Many nations are lost, leaderless and haemorrhaging their brightest young people

A few days ago the International Monetary Fund (IMF) hosted an economic growth forum in the Bahamas. The meeting coincided with an encounter between Cariforum and the European Commission in Georgetown to discuss future development assistance, and a Caricom Heads of Government meeting in Trinidad to consider how to revive the regional economy.

The three events provided yet one more opportunity for Caribbean politicians and officials to meet; to discuss once again what might create sustainable growth in the region; to listen to increasingly more direct remarks from foreign officials; and for media commentators to wonder what if anything might cause the region to emerge from indebtedness, its growing mendacity, and a declining ability to deliver social or other programmes.

The Georgetown meeting marked a more prescriptive approach on the part of Europe in relation to future development assistance, its prioritisation and delivery; the Trinidad meeting resulted in yet more bodies to study the previously studied, namely the regional economy, growth and transport; and the IMF meeting, the best publicly documented of the three, resulted in rhetoric and an outcome little different to the conference it hosted in Trinidad a year ago.

20110220THEVIEWPerhaps the only surprise was that these events continue to be reported as news.

At the meeting in the Bahamas, and for the second year running, the IMF and others provided a road map indicating solutions. Minouche Shafik, its Deputy Managing Director, set out the steps that might be taken by tourism-based Caribbean economies, noting that the present level of growth at one per cent will not improve debt ratios or lower unemployment. She suggested four steps.
First, there was, she suggested, the need to improve the business environment and boost investor confidence. Although she did not say it quite so directly, this requires governments to abandon being the largest employer and take the politically unattractive step of reducing state involvement in what in many other nations would be private-sector led activities. Growth was, she said, higher in small states that had smaller government and lower debt.

Secondly, there was a need to integrate development plans into budget frameworks and implement them, prioritizing scarce resources. In other words, stop dreaming and politicking and relate objectives to budgets and use the ability to spend in a targeted way that has long term outcomes.

Thirdly, Ms Shafik suggested that unless there was better governance, the business environment would not improve; or put another way, she was saying governments can obtain better results if they enable the private sector to lead.

And fourthly, regional collaboration and coordination were required to address common problems. Such an approach, she noted, could lower wage costs, electricity and energy costs, reduce trade protection and financing costs, and provide economies of scale by spreading the costs of public services. In other words states coming together to undertake essential core activities would result in a reduction in costs.

The list is simple, obvious and not new.  Unfortunately there remains little sense across the region that any nation, other than those undergoing full IMF programmes, will take the tough action necessary to implement such reforms.

The problem and the solutions are known, yet it is hard to imagine many of today’s Caribbean politicians or governments agreeing to take such steps other than under duress or, it has to be said, the majority of those in the Caribbean private sector rising to the challenge.

What this all comes down to is the fact that Caribbean governments are faced with a political challenge that most continue to duck: finding new ways to stimulate growth at a time when they know they have little option but to cut public expenditure, reduce their indebtedness, introduce tough austerity measures, and be honest  about how present problems have arisen.

To achieve almost all of what was proposed in the Bahamas, requires a commonly agreed approach, the adoption of long-term policy objectives that government, opposition politicians and social partners all are committed to, and implementation. What unfortunately militates against this across the Caribbean is the tribal nature of politics, animosity between the public and private sector and any sense of a commitment to the national interest that can outlive more than one government.

In this context it is useful to ask why other small nations as different as Mauritius, Iceland, and Ireland, despite their internal differences, have been able, when the need arises, to agree that it is in the interest of all that recovery takes place, and have been able to change direction, accept hardship, and deliver a well-executed recovery.

While the Caribbean is of course for the most part at a lower level of development and has much greater social inequality, much of what is being achieved in small nations elsewhere has been delivered through the creation of a national consensus, an acceptance of the need for longer term thinking and discipline.
Without this it seems unlikely that much of what was proposed will ever happen and that year on year many smaller nations in Caricom in particular, will become ever less competitive, more dependent on outside largesse, encourage ever more rapacious foreign investment, and ultimately become socially unstable.

A week ago the Jamaica Observer published a leading article that is now in wide circulation across the Caribbean and internationally. In part it noted that Caricom’s lack of credibility came from “unending requests for aid, calls for reparations, debt relief, the paltry state of regional economic integration, the failure since 2008 to devise a regional plan to respond to the global economic crisis, non-implementation of the EPA, and incomplete negotiations for a trade agreement with Canada.”

It suggested that what is required is not charity or affirmative action but governments following the example of their citizens who go out into the world, taking responsibility for their lives, working hard with self respect, pride and initiative.

Unfortunately, the sense that prevails in much of the anglophone part of the region is far from this; it is that many nations are lost, leaderless, haemorrhaging their best and brightest young people, unable to meet the social aspirations they have encouraged their electorates to expect, and frozen in time.

Previous columns can be found at www.caribbean-council.org

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