Local October 25, 2013 | 9:58 am

Helping tourism to grow

Few would any longer argue against the centrality of tourism to the Caribbean economy. Thankfully, the days when officials in the region and beyond would suggest that tourism was too fickle a force to support diversification and spur development have long gone; albeit mainly through circumstance rather than conviction. It is now accepted that without the industry, much of the region would be in serious economic difficulty.

Despite this, tourism’s cross-cutting dynamics, and the often simple kinds of support it needs to remain competitive, the sector is still failing to attract the attention of policy makers and multilateral funding institutions.

This is hard to understand when over the past twenty years the structure of the Caribbean economy has been transformed from one that was agriculture-dependent and preference-based, to one where tourism, in all but a few nations, has become the essential provider of employment and national income; and, by extension, a principal source, directly or indirectly of the taxes that pay for public services from education and health care, to roads.

What is striking, in comparison to agriculture, which, essential as it is, contributes far less to GDP in most Caribbean nations, is how little detailed research and technical information is available on Caribbean tourism from which an informed view might develop.

For example it is astonishing that most Caribbean governments do not yet have full tourism satellite accounting (TSA); an approach that provides a globally accepted framework for measuring the direct contribution of the tourism sector to an economy. Such studies provide a complete picture of what the industry consumes nationally and how the tourism economy works in relation to the broader economy. Its value is that its detail and breadth enable governments to use it not just to inform their planning process, but potentially, if well considered, how best to use tourism to stimulate future economic growth.

It is not that this approach is being ignored – there have been IADB funded projects for the Bahamas, Jamaica, Barbados and Trinidad – but the process of extending such studies to every country in the region including the Overseas Territories is long overdue. It illustrates an area that external agencies ought to be addressing if they really mean what they say about encouraging Caribbean development, growth and prosperity.

The TSA requirement is just one of a number of areas where funding and delivery needs to be dramatically speeded up and extended if the region as a whole is to capture the benefits of the gradual upswing in the world economy and key visitor feeder markets.

There are also many other tourism related challenges where the need is known but the funding agencies, despite their proactive language, are unresponsive.

For instance, Europe’s much criticized Economic Partnership Agreement (EPA) with the Caribbean contains an extensive list of potential tourism related deliverables that in theory the development aspect of the EPA ought to support. However, try as they may, both public and private sector bodies from the region have not been able to identify any mechanism that can actually deliver this support.

Why this is serious is that the EPA’s listing relates to the fundamental needs of the industry if it is to be able in future to compete globally, and develop and sustain new feeder markets. It for instance speaks to the possibility of support for practical programmes that would support much needed marketing in languages such as Portuguese, Indian, Mandarin and Russian; language teaching; for help for website development; and much more which, if funded and delivered, would offer quick returns.

In others words, it is not as though the requirements have not been identified. As the extensive language in the EPA and the continuing representations made by the Caribbean Tourism Organisation (CTO) to the international funding institutions demonstrate, there should be no doubt about the needs of the industry. What is missing is a co-ordinated sectoral approach on the part of external agencies to meets the requirements of what has become the Caribbean’s single most important industry.

In particular there is no delivery mechanism that is sensitive to the peculiarities of the industry, through which development support might be channeled in such a way that it is directed by those who understand the need.

In this context there is a European model that could be easily adapted. In 2002 Europe established an integrated programme for the Caribbean rum industry to enable it to become globally competitive by moving gradually from bulk to value added branded products, through a mix of measures aimed at upgrading the industry, and helping meet its marketing, training, environmental and production requirements.

The programme, which is based on cost sharing between the industry and the European Development Fund, has been notably successful, not least because it is controlled in such a way that decision making on what is funded is devolved and independent, and then administered by industry experts.

Unfortunately the dead hand of bureaucracy seems to lie heavy on the potential of such a mechanism being adopted for other key Caribbean sectors.

Tourism and in particular its well-founded public and private sector institutions, CTO and Caribbean Hotels and Tourism Association (CHTA), and their joint entity, the Caribbean Tourism Development Company, offer the opportunity for a similar solution. However, to find officials in Europe or in the region, or in other multilateral bodies able to talk about the detail of such an approach seems all but impossible.

To achieve this it would seem to require both Europe and the region’s governments to recognise collectively the central importance of Caribbean tourism to future regional economic development, and then to develop, as with rum, an integrated tourism industry development programme, located within or delivered through existing regional tourism organisations.

Tourism employs directly and indirectly one in every nine persons in the Caribbean and is the largest employer after the public sector. Understood and treated well, it has an extraordinary contribution to make to regional growth; treated poorly, it has the capacity, in decline, to damage economies and reduce government revenues.

David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org

Previous columns can be found at www.caribbean-council.org

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