Last Friday’s editorial, which focused on Presi-dent Ramotar’s southward gaze towards the Common Market of the South (Mercosur) and deeper integration with the South American continent, ended somewhat tantalisingly with the thought that the shift of perspective away from the Caribbean Community might “reflect a growing perception that Caricom may have, for the time being, reached the limits of its possibilities.”
This view does not necessarily reflect the current frustration with the slowdown of the regional integration project. Indeed, among others, Trinidad and Tobago’s Foreign Minister and former Finance Minister, Winston Dookeran, an economist by training, has been making the point for some years now that Caricom’s possibilities as an economic union are limited. As recently as May, he returned to this theme at a meeting of the Economic Commission of Latin America and the Caribbean, right here in Guyana, arguing that Caricom should focus more on issues of the integration of production and competitiveness. In arguing that it was time to move away from trade market integration towards regional production integration, Mr Dookeran was reported as having said, “We need now to find a convergence model that is located in production, distribution and competitiveness.”
Now, regional production integration is not a new thesis. As far back as 1967, Dr Havelock Brewster and Dr Clive Thomas had, in their seminal work, The Dynamics of West Indian Economic Integration, made the case for the integrated production of goods, with particular regard to large-scale industries, beyond the objectives of a free trade area and a customs union. It is, of course, a matter of historical record that the region was not yet ready for such a bold and transformative vision.
Mr Dookeran’s postulation of a “convergence model” – presumably based on the economic hypothesis that the region’s economies should grow and eventually converge in terms of per capita income – may be an attempt to put a new spin on an old idea. It is not clear that such thinking has any real traction within Caricom, which is by general agreement in a state of crisis.
When President Ramotar, however, refers to the “logical progression of convergence” taking place between Mercosur and the Union of South American Nations (Unasur), he would appear to be talking more in terms of the overlapping of integration schemes rather than the economic theory of convergence. In this context, he sees no incompatibility between considering a closer relationship with Mercosur and membership of Caricom.
There is nothing inherently wrong in rationalizing thus Guyana’s simultaneous involvement in several integration groupings. But, in seeking this type of convergence with the continent, in looking south, notwithstanding the President’s affirmation that Guyana attaches “significant importance” to Caricom, might Guyana not be risking at the same time divergence, as it were, from Caricom?
Certainly, a turn in the south might be potentially advantageous for Guyana, given the need to open up the country, especially our hinterland, to advance the pace of development and the prospects of increased trade with our continental neighbours, principally Brazil. But what realistically do we, a small, commodity-exporting country of 750,000 people, have to offer Brazil’s 195 million inhabitants, who pretty much enjoy the same natural resources as we do, and more, much less the rest of Mercosur?
That is not to say that we should not dare to explore the possibilities for expanding our production base. But perhaps we would stand more of a chance if we could put our regional house in order before we seek to enter into less familiar territory. Especially if we go down the route of integrated production and value-added supply chains, so that even if we might be offering similar products to our southern neighbours, we could do so more competitively.
In spite of Caricom’s current woes, it is still the most logical and important institutional vehicle for achieving this. But to do so, Caricom governments must move more expeditiously to implement the Single Market and Economy, especially in terms of liberalising labour and capital markets, and reducing red tape, improving public administration and overhauling tax regimes, to encourage the requisite flows of skills, knowledge and investment – and this should hold not only within the region but also with a view to tapping into the diaspora. Apart from the fact that efficiency, transparency and accountability have to be the foundations of an enabling environment, if we are serious about opening the door to the wider region, we need to open up to our own people.