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Sunday, April 20, 2014         

UNDER THE SUN


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Tourism-dependent economy can make you dizzy

By Cynthia Oi

POSTED:



As political turmoil tumbles through the Middle East and North Africa, the price of oil streams higher and the next thing you know, shipping companies that bring every 25-pound bag of rice, every sack of flour, every printer ink cartridge, spool of thread, Prada cashmere cardigan and monster truck tire to these fair islands are bumping up their prices.

The rise in fuel surcharges is very distressing to lowly consumers whose place at the bottom of the economic heap guarantees they will eat the increase whether they order the minibento or the protein-overloaded Zip Pac.

There is little solace in the knowledge that they won't be alone, that a prolonged surge in the cost of crude will mean a global battering.

But that's too much to think about. Here in the middle of the Pacific, in a state blessed and cursed by geography, there are worries aplenty, as small as they may be to the outside world.

You know the scenario. Higher fuel prices lead to higher airfares, which lead to fewer tourists, then decreased hotel occupancy with lower rooms rates and fewer tourist dollars, which result in layoffs. This will be followed by lower income-tax collections and other revenue, then budget-cutting at the state Capitol and county office buildings just as demand for government aid and services escalate. On the same track, drops in income reduce spending, slicing into retailers across the board. Economic instability makes businesses disinclined to invest, further stifling employment.

The predictable wobbly path of a tourism-dependent economy has yet to stimulate a better route or at least bankable sidelines to carry some weight. Talk of tech remains chatter despite a huge public investment via tax credits. Courting Hollywood with more financial sweeteners will never create a significant enough base to show Hawaii the real money, even if Cuba Gooding is the guiding star.

Renewable energy research and resource development still hold a glimmer but Hawaii's leaders have yet to offer crisp encouragement. Lack of focus in this field is evident. In merely setting deadlines on home-grown power production, the state hasn't done much to guide prudent projects that will serve all islands fairly and equally. This is especially pronounced in the plan to cover large tracts of land on Molokai and Lanai with wind turbines, run undersea cables to Oahu (an idea with unresolved reliability) and retaining the current massive distribution network (with questionable practicality) dependent on single-source technology.

Attempts to expand agriculture that would at least provide some food and economic security appears to have decelerated as calls mount for new subdivisions, shopping malls and resorts, not to mention rail tracks and stations, on arable belts.

Land development, everyone knows, cannot be the underpinning of small island economies. More homes, office buildings and supermarkets will be needed only if there are people who can afford to live in them, who are employed by businesses that lease workspaces and can find foods and goods at prices unencumbered by spiraling surcharges.

This discussion isn't new. And yet, it needs to be revived. Until these issues are evaluated pointedly and holistically, the predictable pattern of a defective economy will not be transformed.

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Cynthia Oi can be reached at coi@staradvertiser.com.






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