Home' Trinidad and Tobago Guardian : May 4th 2017 Contents BG20 | REGIONAL
BUSINESS GUARDIAN guardian.co.tt MAY 4 • 2017
Caribbean fears over Cuba
tourism may be misplaced
The International Monetary
Fund (IMF) says fears by
Caribbean countries that
the opening up of United
States-Cuba tourism could
seriously impact the sector
in the region "may be misplaced".
In a working paper titled "Revisiting the
Potential Impact to the Rest of the Caribbean
from Opening US-Cuba Tourism"
, the authors
found that "there is no reason to suggest that
the sector will not continue to expand in the
The paper noted that Cuban revolution and
the subsequent US embargo on Cuba helped
shape the tourism sector in the Caribbean, fa-
cilitating the birth and growth of alternative
"Therefore, the apprehension of the Carib-
bean tourism industry towards a change in US
travel policy to Cuba is understandable, but
likely unwarranted. The history of tourism in
the region has shown that it is possible for all
destinations to grow despite large changes in
"Our estimations show that liberalising
US-Cuba tourism could result in US arrivals
to Cuba of between three and 5.6 million, most
of it coming from new tourists to the region,"
the Working Paper noted, identifying also the
destinations most at risk of changes in US-Cu-
The authors of the Working Paper---Se-
bastian Acevedo, Trevor Alleyne, and Rafael
Romeu---argue that the potential opening up
of US-Cuba tourism has the Caribbean region
concerned, and understandably so.
"After all, the US is the single largest tourism
market for the Caribbean and, for most coun-
tries, the most important source of tourists.
Nonetheless, the analysis presented in this
paper suggests that this anxiety may be mis-
"Tourist arrivals have grown throughout the
region (with the exception of The Bahamas)
over the last 20 years, accommodating rap-
id expansion in some destinations (Cancun,
Cuba, and the Dominican Republic)."
They said as such, there is no reason to
suggest that the sector will not continue to
expand in the future, noting that while tour-
ism shares have shifted with Cancun, Cuba,
and the Dominican Republic becoming larger
players in the region, the rest of destinations
have still managed to grow their sectors at re-
spectable rates, even as their market shares
"Furthermore, Canadian tourists have been
the fastest growing market in the region and
in particular have become the most important
market for Cuba. And still Canadian tourism
has grown in all destinations at a very fast pace
despite the fierce competition with Cuba.
There is no reason to believe that free trav-
el between the US and Cuba would be very
The Working Paper notes that there will
be a period of adjustment and more intense
competition, which, as in the past, the Carib-
bean destinations must confront with sensible
"But the process is likely to be gradual, for
example, Cuba will also need to adjust its eco-
nomic policies to be able to scale up investment
and improve the quality of its tourism services.
This will allow time for other Caribbean des-
tinations to adapt to the new equilibrium and
tourism flows will continue to grow."
The paper notes that while an analysis has
shown that completely removing the US travel
restrictions to Cuba would significantly in-
crease tourism flows, this increase will not
happen overnight, because of many factors
including the fact "even if there were a sudden
and complete removal of travel restrictions, it
would take some time for the tourism industry
in the US and Cuba to adapt, and absorb more
US visitors to Cuba".
The authors argue that the change in US
policy is expected to benefit the region as a
whole as the models indicate that aggregate
tourism flows will grow.
They said the increasing US tourism demand
in Cuba will push prices up and result in a shift
of some Canadian and European tourists, who
would have otherwise visited Cuba, to trav-
el to other Caribbean destinations. This will
partly offset any potential loss of US tourists
that some destinations might suffer in the
adjustment phase to the new equilibrium. CMC
OECS countries closer to removing barriers to trade
The St Lucia-based Organisation of Eastern Caribbean States
(OECS) Commission says the sub-regional sub-grouping is
closer to removing all of barriers to free trade and strength-
ening its customs union.
The commission said it has completed a series of regional
capacity building consultations which provide a clearer under-
standing of the new era in domestic, regional and international
trade for the seven OECS Protocol member states.
It said the consultations considered the removal of import
formalities on goods traded within the Customs Union and
the harmonisation of border and regulatory procedures with
respect to goods imported from countries outside of the region.
"To date, the commission has held consultations in St. Vin-
cent & the Grenadines, Dominica, Montserrat and St Kitts &
Nevis on the work undertaken to establish the Customs Union
and Free Circulation of Goods," said OECS Director General
Dr Didicus Jules.
"These are the next steps towards advancing the implemen-
tation process and augmenting the role of the OECS Com-
missioners and National Working Groups in facilitating the
operations of these regimes at the national level," he added.
The commission said that stakeholders are also engaged
in "open and fruitful discussions" on managing revenue on
goods imported into the Customs Union and building capacity
of national border and regulatory agencies to facilitate the
free circulation of goods; including trade in fish and other
Additionally, stakeholders have been on ongoing initiatives
to enhance intra-OECS transportation logistics for trade in
fresh produce and agro-processed goods, and proposals for
building the capacity of farmers and manufacturers to better
participate in the single OECS domestic space.
The OECS Commission said it will continue consultations
in other member states, before updating its strategic plan for
the establishment of the Customs Union and free circulation
of goods regime.
The free circulation of goods in the OECS Economic Un-
ion is intended to enhance the development of the region's
economies by providing an environment where businesses can
trade their goods, uninhibited, to a wider regional market and
consumers have access to a broader range of quality products
at more competitive prices.
It is expected that this regime will lead to increased in-
tra-OECS trade and investment, greater customer satisfaction,
and improvements in the quality of life for OECS Citizens.
The OECS groups the islands of Antigua and Barbuda,
Dominica, Grenada, St Lucia, St Vincent and the Grenadines,
Montserrat and St Kitts-Nevis. CMC
IMF Working Paper:
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