The Caribbean region: Relevancy?

by on 01/12/18 at 9:02 pm

At a recent Caribbean Tourism Organization (CTO) event in Nassau, Bahamas, the State of the Industry Conference (SOTIC) once again reviewed and explored the opportunities that would become available with the adoption of the One Caribbean concept.

In reality, the research should explore the question as to the relevancy of the Caribbean region.

The Past is Prologue…or is it?

The economies of the Bahamas and The Caribbean region are faced with challenges that are decades (if not centuries) in the making. At one time the areas were of significant importance to European countries as they sought power and prestige. Militarily the countries were fighting over the Caribbean region as they searched for military bases that would enable them to reach South America and control key islands such as Cuba while the European merchants wanted control over real estate to access the then rare and profitable goods such as sugar and tobacco.

This geographically and economically important sector soon became a battleground and by the 16th and 17th centuries, Spain, France and England fought to control the region’s territories and shipping lanes. As European empires declined in the Americas (early 19th century), the geopolitical climate of the Caribbean changed. When France and Spain withdrew from the region, a vacuum was created and was filled by the US and by the late 19th century the US had snatched Cuba and Puerto Ricco from the Spanish and there has been no new competition from any European power since then.

Historically the countries in the region were commodity exporters but expanding and diversifying their economies has been difficult. The Caribbean states cannot rely entirely on domestic markets for economic growth and some of the smallest states are totally dependent on tourism or other one industry projects such as petroleum refining in Curacao, the export of medical goods in the Dominican Republic (aided by its inclusion in the Central American Free Trade Agreement and low tariff exports to the US), with Trinidad and Tobago relying on natural gas for economic development. However, Jamaica and other nations lack these benefits and constantly face slow economic development, overreliance on services and persistent financial deficit.

Few regions in the world have declined in relevancy so quickly as the Caribbean. Four hundred years ago the Caribbean Basin was the center for competitive European powers. Today, the region is a collection of islands that have developed separately and are divided by their own economy and political systems. The economic challenges they encounter are a direct result of their small size and limited financial options. In the 21st century the region is identified by uneventful playlands and dependency on foreign markets for financial support as well as food and other economics aid.

While the areas are strategically important to the security of the United States, they are economically irrelevant to US policymakers, and will remain in this position for the foreseeable future.

The Caribbean continues to be strategically important to the USA; however, without competition there is little happening of importance and the US now concentrates on secondary issues that include drug trafficking, migration and regional trade.

 Not by Tourism Alone

There has been a growing dependence on all- inclusive vacation packages. However, all -inclusive holidays are frequently organized and bought in the customer’s country of origin and the most generous percentage of the revenue stays with those who control the market (direct access to potential customers, airlines and sometimes to the facilities in the host country). In addition, international capital in the region – where more than 60 percent of hotel complexes are owned by foreign nationals – does not filter through to the domestic society. The first beneficiaries are international investors (North American, European and South African) who take advantage of attractive tax systems that allow the rapid movement of earnings without having to reinvest.

Frequently tourism officials quote the contribution of tourism to the local economy. However, the numbers can be misleading, for they do not factor in the cost-of-doing business. For example, less than 15 percent of the food consumed in hotels on Saint Lucia is locally produced. Perhaps this can be explained, in part, by the difficulty of guaranteeing a regular supply of provisions, the need for health checks and visitors’ tastes. However, the net result, is a much smaller contribution to the Saint Lucia economy. The studies conducted for the island of Saint Lucia find an equivalent financial loss of up to 40 percent of the declared tourism revenue. Therefore, the net contributions from tourism should be considered when all important factors have been deducted (especially food related).

Tourism is not a Free Lunch

How much does it cost a country to host tourism and how is the revenue obtained distributed? From a government’s perspective, the immediate priority is jobs. From afar, the Caribbean islands frequently appear like simple host structures that fall in line with an international system where the likelihood of local participation is limited. The development of the tourism sector has resulted in systems that are beyond the control of a resentful and impotent local population. The cost of tourism for the local citizens and their environment is particularly severe: inflation and dollarization of local economies alongside the closure of sections of their coastline.

It is necessary to find new options that are firmly rooted in the host territories and populations to create a genuine sustainable tourism development program. At the core is the idea of ecotourism although there are other options. However, new tourism must be complementary and original, better integrated into the host societies and their environment and deliver alternatives to the classic resort-based mass tourism product that alienates rather than integrates the people, culture, skills and abilities of the local citizens.

Hotel complexes have become fortresses and inaccessible with security playing a crucial role in their commercial success. The tourist is isolated by geographical location and hotel. The visitor is closed off to the rest of the host territory while host populations find themselves in urban suburbs and “invisible” decaying communities, hidden and even forgotten.

Although crime statistics from many Caribbean region countries are high, the region has been able to play on its image of a safe paradise and a low risk destination by herding tourists into exclusive areas. However, in some destinations, the reality of serious social tensions, pockets of extreme poverty and no-go districts that are run by organized criminal gangs and drug cartels have moved into resorts in such locales as Negril. Tourist cities like San Juan have high security perimeter fences around a heritage site where the visitor can move around without being disturbed, under the watchful eye of police forces with special training in tourism protection.

Tourist Bubbles

Mass tourism has created uniformity in the design and function of the tourism product with a concentration on standardization. Loss of originality has led to a loss in the uniqueness of a location and any reference to a particular national territory or unique hotel is secondary. A recent visit to the Coral Towers, (an Atlantis Hotel that is part of the Marriott Autograph collection) was evidence of a property scrubbed clean of any vestige of Nassau, or The Bahamas (except for a few low-quality sculptures of dolphins separating one hotel section from another) and Caribbean music poolside.

The Caribbean is marketed for its sunny climate, perfect beaches and authentic souvenir junk. Many guests are happy to remain in their air-conditioned tourist bubble and there was no need to leave. The hotel provides ample opportunities for swimming, dining, entertainment, gambling and international brand shopping. Guests pay a price for paradise and everything is designed to minimize the contact between the tourist and the local community. Everything is respectable. The desire for the exotic is satisfied and at the same time the guest is protected from anything different.

If the tourist bubble were the first step toward experiencing a “faraway land” and included a “training period” that would guide the tourist into more integrated activities with the host society – there could be gradual meetings arranged between the visitor and the host society; however, with the current system, the tropics and the “safe” exotic are an end in themselves. While there is conversation to make changes in tourism opportunities, there is little more than sound and wind to demonstrate the seriousness of the commitment.

Citizens of the host country are experiencing environmental problems created by tourism. The disappearance of natural resources and increased pollution, shortages of potable water, high costs of food and medical / health care…all are results of a tourism focus rather than a domestic concern. Government decision-makers allow cruise ships to pollute their waters, and the hosts are left to deal with waste left behind by the cruise passenger. Hotels consume enormous amount of wastewater and some hotels lack adequate treatment systems. Fragile marine worlds are being devasted by mass tourism from cruise passengers, pleasure boat moorings as well as underwater diving and hunting in weakened coral systems.

Troubles in Paradise

With government officials more concerned with their positions than the welfare of their constituents, decisions on how to maintain the environment, and access to and management of limited resources is politically motivated. New international residents (either through citizenship by investment or residence by investment) have selected the Caribbean region as their own personal Paradise destinations. The people born and raised on these beleaguered islands are unable to compete in a society that deprives them of resources that rightfully belong to them, including the land and coastal areas on the mainland, leaving them few options but to live in less than desirable areas of the country that have poor infrastructure and limited access to transportation.

Is There a Future?

At the CTO SOTIC event, tourism officials? repeated the work “hope” time and time again while the important word, “plan” was rarely part of the presentation.

David Jessop, the Director of the Caribbean Council has found that, “…since 2007…annual visitor spend [in the Caribbean] has fallen by US$5 billion. Governments ignore this at their peril. If income is falling and profitability has yet to reach pre-2007 levels, it suggests that the Caribbean is becoming less competitive in relation to other destinations and that current levels of tourism employment and tax revenue may not be sustainable.”

Jessop continues, “What is even odder is that beyond this there is little if any interest by governments or regional institutions in the econometric modeling of the Caribbean industry to enable the development of models into which assumptions…. demonstrate whether the reduction or increase in taxes bring greater or lesser returns. As a consequence, taxes go up, airlines are incentivized and tax holidays are granted without there being any clear understanding of whether the short, medium or long-term impact is likely to be positive or negative. For an industry worth more than US$25 billion per annum and which employs at least thirteen percent of the region’s workforce, this is truly disturbing.”

Jessop goes on to say that industry professionals operate in “silos” with “gifted amateurs” who are “unclear” as to how “to advocate new ideas at a regional level or bring about change in the policy environment.” He finds that the Caribbean tourism industry “desperately” needs political enlightenment and “regional visionaries” who are able to work with the public and private sectors, convincing them of the “benefits of a strategy that ensures the sector not only becomes, but remains globally competitive.”

The United States is not in a position to “write off” the region. The CSIS study of The Relevance of US-Caribbean Relations (2017) finds that, “The Caribbean basin is connected to the United States in geographic, economic and human terms. Its prosperity and security directly impact that of the United States. Accordingly, the choices that the United States makes with regard to furthering the region’s security and prosperity will be felt in the United States as well.”

If Not Now, When?

The question remains, when will the public and private sector leaders in the Caribbean countries and the US recognize that the region is more than a playground, an attractive locale for second home buyers and a viable option for people looking for additional passports?

The potential of the region has been ignored for too long and there is precious little time remaining for open discussions on major issues that include: disaster relief, incentives and trade agreements to encourage trade with and investment in the region and expanding programs to strengthen Caribbean institutions.

© Dr. Elinor Garely. This copyright article, including photos, may not be reproduced without written permission from the author.

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