singapore (84.1), Switzerland (83.7), and Ireland (83.1) “have earned a designation of economically free by recording scores of 80 or more”.

Some 26 countries “earned a designation of mostly free by recording scores of 70 to 79.9; and an additional 58 were considered at least moderately free with scores of 60 to 69.9. This last group included Barbados.

“Thus, a total of 87 countries, or slightly less than half of the 176 countries graded, have institutional environments in which individuals and private enterprises benefit from at least a moderate degree of economic freedom in the pursuit of greater economic development and prosperity,” Heritage Foundation said.

On the opposite side of the spectrum, it outlined, about 50 per cent of the countries graded in the 2025 Index (89 economies) “have registered economic freedom scores below 60. Of those, 60 economies are considered “mostly unfree” (scores of 50 to 59.9), and 29 countries, including China and Iran, are in the economically repressed category”.

The Heritage Foundation called the US’ continuing decline within the mostly free category “especially notable”, noting that its score plummeted to 70.2, one of the lowest levels in the history of the Index.

“The US is now the world’s 26th freest economy. The major causative factor in the erosion of America’s economic freedom is excessive government spending, which has resulted in mounting deficit and debt burdens over the past four years,” it said.

“On the other hand, Argentina recorded one of the largest score improvements, moving out of the bottom tier of economic freedom in the 2025 Index.

“Providing concrete momentum for the revitalisation of Argentina’s economy, various fiscal and regulatory measures adopted as part of reformminded President Javier Milei’s decisive economic reform agenda have already generated notable progress.”

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