Professor Norman Girvan, in an address entitled, ‘Reinventing the CSME,’ to the Caribbean Association of Judicial Officers (CAJO) in Barbados, last Friday, assessed the crisis in the regional economic integration process, focusing on the Caricom Single Market and Economy (CSME), and proposed a possible way out.
Caricom’s problems have already been subject to much analysis; no need to repeat the litany of woes bedevilling its flagship programme, the CSME, or Prof Girvan’s own recapping of its sorry history of missed deadlines, incomplete status and uncertain future. Suffice it to say, the widely respected Caribbean development economist describes the CSME as “comatose” and advocates that it be ‘reinvented.’
Prof Girvan himself, along with other regional economists, has previously shown that there has been little growth in intra-regional trade since 1992, with only Trinidad and Tobago really benefiting. In his CAJO lecture, he reiterates that “more than 80%” of Caricom’s foreign trade is with extra-regional countries and that Trinidad and Tobago alone “accounts for about 80% of all intra-regional exports,” with the rest of Caricom running large trade deficits with that country. For Prof Girvan, this asymmetry and the fact that Trinidad and Tobago’s exports to Caricom “are only 15%” of its total exports explain why “neither T&T, nor the rest of Caricom, attribute a great deal of importance to the regional market.”
Given the additional political and economic challenges faced by Caricom governments, Prof Girvan surmises that they “do not really believe that the CSME, as presently structured, offers the likelihood of significant economic benefits. At the same time they confront the massive task of implementation; incurring significant financial costs as well as diminished policy space nationally. For some of the smaller members, implementation may be beyond their capacity.” In this respect, Prof Girvan bluntly states that “the governments do not believe it is worth the effort,” which is perhaps the only logical explanation for their now notorious lack of political will. But it is, equally, a self-fulfilling prophecy.
Nevertheless, this leads Prof Girvan to ask “whether the CSME is the right kind of economic integration at all,” arguing that it “has been a failure; not because it was implemented and failed to bring about the desired results; not because its failure in implementation is due to defects in governance; but because it is [a] borrowed model of integration known as Open Regionalism, which is an imperfectly designed instrument to boost the development of Caricom economies. Hence it never developed the degree of traction among governments and other stakeholders required to sustain it.”
He posits further that the CSME was adopted because of “the ideological atmosphere of the times, and the influence of the Washington-based institutions and Western donors,” that is, the time when the Washington Consensus reigned and globalisation and liberal capitalism were the flavour of the decade. As such, Prof Girvan concludes that the policy-makers and decision-takers of the period were “misguided or misinformed.”
Prof Girvan’s frustration with the slow pace of integration is understandable. But he sidesteps the view that the Single Market is not all about growing the regional market; it is also about creating economies of scale and facilitating value-added supply chains, with a view to deriving greater benefits from extra-regional trade. Indeed, for the region’s small economies, the CSME, with its core objective of deeper economic integration, still appears to offer the best opportunity to harmonise policies and regulatory frameworks, rationalise production, enhance productivity and increase competitiveness.
Prof Girvan’s thesis, moreover, seems to ignore the fact that many of the recommendations pertaining to the CSME emanated from the West Indian Commission’s 1992 Report, Time for Action, which was based on groundbreaking and historic consultations undertaken over two years, across the wider Caribbean and in the diaspora. In this context, the thrust towards deeper integration enjoyed the support of the region’s main stakeholders, its citizens. In addition, the revision of the Treaty of Chaguaramas, to provide the new enabling framework, was informed by solid technical work and achieved through painstaking negotiation. How then could the region’s leaders be “misguided or misinformed”? If anything, they have dilly-dallied so much that the moment has passed and there is need for reappraisal.
Yes, the times have changed and the region needs to adapt to new realities. Prof Girvan proposes that the CSME needs to be “reinvented” and he recommends: a regional investment programme focusing on agriculture and food sovereignty, renewable energy, and maritime transport (he might have added tourism); fast-tracking the free movement of skilled nationals; mobilising civil society through the establishment of a permanent forum; giving legal status to the Caricom Charter of Civil Society; and reconciling national sovereignty with regionalism through selective delegation of authority by governments to Caricom organs.
Without the benefit of more detail, however, it is difficult to determine how successful this approach would be, given that apart from the emphasis on civil society, these are all areas that are already on the table and suffering from the same lack of dynamism that afflicts the CSME and Caricom in general. The whole conundrum demands further discussion.