War threatens Caribbean --Banana exports suffering in the Caribbean

www.lapress.org Charles Arthur.  Mar 22, 2003

Caribbean economy could suffer fallout from war.

At a time when most of the region’s countries are suffering economic difficulties resulting from the collapse of traditional agro-export industries such as sugar and bananas, further economic disruption as a result of the war against Iraq, which began March 20, could have dire consequences.

The Caribbean is particularly vulnerable because it is now heavily reliant on revenues from tourism — a sector that each year provides some 30 percent of the region’s gross domestic product, and employment for around one in seven workers. (LP, June 21, 1999).

At a Trinidad summit meeting in mid-February, the 15-member Caribbean Community (CARICOM) released a statement opposing the use of armed force against Iraq. The communiqué, which urged the US and its allies to exercise restraint, stressed that Caribbean leaders were "deeply troubled over the humanitarian tragedy that an outbreak of war could bring about and the disastrous effects it could have on global economic stability."

Tourist arrivals declined sharply in the aftermath of the September 11 attacks in the United States, as a dip in the US economy and heightened fear of air travel deterred many potential visitors during the following winter holiday season. The World Tourism and Travel Council estimates that 364,000 people in the region lost jobs as a result.

According to the Caribbean Tourism Organisation (CTO), an aggressive publicity campaign and slashed airline ticket and hotel prices succeeded in reviving the Caribbean tourist sector during 2002. But this recovery is now in jeopardy.

The CTO bulletin for the first quarter of 2003 warned, "The possibility of war in Iraq undercuts the stability which international tourism, especially long haul travel, needs in order to operate at its best ... The onset of war will likely hit international travel quite hard."

A heightened terror alert could again hit passenger confidence in air travel with immediate repercussions for those Caribbean islands dependent on airlines to bring tourists to their beaches and resorts.

Neither is the important cruise ship sector immune. In December 2002, the P&O Princess Cruises company started canceling stops in Trinidad in the wake of a warning of possible terrorist attacks issued by the British Foreign Office. The warning, made in the context of the Bali tourist resort bomb blast, is believed to be connected to a Trinidad police investigation of a black Muslim cleric known to sympathize with Osama bin Laden. A total of six planned visits to Port of Spain, each of which would have brought about 1,200 passengers ashore, were cancelled before the travel advisory was withdrawn.

In January 2003, Jamaica’s Minister of Tourism, Aloun Assamba, called for the implementation of new security measures at the islands’s main cruise ship ports if her country was to avoid the same fate.

Although few Caribbean politicians have risked incurring the wrath of the US by speaking out against the war, CARICOM Secretary-General, Shridath Ramphal, has been prepared to sound the alarm. Pouring scorn on optimism that the Iraq war might be quickly over, he said, "Do not believe that the Americans sent half a million forces and hundreds of tons of weaponry into Iraq for a couple of weeks. We are in for the long haul. What will that war environment mean for the tourism industry on which the Caribbean relies so heavily?"

The possibility of rising fuel prices is another issue of concern to the Caribbean. The previous hike in the price of crude oil on the international market, coinciding with interruptions to Venezuela's output as a result of the campaign to destabilize the government of President Hugo Chavez, (LP, Jan. 15, 2003) has already had an impact.

In Jamaica, bus and taxi drivers and operators have threatened violent disturbances in response to a hike in fuel costs, while in Guyana and Haiti there have already been a number of strikes to protest recent fuel price increases. If war in Iraq lasts any length of time, or if it is accompanied by sabotage of the country’s oilfields, then international fuel prices would be expected to skyrocket.

As Maurice Odle, economic adviser at the Guyana-based CARICOM Secretariat, warns, "We are still reeling from the effects of 9/11 and we know for sure that our high-energy sectors like the aviation industry would be seriously affected. We can see airfares and jet fuel (prices) going up and that would be tough on airlines and our tourism industry."

One of the region’s main airlines, the ailing BWIA, is already facing monthly losses of around one million US dollars, and in January it laid off 617 of its 2,400 workers, many of them maintenance engineers.

The wider consequences of a prolonged war could also negatively impact on the Caribbean. Higher oil prices would further undermine the fragile economies of the United States, Germany and Japan, and might in the long run lead to a worldwide economic contraction.

Such a scenario would be disastrous for countries like the Dominican Republic and Jamaica that are heavily dependent on external financial sources in terms of investment and capital flows, and Haiti where the economy is sustained almost entirely by the remittances sent back by nationals working abroad.

At a time when most of the region’s countries are suffering economic difficulties resulting from the collapse of traditional agro-export industries such as sugar and bananas, further economic disruption as a result of the war against Iraq, which began March 20, could have dire consequences.

The Caribbean is particularly vulnerable because it is now heavily reliant on revenues from tourism — a sector that each year provides some 30 percent of the region’s gross domestic product, and employment for around one in seven workers. (LP, June 21, 1999).

At a Trinidad summit meeting in mid-February, the 15-member Caribbean Community (CARICOM) released a statement opposing the use of armed force against Iraq. The communiqué, which urged the US and its allies to exercise restraint, stressed that Caribbean leaders were "deeply troubled over the humanitarian tragedy that an outbreak of war could bring about and the disastrous effects it could have on global economic stability."

Tourist arrivals declined sharply in the aftermath of the September 11 attacks in the United States, as a dip in the US economy and heightened fear of air travel deterred many potential visitors during the following winter holiday season. The World Tourism and Travel Council estimates that 364,000 people in the region lost jobs as a result.

According to the Caribbean Tourism Organisation (CTO), an aggressive publicity campaign and slashed airline ticket and hotel prices succeeded in reviving the Caribbean tourist sector during 2002. But this recovery is now in jeopardy.

The CTO bulletin for the first quarter of 2003 warned, "The possibility of war in Iraq undercuts the stability which international tourism, especially long haul travel, needs in order to operate at its best ... The onset of war will likely hit international travel quite hard."

A heightened terror alert could again hit passenger confidence in air travel with immediate repercussions for those Caribbean islands dependent on airlines to bring tourists to their beaches and resorts.

Neither is the important cruise ship sector immune. In December 2002, the P&O Princess Cruises company started canceling stops in Trinidad in the wake of a warning of possible terrorist attacks issued by the British Foreign Office. The warning, made in the context of the Bali tourist resort bomb blast, is believed to be connected to a Trinidad police investigation of a black Muslim cleric known to sympathize with Osama bin Laden. A total of six planned visits to Port of Spain, each of which would have brought about 1,200 passengers ashore, were cancelled before the travel advisory was withdrawn.

In January 2003, Jamaica’s Minister of Tourism, Aloun Assamba, called for the implementation of new security measures at the islands’s main cruise ship ports if her country was to avoid the same fate.

Although few Caribbean politicians have risked incurring the wrath of the US by speaking out against the war, CARICOM Secretary-General, Shridath Ramphal, has been prepared to sound the alarm. Pouring scorn on optimism that the Iraq war might be quickly over, he said, "Do not believe that the Americans sent half a million forces and hundreds of tons of weaponry into Iraq for a couple of weeks. We are in for the long haul. What will that war environment mean for the tourism industry on which the Caribbean relies so heavily?"

The possibility of rising fuel prices is another issue of concern to the Caribbean. The previous hike in the price of crude oil on the international market, coinciding with interruptions to Venezuela's output as a result of the campaign to destabilize the government of President Hugo Chavez, (LP, Jan. 15, 2003) has already had an impact.

In Jamaica, bus and taxi drivers and operators have threatened violent disturbances in response to a hike in fuel costs, while in Guyana and Haiti there have already been a number of strikes to protest recent fuel price increases. If war in Iraq lasts any length of time, or if it is accompanied by sabotage of the country’s oilfields, then international fuel prices would be expected to skyrocket.

As Maurice Odle, economic adviser at the Guyana-based CARICOM Secretariat, warns, "We are still reeling from the effects of 9/11 and we know for sure that our high-energy sectors like the aviation industry would be seriously affected. We can see airfares and jet fuel (prices) going up and that would be tough on airlines and our tourism industry."

One of the region’s main airlines, the ailing BWIA, is already facing monthly losses of around one million US dollars, and in January it laid off 617 of its 2,400 workers, many of them maintenance engineers.

The wider consequences of a prolonged war could also negatively impact on the Caribbean. Higher oil prices would further undermine the fragile economies of the United States, Germany and Japan, and might in the long run lead to a worldwide economic contraction.

Such a scenario would be disastrous for countries like the Dominican Republic and Jamaica that are heavily dependent on external financial sources in terms of investment and capital flows, and Haiti where the economy is sustained almost entirely by the remittances sent back by nationals working abroad.