be threatened. barbados is well positioned to be among the first to benefit from a revival in international resort tourism, whenever that occurs. the country now has a high proportion of tourism product in the top end of the market. although high net worth individuals were especially hard hit by the financial crisis, the high income market is expected to be the first to recover. moreover, barbados has acquired an enviable profile internationally as being among the most desirable of holiday resorts. i am not quite sure how we did it, but i saw it happening when my wife and i lived in maryland. when we arrived there in 1998 barbados was known only to the cognoscenti, but we began to hear the country being mentioned in the media with increasing frequency. tiger woods ’ wedding and serena williams ’ first visit raised our visibility, and rihanna has of course sealed our reputation. by the time we left maryland last year, barbados was a household name, and everyone we met wanted to visit. the onslaught of the economic crisis has not materially altered barbados ’ economic priorities or the constraints which those policies must respect. the economy continues to be driven by exports of goods and services, mainly tourism, which provide the foreign exchange needed to satisfy the country ’ s import demand. it remains the case that policies should be directed to diversification, principally by the exploitation of tourism niches. tourism will remain the principal engine of growth for the foreseeable future, and we must move ahead of the curve in renewing the product and innovating within the sector, to avoid the stagnation that will otherwise result from a stale product range. international business services, energy and environmental services are other known priorities. the government and private sector of this country are not short of good ideas for investment in these priority areas. the critical limitation is the capacity for implementation. it is not well known that some years ago the idb actually cancelled loans that had been approved for barbados ’ social and environmental infrastructure, because government failed to get the target projects underway, many years after the funding had been approved. this capacity for swift and efficient implementation of projects, while observing established procedures for accountability and disclosure, needs to be established and strengthened. it is not an overnight process, it is not easy to do, and it will not generate flashy headlines, but it is what really matters. barbados ’ institutional arrangements for making public policy are also a major strength of the economy, that enable the country to cope with the impact of the economic crisis,

in the industrialised world. and the automatic countercyclical triggers such as unemployment insurance payments and other income supplements are much weaker in the us. expansionist fiscal policies by the world ’ s largest economies are an essential element for the recovery of the international economy, and it is not an accident that the countries whose governments have been most vigorous in funding job creation from the public purse are showing the most convincing evidence of economic recovery. the workers who find jobs in the design, construction and renewal of public works in turn generate demand for the services of transport, finance, lawyers, engineers, health, education, public utilities and other services. governments need to borrow to fund the expanded expenditure, but there is a ready and inexpensive source of funding, from investors in search of low risk government securities. in contrast to largely self - reliant countries like the us, countercyclical government spending in small open economies like barbados is of limited use, and may have lethal consequences. in the us each extra dollar of income earned occasions no more than 23 cents of spending on imports. that means that when the us government spends $ 10 million to pay wages for new public works, those wage earners spend almost $ 8 million on goods and services provided by other americans, and only a little over $ 2 million on imported goods and services. in barbados it is almost exactly the opposite. our propensity to import is 76 cents of every dollar. were the barbados government to spend $ 10 million on new public works, only a little over $ 2 million of the money earned would be spent on items such as hairdo ’ s and bus fares, and almost $ 8 million would be spent on imports. in other words, countercyclical expansion in the us benefits mostly americans, whereas countercyclical policy in barbados benefits foreigners to a far greater extent than barbadians. ( a comparison of average import propensities for the five - year period 2003 - 2007 in the us and caribbean countries may be found in the newsletter of the caribbean centre for money and finance, january 2009, available at www. ccmf - uwi. org. ) what is more, there is nothing that can be done to reduce barbados ’ import dependence. almost everything that supports the quality of barbadian lifestyles and our high standard of living is imported, or has a high import content. import substitution activities such as chicken production and the pine hill dairy substitute imports of raw materials for imports of finished goods,