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
|