Gov. Bush mobilizes economic troops to protect state's key industries in war time
By Frank Norton
Gov. Jeb Bush is asking state and local agencies, including the Office of Tourism, Trade and Economic Development, to gather experts to forge a defense plan against war-based threats to Florida's economy.
A potential war with Iraq could menace Florida's tourism and trade sectors, analysts say, and firms are already bracing for lean times in the nation's fourth-largest economy.
Most agree tourism is the most vulnerable sector in Florida, followed by trade and foreign investment.
But all business would suffer significantly if a protracted Iraqi conflict occurs, said Pamella Dana, director of the governor's Office of Tourism, Trade and Economic Development.
This week, development agencies such as Enterprise Florida, Visit Florida and Miami-Dade's Beacon Council are responding to the governor's request with individual ideas for heading off severe losses in any one industry. Visit Florida, the state's marketing agency, said its plans to minimize effects from further drops in tourism are in the final stages.
"We learned a lot from 9/11, especially that we must be proactive, not reactive," Ms. Dana said.
While she said the specter of war is already restraining consumer and business investment, she said the most serious threats are still manageable.
"Right now we must determine the possible resources, programs and policies to help minimize the potential threats," she said.
J. Antonio Villamil, CEO of the Washington Economics Group in Coral Gables, said South Florida is by far the most vulnerable geographic region in the state, due to its dependence on air-travel tourism.
"We're more dependent on oil imports because we're the tip of the peninsula and 96% of our visitors arrive by air," he said.
That means an oil price shock could gouge airlines and rip into South Florida's travel-dependent economy, he said.
Bottom-line impacts are already being felt.
"The key issue here is uncertainty, and that has already impacted our consumer and business confidence. Big-ticket investments are being postponed and we're growing at a slower rate than we should given the positive fundamentals," said Dr. Villamil, who also chairs the governor's Council of Economic Advisors.
South Florida lacks the defense-contract businesses of Orlando and the Panhandle, where military spending can offset war-time negatives. Defense contracting contributes more than $30 billion annually to the state economy.
"As the state's primary economic development organization, our main priority will be to ensure Florida continues to experience positive job growth, as it has for the past six straight months," Enterprise Florida President and CEO Darrell Kelley said in a statement on war preparation.
On Monday, he wrote to local economic development agencies, including Miami-Dade's Beacon Council, to investigate how war would impact their key business sectors.
"Right now we're in the study phase," said Dana Fernety, a Beacon Council vice president. "We're not ready put forth any kind of conjecture yet."