Exports and all that
Central Bank Governor Dwight Venner not only wants the private sector to be more prominent, but also wants us to export more. This is understandable. It is the exports that provide the foreign exchange that underpin the value of our currency. The exports of a country usually comprise minerals, agricultural products, manufactured goods and services.{{more}}
In SVG, we have not yet managed to discover any minerals. We hope to export geothermal energy, but like many others in the OECS we have talked the talk, but have not yet managed to walk the walk. This may change soon.
It is unlikely that we can ever match the Chinese in efficiency or competitiveness and be able to export manufactured goods. Ironically, however, some Chinese have come here and do some manufacturing. It is mainly for the local market. It certainly helps to reduce imports and provide some jobs.
In days of yore we lived by exporting farm products: sugar, arrowroot, cotton, bananas and ground provisions. However, many of these products depended on protected markets. The rise of free trade swept away the protection and, moreover, plant disease became more common, leading to a dramatic decline in agricultural exports. To their credit some companies and many individuals still try to export crops to niche markets in and out of the Caribbean.
It used to be said that once people leave the land there is little chance of them ever returning. The crisis in Greece has shown otherwise. There, unemployed graduates have taken up agriculture, using very advanced cultural techniques. Perhaps some Vincentians may like to imitate them. Government might wish to, but lacks the wherewithal to, employ all graduates in perpetuity. As Governor Venner pointed out, OECS Governments are overstretched. Migration outlets are, moreover, not what they used to be. Our young people will, therefore, have to become more enterprising, as they strive to make their way in a hard world.
Some time ago National Properties conducted negotiations with Neal and Massy. They are the big Trinidadian firm who own the Hi-Lo supermarkets and have now taken over Super J and Save A Lot in SVG. We wanted to sell produce to Hi-Lo in T+T, but could not agree on price. Now that Neal and Massy are in SVG, we may be able to sell them something, if we raise our level of efficiency. The Argyle airport should also improve the prospects of exporting farm products, including those to which Vincyfresh has added value.
Our main exports these days, however, are services. Their value is more than double that of the export of goods. The services we export are a mixed bag: medical education, financial services (off-shore companies) and above all tourism. There are some four medical colleges, at least one partially owned locally. Long may they continue! We have been in the offshore company business for over 50 years. It has never quite made the impact that we hoped and has sometimes been an embarrassment.
Tourism is our main export service industry. It has several subsectors: cruise ships, yachting, local hotels and the foreign-owned enterprises. Cruise ships are the most visible, but probably the least lucrative. The money stays mainly with the shipowners. Local hotels have, to a large extent, been displaced by cruise ships and the sector has suffered accordingly.
The foreign owned enterprises with their residences, hotels and villas in Bequia, Mustique, Canouan and Buccament are the biggest players in our tourist sector. If these were to close, we would lose a lot of revenue and jobs. It goes further than that. They bring in a lot of the foreign currency we use to buy the imports with which our shops and stores are stocked. Some of these locally owned shops will also have to close if the foreign enterprises disappeared.
It has long been noted that we import some $800 million worth of goods, but export only $100 million leaving a gap of $700 million. It is the tourist receipts and the foreign investment made in setting up tourist facilities that bridge much of the gap.
So that, when people unthinkingly deride these foreign owned tourist enterprises, they are making Governor Vennerâs job more difficult as he tries to manage the reserves and keep our currency stable. By all means, let us play our politics, but let us not in the process light fire around our own heads.
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