Sunday, January 3, 2010

The need of one currency is a key player that we still don't have for an open caribbean market.

A letter to the editor:

Letter: CARICOM is fast becoming a dead fish

Published on Friday, January 1, 2010

Dear Sir:
Following two disastrous world wars, the cold war and other regional wars the countries of Europe have successfully united their respective economies into what is today the very powerful European Union (EU). Their common currency, the Euro, is a strong currency and may one day replace the dollar as the international trading currency of choice.
The European Union became the envy of other regional areas of the world and it is out of this the Asian-Pacific countries, led by the then Australian Prime Minister, established the Asian Pacific Economic Co-operation (APEC) in 1989. Prior to the formation of APEC, the Caribbean Community (CARICOM) was formed on August 1, 1973.
CARICOM currently consist of fifteen (15) states including Haiti and Suriname, who joined the organisation after its formation and some associate members including the Caymen Islands. The primary objectives of CARICOM are as follows:
Improved standard of living and work
full employment of labour and other factors of production.
accelerated, co-ordinated and sustained economic development and convergence
enhanced co-ordination of foreign and economic policies
enhanced functional co-operation.
After 35 years of operation the people of the Caribbean are still to benefit fully from CARICOM, as a result of the insularity of many Caribbean governments. We are still trading with many different individual currencies, with only the countries of the OECS having the same currency, the EC$. Apart from that, CARICOM hasn't emerged as a major player on the world economic stage.
CARICOM brought some benefits to the region with the establishment of a number of regional institution such as CARDI, CARICAD, CFNI, CTU, CXC, UWI and the CCJ. Yet, despite that, CARICOM in my view has failed to meet the aspirations and dreams of the Caribbean population.
The full implementation of the Caribbean Single Market and Economy (CSME) is still a nightmare. The implementation of CSME should see the free movement of good and services, the right of establishment, the common external tariff, free circulation, free movement of capital between CARICOM member states. Even after a decision was taken to have the CCJ as the Caribbean's final court of appeal, only two countries have the CCJ in that capacity. I am pleased that the OECS countries have seen it fit to finally sign the OECS economic union protocol. This protocol must now seriously be fully implemented across the OECS and subsequently all of CARICOM.
The time has also come for CARICOM to expand to include countries such as Puerto Rico, Martinique, Guadeloupe, the Dominican Republic, Venezuela and The People's Republic of Cuba. If communist China and Vietnam can be members of APEC, then what is preventing Cuba from becoming a member of CARICOM? Barring some major geographical catastrophe, Cuba will remain the biggest island in the Caribbean with a population in the millions.
APEC expanded from twelve (12) economies in 1989, and now attracts a membership of twenty-one ( 21) countries, including China, Japan, Canada, Russia and Mexico. The pariah state of North Korea is excluded for obvious reasons.
The main purposes for the formation of APEC include:
creation of an intergovernmental and regional forum
co-ordination of economic and trade policies in the region of Asia-Pacific
to promote economic and trade liberalization, co-operation and integration.
to be a starting point of Asia-Pacific integration in response to improving regional integration in Europe and North America.
Although its goal are high, and with similar goals like CARICOM, APEC is different from other intergovernmental organisation . It is operated without an institutionalized negotiation mechanism, lacks a binding decision making system and is devoid of a well-functioning secretariat. CARICOM on the other hand has a functional secretariat in Georgetown, Guyana.
APEC therefore lacks sufficient capacity to fulfill its objective, enhance operational efficiency and maximiz co-operation effectiveness. It is in this regard that, like CARICOM, APEC has been criticised and mocked as a ''Talk Shop".
Despite of all that criticism, unlike CARICOM, APEC has grown significantly. The region represents a population of 2.6 billion people, a massive market, with more than 49% of total volume and 55% of GDP on average out of the entire world. This has made APEC a much more powerful body than CARICOM. Furthermore, APEC has never stopped striving to fulfill its promises and goals regarding Asia-Pacific economic integration . Specific action plans initiated by APEC include the Shanghai Accord.
More importantly, issues covered by APEC have been expanded from trade and investment liberalisation to more wide ranging areas and fields such as business facilitation, capacity building, sustainable development and human security.
Unlike CARICOM, APEC operates based on a spirit of "open regionalism" in order to avoid creating a closed trading block and to recognize the importance of multilateral trading system. While CARICOM and the Caribbean region appears to be just straggling along, APEC and the Asian region proudly represents the most economically dynamic region in the world.
APEC has agreed to make it 25% cheaper, faster and easier for investors to do business in the Asian region by 2015 and to remove all barriers to free trade by 2010. APEC has also vowed to help business operate in the region. CARICOM on the other hand is stuck in bureaucracy and inefficiency. It most CARICOM countries it takes a business years to obtain a licence to operate. This process is killing foreign direct investment (FDI). Despite CARICOM's close proximity to the world's biggest economy, the United States, it hasn't been able to attract major investors from the US and is also experiencing difficulties exporting its goods and services to the US. The US is a member of APEC, however it is not a member of CARICOM.
Inter-regional transportation by air and sea within CARICOM is extremely poor. CARICOM nationals continue to experience great difficulties to travel within the region and when they do it is very expensive. The talk about a regional ferry is still just talk. What would it take for fifteen (15) governments to operate a fast regional ferry service.Such a service will have many positive effect on the region economies. Apart from the problem with inter-regional transportation, CARICOM is also experiencing problems with international transport and trade. The problem is less acute within APEC region. China has just unveiled the fastest high speed train service in the world. and the region is connected by a striving ferry service.
There is a need for pro-active action and reform within CARICOM for fear of that organisation losing its usefulness. The world's economic dynamics have changed and are rapidly changing, CARICOM can't afford to be tangled in inaction and be an isolated body. With the emergence of ALBA, there is a subtle treat that CARICOM may disintegrate as more and more of its members join ALBA. While CARICOM is struggling to find its feet, APEC is now leading the world gradually out of its current economic recession and may one day become the most powerful economic block in the world.
As we enter a new decade, we may reflect on the past decade and realise that we have lost an opportunity to unite the economies of the entire Caribbean region including Cuba. We could have been a much more powerful and influential people only if we had more visionary politicians, leaders and citizens demanding accountability from them. We have sat back for too long and allowed our politicians to take us for a bumpy ride. We now have to grab the bull by the horns and move forward in unity and, in the words of former Alaskan Governor Sarah Palin, "only a dead fish goes with the flow'. I fear that CARICOM is fast becoming a dead fish.

Foxy Stewart

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