Focus on niche areas to rebuild economies – Coke-Hamilton

Barbados and other small island developing states are being warned of the urgency to think more strategically about what should be done to revitalize their economies and increase resilience and sustainability.

In fact, trade and development officials have insisted that while tourism should remain a key sector to Barbados’ earning potential, greater linkages with other sectors, an increased use of technology and stronger focus on developing the services industry must be the order of the day.

The suggestions were made during the Barbados Coalition of Service Industries (BCSI) Fish Bowl conversation series on Wednesday, which was held under the theme Services for Economic Resilience and Post-Pandemic Recovery.

Director of the International Trade Centre (ITC) Pamela Coke-Hamilton said in order to advance services competitiveness for resilience and recovery the answer was not to move away from the vital tourism sector, but to “diversify, modernize and build sustainability principles into the current industry”.

“Barbados will remain a tourism economy,” declared Coke-Hamilton, as she put forward three broad ideas, which she said the island and other regional economies could undertake in the services sector to reduce vulnerability and build resilience and sustainability.

The first, she said, would be to take rapid action to “revitalize” the tourism industry by focusing on niche areas including health and wellness tourism, sports tourism, education tourism and aligning it with national objectives and capitalizing.

At the same time, Coke-Hamilton said a build out of digital services was necessary to increase competitiveness and diversity in the services offering.

“The pandemic accelerated digital transformational average by seven to ten years,” she said, adding that digital trade itself was a fast growing segment that provided significant export opportunities for the region.

Adding that the investments now by companies in digitalization made for long-lasting changes, Coke-Hamilton said companies that were unable to adapt digital technologies on a wide scale risked being “left behind”.

“So in order to maintain competitiveness in this rapid digital transformation we need to invest in ICT infrastructure and digital skill development, as well as to encourage the use of digital technologies to transform businesses for increased productivity and diversified offerings,” she said.

She said if work was done at the regional level in this area it could help Caribbean economies to achieve the scale necessary to lower costs and ultimately expand access to other areas such as reliable and affordable energy, transportation and telecommunications infrastructure.

“The third idea is to build resilience through green and sustainable strategies,” she said, while pointing to the importance of investing in research and development and innovation.

“Taken altogether, the key words for recovery are safe, digital and green. Services are key to advancing all these strategic areas and contribute to economic recovery, increase resilience and sustainability,” she said.

“A multipronged approach with stakeholder buy-in from micro, small and medium sized enterprises , business support organizations and governments will be critical to implement these changes as quickly as possible and reduce the impact of future shocks on the economy,” said Coke-Hamilton.

Stating that the idea of “going back to normal” after the COVID-19 pandemic was a fallacy, Coke-Hamilton said Barbados could no longer depend on short-stay tourist arrivals.

“The idea of short stay like four days for example, is going to be very difficult . . . So we have to start investing in the long stay arrangements. The 12-month [Welcome Stamp] visa initiative is a great start. Outside of that, we need to look at the kinds of industries that can attract people and allow them to bring their skills and allow them to build while they are there,” she said.

Meanwhile, Isabel Durant, Acting Secretary General of the United Nations Conference on Trade and Development (UNCTAD), also insisted that the services industries must play a critical role in building economic resilience and recovery.

Pointing out that global trade in services for the first quarter of this year was about nine per cent lower than it was the same period last year, Durant said improvements in services were crucial for productivity and competitiveness.

She also highlighted the need for greater adaptation of technology and digitalization, insisting that this served to strengthen other industries, and better connect businesses with consumers.

“But this is not enough, to build resilient countries in the Caribbean, they need to further diversity and upgrade their economies. This requires current and supportive policies and regulations and an ecosystem,” she said.

Durant said it also called for more efficient trade policies, industry policies to address structural gaps and support diversification, as well as a more holistic government approach and coordination with civil society and private sector.

Durant said there was no one sector that should be the focus as Barbados and other countries seek to move away from depending solely on tourism, explaining that it was about creating stronger linkages between industries.

“So it is really a combination between tourism, which is a very important sector, linked to digitization, green technology, green energy and all those issues which are feeding each other. I think we have to stop thinking about each sector as separate issues. Sectors are interrelated,” said Durant. (MM)