Ronald Sanders – Dominica: Poverty and Potential (Part 2)

May 25, 2008 Ronald Sanders

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By Sir Ronald Sanders

A few years ago, Hugh O’Shaughnessy, an English journalist writing about the Caribbean island of Dominica, said that it was the only territory that Christopher Columbus would recognise today, so little had it changed from when he chanced upon it in 1493.

The island’s physical appearance remains the same because of its under-development. Its coast lines are not taken over by hotels, and apartment buildings and much of its interior still consists of pristine and beautiful rainforests.

It is arguably one of the most naturally lush and beautiful of the Caribbean islands.

As I said in the first part of this Commentary on Dominica, it is a poor country in terms of income per capita and its level of development.

For years hurricanes have roared through it destroying its infrastructure and its agricultural production.
Last August, Hurricane Deane destroyed almost 20 percent of the country’s GDP with the agriculture sector, one of the major sources of foreign exchange earnings, taking the brunt of the damage.

This caused the government to apply for emergency assistance of US$3.3 million from the International Monetary Fund (IMF) which was finally approved in February this year. And, while these funds would help to maintain Dominica’s foreign reserves, it hardly dents the country’s needs for concessionary financing to advance its development.

The IMF itself estimated that economic growth slowed to around 1 percent in 2007 from a pre-hurricane forecast of 3 percent growth, while the loss in export earnings in 2007 and 2008 is estimated at 4 percent of GDP.

Much of the hurricane damage would have been done to the banana industry which was once vibrant and is now struggling because of the loss of its preferential access to the market of the European Union (EU).

But the country does have some competitive advantages, and encouragement to local and foreign investors could help to pull it out of the doldrums.

Its two advantages arise precisely from its underdevelopment. First, it has huge acreages of rain forest which make for desirable eco-tourism, and second, one needs only to spit a seed in the ground and something sprouts.

If the markets were assured and the transportation links existed, Dominica could satisfy a significant portion of the needs of neighbouring islands such as Antigua, Barbados, Martinique, Guadeloupe and the US Virgin Islands for fruit and vegetables.

In this particular period of a significant rise in the cost of food, and a growing shortage of some commodities, the Dominican government should be leading an initiative with other Caribbean governments and the private sector to explore the most feasible ways of developing production capacity, contracting buyers and transporting produce – even if through the wet-leasing of refrigerated ships.

Dominica also needs a complete revamp of government bureaucracy. The island is rated 17th in the chart of small island developing countries that are business friendly. Eight of its partners in CARICOM are ahead of it. In the world ratings it is listed at 77th of 178 countries.

In eco-tourism, there is already evidence of the attractiveness of the island for people who want to commune with nature, hike, through forests, and bathe in the therapeutic waters of sulphur springs that percolate in the rivers.

But, again transportation remains a problem. The small airport cannot accommodate the large passenger airplanes that now fly from Europe and North America to the Caribbean.

But who will fly to an Island with less than 700 hotel rooms and an insufficient number of taxis to cater even for the cruise ships that call there mostly in the winter months?

Dominica’s rainforests also offer a source of national income as a repository for carbon.
The government might do well in joining Guyana’s President Bharrat Jagdeo in his insistent call for compensation to countries that preserve their rainforests that are so vital now to all mankind including by providing a sink for sequestering greenhouse gases in the global fight against climate change.
Clearly, a multi-disciplinary study is required to focus on developing the country’s competitive advantages and on working out how to overcome the obstacles to that development, including attracting the necessary private and public sector investment.

At the moment, the government is pursuing help where it can get it. Largely, this is coming from Venezuela, China and Cuba.

In the case of Venezuela, the help is in deferred payment for oil, but a large debt is being accumulated. There is also now a storage facility in Dominica said to be owned mainly by the national oil company of Venezuela, PDVSA.

The Dominica government has also acceded to the principles of ALBA, a cooperative scheme started by Venezuela.
It is the only CARICOM member state to do so, but what precise benefits it brings to the island is not clear.
Over one hundred Dominican students are reportedly at Cuban medical and nursing schools and another 75 are in other schools.
Quite where they will go after their training is unclear, but at least they are not on the job market in Dominica and they are being trained for employment even if, in the end, not all of them will remain in Dominica.
Given the neglect by the larger powers in the Hemisphere, particularly the United States, and the readiness by international and multi-national organisations to treat poverty and underdevelopment as just numbers on a chart rather than the lives of real people, one can understand the inclination of the Dominican government to take help wherever it can get it.

But short term help is not enough. A detailed programme of development, actively marketed to both private investors and international financial institutions, is vital if Dominica is to rise out of poverty and fulfill its potential.
(The writer is a business consultant and former Caribbean Diplomat)
Responses to: ronaldsanders29@ hotmail.com

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