Growth not enough

Arthur suggests tourism reform

Tourism is the only sector capable of pulling the Barbados economy out of crisis, but it is constrained and congested, says former Prime Minister Owen Arthur.

Addressing a 40th anniversary function hosted by the Institute of Chartered Accountants of Barbados last night, Arthur also warned that the Central Bank’s one per cent growth projection for 2015 for the overall economy was inadequate.

Former Prime Minister Owen Arthur
Former Prime Minister Owen Arthur

“. . . The one per cent growth that the economy is now reported to be on the point of realising is too far off the three per cent growth rate that Barbados needs to record to stay on a stable path of development and cannot repair the economic damage that has resulted from an extended period of falling production, savings and investment,” the former Minister of Finance said.

Arthur also zeroed in the performance of the island’s bread and butter industry, for which growth in the first quarter was reported to be four per cent.

He cautioned that “if the other sectors of the economy remained dormant, tourism activity would have to grow by over 15 per cent per year to cause the overall economy to expand at an annual average rate of three per cent per year, which is claimed as the target planners are seeking to achieve.”

While describing the tourism sector as “the only bright spark” for the economy, which he said had been in the doldrums for some seven years, Arthur called for changes to make the sector internationally competitive.

“The brutal truth is that the only sector which is capable of generating activity running into the hundreds of millions [of dollars], both from the point of view of its direct income generation and its contribution to net private capital inflows, is the tourism sector,” he said.

Arthur expressed amazement that the sector continued to perform, despite constraints, “ranging from obsolete planning regulations, the absence of attractions such as water theme parks, and others forms of adult entertainment”.

“ . . . such constraints prevent investors from realising reasonable returns on their investments in Barbados,” he said.

Although tourism directly impacts  60 per cent of economic activity in Barbados, he also pointed out that tourism development was concentrated on a narrow strip on the west and south coasts of the island.

He therefore spoke of a need to, “open a new frontier of development for tourism” in southeastern Barbados, and to ensure that a cluster of services were encouraged to emerge there to support a wide range of leisure activities.

While it is unlikely that Barbados will ever be an international industry leader in terms of its prices,  he stressed that tourism differentiation was key and that there must be continued emphasis on promoting the island’s number one industry as  “a five-star product, in a five-star society”.

“On the latter matter, it’s important that Government’s capital works programme, which has plunged to startlingly new lows, be regenerated to support a high quality tourism experience,” Arthur said.

One Response to Growth not enough

  1. Alex3 April 27, 2015 at 3:40 pm

    Mr. Owen could be correct as he was there for a lot of what now ails the economy.
    The problem we have is that Barbados is still a very expensive place for most people to travel.
    If a two week all inclusive stay at a decent hotel on the beach with air included can be bought for $10000 US you can be assured Cancun, Mexico, Cuba and Jamaica can offer the same experiences for probably 30% less.
    The colonial influences that shaped the tourism industry of the past that made Barbados appear elitist will not complete in today’s world.
    Oh sure you can attract cruise ship passengers with the diamond and emerald shops but from discussions with staff this last trip, they are not buying.
    When a cute pair of toddler sandles at Payless shoes cost $44US do you really think someone will buy them.
    Is dinner at the Cliff, Cin Cin or Sandy Lane really worth the money when compared to may other places which offer great friendly service and excellent meals.
    The BHTA needs to rethink the value for money equation as they compete with the rest of the Caribbean other wise things will not change.
    Insanity has been defined as “doing things the same way, using the same tools, over and over again and expecting the results to be different”. Time to look at the basic model.


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