International economist Dr Fred Bergsten thinks Barbados should further intensify work in tourism because it is the fastest growing market, though he concedes the usefulness of economic diversification.
As he pointed out likely diminishing returns in small states spreading their economic base too widely, he noted that not only was tourism a constantly expanding industry, but opportunities lay in China, and the island should invest more in attracting nationals from
He told the Inaugural Caribbean Economic Forum last night that tourism for the region had much more potential.
“I see enormous opportunities for Barbados, and other small island economies in the Caribbean,” he said, “if you could develop new strategies in increasing airlift from China to the Caribbean, via either Europe, or the west coast of the United States. If you could put together package deals, the Chinese tourists will go three days to Barbados, three days to Antigua, three days to St Lucia, etcetera.”
Bergsten, the featured speaker for the event, hosted by the Central Bank of Barbados and held at the Grand Salle, said that with what may now be the world’s largest economy holding trillions of dollars in surplus, Chinese tourists were using their newly found wealth to see the world; so Barbados and other islands must leverage their attractiveness to bring these people here.
“The same way Chinese tourists love to hop from London, to Paris, to Zurich to Rome, and see a few sites and go home and say they’ve done it. If you could . . . you might be able to tap a massive new market.”
These remarks of the distinguished visiting fellow, and director emeritus of the Washington-based Peterson Institute, came weeks after Prime Minister Freundel Stuart told newly accredited Chinese Ambassador to Barbados Wang Ke of Barbados’ interest in attracting more Chinese visitors to
Also recently, Barbados’ Ambassador Designate to China Dr Chelston Brathwaite informed Barbados TODAY that the island was on the verge of announcing a new China policy, and hinted that tourism might be its prime focus.
Bergsten said last night: “If the Caribbean countries could get together . . . to pool resources in a sector where you clearly do have a competitive edge . . . and particularly there are these new emerging economic powers, you get the higher income levels, get the stronger exchange rates, a huge capital resource, they will want to see the world”.
He said, “Small is beautiful, and the fact that you are small means . . . that if you got only a very tiny share of such a huge market, it could be a game changer”.
It is however, the smallness of territories of the region that caused him to warn against spreading our economic wings too far. “Small economies, within the Caribbean and elsewhere, really do have to focus on a relatively small number of economic issues. If you try to diversify across your economy too widely and try to pursue too many ventures of different industrial sorts, you really run a risk of doing nothing well.”
Noting that this advice might “sound like harsh medicine”, he said: “I believe in the principle of comparative advantage, and that says do more of what you do best.”
He said that larger states were forced to pursue a wide variety of industries, agriculture and services, “but in a small economy you really do have to emphasize those few things that you do best, and try to make sure you do them really well”.