Column: CSME - Free movement and a larger Fund
(AS 15/02/2006) Antigua - The 13 operational countries of the Caribbean Community and Common Market (Caricom) should agree to the completely free movement of people from Less Developed Countries (LDC’s) to the More Developed Countries (MDC’s) on a non-reciprocal basis as the first step to encouraging them into the Caribbean Single Market (CSM).
The Bahamas and Haiti are excluded from this proposition.
There should also be agreement that the seven LDC’s would be allocated at least 60 per cent of the resources of the Regional Development Fund (RDF) to implement structural adjustment programmes. And, the Fund itself should be larger than is presently contemplated.
Since it is unlikely that the Caricom countries alone can contribute the resources that an enlarged RDF would require, contributions should be sought from outside countries and regions.
Thus, Caricom should commit itself to placing on the agenda of its negotiations with the European Union (EU) for Economic Partnership Agreements (EPA’s) the proposition that the EU should contribute to funding adjustment in the LDC’s through the RDF.
After all, the loss of preferential treatment for bananas in the EU market has materially hurt the economies of St. Lucia, St. Vincent & the Grenadines and Dominica. And, the sugar industry of St. Kitts – already ailing – fell to the EU hatchet that hacked the preferential price paid for sugar.
Agreement from the EU to contribute to the Fund for the structural adjustment of the OECS countries should find resonance in Canada, the United States and Japan – all three of which enjoy trade surpluses with the OECS nations.
These two practical measures of non-reciprocal freedom of movement of people from the LDC’s to the MDC’s, and the larger allocation of the RDF’s resources to the LDC’s would, undoubtedly, embolden the countries of the Organisation of Eastern Caribbean States (OECS) to join the CSM on 30 June without equivocation.
There can be no doubt that regional integration for Caricom countries is a necessity.
In this connection, even if the OECS countries do proceed to establish an Economic Union on 18 June, they will still be weaker and less able to manoeuvre in the international community than if they were part of the CSME.
By the same token, a CSME of thirteen countries is also stronger than the group of six that kicked it off on 30 Jan. The two groups need each other.
But, there are genuine concerns among the OECS countries, and they should be addressed, particularly as the issues are not insurmountable.
The primary concern of the OECS, or LDC’s, is not about the movement of skilled Caricom nationals into their countries. Both the governments and the private sectors in the OECS recognise that they need skills if their economies are to grow. They also recognise that some of their own skilled people will move to other Caricom countries, and they will have to be replaced.
Their bigger fear is that, under the CSM, competition from better resourced companies in larger Caricom countries will close their local companies, creating unemployment and social and political upheaval. In their view, therefore, dislocated labour – particularly unskilled – should be able to move to other countries.
If such dislocated labour does move to other Caricom countries and finds employment, then clearly they will be satisfying a need and contributing to that country’s economic well being.
Given that there is little unemployment benefits in Caricom countries, labour is very unlikely to move from being unemployed in their own homeland, where they at least have the benefit of a family network, to being unemployed in another country where there is no support at all.
Consequently, the prospect of huge numbers of unskilled labour from the OECS swelling the ranks of the unemployed in the rest of Caricom is most unlikely.
With regard to the RDF, Trinidad & Tobago, Jamaica and Barbados should acknowledge that the benefits of trade in goods under Caricom have flowed primarily to them. In recent years, a similar development has taken place in financial services especially.
Trinidad & Tobago has been the greatest beneficiary both in trade in goods and services to the rest of Caricom and, on a comparative basis, more particularly to the OECS. Consequently, it is in Trinidad & Tobago’s self interest to be generous in its contribution to the RDF.
Of course, the Trinidad & Tobago government would be right in pointing to the Venezuelan PetroCaribe facility to which the OECS countries have signed-up as a diminution of its market within Caricom, and, therefore, reason to be less supportive of these countries.
That argument, of course, speaks directly to the danger that PetroCaribe poses to the project of deeper integration within Caricom.
But, Trinidad & Tobago’s government should take up the gauntlet thrown down by St. Lucia’s Prime Minister Kenny Anthony – it should work with the Trinidad oil companies to match the Venezuelan terms, and by so doing, not only maintains its market in Caricom, but also safeguards the regional integration project. Other countries within Caricom – such as Guyana and Belize – may well argue that their own situation also demands special attention. Unquestionably, they do.
Guyana is a Highly Indebted Poor Country (HPIC) and it will shortly face the loss of millions of dollars of annual revenue from the cut in the price that the EU will pay for its sugar.
Belize has already suffered the loss of a preferential price for its banana exports to the EU and will join Guyana in enduring a slash in the price for its sugar.
The situation of these two countries strengthens the argument for a larger RDF, and one to which significant contributions are made by the EU, the US, Canada and Japan.
But to encourage the support of external countries, Caricom nations must show themselves ready to make the hard decisions that are necessary to show that they are serious.
Therefore, the CSME must move ahead at full pace with the OECS joining on 30 June as pledged. If non-reciprocal free movement of people from LDC’s to MDC’s helps, there is no harm in granting it.
And, a larger RDF with specific allocations to the LDC’s to assist with structural adjustment is patently necessary. Caricom should now move to put implementing and management capability in place for the CSME – one that would command the support and confidence of the international community.
It is time for the Caricom Commission to be established with the CSME as the full time task of one of the Commissioners.
By Sir Ronald Sanders, a former Caribbean diplomat, now a corporate executive who publishes widely on small states in the international community.
The Bahamas and Haiti are excluded from this proposition.
There should also be agreement that the seven LDC’s would be allocated at least 60 per cent of the resources of the Regional Development Fund (RDF) to implement structural adjustment programmes. And, the Fund itself should be larger than is presently contemplated.
Since it is unlikely that the Caricom countries alone can contribute the resources that an enlarged RDF would require, contributions should be sought from outside countries and regions.
Thus, Caricom should commit itself to placing on the agenda of its negotiations with the European Union (EU) for Economic Partnership Agreements (EPA’s) the proposition that the EU should contribute to funding adjustment in the LDC’s through the RDF.
After all, the loss of preferential treatment for bananas in the EU market has materially hurt the economies of St. Lucia, St. Vincent & the Grenadines and Dominica. And, the sugar industry of St. Kitts – already ailing – fell to the EU hatchet that hacked the preferential price paid for sugar.
Agreement from the EU to contribute to the Fund for the structural adjustment of the OECS countries should find resonance in Canada, the United States and Japan – all three of which enjoy trade surpluses with the OECS nations.
These two practical measures of non-reciprocal freedom of movement of people from the LDC’s to the MDC’s, and the larger allocation of the RDF’s resources to the LDC’s would, undoubtedly, embolden the countries of the Organisation of Eastern Caribbean States (OECS) to join the CSM on 30 June without equivocation.
There can be no doubt that regional integration for Caricom countries is a necessity.
In this connection, even if the OECS countries do proceed to establish an Economic Union on 18 June, they will still be weaker and less able to manoeuvre in the international community than if they were part of the CSME.
By the same token, a CSME of thirteen countries is also stronger than the group of six that kicked it off on 30 Jan. The two groups need each other.
But, there are genuine concerns among the OECS countries, and they should be addressed, particularly as the issues are not insurmountable.
The primary concern of the OECS, or LDC’s, is not about the movement of skilled Caricom nationals into their countries. Both the governments and the private sectors in the OECS recognise that they need skills if their economies are to grow. They also recognise that some of their own skilled people will move to other Caricom countries, and they will have to be replaced.
Their bigger fear is that, under the CSM, competition from better resourced companies in larger Caricom countries will close their local companies, creating unemployment and social and political upheaval. In their view, therefore, dislocated labour – particularly unskilled – should be able to move to other countries.
If such dislocated labour does move to other Caricom countries and finds employment, then clearly they will be satisfying a need and contributing to that country’s economic well being.
Given that there is little unemployment benefits in Caricom countries, labour is very unlikely to move from being unemployed in their own homeland, where they at least have the benefit of a family network, to being unemployed in another country where there is no support at all.
Consequently, the prospect of huge numbers of unskilled labour from the OECS swelling the ranks of the unemployed in the rest of Caricom is most unlikely.
With regard to the RDF, Trinidad & Tobago, Jamaica and Barbados should acknowledge that the benefits of trade in goods under Caricom have flowed primarily to them. In recent years, a similar development has taken place in financial services especially.
Trinidad & Tobago has been the greatest beneficiary both in trade in goods and services to the rest of Caricom and, on a comparative basis, more particularly to the OECS. Consequently, it is in Trinidad & Tobago’s self interest to be generous in its contribution to the RDF.
Of course, the Trinidad & Tobago government would be right in pointing to the Venezuelan PetroCaribe facility to which the OECS countries have signed-up as a diminution of its market within Caricom, and, therefore, reason to be less supportive of these countries.
That argument, of course, speaks directly to the danger that PetroCaribe poses to the project of deeper integration within Caricom.
But, Trinidad & Tobago’s government should take up the gauntlet thrown down by St. Lucia’s Prime Minister Kenny Anthony – it should work with the Trinidad oil companies to match the Venezuelan terms, and by so doing, not only maintains its market in Caricom, but also safeguards the regional integration project. Other countries within Caricom – such as Guyana and Belize – may well argue that their own situation also demands special attention. Unquestionably, they do.
Guyana is a Highly Indebted Poor Country (HPIC) and it will shortly face the loss of millions of dollars of annual revenue from the cut in the price that the EU will pay for its sugar.
Belize has already suffered the loss of a preferential price for its banana exports to the EU and will join Guyana in enduring a slash in the price for its sugar.
The situation of these two countries strengthens the argument for a larger RDF, and one to which significant contributions are made by the EU, the US, Canada and Japan.
But to encourage the support of external countries, Caricom nations must show themselves ready to make the hard decisions that are necessary to show that they are serious.
Therefore, the CSME must move ahead at full pace with the OECS joining on 30 June as pledged. If non-reciprocal free movement of people from LDC’s to MDC’s helps, there is no harm in granting it.
And, a larger RDF with specific allocations to the LDC’s to assist with structural adjustment is patently necessary. Caricom should now move to put implementing and management capability in place for the CSME – one that would command the support and confidence of the international community.
It is time for the Caricom Commission to be established with the CSME as the full time task of one of the Commissioners.
By Sir Ronald Sanders, a former Caribbean diplomat, now a corporate executive who publishes widely on small states in the international community.
posted by InCar Group Press Room at 17:59
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