Our last editorial on this theme focused on the need to come to terms with the fact that the pressures for finding new ways of decision-making both in Europe and for Caricom have been the result of both domestic (that is within Caricom) and external pressures. First, the decision to proceed to a Single Market and Economy presumed a cohesion of decision-making that was necessary to make the Caricom region a seamless economic system uninhibited by contradictory decisions emanating from the separate states. And secondly, we observed that external pressures were inducing us to consider the nature of the relationships between Caricom and the other countries of the Greater Antilles in particular, as major states and the collective European Union began to perceive the archipelago and the continental West Indian states (Guyana, Belize, Suriname) as part of a Caribbean system that also logically included the Dominican Republic and Haiti, and as time evolved, Cuba.
It is as yet unclear whether the leadership of our community grasped the implications of a movement from regional development based on protection of industries destined to serve, through trade, the whole of Caricom (the job of the Common External Tariff), to the new (call it post-WTO) necessity to organize productive activities that involve cross-border operations in order to create optimal scale for competition in the wider international economy. At best we could say that Dr Eric Williams’ initiative in the mid-1970s, in proposing the utilization of Jamaica and Guyana’s bauxite and Trinidad’s natural gas to create a regional aluminium industry, gave a hint of the possibilities for the underpinnings of a single regional economy. But the simultaneous counter initiative of JAVAMEX, involving Jamaica, Mexico and Venezuela suggested that not all leaders of the time were willing to give first priority to Caricom, as distinct from the larger formulation that subsequently came under the rubric of the Association of Caribbean States (ACS).
But certainly as far back as thirteen years ago, speaking at the University of the West Indies’ Institute of International Relations in Trinidad on the theme of ‘New Realities of Caribbean Economic Relations,’ then Prime Minister of Barbados Owen Arthur indicated that his government clearly understood the meaning of the shift from Caribbean Common Market to Caribbean Single Market. At the time he observed that, “instruments such as the Common External Tariff will be rendered obsolete by the turn of the century as mechanisms of integration because of reciprocal trade arrangements to which the region will become a party. Equally, the fascination with mechanisms to promote intra-regional trade, while important, must come to be seen in their true perspective as impacting only on less than ten percent of Caribbean economic activity. The focus of Caribbean integration must, therefore, shift from tinkering with measures to deal with intra-regional trade to measures which can enhance the region’s international competitiveness.” Here Arthur blended the external influences (the new WTO rules) and the necessity for the creation of new levels of economic scale, as the reasons for organizing a different kind of regional economy.
From this latter perspective the recent Jamaica-Trinidad ‘patty war’ relating to impediments allegedly placed in the way of the export of Jamaican patties to Trinidad, can be seen to be a highly exaggerated affair, undeserving of ministerial contention across the seas. And indeed, what it clearly showed up, is the continuing unwillingness after all these years of the Caribbean Common Market to resort to the mediation and related instruments for resolving problems of this kind, without making them appear to the West Indian publics as major disputes. An unwillingness still exists to resort to normal dispute resolution instruments like mediation, or the Caribbean Court of Justice; though the resort, in the Trinidad Cement Limited/Guyana case to that institution has pointed the way.
The current global economic crisis affecting the Caribbean has given an opportunity to Caricom governments to consider policy directions for the region as a whole once again. The effects of the crisis on the community, however, have only highlighted trends in the individual economies that have been evident for some time, so that the current crisis cannot be said to be the cause of present difficulties, but simply to have exaggerated them. The extended difficulties of the Jamaican economy originating in the domestic difficulties of the 1970s and combined with the long-term decline in demand for Jamaica’s economic driver, bauxite, have brought the country’s economy to a level of stagnation that really requires deep internal changes that governments have been hesitant to make. The country’s tourism industry, relatively buoyant in recent years, but now threatened by the global crisis, has itself been on somewhat uncertain ground, as successive Jamaican governments have struggled to maintain Air Jamaica because they deemed it to be a critical element in the success of the tourism industry.
Much the same can be said for Guyana, with its sugar industry threatened by the WTO rules as highlighted by the success of Brazil and other countries in cases brought to that institution. The country’s bauxite industry lingers on. And though President Jagdeo has been given prime responsibility at the Caricom level for a regional agricultural revival – no doubt because Guyana has been seen as the major base for a modernized Caribbean agriculture – there is still little indication that the push needed to get the initiative off the ground is really evident.
The OECS countries, victims too of the WTO rules as the United Kingdom, through the EU, makes more and more concessions to the Latin Americans on banana imports from the ACP states, are now fully cognizant of a consequent potential threat to their own, up to now viable currency arrangement, from a substantial loss of returns from the countries’ banana exports. As with other states, the resort to tourism has been a significant backstop, but as Antigua’s long history as a tourism destination has shown, there are other domestic determinants of government decision-making that inhibit stabilisation of that economy as well.
The fact of the matter is, of course, that these underlying structural deficiencies of Caricom economies, and the need for regional policy responses to them, have been discussed in depth since President Arthur Robinson organized a regional conference on the Caribbean economy in 1986, when the determination, under strong pressure, of the EU to reorganize the preferential system was recognized. Surely the required policy responses, and the extent of assistance required, should have been insisted upon by our governments in the run-up to the negotiations for a new Regional Economic Partnership Agreement (REPA)? (And this does not mean that the EU could be held responsible for any wholesale reparations.) The basis for doing so was, and is, the EU’s original assertion in its 1996 Green Paper on the replacement of Lome/Cotonou, that support for regional integration would be a significant aspect of a continuing relationship.
Further, contemporaneously with our preoccupation with renegotiating Lome/Cotonou, our governments were involved in seeking to define and negotiate the practical significance of our status as “small, vulnerable and open” under the leadership of a team led by then Prime Minister Arthur (with the assistance of Canada). But this has come to naught. The thrust, in any case, was essentially individual and not regional, given the way in which the international financial institutions normally operate.
To take the approach in dealing with the resuscitation of our economies of preparing and negotiating sectoral arrangements as a regional collective, would have forced our governments to define more precisely what is actually meant by their commitment to the creation of a single economy in the present global environment. And it would also have opened the door to pressuring the EU to define what they meant precisely.
So while it is encouraging to see that a representative group of government leaders, and their technicians are now gathering in Jamaica to define a policy position indicating the kind of support that our countries, as small, vulnerable open economies now require in the face of the current global crisis, we wonder if they see any connection between the salvation of their individual economies and progress towards a single economy – if by a single economy is meant a cross border agglomeration of economic activities that permits effective economies of scale in contemporary global economic activity. The present predicaments of our individual air transportation industries is a good example of this, dealing as that industry does with both our regional and international tourism engagements.
Though our major regional economic institutions – CDB and Caricom Secretariat – will be present as important technical back-ups for our heads, it would be useful to know if Professor Girvan’s Caricom document on the single economy of 2007, will form part of the consideration of what we are saying to the international institutions. The Inter American Development Bank in particular, is committed to cross-border infrastructural integration. Can we invoke their support for the single economy?
To take this kind of initiative requires, however, a Caricom institutional infrastructure itself for regional policy-making and implementation that does not now exist. What we now have, as in the case of the present initiative towards the international institutions, is an ad hoc collection of individual regional institutions, temporarily dragged away from their normal preoccupations, really of assisting individual states with their difficulties and priorities. Given that basis, the follow-up to decisions made always becomes difficult.
We are therefore still at square one on the issue of regional governance of the making and implementation of decisions for a Single Economy. Will the Heads, after they return from Jamaica, feel it necessary to go back to this issue, which once again did not get to grips with at their conference in Georgetown last month? We can only hope.
