The achievable objective of integrating sister CARICOM communities into one regional society which will facilitate charting programmes for the increased prosperity for all our countries is a vision I have carried all my political life.
While recognising the need for the creation of an international market-
We need to address our own socioeconomic problems and formulate policies within the framework of our capacity for solution. A united, integrated Caribbean Community can successfully orchestrate ways of solving our problems so that we can stride on the international platforms -
The past six decades have witnessed the Caribbean Region passing through several crises of dependency and underdevelopment -
From time to time, various solutions were put on the agenda to deal with the "unprecedented difficulties".
In 1942, Professor Arthur Lewis pointed out that the way towards the raising of living standards was modernisation of agriculture and industrialisation, and the transfer of the surplus population to British Honduras (now Belize) and British Guiana (now Guyana). But this did not materialise.
In the preparations for the Caribbean Federation, the idea was mooted that the way forward was overall planning for the region and territorial specialisation, and a conscious effort to stimulate development in seven of the ten lesser developed territories with less than 10 per cent of the income of the region. This also did not materialise.
At Montego Bay, in 1 945, the Caribbean Labour Congress (CLC) proposed a Caribbean Federation with Dominion Status and self-
Flawed models of development -
The "oil crisis" and recession in 1973-
The major Caribbean export products -
The CDB President, Sir Neville Nicholas, told a Press Conference on February1, 1994:
"When taken as a whole, the Region’s economic performance was still less than satisfactory because the major economies were the most disappointing and the impact of their minimal progress will be felt by the whole Region."
The Most Developed Countries (MDCs) of the Commonwealth Caribbean of’ the early 1 960s have become virtually the Least Developed Countries (LDCs) with negligible growth rates and explosive problems. The slow recovery from recession in the industrialized countries did not greatly assist them.
The only "industry" making gains is tourism, responding to a slow recovery from recession in the industrialized countries, particularly the USA. But this service industry is faced with threats from crime, violence, narcotics, high service charges and competition from cruise ships and other attractive tourist destinations.
The Caribbean economies, particularly their manufacturing sectors, in their quest for exported-
1. Competition for modernized high-
2. Competition from South-
3. Dumping of goods.
4. An increasingly difficult funding situation, particularly for public sector activities.
In this era of globalisation and modernised capital-
The resulting intense trade competition, trade barriers, and protectionism are contributing to growing local inequalities and a widening gap between the rich and the poor in the developed North as well as the developing/stagnating South.
So alarming is the plight of the poor that the Caribbean Conference of Churches (CCC) not too long ago advised churches and their leaders to convert sonic chapels and church halls into soup kitchens, offices into medical clinics and grounds into playing fields for the children. The situation cannot be allowed to become explosive as in the late 1970s, or at the time of the Great Depression of the 1930s, when there were disturbances throughout the Caribbean.
With stagnating/collapsing economies, structural adjustment programmes became generally mandatory. These were intended to provide the framework for a development thrust which is in keeping with rational objectives. Regrettably, the programmes have reduced the options and choices available to our countries. In fact, serious social and other stresses have arisen as a result of implementation of these programmes.
The Standing Committee of Caribbean Finance Ministers noted that the Structural Adjustment Programmes of some Member States had not only caused contractions in public sector investment programmes, but constrained the capacity of Governments to provide funding for viable projects and counterpart funding for externally supported activities.
The situation in Guyana is instructive. A virtually bankrupt situation caused the country to be declared ineligible in 1985 for further credits by the International Monetary Fund (IMF). A structural adjustment programme, though necessary, has been fraught with many contradictions and difficulties. These include:
1) Devaluation of the Guyana Currency from G4.15 = US$1 in 1985 to G$126=US$1 in 1992, led to a grave decline in real wages and salaries, increased prices for critical goods and services, raised costs of imported inputs, significant increases in debt payments in Guyana dollars amounting to 105 per cent of current revenues in 1992 and 80 per cent in 1993, which contributed to a huge budget deficit and drastic budgetary reductions in expenditures on subsidies of essential goods social services and employment cost, which in turn led to massive retrenchment in the public sector and administrative incapacity;
2) Low wages and salaries, despite current budgetary support from the World Bank and the British ODA for the Public Administration Project, led to a 10-
3) Unsustainably high real interest rates, which become a disincentive to productive investments and shift the economy towards speculative and trading activities, leading with high net GDP growth rates to increased social inequality;
4) A credit squeeze which led to overall contraction of the economy, decline in capacity utilization and an accentuated shortage of critical goods and services;
5) An undermining of food production and self-
6) An erosion of the capacity of infant industries, thereby slowing industrialisation;
7) A floating currency linked to trade and monetary liberalization and speculative and trading activities, causing monetary and other instability through a further devaluation of Guyana dollars from G$125=US$1 at 31 December, 1993 to G$145=US$1 at May 1995;
8) Lack of administrative capacity in the Forestry Commission leading to pressures not to grant timber concessions, even though attraction of private investment is mooted for economic growth and development;
9) Divestment (not privatization which can take many forms) of all public economic enterprises, even profitable ones like banking and sugar, and despite historical experience in Guyana with private and public enterprises under different governments;
As regards the demands of the international financial institutions for a speedy privatization/divestment of state-
"Special care must he taken to prevent disruption of the delicate social balance, as winners and losers of the adjustment process are, without deliberate redistribution measures, likely to run along ethnic lines. Blind application of market forces would result in tangible benefits for the East Indian population group that is strongly represented in agriculture, professional services and commerce, and net costs for Afro-
Need for Change
CARICOM and its antecedents were set up at a time when the world was rather different from what it now is. In those days, both high trade harriers to the markets of the outside world and the dominance of economies of scale, as distinct from technology and science in manufacturing industries, dictated a strategy of integration for development based on common external protection within a liberalized trading area and promoted by such state instruments as fiscal incentives and regional agricultural and industrial programming. To this basic thrust was added inter-
But now, after more than 25 years, our community-
It would not be a secret to say we are rather disappointed with the economic progress of the community.
We need our own agenda. The Latin American and Caribbean Commission on Development and Environment sponsored by the UNDP and the IDB, concluded that "more than a half century of flawed development produced total stagnation."
A New Global Human Order
The CARICOM countries are faced with declining aid and investment flows. In addition, the Region has an external debt burden of over US$10 billion, which is the greatest obstacle to real development.
Consequently, as a result of "aid fatigue" and "donor fatigue" it is necessary to raise additional funds for social progress.
Financial resources for global development co-
* Demilitarization Funds -
* A global tax on energy. A tax of US$1 on each barrel of oil (and its equivalent on coal) would yield around US$66 billion annually;
*Taxing global speculative foreign exchange movements. A tax of 0.5% on the value of each transaction can yield US$12500 billion annually as proposed by Nobel Prize winner, economist James Tobin.
Such a fund can be put at the disposal of the United Nations for assistance to countries both in the North and the South for economic growth and human development.
In the North, funds can be allocated for a Works Programme as in the USA by the Roosevelt New Deal administration during the 1930s Great Depression, and for a reduction of the work-
In the South, generally, and in the Caribbean Region particularly, funds can be allocated for a Regional Development Fund, debt relief, grants and soft loans to accelerate development.
The Caribbean regional integration movement will succeed to the extent that, in keeping with the principles of good global governance, partnership and interdependence, we diligently strive for a New Global Human Order.
(Dr. Cheddi Jagan is President of the Co-
This article was reproduced, with permission, from Caricom Perspective
June 1995 -