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.
“. . . 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.