by Michael Derek Roberts
Grenada, along with its sister islands of Carriacou and Petite Martinique, exemplifies the vulnerability of 21st-century Caribbean economies heavily reliant on tourism.
While tourism provides crucial revenue and employment, its susceptibility to external shocks — global economic downturns, natural disasters, and pandemics — underscores the urgent need for economic diversification. Moreover, the key tourism industry is riddled with “disguised unemployment.” This occurs when part of the labour force is either left without work or is working in a redundant manner, such that worker productivity is essentially zero. Hotel workers whose employment is seasonal, have little or no protections like unemployment or health insurance and are often paid very low wages, typifies this definition.
Grenada’s economy has historically depended on agriculture (primarily nutmeg, bananas, and cocoa) and more recently, tourism. Carriacou and Petite Martinique, with their smaller scale and more limited infrastructure, are today even more reliant on tourism and fishing. This concentration exposes them to significant risks. A hurricane can devastate tourism infrastructure, a global recession can slash tourist arrivals, and a disease outbreak can halt travel altogether, as witnessed during the Covid-19 pandemic.
To build resilience, Grenada, Carriacou, and Petite Martinique must actively pursue diversification strategies, a discussion that has gone on for many decades, reaching its height during the Grenada Revolution from 1979 to 1983. With the demise of the Revolution, Grenada’s New National Party (NNP) jettisoned advances in diversification and focused on building the Grenadian economy around tourism and services, along the lines of the conservative Jamaican model.
Today, technology offers a promising avenue. Here is where the Dickon Mitchell administration earns high marks. Just 2 years into its term in office, the government has moved to rapidly diversify the Grenadian economy. Its “Transformation Agenda” is in line with the National Democratic Congress’s “putting people first” approach. The government is investing in digital infrastructure, training, and entrepreneurship that can create opportunities in areas like software development, business process outsourcing, and online services, tapping into the global digital economy. Cybersecurity is another big 21st-century service that the Grenada government has focused on, aiming to create a set of high-paying jobs that can expand the country’s tax and revenue base.
Renewable energy is another crucial sector. Grenada has significant potential for solar, wind, and geothermal energy. Developing these resources can reduce reliance on expensive fossil fuel imports, lower energy costs, and create new green jobs. Carriacou and Petite Martinique, with their smaller populations, could potentially become entirely energy self-sufficient through renewable sources.
Sustainable agriculture is equally important. Promoting organic farming, agro-processing, and diversification of crops can enhance food security, create value-added products for export, and reduce reliance on imported food. Carriacou and Petite Martinique, with their traditions of fishing and farming, can capitalise on niche markets for locally sourced, sustainable produce.
However, diversification requires strategic planning and investments. The government must create a supportive environment by offering incentives, streamlining regulations, and investing in education and training. Public-private partnerships are also crucial to mobilise resources and expertise. Regional cooperation through Caricom can help facilitate diversification efforts by expanding market access and sharing best practices.
So, while tourism will likely remain an important sector, Grenada, Carriacou, and Petite Martinique must prioritise economic diversification to build a more resilient and sustainable economy. By investing in technology, renewable energy, and sustainable agriculture, Grenada and Caricom nations can reduce their vulnerability to external shocks and create a more prosperous future for their citizens.
Michael Roberts is a New York City-based professional Grenadian journalist, Editor of Caribbean Times News, and political strategist for over 32 years.
