Between the sky and the sea
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CTA. 1999. Between the sky and the sea. Spore 81. CTA, Wageningen, The Netherlands.
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The economies of ACP island States, just as all other ACP States, depend largely on trading agreements with Europe and other Northern countries. Their economic vulnerability is compounded by their isolation, minuscule areas of available land,...
The economies of ACP island States, just as all other ACP States, depend largely on trading agreements with Europe and other Northern countries. Their economic vulnerability is compounded by their isolation, minuscule areas of available land, limited domestic market, lack of proper transport infrastructure, and, for many, vagaries of the climate. Island States in the ACP Group are buffeted by the gales of globalisation and the winds of change raised by the renegotiation of the Lomé Convention, which is apparently the only counterbalance available to the governments of these countries. Such is their plight that they are forced to look for alternative strategies and crops. For some, time has ground to a halt; for others, change is at hand. The Lomé Convention confers privileges on the small ACP islands, but the future of the commercial aspects of the agreement is uncertain. The joint dialogue between the ACP States and the European Union has counterbalanced the game played by national interests. The common identity provided by the ACP grouping thus serves as a springboard to the wider international stage. All the same, each island is faced with the same imperative to diversify without losing more time. Diversified agriculture, or a fishing miracle? Take Mauritius. It built its development on the preferential access granted to its major crop, sugarcane, to the European market through the sugar protocol in the Lomé Convention. Its profits were invested in tourism and an industrial free zone, which, in turn, benefited from the Multifibre Agreement. Under the Agreement, the island's textile products were given preferential access to the European and American markets. The results are impressive: continued growth above 5% for more than a decade, a fourfold increase in per capita gross national product since 1970, and high employment. Some may have suffered from such development, but then they have benefited from free access to education and healthcare. However, such growth does not obviate the need for Mauritius to diversify into different sectors. In anticipation of an expected loss of export earnings from sugarcane-which today occupies 90% of arable land and represents 6% of GDP-some plantations have already diversified into horticulture (cabbages, carrots, ginger, strawberries, and papaya). This option holds little long-term promise though, and most producers seek to increase the use of sugarcane by-products, in particular bagasse (crushed cane fibres), which is used in electricity generation stations. Sometimes there is little future in agricultural diversification and here fisheries can offer a promising alternative. In the Seychelles, for example, high hopes are based on the development of fisheries and the canning industry. Some observers believe that this sector could outgrow tourism in terms of both revenue and employment. The Heinz multinational company, which took a 60-percent stake in the Indian Ocean Cannery (now renamed Indian Ocean Tuna), has raised annual production of canned tuna to 160 t (compared with 58 t in 1997). It currently employs 1200 people and is expected to recruit another 800 by the year 2000. The promise of the blue seas At the time of independence in 1975, São Tomé and Principe inherited an economy based exclusively on a single crop: cocoa. Nowadays, a few tonnes of coffee are exported, but other products such as banana, pineapple, and palm oil are sold only on the local market. Agriculture is still the lung of the economy but it cannot always meet the food needs of the population. The country is on the verge of bankruptcy as a result of a drop in cocoa production. That has three major causes: first, a land reform programme, which led to widespread deforestation with a devastating impact on cocoa cultivation; second, the privatisation and re-distribution of land to an ill-prepared population; and third, the lack of funds and equipment. São Tomé and Principe have now placed their hopes on two solutions to bring them, as it were, into safer waters: petroleum in the Gulf of Guinea and a free trade zone. Gold has another colour in other island States, renowned for being 'holiday paradises. If tourism is properly controlled and its use of land does not harm farming, it can become the mainstay of an island economy. This is the case in the Seychelles, where tourism generates 70% of foreign exchange earnings and 17% of GDP. The island could achieve this only through political stability and a strategy for establishing the necessary infrastructure (international airport, hotels). Other islands suffer from internal conflicts, which totally rule out the possibility of any sustainable returns from an investment in tourism. On the other hand, the fall in the number of visitors suffered by the Seychelles during the Gulf conflict clearly shows the risks of an excessive dependence on tourism. Diversify exports New opportunities exist for ACP island States to sell their primary products to countries with more growth potential than Europe; for this they need to diversify their products and exports and markets. The rise in regional trade within Africa and in the Caribbean could be a favourable development. Not that approaches to encourage intra-ACP trade are an alternative to exports to Europe and the rest of the world, but simply a complement. Trade within the ACP Group is just as viable as exports to Europe or elsewhere, with the exception of a small category of products that benefit from lower transport costs and strong demand from other regions. The Lomé Convention already caters for support to such intra-ACP trading; one logical step might be to extend it to trade with other neighbouring. There are, however, several roadblocks, which have to be removed on the way to diversified products and markets through interregional and international trade, and tourism. They include customs barriers, lack of information, and, above all, poor infrastructure. In this, most ACP islands share the same problem. Sound infrastructure is a precondition for development (see Spore 76). But in the islands, airport services are not reliable (poor flight frequency and inadequate safety of goods and passengers), nor do they have any competitive advantage to become profitable, either in trade or in tourism. The distance between the islands and the continents is long; much remains to be done to bridge it. For further reading Pacific ACP States and the end of the Lomé Convention. R Grynbert. 1996. 34pp. ISBN 3 86077 593 6 Free from : Friedrich Ebert Foundation, Godesberger Allee 149, 53170 Bonn, Germany Fax: +49 228 883 396 Email: email@example.com Small islands development network (SIDNet) Website: http://sids.org/
- CTA Spore (English)