MercoPress. South Atlantic News Agency

Falklands: Businesses optimistic despite economic challenges

Businesses are incredibly optimistic about their future in the Falkland Islands, despite the economic challenges they currently face.

The Falkland Islands Development Corporation's (FIDC) Business Climate Survey has shown that two thirds of companies in the Islands are planning to grow their business in the next 12 months. This optimism persists despite current challenges such as uncertainty in the illex fishery, reduced Government spending and the charter flight ban.

The survey was sent to every business in the Falklands, along with Government heads of departments and councillors. There was a huge response, with replies received from 36% of those contacted (98 people out of 271), and significant representation from every sector of the economy. The survey was previously carried out, for the first time, in 2003.

The fisheries sector was the most optimistic, with every responding company saying they expected to see improvements in their business in the next two years: This would seem to endorse the new fisheries regime. Retail, tourism and farming also expect improvements in their industries, although less so than in the 2003 survey.

The sectors identified as having the best potential for future growth were tourism and oil/mineral exploration.

The cost and shortage of labour are unchanged since 2003 as key barriers to economic development. When the survey was previously carried out, it was clear that Government had a very different perception of such obstacles from the private sector, but the two sectors' views now seem to be converging.

Reductions in the size of Government have been welcomed, with the number of businesses thinking Government is ?far too big' dropping from 35% to 21%.

FIDC's recent policy of divesting parts of its operation (e.g. FIMCo, FITB, Pebble and Port Howard Lodges) and focussing on the core areas of business support and infrastructure development appears to have paid off. On a rating on 1?5, where 5 is high, the overall rating given to FIDC has risen from 3 to 3.8 in the past two years.