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Team Unity Leader Talks About The Federation’s Challenges by Glen Bart Frigate Bay St. Kitts

Part I: Team Unity aims to restructure tourism One of the economic priorities for Team Unity would be the restructuring of the tourism industry, says its leader, Parliamentarian Hon. Dr. Timothy Harris. In an exclusive interview with the Observer, the Team Unity leader was critical of the way the economy was being managed, and expressed the need for some fundamental changes, especially within the core pillars of the economy. He said the recent economic performance of the country is “nothing to celebrate about”. In explaining why, Dr. Harris said, “We agree with the Governor of the Eastern Caribbean Central Bank that the growth rate, in St. Kitts and Nevis, has been inadequate to allow for people’s expectations about a good quality life to be realized, and when we look at the recent past, we have had, from 2010, negative growth.”He said there has been several years of negative growth followed by some positive growth reported for 2013, which he admits is better than negative growth. But, he said it is important to examine the environment of that growth. “The point is that when you begin to look at it, having regard to the magnitude of the negative growth, the quality of life, now in 2014, based on the 2013 projection of growth is still less than it was in 2011. That is why I continue to make the point, there is noting to rejoice about, although it’s a good development that there is positive growth, which is always preferred to negative, but the economy as a whole is still smaller in 2014 than it was in 2010. “And so, we have a problem, and it would take consistent growth to change the pathway, and that is why in 2014, life for many is still as hard as it was two, three years ago, for nothing fundamentally has changed in the economy. “And when we peruse the reports, the reports are telling us that this growth is coming from Citizenship-by-Investment (CBI) expenditure. This growth is not coming from significant developments in agriculture. Indeed, agriculture’s contribution to the economy is still less than 5 percent. This growth is not coming from positive development in manufacturing. Indeed, in their last report, they tell us that manufacturing was on the decline. “These are the pillars of the real economy – agriculture, manufacturing, tourism, financial services, and recently we added alternative energy. Now, nothing is happening in alternative energy. The geothermal project is stalled. So the growth is not coming from that. And that offered exciting prospects of creating jobs in a new industry, but that’s not moving, and manufacturing is not moving, and agriculture is not moving. Is the growth coming out of tourism? No. “Tourism figures in 2005, and this is why we have to separate all that talk from the government from the reality, and I look at the reality that in 2005 – 2006, we had an average 140,000 stay-over visitors, and the total expenditure between cruise, stay-over, and other sub-sectors was $355 million of tourism expenditures. “Fast-track to 2008. In 2008, when we had the determination that the world was in crisis, we had about 128,000. In 2013, we have not reached 110,000 visitors. We are averaging just about 107,000, so in 2013, we are about 35,000 visitors below what we had in 2005-2006, and we are still below where we were when the global recession broke in 2008. Well, that can’t be something to celebrate. “So when we look at that reality, we understand why the revenues, that is, in spite of over 600,000 cruise passengers, the total revenues is basically $272 million in 2013. Compare that to $355 million in 2006. We are significantly below. None of the important growth pillars is driving the economy. And so, the economy is being operated by the magic of the CBI, which now faces its most fundamental challenge.”Dr. Harris was of the view that not enough planning has gone into economic development, and felt that much has remained the same. “The economy, in a nutshell, is still in a crisis. The economy has not emerged from the crisis, and there has been no fundamental change in the structure of the economy. It still remains an economy dependent upon tourism, manufacturing, agriculture and financial services. The talk about alternative energy is yet to be realized.”Going forward, the Team Unity leader said the “plan is to move from talk to action and solution”. Speaking specifically of tourism, Dr. Harris said that what is lacking is a tourism master plan for the country. He commented that when “it suits the Government, they say they’re going ‘high-end’. But, are the citizens and residents prepared for high-end tourism? Are they trained? Do you have the managers to support that kind of tourism”? Presently, Dr. Harris said, “There are over 400 hotel rooms in the country being used as student dorms, not being used as regular hotel rooms. There is no fundamental growth in numbers, neither in the tourism product.”Over the past few years, the Federal Government has been announcing various hotel and condominium projects mainly for the Frigate Bay and Peninsula areas. But Dr. Harris says, “We are hearing a lot of things being built. We’ll wait to see what would happen when they are built. Would they become ‘White Elephants?’ We don’t know for there is no strategy, as to where the new people would come from. There needs to be a proper analysis of our tourism. Are we doing the right thing in marketing? We are going by ‘adhocism’. Randomly we make a catch.”In its tourism development, Dr. Harris said that Team Unity would focus on stay-over visitors, rather than cruise tourism. “The research says only about 5 percent of the revenue of tourist expenditures comes from cruise, despite all the numbers, and that is throughout the Caribbean, Jamaica may have had the best figures of about 10 percent. In 2005, we probably had less that 100,000 cruise visitors, but look how much money we got, $355 million. In 2014, when we had over 600,000 cruise (visitors), look how much we got, less than $300,000 million. So, it tells you that this geometric movement in the cruise is not reflected in terms of dollars.”He also pointed out that the low spending of cruise passengers is the result of various reasons, including the ship’s itinerary (Sequence in ports of call) and the all-inclusive nature of the newer vessels. “These are some of the challenges with that particular product. We are getting increased numbers but not increased expenditure,’said Dr. Harris. “The cruise looks pretty – a lot of people in town, but what are they doing in town. It is economic value that is needed. That is why Anguilla, when you look at the Central Bank’s figures, smaller tourist population, little or no cruise, but competing with us with tourist expenditure. Again, it makes the point that it is not the cruise. It is the stay-overs.””We want to restructure and reposition tourism and bring in new areas. Fundamentally restructure the industry and develop a proper master plan to guide the Sector’s development, says Dr. Harris.

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