A Bahamian comparative advantage
• First published November 28, 2018.
Trade is buying and selling goods and services. In successful trading, one produces and sells what one produces best relative to others with whom one trades. I can landscape my yard and I can lead organizations. I can try to do both during the week to make money, but when I am landscaping I cannot be leading an organization at the same time.
Landscaping can earn me about $60 per day, because I am not the best at it; consulting about economic matters can earn me more than three times that amount, at a minimum. For each day that I spend landscaping when I could be consulting, I give up $180; and for each day I spend consulting when I could be landscaping, I give up the lesser amount of $60. My landscaper can earn $100 per day landscaping, but much less — say $25 per day — consulting. For each day he spends consulting, he gives up $100, and when he is landscaping, only $25. His comparative advantage is in landscaping. If we both act in our best interest, that is, doing what we do relatively best, we can both be better off because we will apply ourselves to areas where we earn most and use the extra money to purchase what we need and want. This comparative advantage is the basis of successful trade, both in theory and in practice.
For decades, The Bahamas plowed its energy into the hospitality industry. In that period of time, we trained for and supplied hospitality services to multiple millions of visitors as they hopped in taxis or on buses, arrived at our hotels, ate in our restaurants, toured our sites, tanned on our beaches, fished in our waters or did business in our economy. For much of the last six decades, we did hospitality better than most and we were rewarded handsomely for it. Our economy exploded, moving from a farming/fishing village with a modest income per capita to an economy with the third-highest per capita income in the Americas. My own travel throughout our region and a good part of the world revealed that as host to strangers, The Bahamas was by far much better at it than most. We had a clear comparative advantage in hosting people and, notwithstanding our higher cost of service, for the most part, people were prepared to pay our price.
Our hosting of strangers was characterized for decades by a genuine delight in meeting and entertaining people. We had a certain lightness about us and friendliness in our demeanor. Happiness was our natural brand and making others happy was our specialty. To send the stranger away with a strong desire to return was our deep desire. “Once is not enough; even twice, you don’t see all of we stuff. Come back for some conch, peas and rice and guava duff; for when you visit The Bahamas, once is not enough”, was our trademark. For years throughout the world it was echoed, and we Bahamians wholeheartedly agreed, “It’s better in The Bahamas”. Smiles were plenty and free; courtesy was universal and abundant; entertainment was alive and innovative; and laughter was common and authentic. This was our comparative advantage — the stuff of which happiness is made.
Within the last 20 years or so, it seems we lost something of ourselves in the area of hospitality. We seem a much more bothered people, less happy, less inclined to be exceptionally happy with strangers or to make them happy, and more dissatisfied with what friendliness can produce in the way of prosperity. Our comparative advantage has been eroded, and people from Mexico, the Dominican Republic and Cuba have built an edge. As this has happened, our trade declined to our disadvantage.
Despite our decline in this area of hospitality, recapturing our edge is well within our means. Hospitality for us is not lost but suppressed. It is suppressed by some knowledge and experiences that we have had that are antithetical to our good nature. It is suppressed by the strain and stresses that the present economic malaise is putting on us. The good thing is, if we can see our way clear, regaining our competitive advantage in this area could represent the most cost-effective way for us to boost our economic circumstances substantially. The Bahamas is still a dream destination for many people, and there is still a global appetite to visit us.
The problem is, as I see it, when people think of us against the backdrop of the offerings of our cheaper and more enthusiastic competitors, we don’t rise to the highest level of “visit now”; rather, we fall in the category of “do one day”. Wowing hospitality and customer service can raise our profile in this way because the millions of visitors who now come can be our ambassadors, bragging about the great time they had here. It has always been and remains to this day that word of mouth is the best form of advertisement. It is merely a question of the willingness and effort to get there.
Regaining our comparative advantage in the hospitality space is low-hanging fruit. Still, it requires leadership to reach. We have to mount a national campaign to recruit a larger segment of our population to this important task. We must also set the example at the top, every top. In government, business, education and civic groupings, all leaders must give themselves to “wowing” performance and motivating their organizations toward this end. I know that no leader in this nation doubts the need for economic resurgence and therefore supports every effort to bring it about. So let’s do it.
• Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.