How dependable is tourism?

How dependable is tourism?

Henley W Morgon

Wednesday, August 05, 2020

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The novel coronavirus has proven me wrong. I have touted the need for Jamaica to move away from being a producer and exporter of samples — a little bit of this and a little bit of that — and to, instead, fully embrace tourism as the country's economic saviour. In pursuing this line of thinking, I denigrated the National Industrial Policy (NIP). Published April 25, 1996, the NIP lists tourism, along with entertainment and sports, as a sector among equals, instead of the hub around which the other sectors — namely services, technology, agriculture and manufacture — revolve. To me that was sacrilege; doing the wrong things well. I have supported a mono-product economy based on tourism.

My position, I thought, was on solid ground. In 2018 the global tourism industry generated US$1.8 trillion and accounted for one in 11 of the world's jobs. Jamaica's tourism product has catapulted beyond the four-million arrival mark even in adverse circumstances and is a major contributor to foreign direct investment (FDI). Tourism, in a real sense, is the proverbial goose that laid the golden egg.

But tourism has two vulnerabilities. The first is natural disasters, so-called acts of God, which with little warning can wreak destruction on an industry that promotes itself as a “sun, sea, and sand” destination. The second is the unequal distribution of earnings and low diffusion into the wider economy.

At the November 2017 United Nations World Tourism Organization (UNWTO) Conference held at the Montego Bay Conference Centre, former UNWTO Secretary General Taleb Rifai caused quite a bit of stir when he seemed to criticise Jamaica's tourism model for failing to adequately circulate earnings from the sector outside large, all-inclusive properties.

Jamaica has been at the forefront of countries trying to mitigate these problems. The Tourism Linkages Network, currently under the chairmanship of Adam Stewart, was established in June 2013 to serve as a catalyst for spreading the tourism dollar throughout the Jamaican economy. Specifically, the goal in establishing this facility is to increase the consumption of locally produced goods and services in our hotels through sustainable linkages between the tourism sector and other productive sectors of the economy, such as agriculture, manufacturing, and entertainment, to which it is closely linked.

In response to the threat posed mainly by climate change and natural disasters to tourism-dependent economies, another innovation, the Global Centre for Tourism Resilience and Crisis Management, was established on The University of the West Indies, Mona campus four years ago. Quoting from the foundation document by Minister of Tourism Edmund Bartlett, whose brainchild it is, “The ultimate purpose of the centre is to assist destination preparedness, management, and recovery from disruptions and/or crisis that impact tourism and threaten economies and livelihoods.”

Coronavirus has exposed, to a greater degree than ever before, the soft underbelly of tourism-dependent economies. While the vast potential of Jamaica as a major tourism destination remains largely untapped and ready for development, in the wake of the pandemic a diversified economy seems to be a more reasonable proposition than one dependent on a single product or resource for export, economic growth, and development.

This is no fault of tourism. Many studies revealing the risks of mono-product economies have been done. Two examples are Nigeria in West Africa and Appalachia, a cultural region in Eastern United States that stretches from Southern Tier of New York State to northern Alabama and Georgia.

Nigeria, a country with a population of 180 million plus, is resource rich. Discovery of vast reserves of oil in the mid-1950s caused a shift in focus away from development of other resources and an overdependence on oil during the boom years. Appalachia, with a population of about 25 million people, is similarly rich in both quantity and diversity of resources. It became overdependent on coal mining when coal was king. The discovery of shale oil in the United States, which meant that country was no longer a huge importer of the commodity, and President Barack Obama's war against coal had negative effects on Nigeria and Appalachia, respectively.

Is Jamaica becoming overexposed and at risk to a similar fate? In a country where services represent 70 per cent of the economy, the tourism industry accounts for over 50 per cent of the country's total foreign exchange earnings and provides about one-fourth of all jobs. By those statistics, Jamaica is approaching the international criteria for what defines a country with a mono-product economy. The solution is not to slow the growth of tourism. Government must instead pursue deliberate strategies and make the necessary investments to grow entertainment, sports, manufacturing, financial services, and technology from merely being sectors to achieving industry status.

The Friday, October 26, 2017 edition of the Jamaica Observer carried a story 'Jamaica must diversify beyond tourism — Shaw'. The story covered remarks made by then Finance Minister Audley Shaw to its Caribbean Business Report while attending the Commonwealth finance ministers' meeting in Guyana. In retrospect, Minister Shaw might have been pointing us in the right direction.

hmorgan@cwjamaica.com


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