Negotiating an economic cul-de-sac
If you travel down a cul-de-sac it is an incontrovertible fact that you can travel no further than the end of the street. To go any further one would have to reverse and change course. There are no guarantees that the chosen alternate route may not also lead to another dead end, arguably though, such a course of action offers more hope than simply resigning to maintain the status quo.
Most small open economies (The Cayman Islands fall into that category, even though some influential voices would want to have you believe otherwise) that chose “development by invitation” as the preferred economic model in the latter half of the twentieth century have arrivedat or are nearing the end of the economic cul-de-sac that is the inevitable end game of a catholic approach to this model of development.
To be clear the adaptation of a suitable variant of the “development by invitation” theory was a necessary and justifiable approach to be utilized in kick starting the development of small states possessed of extremely limited resources.
The more successful small states recognized at around two decades into the process of development through this necessary but ultimately limiting approach, that it was vital to ensure that the concurrent and measured development of its indigenous capital, (in particular its human capital) be placed at the centre of the macro agenda, if indeed, in the medium to long term it was going to be possible to deliver sustainable development to its populace.
Whereas Singapore is a shining example of a small state where these essential determinants for sustainable development were fully understood and suitable policies formulated and unswervingly implemented to ensure fulfillment of the objectives, the Caribbean states (Cayman included) individually and collectively have in the main failed to devise and consistently implement appropriate strategies tailored to their respective circumstances to ensure similar outcomes.
From observation it would appear that it is not a matter of a lack of understanding on the part of any of the participants in the decision making process in the various island states (Cayman included) but arguably an absence of the political will to take the necessary action that ultimately would serve to enhance the possibility of a more sustainable economic performance.
Consequently at a domestic level, the extended period of economic malaise (2008 onwards) has warranted that both public and private sectors deliver initiatives to regenerate the economy. Near unanimity exists in the utterances that have been forthcoming to date. As they would have it we will continue to meander down the well travelled road.
But for the usual lip service offerings about the importance of protecting the interests of locals, the focus continues to be one of inviting mainly large players in the traditional sectors (finance, tourism and construction).
The odds are better than even that this “reverse and come again” policy will lead to the same place at the end of the economic cul-de-sac, albeit at an accelerated pace the next time round.
The possibility of an alternate outcome requires an intergenerational commitment to forge a “new road” as an outgrowth of the road well travelled.
Today’s opinion shapers and decision makers owe it to the next two generations to ensure that they too are not destined to the task of meandering up the cul-de-sac yet again.
Category: Viewpoint
I guess many missed it Mr. Iton. In plain english it means that for too long many countries have been held captive by the lure of development, or what is more commonly termed investment. Generally, this investment arrives with strings attached (concessions) and from outside the vicinity leaving local businesses to compete with multinationals or linger without proper support from their government. The profits generated by this type of investment do not go back into the local economy in great numbers, but are sent back to head office. It may appear at first to be a gain at least for politicians as they point to the development but it also leaves the local economy at the whim of outside sources and decisions beyond local control. In reading this viewpoint I couldn't help remember what was contained in the book Confessions of An Economic Hitman by John Perkins. As the tactics (agreeing to investment without reading the fine print) and the results are the same. It is indeed a cul-de-sac when local control of the economy is sold off out of panic or for political expediency. Thanks for your viewpoint because it does make sense. And as a warning. Mr. Bush of course wouldn't understand any of it.
Thanks for interpreting this. I hope in the future Mr. Iton will express himself in layman's terms.
That is a great and very telling book. Any one that has worked in those industries abroad knows it is all true.
I suggest the following for finding solutions to small market Carribean economies, "Reclaiming Development: Independent thought and Caribbean Community" by Kari Levitt.
Great, but what would you suggest as an alternative? It's easy to point out what isn't working but please be so brave as to tell us what you believe should be done to create jobs?
Big words in long sentences do not good argument necessarily make.
Smart a$$ words do not a comment make. Sorry if this was over your head Yoda but you're pretty short.
Short I may be, but funny you are not. At least know I that short I am.
well said Mr. Iton. I agree 100%. Nice
Once again an articulate discussion that states the present course does not work but it is short on suggestions or alternatives.
I believe that too much emphasis is being placed upon cruise ships. Everything around cruise ships is geared for the cruise ship to make money and to make a profit on every off ship excursion with drinks and gambling major profit streams. Keep a limit to cruise ship visitors and focus on Cayman as a wonderful stayover destination.
Keep a handle on the sin and vice activities and continue to focus Cayman as a family friendly destination with diving as the center piece of the water activities.
Get Caymanians interested in the service industry where they can share their culture and experience with visitors.
The reason we need cruise ships in Cayman is not for the passengers who spend very little when ashore and clog up town, it is because the CI Government makes a $25.00 per passenger "head tax" when they anchor. Government gets this money even if the passengers never leave the ship. It is built into their cruise ticket. Also note that if government contracts out the building of a docking facility, it will forfeit this valuable revenue stream for decades in order to pay for the dock. There are obviously underlying reasons for wanting such a facility. The new super size ships are capable of anchoring off shore like the other ships. By not caving in to their demands for a dock, perhaps they won't come. This will simply serve to increase the demand for stay-over tourists or will cause tourists who want to come by boat to take a smaller ship. Either way Cayman wins. Check the news archives about the financial fiasco and cost overruns that took place on the last addition made to the George Town dock. Have we lost our collective memories???? I remember it very well. Guess who was the head of Government back then.
Bean Counter
So Mr Iton what direction would you suggest that the country go to avoid the proverbial cul-de-sac. I suspect that you are also suggesting that education must play an integral role if any success is to be achieved; this I strongly support.
This will only make sense to somone who has really graduated fro a real high school. All othersjust continue looking toward your uneducated leadership for guidence.
I bet you hang modern art on your walls and see things in the picture that the rest of us cannot see.
So what was the point? Wasit to demonstrate what an intellectual cul de sac looks like?
Makes sense to me! He is pointing out the fact that sucessive governments have all taken the same nonsensical route to no avail and that we do not seem to be learing from the lack of any obvious sucess. At the end he suggests that our current leaders need to recognize the need for a change in direction (most of the country is now saying this). Im not sure how you do not get this message loud and clear, perhaps you just simply do not want to hear it!
That's six minutes of my life I ain't going to get back.
Erm, huh? I'll have to wait for other posters' comments to help me because I can't for the life of me figure out what Mr Iton is saying that would help us to do something different.
It is 'to do something different'
Location, Location, Location.
The Caribbean is unique in its' location, climate and variety of offerings. As the price of oil creeps higher and higher, the beautiful Caribbean will become more expensive for travelers. The Caribbean is unique and offers different experiences with each island. Perhaps a solution would be to make all the islands into one nation so that we could all benefit from each other's unique resources both natural and man made. Of course politics and nationalism will keep this from happening and we will continue to compete against each other rather that use each other for our mutual benefit.
Probability shows that if one avoids repeating the same mistakes over and over learning from the past)that eventually, a solution will be found.
Bean Counter
You are on the right track Bean Counter. The only way for small states in the Caribbean is to establish, or improve upon, regional organizations. The current system was set up by Reagan for the use of the U.S.
The problem is that you have to include Cuba in the organization, and really as the catalyst. That takes some tremendous political will that we don't have. But we could be an important piece to the puzzle with the financial systems already set up. The Caribbean and South American have to get out of the sphere of influence by the U.S. and drive their economies based on regional trade and growth, coupled with national enterprise.Our national enterprise has to be educated human services similar to the Asian states.
A shining example is Brazil. Although there approach to the slums in Rio is despicable, their economic plan (now spanning over a decade) has been to utilize their national resources for inward investment. They received the 'invitation development' in the 80's and realized it was only opportunistic for the transnationals.
For the posters that don't understand the point, in a nutshell is this. To have long term economic development in small economies such as ours, you have to use the invitation development in the short term to help internally develop your economy with sustainable industries.
This was recognised a long time ago and efforts were made to create a united Caribbean called the West Indies Federation, which of course disintegrated and one of the causes was when countries started to compete against each other to be the 'capital'. CARICOM has since then been created of which Cayman is an Associate Member (cannot obtain full membership because it is not an independent country) and there is even a CARICOM passport.
I read this looking forward to there being a point to this article. Sadly there did not appear to be one.