MercoPress. South Atlantic News Agency

New document outlines sustainable future for Falkland Islands

The economy is overly dependent on three vulnerable sectors: fishing, agriculture and tourism.

The Falkland Islands requires an enhanced foreign investment climate, among many other economic ‘enablers’ in order to achieve a sustainable economic future, according to the newly released Falkland Islands Economic Development Strategy (EDS).

The document that has been researched and under construction for the past two years examines countless themes that affect the Islands economy, and under ‘business environment issues’ it notes that while the Islands offers a relatively open economy an improved tax regime, legal framework and foreign investment climate will facilitate the attraction of more development-friendly capital.

The economic landscape of the Falkland Islands has transformed substantially over the past 25 years and the last decade has been marked by modest economic growth, however, ‘several strategic shortcomings exist’, notes the document. The economy is overly dependent on three vulnerable sectors, fishing, agriculture and tourism. In addition, internally, geographic isolation, a small and aging population, a looming labour gap and skills shortage, limit the Islands ability to continue to build upon ‘its strong legacy of the past and to develop a sustainable and vibrant economy for the future.’

According to the EDS the retention of highly skilled and educated workers on temporary work permits remains low and the labour force remains static in terms of ‘size, upskilling and new opportunities’. The document emphasizes that the current immigration and work permit policy needs to more efficiently induce a growth in permanent residency and reduce the high outbound turnover rate and the high cost of worker recruitment.

The paper also notes the ‘attitude of Argentina poses challenges for the Falkland Islands’. Any economic development strategy will have to take into account the political, diplomatic and commercial ramifications of Argentine actions and foreign policy.

The way forward?

In terms of the business environment, in the short term there will be moves to forge cooperative working relations and partnership between the government and the private and non-profit sectors. A Board of Investments (one-stop investment promotion agency) will also be introduced.

In the longer term there will be fiscal incentives to stimulate development and a favorable and development-friendly tax policy.

Regarding the legal environment, the regulatory regime can be used to ‘improve the competitive environment’ entailing a faster response and delivery in the creation and amendment of legislation to improve business efficiency, optimize business opportunities and instill confidence in the regime.

Under medium term actions for trade policy the document notes a ‘Special Economic Zone’ in Stanley and at Fox Bay (or possibly Fitzroy on East Falklands) to attract foreign investments and enterprises including agri-businesses, tourism and port related enterprises.

The worrying issue of labour supply may be solved by streamlining and fast-tracking a flexible work permit programme driven by market needs, as well as extending automatic residence or permanent right to remain to aliens currently in the Islands and returning former Falklands residents.

Immigration reform and legislative changes will cover the establishment of a clear, path towards permanent residence and Falkland Islands status, with a shorter qualifying period.

The specific targets of the document are numerous but according to the introduction, overall the aim of the project is for ‘the public, private and voluntary sector to work together on ensuring the islands continue to thrive.’

By Lisa Johnson – SeAledPR – Stanley