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The island is divided into 11 parishes and the city of Bridgetown for administrative purposes. There is no local government. Barbados' defense expenditures account for about 2.5% of the government budget.

On July 4, 1973, Barbados, Trinidad and Tobago, Guyana, and Jamaica signed a treaty in Trinidad to found the Caribbean Community (CARICOM). In May 1974, most of the remaining English-speaking Caribbean states joined CARICOM, which now has 14 members. Barbados also is a member of the Caribbean Development Bank, established in 1970, with headquarters in Bridgetown. The eastern Caribbean's Regional Security System, which associates Barbados with six other island nations, also is headquartered in Barbados. In July 1994, Barbados joined the newly established Association of Caribbean States (ACS).

Barbados, or as known by the British "Little England", is an Independent island nation situated on the boundary of the Caribbean Sea and the Atlantic Ocean. The island is about 434.5 km (270 miles) north-east of Venezuela.

Since achieving independence in 1966, the island nation of Barbados has transformed itself from a low-income economy dependent upon sugar production to a middle-income economy based on tourism. The economy went into a deep recession in 1990 after 3 years of steady decline brought on by fundamental macroeconomic imbalances. After a painful readjustment process, the economy began to grow again in 1993. Growth rates have averaged between 3%-5% since then.

The start of the Port Charles Marina project in Speightstown helped the tourism industry continue to expand in 1996-99. Offshore finance and informatics are important foreign exchange earners, and there is also a light manufacturing sector. The government continues its efforts to reduce the unacceptably high unemployment rate, encourage direct foreign investment, and privatize remaining state-owned enterprises.

The main factors responsible for the improvement in economic activity include an expansion in the number of tourist arrivals, an increase in manufacturing, and an increase in sugar production. Recently, offshore banking and financial services also have become an important source of foreign exchange and economic growth.

As a member of CARICOM, Barbados supported efforts by the United States to implement UN Security Council Resolution 940, designed to facilitate the departure of Haiti's de facto authorities from power. The country agreed to contribute personnel to the multinational force, which restored the democratically elected government of Haiti in October 1994.