Economic diversification : a new life line for lesser developed countries? : case study of the OECS' tourism industry

Abstract

One of the great challenges facing policy makers is finding effective strategies that contribute to active and sustainable economic development. As arguments and evidence cumulate against the efficiency of neoliberal regimes surrounding the decreased stability and increased volatility and underdevelopment in Lesser Developed Countries’ (LDCs) economies that adopt these policies, researchers and governments are faced with finding an alternative that would fill in the gaps left by current policy strategies. The proposed alternative development strategy of Economic Diversification has proven to be effective in reducing the vulnerability, providing protection and adding to the growth and development of LDCs. These factors thus support the argument of this thesis that current economic development strategies are not contributing to the effective development of LDCs and thus Economic Diversification is the most viable alternative presently available to them. A case study of the Organization of Eastern Caribbean States’ (OECS) tourism industry is conducted because of the region’s use of neoliberal policies. This has led to a heavy reliance by OECS governments on one sector for revenue generation, currently seen in its tourism industry. This unbalanced economic structure has led to member states’ economies being very susceptible to shocks that occur internally, regionally and/or in the global economy. Therefore the apparent inefficiency of current neoliberal policy regimes in the region makes it a credible candidate for investigating if economic diversification would be an effective alternative economic development strategy for the region and whether the region’s tourism industry can be used as a catalyst for its application.