OUR ISLANDS, NATURAL PARTNERS FOR REGIONAL INTEGRATION Page 17

Common Economic Policies

TOURISM

The tourism industry has replaced agriculture as the principal economic activity in the majority of the seven Protocol Member States of the OECS and is in fact a crucial sector of the economy of each Member State. It provides the highest number of jobs, contributes heavily to production and exports, earns the greatest amount of foreign exchange for governments making it a critical source of revenue for them as is illustrated in Table 4.1 and 4.2. In Saint Lucia, tourism provides 50% of the country’s employment, with almost the same percentage in Antigua and Barbuda while in the other Member States it accounts for approximately one quarter of the employed population. In Dominica, Saint Lucia and Grenada, revenue from tourism forms 60% of receipts from exports while in Antigua and Barbuda and St. Vincent and the Grenadines, it is approximately 50%.

TABLE 4.1 Contributions of Travel and Tourism to GDP, 2017

COUNTRY GDP Share Employment Share Visitor Exports/ Total Exports

ANTIGUA AND BARBUD DOMINICA

51.8 46.1

37.6 34.4

GRENADA ST. KITTS AND NEVIS

23.3 21.4 26.8 25.6

SAINT LUCIA 41.8 50.8

ST. VINCENT AND THE GRENADINES

23.4 21.5 60.4

56.4 60.8 33.4

67.1 48.0

Source: World Bank 2018: OECS Countries Systematic Regional Diagnostic However, despite this remarkable development of the tourism industry in the OECS and its pivotal role in Eastern Caribbean economies, OECS countries have the smallest share of the tourism industry in the Caribbean and have become less competitive in the global market. As can be seen in Table 4.3, OECS countries experienced the lowest growth in tourist arrivals as compared to other regions of the world while other Caribbean countries gained approximately four times their rate during the twelve year period from 2005.

According to the World Bank’s 2018 Diagnostic Report on the Region, this decline is due to the lack of diversification in the regional tourism market, its high prices, the impact of natural disasters and the 2009 world financial crisis. It was consequently essential for the OECS to address these challenges to the industry, if the industry was to remain competitive and continue to be an engine of growth.

Since the tourism sector in each island has grown largely independently of that of the other islands, Article 21 of the Economic Union Protocol therefore provides for Member States to adopt, “where advisable” a common policy on tourism development that involves establishing a mechanism for joint tourism marketing and promotion, and the creation of greater community participation in the industry. Through this common approach, it is anticipated that the seven Protocol Member States will be able to make their respective tourism sectors more competitive and that they will achieve greater success together than each would on its own.

TABLE 4.2: International Tourism Receipts as a Share of Exports (2010-2016 Average)

Percentage 0-20% 20 -40% 40 -50% COUNTRIES ST. KITTS AND NEVIS

50-55% ANTIGUA AND BARBUDA

ST. VINCENT AND THE GRENADINES

Source: World Bank 2018: OECS Countries Systematic Regional Diagnostic

Common Economic Policies

60% DOMINICA

SAINT LUCIA 60-65% GRENADA

TABLE 4.3: Annual Growth in Tourist Arrivals in Regions of the World 2005- 2017

Africa Americas excl. Caribbean Asia and Pacific Caribbean Europe Middle East OECS

5.0 3.9 6.4 2.7 3.2 4.6 0.6

Source: World Bank 2018: OECS Countries Systematic Regional Diagnostic

In 2011, in response to the mandate of the Economic Union Protocol, and to address the challenges facing the region’s tourism industry, the OECS adopted a Common Tourism Policy which was based on extensive consultations with private and public sector interests across the Eastern Caribbean.

It was the first harmonised policy to be developed in keeping with the Economic Union Protocol. Its aim was to gradually harmonise the tourism policies of the Member States in order, “to achieve more than the individual states can achieve on their own, to progress towards a sustainable and self-sufficient tourism economy, and to contribute towards a wider understanding and awareness of the value of tourism amongst governments, officials and residents of Member States.”

Since the adoption of the Common Tourism Policy, two other initiatives have been added to the efforts of the OECS to strengthen the tourism industry in its Member States. In 2018, the OECS adopted the OECS Development Strategy (ODS) which outlines major policies that will be pursued by the Member States to achieve the social and economic betterment of the people of the region and to respond to the threats to this aspiration. The ODS is also in fulfilment of the Economic Union Protocol. It is for the period 2019-2028 and is complemented by an Action Plan which is to be reviewed and updated in 2022.

Tourism development initiatives, for example joint marketing and product development, and ease of travel within the region by air and sea, are a fundamental part of the ODS. In January 2019, OECS Ministers of Tourism, agreed to a tourism work plan that includes activities for community tourism and the enhancement of joint tourism marketing and promotion.

Notes

1. The World Banana Economy 1985-2002: Pedro Arias; Barnes & Noble,

Google Books 2. Eastern Caribbean Currency Union: Selected Issues; IMF March 2007

KEY WORDS FOR FURTHER REFERENCE

▪ ITC ▪ UNCTAD ▪ WTO ▪ WIPO

Functional Cooperation in Health

BUILDING ONE COMMUNITY

In the opening paragraph of the Protocol of the Revised Treaty of Basseterre establishing the Economic Union, the Governments of the Eastern Caribbean States declared their determination to establish “the foundation of a closer union among the peoples of the Eastern Caribbean”. This declaration expresses their recognition that their people are in fact already united, are already one people and one community; and it affirms their undertaking to strengthen that community and make it more united through the bonds of the OECS. The OECS has been developing these bonds in a variety of areas like health, education, the environment, civil aviation, the judiciary, defence and security and telecommunications.

HEALTH

In 1986, the governments of the seven Full Member States of the OECS established a Pharmaceutical Procurement Service (PPS) to bulk purchase medicines and medical equipment on behalf of the Member States. There were two objectives behind that decision: the first was to strengthen their negotiating power to deal with pharmaceutical companies by purchasing medical supplies as a unit, instead of doing so individually; and the second was to make medical products more affordable for the people of the Member States.

The PPS has proven to be one of the most successful programmes of the OECS because of its direct and significant impact on the lives of the people of the Eastern Caribbean region. Consumers in the OECS are paying considerably less for medicines that they would have had to if the PPS had not existed. The programme has also ensured that medical products meet the required quality standards and that they are not in short supply. Another noteworthy achievement is the leading role that the PPS is playing to combat HIV/AIDS in Eastern Caribbean countries. By acquiring drugs for the treatment, prevention and containment of the disease from international agencies, the PPS has made them affordable and easily available for distribution throughout the OECS.