Socioeconomic Challenges and General Concerns
The Caribbean Community (Caricom) was due to start 2006
with the launch of the perpetually postponed Caribbean Single Market and Economy
(CSME). Instead, only six of 15 full members will celebrate its inauguration in
the special ceremony being hosted by Jamaica on 23 January. Successful
signatories - Barbados, Belize, Jamaica, Guyana, Suriname and the twin-island
state of Trinidad and Tobago - brought the CSME into operation on the first day
of 2006. However, the remaining nations will lag behind until later this year,
at best. Haiti's participation is uncertain, since it was suspended from the
Caricom and is beset by security and governance problems. The ambitious
Caribbean economic integration project was supposed to come into force at the
close of 2004, but ultimately only market integration aspects of the regional
accord were finalised in the flagship nations of Barbados, Jamaica and Trinidad
and Tobago (see Caribbean: 11 November 2005: Caribbean
Single Market to Meet Deadline, but Economic Integration Measures Delayed).
A year later, only the Caribbean's largest and/or economically strongest
countries consented to comply with the 31 January 2005 deadline. The CSME
effectively means the lifting of trade barriers among the aforementioned states,
allowing for the free movement of capital, goods, services and labour; a
regional passport should be implemented in 2007.
The early days of 2006 were nonetheless marked by the
absence of the smaller Organisation of the Eastern Caribbean States (OECS) -
Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines,
St Kitts and Nevis and Montserrat - which were concerned about the detrimental
effect that liberalisation could have on their less competitive economies. These
small island states fear that more competitive and larger economies will benefit
most from the single market, and there are concerns on a regional level
regarding the expected increase in migration within the bloc. According to
Trinidad and Tobago Premier Patrick Manning, six other nations will join by
March 2006, including St Vincent and the Grenadines, the only country that has
failed to ratify all of the documents paving the way for the implementation of
the accord. Questions remain over struggling Grenada, despite its tentative
commitment to the scheme.
OECS Lags Behind, Fears Prejudicial Effects
OECS members contended that they were not in a position
to proceed with the trade accord at this stage. Their smaller size and inability
to capitalise on economies-of-scale render them vulnerable to more
cost-effective enterprises originating from their larger Caribbean neighbours.
The Caricom has striven to allay such fears by establishing the Regional
Development Fund (RDF), which is set to direct funds to more exposed economies
to assist the OECS and compensate for revenue losses. Financing will come from
regional powerhouses and the international community, but no consensus has been
reached as to the initial amount to be dedicated to the RDF. The debate now
focuses on US$50 million or US$120 million as the basis for the fund. Financial
and technical experts will soon release a report, expected this month, on the
RDF's methods of accessing benefits and the ideal amount of the fund.
St Vincent and the Grenadines seems to be indecisive.
Recently re-elected Premier Dr Ralph Gonsalves reiterated its commitment to the
scheme, but is waiting for the Caricom to address some of the issues he deems to
be of utmost importance to Vincentians, such as the existence of the RDF, prior
to signing further documents and giving his approval. St Kitts and Nevis
initially bid for a month's delay in the accord's implementation (31 January
2006), but it is as yet unclear whether the islands will be ready to withstand
greater competitive forces by then. St Lucia also affirmed its desire to see the
dawn of the single market on its territory, but wished to co-ordinate efforts
with other OECS members to ensure that the CSME becomes an opportunity and not a
threat to its national productive apparatus. Grenada's Prime Minister Keith
Mitchell announced in a broadcast earlier this month that his country would join
'sometime in 2006'. He explained that the delay was 'necessary' to provide 'time
to finalise a number of outstanding legal matters, in addition to providing a
much-needed window to complete our public education programme'. In a boost to
the OECS, Trinidad's Premier Manning pledged to help nearby Grenada and St
Vincent in the event of further natural disasters. Grenada was devastated by
Hurricane Ivan in September 2004 and is still in the process of recovering. In
the same statement, published by influential daily the Trinidad and Tobago
Express, Manning announced plans to travel around the Caricom over the next
six months to oversee the effective implementation of the CSME.
Outlook and Implications
The varied development status of Caricom members and the
different sizes of their economies complicate the integration process. With this
in mind, the bloc is using the European Union (EU) as a model, which inspired
the RDF. Delays to the establishment of that fund have left smaller nations
jittery. Dominica, which is in the process of promoting eco-tourism in the face
of its declining traditional industries, has refused to provide an
implementation date. Its prime minister, Roosevelt Skerritt, instead asserted
that the OECS intends to join the CSME as a single bloc. Montserrat's entry has
been delayed; still a British colony, it is awaiting permission from the British
government for membership. The timing of Antigua and Barbuda's entry is also
uncertain. Barbados's Prime Minister Owen Arthur is expected to step up his
efforts in the coming quarter to reach a consensus to ensure that the
outstanding states enter the CSME. Trinidad's Manning is supporting his work and
is set to visit Guyana and Jamaica this month, prior to hosting the Caricom
Intercessional meeting on 9-10 February. In advance of those talks, the opening
ceremony provides a pertinent opportunity for larger nations to offer the
necessary support to the OECS that would give them the confidence to make a
final commitment.
