The dangers of a tourism-led economy

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Dear Sir

I recently read an article which was commenting on the precarious position that the Dutch Caribbean islands found themselves during the COVID-19 pandemic. The article was referring to the fact that the pandemic had brought tourism in Aruba, Curacao, and Sint Maarteen, which is the mainstay of their economies, to a virtual standstill.

In Aruba, it was projected that the government will run out of money by mid-September and the government needs (Euros) € 320 million to plug its shortfall for this year and an additional € 270 million for next year. Debt to GDP is expected to rise from 63 to 93 percent.

Curacao has so far received € 180 million from the Netherlands and is seeking another € 250 million to ride out the storm. Sint Maarteen has also already received € 25.5 million. The Dutch government has stated that there must also be reforms as conditionalities to these loans, placing demands for wage cuts and that there must be Dutch control on the expenditure. This perceived loss of self-rule has come with great resistance in these Dutch Caribbean Islands.

One would recall Saint Lucia’s prime minister Allen Chastanet using Aruba as an example of how tourism can transform an island and seemingly suggesting that that was the path that Saint Lucia should go. COVID-19 has exposed this myth that tourism is the panacea for our economic woes. Saint Lucia must have a diversified economy, and yes tourism must be a rivulet flowing into the economy river.

We need to begin to see employment success as more than tour guides, taxi drivers and waiters. We must educate our people with the technological skills that go beyond working in a call centre. We cannot beat our chest and say well done, by creating these low paying jobs.

We can look at the Rwanda Model, which has kept agriculture contributing 33 percent of the economy. They have pursued industrialization with a focus on import substitutes for internal consumption and they also have focused on tourism.

Sir John Compton model of the tripod economy, consisting of agriculture, industry and tourism is the correct model.

We need to go back to the Tripod Economy Model, build back our strength in agriculture, and look at new ways of creating a wide small industrial base, and enhance our tourism. It was that model that brought transformation to the rural communities of Saint Lucia.

John Peters

1 COMMENT

  1. Fully agree with the writer, we can no longer put all our eggs in one basket, diversification has been and will be the way to go. However, tourism and Call centers can supplement the economy but they cannot be the mainstay, because of how susceptible tourism can be and that too many countries rely heavily on it.

    I believe that the manufacturing industry can also be revived in the near future. We complain that the cost of fuel is too high, but, why don’t we build wind farms, utilize solar energy, or even hydroelectricity (the ocean for that matter) to augment the high cost of electricity.

    With vision, we then bring about implementation. Without vision, my people perish.

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