“Why is Haiti so poor? Well, it has a history of oppression, slavery and colonialism. But so does Barbados, and Barbados is doing pretty well.” That’s David Brooks, going out on a crazy limb. (He goes out on some others, which we’re not even going to address. This one is maddening enough.) For starters. Barbados has a population well under 300,000, and Haiti has a population of over 10 million? Haiti is almost 11,000 square miles and Barbados is 167? This is a question of manageability. More importantly, Barbados has been stunningly smart in occupying the middle ground between neighboring tax haven islands and the highly-regulated (and/or more greatly taxed) larger neighbors in the Americas.
At least 240 U.S.- and Canada-based insurance companies operate in Barbados’ international business sector. (Meanwhile, AIG has outposts in Jamaica and Trinidad & Tobago-and Goldman Sachs has a troubled office in Cayman.) While definitely not a tax haven, so that they can provide companies with a clean bill-Barbados has extensive agreements with the U.S. and Canada, China and Venezuela alike-Barbados still has extremely favorable financial arrangements for corporations.
And while tourism accounts for about half the country’s economy, Barbados had $240 million in tax income in 2009 from their “international business sector”-a bit more than half of the $412 million in 2009 corporate tax income in the country.
That sort of income is Barbados having a severe downturn, in both tourism and corporate taxes, from 2008, by the way. In fact, the U.S.-led financial crisis very nearly took down much of the Caribbean over the last year. Barbados is entrenched enough to survive.