The Long View by David Jessop

 

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Some years ago, the then Prime Minister of Barbados, the late Owen Arthur, told me that unless regional leaders could agree on how to achieve economic parity between CARICOM’s member states, a viable Caribbean Single Market and Economy (CSME) might not be attainable.

 

During a lengthy exchange he suggested that to overcome the differences in the weight, size and performance of Anglophone Caribbean nations, CARICOM’s members needed to have greater political will. The meant, he said, adopting, implementing, and sustaining measures that would rebalance relationships, enable intra-regional capital flows, and stimulate economic complementarities. Without this, he said, it would be hard to make competitive and economically secure a geographically fragmented region.

 

More than two decades on, it is hard to avoid the conclusion that the Caribbean’s ‘big fish small fish’ issue so concerning Prime Minister Arthur may never be comprehensively addressed.

 

Despite having received over decades common-sense proposals that could enable the Anglophone Caribbean as a group to adapt to the external forces shaping economic globalisation and regional and international relationships, CARICOM governments do not appear to have the will or strategic patience required.

 

Instead, fear of being left behind by neighbours, petty nationalism, and the domestic political consequences of voters seeing more economically viable neighbours achieving greater economic influence, suggests that the region as an entity is unlikely to match the pace of global economic change.

 

Regional market

 

Almost all that is needed to remedy the Caribbean’s economic malaise is encapsulated in an address,  ‘A new Approach to Regional Development- the Growth Agenda’, delivered in Jamaica in early 2019 by Barbados’ Prime Minister, Mia Mottley.

 

Addressing the Jamaica Stock Exchange’s annual conference, Ms Mottley argued that the region had failed in the 1980s and 1990s to scale up regionally to ensure competitiveness, adjust its smallness in the face of trade liberalisation, recognise the broader implications of climate change, or prepare for changing global security requirements related to financial flows. Consequently, she said, emerging economies were leapfrogging the region and achieving higher levels of growth.

 

Her solutions remain wholly relevant, today and for the future.

 

Caribbean growth, Barbados’ Prime Minister said, could be mobilised. To achieve this, a CARICOM-wide single integrated regional capital market and accompanying measures were needed to liberate intra-regional private sector investment and citizen saving. She also advocated the parallel delivery of higher minimum standards of education and skills; free regional movement of all labour; bringing skilled migrants into the region; renovating the region’s largely staid banking model; broadening the basis for economic ownership; and prioritising CARICOM states needs in relation to food security, intra-regional air and maritime transport, and ICT.

 

Since then, Dr Avinash Persaud’s CARICOM Commission on the Economy has added depth to each of these ideas, putting forward genuinely radical proposals on resuscitating the regional integration process in ways that circumvent the lack of funding and absence of political will.

 

Two-speed CARICOM

 

Importantly, the Commission proposed spurring regional development on the basis that groups of member states implement and develop what is agreed regionally at different paces, with a minimum of five countries or a third of member states taking proposals forward, so that a two or more speed CARICOM might gradually become a genuine single market and economy.

 

It linked the obvious and focused on the practical. Although distant from the high ambition of the Treaty of Chaguaramas, the report offered a way out of the present implementation impasse by linking its alternative model of integration to improved connectivity, education, a larger regional role for the private sector, genuine free movement, and a changed approach to inter-regional transport.

 

The report is probably the region’s last best hope of achieving the economic re-engineering required if the CSME is ever to achieve the cohesion and purpose necessary to compete globally as a bloc, because  realpolitick has already begun to define future outcomes.

 

For those who care to look beyond the rhetoric, the Caribbean’s economic future is being reshaped.

 

Guyana, which according to the IMF will this year alone see its GDP grow by 16.4% and by 2024 achieve export earnings of US$8bn, is exploring common economic projects and security arrangements with Suriname, French Guiana, and Brazil, likely making the Northeast corner of South America of global economic significance, offering new opportunity to a diversified and better integrated Trinidad.

 

Jamaica, The Bahamas, and beyond CARICOM the Dominican Republic, are drawing closer economically to the US and China, with analysts forecasting high rates of post-pandemic growth. Elsewhere, the OECS continues to deepen its subregional integration process, consolidating its already close ties to Barbados and Trinidad, while Belize’s economic future lies with its neighbours, and most of the Caribbean overseas territories have long been globally integrated.

 

Private sector role

 

Central to this process of change is the way in which thinking in the region’s private sector is evolving, and the changing focus of foreign investment flows.

 

Despite multiple impediments, conglomerates like Massy Holdings, Goddards, Guardian Holdings and Grace, are successfully cross-listing, investing in or engaging in productive ventures across the region. At the same time, vast sums are likely to be invested by foreign entities in multiple sectors and infrastructure in the Guianas, while elsewhere the external focus is country specific, on ports, logistics hubs, and near shoring rather than regional opportunity.

 

Change can also be seen in youthful knowledge and skills-driven small and even micro enterprises that have recognised that the size of a domestic market is irrelevant if through connectivity they can join with others in the region and overseas to market services from research to teaching and animation.

 

If CARICOM’s leaders do not act, these geopolitical and real-world developments threaten to outpace the CARICOM Commission’s recommendations, which appear to have been kicked into the long grass by some Governments, making it more likely that some nations will move pre-emptively to deepen economic relations, based on geography, politics, similarities, and shared objectives.

 

Just over a week ago Sir Ronald Sanders, Antigua’s Ambassador to the US, argued in his column that the time had come “to re-think the integration project”. “Maybe if a smaller group could achieve success in greater cohesion and coherence the others will recognise value and act to be a convinced part of it. But pretence that all is well helps none”, he wrote.

 

As Sir Ronald suggests, the time has come to reimagine both CARICOM and the CSME. If member states are unable to do so, the future will be new and overlapping economic relationships that address national and sub-regional development challenges in real time. If that happens, it will undercut and ultimately result in the demise of regional unity, lessening the region’s place in the world.

 

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@caribbean-council.org

Previous columns can be found at https://www.caribbean-council.org/research-analysis/