Recently, I was reading about the Budget 2010 in Barbados, and the serious financial state of that country. The Budget revealed a deficit of $ 814,634,684 Bd or $ 1.1 Billion XCD. This is a staggering figure for a country with a population about twice the size of St. Lucia. However there are some important lessons to be learned from Barbados. Tourism arrivals were down about 5.3% and are now on the upswing, and thus it is clear to any observer that this fiscal crisis was not caused by the decline in Tourism arrivals.
The past robustness of the Barbados economy has been led by foreign direct investment in the high end villas and condominiums within the island. It is primarily this decline that has caused this shortfall in revenue. Our economists in St. Lucia would do well to observe the Barbados model and see how robust economic growth can be achieved and how to avoid the mistakes.
The Ministry of Tourism seems unable to make the connection with the importance of foreign direct investment and their role as the generators of economic activity thru tourism. We are lost in a numbers game, with our minds being sporadically tickled by statistics on tourism arrivals.
No country can break into first world status by having a surge of cruise ship passengers. Most of these cruise tours are so low priced that the average person on such a trip is a middle- middle income person. You observe these people and you can see they have but a few cents in their pockets to buy anything in St. Lucia. Yes we get a few dollars in passenger taxes, and some taxi operators will get a trip, but this will not create the transformation we all dream to happen in St. Lucia.
Has there been a significant and measurable growth in the economy? An increase of arrivals of 1 % of high end tourists can create more economic activity as against a 10% increase of ‘biscuit and cheese’ tourists. So the improved state of our economy cannot be based on arrivals, but the economic transformation that the effort has brought.
This is where the Ministry of Tourism has failed to pick up the ball. If you look around St. Lucia, you would be quite surprised at the number of high-end developments in the North that have stopped. In 2008/2009 if you passed by the Gros Iset Town entrance you would have seen virtually hundreds of workers waiting for transport to go into Cap Estate. In 2010 there is no one, absolutely no one waiting for transport. What was responsible for this surge in economic activity? At that time you had the following projects on stream:
- Cotton Bay Resorts
- Canes on Cotton Bay
- Raffles
- Villas on the Green
- Villas in the Green
- Cap Maison
- Almond
- Le Sport
- Cap Estate Country Club
- Zara Villas
All were foreign direct investment. In Dennery you had Le Paradis ongoing, a foreign direct investment. While some are completed, many have stopped and some never got started.
The primary reason for the stoppage is related to marketing. Many developers lost clients during the world financial crisis and were unable to sustain and step up their marketing campaign to get new and replacement clients. Has the Ministry of Tourism spoken to these developers to see how they can assist? The answer is NO!!.
Did the Ministry of Tourism consider that it may be possible to marry a marketing effort with a road show for the High-end villas/condominium market and thus create the sales to allow these projects to restart?
While there may have been mistakes on the Hyatt project, it is unquestionable that the concept of Governmental involvement in ensuring the success of tourism projects is sound policy. Sir John did it for Sandals, Dr. Vaughn Lewis did it for Jalousie, and Dr. Kenny Anthony did it for Hyatt. Sound economic policy that should not be reversed due to societal misconceptions.
We have to begin to think outside of the box if we are to bring this glorious land of St. Lucia to the place where God has destined it to be. Mundane and simplistic are words that should not be even found on our lips, excellence and creativity is where we have to be.
I challenge the Ministry of Tourism to sit down with the developers that can create the economic impetus by foreign direct investment and see where the marriage of efforts in marketing can be consummated. They need marketing support and the Ministry of Tourism is best placed to provide that level of support.
If we assume the labour content and locally produced materials equate to 50% of the cost of a unit, then a high-end villa costing $ 5.0 million US can bring in a net of $ 2.5 million USD directly into the economy. The surge of such construction in Barbados’ west coast brought the robust growth of the Barbados economy over the last ten years.
The Ministry of Tourism has to see such high end investments as an integral part of the economic development of St. Lucia. The Government of St. Lucia has to provide the marketing support to these developers to kick start these projects in the North of the island and create the employments opportunities for St. Lucians.