Saturday, April 20, 2024

EDITORIAL: Tough situations alter cases

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It is an inescapable fact that tourism is a major bone in our national economy, for it is our largest earner of foreign currency. The Government must have had this cardinal reality in mind when it decided that something had to be done about the closed Almond Beach Village property.
The decision to purchase the property with the assistance of the Chinese Government and National Insurance Scheme funding reflects an attempt to get this property back on the market, generate some foreign exchange and also to create more employment.
One does not have to be a Solomon to understand why this has been done, but one can expect there will be political and other questions asked about the purchase. Yet, running a country is about taking decisions, and hard practicalities have to be weighed alongside a host of other relevant social factors which may not matter to the private sector investor.
We note the Government has disclosed that it does not wish to get back into the business of running hotel plants. That is understandable; but, as has happened in the past, tough situations alter cases.
The decision to acquire Gems of Barbados some time ago was predicated on what was then said to be the national interest in shoring up and rescuing the South Coast as an integral part of tourism development. Some consideration was given to the social costs of the dislocation of thousands of breadwinners from employment if the Gems properties were not acquired, heavily indebted to the Government and other creditors as they then were. The ultimate objective of saving jobs coincided with the national interest in earning foreign exchange, and it appears too that the need to earn foreign exchange while providing jobs is present in the Almond deal.
These are laudable objectives, and even if a government is committed to privatization, bullets sometimes have to be bitten in the national interest, and it matters not who is holding the reins of power at the time.
We recall earlier and similar bullet-biting decisions in the tourism sector. Both the Hilton and Almond Beach were built (respectively by DLP and BLP) to jump-start aspects of our tourism development, but when the ageing and leaking Hilton needed to be replaced, the Owen Arthur administration sold shares in the Barbados National Bank, tore down the old Hilton and applied the proceeds to the construction of a brand-new Hilton.
He was roundly criticized, but the plush Sandy Lane Hotel was similarly bought by private investors who tore it down shortly thereafter and rebuilt it from scratch because it made sense. We mention these facts from our recent past to illustrate the need for governments of all shades to make the vital decisions which may run counter their declared strategies, but the national interest cannot always be counted in dollars and cents for there are things known as social costs.
Yet, given the current position of the country’s fiscal situation, there must be no compromise in the quest to have Almond properly managed. It must have a private sector focus on profit-making management, and it cannot become another entity depending on transfers from the Central Government to keep it going. The administration must provide the enabling business environment but the operators must provide skilled management of the property if the purchase is to work for the national benefit.

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