Economic Diversification of the Bahamas. A HORRIBLE Idea: Come 2017, there is no doubt that political party platforms will will recycle the old worn Bahamian political cliché regarding the need to diversify the Bahamian economy. Listen, I love aspirational flowery political rhetoric just as much as the next muhman, but really? Diversify to what? And why? We are a one crop economy. We export a service - tourism. We have neither the size nor scale to develop any significant other industries for which we would have a global comparative advantage. So a few niche things here and there may work, but lets put down that diversification nonsense and think about our one-crop dilemma in a different way: While we been busy paying lip service to the Holy grail of diversification, our Caribbean neighbors been building tens of thousands of hotel rooms to meet an expanding global trade in tourism. The long term prospects for tourism remain strong as rising global real incomes and more transportation options mean that proportionally more and more of the world will take vacation routinely. So the fundamentals of the tourism industry will remain strong and the number of prospective tourists will grow. Plus, by accident of geography, we are the closest Caribbean destination to the American mainland, conferring a cost and time advantage for those growing number of American seeking sun and sand. The future growth prospects of the tourism industry remain bright But even if our tourism numbers do not grow appreciably, we still have so much more value to squeeze out of the existing customers! Visitors routinely complain of a lack of things to do. Crudely put, that means that they want to give us more money and we are not giving them the opportunity to do so. The value added component of our tourism plant needs substantial attention. We collectively could probably squeeze another $1 billion out of the existing tourist base just by giving them things to do, other than spend their money buying T-shirts made in China. Zip-Line across Nassau Waterfront? Fire Dancing and Limbo classes? Mini workshops on preparing Bahamian and Caribbean cuisine? Survivor games on a Cay? The possibilities are almost limitless. So before we go off to chase the Diversification of the economy, lets pause to realize like Samsung that the next big thing is here! And it been here for the last 60+ years! Lets grow it and perfect it. Then we could go chase the other opportunities....
Posted on: Thu, 30 Oct 2014 12:04:25 +0000
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