What does outsourcing really mean for the Caribbean region
- Tuesday, September 25th, 2012 at 2:50 PM
Portia Harrigan
I spent twenty-two months in the Bahamas between August of 2010 and June of 2012 and came away with what I consider a PhD in Life Studies. The life lessons that one does not learn in a classroom, the lessons that no amount of reading can impart. The kind of lessons you have to learn first hand, through experience- one of them being the up close and personal of a nation grappling with the unexpected realities of a changed global economic environment.
Firstly, what I saw was an advanced case of what is currently developing throughout the region. A nation of people who had become so comfortable in the past, that there were nominal plans for the future, which was now upon them. An overly bloated public service, an education system which long ceased to be relevant, a healthcare system in disarray, skyrocketing crime and social decay and a telecommunications system way behind many of its counterparts. The socio-economic landscape had drastically shifted beneath the very feet of my fellow Bahamians, but most were totally unaware or unprepared as for the first time in modern history, the unemployment rate in the Bahamas exceeded 17% in 2011.
The deep global recession from which the major players in the developed world were ever so slowly emerging, was taking a firm grip on the country. And, even those who may have thought they were well prepared were hard struck by the reality that things just weren’t what they seemed. In my own family were young doctors and lawyers, who could not find work.
The law firms were downsizing or not hiring. After all, only Bahamian lawyers could practice in the Bahamas and specialisations are very limited. Few Bahamian lawyers are trained in or have experience working in areas such as financial services and so the nation is pretty much oversaturated with lawyers, with no international firms to absorb the excess. As for the doctors, one remains unemployed, one has been sent off to a family island as the community doctor (sans much experience) and another has found work with the new Bahamar Hospitality development as a health inspector.
In addition, in a country that graduates over 5,000 students from high school alone each year, companies were downsizing or “outsourcing”, that nasty little five-letter word that nobody wants to hear. The president of the United States, Barack Obama talks frequently about giving tax breaks to companies that bring jobs back to America, but as Thomas Friedman wrote in the New York Times last August, unlike what Barack Obama thinks about outsourcing just being about jobs, it is about global competitiveness, it is about channeling as much to the bottom line as is possible. It is about getting the job done the best way at the most cost efficient rate and if you don’t do it, you will not compete. He suggests that to remain competitive therefore, requires that one must become a part of the outsourcing phenomenon.
And so, like America, some of the jobs that leave these shores will never return. The very word “outsourcing” can be quite deceptive too, leading one to think that the jobs are simply being sent abroad, but this is not necessarily the case as immigration laws also allow for the importation of cheap labour. The tech capitals of the United States are reeling from such a reality, but the reality also is that Chinese, Russian and Indian immigrant technologists have transformed the industry, creating immeasurable wealth for thousands of Americans.
According to the OECD’s PISA tests, the United States and the United Kingdom have lost their competitive edge, particularly in the areas of math and science and the countries excelling are South Korea, Singapore, Hong Kong and Shanghai China, places to which jobs are being outsourced. The only Caribbean nation on that list is Trinidad and Tobago, ranking 52 of the 73 countries tested. This suggests that this region’s challenges in education are similar to those of the US and the UK, lagging behind while the world’s requirements in certain industries now require specific expertise or specific expertise at lower costs, very limited human input or no human input at all, with the emergence of more intelligent robotics.
The report on education in the Bahamas is that of the 5,000 high school students graduating every year, the overall average is a D, with many students failing the two basic subjects of English Language and Math. Thomas Friedman writes in his article, “The trend is that for more and more jobs, average is over. Thanks to the merger of, and advances in, globalization and the information technology revolution, every boss now has cheaper, easier access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before.”
He writes on to say, “Which is why it is disturbing when more studies show that American K-12 schools continue to lag behind other major industrialised countries on the international education tests. Like politicians, too many parents think if their kid’s school is doing better than the one next door, they’re fine.” Thomas Friedman is a patriotic American, but he realizes that in order to fix America’s problems, they must firstly be acknowledged and secondly be addressed and so too with urgency. It is with extreme urgency, that we too in the Caribbean must acknowledge our weaknesses.
There is no denying that Caribbean citizens are pursuing the highest levels of education, for as in the Bahamas, there are more lawyers than the country can readily absorb. There are also a number of persons aggressively pursuing MBAs and PhDs, but sadly, many of us are not taking advantage of opportunities to broaden our life experiences, we are not availing ourselves of the overseas training available to us in our respective companies, we are not conversant in current affairs and we are not paying attention to the changes in the very sectors in which we work and so the story of outsourcing continues.
The message here is that education does not begin or end in the classroom-education is constant and all encompassing. Right at this moment, I am finding it necessary to undergo rigorous restructuring to remain relevant or die; it is a constant matter of sharpening one’s saw, according to Stephen Covey’s Seven Principles of Highly Effective People. The world is constantly changing, it does not stop to let anyone off and if the Caribbean does not change its approach, adjust its perspectives, seek to be current in what is happening on the world stage, we will be left behind.
This outsourcing phenomenon will not go away, for as every CEO sees it today, the world is his marketplace. His clients are everywhere and the availability of labour to service his clients is everywhere and under the concept of globalization, he is free to engage the best and least expensive labour for his business from anywhere in the world. The modern CEO does not see it as outsourcing; he sees it as remaining competitive, he sees it as survival.
And so, what does the region do in light of the “outsourcing reality?” We must confront it head on. The issue must not be allowed to linger, unaddressed as the Eastern Caribbean dealt with the banana issue. The shifts in the economy are inevitable and the population must be prepared for a new vision. New forms of economic stimulation must be pursued, there must be incentives and grants made available for the easy establishment of SMEs. The private sector must be unleashed to explore, develop and implement new ideas.
The region’s tourism products and services must be upgraded. The issue of Human Capital Development must be acknowledged and addressed—this is a Caribbean wide challenge. The current Minister for Education in the BVI has introduced Financial Services and Tourism Studies at the High School level and this is highly commendable, however, it must go further. It is extremely urgent that we address the deficiencies in math, science and reading in our schools. Throughout this region, students are graduating without the fundamental understanding of subject –verb agreement; many are unable to write a simple application letter and math and science have become to some, a form of gibberish, some sort of incomprehensible foreign language. The issue of education must be addressed holistically; teaching methods, technological integration, the learning environment, class sizes and most importantly, parental involvement.
Outsourcing, impacting women more directly in many cases is but only one of the socio-economic challenges facing the region. A result of the collapse of the construction industry is the high rate of unemployment among our men. The industry continues to be stagnant with very little activity and with new technology, may never return to prerecession levels. These men therefore need to be retrained. They must develop new skill sets. In the BVI, there is room for more captains, landscapers and maintenance personnel. These men must be afforded the opportunity to develop their computer skills.
Today, waste management, formerly referred to garbage collection has become very sophisticated and requires computer skills, allowing for a high-income capacity. These are all good paying jobs/businesses, which today require the requisite training for proper compensation. Someone who has invested a million dollars in a home wants top rated landscaping and that requires training. This is the way of the future and we must get on board.
As for us women, there is a new book out entitled “The End of Men and The Rise of Women”, suggesting that notwithstanding the challenges that women too face in the current economy, we have pulled quite ahead of men and the power dynamics between men and women have radically shifted at every level of society. In many situations, the earning, learning and spending capacities of women are far outstripping men and this could be the new reality. A reality which requires women not only to carry a larger share of the familial financial burden, but also requires that women step forward in greater numbers to offer solutions for the region’s burgeoning socio-economic challenges.
Portia Harrigan is the former Managing Editor/current Project Coordinator of Business BVI, Managing Editor for eWoman Magazine and the Managing Director of Oyster Global Marketing Group. She has written extensively in the local media since 1993.
Copyright 2013 BVI News, Alliance News Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.
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Market in India has turned it into a incredibly favorable location. Outsourcing to India promotes the requirement for software goods which have global quality for several industrial and business areas.
I am just 25 years old and – can you believe I went through all the blogs and the article?? Yes. I did. This is one of the most intellectual discussion I have even seen on a news site. I must say special thumbs up to Confuscious, Ray and some other blogegrs who I now know by those names because of the great contributions they usually make. Maybe you guys should start submitting full articles instead of responses. Hopefully admin will allow. AGAIN. The issues discussed are serious. I look forward to the continuation of this first-class dialogue.
@M. Sceptic. Just wanted to acknowledge your post & express my personal appreciation of it. Comments such as yours I find more valuable & meaningful than solely liking or disliking a post as it shares your thoughts one way or the other.
What you have witnessed here is what I term interactive blogging which I consider a better way of communicating similar to the way we would engage in real life conversations. It’s not a completion; rather it’s a dialogue and exchange of ideas all made easier because we had a great article to begin. For me, blogging is about learning and sharing ideas, and it’s good that you found the entire process an intellectual one. As you witnessed while reading, there are some very thoughtful & capable people who routinely blog here. I encourage others to follow similar suit.
As for writing articles, I personally prefer at the moment to express my thoughts on topics as they appear in the news in real time as oppose to writing articles. It’s easier for me to do so relative to commitment and my daily obligations. Keep reading.
Excellent article Portia. A focus on cutting edge math and science, and introducing a multilingual culture- that is building a significant part of the population that is fluent in written and spoken English, Spanish and Mandarin. The BVI must get savvy in dealing with a global environment that is rough and tough, and unforgiving, with capital and labour moving where it receives the best returns.
Dickson, this is great. I think we are a maturing community. I actually wrote the article on Friday last, completing it on Saturday, with the intent of sending it out on Monday morning. Reading the comments on other articles, I was a bit reluctant as I did not know if I could take the heat, but I must say that it is very refreshing to read the very substantive and intellectually stimulating responses.
I do hope, that just as you write often on these issues that we can encourage persons like Confucius, E Leonard and Ray in particular to participate in more of a public forum. It’s time for us to have all hands on deck and for the best and brightest minds to contribute in a meaningful way.
Yes Portia- we have to be tough when writing on this type of format and unforgiving forum-but be encouraged-and like the Great Winston Churchill did- use criticism and harsh comments to become stronger and wiser
A deep, penetrating, and profound article written from a personal experience and perspective of where the rubber meets the road and from the grassroot level. Portia, superb job!
Outsourcing, like offshoring or globalizing, is a buzz word that is sweeping across the globe. Typically, outsourcing or offshoring is a means used by MNCs
in developed countries to produce goods and services in underdeveloped and developing countries. For the most part, it is often a win-win for both developed and underdeveloped/developing countries.
For underdevoloped/developing countries, it provides badly needed employment and economic growth opportunities. And for the MNCs, it boosts their profit margins, meeting shareholders expectations. Education, stability, security, transportation, infrastructure……..etc are key factors in attracting and sustaining outsourcing. All of these factors are important but a steady stream of educated and qualified labour is a core requirement.
The more educated and deeper the workforce the stronger the comparative advantage, producing goods or services at a lower marginal or opportunity costs, in providing outsourcing services. To gain either a comparative, competitive, or absolute advantage in outsourcing, the BVI has to promote and invest heavily in its human capital. It has to raise the bar on education, especially in the STEM area.
Outsourcing may be a means and method for enhancing economic growth but it needs to be well planned. The BVI cannot do irreparable harm to its pristine environment to meet the demands of outsourcing; there must be a balanced approached.
Nice to hear your input Leonard. Could you expand on that last statement if you will in that “there needs to be a blanced approach.” What specifically would you consider a balanced approach to outsourcing? Thanks in advance.
Ray, here is a cursory peek at what I think a balance approach may entail:
***establishing reasonable and workable policies to prevent the impairment of the sea, and to protect other natural, and cultural resources;
***developing and implementing policies to protect public health and safety;
***requiring companies to take resonable effort to employ qualified Virgin Islanders in middle and senior management capacities and not just as heavy lifters;
***paying a reasonable impact fee to cover additional services resulting from any development ; a developmental link fee. For example if the electric power plant has to be expanded solely to accommodate a specific development, that development should incur its fair share of the additional cost;
***ploughing back a reasonable percentage of profit back into the local economy. Encouraging shopping local to the maximum extent practical;
***requiring public sector incentives to provide tangible benefits to the BVI and Virgin Islanders;
***requiring investors to have some reasonable “skin” in the game;
***local entrepreneurs having an equal access to public sector incentives as external investors; and
***requiring companies to provide reasonable and attainable plans of action and milestones (POA&M) ; and hold them accountable for meeting them.
Thanks again Leonard. Appreciated.
E. Leonard, it would be great if we can connect. Please reach out. You know where I am at Oyster.
Very good article. What makes me laugh when it comes to outsourcing is that everybody want things cheaper but everybody wants to make much more money every year. Both cannot happen, it’s either or! The problem in the BVI is the entitlement mentality and things coming to easily when it comes to jobs especially. We were nowhere near ready for this shift and it has caught most of us offguard. Sadly many are spending their last penny trying to get a ‘certificate’ from somewhere but that won’t cut it either. You either know or you don’t, you either can or you can’t. If we don’t pull up our socks soon we will be the new expats, seeking employment in other people’s countries, what a day of irony that would be!
Your comment doesn’t make much sense. Labour is outsourced so the company mostly for cheaper labor to increase the bottomline for the company. It is always about the company and its shareholders being able to put more money in their pockets. it is never about the host country. It is never about the people in the country who receive these ridiculous low wages for doing the SAME work that would be done homeland employees such as the US. So a Trinidadian call center worker makes $3.00 per hour answering phones for these huge telecommunications companies or airlines- these same jobs done by a US worker would cost the company perhaps $15.00 per hour. Savings are not passed on to consumers. So outsourcing is always about the bottomline for companies. Here in the BVI these overseas firms that the Government continue to give licences to come and operate here are increasingly trying to take as much as they can from the BVI and give less and less. They make all kinds of promises before they get in and once they are in BVI Islanders become decorations in their offices. The labour department continue to provide work permits for persons to come here and receive training from BVI workers only so they could go back and do the work that will now be outsourced from the BVI. They take and they take and for some reason unless the Government/Premier really understand how these financial services work he will continue to jeopardise the future of the BVI by continuing to grant licences to overseas firms to conduct business in the BVI.
First let me say this is a well written article that provides a good background discussion on what outsourcing for the Caribbean really means. Some of the responses have been great as well. I enjoyed reading both the article and the responses. Confuscious as usual, good commentary. Any intellectual discussion is my cup of tea, and this one soothes my throat.
As for outsourcing, it is here to stay and has become a part of the global economy. Typically, when we think of outsourcing, we do so in the context of developed nations (U.S. U.K, etc) manufacturing goods or providing services in less developed nations at a much lower cost than what is possible in those developed nations, and re-importing those goods and services to be sold at a much higher cost. The practice has its critics as there are real concerns about labor conditions and the human cost when goods and services are produced on the cheap. But nevertheless, despite this, outsourcing has essentially transformed countries such as the U.S. from a previous manufacturing economy to a service one, and there is no sign that is about to change any time soon.
If one look at the countries that have been able to take advantage of outsourcing opportunities, they are highly populous, quite often poor countries relative to working wages and conditions. Some like India have a highly educated populate, have highly sought technically skilled individuals, and are fluent in multiple languages, most importantly English.
Therein lays the challenge for the Caribbean. Despite English is the predominant language spoken, a plus to outsourcers, many Caribbean countries lag behind in English proficiency. Our tendency of having our own dialects, which is ok, is not international friendly. Additionally, many Caribbean countries do not have a large reservoir of highly technically trained individuals. Most importantly, practically all companies who outsource goods and services are doing so to maximize profits, and would not find the Caribbean a profitable venture simply because wages tend to be much higher than let’s say China, India, or even so Latin American countries. Additionally, the various governments’ labor policies would make it difficult to set up shop.
Nevertheless, all is not doomed. The Caribbean can get in on the act if respective governments can create attractive conditions for outsourcers such as negotiating free trade agreements. With respect to the B.V.I., our greatest assets are our people and it’s very high literacy rate compared to the region as a whole. Indeed, the B.V.I.’s literacy rate is in the high 90s. If our government and businessmen & women could tap into that literacy, they might just get a share of the outsourcing pie by finding suitable outsourcing products or services. If we are going to grow economically, we are going to have to be open to all possibilities, or get left behind in the dust. Money is money. The financial and tourist sector is not going to cut it as we along.
Exactly. That’s why America is suffering. They were spoiled, they had Unions etc. driving up costs of doing business. I’m not saying anything is wrong with that, but the sad reality is, with technology, companies will do what’s in the interest of the bottomline, and that’s the ‘bottom line’. When they have to worry about this coverage and this liability, this union, this sick out, this walk off, costing them millions. They set up in places where they’re happy to work. Sounds familiar? BVI mentality. Not saying we should let people have us like slaves, but we have to agree our mentality when it comes to what’s expected on a job is not the greatest. Showing up on time and leaving at 5 doesn’t constitute a day at work. Financial Service companies can move to other jurisdictions like Panama and save 60% in costs and get better service, sad, but it’s TRUE! So, what will we do? SIt complaining with our maroon passport our get our asses in order? you pick.
Speak for yourself. Many private firms/Trust Companies work their staff like slaves with no recognition yet those personnel still go the extra mile. If you don’t know what’s going on behind the brick walls ask someone who knows.
This article is on point Mrs. Harrigan and a well needed harsh dose of reality for us here in the VI. BVI Blood and Confucius made some good points in their comments.
It is a combination of factors that we need to address and need not play around with them.
1. Immigration and Labour Policies;
2. Increase educational awareness and concentration in other areas beside Financial Services and Tourism;
3. Like Conficius already stated human capital and environment; and
4. Succession planning which we currently have none of in the public or private sectors.
5. Last but not least, the gathering of proper STATISTICS so elected officials and senior civil servants can make sound decisions based on ‘factual data’ instead of the grab out of the air decision making we have been experiencing in the last 20 years.
If you watched CNN last Sunday, what she wrote in this article, was just part of Fareed Sakaria show
http://globalpublicsquare.blogs.cnn.com/?iref=allsearch
What are you suggesting?
I thoroughly enjoyed this article. Much food for thought.
This is a very well thought out and timely article. FACTS! I have told people over and over again, simply getting a ‘degree’ doesn’t cut it in these times. If you are not versatile and know how to articulate yourself in certain situations your piece of paper is totally useless. Qualifications means being as well-rounded as possible, being able to handle situations from all angles, not just being a ‘tick box’ person. I hope as much people read this as possible and realize what’s happening and what WILL HAPPEN in the BVI.
No longer will we be able to ‘cut style’ on being bartenders, waitress, sailors, barbers, hairdressers, captains, landscapers etc. We will have to start looking at ourselves and get out of this comfort zone because it’s not going to last forever. Many expats coming here for work and opportunity have already gone through these things in their homeland which is why they are so grateul for any little thing they get here, they can appreciate it because they have seen firsthand what it is for a country’s economy to go belly up.
The BVI can be saved, but it’s up to us to stop being small minded and unify with one goal in mind. Complaining and thinking that Government is the answer to everything will not work. As we speak, Government doesn’t need half of the staff they employ, they know this, but they also know that laying off will cause a bigger problem so what they do? Struggle to pay them all each month hoping that some day soon the private sector can hold some of the strain. Can that happen? Not right now, as the private companies are downsizing as well. Finally, a lot of our labour and immigration policies will come back to bite us and it doesn’t seeem as if we are aware of this.
Thank you ever so much Ms. Harrigan! I have said it before and will say it again; how many doctor’s lawyers and accountants can we really expect to absorb into the BVI economy? We MUST expand our horizons!
Government talks about the twin pillars of our economy being financial services and tourism. I believe the twin pillars of our community are our people and our environment ~ in that order. Let’s be honest, we have very little to offer the outside world other than a stunningly beautiful environment, that also happens to offer the single best recreational sailing grounds in the world.
We cannot feed ourselves and are almost entirely dependant upon outside sources to provide our food. If there were to be a famine in North America, we would be in very serious trouble! The idea of a major famine is not so far fetched. With the global weather patterns changing so drastically in recent years, flooding and droughts have become common place. Both types of major disasters destroy crops. There are also hurricanes, tsunamis and earthquakes to consider. Are we any better prepared to handle the aftermath of a major disaster than Haiti was?
Not so long ago, our government made moves towards building greenhouses on Virgin Gorda. However, this project has been at a standstill for quite some time. So we have to ask ourselves; what if the worst scenario happens? What then? Will we all suddenly call Omar Hodge a visionary who wasn’t appreciated by his own people? Will he become the next Noel Lloyd?
Sadly, we have egregiously mismanaged our environment in recent years. Large mangrove stands have been destroyed by oil spills and land reclamation projects, with very little concern for environmental ramifications. Hundreds of thousands of tons of dirt, rocks and boulders have been poured atop coastal reefs and upon the sea bottom in an effort to manipulate our coastal land mass. The next great government project always seems to take precedence over our environment. In many cases, no environmental impact studies took place ~ but even when they were conducted, the “perceived” benefits always managed to outweigh the environmental expense. I cannot remember the last time any major project (government or otherwise) was terminated, moved or substantively altered due to the potential for unacceptable levels of environmental damage. I believe these studies are performed in an effort to mitigate the potential political uproar caused by those pesky environmentalists who are always causing trouble for our government ministers. Our government seems to just go through the motions to placate the public.
Our single major resource is our people ~ and specifically our youth. Unfortunately, we are woefully mismanaging them as well. With little to offer the outside world in order to attract outside dollars, all we have is our own collective intelligence. Yet our collective intelligence quotient is not keeping pace with the outside world. In fact it never has. We simply cannot compete on a level playing field. Crime statistics amongst our youth is out of control. The high school drop out rate among young men is escalating. Unemployment amongst our youth has sky rocketed. Our prison is full to bursting with young men under the age of 30 and our moral values have become barely perceptible.
Is it so outrageous to think that the BVI “could” become the next great brain trust for technological advancement? Why not?
OK, so we don’t have a lot of land mass. We can’t grow our own food and we aren’t the wealthiest nation in the world ~ but let’s ask ourselves what if? What if we invested in our own children and their education? What if (as a community) we set about to become the world leader in solar energy or wind energy systems and design ~ or anything else for that matter! All we need is one (or two) small pieces of the pie to guarantee our children’s future.
What if, our government were to hire a few of the the best and brightest minds in the field of solar and wind energy sytems and have them start a college course specific to developing new solar and wind technology systems? What if we dedicated a new wing of the college to ONLY this field of study? Is it possible that we could generate a new industry for the BVI? An industry in which we could actually have a hope of becoming competitive (and perhaps even a leader) on an international level? We have all the natural resources right on our front door step. We have wind and plenty of sun! The BVI is an ideal place to promote and develop green technologies! All we need is a physical location to house the course, the required equipment and the high calibre people to make it happen. Of course, we will also need politicians who will back the “green movement” rather than fighting it with every fibre of their beings.
I would rather invest in the development of green technologies and our children’s future, than a new airport! Once the airport is built, then what. Do we just wait for the airlines to knock down our doors, begging to provide regular flights into and out of the new and improved BVI? Are any one of us really willing to put a LOT of our eggs in some airline’s basket, HOPING they will do right by us? Do we really want to invest all this money on a wing and a prayer that somebody else controls?
We currently have all of our eggs in financial services and tourism. WHY shouldn’t we expand our horizons? Why shouldn’t we put some of our eggs in our children’s baskets and provide them with the means to catapult themselves and the BVI into an emerging international market? Is it possible that we may have the next Albert Einstein or Stephen Hawking amongst us? Is it possible for the BVI to actually develop and possibly even “MANUFACTURE” something that might have global appeal?
What if?
Confucius,
It is obvious that you too have thought long and hard about where we are and how we can get to where we should be. We need to have these discussions with a view to actually implementing what is deemed feasible. In these parts, we tend to spend a lot of energy talking, but it is often difficult to advance to the implementation stage. We spend to much time listening to the naysayers.
As for the airport, we do need that. We must begin to look at development from an holistic perspective, rather than in a vacuum. We need the airport capacity in order to create the appetite for product development on the ground. We have to be real, our tourism product, particularly on the island of Tortola is lacking and whether it is foreign or local , no one is going to invest in product if we cannot get the people here. There is interest out there, but we have to do our part.
Also, there is no reason why we cannot focus on specific areas of human capital development while we are developing infrastructure. As a matter of fact, that is what needs to be done. While the airport is under construction, we should have a number of persons in training to efficiently and effectively manage the respective areas. And, yes indeed, in light of the increasing costs of and growing demand for fossil fuels, we should be aggressively pursuing wind and solar energy.
Lastly, our children are our future indeed and now, more than ever, we should be investing in them to ensure that they can compete anywhere on the world stage.
I agree that an extended runway provides the opportunity to land larger aircrafts at TBL. And, yes, it will probably improve the BVI’s posture as a more competitive, high end tourist destination if there were direct flights into TBL.
However, there a few potential obstacles to the possibilities of sustained direct flights. Capital project priority and passenger load factor, which measures the % of available seating capacity that is filled by passengers.
The BVI is struggling to complete some other critical capital projects and adding $20-35M to extend the runway will exacerbate the financial position of the territory. It needs to prioritize its capital projects, funding its most critical needs first. Finishing the hospital, reworking the crumbling road network, and constructing additional high schools among others are more critical needs at this point. Confucius presented a workable plan for meeting our airlift needs that needs to be strongly considered.
Another issue is passenger load factor (PLF). From my days in airline economics class, numerous acronyms comes to mind RPM, ASM, CASM and PLF. Our hospitality industry planners, aviation planners, as well as others, need to peruse these acronyms. The breaking news is that no airline will maintain a route if the PLF is not consistently above the breakeven factor. The BVI is a small locale. Thus I’m not too sure it can support direct flights at this time. The bottom line is an extended runway could be a boon or a bust;this could be an expensive bust with significant opportunity cost. We need to pause and closely reexamined the pros and cons and cost vs benefits.
Ms. Harrigan, I truly appreciate your response. However, on the issue of the airport expansion, we are going to have to agree to disagree.
I truly believe that a well planned ferry terminal, (located in West End but not in Sopers Hole) extended ferry hours (to accommodate late arrivals in St. Thomas) and smaller, state-of-the-art ferries providing more frequent service, would serve our community much better than the current plans for the airport expansion. Further, I believe all of this could be accomplished much more quickly and at greatly reduced financial and environmental costs associated with the proposed airport plans.
But if we all agreed on everything, it would be a boring world. The point is moot however, as we have been told in no uncertain terms that we have no say in the matter.
@Confucious. I cannot remember a time ever that I have disagreed with your views as I believe we are cut from the same cloth, and have similar views on most subjects. I think you know I have much respect for your views.
I believe you to be are very thoughtful and mature person who would not take offense if I said, I see things differently on the airport expansion, and share Ms. Harrigan’s views on this.
I believe your suggestion relative to the ferry is good, but as I have stated on this forum before, I think the airport expansion would benefit the territory. It may not seem that way just now to some; however, I predict that when all is said and done, we will be able to look back at the airport expansion among other projects as one of the things that contributed to the growth of the B.V.I.s economy. Sure, it will cost some money, and the government should take all environmental concerns into careful consideration as they move forward, but I think they should proceed.
Nevertheless, despite I see things a little different on this one issue, I have a feeling that if I knew you in person, that despite our familial agreements, we would have engaging and insightful conversations filled with laughter. Take care brother.
To Spinx,
Firstly, I believe our market is too small to sustain any major airline for any length of time. The likelihood of “direct” flights being provided into the BVI from any major markets is slim and none. “IF” we are able to negotiate any deals with the major airlines, I guarantee you, the flights into the BVI will be MILK RUN flights with two, three and four stops along the way before they arrive here.
As our government is attempting to attract the high end visitor, what do you think will happen? That high end visitor may be willing to put up with a few small inconveniences to get here, but is he or she willing to actually suffer through a MILK RUN flight? The answer is absolutely not!
Yes the USVI is our competitor, (to an extent) but if we can USE their airlift facilities and concentrate on making the ride from St. Thomas as pleasant, comfortable and convenient as possible, we will be waaaaay ahead of the game ~with a much, much smaller investment and drain on our already strained economy. I am not saying that our own airport should NEVER be extended. I am only saying that now is not the time!
The USVI does not have the charter companies we have. They do not have the “relatively” safe environment we have. They do not have the beaches we have and they don’t have the relatively small population we have. Most of the people who come here, wouldn’t dream of vacationing in the USVI.
We can piggy back onto their (USVI) airport investment, provide state-of-the-art ferries and a wonderfully efficient and effective ferry terminal at a FRACTION of the cost of the airport. More importantly, we would not have to mess with nature and completely screw up an otherwise pristine Trellis Bay! In addition, all this could be accomplished in relatively short order. AND ~ I never said all of this would be funded by government. The ferry terminal yes. The ferries ~ NO!
It is time that the ferry companies step up their game. They are either in it to win it or they are out! Throw open the doors to investors and just see what happens. There is absolutely NO EXCUSE for broken down ferries or 2 to 4 hour delays. It is time our ferry companies had some pressure exerted on them to provide the service our visitors deserve!
Ray,
I know that we almost always agree on major issues, but this is one we simply cannot agree on ~ and no, I do not take offense with any opposing point of view.
It is what it is and time will prove one or both of us to be wrong. I just believe that we should err on the side of caution.
We do not have a very good track record when it comes to major projects. We only need to look at our hospital to verify that statement as truth. The airport extension is messing with nature and I do not believe that enough thought has gone into thinking through the entire project, including the major drawbacks of the physical limitation of the area and the proposed physical layout of the runway.
We can however manage to build a decent ferry terminal rather quickly as there are several in operation throughout the Caribbean that can be used as models.
I take no delight in the thought of saying, “I told you so” after having spent millions and millions and further millions on our airport extension. I am begging government to proceed with tremendous caution if they decide to proceed at all.
We are committing our grandchildren (and possibly our great grandchildren) to the debt this will airport extension will incur! Spending the time and money required to have it PROPERLY designed by those who truly know what they are doing is in not only in order, it is the only responsible way to proceed.
Confucius
Explain why you think it is wise to depend on the USVI, who is also our competitor in the area of tourism, for our airlift? They are Governed by the USA in terms of Ports and Security. DO you think it’s wise for us to join at the hip, invest in depending on them, not knowing how things can change in an instant, leaving us high and dry? Even with the airport extension they still need to work on the Ports so people will have a choice. But should we use that as our only choice? Do you realize that Government will have to pump millions into Ferries in order to achieve what you’re implying?
People seem to think Ferries make money hand over fist but that’s not the case. Ask anybody who went or tried going to St Thomas for the past 3 weeks. Pure chaos! Boats are down, some are struggling and barely keeping their schedule, others are 2hrs late. For that to change, Government will have to subsidize it to the tune of millions which I think is a waste of time to be honest. Either that or one or two players will have to drop out of the race. It’s not sustainable. When the US makes a rash decision regarding their ports then what are we to do? It’s not about who’s right or wrong here, it’s what’s practical in teh long run. USVI are struggling and need any penny they can get. We are friends, yes, but we don’t need to be so dependent on our competitor for traffic. Let’s do a survey on people that would rather ferry or fly direct and you’ll see.
Our reality in the BVI is that many trained locals do not return to our shores when they do take advantage of overseas opportunities, this puts a brain drain on the country. Also, the few locals that do return sometimes (and is becoming frequent leave) leave, which puts the country in a tough situation.
Outsourcing continues to be a problem for many Caribbean countries and the world over. However, the local labour laws still needs to be enforced/updated to ensure a level playing ground for all concerned.
Exactly and the locals remain, do so with a stink attitude hence the influx of expats. Many locals that own their own companies understand this but sadly, most employed by private firms can’t see this reality and make it an expat vs local issue. Until you sit in the hot seat you won’t know the temperature. We have been warned, we have time to turn around, but will we? Will we continue to bicker and banter like spoiled brats or take the bull by the horn to ensure a half-decent future at least, for our future generations? We shall see, but based on what I’v seen and am seeing now, we continue to praise ignorance and despise common sense and doing the right thing.
When you do the survey on the “most” and “many” locals you keep talking about then you can speak.
Great article. Well written and it’s our reality.
A very interesting read and a real eye opener
“its just reality”
tears coming to my eyes now
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