World Bank Group Re-engages with Barbados Through New Country Engagement Note and Disaster Recovery Initiatives

In response to the devastation caused by Hurricane Beryl, the World Bank Board of Directors has approved the Beryl Emergency Response and Recovery Project.

The World Bank Group has officially endorsed a new Country Engagement Note (CEN) for Barbados, marking a renewed phase of collaboration with the Caribbean nation and signaling Barbados' return to the International Bank for Reconstruction and Development (IBRD). This strategic engagement reflects a comprehensive approach to addressing Barbados' economic vulnerabilities, climate resilience, and sustainable development goals.

Barbados, an island nation with a population of approximately 300,000, initially graduated from the IBRD in 1994 after reaching the income threshold required for middle-income countries. For over a decade, the country experienced steady economic growth. However, the 2008-2009 Global Financial Crisis severely impacted Barbados’ tourism-dependent economy, triggering a prolonged recession. Public debt escalated dramatically from 77% to 158% of GDP, exacerbating fiscal constraints.

These economic challenges were compounded by the COVID-19 pandemic and a series of natural disasters, including volcanic ashfall from neighboring St. Vincent and the devastation caused by Hurricane Elsa in 2021. The most severe blow came in June 2024, when Hurricane Beryl inflicted substantial damage on critical port and fisheries infrastructure, causing severe disruptions in the tourism sector—the lifeblood of Barbados' economy.

Strategic Focus of the New Country Engagement Note

The new CEN serves as a framework to guide the World Bank Group's support for Barbados' development priorities, emphasizing resilience and sustainable growth. This marks the first World Bank Group strategy prepared for Barbados in over 30 years and focuses on two primary objectives:

1. Strengthening Climate Resilience:

   • Implementing disaster mitigation strategies.
   • Transitioning to greener energy and water sectors to enhance environmental sustainability.

2. Improving Conditions for Economic Growth:

   • Attracting increased private sector investments.
   • Enhancing education systems and workforce skills to foster inclusive growth.

Leveraging Partnerships and Multi-Institutional Support

Barbados will benefit from the integrated support of the World Bank Group's institutions, including the IBRD, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). This collaboration will optimize resources, promote knowledge sharing, and prevent duplication of efforts. Additionally, the World Bank Group will work alongside a diverse range of development partners to maximize the impact of its initiatives.

Emergency Response and Recovery Post-Hurricane Beryl

In response to the devastation caused by Hurricane Beryl, the World Bank Board of Directors has approved the Beryl Emergency Response and Recovery Project. This initiative aims to:

• Support immediate reconstruction of vital infrastructure.
• Enhance the country's resilience to future natural disasters.
• Strengthen adaptive capacities to combat climate change.

Path Forward: Sustainable and Inclusive Development

Barbados faces the medium-term challenge of charting a sustainable development path that promotes equitable and inclusive growth. The new CEN aligns with this goal, focusing on building climate resilience, advancing social progress, and fostering economic stability within the constraints of limited fiscal resources and external financing.

Through this renewed partnership, the World Bank Group and Barbados are poised to collaboratively address the nation’s pressing development needs, ensuring a resilient and prosperous future for its citizens.