“A Conversation with Dr. Alan Greenspan”

Dr. Alan Greenspan of the former Chairman of the Federal Reserve is sitting quite comfortably across from Sir Dwight Venner, the Governor of the Eastern Caribbean Central Bank. The scheduled discussion on the economic future of the Caribbean region with a specific focus on the tourism industry promises to be interesting. It has certainly attracted the more notable attendees of the conference. I’ve watched Senator Allen Chastanet the Chairman of the CTO, Vincent Vanderpool Wallace its CEO, Philip Saunders of Caribbean Airlines and other premieres of Caribbean government file into the auditorium. We’re all waiting anxiously for a few pearls of wisdom and groundbreaking thoughts… A day later, I’m still waiting.

Dr. Greenspan certainly knows his economics. His resume speaks for itself, from 1987 to 2006 he was the Chairman of the Board of Governors of the Federal Reserve of the United States and he currently works as a private advisor, making speeches and providing consulting for firms through his company, Greenspan Associates LLC. He’s adding credibility to the conference by being here and they’ve probably paid an arm and a leg to have him speak. But he’s not telling us anything that we don’t already know. “Tourism and the world’s economy are critically intertwined…travel and tourism really reflects the degree of affluence in a society”. If a society does not have disposable income the less individuals within that community will travel. His view is that he rising fuel prices are not about to go down. He notes that we’re currently having immediate troubles (indicated by American Airlines stopping routes to Puerto Rico and other Caribbean destinations) and he believes that we’ll continue to have these problems.

However, similarly to Vanderpool-Wallace and Philip Saunders he doesn’t seem very worried about the future of Caribbean tourism. He notes that our product is good – “what does not change is the paradise that is the Caribbean”. “The real cost of transportation is actually decreasing. Technology allows people to move like never before and the latest data [March 2008] on the US going to the Caribbean is only marginally below the previous year. He notes that even he was surprised by this fact. He also explains why oil prices are rising, it’s not that we’re running out of oil, it’s that we’re eating into the buffer that previously existed to keep oil production and supply steady, as a result, oil prices have shot up. But, this will force the aviation industry to invest in exotic metals that will ensure fuel conservation.

So what’s the future of Caribbean tourism? Greenspan explains that economies that do well are those that ensure property rights are respected. Capital moves to those areas, which are safe and protected. And the tourism industry, despite hiccups, is very stable – annually there are 898 million arrivals in the world and by 2020 we expect this number to grow to 1.6 billion. “If we can get past 9/11 and high fuel costs the Caribbean has vast potential”.