OECS countries looking at economic diversification

By Admin Thursday February 23 2012 in Caribbean
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ST JOHN’S, Antigua & Barbuda: Trade between member-states of the Organization of Eastern Caribbean States (OECS) is practically non-existent, with most exports going to markets outside of the group.



Virginia Paul, head of the OECS Trade Policy Desk in Castries, St. Lucia, recently described the disproportionate economic situation on a local radio show. Paul noted that the OECS annually receives more than US$250 million worth of imports from Trinidad & Tobago alone, with petroleum products accounting for some 45 per cent of Trinidad & Tobago’s exports to the sub-region.



Faced with an economy that is perhaps excessively dependent on tourism for its export revenue and employment creation, officials of the OECS are reportedly focusing on economic diversification as an essential aspect of future economic health.



Paul reported that the tourism dollar accounts for 83 per cent of OECS exports, and is linked to 70 per cent of employment in the sub-region. Some territories are more dependent than others on tourism, whose contribution to sub-regional gross domestic product (GDP) ranges from 24 per cent in Montserrat to 75 per cent in Antigua & Barbuda.



All OECS member-states show a negative balance of trade in manufactured products, though the sub-region enjoys a surplus of trade in services. This indicates that service-oriented activities may hold the key to much-needed diversification of the OECS economies. Accordingly, OECS governments regard diversification into services as essential for eventually weaning the sub-region away from its dependence on tourism revenue for economic survival.



Paul privately estimates that a better economic structure for the OECS territories would see tourism representing 50 per cent or less of GDP, employment creation and export earnings.



Following this analysis, OECS governments are strongly urging programs that develop economic activity in a number of areas.



The health and wellness industry, which some refer to as “health tourism”, holds considerable promise, as well-heeled patients from around the world may seek top-of-the-line medical care in the healthy environment of the modern Caribbean.



In the educational services, it has been suggested that nurses be trained to meet international demand.



The Caribbean can also hope to compete successfully in providing professional business services such as accounting, design and information technology. In these sectors, location is not a critical issue and poses no obstacle to high-level performance.



As for the areas of creative arts and culture, the Caribbean region already has a reputation for its unique and exotic offerings in music, festivals, art and crafts. The developing motion picture industry holds significant promise for indigenous film features, as well as the use of the region for shooting international productions.



Paul emphasized that the thrust toward economic diversification away from tourism is a matter of immediate policy, and not some vague future endeavour, suggesting that the sub-economic players of the OECS are well-advised to pay urgent attention to the need to transform the sub-regional economy from its current state of virtual monoculture.


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