Minister of Tourism Richard Sealy is a member of a Caribbean delegation on a mission to the United Kingdom to convey regional concerns to the UK government about the implementation of the Airport Passenger Duty Tax (APD). The tax is estimated to significantly add to travel costs of UK’s outbound air traffic to the Caribbean. The importance of the British tourist market to Barbados is well documented. Minister of Tourism John Maginley of Antigua is also in the delegation, in a BBC interview he hinted the objective of his delegation is to give the British government first hand feedback on how the APD will impact tourism in the Caribbean. Although not hopeful they will be able to influence the British government to reverse/amend its decision in the near term, they are hopeful that the Caribbean will be included in future discussions when the opportunity presents itself to review the decision.
Most surprising has been the announcement by Germany to introduce a similar tax albeit with a lower rate regime. Germany has and continues to be one of the strongest economies in Europe and the world currently ranked as the fifth largest. Despite the current global economic conditions Germany has been one of the few economies to have performed well. The question being asked therefore – why would Germany implement such a measure at at this time? The tax will obviously add to the economic woes of neighbouring EU countries and beyond.
It seems if we are to understand the German financial analysts, the conservative mindset of the German government makes them oppose to deficit financing. The decision to impose taxes at this time is driven by a good economy. The moral of the story told by the German, manage the deficit when the economy is good because one doesn’t know when it will turn bad.
Germany as a member of the G8 would have participated years ago in the implementation of a system known as globalization – its basic design underpinned by trade liberalization, mobility of labour and interconnectivity of global financial systems. The irony of it all is for developing countries like Barbados to observe how a strong economy like Germany is retreating to a domestic policy which reeks of protectionism.
BU is sympathetic about the action regional governments have taken to sensitize the British government to the impact APD will have on our tourism dependent economies. It should tell us the need to restructure our economies. Our economies are already exposed to the volatility of oil prices which experts have forecasted will not* revert to price levels of old, we have to add tourism to the mix now that developed countries have fingered outbound air traffic as a revenue stream.
The blogmaster invites you to join the discussion.