TED Case Studies

Tobago Oil and Tourism




            CASE NUMBER:             214
            CASE MNEMONIC:          TOBAGO
            CASE NAME:              Tobago Oil and Tourism

I.    IDENTIFICATION

1.    The Issue

With the decline in oil revenues during the 1980s, Trinidad and
Tobago found itself in serious economic problems. The government
decided to undergo structural reforms and start developing other
sectors of the economy, particularly the tourism industry. Tourism,
however, may be detrimental to the environment and careful planning
must be done in order to preserve the islandžs natural endowments,
which is precisely what attracts tourists. This paper examines the
current environmental situation of the country and the possible
impact of the tourism industry on the islandsž coral reefs.

2.    Description 

Trinidad and Tobago's economy has traditionally relied on oil
revenues, which represents 25% of the country's GNP. However, in
the last decade, oil production revenues declined as a consequence
of a slowdown in international oil activities and low prices. The
decline in oil revenues was a world-wide problem in the 1980s.
Economies once boosted by the 1970s oil prices were faced with a
sharp decline in their revenues when prices fell in the 1980s.
Mexico is a classic example of this problem. In most of these
countries, the increase in oil revenues was accompanied by an
increase in state-owned companies and state employment. When the
oil crisis came the burden on statežs treasury was even greater
because of all the state-dependent enterprises and employment. Oil
continues to be leading product of the country. Other sectors of
Trinidad and Tobago's economy only showed a marginal improvement in
the last decade and as a result, GDP decreased 60% in the period
1982-91. 

Trinidad and Tobago's government is now developing the tourism
industry in order to generate revenues and address social problems
arising in the last decade. For example, the unemployment rate of
the country is now 20.4%, which means that more than 100,000 people
are jobless in the country.(1) 

Tourism is seen as a solution for the economic problems of the
country because it is a labor intensive economic activity that
generates a considerable amount of revenue for the country. By
increasing tourism in the country, the goverment expects to
alleviate unemployment at many levels of the economy, since this
industry creates many (yet low paid) jobs.  An increased number of
tourists would demand more service and thus generate more
employment, from tour guides to hotel managers to cab drivers,
restaturant chefs and small handcrafters. The government expects
that this initial effort to build a base for the tourism industry
will also stimulate domestic and foreign private investment in the
country in the tourism industry, such as the construction of new
hotels.

The development of tourism, however, cannot proceed without careful
environmental planning because the tourism industry may be very
detrimental to the environment. A greater influx of tourists in a
country without the infrastructure to receive them may cause
environmental degradation that in turn will cause problems for the
native population or deplete the natural attractions necessary for
the tourism industry. In the Trinidad and Tobago case, there is a
chronic shortage of water in Tobago which is becomes critical
during the month of February, when Carnival is on and tourists
flood the island. The hotels end up absorbing most of the water
supply, leaving the local population without water. 

Another environmental problem that has arisen in the recent past is
the depletion of sand for construction purposes. This has not only
damaged the beaches, but also ruined the natural environment where
turtles come to lay their eggs. Since Trinidad and Tobago's tourism
industry development project relys heavily on eco-tourism, this
coutry needs to create a very strong infrastructure in order to
comply with the development plan's idea and secure the island's
environmental assets.

Trinidad and Tobago's environmental problems are multiple and the
development of tourism is likely to worsen the situation if it is
not done without regard to the environment. This case looks more
specifically at the siuation coral reefs in the island of Tobago
(see CORAL case). There are different types of coral reefs off-
shore the island, and they are being harvested or destroyed in
different manners because of unplanned tourist activity. For
example, coral reefs are being harvested for sale to tourists and
sometimes Tobagonians rent special rubber sandals to tourists so
that they can enter the sea and step on coral reefs without harming
their feet. 

Coral reefs take a long time to grow and they are being harvested
or destroyed in a much faster pace than they can reproduce
themselves. With an increase in the number of tourists entering the
country the tendency is to worsen this situation if there is not a
careful plan to protect this natural asset of the island.

3.    Related Cases

     SAOTOME case
     MADEIRA case
     BERMUDA case
     CUBA case
     GALAPAG case
     HAWKSBIL case

      Keyword Clusters

      (1): Trade Product                  = TOURism
      (2): Bio-geography                  = TROPical
      (3): Environmental Problem          = HABITat Loss

Madeira Island has recently been faced with tourism development
projects and its consequences (see MADEIRA and SAOTOME cases). Sao
Tome and Principe, off the coast of Africa, have been dealing with
the same problem. In the Galapagos Islands, ecotourism has started
to bring about disastrous consequences to the archipelago's
delicate and valuable natural heritage. Finally, Bermuda presents
a case in the same region as Trinidad and Tobago, where the clash
between fishing and tourism has raised concern about the island's
economic priorities. All these cases analyze the impact/role of
tourism in island settings.

4.          Draft Author: Aya Tanaka

B.          Legal Clusters

5.          Discourse and Status: DISagreement and INPROGress

While environmental concerns are an important variable when
deciding upon a development procedure, they seem to be at the same
time an issue aside from the main core of the process. The
development of the complex tourism structures must be monitored and
subject to environmental impact assesments. The lack of legal
mechanisms in Trinidad and Tobago to access potential problems with
tourism development makes it an obstacle to tourism development,
since the žopen-endedž character of the situation increases the
risk of both foreign and domestic private investment. 

6.          Forum and Scope: TOBAGO and UNILATeral

7.          Decision Breadth: 1

Even though the nature of the project is based on eco-tourism,
there are many problems that have to be addressed in order to make
Trinidad and Tobagožs general policies coherent with the project
that they want to implement. There are no formal regulations
addressing the environmental impact of development projects, which
so far have contributed to the deterioration of the islands,
particularly the water supply side. The master plan for the turism
project refers to a private organisation, TIDCO, as responsible for
the environment monitoring of the projects.  So far, there are
ammendments under consideration to planning legislation in the
country's legislative branch.  The tourism project is based on a
loan to be made by the Interamerican Development Bank.  The
Interamerican Development Bank is assessing the situation and
building a master plan to develop the island's tourism industry,
but it is the Trinidad and Tobago's government responsibility to
implement it.

8.    Legal Standing: LAW

III.  GEOGRAPHIC Filters

9.    Geographic Locations

Trinidad and Tobago is a two-island archipelago located in the
southernmost end of the West Indies, 7 miles off the coast of
Venezuela. The two islands are 21 miles apart. Port-of-Spain is the
national capital. The population of the country is about 1.3
million, and the ethnic composition of the islands is 40% African-
origin, 40% West Indies-origin, and 20% other. The most interesting
factor that distinguishes Trinidad and Tobago from the rest of the
Caribbean Islands is that geologically, the islands share their
ecological origins with South American mainland rather than with
the Antillean arc: Tobago's Main Ridge is believed to be the
furthest reaches of the Andes. This particularity means that
Trinidad and Tobago boasts a continental range of flora and fauna
not found elsewhere in the Caribbean. 

10.   Sub-regional Factors: NO

Trinidad and Tobago are two very distinct islands. Trinidad's area
is 15 times bigger than that of Tobago (1,864 sq. miles and 116 sq.
miles, respectively). Trinidad is more developed and most part of
the economic activities happen in this island. Tobago is virtually
undeveloped and thus very vulnerable to insensitive exploitation;
there is already a pressing problem with this island's water supply
and sewage system, which is already being used over its capacity.
When tourists come, particularly during Carnival, hotels tend to
use up most of the islandžs water supply and go over the capacity
of the islandžs sewage system, thus creating water problems for the
native population. Please also see number 10 for other sub-region
characteristics of Trinidad and Tobago.

11.   Type of Habitat: TROPical

The climate is maritime tropical, high in humidity, and displays a
wide variety of species. While Tobago's sea shore has a typical
Caribbean outlook, Trinidad's sea is rather muddled because this
island lays close to Venezuela's Orinoco River delta.

IV.   TRADE Filters

12.   Type of Measure: Regulatory Standard [REGSTD]

13. Direct vs. Indirect Impacts: INDirect

Environmental problems have an indirect impact on the tourism
industry. First, the uncertainty of the environmental regulations
may create a disincentive for potential domestic and foreign
investors. Second, if the tourism industry will rely on eco-
tourism, the state of the islandžs environment will be incoherent
with the image they are trying to market.

14.   Relation of Trade Measure to Resource Impact: LOW

One of the most pressing environmental problems of Trinidad and
Tobago is the destruction of its coral reefs (Tobago). The influx
of a greater number of tourists will have a direct impact in this
problem if measures are not taken to prevent the destruction and
harvest of coral reefs.

Other potential source of environmental problems is hotel
construction. In fact, construction in the island has begun
depleting sand from the beaches. Also, if the sewage system of the
island is not rebuilt in order increase its capacity, new hotels
are likely to cause extrenuous problems for the islands'
population.

15.   Trade Product Identification: TOURism

16.   Economic Data

      Trinidad and Tobago's tourism industry output averaged $200
million over the 1980-89 period.

17.   Impact of Trade Restriction: LOW

18.   Industry Sector: TOURism

19.   Exporter and Importer: MANY and TOBAGO

The whole Caribbean region relies heavily in tourism. While the
islands in the north of the Caribbean arc attract mainly North
American tourists, the ones which lay in the southern end of the
arc are likely to attract more Europeans. Another distinction to be
made between tourist origin in the Caribbean is throught the type
of colonization they had. For instance, Dutch tourists are more
likely to go to Saint Marteen, whereas French tourists are more
likely to travel to Martinique and so on. In general, three fourths
of the tourists come from North America and the other half from
Europe.  In 1991, Trinidad and Tobago had 219,836 visitors; 159,735
came from the U.S. and 49,292 from Europe. The rest did not
specify.(2)

V.    ENVIRONMENT Filters

20.   Environmental Problem Type: HABITat Loss

Coral reefs are being destroyed by the tourists who step on them
with plastic sandals provided by tour guides in Buccoo Bay in
Tobago. In Kings Bay, divers hunting for parrot fish end up
breaking the coral as they aim and shoot at the fish. Black coral
harvesting for sale purposes is also depleting the reefs of Tobago.

Other sources of environmental degradation possibly include tourist
trash, cruise trash, souvenir sales (which may use the islands'
animals or vegetation), and other impacts.
 
21.   Number of Species

            Name:             MANY
            Type:             MANY
            Diversity:        NA

22.   Resource Impact: MEDIUM and Structure [STRCT]

23.   Urgency of Problem: LOW and 100s of years

24.   Substitutes: Eco-Tourism [ECOTR]

Eco-Tourism may be a possible solution to the influx of tourists,
but infra-structural reforms are needed before the island is able
to accept tourists.

VI.   OTHER Factors

25.   Culture: YES

The main attraction of Trinidad and Tobago is Carnival in the month
of February and the influx of tourists increases at least tenfold
during this time. Trinidad and Tobago claims to have the most
traditional and best carnival in the world. Another significant and
characteristic attraction of the islands are the brass drums bands,
made of old metal oil barrels. These bands are another particular
charm of Trinidad and Tobago that are not found elsewhere in the
Caribbean.

Culturally, there is a historical resistance to the tourism
industry, which is regarded as a form of colonialism. It is easy to
picture crowds of white tourists from North America and Europe
being served by native Trinidad and Tobago people, who are
overwhelmingly (80%) of African and West-Indies heritage.

26.   Human Rights: NO

27.   Trans-Boundary Issues

Because Trinidad sits right at the delta of the Orinoco River,
Venezuela's main river, Trinidad's surrounding seas is deeply
affected by the composition of the water that comes from the
Orinoco.

28.   Relevant Literature

ARA Consulting Group, Inc.  Trinidad and Tobago's Tourism Master
      Plan, Canada, 1994

Inter-American Development Bank. Trinidad and Tobago Reports.
      Washington, DC: IDB, 1993-94.

The Economist Intelligence Unit. EIU Country Report: Trinidad and
      Tobago. 1st, 2nd,3rd and 4th quarters, 1994.

United States Embassy, Port of Spain. Economic Trends Report,
      1994.

World Tourism Organization.  Yearbook of Tourism Statistics,
      1993.
                                  References

1.    The construction sector had the highest jobless rate (44.7%),
reflecting the stagnation of the economy (The Economist
Intelligence Unit Country Report, 1st quarter 1994).

2.    World Tourism Organization.  Yearbook of Tourism Statistics,
1993.


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