CARICOM countries need to wake up to the warnings of the international community that they should establish and implement the necessary measures, particularly deeper regional integration machinery, to improve their economic viability and advance their social progress. 

Throughout the international community, there appears to be a growing feeling that Caribbean governments lack the political will to tackle the development problems confronting them, opting instead to blame external factors for their worsening economic situation.

Officials of European Union governments, the European Commission and agencies in Canada and the United States privately say in clear terms what they publicly dress-up in less harsh language:  the international community is prepared to help, but there must be clear evidence of the resolve of Caribbean governments and the private sector to develop a plan and a strategy for coping with their problems.

This position is shared by many in the Caribbean itself.

Evidence of this was the reaction to a commentary I recently wrote in which I drew attention to a proposal for an International Donors Conference on the Caribbean to address the urgent issues faced by the region including loss of preferential markets for bananas and sugar, the high costs of fighting drug trafficking and maintaining security, rising unemployment and a decline in economic growth.

Some of the reactions were as follows:

A seasoned Caribbean trade official stated, “What is missing is Caribbean development leadership and strategy and all the donor money in the world cannot develop that if we do not do so from home!  Just take a look at the recent situation with hundreds of millions of EUROS unused and un-programmed in CARIFORUM national and regional development projects and you will understand why donors are tired/fed-up with us in the Caribbean!”

And, the Head of a Regional organization lamented: “We have been advised by some of our traditional donors that we cannot expect to receive the same sort of assistance as in the past because of competing demands that are being made on their resources. This changed position comes at a time when the costs of all that we do are rising and the economic downturn in some of our Members is affecting payment of annual contributions”.

A national politician was brutally frank: “Sure, they (Caribbean governments) should continue to fight their case with the WTO but surely diversification of their primary crop based economies should have begun a long time ago. And what gives Caribbean politicians the right to talk about a lack of social justice at the international/donor level when they preside over much injustice in their own neck of the woods”.

A Caribbean student at University outside the region was equally candid: “Whilst being sympathetic to the Caribbean, I can't help but support the EU and other donors view that the Caribbean has not done anything from their end to help diversify their economies.  It is no secret that the banana industry in Dominica has been in terminal decline since the 1980s, yet successive governments pay lip service to diversification without any serious plan of action. It is time for the Caribbean to get its act together and find solutions to the many problems (economic and social) that it faces.”

 

The call for the Caribbean to “get its act together” is a constant refrain outside the region.  Increasingly, it is being echoed within the area.

 

What is driving this call is a genuine fear that, except for Trinidad and Tobago with its riches in oil and gas, the countries of CARICOM could slip into dire economic conditions if current trends continue.

 

Productivity growth in the region has declined since the 1990s; fourteen Caribbean countries are among the thirty most indebted countries of the world; manufacturing is ruled out as an option for all but three CARICOM countries; the production and export of bananas is unlikely to be sustainable in any but one CARICOM country; sugar production and export appears sustainable only in three CARICOM countries, and even then only in very changed circumstances in which employment levels will be significantly reduced; financial services will not survive as a meaningful contributor to economic growth except in the Bahamas and Barbados of the independent CARICOM countries; and tourism remains unpredictable, hostage to the economic prosperity of the countries from which the tourists originate, the viability of airlines, and the moods of hurricanes.

 

The response of some governments to this situation is to blame the international environment in which they are losing preferential markets for their products; not receiving adequate funding from international agencies and governments to help their economies to adjust and diversify; not getting a sympathetic hearing from the IMF, World Bank and WTO to give their small and vulnerable economies special treatment, and the general reduction in development assistance. 

 

What the governments say about the international environment is, of course, true even though it is not the full story. 

 

It remains the case that those who govern the institutions of the IMF and World Bank continue not to recognize that small and vulnerable economies cannot be treated as if they are Argentina and Brazil, and the prescriptions for addressing their adjustment problems should not be the same. 

 

More and higher taxes, unplanned and unstructured reduction of employment in the public sector, the removal of tax concessions that are tools for encouraging investment, priority on repayment of foreign debt, privatization of utilities such as water and electricity despite the social consequences of unsubsidized costs have not proven to be a successful prescription for economic growth and social stability in small countries. 

 

Similarly, within the WTO, there is as yet not enough support for the idea that small and vulnerable states should fall within a discrete category and be allowed preferences simply because their volume of trade poses absolutely no threat to the world system, and they need it to sustain their development.

 

But, there is also much truth in the view that governments need to “get their act together” if the Caribbean is not to recede into worsening economic and social circumstances.

 

Crucial to getting their act together is the deepening of the regional integration process especially the establishment of the Single Market early next year, and steady progress in creating the Single Economy by 2008. 

 

Equally vital is the establishment of a system of governance for CARICOM that cedes aspects of national sovereignty to regional supra-national machinery that can better deal with the challenges that the region faces.  Those challenges include the capacity for stronger bargaining in trade and finance; fighting drug trafficking and violent crime; maintaining security; attracting investment; making adjustments to their economies; and creating conditions for Caribbean companies to merge so that they can compete in a global market.

 

The mental constraints of ‘national sovereignty’ and national boundaries have to be dealt with head on.  Regional politicians have postponed this necessity for too long. 

 

The warnings of the international community to “get its act together” should not be ignored even as Caribbean governments collectively seek better conditions for the region in the global market place.

 

Responses to: ronaldsanders29@hotmail.com

 

8^th October 2005