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Undertaking Economic Diversity is Critical

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By Lowell L. Kalapa

One of the lessons that has hopefully been learned during the economic malaise of the past decade is that Hawaii needs a broad and diverse economic base.
No one ever dreamed that pineapple and sugar would not be a part of the every day lexicon of residents and visitors to Hawaii, yet despite valiant efforts to save those agricultural piers of the state’s economic foundation, few, if any, plantations remain. Fortunately, tourism was well established by the time the closing began to domino as an inevitable part of the rite of passage of the economy.
However, as we have all learned, tourism is not without its external influences. The valleys of the state’s economy during the last ten years point to the fact that factors beyond our control have a deep and lasting effect on how well we do here in Hawaii. Even though the national economy hit new highs during the past decade, Hawaii did not share the same ebullience. Only in the last year or so when people thought there was no end to the climb in the stock market did the visitors start coming back in droves.
And while one certainly has to admit that the atmospheric rise in the value of the market contributed a lot to the return of the visitor, one also has to admit that for the first time in the history of the visitor industry, there were substantial funds available to market the state. After years of pleading with the legislature to provide sufficient funds, it took an increase in the hotel room tax, otherwise known as the TAT, to make that a reality.
But tourism has not always been a slam dunk, no-brainer choice. In fact, there have been numerous challenges to developing the industry or components of the industry because there was a reluctance to accept change. Evidence of opposition to development of hotels and resorts can be found from one end of the state to the other. From the infamous vote and struggle of Nukoli’i on Kauai to the development of properties on the west coast of Maui to the development of the resort property on the west end of Molokai to the resistance of building of power generators on Maui and in Kona, change has been difficult to accept.
And while we would all think that we could possibly crawl back in time to the Fifties or perhaps even the Thirties, it would be difficult to also accept the lack of conveniences and what many would consider essential services and products to sustain the “quality of life” we have today.
However, if Hawaii is to create the jobs that future generations of residents will need to sustain a decent and acceptable standard of living, then change will have to occur. It means finding new industries and building new economic activity that will lead to the creation of jobs for our children and grandchildren so that they will not have to leave the state in order to find work or decent paying jobs that can sustain a decent standard of living.
Although many see development and diversification of the state’s economy as a threat to the environment and a “way of life,” without that change, Hawaii will stagnate. The state’s economy will not grow. The things that we all take for granted from first run movies to the smooth highways and the convenient inter-island travel schedules will not be available.
For anyone traveling inter-island, the impact of a slowing economy is already noticeable. There aren’t as many flights between islands as there used to be and they are farther between. This is because the traffic has fallen off so much that it doesn’t make economic and financial sense to run twice as many flights which are half empty. While some of the drop-off in demand is due to the direct flights from the mainland and Far East, those interisland flights are also a casualty of the struggling visitor counts and change in visitor profile.
While a wholesale sell out to any new industry or activity is hardly acceptable, each new idea, proposal, or development shouldn’t be rejected just because it will “change” the face of our landscape or that of our communities. In every case, there can be a balance that satisfies the sensitivities of the environment while creating new economic activity and the jobs that are critical to the state’s future generations.
Again, there are numerous examples throughout our state where communities dug in their heels and made the discussion and either/or debate of black and white. The communities that resisted finding a compromise are probably the areas of the state where families are struggling the most to survive, to make ends meet.
Lawmakers and other public policy makers also need to understand this need to achieve balance, because we have entrusted them to make the changes that will move our state’s economy forward.

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