Alliances possible in emerging markets
As Barbados searches for greater competitiveness, a local economist thinks it should “turn its attention to emerging markets”.
Jeremy Stephen, who is project consultant at Damoola Inc. and the current Barbados Economic Society president, said the various challenges facing traditional tourism and international business and financial services should prompt the island to stop competing for “a dwindling pie but begin to strategically build alliances in unchartered markets further afield”.
In an analysis on the issue, Stephen said outside of the BRICs (Brazil, Russia, India and China), there were “many interesting opportunities” for new tourism and international business alliances and Africa featured prominently on his list.
“The African continent now has GDP of more than US$1.6 trillion, and as found by McKinsey & Company in their report on What’s Driving Africa’s Growth published in June 2010, real GDP is on an upward trend, mostly driven by the still-prevalent commodities boom (24 per cent of GDP); wholesale and retail (13 per cent of GDP); agriculture (12 per cent of GDP); transport and telecommunications (ten per cent of GDP); and manufacturing (nine per cent),” he said.
“The report states the clear correlation between the price of oil and the growth in the economy. These resources, though always there, have been employed efficiently and at scale firstly by foreign direct investment from China, followed closely by institutional capital out of Europe.
“Furthermore, it states that once growth across the continent matures, it should be sustained by the rise of the African urban consumer.
“One does not have to look further than Nairobi, Lagos and Johannesburg for confirmation. In addition, African nations have begun to boost exports in order to gain foreign investment opportunities. For example, Angola now has one of the world’s largest sovereign wealth funds that is significantly financed from its international oil receipts.
“There are opportunities here to exploit this new class of tourist and investor groups to develop long-term relationships with them; we must just learn from our failed experience with the Ghanian tourists in 2007-2008.” (SC)