Shifting from tourism to more balanced economy

It is entirely reasonable to question Barbados’ deep dive back into high dependency on the tourism sector as the key pillar on which the economy stands, despite the obvious vulnerability to which it exposes the country.

No one wants to be the bearer of unpleasant news, however, there comes a time when an examination of the threats at your doorsteps cannot be ignored.

There is no denying that tourism has been good for Barbados. It has provided thousands of employment opportunities, chances for skills transfer, expanded markets for producers of agriculture, entertainment and cultural industries practitioners, and most important, a direct source of foreign exchange.

Infrastructural development and an expanded real estate market have also been aligned to a growing tourism and hospitality sector. The number of service providers too, who depend on tourism has also grown.

At the same time, all these areas have increased the island’s risk of significant economic turmoil whenever there is a downturn in tourism or a major world event that impacts people’s ability or desire to travel.

These vulnerabilities were on full display for anyone who doubted during the COVID-19 pandemic. The period of late 2020, 2021 and 2022 were particularly challenging. Those challenges manifested themselves in sharp, deep layoffs and redundancies across the private sector.

Scores of small and microbusinesses which lacked the reserves and technology necessary to keep their operations going, were forced to close their doors, some permanently.

Big businesses also consolidated their operations. Some closed remote branches, choosing to concentrate business at their main operating site, while others like Cave Shepherd & Company accelerated their exit from their main retail business and took a deep dive into the financial services sector.

In all this, it was employees who were forced to make the sharpest adjustment. In fact, many economists and market watchers will attest to the fact that employment trends have shifted to part-time, and contract work rather than full-time employment and the benefits that accrue to full-time workers.

There is no need to remind Barbadians about the trauma endured by hotel and restaurant workers, many of whom took their fight to the streets in public demonstrations against the dispensable approach some employers adopted in the treatment of these employees who engage at the lowest rung.

Tourism as a source of sustainable growth is threatened by climate change, public health challenges, and geo-political developments.

The World Travel & Tourism Council (WTTC) in a June 2023 article on its website argued that rising sea levels, intensifying storms, and deteriorating coral reefs, necessitated urgent action and adaptation to protect this destination.

Nicola Madden-Greig, president of the Caribbean Hotel and Tourism Association contended that tourism remained the primary economic driver of most Caribbean economies.

“The decline in tourism due to climate change would devastate the overall economy, directly impacting other sectors such as agriculture, manufacturing, transportation and the creative industries,” she outlined.

What is most interesting is the fact that in 2019, eight of the ten most tourism dependent countries in the world were located in the Caribbean.

It is against this backdrop that we continue to argue for a more balanced approach to economic development that involves greater diversification of the economy.

This is not to suggest that Barbados turns its back on the sector, but there ought to be greater attention paid to other sectors to fully develop their potential for export and foreign exchange generation.

Across the island, tourism-related infrastructure is on the rise. It is looming so large that some are likening it to tourism playgrounds like Miami and that locals can find no respite from the tourism overload. In rural Barbados and on the southern and eastern coasts, the intrusion of tourism development is becoming a negative.

In response to the argument that the country requires sustained foreign direct investment to support the current lifestyle to which Barbadians are accustomed, the question must be asked: “At what cost?”

There are already rumblings about the quality of employment opportunities and the fact that most tourism related employment is low-paying and the work is often seasonal.

On the Hastings to Bridgetown coastal stretch, several hotel developments are underway and others in the works including the Bridgetown Pierhead Project.

One has to ask about the carrying capacity of Barbados for such largescale developments. What about the impact on the environment, coastal waters, inland water quality, and sewerage systems? Moreover, how much of the foreign exchange generation will actually remain in the Barbados economy?