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How significant that the United States has inflicted itself with a financial wound so grotesque and debilitating that it will never fully recover. With big numbers get thrown around like they are nothing these days—a $140 billion tax refund here, an $85 billion bailout there. America must be one rich country. But America is not rich. It’s broke!

This US financial fallout will seriously affected financial markets around the worldwide and there will almost certainly be a trickle down effect on the already weak Dominican economy and throughout the Caribbean.

This will have negative implications on countries like Dominica – whose tourism and agriculture are linked to the fortunes of developed nations. Tourism is dependent of the volume of tourists and their spending power. Agriculture on the other hand is linked to trade agreement based largely on the interests of developed economies.

It is time we stop and evaluate this likely impact on Dominica and plan a way forward that is in the best interest for Dominica. It is obvious that the sustenance of the Banana industry is handing on by a threat and Tourism is struggling under the effects of high energy prices and airline travel.

Dominica needs to seek greater economies of scale, like the organization of Eastern Caribbean states (OECS) and the CARICOM Single Market and Economy (CSME). In this context, it is in Dominica’s best interests to move quickly and path any conflict-ridden movements affecting the CSME or the OECS.

The only cushion to this trickle down effect would be the degree of unity among the Caribbean countries, and Dominica should run to the front of the line to enhance and sustain its economy.

Your Opinion: What do you think Dominica should do to curb this U.S. financial fallout?

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4 Comments »

Comment by Suki
2008-09-30 08:49:17

It is true that the United States is broke and its fiscal policies were policies that families could not emulate without filing for bankruptcy. That being said, it is true that Dominica should consider its options now rather than subject itself to the rise and fall of the United States. The key here is self-sufficiency. Focus on diversifying crops to feed the entire population and encourage the population to have vegetable gardens in much the same way Cuba does, thereby reducing people’s dependence on outside sources for food. Second, encourage trade between neighbors and villages food for labor to build homes, etc. Develop a niche crop like Hemp (Hemp requires a lot of water which Dominica has naturally) which has been developed in Canada and Europe that can be used to sustain the population and trade (http://www.omafra.gov.on.ca/english/crops/facts/00-067.htm. Finally with regards to tourism, simply shift the focus of where Dominica advertises at the end of the day, everything balances itself and if one country is experiencing a downfall, another country is experiencing a windfall – find that country to bring those tourism dollars to Dominica.

 
Comment by Dan
2008-09-30 10:16:18

I have written before that Dominica should develop pomegranate orchard agriculture. It is less labor-intensive than banana framing, the fruit is more valuable, it keeps a long time, and there can be additional jobs profits from processing the juice domestically. Pomegranate is good-tasting and very good for your health.

I sent in a a post several weeks ago, but it is worth repeating its gist: Capitalism in the US goes in cycles. Wealth builds with greed operating in unregulated areas. Then the houses of cards collapse. Then political reform introduces regulation. And then the sharp operators find new unregulated areas in which to operate and the cycle begins again.

Comment by pete
2008-09-30 12:24:13

Dan

Good idea. We need (more) diversification from bananas. Also, more diversification away from agriculture itself. We also need to develop the necessary infrastructure, eg good access roads, shipping links, airports, incentives for capital investments etc. Then there is the good catch phrase on economics of scale. Pound for pound, promegranates may be more valuable, but what type of volume and commitment is needed to make it profitable and what are the logistics, shipping and market requirements? How is Dominica best positioned to take advantage of that? It takes deliberate strategy from the leaders. I would dare say that the Ministry of agriculture has no shortage of those ideas (possible crops for diversification) from its agricultural economists, agronomists, feasibility projects and research data it has gathered over all these years…It comes down to political priorities. One of the questions will also be how do you sell the ideas to the farmers, when farming in general is becoming less desirable? The youth do not see it as something to aspire to, it seems.

Going back to pomegranates, if the economics prove it to be feasible, the idea seems like a good one. There are many products made from that fruit too..including juices, skin and hair care products, flavors, medicinal uses etc. Domica’s climate can sustain many products in demand.

I remember there was a time (only 20 years ago) when the crop aloe vera was similarly attractive ..There were fields of aloes and even an aloe vera plant on island. But this fizzled out after a few years. In theory the island can grow many crops successfully, but the marketing and related costs may be a factor in moving forward. what lessons have we learned from that? Could that be a useful case study for high-schoolers?

Another question might be how intensively do we need to develop the service industries like tourism. How much would that detract from the policy of agricultural diversification from bananas? It can be argued that one complements the other..We have no choice but to invest more in the area of sustainable tourism or be left behind. Again service quality is key. Welcoming smiles alone won’t cut it.

Part of the deal in diversification of the economy is also to invest more in quality education. The youth seems to have the mentality that its future is overseas and one does not have to be innovative or work hard to succeed. We have so much good talent out there. Dominicans must have some hope, that many things can be sustained on island. Its easy to preach eat what we grow and grow what we eat etc, but it will also take conditioning in an institutional or systematic way to encourage it. However I think that organic farming has much potential. The main issues seem to be cost of production and cost of marketing/transportation, but again, these can be channeled into supplies for the tourist trade. We must however infuse the same quality concerns for those products that had been a requirement of the banana trade.

Lastly I hope that the reunion activities this year will spur greater involvement of the diaspora. Not just in terms of ideas, social connections/belonging and the economic boost it will have on the country this year, but also in terms of hard future investments. We know there are many Dominicans out there who have the means of providing or raising funds for investment, but do not have the confidence or motivation enough in giving it a shot in the economy of their home country. We all have to encourage those possibilities.

 
 
Comment by payton Subscribed to comments via email
2009-06-11 16:14:31

The way i see things would be beneficial to Dominica not in a short-term but rather in a long-term.What Dominican government needs to do is to focus on a strategy where everybody benefits.My suggestion is a free port,now let me explain why.A free port is used as a pull factor to attract investors and away Dominicans to operate businesses in the island ,as a results there will be a greater abundance of human potential both physically (labour) and mentally (brain) which is a plus. There won’t be an immediate pumping of cash in the country, but once the word gets out there and people get settled in ,you start gaining their confidence in risking their cash for investment.I know the government would be concern about paying their customs workers, my answer to that is through tax. There is a guarantee that if you allow an investor or local to bring in there shipments free they won’t worry about the tax paying.Just have them pay a tax free when bringing in their shipment and when their business is in operation they should pay a fee monthly.The government benefits, the local residents benefits and the investors benefits and everybody lives happy. There’s nothing better when a government can supply the peoples request. I think they should give it a try and let us see how is works.life is all about taking chances but this one is a guarantee.

 
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