Where are businesses in Caribbean business?
Sir Ronald Sanders
BRIDGETOWN, Barbados, Thursday March 29, 2012 - The countries of the Caribbean Community and Common Market (CARICOM), with the exception of Guyana and Suriname, are each experiencing severe decline in their economies. The small Leeward and Windward Islands are worst affected, and so too is Barbados.
Governments are struggling to find ways in which to spur economic activity that could produce growth. Meanwhile, unemployment and poverty are growing. Unemployment is highest amongst the youth, making for an alarming situation.
Presenting a lecture to students of the University of the West Indies recently, I received the greatest applause and nods of approval, when I lamented the fact that there were now many graduates of the University who were unable to find jobs that correspond to their level of qualifications, if they could find any jobs at all.
"Governments reach decisions with little or no input from the private sector" --Sir Ronald SandersIn this regard, many Caribbean countries are like pressure cookers, waiting to explode. Only migration and remittances from family abroad are easing the pressure. But, even these valves are not sufficient to relieve discontent completely.
In many cases, this has led to borrowing from local statutory bodies, such as national insurance and social security schemes, to fund capital projects and even to pay wages and salaries. Governments have also borrowed from local banks causing them to carry the greatest risk if there is a default.
A few governments have also borrowed from the Government of the Peoples Republic of China and while many of these loan agreements have not been made public but are said to be concessionary, they have added to the burden of national debt and will have to repaid in the future.
Where is the Caribbean business community in all this?
They appear not to be involved at all. Indeed, in some CARICOM countries, the only involvement of the business community in the present difficulties is that some of them are seeking greater concessions from governments.
The recent Landell Mills report to CARICOM Heads of Government on the restructuring of the CARICOM Secretariat points out that the regional private sector is “fragmented and divided” and many “key private sector players do not even bother to get involved”.
This situation is not good for the region or for the private sector. It is not governments that trade; it is businesses. Therefore, the business community throughout the region should have a keen interest in the meetings of CARICOM trade ministers and meetings of heads of government. The decisions they reach have a major impact on business and on the capacity of businesses to contribute to economic growth and development.
Yet, there are no regular and structured meetings between Caribbean governments and the Caribbean private sector. In other words, governments reach decisions with little or no input from the private sector which they all proclaim is “the engine of growth”.
It is telling that the member countries of the Organization for Economic Co-operation and Development (OECD) and the European Union Commission regularly consult the private sector of their countries recognizing fully that the rules to which they agree, or set, are meant to facilitate businesses on which their economies depend for growth, employment and prosperity.
The Landell Mills report states what should be obvious to all: “The private sector’s views on what works and what does not and on where priorities lie would be invaluable”. For some reason, it does not appear obvious to many CARICOM governments. They treat the private sector with suspicion. Only Barbados has a system of consultations with the private sector in joint meetings with trade unions, but even these meetings are not attended by the “key private sector players”. As the report says, the officials who attend these meetings “are often not business people themselves”. The latter point suggests that serious business people see little point in engaging governments which fail to act on the proposals they put forward.
The report recommends “regular small and informal meetings, possibly over dinner. In our experience an informal arrangement is the best way of building up relationships and getting busy executives to open up on a freewheeling basis”. There is merit in this idea provided it is done in an open and transparent manner. If not, it will lead to allegations of favouritism, discrimination and marginalisation from others who are not invited.
The report dismisses the notion of structured meetings, including a Council of representatives of governments and the private sector. But such a Council is necessary and it would be well attended if it comprised Heads of Government and leading business figures from across the region. Both groups would want to be sure they are dealing with persons who can make and implement decisions. Of course, businessmen will cease to attend meetings, whether it be small working dinners or a council, as soon as they get the first inkling that nothing is done as a result of the discussions.
How to achieve a higher level of confidence between governments and the private sector is a challenge. Each group needs the other if the economies in which they operate – and indeed the Caribbean Single Market – are to be advanced so as to create jobs, reduce poverty and to grow.
In 2009, as head of the Jamaican-based company, Grace Kennedy, Douglas Orane, told a regional private sector body: “The CARICOM region needs to go through a process of self transformation”. Nothing has changed since then. The vibrant Jamaican private sector is well placed to propose a basic plan for the regional business community’s involvement in, and contribution to, the region’s economic progress. With the help of the new Jamaica government, such a plan could be a basis for wider regional discussion, refinement and adoption.
Businesses cannot be left out of business.
The opinions expressed in this commentary are solely those of Sir Ronald Sanders. Sir Ronald Sanders is a Consultant and former Caribbean diplomat.