Cost of living is going to continue rising say experts

THE Balearic economy can no longer afford to be so dependent on tourism and needs to start seriously developing other core industries. The region's first econimic conference opened in Palma yesterday with economists from across Europe agreeing that the Balearics has to look to other industries as it faces increasingly tougher competition from emerging tourist destinations. Tourism suffers, virtually everyone suffers in the Balearics. Tourism accounts for 80 per cent of the regional economy and the Minister for Commerce, Pere Sampol, said yesterday that the Balearics has to look to other economic mechanisms. Sampol said that the government has spent the past four years trying to diversify the economy by investing in the traditional industrial sector while also developing the new technology, environmental and recycling sectors. The conference was opened by Barcelona University professor of History and Economic Institutions, Jordi Malaquer, who said that the Balearics has lived off tourism for the past 50 years, but has been tarnished with an image of being “under developed”. Although not quite the case, he said that the Balearics does not have to do too much to develop thriving new industries such as innovation and development or information technology. The professor also pointed out that while insularity may pose physical problems, in today's modern age of communications, it is no longer a hurdle to business development, adding that Majorca has much more potential than many other island regions in Europe. Esteban Bardolet of the Balearic College of Economists said that for a number of years now, economists have been concerned about the level of Balearic dependence on tourism. “Perhaps there is no other region in the world so dependent on the travel industry,” he proclaimed, admitting that diversifying the region's economy and developing new industries will not be easy because, at least in the early stages, not being on the mainland has its disadvantages. However, until the Balearics is placed in charge of managing its own finances, Bardolet does not foresee the region being able to reduce its dependency on tourism and being directly affected by competing destinations. “The long term outlook is not very optimistic” Bardolet said, adding that until the region can break away from tourism, the cost of living will continue to rise every year. Delegates at the three-day conference will be discussing a number of issues, in particular the present global recession.