CDB CAUTIONS AGAINST OVER-RELIANCE ON TOURISM

By Staff Writer

In a message that would resonate with Cayman and other tourism-dependent countries in the Caribbean, the Acting Vice President of Corporate Services of the Caribbean Development Bank (CDB) is urging against an over-reliance on the sector as an economic pillar.

In a keynote presentation at the recent Wider Caribbean Regional Risk Conference in Barbados, Ian Durant argued that an over-dependence presents serious risks given the regional tourism industry’s vulnerability to external economic downturns.

“Our countries are small, open economies with no reserve currencies. The limited diversity in our export mix results in acute vulnerability. Moreover, the dependence on tourism, which is a very elastic product, deepens the troughs when they occur,” he cautioned.

With tourism accounting for more than half of the foreign exchange earnings, the CDB top executive is urging the region to diversify into other growth sectors - a recommendation which Cayman’s multi-faceted economic foundation is already well-advanced with financial services being a main economic driver.

Official figures show a close to 6.0 per cent increase (5.9%) in stayover visitors in Cayman from January to May this year compared to the same period in 2024.

Despite growing concerns over the state and future of the cruise sector, especially in the aftermath of the referendum no-vote on a cruise pier, cruise numbers rose by 2.3 per cent in the first half of this year compared to 2024. However, while visitor numbers from some of the major cruise lines have increased, there has been a notable reduction in numbers from other companies that normally frequent the destination.

New Minister of Tourism, Hon. Gary Rutty, has committed to developing what he has called “a comprehensive national cruise tourism strategy” with an interim framework expected to be outlined by the end of this year.

But the core message of the CDB Corporate Services lead will not have been lost on Cayman’s government and tourism industry officials.

“We can diversify our economies and reduce risks if we are intentional about creating the ecosystems that would improve competitiveness and exploiting the full potential of the Caribbean Single Market and Economy,” Mr Durant stated. Noting that “this will take some time,” he however stressed that “if we are going to mitigate the constant risks thrown at us by the global economy, we must take these steps to diversify.”

According to the CDB Acting Vice President of Corporate Services, enhanced farm extension services and sanitary and phyto-sanitary standards, improved transportation infrastructure and cold storage facilities, and modernised port operations are policy steps worth considering. He also suggested better access to credit for micro, small, and medium enterprises, streamlined regulatory processes, and strengthened business support organisations.

Food security plays a major role in the economic diversification being prescribed by the regional development bank.

During a previous summit earlier this year, the CDB president Daniel Best, stressed the urgency of becoming climate resilient particularly given the vulnerability of tourism-dependent economies. Speaking in March, he stated then that the Bank would support plans for energy transition and food security in line with its climate change agenda. Safeguarding food security by reducing the dependence on imported foods with economic and health benefits is regarded as a region-wide priority.

“Supporting the energy transition is critical for us. We will focus on delivering reliable, sustainable energy to the region while prioritising energy access for underserved communities…We must also devote our attention to addressing food security. We saw first-hand during the COVID-19 pandemic the risk to food security as global supply chains were disrupted, but this is an issue that the region can address,” Mr Best stated.

(Images via CDB/Durant and ESO/George Town harbour)