David Jordan Chairman FRIEETAD in the OECS Inc.
I grew up in an interesting era, of the 70’s and 80’s which caused my early conscientisation. That era nurtured our thinking not to embrace Tourism, for several reasons including that as a holistic approach to promote the economic development of any developing country. Our exposure to critical thinking started through our education from the early days within the Caribbean Council of Churches during our “regional youth groups days of the AYM ” travelling throughout the Caribbean region. It was said then, that the exposure to liberation theology and the sessions we were part of that the pedagogy was introducing us to a type of radicalism during those days. I recall that because of our enlightenment, we stood for something. We focused more on the causes for underdevelopment of the region and the social consequences to the host economy of Tourism. There was no perceived balance, in terms of the economic benefit. The major argument then was the economic leakage which the host economy experienced estimated then as being ninety –five (95)percent to every dollar invested.
Tourism, was seen as an industry which imported all of its needs – physical and human resource then – from architectural design, the construction materials, to the food beverage for its clientswhile the tourism structures were erected on our “ best beaches.” Notwithstanding the less disparaging comment in this time, in comparison to the earlier years, Tourism has grown to register as much as 89 percent of the GDP in one country and the mainstay of some other economies in the range of 60 percent in others. While it may be argued that more of the dollar spent may be circulated in the economy this has come with major costs to the region associated. There are still evidence of weak linkages and integration with the rest of the domestic productive sectors of the economy. In some countries, whereas linkages are sought with Agriculture and Manufacturing, this has proven so insignificant that most countries’ GDP and have an accumulated huge food import bills. The lamentation is, of the same song,such that there is a growing imbalance in the import and production of agriculture produce and that dreadful (Trade imbalance ) import bill eg St Lucia a population of 175,000 has an Import bill of more than 350 Million (2016 estimates). There are all types of variations to the Tourism sector nowadays, since its introduction and maturation in the region. There are all-inclusives, boutique and now we hear of “enclaves”; which all seek incentives and as much as they could squeeze out the most they can from those economies and which the politicians will willfully facilitate.
Colleagues, it is passing strange however to see how the contemporary concepts of Small Island Developing States,Climate change, Orange economy, Blue Economy to name a few that have taken over the intellectual psyche of our countries’thinkers, technocrats, actors and policymakers and politicians. Rather than the embrace of the earlier focus on the Economics of Transformation (EOT) and its strategies which would have drawn the nexus for wider sectoral development, there is a loose abandon in preference to a modern approach to development void of any seeming philosophy but a greater reliance on Tourism. There is no reflection on the theories of Arthur Lewis, or the several thinkers of that era – ( sorry the list is long and includes my former lecturers, colleague students at UWI…Economics of Transformation to guide, chart and to assist with the economic and social development in the region.
What do we witness?. The trend has gravitated towards those contemporary theories because they have the lure and the mentality “grant economics “ or better “ donor economics” which both focus on varying levels of conditions; before we can supposedly benefit from. Interestingly this mentality has an affinity to espouse the disgusting appendage and phrase. ” Low hanging fruit.” This to my viewpoint and the many who condemn this “ low hanging fruit” mentality agree, that this actually conjures and promotes a dependency syndrome lacking the hard work which has to be expended. Imagine the imagery of harvesting the ripened fruit from the neighbours or anybody’sfruit tree – but is a fruit tree you never planted except for the use of this analogy that which developing countries will access “low hanging fruit” based on conditions from the international community. The analogy does not lend to the process of planting the fruit tree in the first place. So why should you be the beneficiary ? However this is the predominant message and the mentality of the philosophy of the “ low hanging fruit “ in modern day negotiations which seem to be perpetuated. Can the cause for concern be raised is this not mindful of and coveys a message of dependency ?.
Colleagues, when I invited you to read the last IMF Report – St Lucia 2020 in view of the controversy and debate we are currently engaged in St Lucia, I was also reminiscing in the agony and thought of recognizing the volume of material we have read on Economics of Transformation and was wondering if we have learned and or retained any lessons of utilizing our resources optimally and focus on the wholistic form of economic development. Academic thought has grown and I agree. New paradigms now describe the contemporary forms of development approaches such as Sustainable Developmentwhich has embraces the environmental issues as an example. But I ask, are these lessons being consciously applied or forgotten in the setting of modern day Government planning as we see continue to promote an emphasis on mono-sector development of and by our leaders. But it is observed that it is the international community – our international friends – and not by our indigenous original thinkers that are highlighting the risks associated with putting the eggs of development in one basket.
I cannot cease to be perplexed – yet aware, How and Why the policy makers, politicians do not reflect on the those earlier strategies of development in the chart for the economic and social development for the region. But the “ low hanging fruit mentality” is so well embroiled in the thrust that Tourism offers as the panacea for development and growth. The main argument and focus perennially seem all narrow to focus on the statistics tourism arrivals – by air or sea. number of hotels flagged or not,employment as the major benefits. But the thinking of the earlier critiques of Tourism would have been on i) the volume of wastages for example in food, ii) inefficiencies because of Incentives and revenue foregone, iii) costs associated with unutilized airline seats and iv) and the displacement of locals from for their own beaches.; these and many similar concerns are preferred, not to be distilled for the consumption by the tax payers. “Jack the Beach is Mine “ dance, music and social commentary reminds us that Tourism weighs heavily with its many social ills and social displacements as the sociologists will outline and argue.
However, the International Monetary Fund (IMF) as far as I could recollect has always advocated for diversification and multi sectoral approach to the Economic development of the region and the need for a more balanced approached to its economic development. This is one of the theories espoused in the Theory of Economics of Transformation, which the politicians and technocrats should find relevant in this modern time, as it was in the past. But this does not appear to resonate with a form of modern thought and my message. We should not have to wait after all those years to be reminded by the IMF and novel COVID 19 virus pandemic crisis of the risks associated with a policy geared to a mono sector development has its major risks.
I am raising this because it appears that only when we are faced with a crisis as a region we closely refer to our past and try to understand and respond to the vagaries of the uncertainties of “ the time of occurrence.” It is then, we recognize that we have not been consistent in paying attention to the importance of our indigenous thinkers for guidance of our development but have marginalized their thinking and restrict importance allowance to bear roots. But we continue to embrace the thought of what is outside, to bring about solutions to our problems. Then after the crisis is over we go back to the same old adages and policies without amendments and or adjustments if only for a short period of time. And the cycle continues.
The IMF, has been warning the region from time immemorial that there is too much emphasis on a mono–sector approach to the economic development and highlights the risks in maintaining that kind of structural imbalance doing so. It takes us to that same crossroad again, as a result of the novel carona Covid19 virus pandemic crisis and its impact which threatens the very existence of our economies and the health of our nations for an uncertain period of time.
The peoples of the countries in the region, will experience the hardships and will once again be lead via the “ mentality of dependency” to address our small size to withstand shocks, vulnerabilities to hurricanes, drought, climate change – the list is long and do we expect the International community to always come to the rescue?. The traditional member donor countries in the international community they too have their many challenges at this time. Their priority is to their home populations first and cannot assist readily. Thus we see the reality as the pattern and pace at which this assistance comes in a “global lockdown pandemic “environment and the diversion of all attention.
The pandemic has just opened the can of huge worms to my viewpoint on fiscal deficit and other public sector planning and management issues to the open. So while the health Management of the crisis is being addressed, the economic side needs the responsive and relevant policy adjustments that must be adopted innovatively and with extreme urgency of time, and sensitivity to address the failings in our economies and its management. Nor is it a time to cast blame on anyone !.
“ The World Bank and IDB 2018 recently convened a different forum to help shift the mind set of decision makers from ex-poste to ex-ante mindset in minimizing risks to vulnerabilities of climate change and other natural disasters and economic shocks. I guess it is too early to see the transition building resilience in our economies after the period longer before that forum was convened. (ha ha). ECLAC 2020, stressed on a theme and advocacy for grant funding for the region to be relieved of the COVID 19 pandemic crisis. Very few countries focussed on the overreliance of mono-sector type of economic development were registered as not being in attendance. A regional newspaper headline read “ECLAC: Borrowing not an option for Caribbean countries, but debt relief : Some of the stronger leaders have taken a stance while some others strongly see this as the only albatross on their necks and subscribe as I discussed earlier to the mentality of “donor economics “.However it is also interesting to observe that the CARICOM and FAO together with 11 multilateral organisations have sought to come forward with “ Enabling Agricultural investment in Caribbean for effective response, post-COVID-19 recovery” as the theme is geared towards Food Policy ,,,Food Security.
The preceding have all been undertaken with a myriad of different stakeholders – political leaders, policy makers, private sector and public sector officials and to some degree NGOs. However we are still unsure of the wholesome embrace of the social society, including the women groups, the youth and the vulnerables in our societies. The latter is the group that is last to gain as there times when funds allocated, for “social safety nets”( after these hyped sets of meetings and forum) are invariably siphoned and craftily re-purposed for other shining capital projects.
These are challenges which occur at the end of the cycle of crisis which some leaders are good to make use of. The do this either in the attempt to “ blind fold “the electorate on their public fiscal management and planning issues and promote the more desperate circumstances. Here my concern however revolvesaround the following ……Is there a willingness and commitment to activate all what is being said ? and documented ? How soon do we get back to basics Economics of Transformation towards Diversification of our Economies and the rightful place for Agriculture but in an innovative mannerusing technology and with unprecedented “ timeliness and sensitivity” with which we move from the ex-post into the ex–ante mindset towards actions which are required a this time. Let us get the full disclosure of the consensual and cooperative building actions, the quantitative and qualitative targets and priorities set right, with the complementary priority policies and programmes to redress policy formulations and programmes that are more relevant and responsive to our respective countries in the context of cooperative regionalism actions.
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