Two simple questions right off the bat: Does the country consume more than it produces? Does the country import more than it exports?
The answer to those questions will show that there is an imbalance. And the third question that automatically follows is: Where do we go from here?
There is a just as simple answer for that: Diversify the economy and the country will flourish.
That is where the dilemma begins. Actually, the problem itself is not the diversification. It is the many opinions that try to shoot so many holes in whatever is suggested for diversification, that even Swiss cheese looks like a solid mass. And yet, that isn’t even the worst. The worst is that no realistic solutions are brought forward in the first place and if they are, then there is no serious follow-up.
For most of the Caribbean territories, tourism is the major source of revenue, up to about 85 percent. Please pardon my French, but anything over 50 percent is insane.
Economic diversification is the process of shifting an economy away from a single income source toward multiple sources from a growing range of sectors and markets. It is applied as a strategy to encourage positive economic growth and development.
It doesn’t mean at all to give up tourism. Don’t try to pull that one as a counterargument.
Diversification shall be a distinct art to unite while leaving all differences intact. Adding lines of business that are different from the current is the development strategy which in some cases may complement each other.
Where does the logic all start? Maybe by making a list of all items, be it products or services, that are imported. Which of those items could be produced locally? Could alternative products be produced locally and be marketed as “authentic” to give it extra value?
Can these locally produced items be exported? Authenticity could again give it more value and make it competitive when exported. By following this path of increased production, also employment could be boosted. Now we’re talking business, and this talking business does not just give workers something to do, but also people with more extensive skills like managers, administrators, marketers.
Not all imports can be eliminated and that is not the purpose of this exercise.
However, it may create what is called a trade balance between import and export. It will have the monetary advantage that more money stays in the country and can increase the wealth of the population, not to forget that it will benefit the government coffers. A healthy and flourishing economy.
Does it hurt tourism activities? No, it doesn’t, and that wasn’t the purpose either.
Some of the locally produced items can be used by the tourism and hospitality industry. It is just about creating additional business of a third kind and creating a balance of at least 50/50 as for where the revenue of the economy comes from.
Does it need academics and consultants who cost a lot of money and take three months to come up with a conclusion? No. There is no need for lengthy studies that use expressions that many don’t understand anyway and contain long paragraphs with chapters like: “Focusing on strategies to …; addressing the achievement of…; implementation of…; establishment of…; fostering the development of…; instigating…, etc.
Baloney, it just takes some local bright impartial minds in the community and maybe a leader who can say, “I love it when a plan comes together!”
To summarize it, this is about eliminating a problem by pinpointing exactly where there’s an opportunity. The tourism industry has its proven vulnerabilities. Diversification creates opportunities. Vulnerabilities require the ability to counter and to withstand shocks which is called resilience.
Diversification increases resilience. Diversification brings competitive advantages and allows to reduce business risk. It does not only strengthen the local economy, but it also enhances the community’s quality of life. It creates employment and better paid jobs. It motivates young people.
So, what in the world does it need to get started? Protein bars? A strike of lightning? A pressure cooker?
When an economy is like an old battery, it needs new generators to charge it up. It needs fresh thinking by local bright people that have common sense and who start by making a list of all items, be it products or services that are imported but can be produced locally and then follow the line of thinking as described above.
They can make a diversified economy in the Caribbean flourish.