Sunday 30th March 2003 <a href=www.newsday.co.tt>By Linda Hutchinson-Jafar

CARIBBEAN countries, many of them very small vulnerable island-states, are edgy as their latest economic nightmare became stark reality when the United States-led coalition military force declared war on Iraq. For many countries in the region, a war, particularly a lengthy war can only do further harm to their economies, already pummelled by the fall-out effects of the 9/11 terrorist events in 2001 and which were recently showing incipient signs of recovery. Jamaica’s Prime Minister PJ Patterson has warned that the war, which his administration opposes, will only lead to food shortages, rising prices and a flattened tourism industry. “The heightened sense of alert, tension and uncertainty that accompanies war would erode confidence in the economy and wipe out anticipated gains from investment,” said Patterson whose administration is facing bulging deficits that will close this fiscal year at about eight percent of gross domestic product (GDP). Jamaica’s Minister of Finance and Planning, Dr Omar Davies, said the reality of war now meant that the Government could no longer commit itself to meeting set financial and economic projections. The Jamaican Government is already facing a sliding currency, precipitating a rise in interest rates, a J$30 billion hole in the budget, an increase in public sector spending (J$6.4 billion), a rise in its energy bill projected to increase by US$200 million and reduced Net International Reserves (NIR) that now stands at just under US$1.3 billion. Chairman of SuperClubs, hotel magnate John Issa, said the effect of the war on the Jamaican economy rests on its duration and its consequential actions. “One may conclude that it will have a negative impact on tourism but it must be said that once people confirm reservations, they rarely change them and this looks like being the case here in Jamaica. I think people will delay travelling, particularly to the United States and Europe. “Already many Jamaicans have cancelled or delayed their travel arrangements and are monitoring the situation with this in mind. It’s a shame because momentum had picked up for this winter season and already we can see a discernible slowing down in bookings,” said Issa. In St Lucia, Prime Minister Dr Kenny Anthony last weekend made a nationwide address to the population bracing them for the negative fall out of the war. Dr Anthony said just when the tourism based island economy seemed to be climbing out of the stranglehold of another global recession, it is now witnessing  the resurgence of global events over which it has little control and which  threaten to reverse its economic gains. “Every sector of our economy is likely to experience severe strain. This is a period therefore which will take the strongest resolve and commitment of Government, the fullest support of the private sector and the understanding of every St Lucian,” said Dr Anthony. Last month the National Economic Council (NEC) met with a wide cross section of St Lucia to explore the possible impact of a war in Iraq on the island. The NEC has indicated the possibility of a period of immense economic difficulty for St Lucia. “ The NEC has observed that following on the heels of nearly two years of economic stagnation as a result of the world recession and the September 2001 attacks on the USA, a peaceful resolution to the crisis in Iraq could be a matter of economic life or death for several Caribbean nations,” said the St Lucian leader. Stating that the war has very serious implications for St Lucians and for the economy, Dr Anthony said the fear and reality of retaliatory attacks against US and British citizens and further deterioration in the global economy as a result of the war, are expected to have a sharp and negative impact on the tourism industry. “Understandably, there will be a greater reluctance to travel,  particularly by US and British citizens, who are Saint Lucia’s main source of tourism revenue. On the other hand, if the war is short, we may well see a dramatic increase in travel, particularly from the United States.” The impact of the war on the price of fuel is another issue of major concern for St Lucia as any increases in energy costs will have consequences for the cost of goods and services in nearly every sector. “The cost of manufacturing activity, electricity, transportation and other services are all expected to come under increased pressure if the war eventually leads to another cycle of rising fuel costs.” Dr Anthony has called on citizens to be more frugal in their use of fuel and energy as the availability of fuel can no longer be taken for granted. The Caribbean Tourism Organisation (CTO) is also monitoring the impact of the war on the Caribbean. Secretary General Jean Holder said that the CTO has been discussing with its  member countries how best it might guarantee the peace of mind, the security and the investment of customers. “Almost all of our suppliers have now agreed to a very flexible policy of dealing with cancellations and with postponements. The idea is that if a customer should have difficulties for reasons beyond his control, then we want to ensure that he does not lose his investment in coming on a holiday to the Caribbean,” said Holder. On the implications of the war for Caribbean tourism, Holder states: “We are not prophets. We are looking at our prospects realistically.” He said in the first Gulf War in 1991 which was very localised in the Middle East, the Caribbean benefited in large measure because Americans were not travelling across the Atlantic. The Caribbean also benefited from the strength of the economies of Europe at the time. Holder, however, sees the current war as a continuum of the 9/11 events of 2001. “ ...Therefore, this is a theatre of war, although in large measure it may be seen as being localised in the Middle East, (but) it is in fact global, in so far that there are many terrorist elements that are attendant on our situation. “And therefore the whole perception of safety and uncertainty is quite different from (what) it was in the first Gulf War. And, therefore, I think our situation is somewhat more uncertain than it was then,” said Holder. “It is also buttressed by the fact that the world’s economies are in a very shaky situation on both sides of the Atlantic and this has affected things like the price of fuel. “All of these things have weakened the position of our air transportation industry on a global basis. And all of these factors are inimical to the situation of travel and tourism. “So while I remain always optimistic at the extent to which tourism bounces back, I think we have to view the developments of a war, which is a continuum of the terrorist activities as very bad for our tourism industry and if the war is over quickly we hope that these negative factors will quickly disappear,” said Holder. Last week visiting Venezuela’s Energy Minister Rafael Ramirez said the return of normal oil production by his country following several months of a major political impasse will have a positive impact on the global market. “Venezuela has maintained its production of 3-4 million barrels of oil per day and there is certain capacity of other OPEC countries which will permit flexibility in any interruption of supply ... but we cannot guarantee how a war will end,” said Ramirez. Ramirez said while the impact of war on Iraq is unpredictable, a major danger is that it can be translated into instability in the global energy market. “Our commitment as a member of OPEC is to contribute to a permanent stability of the energy market because we understand that to countries of the Caribbean and Latin America — this constitutes a very important factor in the development of their economies,” he said. The Venezuelan minister said it was out of concern for the development of economies in the hemisphere, that his country established the San Jose Agreement and the Caracas Agreement for energy cooperation to guarantee the supply of energy to neighbouring countries.

Tuesday,  March 25,  2003 <a href=www.lapress.org>CARIBBEAN 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.

URL The Associated Press 3/25/03 10:58 AM

ORANJESTAD, Aruba (AP) -- Aruba has reported a more than 7 percent increase in tourism in the first two months of 2003 compared to the same period last year, although the growth came before the U.S.-led war in Iraq.

Caribbean leaders fear that the war will hurt their struggling economies, keeping tourists away just as they recover from a slump following the Sept. 11, 2001, terrorist attacks.

The U.S. market had a 9.6 percent increase in arrivals in Aruba and the island had an increase of 9.9 percent in room-night bookings, the Aruba Tourism Authority said Monday. The number of room-night bookings in January and February was nearly 306,000 compared to 278,000 during the same period in 2002.

Aruba reported that the Mid-Atlantic region of the United States, including Delaware, Maryland, Pennsylvania and Washington, D.C., led the upsurge with a 20.4 percent increase. The Northeast followed with a 12.5 percent increase, tourism officials said.

Aruba is an autonomous Dutch Caribbean territory of about 70,000 residents some 15 miles north of Venezuela.

On the Net: www.aruba.com

www.jamaicaobserver.comc DAVID PAULIN, Observer writer Friday, March 21, 2003

SHAW... why should we pounce on the war and use it as an excuse

FOOD shortages. Rising prices. A devastated tourism industry. Prime Minister PJ Patterson has warned that Jamaica could suffer all of these calamities as a result of a US-led war on Iraq, which he deeply opposes.

But the Jamaica Labour Party's spokesman on finance, Audley Shaw, says Patterson is playing politics with the war, and he said he is calling the prime minister bluff.

"We are not going to allow (the PNP) to use the war as a scapegoat for all the ills of the economy and mismanagement of the economy," said Shaw, who made the same point in Parliament on Tuesday.

The prime minister's warnings followed President George W Bush's 48-hour ultimatum to Iraqi President Saddam Hussein to get out of Iraq or face war.

"The heightened sense of alert, tension and uncertainty that accompanies war would erode confidence in the economy and wipe out anticipated gains from investment," said Patterson.

"Why should we pounce on the war and use it as an excuse for necessary and credible actions on the part of the Government to present a credible budget in April?" asked Shaw.

Patterson's remarks came as oil prices had plunged below the $30 mark -- their lowest in three months -- following Bush's ultimatum.

Zia Mian, an energy advisor in the Ministry of Mining and Energy, said oil supplies are in fact plentiful, and that politically troubled Venezuela had nearly ramped up production to the levels it had pumped at before a crippling oil workers strike. In recent months, Mian explained, uncertainty over Iraq had pushed up prices due to "speculative pressures" that it faced with the start of war.

After Bush's ultimatum, prices dropped $3 per barrel, he noted.

Meanwhile, Beverley Lopez, president of the Private Sector Organisation of Jamaica, said the island's business leaders "have assured us that they do not see any shortages of food stuffs because we do not do any importation from that side of the world".

She added: "The threat of war was having a worse impact than the war itself. A lot of people think a war will be short."

Both Shaw and Lopez said it remains to be seen how hard tourism will be affected by the war.

"So far, in our discussions with the Chamber of Commerce and Hotel and Tourism Association, we gather that the booking are still holding," Lopez said. "They have not had any rush for cancellations up to Wednesday."

Even if tourism does take a hit, Shaw said: "If you know what you are doing and target tourism and invest in a very specialised way, you might find that you are able to snatch victory from defeat."

Patterson is facing a bulging deficit that will close this fiscal year at about eight per cent of gross domestic product (GDP). The finance minister, Omar Davies, has pledged to swipe two percentage points in the coming fiscal year, and that will mean a combination of spending cuts, higher taxes, and more taxes.

www.barbadosadvocate.com Web Posted - Wed Mar 19 2003 By David Hinkson

DEPUTY Prime Minister and Minister of Foreign Affairs and Foreign Trade Billie Miller said that Barbados cannot support the premise on which United States President George W. Bush is proposing to invade Iraq, and is wondering which country in the world would be next to face a preemptive strike from the US armed forces.

Speaking during debate on the 2003-04 Estimates in Parliament, Miller said the conditions for preemptive strikes had not been clearly thought out and that the US, which was supposed to represent the leadership of the free world, “had shown no little disrespect for the UN in recent years” even though it expected other nations to follow the rules of that organisation and other international agencies.

She said the pending action indicated that the processes the United Nations had put in place for the peaceful resolution of disputes had been overtaken by new principles and concepts promoting regime changes and preemptive strikes.

The Deputy Prime Minister said it was a serious cause for concern, and in pointing out current trouble spots in the world such as Palestine, Venezuela and Haiti, wondered whether the day would come when a more developed nation would suggest to Barbados who its Prime Minister or Government ought to be.

She noted that CARICOM Heads of Government at their recent meeting in Trinidad had reached a consensus on the matter which stated that diplomacy and dialogue were the best way for the two countries to resolve the conflict, and were “deeply troubled” by the human tragedy of war and its adverse effects on global economic stability.

The Deputy Prime Minister said Barbados will have to divert slender and hard-fought for resources to prepare ourselves for the damage that a war will cause, including building up food supplies, looking at our food security, and upgrading the security at our air and sea ports as well as at our overseas missions, particularly those in the United States, the United Kingdom, Venezuela, Brussels and Geneva, “where the alert is shining on orange now and may move to red within hours”.

She said Government also had to be concerned about the security of our foreign service officers in those countries, and that the Ministry of Tourism was also trying to determine what contingency plans could be put in place to promote our tourism programme in case the war breaks out.