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Caribbean Islands

Sectoral Performance

Sea, sun, and sand are so much a part of Antigua that they have been incorporated into the national flag. Tourism was the dominant industry in the late 1980s. It accounted directly or indirectly for 40 percent of GDP and 60 percent of employment in 1984 and was responsible for 21 percent of all foreign exchange earnings. Direct revenues from tourism were accrued by restaurants, duty-free shops, boutiques, entertainment and gambling establishments, car rental agencies, taxis, and miscellaneous other businesses. At the same time, agriculture, manufacturing, construction, public utilities, communication, trade, and banking and insurance received indirect revenues from tourism.

Despite tourism's many areas of direct or indirect contact with the domestic economy, the links in the late 1980s were weak, and many tourist dollars leaked back to the outside world. This leakage was primarily a result of the tourist industry's heavy reliance on foreign investment. Foreign investment dominated the larger resort complexes that accounted for the great majority of hotel room capacity. In many cases, the large resorts were built as selfsufficient enclaves, isolated from the rest of the island and offering all-inclusive vacations so that tourists did not need to have contact with other elements of the economy. As a consequence, much of the profit from tourism was expatriated.

The weakness of other sectors also affected links between tourism and the domestic economy. Because foreign businesses chose not to invest in areas such as agriculture and manufacturing and because local investors were also lacking, the entrepreneurial role was left to the government or else was not filled. Because of the resulting low level of productivity, the tourist industry had to import goods, such as food, that the local market could not provide. Ironically, many tourist dollars were lost in importing items purchased by the tourists. The sector most significantly affected by tourism was construction; its growth was positively related to that of investment in the tourist industry.

The nature of ownership in the tourist industry created a dilemma for the government. Since foreign-owned hotels and entertainment establishments expatriated much of tourism's financial benefits, the government encouraged national ownership of the industry. Local investors did not have sufficient capital, however, to support the large luxury resorts that were critical to employment. As a consequence, the government was forced to modify nationalistic tendencies and encourage foreign investment. Still, most of the jobs available to Antiguans and Barbudans were minimumwage service positions; senior-level management posts in the tourist industry were held primarily by foreign nationals.

The manufacturing sector accounted for about 8 percent of GDP and 14 percent of employment in 1984. Manufacturing also represented 85 percent of total domestic exports in 1983. Despite government diversification efforts, the sector was dominated by light manufacturing. Cotton textiles and garments, distilled liquors such as rum, and pottery were the major industries in the sector; each of these was oriented toward exports. Other items manufactured in Antigua and Barbuda included paints, furniture, mattresses, metal and iron products, household appliances, electronic components, and masonry products, produced for both the local and the export (mainly Caricom) markets. The textiles and garment industry accounted for 47 percent of the manufacturing work force. The food and beverages and fabricated wood products industries accounted for 21 and 12 percent, respectively, of the sectoral work force.

Once the mainstay of the economy, agriculture has declined in importance since the collapse of the sugar industry. Agriculture generated only 7.5 percent of GDP and 12 percent of employment in 1984. Small farmers replaced the large plantation owners as the dominant producers in the agricultural sector. Production tended away from plantation crops of sugar and cotton--although sea island cotton remained an important supplier of the textile industry--and toward a varied system of fruits and vegetables to reduce food imports for the local market and tourist industry. The main crops were carrots, onions, eggplants, pumpkins, corn, cassavas, tomatoes, cabbage, cucumbers, potatoes, and yams. The livestock industry was also managed on a smaller scale and contributed to agriculture's increased relative importance in terms of GDP in the 1973-80 period. Livestock included cattle, sheep, and goats.

Despite the partial revival of the agricultural sector, however, several barriers to expansion remained. The most basic of these was the scarcity of fresh water, which limited irrigation. A second obstacle was the governmental land tenure system, covering 60 percent of arable land in Antigua, through which land was leased on a short-term basis. As a consequence, productive investment in the land was discouraged. Other constraints affecting agriculture included limited farm credit, deficient domestic marketing arrangements, a lack of effective agricultural information systems, and difficulties on the part of small farmers in obtaining basic agricultural services.

Data as of November 1987

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