|The Courier N° 123 Sept - October 1990 - Dossier Higher Education - Country Reports: Barbados - (EC Courier, 1990, 104 p.)|
The coyness may sometimes be there in official circles, but Barbados is definitely a middle-income country, compares favourably in many areas with many a developed country and has an outlook that is unmistakably upbeat.
In 1989, Barbados recorded its seventh consecutive year of economic growth, 3.5%, and attained its highest ever GDP per capita: BD$ 11270 or US$ 5635 - a growth that is clearly reflected on the ground in the countrys sound social and economic infrastructures: a good health-care and social security system, educational facilities of very high standard, efficient public services and telecommunications network.
In a Caribbean of seemingly endless economic gloom, Barbados achievement, in the face of an unfavourable international situation, is without parallel. In a way, it fits in with that first or best image, that uniqueness that has always been associated with the island since the British claimed it in 1627. Geographically, it is the most easterly of the Caribbean islands (sitting pretty, as they say, in splendid isolation). It was the only island that was not disputed by the colonial powers.
Arguably the choicest of British colonial possessions in the region (certainly the most anglicised, a fact that has earned it the name Little England), Barbados was the first to establish a parliamentary democracy in the Caribbean. Indeed its Parliament dates as far back as 1639, the third oldest in the Commonwealth. It was here in the 17th century that large sugarcane plantations were first set up in the Caribbean, leading to the massive importation of slaves from Africa. (Previously indentured English labourers were used). This, it should be noted, was a momentous event for Barbados for it saw not only the squeezing out of smallholders and the consolidation of large estates, but also the drastic reduction of the white population. The slaves were freed in 1834.
The society which has emerged from these fortunate and unfortunate circumstances is one that is peaceful, enlightened, hard-working, fair-minded and friendly. Ninety-five per cent of the population are of African descent, the remainder European.
Although Barbados, in terms of natural attributes, is equally blessed with white sandy beaches and fine tropical sunshine like most of the other islands, it is believed by many to have an edge not only in beauty, but also in the pleasantness of its climate, constantly tempered as it is by the sea breeze. This makes Barbados one of the most sought-after holiday resorts in the Caribbean.
Small reserves of oil and gas, and 438 sq km of land are virtually the only assets with which nature has endowed the island. The greatest, however, is its human resources, about 250 000 people, 98% of whom are literate.
Independent since 1966 and politically stable with its functioning democracy, Barbados has been able to capitalise on all the resources at its disposal, thanks mainly to the fact that it has had successive governments whose economic policies were fundamentally not different from one and another.
These governments have so far emerged from either the Barbados Labour Party, BLP (which was founded in the colonial days and led Barbados to independence), or from the Democratic Labour Party, DLP (a break-away faction of the BLP which is currently in government). There is now a third party, the National Democratic Party, NDP, which was set in 1988. It is also of the Labour family, having itself broken away from the DLP. This similarity and, as a result, more or less consistency in policies has created foreign confidence in Barbados, and a very healthy climate for investment.
There is no doubt that this factor has, to a large extent, contributed to the resilience shown by the Barbadian economy to the bouts of depression it has suffered since independence, the most notable being the setbacks caused by the oil crisis of 1973/74 and the world recession of 1981/82 which saw the virtual collapse of Barbados exports to Trinidad and Tobago. Despite these setbacks, Barbados maintained an average growth rate of 5.1 % in the 70s and 2.5% in the 80s.
In the crises, manufacturing and the sugar industry were worst affected, and it has been Barbados good fortune to have been one of the few developing countries to lead the way in reforms in the early 80s. Rather than wait for the Bretton Woods institutions to intervene, the government of the day carried out adjustments it considered necessary. These won the approval and the backing of the International Monetary Fund which provided a stand-by credit of $ 13.4 million in 1982. By the end of the following year Barbados was back on its feet and along the path of growth, with tourism expanding, the industrial sector moving into the new area of offshore business, and agriculture laying more emphasis on non-sugar production. These were in effect the result of concerted efforts at diversification of an economy that had been dominated by sugar.
Sugar: what future?
Sugarcane is, of course Barbados major agricultural crop. For long the the main, and currently the second most important foreign exchange earner, it is still in a state of profound crisis.
Since 1986 when -111 000 tonnes of sugar were produced, output has fallen as the acreage under cane cultivation shrank and two of the six factories closed: 83 000 tonnes in 1987, 80 300 t in 1988 and 63 600 t last year, earning respectively $71.2 million, $67.2 m and $52 m. The situation, however, would have been worse but for a guaranteed export quota of 50 000 tonnes on the European market which Barbados enjoys under the Sugar Protocol of the Lomonvention, at prices above those of the world and the US markets. Barbados however runs the risk of shortly not being able to supply its preferential markets, given its domestic sugar requirement of around 15 000 tonnes. Most telling of the situation is the rising cost of production: $1328 per tonne in 1987 and $1360 per tonne in 1988 against export prices of respectively $ 1040 and $1085 per tonne. The industry has had to survive in recent years more on public support, a tradition that was started as far back as the late 1930s following the Moyne Commissions recommendations, which established the socio-economic link of the product.
The growing gap between revenue and cost of production of sugar, however, has raised the question of whether it would not be wiser to phase out its production altogether. Each time, the argument is advanced that the fates of sugar and non-sugar agriculture are too tightly linked to be separated. As can be seen in the interviews (pages 17 and 22), there are rather powerful arguments in favour of maintaining sugar production, among which are the fact that the industry is a large employer of labour and that sugar is a commodity that cannot easily be replaced. The plan is to maintain a production level of around 90 000 tonnes at least and to earn between $60 million to $70 million annually from the industry. It is yet to be seen whether these targets can be met and how economically sustainable they will be.
Tourism, a driving force that is losing momentum
There is no doubt that Barbados owes much of its economic achievements of the past few years to tourism which has expanded faster than any other sector. In 1983, 328 000 tourists visited the island, spending a total of BD$ 503.2 million. In 1989 there were 460 000 and expenditures were just over one billion Barbados dollars. Contributing 14.3 % of GDP, tourism is, of course, the biggest foreign exchange earner. Its growth is not only a reflection of the boom in international tourism generally and the natural attractiveness of Barbados, but also a result of intensified promotion, backed-up with the expansion and improvement of facilities to cater for all classes of visitors mass, middle and up-market. In 1987, for example, a new port facility for cruise ships was opened in Bridgetown. There are now better road networks across the island and sports and cultural calendars have been introduced to provide tourists with a variety of recreational activities, in addition to the traditional sun, sand and sea.
A new marketing strategy has also been adopted involving the tapping of the United Kingdom, European and Canadian markets, with the introduction of such practices as package tours. The result has been an extension of the tourist season well into the so-called off-season , i.e. April to November. The strategy now is to make tourism a year-round industry not only for foreign exchange purposes, but to ensure greater job security for Barbadians engaged in the industry.
Traditionally, the United States provided the bulk of visitors to Barbados, but their numbers have been falling in recent years, from a share of the market that averaged 41.2 % between 1986 and 88 to 33 % in 1989. Although these deficits have been made up largely by increased arrivals from the United Kingdom and Europe (from 22.4 % in 1988 to 26.2% last year), Barbados is clearly facing greater competition in the American market, particularly from other Caribbean resorts like the Bahamas, St Kitts and Antigua where, noticeably, arrivals from America have increased significantly in the past few years. At a time when Barbados is increasingly being seen as an expensive destination, this must be particularly worrying, although Minister of Tourism and Sport, Wesley Hall, feels confident that Barbados can hold its own by offering value for money. Observers, however, point out that if Cuba democratises and opens up realistically to international tourism (it has already indicated its intention to cash in on tourism), the competition is bound to intensify in the Caribbean, and particularly for Barbados.
So far this season, there have been falls in both arrivals and bed occupancy (see interview with Minister of Tourism and Sports, page 20) from virtually all the countrys sources of tourists. No doubt there is a need to step up promotional campaign - a fact already recognised by the Barbados Hotel Association (BHA) which has, this year, launched a tourism enhancement fund of BD$ 5 million, to be raised annually for promotional activities.
It is noticeable that, in order to recoup losses being incurred whether as a result of the demands for wage increases by the Unions or as a result of low occupancy, hoteliers have increased room rates this year. The extent to which this will affect overall income from tourism is yet to be seen, but it does not augur well for the expensive image that is being associated with Barbados.
Diversification, constrained by export markets
A declining sugar industry and a dominant tourist sector, whose faltering this year could spell trouble for Barbados, bring to the fore the issue of diversification which has been the policy pursued vigorously, especially since independence. As already seen, it has had a measure of success.
It is important, however, to note that, given its poor resource base and small domestic market, manufacturing in Barbados relies heavily on imports and exports (indeed if account is taken of tourism, the economy as a whole is dependent on the state of the world economy). The international scene has not altogether been favourable in recent years to Barbados, and if manufacturing, which was virtually non-existent 35 years ago, accounts today for a significant volume of exports light manufactures such as furniture, food and beverages, pharmaceuticals, garments, electronics, chemicals, cosmetics, it is not for want of dynamism, it is constrained very much by export markets.
Manufacturing accounts for 9.9 % of GDP. It grew last year by 5.4 %. A good deal of the credit for this expension goes to the Barbados Industrial Development Corporation (BIDC), which was set up by an Act of Parliament in the late 50s to stimulate, facilitate and undertake the development of industry in the country. The BIDC goes out to Europe and America to identify companies that it feels can operate viably in Barbados and then persuades them to come either solely or in partnership with local entrepreneurs with a package of incentives: tax holidays, duty-free imports of all raw materials, production equipment and spare parts, subsidised factory shells and, sometimes, technical assistance, in addition to guarantees on the repatriation of dividends, property and capital. Every year one or two manufacturing units are set up in the country providing greatly needed employment opportunities.
Unlike manufacturing, the export-oriented service industry has had no problems. Indeed, its progress has been spectacular in the past nine years.
Whereas, for example, there were only two data processing companies in 1981, there are now 11 operating in Barbados. Manufacturing employs 13000 people (13% of the labour force).
Since the revision in 1977 of the International Business Companies Act, the offshore business sector has also been expanding. Many foreign insurance companies, sales corporations and banks are choosing Barbados as a base, attracted mainly by the tax treaties which Barbados has concluded with their home countries, aimed at ensuring that such benefits as they gain in Barbados are not lost at home through taxes. Barbados currently has tax treaties with the United States, Canada, Denmark, Norway, Sweden and the United Kingdom.
Whether in manufacturing, in services or in off-shore business, Barbados is attractive to foreign investors because of the availability of skills, and a trainable workforce generally, as well as its political stability and good infrastructure.
There is now a drive for an all-round expansion of industry, but there are two major problems: wages are very high, indeed, higher than productivity - in the last 10 years, wages, according to some reports, have risen by 75%, while production has increased by only 10%; Barbados still has serious market difficulties.
The first is an issue which the government recognises but which it will have difficulty dealing with, as it adheres to the principles of collective bargaining (a democratic process, as the Prime Minister puts it), and the Trade Unions show no signs of moderating demands.
It is believed in some quarters, however, that the level of wages is directly related to a new industrial phase, that Barbados is no longer a country of cheap labour and that it is moving on in manufacturing to a new stage of higher quality products during which a few companies would be lost. These would be replaced, they say, by stronger, more competitive ones and, in time, wages will be aligned with productivity.
However plausible this theory, it assumes a recovery of exports. Barbados, biggest market is the Caribbean, but since the collapse of CARICOMs Multilateral Clearing Facility (resulting mainly from the indebtedness of Guyana) and the imposition of import restrictions by Jamaica, and Trinidad and Tobago in the wake of their economic difficulties, Barbados exports to the Caribbean have been severely affected. Furthermore, the United States restrictions on the import of garments, an area in which Barbados had felt it had a comparative advantage, has brought the countrys textile industry almost to a standstill.
Although exports to the Caribbean Community rose significantly in 1988 and 89 (thanks mainly to a re-entry into the Jamaican market) they are far from returning to normal. The US and Canadian markets remain difficult to penetrate despite the Caribbean Basin Initiative and the CARICOM/Canada trade agreement (CARIBCAN) which were designed to boost Caribbean exports to these countries. It therefore, came as no surprise that Barbados visible trade deficit widened last year to BD$ 979.9 m from DB$ 809.7 in 1988, owing to high imports, mainly from CARICOM countries and the United States.
The United States remains by far potentially Barbados biggest export market, notwithstanding the restrictions on the import of textiles. BIDC officials admit that the problem is essentially one of a very small country trying to master the complexities of producing and exporting to a market as large as the US. But if Barbados is to have any sizeable earnings from manufactured products and succeed realistically in its diversification efforts it has to have access to that market and, on this, Errol Humphrey, Deputy General Manager of the BIDC, believes Barbados is in the process of learning how to assess it effectively .
In a country where manufacturing has expanded and the number of cars on the roads has grown from just under 8000 to 18 000 in five years, Barbados has been fortunate in having small deposits of oil and gas which it exploits, thus reducing its dependence on oil imports - an important factor in the countrys import/export equation.
Non-sugar agriculture: still import-substitution oriented
Not facing any significant problem of export market is non-sugar agriculture, the diversification of which is dogged by a plethora of problems: access to land (emanating from the plantation system inherited from the slavery and colonial era), unfamiliarity with new crops and new technologies, and diseases.
Despite these handicaps, Barbados has achieved a good level of self-sufficiency, which in terms of import-substitution, is considerable - a positive foreign exchange step, as Minister of Agriculture, Food and Fisheries, Warwick Franklin describes it (see interview on page 22). Barbados is not only self-sufficient in such items as yams, sweet potatoes, carrots, cabbage, okras, beets and hot peppers, it exports reasonable quantities to regional markets. It is doing well in livestock production and, until recently, in fisheries produce.
A more significant, and indeed worrying, fact about non-sugar agriculture in Barbados is the decline in the area of arable land under food crop production. Last year, a prolonged dry period, according to the Central Bank 1989 Annual Report, was one reason for the reduction in food crops planted, but farmers also appear to be converting arable land for housing development, in an effort to pay off debts. The result was that food production in 1989 was no higher than in 1988 and way below its 1987 level. This meant that regional and extra regional exports of fresh produce declined to negligible proportions.
The fisheries sector, which grew rapidly between 1984 and 1986, thanks mainly to the Oistins Fisheries Terminal project financed by the EDF, has since been depressed, mainly as a result of difficulties being experienced by fishermen in gaining access to richer fishing grounds within Trinidad and Tobagos territorial waters. Barbados is currently negotiating for that access.
Although Mr Franklin believes fruits and yams have great export potential, the development of cotton and the flower industries, in his opinion, will be the main focus of non-sugar agriculture as the major foreign exchange earners for Barbados in the next 7-15 years.
Maintaining external reserves
Last years deficit in the balance of visible trade was the fifth in a row. For the first time, however, since 1981, Barbados had an overall balance of payments deficit of $70 million.
This, coupled with sizeable debt repayments and servicing (the heaviest the country has ever faced) and increased demand on foreign exchange (as the boom in the construction industry provoked demands for imports of materials and equipment), led to a dramatic fall in the countrys foreign exchange reserves in 1989.
Although credit restrictions imposed by the Central Bank resulted in a slight recovery, at only $269.5 million (3) Barbados foreign exchange reserves are worth only three months of imports. Experts agree that renewed pressure on reserves would throw the economy off balance if the foreign exchange earning sectors fail to perform adequately.
As already seen, the prospects are not good for those sectors. Tourism is unlikely to bring in as much foreign exchange as it did last year. This fits in with the forecast of the Central Bank in its 1989 Annual Report. The same report says that sugar exports, will again stagnate while exports of manufactured goods are not likely to increase significantly, concluding that without effective measures to arrest the strong growth in aggregate expenditure and to dampen the import surge, the pressure on the foreign exchange reserves will intensify. Although debt-servicing this year is expected to be much lower than last, this is unlikely to reduce that pressure.
For the immediate future at least Barbados economic stability calls for fiscal prudence. The alternative will be increased external borrowing and probably the intervention of the IMF - an intervention that will inevitably lead to the devaluation of the Barbadian dollar which is currently pegged to the US dollar at two to one.
Barbados needs a stable currency. That is the view of the IMF, according to Deputy Governor of the Central Bank, Delisle Worrell. And for a small country like Barbados, he says the Fund believes that the best of possible options in terms of policy, to avoid devaluation, is to keep a reasonable level of exchange reserves and meet its debt obligations. Barbados, however, has up till now risen to that challenge. It has regularly repaid principals and serviced its debt - a practice that has earned the country the rating of most creditworthy nation in Latin America and the Caribbean. A not altogether laudable feature of this reputation, however, is its tendency to borrow to repay debts. Although this is designed in effect to lengthen the maturity of its debts, it is simply postponing the days of reckoning.
Barbados has excellent relations not only with the IMF but also with other financial institutions, including the Caribbean Development Bank, and the Inter-American Development Bank and the World Bank, both of which have been particularly helpful in recent years in the financing of infrastructural development.
Experts share the Central Banks opinion that there can be only one sound economic course to take - and that is: cuts in expenditures, especially those with foreign exchange implications.
Stabilising the currency, on the other hand, means keeping inflation low, which is something that is difficult to achieve in an economy as open as that of Barbados. The best it can do is to keep inflation at least at the same level as that of the worlds rate of inflation, according to Mr Worrell. At 6.2% in 1989, however, inflation is rising not so much as a result of higher prices in the countries which are Barbados major trading partners as of the governments option increasingly for indirect taxes in preference to direct taxation to raise revenue. The government, as it were, is caught between two poles, says Worrell. To go further as far as indirect taxation is concerned, there is an inflationary impulse that has repercussions, but at the same time there is a strong public reaction against any further indirect taxations. The only solution, in his opinion, is to try over the course of time to reduce the levels of government spending.
So, from the point of view of both capital and current spending there is a need for cuts, certainly sooner than later. Last year, the Sandiford government successfully slashed spending by BD$ 55 million. The 1990 budget appears in that vein in being more modest than expected. The last before the elections, it foresees expenditure of about $1.3 bn against revenue of $1 ten. The government is expected, as usual, to finance the deficit through domestic borrowing, especially from the Central Bank.
The thrust of the budget is to maintain growth and create more jobs. It should be noted, however, that, despite the growth recorded in the past few years, the unemployment figure still hovers at between 16 and 18 %. Moreover, growth has been lopsided: electricity generation, and the construction industry, for example, accounted for the bulk of the growth in 1989. Aiming at a more balanced growth will not be easy. Prime Minister Erskine Sandiford predicts a GDP growth rate of at least 2% this year. This was based on the assumption that tourism and manufacturing will perform at least as well as 1989, but the trend so far will suggest a zero or negative real growth. Whatever happens, Barbados is certainly in for a leaner time.
For more detailed sectoral studies, see the interviews with the Ministers of Tourism, of Trade, Industry and Commerce, and of Agriculture, Food and Fisheries. A historical, socio-economic analysis of Barbadian society by K. Sandiford is published on page 29.
My particular objective is to have balanced growth...
After several years of various ministerial responsibilities in the government of the Democratic Labour Party, Erskine Sandiford became Prime Minister and Minister of Finance and Economic Affairs of Barbados in June 1987, following the death of his predecessor Errol Barrow. He had been Deputy Prime Minister for almost a year. Since then he has presided over the highest rates of economic growth Barbados has known. In this interview with The Courier, he talks of his objectives.
· Prime Minister, Barbados ambition, as revealed to The Courier nearly six years ago in an interview with the then Prime Minister the late Tom Adams, is the achievement of a standard of living more or less comparable to that of western Europe within 10 to 20 years. Are you on course to achieving that objective?
- There are certain situations which relate definitely to hopes and to ambitions, but these have to grounded in terms of what are the realities of the time - and also they are influenced by certain imponderables and uncertainties over which a country has no control. And if you are a very small country with limited resources, you tend to be a taker of situations, particularly economic situations, rather than a creator or influencer of those situations. And I think that is where Barbados finds itself. We have been improving our standards of living and, given a beneficent set of conditions they will continue to improve. We will certainly hope that this will mean better prospects for our people and better prospects for the world. So we are working along the line of continued improvement in our standards of living. Realistically we have a long way to go to catch up with Western Europe.
· Tourism continues to dominate the economy. Your efforts at diversification have paid dividends. Are you satisfied, though, with the pace of diversification?
- To be satisfied may indicate a certain measure of complacency. I do not think that we are satisfied, we always believe we can do better even if we have had considerable progress in terms of tourism and in terms of the diversification of our economy. My particular objective is to have balanced growth in the economy based on some leading sectors, but one that is not skewed unduly in one direction because we believe that a balanced growth, and a balanced economy are the best objectives for a developing country to aim at. So, while we note the growth that we have made, and this has been significant, we believe that there are areas in which we can improve both tourism as well as the other sectors; for example, we believe that there is scope for a better push in terms of our agriculture and there are certain adjustments that we have to make in that particular sector; our food import bill is high, and our exports are low compared to our imports. I think there is much scope for growth and development in the areas of agriculture and fisheries. In the area of services we have had some successes and we believe that there is more scope here for development. So I just mention those as areas in which we believe that there are opportunities for Barbados to develop further.
· One area where you have also been very successful is offshore business. Notwithstanding the treaty between Barbados and the United States, how serious do you view current US concern on the laundering of drug money and the possible effects it could have on offshore banking in Barbados?
- Barbados is, I believe, well positioned and poised to be a financial centre - a business centre - whereby those who see possibilities in that area can combine their business with rest and recreation and get a mix that is generally not too readily available in the high-pressure situations of modern cities. We believe that we can use our resources and endowments in that particular regard to develop as a financial and business centre, and the results to date have been encouraging. But we are not a tax haven, and we are not aiming to attract, we certainly do not encourage, any shady types of operations. We try to keep in place quite stringent rules and regulations, and procedures to avoid as far as possible any activities and enterprises which may remotely be concerned with the laundering of ill-gotten gains. So, we are interested in legitimate business.
· Wages in Barbados have risen far beyond productivity in recent years, clearly a disincentive to foreign investment. What measures are being taken to relate wages more to productivity?
- The major resource in Barbados is our people. We are not richly endowed with a diversity or a super-abundance of the minerals or other resources which constitute the more desirable trading commodities on the world market. For us it is our people and I think it is quite natural that people should seek through their unions to get the greatest possible return for their input into the productive process; it is for all those who are in management, in government, in the unions themselves, to realise the basic fact that productivity and wage settlements must have a direct correlation and if the wages aspect of it outstrips productivity, then the competitive nature of the goods or services that we produce would be lost, and the goose that lays the golden egg would certainly disappear. So I think what we have been seeking to do on all occasions is to moderate the demands and the aspirations of our people for standards of living that may not be immediately attainable, or attainable in the short term. And, you notice, that I am somewhat more modest than others in my projections for where Barbados will be positioned by 1992 or thereabouts as far as our standards of living, compared with those of Western Europe or elsewhere, may be concerned.
· So the idea of a wage freeze, as is being suggested in many quarters, is ruled out?
- My government and I havent spoken about any wage freeze. What we have spoken about is ensuring that labour gets a fair share of any increased productivity which means that if we have a growth rate of 3 %, no one should expect to get wage increases of 30% because that bears no relation at all to increased productivity. So we believe that when a product is manufactured there are certain inputs to it and there must be certain returns for the factors that make up that product. Now we have not spoken about a wage freeze but wage policies which relate such remunerations to the level of productivity.
· You are appealing to the good sense of the trade unions. If you really want to prevent wages escalating beyond productivity, as they are now, wouldnt it be necessary to have a kind of incomes policy backed by law?
- We do have an incomes policy that is based on keeping wage settlements in line with productivity and this is done within the framework of collective bargaining, because we are committed to free trade unions and collective bargaining activities and the right of workers to get together to promote their interests. But as a government we have to look after the national interest. Our policy is to reconcile any conflicting demands through consensus government which is our philosophy as far as this particular area is concerned. But if it becomes necessary pursuing that particular objective, we will not hesitate to take the actions that are necessary if the demands are unconscionable or if they are way out of line with anything that is affordable. Where demands are such that they will have some deleterious effect on the economy generally, then we will take whatever action will be necessary to protect the general welfare.
· For Barbados, the World Bank has advocated caution on foreign borrowing, given its present debt situation. 1989 was a particularly bad year in terms of repayment and servicing. How great, though, is the pressure to borrow more abroad to finance the 1988-93 Development Plan?
- The World Bank quite wisely cautions developing countries about excessive borrowings because if your borrowings are high, that is a commitment to present and future generations to repay and you can only repay out of foreign earnings; and if the terms of trade are adverse in respect of the products that the developing countries have to sell, then that can create a further problem down the road which is at the root of the debt problem. The terms of trade are adverse in respect of the returns on the primary products and other goods that are produced. Sometimes there are difficulties in getting the semi-processed or manufactured products into the market even where there may be provision that they can be admitted; the legal framework may be different from access. So the developing countries still have a major battle to fight in terms of what they receive for their primary products and then also access for the processed products. I think developing countries should not have to wait for the World Bank to tell them that this is a problem or to be warned against it. But the situation is that most of the countries have committed themselves from past years to investment programmes that required considerable foreign investment, some of that investment coming from World Bank sources, other sources, and from multilateral agencies as well. And so what the countries find themselves doing is paying back to the multilateral agencies and to the private international banks sometimes more than they are receiving. This is a dilemma that countries have to face.
In the case of Barbados, there are requirements for public sector borrowing and our requirements relate not only to the servicing of existing debt, which has been built up from past years, but also for maintaining some kind of economic infrastructure and economic activities to help service that particular debt and to maintain standards of living. As far as Barbados is concerned, most of our debts are to the multilateral agencies and those are the ones which indicate that there is very little or no rescheduling; most of the rescheduling programme has been limited to the private institutions. But we are very responsible here. If we go to the market, its because that is the source which we have to tap in order to deal with our problems; we seek to manage our debt and our borrowings in a responsible way.
· Sugar continues to prove uneconomic to produce. Isnt there a case for phasing out its production in favour of non-sugar agriculture?
- Barbados believes in both the private and public sectors; we have a mixed economy and the sugar industry is largely a private sector operation. We believe that the individual agriculturalist takes the decision whether to remain in sugar or not. Our cost of production of sugar is high but we produce a good product. We do not process that product, we sell it as a raw commodity, and largely as sugar and its by-products of rum and molasses. In that regard it is not very much different from the situation in a number of developing countries where they produce the raw materials which are sold in the markets mostly of developed countries - industrialised countries - and then they are processed there and sold at much higher prices than are paid for the raw material on the grounds of the value added. That is the reality of international trade.
We believe that there is a demand for sugar, we believe that it is a good product, it is one of the most important products traded. We have been producing this particular product for centuries. We have built up a knowledge and an expertise in sugar. We believe that the plant, the grass that is the sugar cane, is now well adapted to our environment and it serves as part of the conservation efforts as far as our soils are concerned: it is, for us, a good product. We believe also that being a natural product, it has much better prospects for the nutritional good of people than some of the artificial things that are being produced. We believe that if used in moderation, as anything else should be used in moderation, there are good prospects for it and we will seek to maintain a niche for sugar both in terms of our local needs as well as in terms of maximising our earnings of foreign exchange from it.
· The Grand Anse Declaration proposes a Single Market for the Caribbean, a very laudable proposition. Is there enough political will in the region to see this come to fruition?
- I believe that if you look at our past experience, the answer would be no. We have been talking about various forms of cooperation and integration over the past three centuries, almost from the foundation of the colonies in this region. We have gone from colonial status to independence most of the countries in the Caribbean - but we still have this problem, built up over centuries, of the diversity and particularism of the different territories. In a way this is good. Each person having been nurtured in a particular territory develops strong ties and patriotism, and love of country and so on for that territory - and that is good. I believe that that should be, not a source of weakness, but a source of strength towards building the new Caribbean.
Barbados is committed, and I am certainly committed, to closer integration in the Caribbean. There are ways and means, mechanisms and devices, whereby the particular insular or territorial interest of the separate entities can be combined with the overriding economic, social, political and cultural imperative of working closely together in a world that is developing into blocs. So in terms of Barbados, and in terms of my own hopes for the Caribbean, yes I am committed towards the development of a closely linked integrated movement in the Caribbean. It is something we have to work toward. It is not going to come in 1990; it is not going to come in 1992 like Europe, but I think it will come.
· But what are precisely the briefs of the Ramphal Commission other than widespread consultations?
- It is not just widespread consultations. It is to take a very broad look at the Caribbean and where we go as a people, taking into account our past history, our resource endowments and our place in the world. In other words it is a think-tank that is drawing upon the expressions of opinion and viewpoints in all of the territories of the Caribbean, putting these together and coming up with a broad set of recommendations in terms of where the Caribbean will position itself, the kinds of challenges it will have to meet, the possibilities and the realities of the situation; it is a very important work that has to be done.
· What are Barbados views on the Single European Market?
- Barbados view is that the people of Europe have spoken and they believe that they need a Single Market. I believe the imperatives of the economic and political situation indicate that the countries of Europe, which have been in conflict with one another from time to time, should seek to develop a larger market so that economies of scale and whatever other advantages may come from them, should lead to the development and improvement of Europe as an entity. I have no quarrel with that. If the Europeans wish that for themselves and for their betterment, that is their decision. My concerns have been that, in seeking to achieve a Single Europe, the action should not be inward-looking but should be an open arrangement that would lead to the furtherance of world peace, to freer trade and to improvement in terms of economic justice. It should result in a liberal beneficent kind of situation that will give the world a lead in these areas.
· What is your assessment of cooperation between Barbados and the European Communities through the Lomonvention? What impact has it had on the development of Barbados?
- The Lomonventions, the current and the previous ones, have all been very complex documents. We believe that these are important instruments to regulate the economic and social relations between Barbados (because you asked specifically of Barbados) and Europe - and by Barbados, you can read other developing countries of Africa, the Caribbean and the Pacific. I believe that those Conventions representing, as they do, the distillation of high bargaining, many late night discussions and much give and take and compromise will never satisfy all sides. From the point of view of Barbados, we would hope that some of the problems that are being encountered, from one particular Convention to another, will be ironed out over time. But, as indicated before, we are supportive of the Conventions. We believe each one of them has provided an improvement on the previous one. They are by no means near perfection as far as Barbados is concerned but I believe that they are steps in the right direction. The Lomonvention provides a framework within which economic and social development can take place.
· Apart from the trade provisions and the Sugar Protocol, what do you think of the grant element?
- Grants do not constitute a very important element of the relations among nations, and certainly in terms of Barbados the grants are minimal. It seems to be a disappearing element in the economic relations among countries, and Barbados encounters the argument that we are one of the better-placed developing countries because of our per capita income - a middle income developing country - this presents us with some difficulties. But having said that, there are some grants which are provided and we seek to make use of those grants. If we can get through the difficulties of rules and the bureaucracy and so on, that tend from time to time on both sides to prevent quick disbursement, it will be a very welcome dimension. I must say that as far as Barbados is concerned we have had a good working relationship with the European Delegation and personnel here in Barbados.
Interview by A.O.
Tourism: Value for money is the name of the game
In 1988 and 89 Barbados had a record number of arrivals despite a drop in the number of visitors from the United States, its traditional market. Last year it earned just over one billion Barbados dollars from tourism. Since the beginning of the current season, however, there has been a significant drop in arrivals. With competition intensifying in the Caribbean, can Barbados hold its own? Cricket star Wesley Hall, Minister of Tourism and Sports, believes it can and explains how. First, The Courier asked him about the situation so far in terms of arrivals and bed occupancy.
- To answer that question, we have to speak from a background where, in 1988, we had record arrivals in Barbados - long-stay arrivals, of 451 000 visitors. And in 1989, we had 465 000. So, we broke the record in 1988, and then again the following year we established another record. So we are coming over high. From November/December last year, as we predicted, we had a decline in our arrivals. This was occasioned by the fact that the Americans have been looking rather inwardly and have been trying to get people to stay at home. And, in England, for instance, weve had a situation where high interest rates more or less forced a lot of the people also to curtail their travelling. And therefore we had projected that we would have a decline in our winter travel. But I would say, that in December, there was a 7.5 % decrease in long-stay arrivals. We had 41 632 arrivals, and in January, we had 37 740 which was a decline of 9.4% This is the norm really in the Caribbean, with a few exceptions. Cruise ships arrivals, on the other hand, have increased: in December of 1989, there were 39 757, up 32 % and in January 1990, there were 44 130, up 34%. The increases continued in cruise ships this year, up to the end of May, when it was up 14% So, the occupancy will obviously be in a decline, and what we have tried to do, is to brace ourselves for it in the winter months. December occupancy rate, about 63.5 %; January 72.7 %; February 79.9%; March 67.6%, and April 70.9%. Admittedly, these are a bit down because we do get the bulk of our visitors coming here in the winter
· As you have indicated, your main source of tourists is the United States. The numbers are down. To what extent have these falls been compensated for by European visitors?
- We used to have about 40% of our visitors coming from America, but this has gone down to 33 %. In the past year or so, however, we have intensified our market thrust in Europe. I must say that this was occasioned by the fall of the American dollar in October 1987. We went to Scandinavia, we have now gone into France, into Switzerland and into Italy. Now, these are more or less top of the market destinations - they are the very top of the market, and they obviously come to us only in the winter, but we have been able to go into the United Kingdom, also, and since then, there has been a gradual increase out of England, particularly, and I would say Europe generally.
· Prices are much too high in Barbados. Given the competition that is bound to intensify in the Caribbean, are you not in danger of pricing yourself out of the market?
- Well, my answer to that is that Barbados compares favourably with Antigua, St Kitts, Jamaica and Bahamas. Our problem is that we import most of our foodstuffs, and the prices of consumer goods are higher than in some industrialised countries because most consumer goods are imported, as I said, and this involves transportation costs. But I think to come to this, we have a very high level of social welfare services. We have a good network of roads, we have a good telecommunications system, and the electricity works, etc. People are very comfortable here. I do agree that one tends to get that impression of high cost. What we like to do is to give people value for money, and once that is done, I think that you will find that we will be OK. Value for maney is the name of the game, and therefore we are hoping, with a good product, that we will be able to make sure that our visitors continue to come. We had the label of high prices some four or five years ago, but we favourably compare with Antigua, St Kitts, and the Bahamas, and those are some of the major Caribbean destinations.
· Do you have sometimes the impression that Barbados has probably reached its peak in tourism. Do you still have room for expansion?
- Yes, there is room for expansion. We have about 135 hotels in Barbados; a good mix - some very expensive, some inexpensive, some middle of the range and some apartment hotels. So far, we have about 7000 rooms, 14000 beds. We feel that by the year 2 000, we will increase by about another 1 500. We have not built a lot of new hotels in the last six years or so. We have been on a programme of refurbishing. You see, in Barbados, a lot of the small hotels are owned by Barbadians - about 80% of them, and our position has been to encourage them to upgrade and thus, in doing so, the Government has embarked on programmes to help them with their marketing, with their accountancy procedures and, indeed, with the infrastructure. When this is all completed, we are quite sure that the smaller hotels will become more intimate; some people love small hotels rather than the conglomerates, and we think that this good mix is something that Barbados can well afford.
· What have you done to take care of the socio-cultural and environmental impacts of tourism in Barbados?
- We are very careful with the environment. Indeed this Ministry was once in the Ministry of Tourism and Environment, but the environment has been made a specialist ministry in the Ministry of Labour. We are very conscious of the sectoral linkages, not only with the environment, but certainly with industry with agriculture; we need to grow more food local food, so that we can reduce our import bill.
We are aware that as a small country in the Caribbean we are susceptible to many of the dangers that have beset some of the other countries. We are constantly looking at soil erosion, for instance. We are very diligent when it comes to the pollution of our waters and things like that. We need to sustain the marine life around our coastal waters. As far as the cultural aspect is concerned, we have tried to diversify as much as possible. We are very keen on festivals: the Oistins Festival, the Holetown Festival, for instance. The Crop Over Festival in July has now become the most spectacular, perhaps, in the Caribbean with the exception of Trinidads Carnival. And I think this is actually showing in our visitor arrivals in July. It has become our best month in terms of arrivals. So that cultural tourism, as we call it, is a very important aspect of our development and we are doing all within our power to improve it.
· How confident are you of making tourism in Barbados a year-round industry?
- I think one has to look back at our history. In Barbados 30 years ago or so, we were a summer-winter destination. The affluent would come here, they would come for long stays, they would come for three or four months, and people working in the hotel industry would obviously work in the winter months and probably look for another job in the summer because hotels will close. Now, when we had the seasonality problem about three years ago, we decided to have it alleviated simply by having non-scheduled flights out of, particularly England, and indeed Europe. Our programme really is one of steady growth, not dramatic one. We just want to have a sustained, moderate growth in Barbados, on year-round tourism. That is our goal, to make sure that our workers in the hotel industry have sustained employment and to make sure that the hoteliers are able to keep their heads above water throughout the year. It is no longer a case of making enough money in the winter months to keep you going for the rest of the year. What we need to do is to have a sort of summer programme which would allow hoteliers to employ as many people as possible, to keep their doors open and then find that the gravy, as it were, comes in the winter months. We fuse tourism with sports. We feel very strongly in this country that sports will complement tourism and not compete with tourism. As a result of that position we have encouraged many sporting groups to come to Barbados. You see there has been a change in the behavioural pattern and wishes of tourists. Younger people are travelling - people are travelling now at a tender age and they want to do things that they do best while on holiday. And therefore we have combined the leisure aspect of tourism with the sporting aspect, and the result is that we have been able to have people in all sorts of sporting activities, in cricket, football, netball, hockey, athletics, horse-racing, cycling. This has allowed us to improve our infrastructure because there is no point in us asking someone to come here if we do not have the facilities. For instance, if we had the Cameroon football team (by the way we are very impressed with their performance at the World Cup), we would want to put them in a good stadium to play football. If we are getting cricketers, we will want them to play in happy and congenial surroundings. So, really, it was very important that we in Barbados improve our infrastructure and that is what weve done, and this is something for the sports-tourism fusion. It is about the only fusion that I know of in the Caribbean, but I think that more and more, other Caribbean countries will follow that trend.
We are also very receptive to cruise ships, simply because we wish to think that when someone comes here for a day on a ship and falls in love with the country, he is a potential long stay visitor in the future. We would not have to spend a lot of much needed dollars luring him or her. You know, we feel that the word of mouth is one that has done well in the past. But we feel that one has to do a lot more than that in the future. So we encourage our cruise ship passengers, who are only here for a few hours, to come for longer stays in the future.
I am cognisant of the fact that the time has come for us to look towards exchange of visits with Africa. I mean Ive had one or two ministers from Senegal and Sierra Leone. They have been here, they are our friends and weve all been very happy. I think the time is now ripe, indeed very necessary for us to look at this. When one considers the European market in 1992, when that comes to fruition, I think that, we in the Caribbean, of necessity, would be stupid not to really escalate our efforts to turn to our brothers in Africa. And that is one of my prime moves within the next two or three years. That is one of the things I really want to do.
· I note you say that Barbadians already have a lot of investment in tourism in Barbados - 80 % of small hotels, quite considerable. Are foreign investors welcome here?
- Oh yes. We welcome foreign investors, weve had investors coming here to develop luxury hotels and sporting facilities such as golf courses, and marinas and conventions. You see, our position is simply this: we do not believe that the sea, sand, and surf are the only attributes in going into the 21st century. We believe that we must have goal policy initiatives which will improve our competitive edge and help in our development. So joint ventures with local capital are welcome. We have the Hotel Aids Act which offers incentives to local or foreign investors and this Act just provides for duty-free imports of building materials, furniture, fittings, equipment for new hotel projects and permission to operate on a ten-year tax holiday. These are incentives that we give investors coming to Barbados in the hotel industry, and we are hoping that by so doing we will continue to attract investors.
Interview by A.O.
Diversifying agriculture: A major problem: unfamiliarity with new crops
No other sector of the Barbadian economy has been the subject of so many studies and reports in recent years as agriculture. With the sugar industry still in the doldrums, diversification is more necessary than ever before. In this interview, Warwick Franklin, Minister of Agriculture, Food and Fisheries reviews the prospects.
· Minister, sugar has dominated agriculture in Barbados for a very long time. Its production continues to prove uneconomic. World prices have fallen and production in Barbados has also fallen. Isnt there a case for phasing out its production?
- No, not at this time, and not in the foreseeable future. There is no case for phasing out the production of sugar in Barbados. My opinion is based on the following reasons: firstly, the present acreage occupied by sugar, which is within the vicinity of 30 000 acres, is quite a considerable size to take into consideration in Barbados agriculture; and to replace that with alternate crops, we have not yet found a solution, and I dont see us finding one in the foreseeable future; secondly, from an environmental point of view, sugar is very important in that it keeps about 30 000 acres of land under cultivation. It keeps the countryside tidy (it is a very important thing for us in the tourism sector to have a tidy environment). So, that plays an important part. Another factor is that it is still a relatively big employer of labour. The statistics vary, but I would say that as many as 7 000 people are involved during the crop season. In the off-season, they would be reduced to maybe 1500 to 2 000, or thereabouts; Another factor we have to take into consideration is that the kind of soils we have in Barbados are very thin, and as a result, they are prone to erosion. And the sugar cane-crop has always been a good one from the erosion point of view: it is grass which keeps those soils firm. Further along the plus factors - because I am looking at that first before dealing with the negative factors - sugar cane is a crop that the farmers have been cultivating for many years, and in our diversification programme we have discovered that one of the difficulties is unfamiliarity with new crops. The whole idea of getting farmers to accept new technologies, for new crops, etc. and keep abreast is difficult. One of the most important plus factors is that sugar has the capacity to earn foreign exchange, since at the moment its the only crop with an assured market. The problem we have may be related to price, but we know that the market is assured, it is there. And one of sugars strong points, as a foreign exchange earner, is the percentage we retain (ie the foreign exchange earned minus the foreign exchange spent on inputs). This is higher than most of the other sectors: non-sugar agriculture, tourism and manufacturing. So, sugar will still be earning us about $ 60 million or $ 70 million per year.
These are the main points which any government has to take into consideration. We have made a deliberate policy that we would keep our sugar production level at a maximum of 90 000 tons, hoping to get these from the 30 000 acres currently under sugar cane cultivation. So, we have no plans in the immediate, or distant future and I would say, looking down the road in the next 15 or 20 years - of phasing out sugar production. I think any administration has to look at ways to minimise the losses.
· Diversification of agriculture has been a policy of the Government for a very long time. How successful have you been in this area?
- I would not use the term for a very long time, because any time you are changing your agricultural pattern, changing the whole method of thought and work by people, it takes a long time. As an official policy of government, agricultural diversification, I would say, has been going for eight or nine years. (There is a contention that there has always been some diversification, but what we had was a crop-rotation system over sugar. I wouldnt take that as a deliberate diversification policy. That was a natural consequence of having too much sugar). The diversification programme has been looked at and concentrated on, I would say, in the last seven to eight years. We have had successes. In other areas we have not been as successful as we had expected, and there are very many reasons for that which we will get around to later.
Now, what has been the diversification programme under the present Administration in the areas we are looking at? The first thing we started to look at, were the areas that earn foreign exchange. Foreign exchange is a critical component of the economy of this country. It is a necessity. The present situation is that our foreign exchange earnings from agriculture, apart from sugar, are restricted to some of the crops going out to London and Canada - i.e. some winter vegetables. They are not considerable. On the other hand, I have always viewed foreign exchange saving as an earning, because if we can produce certain crops to prevent us from having to bring them in, that, in my opinion, is a positive foreign exchange step. So our programme has been successful in terms of import substitution.
Lets look at some of the sectors very quickly. Take food crops. In terms of root crops we continue to do reasonably well in yams and potatoes. In fact in the last couple of years, we have been exporting a fair amount. Indeed this year we even have difficulties disposing of potatoes. We have a bit in storage and we have not been able to find buyers. Not that there are no markets out there. There are. The difficulty is competition. The cost of transportation to the market place as well as the cost of production in Barbados, compared with those of other countries, mean that sometimes we get into the market place at a price that is not always competitive. And when some of the big producers come onto the market and saturate it, we have a problem. With yams, we have had difficulty in that our main yam crop, lisbon, has been plagued by disease. Our researchers are looking at other varieties, and as soon as we are satisfied that they are suitable, we will go back and step up production. There is a good export market for yams, better in my opinion than potatoes, but the market we are familiar with is that of lisbon and not having it meant weve had some difficulty satisfying the market.
The other crops are the routine ones of hot peppers, okras, some squash, pumpkins, in not too great quantities.
From the local market point of view we are self-suffcient in root crops, and we are very much self-sufficient in vegetables. Over the last couple of years our production of vegetables has gone up considerably. Our farmers are turning more and more to drip-irrigation and, as a result, there is no longer seasonality in vegetable production as we had before. The main vegetable crops are: carrots, tomatoes, cucumbers, lettuce. Occasionally, we have some vegetables coming in from our CARICOM partners under the CARICOM treaty arrangement.
With regard to meat and our proteins, we are doing fairly well. We are still not self-sufficient in beef, we still bring in quite a bit, but our beef production has been going up. With the advent of the new abattoir, the feasibility study of which we have just completed, and as part of the diversification programme, we are encouraging livestock rearing. I believe, objectively, that over the next five to ten years, we might be able to reach about 40 or 50 % of our requirements. The same, I would say about lamb, the production of which is also increasing. We are self-sufficient in poultry. As a matter of fact last year we produced, I think nearly I million kilograms of poultry meat. And what you must know too (a fact that is not generally known), is that Barbadians are the biggest eaters of poultry in the world, about 100 lbs of poultry meat per person, per year, as against the Americans who come second with 67 lbs.
The other major crop we are looking at, as a foreign exchange earner, although there has been a little bit of controversy about it, is Sea Island Cotton. In the last couple of years, we have been trying to bring cotton back as one of our leading export crops. The reason for that is simply that, in cotton, we have a product of excellent quality known to be one of the best in the world. Now, this is purely from the diversification point of view, but whenever we assess agriculture in Barbados, we come up against the problem of our cost of labour which is relatively high. When you compare cost of labour with those of Latin America and maybe some of the African countries, our cost of labour is high. So, it means that whatever we do, we have to have crops that are of relatively higher value. We have had up until now a preferential market for our cotton lint in Japan, but we have to go beyond the lint stage because our farmers are already feeling a little reluctant to plant because of the low returns from raw cotton.
· Talking about farmers, you are having shortages of labour. What is the attitude of Bajans generally to agriculture?
- This is difficult. One of the big problems in Barbados agriculture is the ownership aspect of the land. Unlike some of the other West Indian countries, Barbados never had a lot of Crown lands. The Government does have some now, but they are as a result of acquisition. It is interesting to note that the first set of lands the Government acquired were as a direct result of the crisis in the sugar industry, going as far back as the 60s. There were large tracts of land available and the Government came in and acquired them. So those are the only lands that the Government has. The other lands are owned by private enterprises which were derived from the plantation system mostly. One of the facts you have to face as a planner in Barbados is that 90% of the land for agricultural purposes is still in the hands of about 5 % of the population. Statistics vary. We have from 10000 to 15 000 peasant farmers. But who is a peasant farmer in Barbados? People with half an acre of land, a quarter of an acre of land, mostly as a result of the same plantation system where for subsistence they were given small plots of land to cultivate? So we really dont have at this moment in time, a farming community as such. We have more or less an owner-labour relationship community in agriculture. As a result of that and it being mainly sugar cane, a crop that is closely connected here with colonialism, slavery etc. it is not usually the first call of the young people. We have, though, seen some of the younger people, those who have been able to have access to land, trying to make something out of it.
· What is the level of mechanisation now?
- The level of mechanisation in the sugar industry is quite high. I think about 70% of the reaping, is being done mechanically this year. The stories coming out are conflicting, though. I have been told that the cost of reaping by the mechanical system is not as low as we were hoping. When compared with manual labour, there is not much gap. But it would have to continue that way, because the labour shortage is continuing.
Interview by A.O.
Trading with the outside world
Barbados adheres to the principle of Free Trade . With a very limited domestic market, a successful diversification of the economy will depend a great deal on the development of a vibrant export sector. But are the outside markets sufficiently open to Barbadian goods? In this written interview, Minister of Trade, Industry and Commerce, Evelyn Greaves, explores the prospects.
· The collapse of the Jamaican, and Trinidad and Tobagos markets in the early 80s adversely affected Barbados exports. How has trade with the two countries recovered following the stabilisation measures undertaken by them in recent years?
- If by stabilisation measures you mean fiscal, monetary and other measures (action) taken by these two governments to improve their foreign reserves and also increase productivity as well as to restructure their economies or sectors thereof, then the following comments can be made:
It is a fact that Barbados export trade to the region, and more specifically to Jamaica, and Trinidad and Tobago, has been seriously affected from the early 1980s, owing to the severe effects of the 1981-83 world economic crisis which persisted in the region long after it had ended in the developed countries. But this was a factor not peculiar to Barbados, for intra-regional trade during the period 1983-87 declined significantly.
With respect to our trade with Jamaica, the serious foreign exchange problems which this country experienced in early 1983 and onwards forced it to operate import licensing and foreign exchange regimes which had a negative impact on intra-regional trade. Barbados export trade was severely affected as can been seen from an examination of the trade data. For example, Barbados domestic exports to Jamaica fell from BDS$ 18.4 million in 1983 to some BDS$6.8 million by the end of 1987.
We had a similar experience with Trinidad and Tobago starting from late 1983 when that country began to experience severe haemorrhaging of their foreign reserves owing to a decline in the price of petroleum, their major earner of foreign exchange. Trinidad and Tobago responded through the introduction of a comprehensive import licensing and foreign exchange control regime, thus severely restricting access to its market. And despite efforts at both the bilateral and regional level to persuade Trinidad and Tobago to relax the regime in favour of CARICOM trade, access to that market remained extremely restricted up to the end of 1988. Barbados domestic exports to that country dropped from BDS$ 79.4 million in 1983 to some BDS$ 16 million in 1987.
Despite the decisions taken at a Special Council meeting of Regional Trade Ministers in 1984, as well as the conclusions of the Heads of Government Conference in Nassau of the same year, no improvement in intra-regional trade was achieved until 1988 when it increased by some 18%. The increase was 27.5% in 1989. This performance during those two years was primarily due to a definite recommitment on the part of regional governments to the improvement of intra-regional trade.
Because of this commitment Barbados was able to achieve an increase in its domestic export trade to the region by 33.5% in 1988 and 40.4% in 1989. Our exports to Jamaica for that period increased by 15% in 1988 and doubled in 1989. With respect to Trinidad and Tobago, domestic exports during the period increased by 33.5% and 68.4% respectively.
Insecticides, chemicals, stationery, building materials, foods items and garments constituted our main export items to these countries.
· You have been quoted as saying that it was time the regional market was considered as domestic. Does this means that protectionism within CARICOM is a thing of the past?
- Let me state up front that I do not know of any economic grouping, including the European Common Market, where some form of protectionism does not exist. Indeed, I believe that Europe 19927 is an admission of this fact.
What I mean is that in terms of how we in CARICOM relate to the outside world our actions and decisions should be informed by the understanding that we are one market. Indeed this is what the Common Market is all about. Let me give you an example of what I mean. When we offer protection to products, say T-shirts or Shirt-jac suits, we are also granting this same protection in our market to similar products coming from any member state of CARICOM. Even in the operation of our fiscal incentives regime when we refer to an approved enterprise producing for the domestic market we mean the entire regional market - not just the Barbados market.
Of course in any economic grouping such as ours or even when one is participating in some special trading arrangement which is designed for the mutual benefit of the participants, there is always provision for safeguards. Articles 28 and 29 of the Annex to the Treaty of Chaguaramas are indicative of this fact. They provide for the imposition of some restrictions on intra-regional trade due to balance of payments problems and difficulties experienced by particular industries in any member state.
· An emerging idea from Trinidad and Tobago is for the introduction of counter trade within CARICOM. Do you subscribe to that?
- It depends on what Trinidad and Tobago perceives as counter trade. As I understand it, counter trade, in its simplest form, is actual barter - exchanging a good for another good or goods. No money is involved. It can become complex whereby a number of mechanisms/instruments are utilised in the facilitation of trade.
If the first concept is being used here I believe that we have passed the stage where we would have to resort to barter within CARICOM. You will recall that I referred earlier to the period 1983-88 when, owing to the serious shortage of foreign reserves within the region, intra-regional trade was severely hampered. This was compounded by the fact that the mechanism which we had put in place in the late 1970s to help us to cope with this problem had to be suspended in early 1983. I mean the Caribbean Multilateral Clearing Facility. But we weathered the storm during those most difficult years. And this was primarily due to the active and close co-operation of the Central Banks and Monetary Authorities within the region.
I believe that what we should be doing is actively encouraging and promoting this collaborative effort.
If by counter trade one is thinking of the utilisation or employment of various kinds of mechanisms for facilitating trade, other than barter, then I would not be averse to considering these proposals. Of course, they would have to be sound and effective proposals.
· Barbados has turned increasingly to markets outside CARICOM, particularly the US and Canada. How far have you penetrated those markets?
- First, in response to your statement - not your question - I would like to point out that given the size of the regional market (some five and a half million people), it is imperative for any country in the Caribbean that bases its economic development partly on international trade, to look to the extra-regional market. Therefore, Barbados should not be considered as an exception. At the same time, it should not be construed that we are ignoring the importance of the regional market.
Barbados total trade, 1980-1989 (millions of dollars) %
Now to your question. Despite the existence of preferential trading arrangements with Canada and United States, Barbados cannot be said to have been that successful in the penetration of these markets. There are several reasons for this:
- We have a narrow resource base from which to develop a wide range of goods at competitive prices for those markets;
- We depend heavily on foreign investment to enable us to capitalise on some of the opportunities offered under the above trading arrangements. But it must be recognised that we are in competition with developed as well as developing countries in attracting such investment;
- Despite the access which we are supposed to be enjoying under these preferential trading arrangements, it ought to be pointed out that what is actually lacking is effective access to the markets of these countries. In general, we do not have the capability to capitalise on the opportunities offered under these arrangements. I believe that most of these arrangements should have been accompanied by a well-structured package of technical assistance to their beneficiaries.
· Recently the Canadian Prime Minister announced a widening of the range of goods that can enter Canada duty free under the CARIBCAN Agreement. What effect will this have on Barbadoss exports to that country?
- I think that question can best be answered by examining the items that were originally excluded from CARIBCAN. These included textiles and clothing, leather products, footwear, handbags and luggage. Prime Minister Mulroneys recent announcements as far as new duty-free items are concerned, included leather luggage and certain vegetable fibre products (still to be defined).
As you will note it does not include textiles and clothing which are of major interest to Barbados, and indeed, the entire Caribbean, since we do have some expertise and the installed capacity to produce and export these products.
To answer your question directly, I do not consider that the recent inclusions will have any effect on our export trade to Canada - certainly not in the short or medium term. But what I want to emphasise, however, is the point I made earlier with respect to the need for these preferential trading arrangements to be accompanied by an appropriate programme of technical assistance. The programme should include assistance such as marketing and product development. CARIBCAN is no exception.
· How crucial to manufacturing in Barbados is the question of management?
- Management - and I mean effective management - is a prerequisite for successful manufacturing in any country. Barbados is no exception. We have recognised that in certain areas of industry in Barbados this question needs to be seriously addressed. The Government is committed to assisting the manufacturing sector in overcoming any difficulties which it faces. This includes improving the management capability of the sector.
Interview by A.O.
Barbados has always been one of the most active members of the ACP Group of States, and has played a key role during the negotiations leading up to the signature of the successive Lomonventions.
Given the countrys relatively small population of some 250 000 people, and the relatively high GDP per capita (US $ 5 635 in 1989) the total of Lom, II and III indicative programmes of ECU 11.36m is considerable. In addition, the European Investment Bank has pursued an active investment programme in Barbados, with approved EIB loans totalling ECU 21.2m since Lom. Furthermore, Barbados has derived substantial benefits from the Caribbean Regional Programme (totalling ECU 160 m under Lom, II and III) both through CARICOM and other regional institutions in the fields of trade, tourism, human resources, agriculture and transport. Barbados also continues to benefit from the Sugar Protocol (quota allocation of 50 312 tonnes) and the Rum Protocol.
At the end of 1989, financing decisions had been taken for 62% of the total financial allocation under Lom, II and III.
The chart on the right shows the sectoral allocation of EDF funds since Lom. The bulk of EDF resources has been devoted to agriculture and fisheries, with significant amounts also going to trade development, tourism, training, and health.
Agriculture and fisheries
Without doubt one of the most successful projects has been the Oistins Fisheries Project financed under Lom with a total EDF contribution of ECU 950 000. The project, officially opened in 1983, enabled the construction of a fishing terminal at the historic town of Oistins, on the south-west coast. Building on the traditional fishing industry the project assists fishermen and vendors by providing a small fishing harbour, including jetty, slipway, maintenance yard and fuel facilities, and simple modular stalls, with annexed vegetable stalls, directly accessible to the buying public. Since the commissioning of the new Oistins complex the annual tonnage of fish landed has doubled.
Sugar still dominates agriculture in Barbados, and remains a valuable source of employment as well as foreign exchange. However, efforts are also underway to encourage diversification, and these have received EDF support.
In the hills of the Scotland District in north-eastern Barbados a major land conservation and agricultural development project was launched in 1982, with an approved LomI Indicative Programme allocation of ECU I 225 000. Extensive conservation work, including terracing, contouring, dam and weir construction and tree planting was carried out to conserve both soil and water in this rugged and relatively undeveloped part of Barbados. Agricultural activities include fruit tree development, tree planting, livestock and irrigation projects. Feeder roads have opened up major parts of the district to local farmers, with the aim of encouraging increased agricultural production and improved marketing. Though slow in implementation this project achieved satisfactory results.
Lom-III Indicative Programmes: Sectoral allocations
The National Fruit Orchard Project (ECU 550 000) was also financed from the LomI Indicative Programme. Demonstration plots were established at Codrington Agricultural Station for mangoes, grapefruit, avocados and pawpaws. The project aimed to establish or rehabilitate up to 50 hectares of fruit orchard on selected farms. Assistance to farmers is provided in the form of short and medium term credit, administered through the Barbados National Bank.
As a small country, Barbados is highly dependent on external trade. Since Lom the EDF has provided considerable support for export development, mainly through the Barbados Export Promotion Corporation (BEPC). Under Lom and II a total of ECU 439 000 was provided in three separate activities aimed at expanding and improving export promotion programmes, as well as improving the overall structure of the BEPC. Particular emphasis was placed on technical assistance to the garment industry.
Under LomII a total of ECU 1 845000 is being provided for export promotion. A significant part of these funds is being devoted to a project to assist with the marketing of Barbados rum in Europe. Barbados rum has been identified as a product with considerable potential, and the initial results of the marketing assistance are promising. Also, the improvements in the access for rum under LomV should help to ensure that Barbados rum exports reach their full potential. Assistance is also being given in the area of design. A design centre is being set up, initially within the BEPC. The aims are to increase awareness of the importance of design of goods, and of packaging, to train young designers, and to provide a much needed service to the manufacturing sector.
The potential of the manufacturing sector, which employs 12 000 people, is being assessed and recommendations are being made for the future development of the sector in a study which got underway at the beginning of 1990. The study is being undertaken by the Barbados Institute of Management and Productivity (BIMAP).
Tourism is the most important sector in the Barbados economy. Receipts from the 500 000 annual visitors provide the main source of foreign exchange and contribute to the relatively high standard of living. The EDF has previously given support to the Board of Tourism in its marketing efforts, and has each year helped to finance participation in the major tourism fairs around the world. Currently a project for the construction of a badly needed new hotel training school is being appraised for possible finance from LomII resources.
The EDF has financed multiannual training programmes under Lom, II and III. The development of human resources is critical to the development of Barbados. Although training facilities are well developed, including the Community College and the University of the West Indies, specialised training may require a period of study abroad. Once the LomII programme of scholarships is implemented, over 70 students will have received EDF awards.
In the health sector the European Community financed under Lom, the Speightstown Health Centre (now renamed the Maurice Byer Polyclinic). Completed in 1978 at a cost of ECU 370 000, the Centre contains a small clinic (8 beds), a laboratory, a dispensary and facilities for public health personnel. The project provides both preventive and curative health care and dental facilities for the population of the northern part of Barbados, thus reducing pressure at the referral hospital in Bridgetown.
Besides the projects summarised above, Barbados has benefited from EEC financial allocations outside the Indicative Programmes. The European Investment Bank (EIB) has lent over ECU 21 m to Barbados since Lom. Loans have been provided to the Barbados Development Bank for a total of ECU 10.5 m. These funds have been used for on-lending to small and medium-sized companies in the industrial and tourism sectors. The Barbados Light and Power Company received a loan of ECU 5 m under Lom for the expansion of electricity generating and distribution facilities. In addition the Barbados Port Authority received a loan of ECU 5.6 m for the improvement and expansion of the Authoritys container handling and transshipping capabilities.
EEC-Barbados cooperation-breakdown of allocations by sector and in ECU
Barbados is an active member of CARICOM and benefits to a great degree from the EECs regional programmes for the Caribbean. Because of its central position and the excellent communication links, a number of regional organisations are based in Barbados. Under Lom and II important projects were implemented by the Caribbean Food Corporation (CFC), the Caribbean Agricultural Trading Company (CATCO), and the Caribbean Tourism Organisation (CTO). In the areas of transport, LlAT, the regional air carrier, and WISCO, the West Indies Shipping Organisation, also benefitted.
Some of the more recent regional projects include:
CARICOM regional trade development programme
CARICOM has set up an office in Bridgetown, with assistance from the Government of Barbados, to coordinate trade development activities in the region. The EDF is supporting a three-year programme designed to encourage free trade, promote the use of regional goods, particularly through improved standards, and encourage extra-regional trade.
Caribbean Examinations Council
The Caribbean Examinations Council (CXC) is being helped by a grant of ECU 750 000 to upgrade its data processing capability.
University of the West Indies
Two major projects funded under LomII are currently underway at the Cave Hill, Barbados campus, as well as at the campuses in Trinidad and Jamaica. The first is a programme of support for infrastructure and equipment (ECU 6.2 m). The Cave Hill component comprises the expansion of the Learning Resource Centre and the establishment of a Central Analytical Laboratory. The second comprises the construction of student accommodation (ECU 16 m). Accommodation for 180 students will be provided at the Cave Hill campus.
Caribbean Agricultural Research and Development Institute (CARDI)
CARDI has received support under Lom, II and III totalling over ECU 11 m. The current LomII project included the expansion of CARDIs existing tissue culture laboratory facilities in Barbados. The main focus of the project will be the propagation of high-yielding yam planting material for use by farmers in Barbados and the OECS.
Delegation of the European Communities, in Bridgetown, Barbados
Area and Geography:
430 sq km. Of coral origin. The most easterly of the Caribbean islands.
settled by the British in 1627, remained a British colony until 1966 when it became independent.
250 000, half of which live in or around Bridgetown; rate of growth 0.6%; overall density approximately 600 persons per sq km; literacy rate 98 %.
Multiparty democracy, the second oldest Parliament outside of England. Parliament is made up of an elected Lower House of 27 persons and Senate of 21 appointed persons. The Head of State is the Queen represented by a Governor-General
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Mainstay of the
tourism, sugar and manufacturing.
Barbados dollar (BD$ = US 50 cents.
Mainly sugar, molasses and syrup, rum, food and beverages, clothing, chemicals.
Manufactured goods, machines and equipment.
CARICOM, United States, Canada and The European Community (particularly the UK and West Germany).
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visible trade (1989):
- BD $ 979.9 million.
of payments (1989):
- BD $ 70 million.
Gross Domestic Product: BD$ 2.9 billion; rate of growth (1989) 3.5%.
GDP per capita (1989):
BD $ 11 270 or US $ 5 636.
BD $ 817.1 m (as at end December 1989). Total foreign debt servicing in 1989, BD $ 210.9 m.
by Keith SANDIFORD
Now that Barbados is celebrating its 350th anniversary of continuous parliamentary government, I cannot resist the temptation to look at my native land from two different perspectives. The first is that of an angry emigrant who left over 30 years ago, determined never to return as a settled inhabitant there. The second perspective is that of an older, and I dare say, wiser, individual.
I was quite disillusioned with Bardados when I first left it, in 1956, to attend the University College of the West Indies at Mona. Since then, I have frequently returned for brief periods and have grown increasingly more respectful of that small island. I left angrily at the age of 20 because, in my judgement, Barbados had made too little social progress for 100 years. Slavery, it is true, had been abolished in 1834 and the apprenticeship system had been discarded in 1838. Blacks had won a certain degree of personal freedom, but they were still shackled by a host of petty conventions.
To understand this aspect of Bardados in the 1950s, one must remember that the country was the product of a sad colonial past. A small percentage of the population owned most of the colonys wealth, while more than 90 % of the people laboured for very little in return. Economic deprivation was accompanied by social stigma and political oppression. Blacks as a rule had no social standing, no economic power, and no political rights. This was the situation as late as 1950.
I very deeply resented that situation. It was compounded even further by a certain Victorian kind of class consciousness which bred snobbery of the worst sort, and a distinctive brand of racism which left Blacks at the base of the racial pyramid and placed browns and mulattoes somewhere in the middle, but far below the whites and the nearly whites. Social climbers often tried to distance themselves from their own roots and a wide range of barriers were set up between individuals, families and groups. You had to know your place in that complicated class structure and often could depend only on school certificates to inch forward slowly up the social ladder.
The social structure was so rigid in those days, that connections were more important than brains, and shades of colour could transcend academic worth. My elder brother (Basil) and I had no illusion about our prospects. We were both at Combermere School in the early 1950s, but we knew that, because of our colour and our background, our only hope of economic salvation was a job in the civil service, or as a teacher, beginning at $40 a month.
The situation was so comical that my younger brother (Harry), who was a curious kind of tumbric colour had a better chance. He, in fact, commenced his career as a messenger with Robert Thom at the age of fourteen and almost immediately began to make a name for himself in the Bridgetown business world without any certificates whatever. It is true that he subsequently upgraded his qualifications and his skills, while demonstrating an acumen that belied his tender age, but his running start in the field of business was based, to a large extent, on the shade of his complexion. By 1967, still only 30 years old, Harry had already rescued Gulstone and Perkins from the inefficiency of their previous managers. Basil, at 33, had moved in the meantime at a snails pace up the lower rungs of the civil service.
This was Barbados then: a poor colony, too British for its own good, and dominated by Victorian values which even the British had already abandoned. Our school system, for instance was still patterned on nineteenth-century Eton and Winchester and the emphasis was still then very much on the four Cs: Cricket, Christianity, Classics and the Cane. So we learnt an enormous amount of unnecessary Latin and Greek, and no natural sciences at all. We learnt a good deal of British and European history and no West Indian sociology at all. We knew some European geography, and could recite all the major European capitals, but we knew very little about Barbados and less about the Caribbean.
Everyone recognised a sharp distinction between the first grade secondary schools and the others, and most families who considered themselves important sent their children to Harrison College, the Lodge School, or Queens College as a matter of course. No one instilled in us any pride in our own past or heritage. We were brainwashed into detaching ourselves from our African roots and all things African were regarded in a negative light. Africa was a continent despised, like the vast majority of her millions of children.
This was Barbados then. And I ran away from it as soon as I could. But I left while the island was beginning to change. The real revolution even though I could not appreciate it at the time - had already begun, with the rise (during the late 1930s) of the Barbados Labour Party and the Barbados Workers Union. These had become two very powerful instruments by 1950. They forced the minority of whites to revise the constitution and establish a system of universal adult suffrage.
The immediate result was a black majority in the House of Assembly by 1955. A legislature which for more than 300 years had catered to the whims of a small white elite was finally representative of the real Barbadians. Two Labour parties shortly emerged, both led by black individuals preaching similar gospels, and the old Progresive Conservative Party, the last political bastion of Barbadian whites, was stifled almost at once. The followers of Grantley Adams and Errol Barrow completely dominated Barbadian politics from the mid-fifties onwards.
Within less than a decade after the democratisation of the franchise in 1953, all the whites had been swept from political power. The repercussions were enormous. Not only did the complexion of Barbadian politics change, but laws against racial discrimination were introduced at long last, and private clubs that had once been exclusively white were now compelled to accept non-white members.
Amazingly, in a society with about five or six percent white, all the secondary school headmasters, with the exception of Hayford Skeete at the Boys Foundation School, had been non-black up to my own time at Combermere.
The two Labour Party governments quickly put that matter right. Stanton Gittens became the first black headmaster of Combermere School in 1961, and Albert Williams became the first non-white headmaster of Harrison College in 1965. By 1970, without exception, all the headmasters at every level in Barbados were black, and so too were the vast majority of headmistresses. Few white teachers were left in any Barbadian school by 1975. Similarly, Barbadians had adopted the habit of appointing black cricket and soccer captains.
This revolution was not confined to sports and education. Consider the clergy, for intance. Up to 1950, the majority of Barbadian priests had been white or nearly-white. By 1970, that was no longer the case. Black Anglican leaders, like Dean Harold Crichlow and Canon Seon Goodridge had emerged. Up to 1950, the only non-white head of a civil service department in Barbados (so far as I could ascertain) was Robert Clarke, the Post Master General. By 1970, it was difficult to find any whites at all occupying such positions of authority.
This, then, was Barbados in transition. Within two short decades, the old vanilla guard had been supplanted by the chocolates, and even the strawberries found themselves in trouble. Political, administrative, clerical, educational, and social power had come to the Barbadian majority at long last.
The question of colour gradually ceased to be important, and even the commercial houses had to recognise that they were likely to be better served by educated blacks than by untrained whites. Hence the frantic search for local expertise which began during the 1960s. The political leaders encouraged this trend by insisting that white foreigners should not be brought in to undertake professional or administrative tasks that could be performed by qualified natives. Parent firms in Britain and elsewhere thus had to engage Barbadian managers, directors, accountants and technicians to run their Barbadian branches.
When I went back home to Barbados for Christmas 1962, I found that it was not only the schools which were coming under the control of blacks, but the hospital staff had already begun to change its complexion. The old UCWI was producing new black doctors almost at the rate of a factory, and the Barbadian natives were beginning to return from Mona literally in droves. So medicine, too, was gradually Barbadianised at long last. By Christmas 1971, when I made yet another pilgrimage to the island, young black doctors, like Dennis Bailey, Belfield Brathwaite, Michael Clarke, Charlie Harris, MacMilla Hodge, Edson Inniss, Noriss Procope, Alfred Ralston, and Robert Thomas had come steadily to the forefront of medicine in Barbados.
My point about all this is not only to demonstrate what political power can accomplish, but to emphasise that such changes cannot take place in an economic vacuum. I stress this because even on my last return to Barbados during the winter of 1988, some of the new men were still complaining about economic inequality. They were still arguing that the Barbadian economy was dominated by the old planter class and that this could be proven by any study of the modern directorates in Bridgetown. It was this conviction which persuaded a number of blacks to make their celebrated (but unsuccessful) bid for membership of the Board of Directors of the Barbados Mutual Life Assurance Society in December 1988.
I do not deny that a good deal of Barbadian money is still white, but I am happy to report that the complaints about white economic monopoly are exaggerated. In fact, after the restructuring of Barbadian politics, several white families preferred to emigrate rather than live in a true Barbadian democracy. Some of them sold their estates and took their money with them to Australia, New Zealand and elsewhere. The business world of Bridgetown is thus no longer dominated by the planter class. Indeed, the old plantations have almost completely been broken up; and new business concerns have emerged. Most of these new business are largely run by the new men themselves, and even the old ones have been compelled by recent governments to employ local experts instead of foreigners.
Local lawyers and accountants have found many opportunities where none had existed in the 1940s. The young radical intellectuals at Cave Hill, who have struck so many telling and timely blows against the outrageous Anglo-Saxon mythology on which my own generation was weaned, are absolutely right when they advocate greater economic power for black Barbadians; but I do think they are quite wrong when they cavalierly dismiss the bulk of new black directors and administrators quite simply as lackeys.
The emergence of a powerful black elite is everywhere manifest, and most obviously so in the field of housing. Spacious mansions have been constructed all over the island and the vast majority of them are being occupied by blacks. When I first left Barbados 33 years ago, the bulk of the homes in such areas as Belleville and Fontabelle belonged to whites and mulattoes. The newer residential areas around Cave Hill, Clermont, Oxnards, and Stanmore are now occupied by the new black bourgeoisie.
I am not suggesting that the wealth of Barbados has now been evenly divided. There are still some rich white families, and there are still many poor black homes. Radicals and social democrats, like my good friend Dr. Hilary Beckles, must still continue their important quest for economic and social justice. But the situation is incalculably healthier in the 1980s than it had been during my childhood.
The root of our economic problem lies partly in our geography. Barbados is not blessed with abundant mineral and metal resources. Our soil is sufficiently fertile to allow us to cultivate a wide variety of fruits and vegetables, but our domestic market is too small and we are unable to compete on the international stage with the large North American producers.
It is also unfortunately the case that Barbados happens to be in an American monetary orbit and must therefore manifest all the symptoms of a severe cold whenever the New York market sneezes. That, as is well-known however, is by no means peculiar to Barbados. Some so-called developing countries are at the mercy of the IMF and are even more unhappy victims of economic imperialism. Even so-called developed-countries are experiencing economic stress. No less unfortunate is the fact that Barbados produces more trained professionals than can be gainfully employed at home. Thousands of graduates leave secondary schools every year and cannot all of them be properly placed in a very limited job market. That is, of couse, a real pity - especially since so many modern countries have cultivated the annoying habit of restricting immigration.
What worries me more, however, than the racial or the economic situation now is the strictly social one. The gap between rich and poor blacks in Barbados has widened. There is a powerful upper-middle class black clique which seems to be running everything in the island. So the traditional habit of using (and sometimes abusing) the old-boy network has come into play. The Mona Men, as I have called them, dominate everything from the banks and businesses to the churches and the schools. They have the capacity, therefore, to do considerable harm. I am, of course, one of these Mona Men myself, and cannot escape an uneasy feeling when I consider how privileged a person I suddenly become from the time I enter the Grantley Adams airport, where I am often recognised even by the younger immigration and customs officers..
My hope is that such power will be wielded humanely. I know that it once was. During the 1950s and 1960s, most of the emerging civil servants and teachers in Barbados had come from modest origins. They could therefore identify most easily with the poor and the destitute. This made the bureaucracy in Barbados at that time much friendlier and less impersonal than the bureaucracy with which I myself have had to deal in countries like Jamaica, Canada, and England. In those days, you see, the Bajan bourgeoisie, was mainly first-generation bourgeois and could not, as they say, play great.
Amazingly enough, when I got to Mona in 1956, I discovered that almost all the Bajans there were very much in the same boat as myself. There were a few exceptions, but most of us were desperately poor. We had no money and no influential parents, and often no working parents either. We had all arisen through the scholarship system and this had been our only salvation. We could relate to poverty in ways in which our Trinidadian and Jamaican colleagues at Mona could never have done. Now, the problem is: how will our own children relate to their less fortunate countrymen? I am much bothered by that.
My concern, however, is tempered by the knowledge that, generally speaking, Barbadians have always responded intelligently to practical difficulties. We are not, relatively speaking, a wealthy community; and yet we have consistently handled our budgets much more skilfully than others in the Caribbean.
It is by researching these kinds of questions recently that I am finally becoming less alienated from my native land. I feel a lot more proud today of being Barbadian than I felt 30 years ago. Barbados now is so much better than Barbados then. Successive cabinets, since the introduction of ministerial government in 1954, have pursued a wide range of social and economic policies which have left the country with fairly efficient schools and hospitals, good roads and new highways, an excellent water supply, light and power systems which are the most reliable in the Caribbean, and a communications network which is the envy of the Western hemisphere.
This improvement no doubt springs from the creative uses to which political independence has just been put. And it is especially in its treatment of the important question of education that Barbados has set a sterling example to the rest of the world.
We place more emphasis on education than anyone else. We have been devoting consistently more than 22% of our gross national revenues to the upkeep of schools, colleges, and libraries. This is a miracle. The Americans, for example, often spend less than 5% on education. The result is that we have more schools per square mile, and more teachers per capita, than any other society of which I am personally aware. At the most conservative of estimates, at least some 5 000 private and public teachers operate in a community of just over 250 000. We have also updated our curricula and have come to pay more attention to such disciplines as agriculture, biology, chemistry, physics, and engineering.
This magnificent obsession with education has paid off handsomely in the quality of our House of Assembly and our Senate. It has been reflected, too, in the astuteness of our electorate. The result is that there has been much less corruption and misgovernment in our recent history than almost anywhere else. Our elections are conducted with less violence than elsewhere and our electorate is one of the best informed in the world. The common people take a keen interest in public meetings and political decisions and have a much sounder grasp of Barbadian political realities than is the norm for modern proletariats.
It is the basic commonsense of the electorate which saves Barbados from the kind of political ruin which has befallen most independent countries. The Barbadian voters will simply not permit a ruling party, for example, to become too smug and arrogant. Hence comfortable majorities have suddenly disappeared during general elections, especially after the incumbents have already enjoyed two consecutive terms. Ever since the Barrow administration was allowed a third innings in 1971, the popular wisdom has been that governments do their best work in about 10 years before becoming stale and complacent. There is no place in Barbadian politics for any monopoly.
Making miraculous use of sugar, molasses, rum, cigarettes, beer, tourism and minimal manufacturing, Barbados has increased its annual revenues from about $44 million to more than $700 million in just over 20 years of political independence. It has spent these monies so frugally, that the interest on its debt charges has never risen to the point where the repayment of loans has interfered with the proper management of the governments budget.
And yet, since 1966, we have built modern hospitals, schools, government offices, roads, a cultural centre, and even a National Bank. None of the other West Indian nations, so far as I know, can boast this kind of performance in public works. A succesion of Labour governments from both sides of the fence have encouraged poultry and dairy farming and the gradual broadening of the agricultural and industrial sectors of the economy. Our record is so good that Barbados can seldom qualify for some of the external aid offered occasionally by the developed countries.
If this account appears too rosy at a time when my namesake, the prime minister, is under all kinds of fire for his monetary and economic policies, those partisans who complain about governmental failure and mismanagement should pay a visit, or a series of brief visits, to other developing nations. It is not even necessary to travel as far afield as Africa and Asia. In almost every neighbouring Caribbean and Latin American country, where public buildings are in disrepair, roads are impassable, water is scarce, telephones seldom work, electricity and gas outages are frequent, the currency has been devalued repeatedly, and all kinds of important commodities are in short supply. Well-to-do persons from other West Indian islands have thus adopted the policy of flying frequently to Barbados to purchase even food and clothing.
Such conditions have done serious violence to the tourist industry in neighbouring countries. Barbados, on the other hand, has been able to retain its appeal as a tourist attraction. In fact, by developing a vibrant Crop Over festival during the past 10 years or so, the island has been able to draw thousands of visitors in July and August. A community so staid as to have been the laughing-stock of its neighbours, as late as 1966, has gradually cultivated part of the Trinidadian calypso and carnival tradition. In the mid- 1950s I myself would have regarded such a development as totally impossible. But young cultural leaders, like Elton Mottley and Trevor Marshall, have performed a minor miracle here. Bajan Yankees and Bajan Canucks have begun to plan their summer itineraries around Crop Over, and the tradition has already become so firmly established that it would now be extremely difficult to destroy it.
Crop Over has helped to make Barbadians more culturally alert. We are now more consciously aiming at composing our own lyrics, writing our own ballads, forming our own bands, and producing our own records. We have become far more interested in drama and theatre than we were during the 1950s.
There are more Barbadian artists, musicians, and writers than there were in my youth. Such gifted teachers as Karl Broodhagen and James Millington, who first emerged in the 1940s, have already left an indelible imprint on Barbadian art and music. And journals such as the New Bajan and Banja are doing much to encourage the growth of Barbadian literature. The establishment recently of a National Cultural Foundation was also a most fortunate stroke.
There is another positive feature of recent Barbadian social history with which, as a firm supporter of the female liberation movement, I am extremely delighted. It is the gradual, albeit grudging, abandonment of male chauvinism which so completely dominated the islands ethos up to the time of my departure.
In 1956, Barbados still maintained a very sharp distinction between the sexes. Salary scales were different in most sectors of the public service and women were not expected to hold any positions of importance. Middle class wives were actually discouraged from working, and maternity leave was beyond our contemplation. Even the public schools were divided according to gender. After the publication of the Jacobs Commission Report in 1961, however, the government made a concerted effort to destroy the gender barriers in the teaching profession. Female salaries were brought into line with those of the men and co-education replaced the older Victorian norm. As it was impossible to treat female teachers preferentially, women steadily emerged to play a more prominent role in most areas of Barbadian life. Some of them have entered politics, medicine, law, and business. They have not yet won full equality, but they have certainly made huge strides in the past three decades.
What then can I say in conclusion? I may still not go back to live permanently in Barbados, having settled comfortably in Canada for almost 30 years. I have dug very deep roots here and my children are native Canadians. But I would certainly not be as unhappy in 1989 as I would have been in 1959 had I been deported and ordered back home.
I recognise, however, that we still have difficulties in Barbados. The unemployment rate, for example, is much too high. Our welfare system is not as sophisticated as the North American, some of our young adults are becoming too addicted to illegal drugs, and our health care system is still hamstrung by lack of funds. but these are not peculiarly Barbadian problems; most modern societies are currently grappling with similar difficulties. The Barbadian record is such, however, that we can rest assured that if any country can solve such problems, that country will be Barbados.
When the present King of Swazilands father, King Sobhuza II, died in 1982, he had occupied the throne for no less than 61 years and was, indeed, the longest-serving monarch in the world by far at the time of his death. The fact of his long reign is no mere historical fait divers, however, for Sobhuza, both before and after the countrys independence in 1968, enjoyed not only immense prestige but also great personal power. He had led Swaziland, as very much more than a figurehead, for more than six decades and his influence on the shape of the country today is immeasurable. First and foremost, he provided stability, through the years of British administration, up to and beyond independence, and beyond his death - by ensuring that the principle of a ruling hereditary monarchy remained an acceptable one in a world in which it was not simply fast becoming a rarity but had actually already become one. Secondly, the King was a great traditionalist, and not only ensured - by revoking the independence Constitution - that the Swazi concept of government remained highly traditional, but also, in a more subtle way, guaranteed a continuing feeling of comfortableness with traditional custom that is also becoming rarity. In present-day Swaziland, modern or Western is not necessarily better, it is merely different. This maintenance of stability and of traditional values was made vastly easier by one vital characteristic: the almost total absence in Swaziland of ethnic, religious or linguistic divisions.
It is truism, and every article or tourist guide on Swaziland will remark upon it, but this juxtaposition of modern and traditional is what distinguishes the country from much of the rest of sub-Saharan Africa. Indeed, to some extent the Swazi position is the reverse of the norm: much of the continent has espoused modern forms of government, while economies have remained strongly traditional; Swazilands government, on the other hand, is only partially modern in concept, but its economy is becoming increasingly oriented towards the modern sector, with some of its manufacturing or processing industries attaining a remarkable level of sophistication.
But first, a little background.
Swaziland is the smallest of the countries of Southern Africa, and is almost entirely surrounded by the Transvaal and Natal provinces of the Republic of South Africa. It also has a 100-kilometre border with Mozambique. Maputo, the Mozambican capital, lies some 80 kilometres to the north-east of the Swazi border, with Johannesburg 350 kilometres to the west. The country divides into four distinct natural regions, three horizontal strips of roughly equivalent size and a fourth, much smaller strip, the Lubombo plateau. To the west is the Highveld, mountainous and near temperate, with an average altitude of 1300 metres. It is known in Siswati, the national language, as Nkhangala (the treeless region) but it in fact now contains one of the largest man-made forests in the world. The west-central strip, the rolling Middleveld, is lower-lying and sub-tropical, and it is here that most of the countrys foodcrops and some cash crops are grown. The Lowveld, to the east, is hotter, flatter and drier and, because it is subject to periodical drought, has become a region for the cultivation of irrigated crops, sugar cane in particular. Finally, there is the Lubombo plateau, similar in climate to the Middleveld, with good grazing and some good arable land.
The word Swazi means the people of Mswati, the mid-19th century king whose name has been adopted by the present King. Mswati ls ascendants came from the clan of the Nkosi Dlamini, and if a considerable number of people in positions of authority today are called Dlamini, including the present Prime Minister and five former Prime Ministers, then it is at least partly because the population is small and the royal family large. Swazi kings are traditionally polygamous, and their wives are never Dlaminis, and the absence of intermarriage, together with the fact that the successor to the throne must himself be unmarried (and therefore, preferably, young), combine to ensure healthy numbers of royal descendants.
The total population of Swaziland is put at around 720 000, some 30 000 of whom are temporary absentees working in the farms and mines over the border , as the Republic of South Africa is invariably referred to. This number is balanced by the refugees from Mozambique and, latterly, following recent disturbances, from the South African homelands, and though the numbers are relatively small in comparison with, say, Malawi, they add pressure on a country which, as it is, has one of the highest population growth rates in the world.
Population growth: worrying implications
Swazilands economy has been growing at an average of 5 % per annum for the past four years, but growth has only just kept ahead of the increase in the population. In 1986, at the time of the last census, it was estimated that 47.3 % of the population was under 15, a statistic which means that the need to create employment, as well as the demands on the countrys health and education systems, will be enormous challenges in the not-so-distant future. In spite of the fact that the Ministry of Education is allotted 28% of the Governments recurrent budget, its resources are still too limited to allow for the building of new primary schools. Efforts are concentrated on the construction of secondary schools, with the building of primary schools left to parents, often with outside help. Funding for teachers houses is also seriously lacking, but government is able only to pay for teachers salaries, and recognisedly modest salaries at that. Parents contribute towards the cost of schooling, including the payment of building fees, but, though education is certainly prized, the financial burden can be very onerous indeed. For rural families, it would almost certainly represent the largest single item of expenditure and might absorb as much as 80% of a households cash income. Some parents, particularly those who do not rely on the land for a living, consciously limit the size of their families so as to be able to continue educating their children. More often, however, particularly in rural areas where children help with cultivation or herding (and this represents nearly 80 % of the country), parents have to withdraw children from school because the total costs of fees, books, uniforms, bus fares and so on simply become too high.
Losses to greener pastures
The Minister of Education, Chief Sipho Shongwe, sees this lack of funds as the overwhelming problem facing Swazilands education sector today. He would like, he says, to see universal primary education, but the money is not there. The inability to retain teachers is a further problem: turnover is high, because the salaries are low, and housing often inadequate and particularly because of the proximity of greener pastures where teachers can get double or more the levels government can afford.
This drain on Swazi brainpower affects all levels of the teaching profession, including university education. Professor Makhubu, Vice-Chancellor of the University of Swaziland, lost professors to Transkei and Bophuthatswana last year. The solution, she says, its of course to pay competitive salaries, but it is a solution which is unworkable at present.
Another characteristic of the Swazi education system which Minister Shongwe sees as a disadvantage has been its emphasis in the past on academic achievement as opposed to practical, vocational achievement, geared to the countrys manpower requirements. We have not only to, educate , he stressed, but also to meet specific targets, and we have not, in the past, met the expectations of the private sector. It is not that vocational training establishments do not exist indeed there are some excellent ones but that the numbers of graduates produced are insufficient to meet the needs of a growing and modernising economy. Electricians, carpenters, welders and mechanics are all in great demand, as are accountants, statisticians, specialised lawyers, bookkeepers and the like. Professor Makhubu recognises that she has to be ...a developmentalist, clued up on how the country is going, in order to shape the University according to the needs of the country, and to this end she plans to create a Business Studies faculty at UNISWA, within the next two years, to respond to the undoubted demand of the private sector. Fortunately Swazi/South African wage differentials are far less pronounced in the private sector than in the public sector, so that the danger of loss of these kinds of skills to other countries in the region is less great.
Approaching the mini-boo m with caution
The Swazi economy is, for a number of reasons, enjoying what the Minister of Finance describes as a mini-boom. Export revenue levels are high, due largely to steady production and healthy prices for the traditional exports, sugar and woodpulp, and soft-drink concentrates (coca cola) have entered the market as a major export earner. A new development is the emergence of manufacturing as the dominant sector of the economy, now accounting for 26% of GDP. Despite the substantial increase in foreign exchange reserves the boom is being approached with characteristic prudence, born perhaps of long experience of influential factors beyond the countrys control.
One such factor is the lilangeni, the national currency unit which though officially de-linked from the South African rand, in fact remains at parity with it. The effects of this are various, amongst which that Swaziland imports South Africas inflation (now running at between 12-14% per annum) and that the countrys debt service payments have increased. Elliot Bhembe, Acting Principal Secretary at the Department of Economic Planning, admits that its difficult to plan a nations economy when its currency is linked to that of a neighbour. But there is general acceptance, even so, that the system has worked well for Swaziland. For one thing, it has avoided considerable complications for trade. More than 80 % of Swazilands imports come from fellow Southern African Customs Union (SACU) countries - RSA, Botswana and Lesotho - and a large percentage of the countrys exports (35-40%) go to South Africa. It is also attractive to tourists, particularly South African tourists, who still constitute the largest group, and, most importantly, it has meant that the lilangeni is, to all intents and purposes, a convertible currency. Actual de-linking could become desirable, nevertheless, if the investment climate in South Africa was to substantially improve.
The backbone of Swazilands economy is, and always has been, agriculture. It accounts for some 40% of exports, 23% of GDP and is by far the largest employer. The countrys agricultural activities take two distinct forms. Firstly, there is traditional, subsistence farming, whereby over 40 000 farmers are supported on smallholdings of less than three hectares on Swazi Nation Land. Here, rainfed food crops are grown for family consumption, with perhaps a little maize or cotton grown for sale. (Swazi Nation Land, which makes up over half the countrys total land surface, is owned by the monarch and held in trust for the nation). Secondly, on the remainder of the rural land, are farms owned by individuals or companies and growing sugar cane, pineapples, citrus fruits, cotton or tobacco. Here, the average holding is 800 hectares (though the largest sugar estate is more than 10 times this) and, while land use is varied, the farms tend to be market-oriented and highly mechanised.
Cattle-breeding and herding is another major agricultural activity: the country has a near 1:1 ratio of cattle to inhabitants - one of the highest ratios in Africa. Only a small percentage of the sector is run along commercial lines, however. As in much of Africa, cattle constitute capital; quantity tends to take precedence over quality, and slaughter only to take place on ceremonial occasions, or for ritual purposes or for family consumption. The pattern is changing only slowly. At the 600 or so diptanks around the country, through which herds have to pass weekly, the word is spread that there is money to be made out of cattle farming... but that herds have to be younger and heavier. The countrys abattoir, now upgraded and under new management, could slaughter many more than the present 80 cattle a day, and there is, after all, a market for the countrys beef in the form of the EECs 3 360 tons per annum - a target not yet being reached.
Sugar: major returns for government
The sugar industry is the countrys largest single employer and although Swazilands three estates and mills, Mhlume, Simunye and Ubombo, are all situated in the Lowveld, cutters are signed on for work from throughout the country and brought to the estates for the duration of the harvesting season. Labour is so plentiful and so relatively inexpensive that Simunye, the newest of the estates, having been 60 % mechanised in its first production year, has in fact now phased out mechanical harvesting altogether. Production topped 500 000 tonnes in 1986, but has averaged 450 000 tonnes or so for the past three years, and though further expansion of the estates would be perfectly feasible, the quota marketing system rules it out. The lions share of Swazilands production goes to the EEC, part of which - 117 845 tonnes of which, to be precise - at a guaranteed price under the terms of the Sugar Protocol. Canada is also a major buyer. The estates, like many of Swazilands large-scale agricultural and manufacturing enterprises, particularly the highly sophisticated ones, tend to be managed and part-owned by expatriate individuals or companies, but with the Swazi development corporation, Tibiyo Taka Ngwane, as a major shareholder. Ubombo Ranches, for example, is 60 % owned by Lonrho Corporation and 40 % by Tibiyo, meaning that the nation benefits far more by the industry than by employment opportunities alone. Earnings could be improved slightly, nevertheless, if the rail link to Maputo harbour could again be normalised. Last year, because of poor security and unsatisfactory rolling stock, the industry as a whole lost 10 000 tonnes of sugar between Swaziland and the Mozambican terminal, and 50 % of production now takes the much longer route to Durban, involving substantially higher transportation costs.
The same is true for what is now Swazilands second largest industry and third biggest export earner, the timber and woodpulp industry, whose transport costs rose by 18 % in 1989.
Forestry: a development success
Forests cover about 7 % of the countrys total land area, and are an unusual feature in Southern Africa. The reason is that they are largely man-made and are, in fact, amongst the largest man-made forests in the world.
Swazilands forestry industry is the stuff of which development dreams are made. Less than 50 years ago the hills of the Highveld and parts of the Middleveld offered little but poor grazing to the Nguni cattle and goats of the local inhabitants. In 1947, Peak Timbers, one of Swazilands oldest commercial companies, began producing sawn timber and in 1949 the Commonwealth Development Corporation, seeing the potential for forestry, embarked on a 50-million tree-planting programme. Peak Timbers is now a major producer of logs and sawn timber and The Usutu Pulp Company, established in 1961, aims to produce 180000 tonnes of pulp a year - nearly 20 % of total world requirements at its mill on the Usutu River.
Local resources as basis for manufacture
There are spin-offs in the form of manufacturing, too. Pine shelves are being produced for export by Swazi Timber Products, for example, a fast-expanding company on the main industrial estate outside Manzini. In three years, annual turnover has risen from E. 240 000 to E. 1 200 000, and the workforce has increased from 80 to 250, with more to be taken on this year. The company is of just the kind that the Minister for Commerce Industry and Tourism, Senator Douglas Ntiwane, loves most . It is export-oriented, heavily labour intensive and local resource-based, with no less than 98 % of its raw materials of Swazi origin.
S.I.D.C., the national industrial development company, has had considerable success in establishing such enterprises in the past four to five years. After a slowish start, some 200 firms are now operating on the Matsapha estate, ranging from small workshops to huge factories employing up to a thousand workers. Growth has been so rapid in the late 1980s that existing infrastructure on the estate needs not only repair but also considerable expansion. South African-owned firms predominate, but there are also a number of major Swazi-owned enterprises.
A healthy investment climate and genuine market advantages
Like its competitors in the region, Swaziland offers the usual package of favourable leasing terms, tax holidays and other advantages to investors, but, in the Ministers words, it also offers the true face of a genuinely independent country, and one known for its political stability. It has good communications, good labour relations and good market access, including access to the European Community. The country is landlocked, it is true, but Maputo (though admittedly a difficult route at present) is only 160 kilometres away, and road and rail links exist to the ports of Richards Bay and Durban in South Africa. Such port access is vital, because most of the industries at Matsapha are export-oriented. Indeed, with so small a domestic market, they need to be. NATEX, the ultra-modern textile corporation, which uses Swazi cotton, would take only four days production to clothe the entire nation! Its Managing Director, Peter Jones, is certain that investing in Swaziland makes good sense, particularly as opposed to investing in South Africa, and this from a number of points of view. In the first place, while there is great resistance to goods from South Africa in, for example, Scandinavia, West Germany and the United States, Swaziland is very much an acceptable source. (It has indeed benefited a certain amount from recent U.S. disinvestment in South Africa). In the second place, labour costs are not only very much lower, but labour relations are also very much smoother. Swaziland is entirely free of the tribally-based industrial disputes that affect parts of South Africa, and a firm like his, which operates 24 hours a day, 351 days a year, would not expect to lose any production at all through industrial action, he says, which in South Africa would be almost unthinkable. Moreover, he adds, the government is very supportive. You are made to feel that they want you and that they need you .
Lack of credit hampers expansion
Not all Swazilands manufacturing is as large or technologically advanced as the big boys at Matsapha. On the outskirts of the capital, Mbabane, is the SEDCO (Swaziland Enterprise Development Company) estate, which houses a number of small and medium-sized enterprises. Some of the businessmen or women who are established here, such as Mike and Thoko Mmema, who now have 23 women working for them, making school uniforms, have found good market niches, but find the estate too out-of-the-way. Others find the rent high, and a common problem - which causes many of the smaller businesses to stagnate unnecessarily - is the lack of credit. With out collateral, they are unable to obtain bank loans, and government credit schemes on soft terms are not yet available.
Infrastructure suffering from success
If the economy is working well, it is partly due to Swazilands relatively well-functioning transport and communications system, and if that system is now coming under increasing strain, it is because... the economy is working well. Traffic volumes, especially on the road between the two main towns, Mbabane and Manzini, which passes through Matsapha, have built up considerably in the past two or three years. Some stretches are carrying up to 14000 vehicles a day, and the congestion is such that the road now badly needs upgrading, probably in the form of widening.
Swaziland has more vehicles per inhabitant by far than any other SADCC country, but, in addition to its domestic traffic, it is a transit state for goods travelling in both north-south and east-west directions. Rehabilitation of the Matsapha-Goba railway line, to and from the Mozambique border, is under study and would link up with a similar project on the Mozambican side of the line. Infrastructure and communications, because of their role in attracting investment and in keeping the economy growing, are given high priority by government and get a handsome share of the budget. But major capital expenditure almost always requires some outside finance. The African Development Bank is a major funder of road projects, and the World Bank has been substantially involved in the past, though is less so now. The Works and Communications Ministry is hoping that the EEC will provide funds for the rehabilitation of the Matsapha-Mozambique line, as well as for the Mbabane-Manzini road upgrading, and that it will extend its assistance to the development of the airport.
Passenger traffic in Matsapha, the main airport, now stands at 80 000 or so annually, and has increased fourfold in the past 20 years. Long gone are the days when, if the air traffic controller was momentarily absent, a total ing - perhaps a cleaner - would answer overflying aircraft with a few set phrases, learnt parrot fashion. Nowadays there is a modern control tower, with sophisticated radio and navigational equipment, and expert controllers. The runway, 2600 metres long, is designed for the 737s typically used in regional traffic, but it can take larger cargo carriers. Freight volumes are low, however, because handling facilities are inadequate and apron space limited. Preliminary discussions are under way regarding the financing of further work on the airport (enlarging the apron and the terminal buildings) from LomV national and regional funds. If all goes according to plan, the improved facilities should be in place by 1994.
Tourism: steady growth
One sector that will benefit from the improvements will be tourism, because more apron space will mean more flights being able to be scheduled. Not that Swaziland is ever likely to become a one-stop destination for European or other long-distance tourists, but its attraction as part of a Southern African tour (combined with the nearby Kruger Park) is already well established. It holds attractions for the up-market traveller, including comfort, peacefulness and golf, and for the adventure-holidayer, and offers ample accommodation for both categories, and for many categories in between. Casinos exist, but the image of Swaziland as a refuge for afficinados of all that was outlawed in South Africa is a thing of the past. As would be expected, most of its visitors are from South Africa. The Sun Group, South African-owned, but in which Tibiyo has a major shareholding, runs three large hotels in the Ezulwini Valley, making up three-quarters of the countrys total hotel accommodation. Over 1200 people are employed in the Suns? and probably 2000 or so work in hotels and guest houses throughout the country. Many more are partly or indirectly supported in ancilliary services or in the handicrafts industry, for example, which produces attractive and good qualitity baskets, candles, pottery, glassware and much else for tourists, as well as for export. Government supports the development of the industry, even if it has not always been as dynamic as the private sector would have liked. It has just agreed, for example, to issue visas to visitors from EEC countries not enjoying visa exemption at border posts, free of charge, which will reduce delays and encourage greater numbers of arrivals. Another initiative which Minister Ntiwane hopes to bring into being, is a tourist village, a representation of a traditional Swazi homestead at which visitors could not only see and understand the daily pattern of rural life, but could also witness, year round, the highly spectacular traditional dances such as sibhaca, umbholoho and the umhlanga (Reed Dance) that are now to be seen, in their traditional context, perhaps only once a year.
There is a paragraph in this magazines last country report on Swaziland, written in 1985, which now makes rather interesting reading. It concerns the countrys (then) future economic outlook, and reads as follows: The Department of Economic Planning and Statistics... forecasts real growth to rise by only 0.8% in the period 1984-90, because the factors that enabled earlier growth are unlikely to come into play. Happily, this forecast (based largely on projected developments in the sugar, woodpulp and fertiliser industries) has turned out to be quite inaccurate, and proves what the Department nowadays readily admits: that there is high risk in even medium-term economic forecasting at a time, and in a place, where coefficients can change so radically, so swiftly.
Possibly this has never been so true for Swaziland as now. Political, economic and social change in South Africa, such as that now gathering momentum, is bound to have major repercussions on Swazilands economy. So, too, could change for the better in Mozambiques economy, which was once a powerful force in the region, since greater regional security would ease the refugee problem and would bring obvious benefits to trade through improved transport links. But on whether the changes would benefit Swaziland in both the short and the long term, opinion is divided. Investment opportunities might well be lost to South Africa, and Swazilands customs revenues would decrease, but it might also be the case that the country would be carried along in the general upturn that the regions economy would be likely to experience. Whatever the outcome, these changes are still a few years off, and the Swaziland government has time to refine and bring into sharper focus its overall development strategy. To continue improving the investment climate will surely be a pillar of that strategy, and one which carries few risks: it will pay dividends in both the worst case and the best case scenarios.
Swazis tend to refer to South Africa as greener pastures , particularly in the context of higher wages for certain trades and professions. But the term, in any other context, is surely debatable. Swaziland after all, has a stable and widely supported form of government, a people undivided by language or ethnic origin, a fertile soil or, at least, a not infertile one-and, of late, a prospering economy too. Its pastures, both literally and figuratively, are at present pretty green themselves.
Myfanwy VAN DE VELDE
Obed Mfanyana Dlamini was appointed by King Mswati III to be Swazilands sixth Prime Minister in July 1989. Born in 1937 in the Shiselweni district, he held posts in teaching and banking before his appointment, as well as various positions of leadership in the countrys trade union movement, culminating in his election as General Secretary of the Swaziland Federation of Trades Unions.
As Prime Minister, Mr Dlamini heads the modern, as opposed to traditional, arm of Swazilands dualistic governmental system, that comprising a cabinet and a bicameral parliament, very much along the lines of the Westminster model, though with important distinctions. One of these distinctions resides in the prerogative of the Head of State, the King, to appoint the Prime Minister (as indeed all other ministers, and a proportion of both Houses of Parliament). Another consists of the tinkhundla election process, to which Prime Minister Dlamini refers below, by which individuals are chosen at tinkhundla (traditional meeting places of the people) to form an Electoral College which votes in members of the House of Assembly. At the same time, the monarchy is advised by a council of elders, the Council of State or liqoqo.
It was on the question of Swazilands concept of government, which is unusual in Africa, that The Courier first addressed Mr Dlamini.
· Swazilands system of government is authentically African and has certainly provided for political stability. Has a different system ever been considered?
- Our present system of government, which we call the tinkhundla system, is relatively new. It was introduced in October 1978, just over 11 years ago, following the repeal in 1973 of the Independence Constitution which was tailored on the Westminster model.
So far, no major changes have been made to the tinkhundla system of government. However, there is already a growing public feeling that this system is now in need of some modifications here and there so as to make it more responsive to the political aspirations of the people of Swaziland.
We are currently looking into all the possibilities and we sincerely hope that it will soon be possible to effect the suggested modifications.
· As a small nation, the fortunes of your much larger neighbours are obviously of great significance. What have been the effects on Swaziland of South Africas recent degree of glasnost and what, in your view, would be the effects on Swaziland of peace in Mozambique?
The recent political events in South Africa are extremely encouraging. It would seem that a new era of peace is dawning on the entire Southern African region.
As you are no doubt aware, political violence in South Africa in the past used to spill over onto Swaziland and many Swazi nationals were killed or injured in the process.
Naturally, Swaziland is very pleased to see peace initiatives in South Africa replacing violence. We pray and hope that the current peace initiatives will succeed.
We are also hopeful that the end of apartheid in South Africa will bring about the lifting of sanctions against that country, the return of investments to South Africa and the end of South Africas isolation by the international community.
This, I hope, will bring about an appreciation in the value of the South African rend to which our own currency, the lilageni, is linked.
This would, in turn, ease the current burden of expensive imports on Swaziland resulting from the present unfavourable exchange rate for hard currency.
Equally, Swaziland would happily welcome the advent of peace in Mozambique. As you are no doubt aware, Swaziland uses the Maputo port facilities for its major exports, e.g. sugar. The fighting in Mozambique has been very disruptive to Swazilands rail links with Maputo.
· The refugee situation, described three or four years ago as having reached crisis proportions is now very much worse. How are you coping?
- So far, Swaziland has been fortunate in receiving substantial amounts of financial assistance from the international community. For instance, the EEC has just given us an amount of ECU 747665 to finance the expansion of facilities at one of the refugee settlements in Swaziland in order to cater for the accommodation and schooling needs of the growing refugee population.
However, unless the present rate of new arrivals is considerably reduced, the crisis will certainly get out of control. Hence the urgency for finding an early peaceful solution to the war in Mozambique so that the refugees from that country could return home.
· Swazilands own population is also expanding rapidly, such that the present high unemployment levels will rise unless steps are taken. Are attempts being made to reduce population growth as well as to create jobs?
- The rapidly increasing population and the growing problem of unemployment are, at present, the two major difficulties facing the country
In an attempt to address these problems, government has launched an extensive family planning compaign aimed at encouraging Swazi nationals to both space and limit the number of births per family.
We have also continued to create an investment climate in order to encourage investors to come to invest in our country, and are trying to diversify our economy in order to encourage a greater degree of participation by Swazis in the development process of their country.
· What is Swazilands economic strategy for the 1990s?
- The main objective of our economic policy is to improve the welfare of our citizens through the creation of productive job opportunities.
Our record on this during the 1980s was very mixed. The early part of the decade was characterised by slow growth rates. The middle years required a major programme of rehabilitiation from the serious effects of cyclone Domoina which struck Swaziland in 1984. The past two years, however, have seen significant growth, with increases in real GDP per capita. In each year from 1986 we have had an increase in foreign exchange reserves, fuelled by rapid increases in exports, notably sugar, wood products and manufacturing. Manufacturing is particularly encouraging as it indicates that the economy is diversifying. Indeed, manufacturing now contributes as much as agriculture to GDP, although it should be remembered that much of our industrial activity is based on the processing of our agricultural produce.
However, we are aware that the increase in investment that enabled this growth is partly fortuitous. Many investors have tried to distance themselves from the Republic of South Africa while gaining access to the EEC market and the Preferential Trade Area for Eastern and Southern Africa.
These circumstances could change quite rapidly, especially if there is a peaceful transition to a non-racial democracy in South Africa. This is something we all hope for but it is outside our control and it must be recognised that such an event could place great strains on our economy.
Thus, the largest single impact on our economic future is something that we are unable to plan for and incorporate in our economic strategies for the 1990s. What we can do, however, is to ensure that Swaziland remains as attractive an investment area as possible. This involves, of course, offering some incentives, such as tax holidays and soon.
· Despite the considerable advantages it offers to investors, the manufacturing sector seems not to have expanded greatly. Is this in fact the case, and if so why? Has Swaziland been sufficiently actively sold as a prime location?
Firstly, the statement that the manufacturing sector seems not to have expanded greatly, is not quite correct. In Swaziland, the manufacturing sector presently accounts for 25 % of GDP. This proves that it has experienced a substantial growth over the past few years. Indeed, in his 1990 budget speech, the Minister for Finance stated that, since the 1985 fiscal year, there has been an upswing in investment in manufacturing enterprises and growth of this sector is estimated to be about 10 % per annum over the last five years.
Agro-industries, including wood-processing, account for about 75 % of our industrial production. Commercial agro-processing involves sugar, wood-pulp, citrus, pineapples, cotton, maize and meat. And in addition to food processing, the manufacturing sector includes bricks, textiles and beverages, and much else.
As far as selling Swaziland is concerned, substantial efforts have been made to promote the country regionally and internationally. Indeed, a number of investment promotion seminar and/or conferences have been conducted in South Africa, Botswana, Canada and the U.S.A. The last seminar conducted has been recently held in Washington D.C. and was sponsored by USAID. It was directed by a highly-powered delegation which included the Ministers of Finance and Commerce and Industry as well as the Governor of the Central Bank and a number of prominent businessmen from Swaziland. The Head of State, His Majesty King Mswati III, has graciously accepted to become the countrys ambassador at the highest level for promoting Swaziland to investors worldwide.
Government has also established the Swaziland Industrial Development Company as the major vehicle for promoting new investment. Specifically, SIDC acts as the countrys first point of contact for prospective investors by offering them both financial and advisory services.
In order to encourage potential investors to come here, SIDC has decided in principle to establish investment bureaus in the European Economic Community and North America. Furthermore, I would add that on the occasion of an EEC-funded seminar in Lisbon in May 1990, Swaziland representatives made special promotion efforts to attract Portuguese investors to the country.
· Tourism has suffered in the past from competition from South Africas homelands. What can Swaziland offer the tourist that the homelands cant?
- There was indeed a small decline in the volume of tourist flows from South Africa between 1975 and 1980 following the establishment of the Sun City resort in Bophuthatswana. However, as Swaziland is not wholly dependent upon South African tourists, the decline was small and was made up mainly of gamblers who were attracted to the new gambling facilities nearby in Bophuthatswana.
Following this decline, we stepped up our marketing campaigns in Western Europe and the decline was soon reversed.
Swaziland has a unique tourism package to offer. It has a monarchical institution which has long disappeared in most countries in Africa, and the rich and colourful cultural heritage of the Swazi people, their friendliness and hospitality are unrivalled tourist attractions.
The incwala and the reed dance, for example, which are held annually, are some of the old traditional values of this nation which are very popular with tourists. The incwala is a festive occasion for tasting crops of the new season and is essentially a kingship ceremony which is held in either December or January each year. The umhlanga ( reed dance ) is usually held at the end of August or early September of each year. This is a special ceremony for Swazi maidens who have attained marriageable age. The maidens gather at the Queen Mothers residence, then set out to cut the reeds which end up being used as windbreaks for the Queen Mothers residences. The process may take up to a week, culminating in two main days of singing and dancing for the public.
There are other minor traditional dances which also form an integral part of Swazi life. These include the sibhaca dance, with its stirring rhythms, dramatic movements and exciting colour which has gained it much popularity among our visitors and the traditional wedding which is almost as colourful as the incwala ceremony. These ceremonies have no fixed period.
Apart from being rich in traditions, the country has a super tourism structure that can suit any tourist from any part of the globe - reasonable hotel accommodation, adequate roads, sports facilities including the popular golf and the car rallies, wildlife, handicrafts and casinos - all within easy reach in this tiny kingdom.
And, above all, the stability of our political system, the favourable climate and the scenic landscape all combine to offer the visitor a glimpse of the imagined Garden of Eden.
So as to facilitate the flow of tourists into the country, government now grants free entry visas to all European Community nationals. Other nationals who require visas to enter the kingdom can obtain them at all ports of entry to Swaziland.
· SADCC is celebrating 10 years of existence this year. How do you rate its achievements?
- I rate SADCCS achievements in the past ten years very highly. We have, in the past decade, achieved a great deal in the area of transport, for example.
The successful rehabilitation of the Beira railway line and the port facilities at Beira are some of the most important achievements of our organisation.
Another important achievement has been made in food security. We now have well documented food requiremeets, consumption patterns and well researched food production strategies.
· What do you see, finally, as the principal benefit to Swaziland of being a signatory to the Lomonvention?
- Swaziland derives considerable benefits from the Lomonvention. I can mention for instance, the benefit of selling a predetermined quantity of its sugar at favourable and prearranged prices to EEC countries.
Interview by M.v.d.V.
Head of State:
His Majesty King Mswati III.
Head of Government:
The Rt. Hon. Obed Mfanyana Dlamini, M.P.
Form of government:
Monarchy, with democratic features designed to accord with Swazi tradition and custom
6 September 1968.
17 364 km².
Mbabane (pop. 38000).
Siswati and English.
681 059 (1986) growth rate: 3.4% urbanised: 29.7%
Lilangeni (plural Emalangeni).
118 per 1 000.
sugar, cotton, citrus, pineapples, maize, tobacco.
coal, diamonds, asbestos, gold.
GDP by sector
manufacturing (23.8 %); agriculture (23.3 %); government services(17.8%); wholesale, retail, hotels and restaurants (10.3%); transport and communications (6%).
sugar (35 %); woodpulp (18%); soft drink concentrates, canned fruit, citrus, meat, coal, asbestos, textile yarn
machinery and transport equipment (24%); minerals, fuels and lubricants (15%); food and live animals (10%); manufactures (13 %); chemicals and chemical products (7%)
Visible trade balance:
(E. 000) 202801 (1988).
Rate of inflation:
Main trading partners:
Common Customs Area (i.e. Botswana, Lesotho and South Africa) 80%
Common Customs Area, United Kingdom
Swazilands coat-of-arms, depicting the Ngwenyama (Lion), representing the King, and the Indlovukati (She-Elephant) representing the Queen Mother. The motto Siyinqaba means We are a fortress
by Kieran OCUNEEN
Like many of the former British colonies in Africa, cooperation between Swaziland and the Community began in 1975, when an international cooperation agreement - the Lomonvention - was signed in the Togolese capital, LomThis, first, Lomonvention linked 46 countries in Africa, the Caribbean and the Pacific with the then nine EEC Member States and was designed to last five years, until February 1980. At the time, the EEC Delegation dealing with projects and programmes in Swaziland was located in Maseru, the capital of Lesotho, with a suboffice in the Swazi capital, Mbabane. A fully-fledged Delegation was opened in Mbabane in 1982.
Trade and aid were at the heart of the first Lomonvention, and of the three subsequent Conventions (Lom V was signed in December 1989) and considerable assistance to the social and economic development of the Kingdom of Swaziland has beer given in the years since 1975. To date, the total value of that assistance amounts to over 640 million Emalangeni at current exchange rates.
The Convention provides that the ACP countries, including Swaziland, have duty-free access to the 325-million EEC consumer market for virtually all their exports. This means, for example, that Swaziland pays no duty at all on its exports of tinned pineapples or pinewood furniture to the EEC, whereas neighbouring South Africa would have to pay a 20 % duty on the same products.
Sugar and beef
Levies are still payable, however, on a limited number of agricultural products exported by ACP countries to the EEC, particularly, of course, those which compete with Europes own produce. However, under the terms of protocols to the Convention, agreed quotas of sugar and beef, for example, can enter the Community duty-free (or near duty-free) and at guaranteed prices. Thus 116 000 tonnes of Swazi sugar enters the Community each year free of duty and at a price which for many years has been well above the world market price. Similarly, a quota of 3 363 tonnes of Swazi beef may enter the Community market almost levy-free (with a 90% rebate) at prices which, again, are generally well above those obtainable elsewhere. However, whereas the sugar quota is met, Swazilands beef quota (which calls for stringent slaughter, chilling and deboning regulations to be observed) is not yet filled, though the recent rehabilitation of the Swazi Meat Industries abattoir should make this possible in future. As a rough indication, the special arrangements for Swazi sugar and beef could yield up to E 50m each year more than the Kingdom would get by selling the same products at other markets.
Incorporated in the Convention is the Stabilisation of Export Earnings (Stabex) scheme, designed to assist countries when export revenues fall due to a drop in price, or production, or both.
Swaziland has benefited considerably from the Stabex system: under Lom, the country received three grants amounting to ECU 13 m (E 40 m) to help offset the effects of diminishing export revenues from iron ore mining. During the course of LomI (1980-85) the system operated again in Swazilands favour, this time for cotton production, badly hit by drought. Two grants, totalling ECU 8 m (E 24 m), were given to compensate for loss of earnings. Swazilands timber exports are also covered by the scheme.
Rise in exports
More generally, Swazi exports to the Community have grown remarkably in recent years: in 1981, for example, they stood at ECU 64.8 m; by 1985 they had reached a value of ECU 105 m and, in 1986, rose to ECU 123.8 m. The Community now accounts for almost half of Swazilands exports, compared with only 20% at the beginning of the 1980s. The countrys overall trade surplus with the Community rose from ECU 50.3 m in 1981 to ECU 112 m in 1986, representing an increase of 122 % over a period of five years.
Swazilands indicative programmes under Lom, II and III
On the aid side, Swaziland has received, from national and regional programmes, a total of ECU 73.5 m, or the equivalent at current exchange rates of E220m. Half this amount went to human resource development and training, which has a vital role to play in Swazilands progress towards self-reliance. The biggest beneficiary of aid in this field has been the University of Swaziland, with E 37 m provided in grants for the building of hostels, an assembly hall, the building and equipping of science laboratories, agricultural education units and for technical assistance, and it is expected that the University will benefit further under the programme for LomV which is shortly to be agreed with Government.
Other major training projects include the Ngwane Teachers Training College and the Vocational and Commercial Training College (VOCTIM) at Matsapha. The Teachers Training College has so far received assistance to the tune of some E 15 m, both in the form of buildings (classrooms and student and teacher accommodation) and in the form of scholarships for staff to upgrade their qualifications. The College, which has been in existence since 1982, has received funding under all three Conventions, and Government has expressed interest in further assistance from the EEC for, inter alia, the stocking and extension of the library. Some 120 students qualify each year from Ngwane, and, given the Colleges high reputation, and the current shortage of primary teachers, all who graduate are sure to find jobs.
VOCTIM, located near the countrys manufacturing heartland at Matsapha, at present trains some 140 students in a variety of vocational skills, including building and construction, business administration, automotive and electrical engineering and woodwork. The Institute, which has just emerged from an independent assessment with flying colours, has an excellent reputation and, here again, graduates are in heavy demand in Swazilands expanding and modernising economy. To date, the Community has contributed some E 13 m to establishing and running the Institute.
Further contributions in the field of human resource development and training, at regional level, have been in the form of specialised training for Swaziland Railways, Customs, Posts and Telecommunications and the Institute for Development Management.
The second priority area for EEC assistance in Swaziland has been rural development, for which a total of E 60m has been allocated over the years. Projects have included a Smallholder Support Programme (E 18 m), the Simunye Irrigation Project (E 10m). Rural Water Supply and Rural Dams projects (E 12 m each), and a foot-and-mouth disease barrier fence (E 3 m).
In addition, help has been given to stimulate trade and manufacture in the form of training and technical assistance to S.I.D.C. (the Swaziland Industrial Development Company), to an integrated Trade, Tourism and Handicrafts project, and funding for participation in international trade fairs.
One important aspect of Swazilands human resource constraints is the shortage of skilled professional manpower in the public service. To address this problem, the Community has provided substantial amounts of Technical Assistance to the Swaziland Government. Thus, experts have been provided for the Ministries of Agriculture, Commerce and Industry, Economic Planning, Education, and Finance as well as to support the Swaziland Governments SADCC operations.
A major engineering project, and one which is likely to continue to receive funding under LomV, is the national airport at Matsapha. To date some E 6 m has gone to building and equipping a new control tower and for the additional training of air traffic controllers. Continued funding would contribute to enlarging the apron and upgrading the terminal building, so as to relieve present congestion.
Microprojects: low cost, high benefit
An important characteristic of Swazilands cooperation with the EEC lies in the high proportion - over 15% - of the total allocation spent on microprojects, a percentage shared by only three other ACP States. An E 14 m Microprojects Programme, run by an EEC-funded Technical Assistant and his staff, helps local communities to develop piggeries, dairies, markets, vegetable gardens and poultry farms, as well as build schools, clinics, Bailey bridges, rural dams and footbridges.
Community development, such as organising womens knitting or sewing workshops or youth groups is another activity. In the early phase of the programme the vast majority of the projects were educational: 39 schools were built, and only 10 of the projects related to agricultural development. Today, this ratio has been reversed. Communities contribute a minimum of 25% of the cost of the project (which should not exceed ECU 300 000 in value), and, though some cash might be provided, this contribution is often in the form of materials or labour. The greater flexibility in the implementation of the microproject programme is a welcome aspect of this form of assistance, and the benefits to the people of Swaziland, particularly rural populations, is of course very direct. At present the Microprojects Unit is implementing 75 projects, throughout the country.
Swaziland is, of course, a member of the Southern African Development Co-ordination Conference (SADCC) and is responsible for the regions Programme of Action in the area of Manpower Development. The Swaziland Government thus hosts the Regional Training Council, which is the coordinating body, and provides the RTC with a secretariat.
Under LomI and LomII the Community has supported the work of the RTC secretariat by means of technical assistance and has sponsored the development of a wide range of regional manpower and training projects. Under LomII, 17 projects have been approved with a total budget of ECU 10.3 million. These include projects such as the training of SADCC agricultural managers at the Mananga Agricultural Management Centre in Swaziland as well as major projects throughout the nine SADCC countries. At present a further 14 projects are under development with earmarked funding of approximately ECU 12 m.
Finally, Swaziland has benefited from a number of minimal interest rate loans from the European Investment Bank and from aid for refugees, partly in the form of food aid. The loans (totalling ECU 23 m) went to the National Industrial Development Corporation, Simunye Royal Swazi Sugar Corporation, the Luphohlo Hydroelectric Scheme, S.I.D.C. industrial building and to the Swazi Meat Industries slaughterhouse at Matsapha. Aid to refugees included E 23 m, spent partly on the building of the secondary school at Ndzevane, and the equivalent of E 4.5 m in food aid.
The projects and programmes to be supported from Swazilands national indicative programme for the fourth Lomonvention (ECU 30 m) will be agreed on with Government later this year, and, together with allocations under the Regional Programme, it is clear that the Community will be able to support the Kingdoms development plans well into the 1990s.