By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
Tourism industry success was was yesterday described as critical to this nation’s foreign currency earnings, the Central Bank’s governor yesterday disclosing that the sector generated some $2.2 billion in 2013.
Wendy Craigg, while addressing a tourism conferenve, said the foreign currency earned from the industry helps the Bahamian economy to grow and maintain its one:one fixed exchange rate peg with the US dollar.
“The foreign exchange we earn from tourism helps us not only to grow as an economy, but helps us support what we have identified as the exchange rate regime that we wish to maintain in the Bahamas,” said Mrs Craigg.
She added that the impact of the tourism industry on the overall economy was evident during the financial crisis. “Tourism impacts almost every sector in the economy,” said Mrs Craigg, pointing out that hotel and restaurant workers account for 16.3 per cent of the labour force.
“One benefit of tourism is foreign exchange income. Tourism, for us, is our major export. Foreign currency earnings from tourism totalled some $2.2 billion for tourism in 2013,” said Mrs Craigg.
“That is some 77 per cent of our export earnings. Those earnings contribute to our foreign exchange for the country.”
“When we earn from tourism we are supposed to save some of those foreign currency earnings,” she added. “That is done through the Central Bank. We hold for the country what is know as the external reserves. That accrual for foreign currency is used to fund the demand for foreign currency. Wen persons have to import goods from overseas, if the banks don’t have the excess foreign currency on hand they will buy it from the Central Bank. You have to keep a certain amount of reserves.”
Mrs Craigg added: “Our currency is fixed to the US dollar one:one. In order to keep the fixed exchange rate we need to have on hand a certain amount of foreign currency.
“Most of that foreign currency comes from tourism, together with foreign investment, most of which is tourism related. It is important to generate foreign currency reserves so that we can support our fixed exchange rate and we will have enough funds to purchase imports.”
Comments
Economist 9 years, 3 months ago
What a sad commentary. Concentrating on Tourism, the old tired industry that will soon be much smaller as Cuba opens up.
This is the Central Bank, the one institution that should have a grasp on where the economy needs to go. This country needs to take advantage of the possibilities that Freeport can offer so as to diversify our economy.
I am informed that for the last 10 years it has been Freeport's industrial sector that has kept it alive, not tourism. Borco, Polymers, Pharma Chem, Bradford Marine, Quality Services, the Shipyard and the Container Port. Other companies like Bahama Rock and Freeport Aggregates as well.
What about the fishing industry, Central Bank? Maybe we can expand that too.
Hey, Central Bank, there is more to The Bahamas than just Nassau, or don't 100,000 Bahamians mean anything to you?
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