Historically, the economy was heavily dependent on sugar from the middle of the seventeenth century. However, although the production of sugar is still important as an earner of foreign exchange, greater dependence is now placed on tourism which plays a major role in the economic life of the nation and ranks as a principal foreign exchange earner.

Since independence there has been significant expansion in the industrial sector. Manufacturing firms are major employers of the work force and a broad range of items is produced. In agriculture, Government's policy has been to reduce dependence on sugar and to encourage agricultural diversification especially in vegetables, poultry, meats and fishing.

The development of the international business and financial services sector which began around 1977 now contributes significantly to foreign exchange earnings. Legislation has been enacted to extend the island's attractiveness as an international base for foreign owned companies and Barbados now offers facilities for international business companies, international banking, exempt insurance and management companies, ship registration and societies with restricted liability.

Barbados has a well-educated and trainable workforce, and its legal framework is considered to be a model for international business centres. As allowed under international trade and financial agreements, Barbados maintains ordinary exchange controls to protect its balance of payments.