COMMENTARY: Changing Caribbean Economies

Bud Slabbert

The Caribbean is being stuck with economies that are over-proportionally depending on revenue from tourism and related activities. No, this is not just about hurricanes. If it wasn’t the weather, then it was the Zika virus or a recession. It is an economy that was directed in an unsafe direction.

What was in the past is history and what evolved over the years shall not be judged. There is no time for blame games and this is not around politics or politicians from the past until today. It is not about one particular territory but rather about a whole region. What happened yesterday in one location may happen tomorrow in another, or even happen to all. But, as of today, changes are required.

When it’s time for changes, and while being aware of potential risks or dangers, then it may be considered negligence if one doesn’t make appropriate real tangible changes. Bringing matters back to ‘normal’ after an unfortunate event is about the same as not making changes. Not being able to make changes, is not being able to respond, or ‘ir-response-able’.

Some rave about the Caribbean being the most significant tourism region. That may be true when comparing geographical regions. Considering that the main tourism season lasts approximately half a year, then from an economy viewpoint, it only is a half-truth.  Things are never what they seem. Yet, the complacent species may think that what seems to be is always better than nothing. That is no-good for the well-being of an economy and its community.

If tourism revenue is 70-80 percent of an economy, and that tourism season lasts about 6-months, it means that the economy is running on half capacity. If an event hits the tourism industry, the economy will be in shambles. Using glue to put the broken pieces together is neither a solution nor necessary change. Promoting more tourism activity to fill up the capacity gap is like using one hand to wave the flag and the other hand to hold up the pants.  It is a losing game because it represents an even more undesired increase of dependency on tourism.

Diversification of the sources of revenue in the Caribbean economies should be top priority. More efforts should be made and more funding should be available for international business development that is not depending on tourism. That may mean that foreign business development and investment specialists with a proven track record need to be engaged. They must get the appropriate paraphernalia at their avail to attract new industry segments. This is not about sun, palm trees and white beaches anymore, but more about infrastructure, telecommunication, transportation, etc.

Now that we have the lecturing behind us, let’s try to find solutions. I hate the generic statements that sound like coming from an individual with his head in the clouds, like: “We need a unique global sustainable industry development with a secure return of investment!” Sure. Just take a look under the clouds and see what the reality is. To express it a bit more crudely: “Who looked under the oxtail, doesn’t like the soup anymore!”

It may be difficult to point out an industry segment that would be attracted to settle on an island rather than on a continent. However, they do exist but it may need tougher and more intelligent efforts to bring them in. It could be an innovation, research or development center, horticulture, aquaculture, fashion and design, property rights registration and protection, artistry. These few examples are only providing some food for thought. More ideas are needed. Organizing regional ‘Think-Tanks’ may help.

The Caribbean has a huge amount of capital outside the region and the return of investment of that capital stays abroad. It is called “Human Capital”. Young people who went abroad to study and became too overqualified to come home and no appropriate positions that suit their qualifications are available for them. Some call them the “Diaspora” and think that that’s a great name for it. According to the dictionaries, that word belongs in the category of expressions for displaced persons. Not really something to be proud about. Another scary word that could be used in conjunction with it is “Braindrain”, a continuing dynamic in the region.

What might help stopping the brain drain is something that was listed in the suggestions: innovation research and development centers. Developing knowledge industry. Knowledge can result in solutions. There is always a demand for solutions, and a willingness to pay for it; thus, a market. The intelligence that is bred here locally may attract clientele from abroad. It may result in unique entrepreneurial activities and well-paid positions on island or within the region and the return of investment could remain at home.

‘Human Capital’ falls in the category of ‘Own Capital’. Own capital funds are generally a condition for outside financiers and investors. Without sufficient responsible own capital resources, outside capital givers are not ready for investment. Instead of driving an industry forward that creates employment for room-maids and taxi-drivers, some rethinking needs to be done.

On a different note. It may sound like it is off-the-wall. Studies have shown that the same gene that makes one smarter also makes one more likely to go crazy. And you know what? Being brainy-smart and crazy-cool can lead to more revenue and benefits; it is a proven formula in business and artistry. In business, the brainy-smart outdo the competition; in artistry, the crazy-cool create new styles and trends. Typical is that both outdo their equals by coming up with something more interesting or innovative. The region needs to find something that outdoes others.

We have a challenge on our hands. Being able to handle a challenge with true changes creates strength, but in the meantime…., one cannot throw confetti while the revenues are down.

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15 Comments

  1. LifeandDeath
    December 1, 2017

    “Instead of driving an industry forward that creates employment for room-maids and taxi-drivers, some rethinking needs to be done.”
    This is the most significant phrase to me in this entire article. It gives an insight into the type of thinking at the level of Caribbean governments and policy makers. Also it reveals what our populations are satisfied with. Either because both groups can think no further for lack of education and or experience or because as a result of the lack of education, specialized skill sets are also fairly limited and hence can not appeal or access jobs or investments at levels above room-maids and taxi service.
    So the diagnosis would be to review the history of our Caribbean peoples and dissect our population demographics by education, skills etc. and then seek suitable investments. Because, “Without sufficient responsible own capital resources, outside capital givers are not ready for investment”…

  2. Truth Be Told
    November 30, 2017

    Excellent analysis! Greater truths have never been told; it is time to speak truth to the powers that be whether they like to hear it or not!

  3. Dan the American
    November 30, 2017

    If I could get my wife to move to Dominica with me, I’d start a mutual fund called DomFund. It would be run entirely by Dominicans, servicing the world investment market. Imagine an island economy based on the buying and selling of money instead of trying to keep tourists happy…

    All I’d need to get started would be access to the Internet.

  4. kaykay
    November 30, 2017

    Very apt and time article. I have been commented in the past about the dearth of native Caribbean development theorists and practitioners. I think we need to make the first step. We can no longer proceed as if there was no plan. I would like to contact the writer.

    • Diogenes
      November 30, 2017

      I see no problem giving you my email address: cdrbud at gmail dot com as long as messages are sincere and make sense.

  5. anonymous
    November 30, 2017

    Amazing article!

  6. Looking
    November 30, 2017

    Thank you Mr. Slabbert for the wonderful insights, these are not as important for the typical politician though. We just wonder if our politicians were armed with this knowledge or probably just humble enough to listen to those wise words even if it meant losing their seats in parliament.

  7. dee
    November 30, 2017

    Knowledgeable man .
    ”who look under the ox tail don’t like the soup anymore”
    great saying
    especially if they see de …. coming out exactly while they looking.

    • Me
      December 1, 2017

      Do you eat eggs Dee?

  8. Fr. Franklyn Cuffy,
    November 30, 2017

    This piece on “Changing Caribbean Economics” by Bud Stabbert is a very thought provoking. This is a discussion that must be continued by the experts. I am looking forward to seeing and reading the other comments.

  9. Believer
    November 30, 2017

    Beautiful, thought-provoking commentary.
    Would recommend our economists and planners pay close attention to the analysis contained in
    this essay.

  10. Mc Carthy MARIE
    November 29, 2017

    Excellent commentary. For the last 15 years I have communicated to every Minister of finance the idea that Dominica can be made a major centre for the domiciliation of intellectual property, particularly copyright which is my particular forte. Readers of Dno might wish to read the following two documents on which I worked as the Project consultant , Economics:
    http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_tt.pdf

    http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/econ_contribution_cr_oecs.pdf

    • Me
      December 1, 2017

      Good message but perhaps touted by the wrong man?

    • LifeandDeath
      December 1, 2017

      Thanks much Mc Marie. Incidentally 13 of the last 15 years has seen the same Finance Minister in Dominica. An unqualified parody for the true responsibility of real finance ministers anywhere. And that in itself is part of Dominica’s problem.

  11. Shaka Zulu
    November 29, 2017

    How many times i have been here talking about our human resources. Recently the PM talked about having German company come help us set up international standards. I asked about the utilization of DAAS, a Dominica pool of intellectuals who have experience with major international companies in the US in almost every field possible. I bet most of them would help free of charge in a time like this. Yet, because they may have spoken out contrary to the leaders they are not considered. Maria is a perfect opportunity for reflection, and new direction. Not the same ole instant gratification and shortsighted policies and plans.

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