McPherse ThompsonAssistant Editor – Business

AN ECONOMIST hasrecommended thatCaribbean tourism

destinations move to expandtheir customer base before anyopening between Cuba and theUnited States, to offset some ofthe losses that could come withthe new dispensation.

Economist Rafael Romeu saidtiming is important becausecapturing tourists dislocated bythe influx of Americans intoCuba could offset some lossesand secure a share of thegrowing tourism pie.

Romeu also recommendsother steps, such as specialisingin and delivering customisedservices to clients, based onnon-economic features likeculture and language, increasingairline competition, andguarding against increasingcosts, particularly tourist visarequirements aimed at UnitedStates visitors.

His recommendations areoutlined in an article by NicoleLaframboise, a deputy divisionchief in the InternationalMonetary Fund’s (IMF) WesternHemisphere Department, inthe fund’s September 2015

magazine, Finance andDevelopment.

Laframboise said the openingof Cuba to US travellers couldbring a major upheaval inCaribbean tourism, but ifcountries prepare and invest, thegains from trade need notnecessarily come at theirneighbours’ expense.

“However, time may be of theessence,” she said. “The charmof a mid-century Cuba won’tlast long once this uniquemarket expands and modernizesto accommodate the arrival ofAmerican tourists.”

Laframboise suggested thatlifting restrictions would raisethe purchasing power of USconsumers in the short term.

NO NEED TO DESPAIR

Referring to Romeu’s 2008assessment of the possibleimpact on the Caribbean ofliberalisation of US travel toCuba, she said the economistfound that it would increase thetotal number of tourists visitingthe Caribbean by between fourand 10 per cent.

“So policymakers in otherCaribbean islands need notdespair,” Laframboise said.“Growth in US tourism to Cubawill not necessarily mean anequivalent reduction in visitorsto other points in the Caribbean.... Moreover, there are a largenumber of potential newCaribbean tourists from placeslike Canada.”

That does not mean thatchange would come withoutdislocation, said the IMF’sdeputy division chief.

It probably would involveredistribution – the so-calledsubstitution effect. An influx ofUS tourists with relativelyhigher purchasing power wouldquickly fill Cuba’s hotels,outbidding and displacingtraditional tourists. At leastsome of the sun-seekersdisplaced from Cuba wouldlikely go to other islands in the

Caribbean, including thoseabandoned by the US tourists.“Which of those islands wins orloses is harder to parse,” shesaid.

The importance of Jamaica’searnings from tourism is notspecifically spelt out in thememorandum of economic andfinancial policies theGovernment submits to the fundas of the four-year economicsupport programme.

However, its significance canbe gleaned from a requirementthat, to ensure adequatemonitoring of economicvariables and reforms, theJamaican authorities willprovide information on tourismindicators within four weeksafter month end.

Tourism indicators may vary,and have not been outlined inthe memorandum, but usuallyinclude, for example, visitorarrivals, visitor expenditures,daily room rate, room stock,hotel-occupancy rates, andvisitor length of stay.

Tourism has consistently beenthe largest earner of foreignexchange in the Jamaicaneconomy. Its contribution to thecombined value of all the goodsand services produced in thecountry each year is significant.

Along with remittances,tourism is tied for the topforeign-exchange earner and, in2012, contributed close to US$4billion dollars to the Jamaicaneconomy.

That revenue came from morethan three million visitorsworldwide, with travellers fromthe United States, Europe andCanada leading the way.

The tourism sector directlyemploys about 80,000 personsand, viewed as an exportindustry, accounts for some 40per cent of Jamaica’s totalexport of goods and services,according to the Ministry ofTourism and Entertainment.

mcpherse.thompson@gleanerjm.com

• www.jamaica-gleaner.com • gleanerjamaica • jamaicagleaner • BUSINESSC4

$2.027TJamaica’s total stock of

public debt stood at $2.027

trillion at the end of June

2015. This was down from

$2.045 trillion at the end of

May 2015, according to data

from the Debt Management

Unit in the Ministry of

Finance and Planning.

IMF-JamaicaCalendar

SEPTEMBER 2015

� Tax Administration Jamaica

(TAJ) programme unit and

operational plans will contain

implementation strategies and

detailed expected outputs and

outcomes consistent with the

national compliance plans to be

achieved for arrears management

and objections.

� Completion of staffing the TAJ

as a semi-autonomous revenue

authority will require hiring the

direct reports to chiefs and general

management, and staff for the

human resources, finance and

accounts, strategic services

(including planning, performance

monitoring and reporting and

programmes) and customer-care

centre.

� Executive board review of the

ninth review under the extended

fund facility.

� The Treasury Single Account

(TSA) at the Bank of Jamaica will be

further expanded and improved. All

salaries of civil servants at the

central government will be paid

through the TSA.

� All funds under the direct control

of the Administrator General’s

Department to be managed in the

General Ledger of the Central

Treasury Management System.

OCTOBER 2015

� Legislation governing the tax

regime that will be part of the

special economic zones will be

tabled in Parliament.

� Government to put in place

shared services within the central

government, starting with the legal

services, with support from Justice

Canada.

� Government to start executing

the strategy paper to gradually

tighten prudential standards for the

securities sector.

NOVEMBER 2016

� Government to make effective

any legislative provisions to

support the national crisis-

management plan and to strengthen

the resolution framework for the

securities sector.

DECEMBER 2015

� Following up on its entity-by-

entity review of all grandfathered tax

incentives, the Government will

assess the fiscal impact of ongoing

grandfathering beyond 2020.

THIS WEEK’S

BIGNUMBER:

Check here weekly for calendar updates

THE GLEANER, WEDNESDAY, SEPTEMBER 2, 2015

With shift in US-Cuba relations ...C’bean region must prepare,invest to exploit tourism

AP

Cyclists ride past US yacht Stil l Water, moored atHemingway Marina in Havana, Cuba, on Thursday,August 6, 2015. The United States has eliminatedrestrictions on nautical tourism, opening up opportunitiesfor boating in Cuba.

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JANAAC Introduces Monthly Feature:Accreditation - The Business Advantage

Mrs. Sharonmae ShirleyCEO, JANAAC