When heads of government of the Caribbean Community and Common Market (CARICOM) meet in early July, a big responsibility will fall on the shoulders of Guyana’s President Bharat Jagdeo as chairman to heal the wounds that are causing the regional project to haemorrhage.
President Jagdeo will have to dig deep within himself for the diplomatic skills that will be necessary not only to suppress his own annoyance over recent events in CARICOM, but also to guide his colleague leaders to practical measures that will fix the rifts between them and set the Caricom ship upon an agreed course of further progress that benefits all.
All other CARICOM leaders will have to contribute to the healing process by showing a high level of maturity in their discourse with each other and by eschewing a desire for purely short-term national advantage in favour of longer term gain for all.
The economic prospects that CARICOM countries face are deeply troubling. Addressing them at every level, especially international bargaining, calls for a united CARICOM, not a fractious one.
The current Chairman of CARICOM, the Prime Minister of Belize Dean Barrow, captured the dire conditions confronting CARICOM countries when, on June 24, he told a special session of the UN General Assembly that for the Caribbean “the current set of economic conditions is the worst to have overtaken us since independence”.
There was no exaggeration in this declaration by Mr Barrow, nor was there any hyperbole in his further assertion that “there is now no prospect of our countries achieving the time-bound Millennium Development Goals”.
The reality is that given the decline in the prices of their principal exports, reduction In aid, the significant downturn in tourism, the dramatic fall in remittances from their Diaspora, and the severe strictures in borrowing money on the commercial market, CARICOM countries are experiencing a new level of desperation particularly as many of them have a debt to GDP ratio of over 100%. If they were companies, many of these countries would be regarded as bankrupt.
Turning to the International Monetary Fund (IMF) is of little help to them in the present circumstances. For they can only borrow in proportion to their quotas and their quotas – particularly for the six small countries of the Organization of Eastern Caribbean States (OECS) – is too small to contribute effectively to their needs. Further, IMF money is the one source of funding that cannot be written-off so there is no prospect of relief from this debt.
Of course, several countries are in such dire straits that they will end up in IMF programmes, not only because of the effect of the current global crisis on their economies, but also because of poor policies pursued in the past. Some countries have already sought help from special IMF windows – Grenada and St Vincent and the Grenadines among them. Others, such as Jamaica and Antigua and Barbuda, are now teetering on the edge of full IMF programmes and will shortly be there.
The situation is worse now for CARICOM countries, except for Guyana, because over the last three decades in which a new generation has reached adulthood, the region has enjoyed a summer of relative plenty making the current insufficiency difficult to manage. A big contribution to the season of plenty in the decade of the 1980’s was preferential access to the European Union (EU) market for sugar, bananas and rum and a high level of aid from the US, the EU and Canada. But the summer of plenty has now turned to the winter of drought, and the full Economic Partnership Agreement that CARICOM countries signed with the EU last year bears no resemblance to the treaties of the past.
In Guyana’s case, it has been a Highly Indebted Poor Country for most of the last three decades only recently being pulled out of the most difficult economic circumstances by virtue of debt write-offs. Nonetheless, Guyana too is now plagued with falling prices for bauxite, a decline in remittances, and the loss of its preferential market in the EU for sugar. Only relatively high prices for its gold production make a significant contribution to the economy.
Unemployment levels have already begun to increase in every country, including Trinidad and Tobago, despite its comparative wealth in oil and gas. And, the forecast for improvement is not encouraging.
It is clear that CARICOM countries will suffer the effects of the recession in the US and Europe for some time after these areas begins to recover. Given the very high levels of unemployment in the US and UK especially, there will be a lag time before employment reaches a stage where tourism and remittances return to their 2007 levels for the Caribbean.
Given this troubling international environment, the first business of CARICOM Heads of Government as they gather for their 30th meeting should be to agree that there was never a time in their history when there was a greater need for a Caribbean Community and for CARICOM itself. The problems that beset CARICOM countries in coping with the severe challenges of the global environment will not be overcome by national action alone.
If they were to come to such an agreement and to publicly declare it, they will have to grab the nettle of some issues that are ripe for resolution by reasonable but frank discussion. One of them is the matter of migration of CARICOM people within the Community; another is the seeming division within Caricom being caused by the proposal for an Economic Union between members of the OECS and Trinidad and Tobago; a third is the abject failure to put in place effective governance of Caricom; and the last and most important is an agreed plan for implementing the single market and economy with penalties for every infraction.
This cannot be beyond the capacity of the Heads of Government of CARICOM. This is crunch time, and time for leaders to deliver the regional project over which generations of Caribbean people have laboured.
In the words of the Dean Barrow, CARICOM’s Chairman, talking about the United Nations on June 24, “What do we tell our people? That we attended yet another dress rehearsal for a shadow play? Another instalment in this drama of progress that never actually takes place?”
Mr Barrow’s answer to his own poignant questions was “No”. And, so it must be also at the CARICOM Summit in Guyana in July. It must be a resounding “No” to further shadow plays. Consequent upon this Summit, measurable advances must be made by CARICOM leaders or they will have failed their people and a price will be paid.