Fri 15th Jul 2022
SVG’s dependency upon tourism and foreign fuel is a big risk
SVG’s dependency upon tourism and foreign fuel is a big risk to the stability of our economy. SVG has only one main economic sector and that is tourism. Building an economy on only one sector is very risky, because if that sector collapses or shrinks significantly, then the economy is liable to collapse.
On top of having a fragile economy, our country is put further at risk by relying heavily on fossil fuel imports to supply the majority of our electricity.
The issue with dependency on these two specific factors – tourism and fossil fuel – is that we have no control over them. We cannot guarantee a certain number of tourists every year and we have no control on the price of fossil fuels, which have increased a lot recently.
The Covid pandemic is an illustration of how little control we have on tourist arrival numbers. International travel bans due to Covid wiped out any income we would receive from an already weak and small tourism industry. Also, the current high price of oil, means that our electricity charges are extremely high, and our country loses much more money abroad to pay for oil, reducing our ability to build up foreign currency reserves.
We can see similar circumstances in Sri Lanka whose economy is on the verge of collapse. A significant part of the Sri Lankan was tourism and it relied on imports of fossil fuels.
The COVID-19 pandemic dealt a major blow to their tourism industry too. Tourism revenues were estimated to have fallen by 75 per cent in 2020. In 2020 arrivals fell 70 percent to 507,704 from 1,913,702 in 2019.
Sri Lanka does not have enough money to buy fossil fuels. Now, the country doesn't have enough fuel for essential services like buses, trains and medical vehicles. Officials say it does not have enough foreign currency to import more fossil fuels.
This lack of fuel has caused petrol and diesel prices to rise dramatically since the start of the year. Schools have closed and people have been asked to work from home to help conserve supplies. The price of everyday goods has risen sharply. There have also been power cuts. A lack of medicines has brought the health system to the verge of collapse. Sri Lanka is defaulting on debt payments.
This is an example of what can happen to weak economies that are poorly managed.
Leader of SVG Green Party, Warrant Officer Ivan Bertie O’Neal BSc (hons), MSc, MBA, believes that tourism could never create prosperity for SVG. It is very difficult to understand why the ULP regime has built our economy on tourism, given the risks it poses for sudden collapse and the terrible consequences.
Our country needs to move away from tourism to an export orientated economy and free high-quality education from pre-school to our own world-class science and technology university, to create prosperity for all our people. We need to create a renewable energy industry also to produce our electricity.
There is no long-term net benefit from tourism and having Taiwan and the super-rich of Mustique and Canouan in our country.
SVG should cut ties with Taiwan and use our deep-sea tuna fishing licence to set up a tuna fishing and canning industry. This would create thousands of jobs and hundreds of millions of dollars in revenue for our country.
We need to make our economy less at risk to collapse.