Scotia Bank's assessment of what Cricket World Cup has left behind
Business Editorial
Stabroek News
April 27, 2007
In the fullness of time both the governments and private sectors in Cricket World Cup (CWC) participating countries will undertake their separate assessments of how we handled this important assignment. Those assessments are likely to include how the respective regional economies fared in the wake of the influx of extra-regional visitors for CWC and whether or not, for example, the experience holds out any hope for a significant positive change in tourist travel to the region. Presumably, too, regional Heads of Government will, at some stage, assess the event with a view to determining how Caricom can build on the experiences that derived from the hosting of the event and whether, perhaps, there are opportunities to be seized upon for enhancing regional economic integration.
While some of these assessments will take weeks, perhaps even months to materialize, Scotia Bank, one of the major corporate sponsors of CWC, has already published an assessment, by its economic research arm Scotia Economics, of both the immediate gains that have accrued to the region on account of the game and the longer-term economic benefits that can be derived from our hosting of the event.
The report provides an inventory of both the infrastructure and the opportunities that have arisen out of CWC and assesses how these can impact on the economic development of the region. It also provides, both in general terms and in the specific cases of some of the CWC participating territories, an idea of the costs associated with the region's preparations to host the games.
It is a heartening, indeed a decidedly upbeat assessment that asserts, among other things, that the millions of dollars in investments in critical developmental infrastructure like roads, electricity, information technology and hotels that preceded the arrival of CWC in the region - along with the potential for a vastly expanded tourism market - provide a platform upon which the region can build in its quest to lay a foundation for economic development. Significantly, it makes the point, albeit subtly, that the real gains to the region from CWC ought to be measured not so much from the profits that were made from the influx of visitors but from the fact that the investments in the various areas of physical infrastructure can now be integrated into the broader, longer-term developmental goals of the region.
For example, the report makes the point that in the wake of CWC the region can anticipate foreign direct investments of between US$500m and US$700m much of which will no doubt target the region's manufacturing and service sectors. The influx of this fresh wave of investments will be facilitated by the improved roads, electricity generation and information technology infrastructure that are now in place and which, in their absence hitherto, may have been serving as a barrier to investor confidence in the region.
In the area of hotel development and the various other sub-sectors of the tourism industry, what CWC did was to provide a short, sharp burst of investment that is altogether uncharacteristic of Caribbean economies and would otherwise not have been undertaken.
As Scotia Economics Vice President Pablo Breard puts it, "the event has triggered considerable near-term investment in hotels and facilities construction, boosted demand for goods and services and inspired strong foreign currency inflows." In fact, Scotia Economics is predicting that the projected 5.5 per cent growth in the regional economy this year will, in large measure, be accounted for by the CWC.
The significance of the Scotia Economics study must be seen not only as a boost for a region that spent many months pondering the likely impact of its hosting of the games but also from the standpoint of the purpose that it serves as a kind of investment portfolio for the Caribbean. The study provides a credential from a highly reputable finance and banking institution that could attract the attention and interest of potential investors and lending institutions seeking objective information that can serve as a basis for making decisions on investment. In some countries in the region, including Guyana, we have been less than highly successful in "selling" ourselves as havens for investment and Scotia Bank, through its assessment, is certainly helping the region to sell itself abroad.
There is a clear message that is implicit in the Scotia Economics assessment which, hopefully, will not be lost to the region. That message is that what CWC has really offered is a window of opportunity that we alone can open and that we can only do so if, both as individual territories and as a region, we seek to build on the opportunities which the event has left behind.
The challenges are quite obvious. The investments in the various areas of infrastructure must be protected through the implementation of systems that seek to maintain and manage those facilities and, no less important, to integrate them into the broader development matrix of the respective Caribbean territories.
And if, as the report suggests, the potential for economic development in the region lies, in large measure, in a greater influx of tourists and investors into the region then countries like Guyana now have an even greater responsibility to seek to create an enhanced enabling environment. Scotia Bank's report, is, perhaps, most encouraging, insofar as it seeks to alert the region to the importance of seizing the opportunities created by its hosting of CWC.