How Beneficial was the CARICOM Leaders’ Meeting? | Sir Ronald Sanders

CARICOM leaders pose for their official photo at their last summit in Jamaica earlier this month.

By Sir Ronald Sanders

KINGSTON, Jamaica, Monday July 23, 2018 – Last week, the Washington-based publication, Latin American Advisor, sought responses from me, and others considered knowledgeable on Caribbean affairs, to three questions regarding the recently held CARICOM heads of government meeting in Jamaica.

For the benefit of readers of this column, I provide more detailed answers to the three questions here than I did to the Washington publication.

The first question was: What were the main accomplishments of the meeting? Undoubtedly, the main achievement was a renewed commitment to making the Caribbean Single Market and Economy (CSME) more effective. After years of ‘pausing’ the implementation of the many national actions required to advance the single market, new life has been breathed into the process.

Significantly, the new Prime Minister of Barbados, Mia Mottley, who has taken over lead responsibility for the CSME from her predecessor, Freundel Stuart, will hold monthly meetings with officials of the CARICOM Secretariat. This oversight will allow regular monitoring of progress and allow Ms Mottley to consult directly with her colleague heads of government on removing bottlenecks to implementation which has long been a hindrance to advancing the economic integration process.

Additionally, a special meeting of the Heads of Government will be held in November to focus exclusively on the CSME. There is a now a large body of reports from various sources, including the private sector which can inform the meeting of leaders. There are many contentious issues to be faced. Overcoming the challenges will not be easy, but the willingness to dedicate a meeting to deal exclusively with the matter is a positive sign.

The second question posed by the Latin American Advisor was: what resulted from the presence of non-CARICOM heads of state, Cuban President Miguel Díaz-Canel and Chilean President Sebastián Piñera, at the meeting?

Cuba and CARICOM countries have had a strong co-operative relationship since 1972 when four independent nations of CARICOM defied the U.S. embargo to establish diplomatic relations with Cuba. Relations with Cuba were dominated by the leadership of the Castro brothers – Fidel and Raul – for the 46 years that followed.

Therefore, it was important that CARICOM leaders and the new Cuban President had the opportunity to get the measure of each other and to understand whether there would be any divergence of policies by either side.

As it turned out, the meeting underscored the solidarity of Cuba and CARICOM, including CARICOM’s support for the lifting of the U.S. economic and financial embargo against Cuba. Leaders also agreed to increase trade and deepen economic relations.

With regard to Chile, Chilean President Sebastián Piñera has continued showing the interest in the Caribbean displayed by his predecessor in office, Michelle Bachelet. It was agreed that the CARICOM-Chile joint commission would be convened in Barbados to further cooperation on a range of issues of mutual interest, including a multidimensional approach to measuring poverty. Chile is also interested in a free trade agreement with CARICOM which would be difficult but should not prevent agreement on a partial scope scheme. CARICOM needs to diversify its trading arrangements to break its vulnerability to a narrow group of countries.

Chile has shown a willingness to help champion arguments for a change in rules that disqualify Caribbean countries from access to concessional financing from international financial institutions. In this context, President Piñera’s encounter with CARICOM heads was a very important development.

The final question was: what are the most critical issues currently facing the Caribbean and do the region’s leaders have the right plans to tackle them?

The critical issues for the Caribbean are: unemployment, the damaging effects of climate change, high debt that limits their fiscal capacity for spending on social welfare and infrastructure; and an international environment that is unhelpful to their plight.

Over the last decade, in the wake of the 2008 global financial crisis that originated in the U.S. and that spread globally, efforts to tackle these issues have largely been pursued at a national level. Regional collaboration was eased to one side as beggar-thy-neighbour policies were implemented. There will long be a debate on whether the failure to implement regional responses contributed to retarding growth in Caribbean countries and increasing their dependence on countries outside the region, and therefore, compromising their individual and collective independence.

In any event, many heads of government have privately indicated that the July meeting was one of the best in the last five years. New energy and interest were displayed, and significantly, while there was some argument that the ‘E’ in ‘CSME’ should be abandoned because realistically, it’s unlikely to be accomplished in the foreseeable future, many leaders insisted on its retention as a legitimate aspiration of the Caribbean people and, therefore, a necessary goal of Caribbean governments.

The ‘E’ in ‘CSME’ embraces the creation of a single ‘economy’, going beyond a single market. It would include a single currency, a single Central Bank, common financial legislation and regulation, restrictions on governments from printing money, limitations on incurring debt and constraints on careless spending of foreign reserves. It would also remove the need to change currencies to travel around the Caribbean and to pay for goods and services.

Indeed, what the ‘E’ in CSME would do is to replicate across CARICOM, the successful project by the countries of the Organization of Eastern Caribbean States (OECS) in establishing a single currency and deeper and supportive integration arrangements that have saved their individual states from greater economic hardship and facilitated the movement of Caribbean people within their own region.

Steps are being taken to stay on the path to a single economy. They are baby steps such as completing work on a financial services agreement and an integrated capital market. But they are, nonetheless, important steps, and they indicate that the meeting of heads of government, rather than being sidetracked by narrow national interests, appeared to have moved – albeit not leapt – to a more regional approach to dealing with the issues confronting them regionally and collectively.

It is important to note that, by its own choice, the Bahamas is not part of the CSME arrangements and many of the observations in this commentary do not apply to it.

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ronald-sanders

Sir Ronald Sanders is Antigua and Barbuda’s Ambassador to the US and the OAS.  He is also a Senior Fellow at the Institute of Commonwealth Studies at the University of London and Massey College in the University of Toronto.