LIHU‘E — Will Kaua‘i’s economy ever recover? Economists like University of Hawai‘i Department of Economics Associate Professor Byron Gangnes seem to think so, even if the “recovery path” is long, he said Thursday. LIHU‘E — Will Kaua‘i’s economy ever recover?
LIHU‘E — Will Kaua‘i’s economy ever recover? Economists like University of Hawai‘i Department of Economics Associate Professor Byron Gangnes seem to think so, even if the “recovery path” is long, he said Thursday.
LIHU‘E — Will Kaua‘i’s economy ever recover?
Economists like University of Hawai‘i Department of Economics Associate Professor Byron Gangnes seem to think so, even if the “recovery path” is long, he said Thursday.
Kaua‘i resident Danny Hashimoto has a different opinion. Rather than the island returning to its financially explosive height of previous years, he said a “major change in lifestyle” will occur.
“It’s not only about making money, but saving,” said the entrepreneur, real estate broker and developer. People are learning to live “more simply,” and are emphasizing economic diversity and sustainability.
“I believe the real ‘growth’ we can expect to see as this transition is made will not be measured in the Gross National Product or individual/collective material wealth,” Hashimoto said. An individual’s well-being will no longer be measured in how much material and monetary wealth they possess.
The growth spurt in home and community gardens across the island is just one example of how people are beginning to “work together cooperatively,” taking advantage of Kaua‘i’s natural “garden of Eden” without having to rely on imported products which are deemed highly unsustainable, he said.
In fact, farming and agriculture is actually one of the six “emerging” industry clusters the county is developing as a “Plan B” for economic growth, according to Office of Economic Development Director George Costa.
Gangnes said he has a “hard time imagining tourism is not going to continue being the dominate industry for many years to come.
“That’s not to say there won’t be some diversifying taking place,” he said.
However, industries like varied agriculture, business services and technology will be such a “small piece of the pie that, even if they continue to grow, will not be replacing tourism as an engine of growth,” Gangnes said.
The “big unknown” truly lies with the cost of energy, he said.
“Energy prices are going to rise,” he said, adding they will likely not return to 2008 levels in the next few years, but there is a “great deal of uncertainty further out.”
Hawai‘i could service tourism at $150 per barrel, but could it service the industry at $300 a barrel? Gangnes asked.
Kaua‘i may not be able to get back to its previous “peak years” of tourism anytime soon, said Kaua‘i Visitors Bureau Executive Director Sue Kanoho.
“That boat has sailed,” she said. “People are just more discerning now.”
With the visitor market “feeding us,” a “downturn is a good example of the importance of sustainability,” she said.
The levels at which the economy once operated “was at a pace that cannot be sustained” given the carrying capacity, said Kaua‘i Chamber of Commerce President Randy Francisco.
“Cranking up” our efforts in diversifying the economy is essential to the island’s survival, he said.
However, when examining Kaua‘i’s economy over a 20-year period — 1990 to 2009 — the island actually experienced “somewhat of a ‘zero growth,’” Costa said. “We’ve had peaks and valleys during this time period, but overall, there’s been minimal growth.”
The resident population grew by only 1.2 percent, and total jobs, along with per-capita income, increased by a mere 0.6 percent during that period, he said.
“The affects of our current ‘down economy’ are exacerbated with prices of consumer goods increasing by 3.3 percent and property taxes by 8.4 percent,” he said.
“Rising fuel prices and our dependence on fossil fuels for transportation and electricity contributes to our dilemma and signals the need for more renewable energy sources and sustainability.”
The island was almost 14 percent efficient in renewable energy sources in 2009, according to an interview earlier this year with Kaua‘i Island Utility Cooperative Staff Engineer Steve Rymsha.
“Energy is going to become more expensive, but we’re going to become better at dealing with it,” Gangnes said regarding alternative-energy sources.
The county’s developing-industry clusters, which include renewable energy, will seek to reduce the island’s “enormous dependence on imported fossil fuels,” Costa said.
“These new technologies will not only bring new job opportunities but it will also help us be more sustainable and not be at the mercy of rising oil prices,” he said.
“This alone will eventually help reduce the cost of doing business on Kaua‘i.
“Fortunately for Kaua‘i” there are other industries still providing many jobs for residents, including the Pacific Missile Range Facility and the seed-corn industry, Costa said.
In fact, the seed industry has been experiencing economic growth on Kaua‘i for the past six years, said Pioneer Hi-Bred International Business and Community Outreach Manager Cindy Goldstein.
Between 2007 and 2008, the estimated value of the seed industry was around $140 million, approximately a 40-percent increase from 2006 to 2007, according to a report from the Hawai‘i Field Office of the National Agricultural Statistics Service.
The estimated for the value of the seed industry in Hawai‘i between 2008 and 2009 is around $176 million, a 26 percent increase in value from the previous year.
“I don’t see a fundamental transformation of the economy changing,” Gangnes said when asked if a new economic paradigm was occurring. But, diversity will continue to develop gradually over the next 20 years, he said.
• Coco Zickos, business and environmental writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com.
