Canada can do more for the Caribbean, so can the Caribbean?

The Canadian International Development Agency (CIDA) recently invited me to review with its Caribbean staff the state of play of regional integration in the Caribbean and ways in which CIDA’s work could help the process. This commentary is an abridged version of a longer and more detailed presentation.{{more}}

In reviewing the region’s condition, I stated what we all know and that is CARICOM countries, except Guyana, have always witnessed grave economic decline. Of all the CARICOM countries, only Guyana has witnessed continuous economic growth. According to the International Monetary Fund (IMF), “Guyana’s economy has exhibited resilience, registering a fifth consecutive year of robust growth. Real Gross Domestic Product (GDP) is projected to grow by just under four percent this year, above the out-turn in 2009, supported by increased activity in the sugar, gold, and services sectors”.

Sadly, I had to admit that the governments of the region have not seriously explored accelerating the regional integration process as one of the ways to ameliorate the worsening economic situation of their individual countries. Indeed, what we have seen is division among the governments as they scramble to find individual solutions to their crisis. The absence of cohesion, let alone unity, in the scrambling around in the international field for whatever cherries may be picked has led to confusion in the body politic of the Caribbean people about the value of CARICOM, and added to the uncertainty that hangs over the region as an ominous cloud.

In a sense, it is understandable that governments have acted this way, although they are not without blame. The region’s institutions have produced no blue prints for how together CARICOM countries might successfully deal with the crisis that confronts them. Even in the approaches for borrowing from the IMF, whether under its stand-by arrangements (as in the case of Antigua and Jamaica), or its special windows (St Vincent, St Kitts and Grenada), there has not been a unified CARICOM approach at least on the framework of the agreements and the conditionalites that the IMF continues to impose in its quest for exchange rate stability.

That there is need for urgent reform of our regional institutions is beyond question. All of them need to focus squarely on the region’s grave problems and conduct the research and development desperately needed to help formulate and implement well thought out policies over a range of areas including food and energy security, climate change and disaster preparedness – all of which are now pressing problems in the region and pose what Professor Norman Girvan rightly describes as “existential threats”.

Over the last few years, the actions of some governments have weakened the integration process and weakened belief in it. These actions include deliberate policy positions to expel CARICOM nationals from some countries; shabby treatment of CARICOM nationals at airports; and the ascendancy in Trinidad and Tobago of the view, amongst a small but influential minority, that CARICOM is a burden and, more worryingly, that Trinidad and Tobago is a “superior” nation to other CARICOM states and should graduate itself out of CARICOM.

There is not sufficient acknowledgement in any CARICOM country of the benefits that regional integration in all its aspects bring to each of the countries; and those benefits (from which Trinidad and Tobago and Barbados are the principal beneficiaries) go far beyond intra-regional trade.

An overarching problem faced by the region is the failure of governments to implement the decisions taken jointly in CARICOM for the establishment of a Single Market and Economy; and a weak CARICOM Secretariat as an instrument for promoting regional integration and as a mechanism for pushing for the implementation of decisions, as well as a centre for preparing and implementing regional projects, including accessing funding from external agencies.

With regard to the private sector, both the global reports on “Doing Business” and on “Competitiveness” have rated CARICOM countries, with no exception, as plagued with problems. These problems range from high crime in certain countries to excessively bureaucratic procedures, high port charges, lack of business innovation, and even inadequate telecommunications to support information technology enterprises. But they also include an absence of legal and other facilitating frameworks that would allow cross-border mergers and acquisitions of similar competing companies in member states, and not enough incentives for integrating production in the region.

So, what could agencies such as CIDA do to help advance the region’s economic and social progress?

First, CIDA should consider helping the region, through regional institutions in collaboration with Canadian institutions, to undertake research and development in the following areas: food and energy security, disaster preparedness, climate change, and low carbon strategies. An institution such as the University of the West Indies (UWI) could be the central Caribbean partner in this undertaking. The purpose would be to develop well researched strategies, policies and implementation mechanisms for governments in each of these areas.

Second, it is well known that every year a goodly number of doctors, nurses and teachers trained in the Caribbean at the expense of Caribbean taxpayers are encouraged to migrate to Canada. Canada gets the benefit of their skills and knowledge at the Caribbean’s expense. CIDA might consider making an annual contribution, on a predictable basis over an agreed number of years, to Caribbean institutions that train these people from whose skills Canada benefits. In that way, the Caribbean institutions would be able to train a sufficient number of people annually to satisfy Canada’s needs (much cheaper than Canada could do it) while retaining others to cater for Caribbean demands.

Third, Canadian commercial banks have existed in the Caribbean for over 100 years. Over these years, Canadian banks, which now dominate the banking industry in the region, have made huge profits that have been repatriated to Canada for Canadian development. Could not CIDA now encourage these commercial banks to set aside a portion of their profits, made in the Caribbean, for allocation to a Caribbean Development Fund (CDF) from which governments and the private sector could draw low-cost loans for developmental projects? This money would not be a giveaway; it would be a loan, except that it would be at non-commercial terms and it could be targeted to projects for sustainable development.

I suspect, the Free Trade Agreement currently being negotiated between Canada and CARICOM – given the fact that the benchmark will be the existing uneven Economic Partnership Agreement between the Caribbean and the European Union – will do the Caribbean little good.

(The writer is a Consultant and former Caribbean diplomat)