Economy & Trade, Financial Crisis, Global Governance, Headlines, Latin America & the Caribbean

CARIBBEAN: Regional Economy Plan Mired in Crisis

Peter Richards

BRIDGETOWN, Barbados, Jan 22 2009 (IPS) - Even as Caribbean countries hope to present a more united front to confront the region's growing economic woes, the current global recession has made this complex transition much harder, experts warn ahead of a special summit here at month-end.

The meltdown has prompted some Caribbean countries to announce plans for their own economic stimulus packages. Trinidad and Tobago, the Caribbean's only major oil exporter, is now re-examining its contribution to a regional development fund intended to provide financial and technical assistance to disadvantaged Caribbean Community (Caricom) states.

Caricom Secretary General Edwin Carrington recently warned the crisis was "a very serious one" and that the region was not going to escape its impact.

"The question is how can we minimise it," he told reporters.

In 1973, Caribbean countries signed the Treaty of Chaguaramas reforming their free trade association, known as CARIFTA, into Caricom, with a common market as a key part.

The new arrangement was intended to improve standards of living and work, accelerate economic development and expand trade and economic relations both inside and outside the bloc, while enhancing international competitiveness.

A new version of the treaty in 2000 encompassed the desire to transform the common market into a single market and economy – the CSME – in which goods, services and labour would move freely.

Last weekend, former secretary general of the Association of Caribbean States Norman Girvan, an expert on the development of a single regional economy, described a lack of "enthusiasm" towards the integration process.

"Our leaders are not prepared to take a qualitative leap into collective sovereignty and until and unless they are willing to do that, we are going to continue in a state of paralysis and go into a state of more and more fragmentation," he said on a radio panel.

Michael Howard, an economics lecturer at the University of the West Indies (UWI), stressed that the present global economic crisis could seriously undermine the CSME.

"The Caribbean economies are not complementary in a way which would enhance an integration movement. Each economy seems to look outside to some other support system. What one finds is a problem of market failure," he said.

The Jan. 31 special summit in Barbados is being preceded by at least four high-powered meetings involving regional technocrats, central bank governors and ministers of finance and comes amid calls for a new governance structure for conducting the business of the 15-member Caricom grouping and the future of the CSME.

Adding to the Caribbean leaders' problems, Guyana has been embroiled in a public spat with the 12-year-old Barbados-based Caribbean Regional Negotiating Machinery (CRNM), particularly following the outcome of negotiations with the European Union for a full Economic Partnership Agreement (EPA).

Regional governments created the CRNM to develop, coordinate and execute an overall negotiating strategy for various external trade negotiations in which the Caribbean is involved and is now planning a round of talks for a Caricom-Canada trade accord.

But following the signing of the controversial European Union-Caricom Economic Partnership Agreement (EPA), Guyana's President Bharrat Jagdeo has made it clear that the CRNM "cannot speak" for his country, and therefore to trust it with another negotiation was not the "smartest" thing to do at this time.

Jagdeo says the CRNM operates "as though it's an independent entity vested with different powers," and believes it should be brought under the authority of the Caricom Secretariat.

Noted Caribbean journalist Rickey Singh said the CRNM also faces another problem. Writing in his weekly regional newspaper column, he said "it is known that tensions exist between it (CRNM) and the Community Secretariat that need to be seriously and objectively addressed to overcome the immediate problem that stands in the way of preparations for the already delayed Caricom-Canada negotiations".

The Caribbean leaders are hoping to have the CSME fully implemented by 2015. But recent pronouncements, even by its supporters, have raised eyebrows as to whether that can be achieved.

Barbadian Prime Minister David Thompson, who has lead responsibility for CSME, has warned of changes in his country's immigration policy that would give employment preference to Barbadian nationals, a position contrary to the Revised Caricom Treaty that governs the CSME.

UWI lecturer in political science Dr. Tennyson Joseph said the language coming from the Barbados administration "would lead one to conclude that the current leadership is not pro-integration".

However, Foreign Minister Christopher Sinckler insists that Barbados is fully committed to the CSME, and warns that if "the intellectuals believe there is some magic wand that you are going to wave and achieve Caricom integration overnight, it isn't going to work that way. All countries in Caricom have problems."