BRIDGETOWN: A world economist has suggested that the upswing in the global economy will filter down to the Caribbean.
During the first-ever Caribbean Economic Forum staged by the Central Bank of Barbados last week, Dr. C. Fred Bergsten, Director Emeritus of the Peterson Institute, an international Economic think tank, said the worst of the global recession has passed and the region must now look to new economic interests as it repositions itself.
Dr. Bergsten said the Caribbean must release its grip on traditional trading partners such as the United States and Europe and look towards new partnerships with the world’s emerging markets: Latin America, especially Brazil, and East Asia, particularly China.
“The truth is neither North America nor Western Europe are the new dynamic leaders of the world economy,” said Bergsten. “The emerging markets of developing countries around the globe now account for the half of the world economy, they are growing three times as fast as high income, traditional economic power houses and that’s where the dynamism is and so to have a good shot at expanding dynamic economic growth in this region I think you need to diversify beyond those markets.”
Bergsten believes China is a potential goldmine for the region’s tourism dependent economies, which have been losing their market share in the U.S. and British markets.
“China is already the second largest spender in tourism in the world, over a 100 billion dollars but it’s only begun,” he said. “China is going to explode as a source of tourism. There is going to be a tsunami of Chinese tourists flooding the world over the next several decades and if the Caribbean can get a small slice of that huge market it would do wonders for the economy.”
Although Bergsten advises Caribbean economies to diversify, he warned the region to choose its niche markets wisely. He said when small economies try to pursue too many ventures, they run the risk of doing nothing well.
“I believe in the principle of comparative advantage and that says do more of what you do best,” said Bergsten. “Now if you are a huge, continental economy like China or the U.S. and a few others, you can provide a wide variety of industries and services and some agriculture as well. But if you are a small economy I think you really have to emphasize those few things that you do best and try to make sure you do them well and really well means you do them on a competitive basis.”
Bergsten said tourism is the sector the Caribbean should focus on. He advised Caribbean countries to pool their resources to cash in on the lucrative Chinese market.
“If you develop targeted strategies for increasing airlift from China to the Caribbean via either Europe or the West Coast of the United States, if you could put together packaged deals where Chinese tourists could go for three days to Barbados, three days to Antigua, three days to St. Lucia…if you could put together what I think would be somewhat new, creative devices of that type you might be able to tap a massive, new market,” he said.