More doubts over CARICOM’s future

An interesting analysis, entitled CARICOM’s Future in Doubt, was published by the Economist Intelligence Unit on October 5. Ordinarily, it might be somewhat galling to read of the ills of our Community in the foreign press, but the EIU’s diagnosis and prescription make for such a generally well-informed and provocative piece that one is tempted to surmise that the report was written by a regional insider. Not that it should matter who the messenger is for, by now, we should all be familiar with what ails CARICOM even if we are not fully agreed on what needs to be done.

It is worth summarising the EIU’s main points: “Regional integration, once seen as a natural response for CARICOM’s small, vulnerable economies to globalization and the emergence of other trade blocs, appears to be floundering”; as for the implementation of the CARICOM Single Market and Economy (CSME), “little progress has been achieved since 2006”, with our leaders placing the single economy component “on pause” this year. In this respect, the EIU’s judgement is damning: “The inability of CARICOM to implement the CSME calls into question the future of the regional project and highlights the inadequacies in regional governance structures. Public apathy and lack of public confidence in regional institutions threaten to derail the entire process.”

Notwithstanding this dismal context, the EIU believes that the appointment of Irwin LaRocque as CARICOM’s new secretary general “provides an opportunity to consider the myriad challenges” currently facing the regional bloc, with five areas being highlighted for action.

Firstly, CARICOM’s governance structure needs to be reformed to institute “an executive mechanism with both the authority and resources to implement decisions”. Nothing new there but, curiously, the EIU seems to be shifting the locus of responsibility by arguing that “persuading the heads to cede any degree of national sovereignty and endow the Secretariat with real powers will require considerable diplomatic skill on the part of the new secretary-general.”

Secondly, in operational terms, there is a need to “rationalize” CARICOM’s institutions, including a complete “overhaul” of the Secretariat, in light of the inability of members to increase, or even maintain current levels of funding, and the proliferation of other “under-resourced” regional institutions, themselves in need of rationalization and central coordination. Agreed – a leaner, more efficient Secretariat, making the best use of modern technology to cut down on meetings and travel and drawing on an integrated network of regional and national technical institutions, would greatly contribute to making CARICOM’s machinery fit for purpose.

Thirdly, in the context of the global financial crisis, weak GDP growth in the Caribbean and the high indebtedness of most countries, and since members cannot “meet their financial obligations to the regional initiative,” the EIU concludes that the Secretariat “has to be concerned with finding ways to promote growth, job creation and development across the region in a way that distributes the benefits of CSME evenly”, including encouraging the involvement of the private sector, “if the region is to do more with less”.

Now, one can understand the EIU’s contention that “kick-starting economic growth will require a deeper economic integration at a time when most countries are growing more insular and focusing on their own domestic challenges” but one would be hard pressed to accept that it is the CARICOM Secretariat’s job to tackle issues of macro-economic policy. Perhaps the EIU really meant that it is the challenge of the secretary general and the Secretariat, along with institutions like the Caribbean Development Bank, to promote the preparation of a roadmap for regional economic growth and development.

The fourth challenge is that of reinforcing cohesion within the bloc in the face of a “waning” sense of regional unity, insularity, unequal levels of development and the attractions of alternative alliances. Yes, as the EIU suggests, Mr LaRocque “will have to keep CARICOM members squarely focused on their CARICOM commitments if a real sense of regional unity is to be cemented.” But he will also have to present compelling facts and figures to remind and convince his political masters of the benefits of integration.

Finally, and this is perhaps the most contentious point, the EIU concludes, in light of the challenge to increase intra-CARICOM trade, that this may be “an appropriate time to revisit the basic assumptions underlying the CSME” given its failure to “remove barriers to the free movement of capital and labour, stimulate intra-regional trade and investment, and encourage the scaling up of regional enterprises.” But is this not defeatist and does it not contradict the argument regarding the need to reform, rationalize and strengthen CARICOM?

Notwithstanding the enormity of the challenges, as recognized by the EIU and indeed, by every serious observer, the basic premise contained in the 2001 Revised Treaty of Chaguaramas – “deepening regional economic integration through the establishment of the [CSME] in order to achieve sustained economic development” – remains as valid in today’s world of global economic turmoil as it did a decade ago. And if the consensus is that it is the role of the new secretary general to remind the regional leadership of their responsibility, then so be it. But these very leaders who placed their confidence in Mr LaRocque must now give him a fair chance to push the regional agenda, which may well have to be “shrunk” as the EIU suggests.

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