Prominent economist Marla Dukharan has expressed confidence in Barbados’ ability to earn significantly from, and ensure economic development through, the exploitation of its ocean space.
Outlining what she described as a risk management approach to diversifying Barbados’ economy and making the country fully energy independent in the medium-term, Dukharan said the more than 186,890 square kilometres of marine space around the island should be used for the development of renewable sources of energy and careful management of hydrocarbons once found.
She was addressing the UNDP High-Level Political Forum virtual side event on Wednesday, held under the theme Unleashing the Potential of the Blue Economy.
“The ocean must be a major component of any smart diversification and development strategy, but especially in Barbados which is a water-scarce country,” said the Barbados-based economist.
However, she said one of the challenges of harnessing the blue economy in the region was getting leaders to do “the difficult work involved in diversifying the economy” despite robust discussions on the matter over the past several years.
“They seem to chase, with vigour, whatever works well at the time. First, it was sugar and other agricultural products and now it’s largely tourism,” Dukharan said.
However, she insisted, with persistent low growth, high debt and unemployment and overall underdevelopment, “diversification is a risk management approach we must adopt if we are to survive”.
Dukharan recommended that the country seriously look at creating an entire network around the use of seawater to provide opportunities for residents while earning foreign exchange for the country.
“What about creating an industry around this desalinated water, where the output is exported and the energy inputs are derived from the renewable resources available right in the ocean such as wind, ocean tides and even solar? What if this desalinated water could be channelled intentionally to support the creation for expansion of other industries such as aquaponics and agriculture more broadly?” she said.
Dukharan warned that as the island embarks on oil exploration, it should not lose sight of maximizing its potential for clean and affordable energy.
The economist, who was born in the oil-producing nation of Trinidad and Tobago, said she understood “the temptation of oil and gas”, pointing out that with Barbados potentially sitting on significant hydrocarbon resources, this could be a possible challenge to the island’s quest to harness the blue economy for diversification and development.
International oil exploration giant BHP is expected to start a seismic survey off Barbados’ shores in the second half of this year. The deepwater exploration is to take place in two offshore acreage blocks – the Carlisle Block and the Bimshire Block.
“Based on what is known as the resource curse or the paradox of plenty, it is no coincidence that the countries in this region which produce hydrocarbons, such as Trinidad, Guyana, Suriname and Venezuela, these are the most spectacular socioeconomic underperformers in our region,” she said.
“What differentiates these countries and their natural resource-driven economic outcomes from the Norways, Canadas and Australias of the world is institutional strength. Pouring oil unto an institutionally weak country, like Guyana for example, is not likely to solve its developmental challenges, unfortunately.”
However, in the case of Bridgetown, Dukharan said already being one of the region’s strongest institutionally, it should be able to learn from the mistakes of others countries and take best practices should it strike oil in its ocean space in coming months.
“If Barbados is able to prepare itself from an institutional standpoint, especially its environmental laws and regulations and its fiscal framework; is able to establish a sovereign wealth fund upfront; is able to learn from the mistakes of Trinidad and Tobago, for example, and mitigate the risk of repeating them; and is able to tap its more experienced friends who get it right, like the Canadians and Norwegians for example, and ask them to assist with negotiation with the oil companies, then I think Barbados could be potentially the region’s first diversified blue and green hydrocarbon producer, perhaps in the world. I think this is the real challenge,” she said.
Meanwhile, Minister of Maritime and the Blue Economy Kirk Humphrey acknowledged that while the task ahead to develop the island’s ocean space would be challenging, it was a journey Government was prepared to take.
Pointing to climatic events, dying coral, declining fish stock, the menacing sargassum weed and other ocean-related challenges, Humphrey said Government had started to invest in mitigation and adaptation measures.
“We are going renewable, we have banned petroleum-based plastics, we are protecting our coral, we are discussing marine parks, but we know this is not enough,” he said, adding that the recent passage of Hurricane Elsa highlighted the need for more serious and urgent actions.
Lauding the UNDP and other partners for their continued support, Humphrey said: “We are currently working to develop our marine spatial plan with the Nature Conservancy, and we will be rolling it out very soon and . . . in the next three to five years we hope to conclude it.”