Faced with a “perilous” tourism industry and overall “calamitous” economy, the time has come for Government to “spur economic activity” through a stimulus programme using some of the island’s more than $300 million in foreign exchange reserves.
And while it is at it, the Freundel Stuart Administration should also undertake an urgent restructuring of the Barbados Tourism Authority, implement a special tourism industry wages and salaries policy based on productivity, free up regulations governing land use, and reduce duties on items imported by the sector.
Tax relief “to expand the purchasing power available especially to middle class Barbadians” should also be given.
These proposals are all part of a 10-part “way forward” Leader of the Opposition Owen Arthur proposed to members of the Barbados Hotel and Tourism Association today.
Speaking on the topic, Securing Barbados’ Tourism: An Imperative For National Development during the BHTA’s Fourth Quarterly Meeting at Hilton Barbados, the Barbados Labour Party leader said the current state of tourism and the economy merited such “extraordinary measures”.
“With our foreign exchange reserves standing in excess of $300 million of the amount required for safety, some stimulation of domestic demand should be encouraged to spur economic activity in Barbados,” the former prime minister asserted.
“Such an initiative should not be seen as an alternative to stimulating continued development in our export sectors, but as a compliment to such a programme… It is necessary to stop not just the decline but, more especially so, the dangerous downward spiral of economic activity in the country.”
Arthur also suggested that as tourism struggled for vibrancy overseas, Government should approve a sector request for a staycation tax rebate “even as a temporary measure”.
This, he added, should be complemented by tax relief for Barbadians to allow to them to fully participate in the staycation initiative.
But beyond stimulation, the Opposition Leader’s tourism recovery plan included a restoration of fiscal discipline, making enterprises in the industry viable, increasing access to finance, introducing flexible land use policies, solving contentious trading issues including duties, facilitating private investment, changing institutions like the BTA, starting the incomes policy and diversifying the tourism product.
He said he saw a need to urgently implement new plans to revitalise Bridgetown and Speightstown by focussing on heritage, and completing two retirement villages in St. Peter to benefit from that niche market.
As far as remuneration for workers in the sector was concerned, Arthur said the current state of wage restraint was unsustainable and suggested linking future changes in incomes in the sector to industry based levels of productivity, in addition to establishing employee share ownership options.
He warned that if these and other “extraordinary measures” were not implemented “it is likely that the entire Barbados economy will continue its spiral downward”.
“The current perilous state of the industry is without precedent or parallel in our history. And so too is the calamitous state of the national economy in general,” he stated.
His way forward focussed on tourism as “leading sector in relation to its contribution to output, employment and foreign exchange generation”, in addition to picking up the slack left by other under-performing productive sectors, including manufacturing and agriculture. (SC)