Letter of the Day: Tourism credit bank a worthy proposal
Tourism credit bank a worthy proposal
THE EDITOR, Sir:
My proposal to establish banking support for tourism stakeholders, and more so small and medium-size players, is not one that would be state-run. Nowhere in my comments did I say so.
It is suggested that the proposal can be developed with the EXIM Bank and, as such, fall under standard banking protocols. The proposal is also in line with the new administration's growth agenda and is reflective of what exists on other major tourism markets, including the Dominican Republic, which has a successful model.
My deep involvement at the highest levels of the international tourism industry, including chairman of the United Nations World Tourism Organisation's executive council for affiliates, which spans five continents, and being the first in the world to serve on the executive of both the public- and private-sector arms of that organisation, has allowed me to absorb the many moving parts that make tourism successful in many places throughout the world.
The idea for banking support for tourism stakeholders and potential tourism stakeholders comes against the background of our indigenous sector experiencing serious challenges and the existence of a high level of leakage of the tourism dollar, the overwhelming majority of which goes back overseas. In that vein, there is a need for more local stakeholders to be able to meet demand from the sector.
Establishing banking support would also induce local and international financial houses to come on board and play their part
A recently commissioned Tourism Demand Study has provided the ministry with empirical data that will allow us to effectively plan and identify demand for goods and services in the sector.
The study shows that there is tremendous opportunity for trade that could be as high as J$56.7 billion annually for processed foods, J$5.3 billion for fruits, and J$1.6 billion for vegetables.
Annual leakage in the manufacturing sector is estimated at some J$65.4 billion, which is equivalent to 33 per cent of total annual expenditure by the tourism sector on manufactured goods.
When it comes to the agriculture sector, leakage is estimated to be in the range of J$1.6 billion to J$5.0 billion, which represents 8.5 per cent to 25.5 per cent of annual expenditure on agricultural products.
What does this tell us? It proves what we already know - that the opportunities for increased linkages between local suppliers in the tourism sector are vast and diverse and there exists a need to address a major complaint by small players about their gross lack of access to capital to build out and/or keep their businesses humming.
If we are serious about growth and having more tourism dollars staying right here in Jamaica, we have to address this glaring problem.