Former Federal Reserve Chair Alan Greenspan encouraged a gathering of Caribbean tourism leaders to consider economic investments from the U.S. as a big picture, long-term objective and preached patience through a struggling domestic economy.
Dr. Greenspan was the keynote speaker at the First Annual Caribbean Tourism Summit, taking place in Washington D.C. at the Ronald Reagan Building of the International Trade Center. The summit is organized by the Caribbean Tourism Development Company.
Leaders from political, tourism and investment communities and the Caribbean Diaspora gathered in the nation’s capital to discuss the economic future of the region, a press release noted.
The hour-long session, billed as, ‘A Conversation with Dr. Alan Greenspan’ was moderated by Sir Dwight Venner, Governor of the Eastern Caribbean Central Bank.
In introducing him to the more than 300 summit delegates in attendance, Senator Allen Chastanet, co-Chair of the CTDC, praised Greenspan for his economic foresight, especially as it related to the tourism industry.
‘Dr. Greenspan recognised the importance of the service industry early on, including tourism,’ said Chastanet. ‘This recognition allowed for a more targeted policy which enabled that sector of our economy to significantly grow.’
Greenspan, chairman of the Federal Reserve Bank from 1987-2006, addressed the topics of the current global economic environment and the impact of increased travel costs on the Caribbean’s tourism industry. While he cautioned that the region may not see a dramatic increase in U.S. investments in the short-term, he suggested that the region’s ability to produce reliable return would eventually result in added confidence from investors.
‘Capital will flow where profits can reasonably be projected 10 or 15 years down the road,’ he said.
In the interim, he advised that the region must continue to emphasize its strengths to consumers and investors alike.
‘You have one of the greatest assets possible for tourism in your natural beauty,’ said Dr. Greenspan. ‘You have to continue to emphasize it.’
He noted that tourism is still a relatively new industry, saying, ‘There were no vacations 400 years ago. It is really a post WW II phenomenon. The ability to move beyond your own borders reflects the affluence of your society. Globalization is breaking down barriers, not just for goods, but a trend towards people moving.’
Greenspan observed that, ‘The real cost of transport, despite oil prices, has been going down. The critical shock is oil.’
Addressing the current state of the airline industry, Greenspan said, ‘If you can’t get the cost per mile down, it will continue to negatively affect the industry. It may take awhile but a lot of technological changes have to be made.’
The bottom line, he said, ‘Oil will never go back to $20 per barrel. We’ll see ever-increasing jet prices but even more fuel efficient jet engines.’
Greenspan emphasized that the destinations worldwide that are the most attractive to investors are those in which the rule of law is the strongest, noting that safety is the lynchpin of a strong infrastructure. ‘Capital moves to areas that are safe,’ he said.
Despite the challenges the tourism industry faces, Greenspan advised, ‘We tourists will find a way to get there.’
Greenspan’s appearance was part of a full schedule of lecturers and industry experts who have shared their insights with delegates from more than 30 Caribbean nations and the accommodations sector.