Beyond tourism,

Hawaii

Beyond tourism, defence, a quest for diversity

Hawaii’s economy in 1984 is expected to be boosted by a 9.3 per cent increase in U.S. Gov ernment spending in the Islands, but, in general, the state will recover more slowly than the mainland from the 1982-83 re cession, says the Bank of Hawaii in its annual review for 1983.

Agriculture and manufacturing

both suffer from problems, and

unemployment is rising whereas

on the mainland it is declining.

Yet the state’s unemployment rate, which hit a high of 7.2 per cent in June, 1983, is still behind the U.S. national average of 10.4.

Hawaii was a good deal less affected by the recession than was the mainland but, today, the Islands are also profiting less from the national recovery.

Major buffers during the

downturn were increased spend ing on defence by the U.S. Gov ernment and, oddly perhaps, a rise in tourist numbers. This lat ter phenomenon at a time when, nationally, Americans had less to spend might have been achieved at the expense of the trans- Atlantic travel trade as those who customarily spent their vacations in Europe sought more econom ical relaxation.

In fact visitor arrivals in 1982, when the recession was hitting its depths, were a record, passing four million for the first time.

Last year there was a further small rise and this year is expect ed to see at least maintenance of these high levels, or even a small increase. Visitors spent nearly SUS 4 billion in Hawaii last year, which is about one quarter of the state’s total expenditures.

The bank’s review goes into considerable detail in examining trends over the last half-decade or more in the now all-important tourist industry and concludes that something of a plateau may have been reached. The boom years of the ’6os and ’7os are

over, the industry is established, internationally, as well as on the mainland.

Yet significant changes are

seen. Where, previously, Hawaii was a destination for middle and upper-income groups (and re mains so) the pattern has de finitely swung over to high volume, low-cost, tourism.

While this has resulted in steady growth of visitor arrivals and spending, it has also made the state more vulnerable to econom ic surges and declines on the mainland.

Generally, says the bank, the visitor and defence industries’ dominance of the state’s economy is seen as as not heal thy, “The search for ways of restoring a more diversified economic base for Hawaii has become a major aspect ...”

“Various activities from ocean mining to aquaculture to exotic fruits and alternative energy have been identified as potential and

perhaps preferred industries to

promote,” says the bank. “All of the non-traditional areas pro posed remain unproven. The true candidates for industrial develop ment must ultimately be deter mined by the firms at risk in the ventures: and the noteworthy de velopment at this stage of the economy’s transition is the grow ing official resolve to stimulate new and dynamic forms ol economic activity in the state.”