Crisis in Tivoli

The recent events in Tivoli which led to the shutdown of Down town and a negative image of Jamaica being plastered all over the major newspapers and television stations of the world has come to an end but the effects still linger on.  As I write the government is trying to mount an advertising campaign to assure the tourists that it is safe to come to Jamaica and businesses are trying to put a cost to the disruption.

The whole incident has raised two important points about running an economy.  Firstly, crime should never be allowed to happen unhindered as sooner or later it runs out of control.  The cost to an economy of dealing with an outbreak of criminal violence is more than that of providing effective policing.  Once again it shows that we have been penny wise and pound foolish.  There are many communities throughout Jamaica that are having problems with criminal gangs and we often do not realize what it is costing the country. 

 There is a loss of revenue to the government, higher costs of construction due to extortion and most importantly the loss of lives of productive members of society.  The costs of the exercise may be high but the cost of doing nothing is always more.

The second thing that has been highlighted is how dependent the country is on tourism.  For too many years Jamaica has relied on tourism to the exclusion of everything else.  When a country (or a person) puts all of its eggs into one basket then it runs the risk of a total collapse in finances should something overturn that basket.  For an economy to grow and to be able to survive shocks to the financial systems there needs to be diversity.  Tourism in particular is very vulnerable to many factors such as natural disasters, crime, war, climate change, etc.  Diversification will help to reduce our dependence on tourism and will provide more opportunities for badly needed jobs.  The reemphasis on agriculture is a step in the right direction but it should not stop there.  An old teacher of mine would say if you fail to prepare then prepare to fail.  In our current financial scenario failure is not an option.

Tags: Carl Wilson