By Dr. Jan Yves Remy
At the invitation of the Governor of the Central Bank of Barbados, I recently participated in a vibrant session of the Caribbean Economic Forum entitled “Putting People at the Centre of Development in the Caribbean”. My fellow panelists – Professor Avinash Persaud and Dr. Damien King – were two of ten eminent members of the CARICOM Commission on the Economy, who, in March 2021 released a Report entitled “Caribbean 9.58 – Speeding Up the Caribbean”. Any self-respecting Caribbean national would appreciate that the Report’s key leitmotif is to accelerate CARICOM’s integration process, just as Usain Bolt blazed a trail in his record-breaking 100 metres dash.
At 47 pages, the Report is a marked change from others, like Sir Shridath Ramphal’s 1992 Time for Action Report, which at 550 pages, was all-encompassing but ultimately did not result in the implementation of all of its lofty goals.
This Report packs a different punch. With Commissioners drawn from international and regional royalty in economics – including heads of regional organizations and think tanks, current and former WTO Directors- General, special advisors to the region’s Prime Ministers – the promise of the Report was outsized. Whether it can deliver on its aim of unlocking the key to Caribbean integration and growth remains to be seen.
In this SRC Trading Thoughts, I outline some of my key takeaways and thoughts about the Report.
On process and themes
A major preoccupation for the Commissioners was to address CARICOM’s alleged “implementation deficit”, the perennial headache that CARICOM Heads of Government face of taking decisions jointly when they meet bi-annually, but which remain unimplemented by Member States either because of financial or human resource constraints, or lack of true political will. A further difficulty the Commissioners perceived, is that some decisions on integration initiatives are not taken at all, since unanimity in decision-making requires that all CARICOM Heads agree to move ahead at the same pace, which is often hard to achieve.
The Commission helpfully offers a two-fold solution to this bind: the concepts of “subsidiarity” and “enhanced cooperation”. By the former, the Commission means limiting regional action to a few select areas, leaving the rest within the remit of the nation State; and by the latter, the Commission means that, where all agree, 5 of the 15 CARICOM countries can proceed with the integration agenda, with the intention that the others will follow at their own pace.
As a threshold issue, I question whether either of these suggestions is new to CARICOM. “Subsidiarity” is the basis for most regional integration regimes and CARICOM is no exception. The Revised Treaty of Chaguaramas (RTC), which provides the legal framework for CARICOM, does not cover every conceivable area of economic activity a country can pursue and already gives CARICOM Member States wide berth in pursuing areas individually. In fact, that might be the exact problem with our integration process: has COVID-19 not taught us bitterly that regional prioritization and action are no longer options but necessities? I am therefore slightly perturbed that in its Report, the Commission includes among the list of areas for national and not regional action topics like health and digital training and upskilling, with regional efforts being merely supportive.
“Enhanced cooperation” is not that novel either. The mere existence of a sub-grouping like the OECS within CARICOM, , and the ability of individual Member States to “opt out” of decisions suggests that there is already accommodation in CARICOM for different paces of integration. What is new, indeed, is the Commission’s recommendation that this be the default approach for CARICOM. While I appreciate the economic logic of this recommendation – some moving ahead is better than none – the Caribbean idealist in me still has some questions. First, what is so magical about the number 5? The Commission explains that the European Union accomplishes a similar “variable geometry” by designating a threshold of one third of its membership to proceed with integration first, but the EU is entirely different: one third of the European Union’s 27 countries is still enough to provide it with the critical mass needed to achieve meaningful economies of scale. The same does not hold in CARICOM where certain combinations of 5 countries might barely reach half a million people. Will 5 countries allow CARICOM to achieve the type of scale that we need to justify this huge effort of integration? And what about the political dimension? At the World Trade Organization (WTO) and in East Africa, selective integration continues to cause political mayhem and rifts among membership. Can we afford this type of political fallout among our ranks at CARICOM?
The Four Recommendations
Beyond process-related recommendations, the Commission also put forward four substantive areas for action, carefully chosen to bear out the Commission’s theory that implementable solutions, with minimal government financial outlay, are possible. For each, the Commission explained why that solution would “move the needle” on regional growth, and what specific “action” is needed to implement it.
The four recommendations include: freer movement of labour by allowing persons with more than 2 secondary school certificates to work freely across CARICOM, upon electronically-verifiable proof in their passports; freer movement of goods and people by facilitating a private sector-led Caribbean-wide ferry service between the islands; freer movement of (financial) services through the creation of a regional one-stop shop that can provide “fit for purpose” certification to facilitate regional subsidiaries and payment systems; and private sector involvement in resilience building through new building codes and the creation of a new asset class of growth and resilience bonds.
I can get excited about each of these recommendations since each one is sorely needed in CARICOM. Therefore, it does not bother me, as it does some, that many of these recommendations have been made before. Indeed, the added emphasis by the august Commission elevates their status and should underscore their centrality. That said, what I do query is whether these solutions are the indispensable ones CARICOM needs to move integration forward at this juncture. Take for instance the idea of a ferry system. Last week alone, CARICOM’s Council on Trade and Economic Development (COTED), was discussing the Multilateral Air Services Agreement and COVID-19 has seen the sprouting of a nascent airline sector. Should our limited attention now be focused on creating a region-wide ferry system? And, in these difficult times, where are the investors that the Commissioners envisage will invest the $50 million to get it started? And what about the free movement of skills agenda that the Commission wishes to transform? At the same COTED meeting, there was reinforcement of the commitment to the idea of a phased approach to skilled migration across the region, which the Commission’s recommendation would render redundant. How do we reconcile these two approaches? And what about the Commission’s promise that its recommendations will require little political or financial outlay, when each calls for some, admittedly reduced, degree of regional harmonization and regulatory convergence among the bureaucracies of Member States. Some of the proposals even call for the creation of Committees, which is anathema to Caribbean people who are tired of the bureaucracy of regional efforts.
A Missed Opportunity for the Commission or Call to Action?
Differences aside, this Commission’s Report is a welcomed breath of fresh air to a CARICOM process that has become too mired in achieving bureaucratic milestones, and not enough about real development of Caribbean people. And for their attempt to reignite the debate, the Commissioners must be commended.
But a few lingering questions remain for me. As a trade law specialist, I combed the pages of the Report eager to hear how the esteemed Commissioners think the region can more valiantly emerge from Covid-19 and economic stagnation to become more export-diversified, resilient and competitive in a rapidly changing world. I wanted to know from this body of world-renowned experts how exactly we can use the platform of integration to pursue at international levels development policies that are quintessentially Caribbean, like vulnerability, proneness to natural disasters, limited finance options, digital innovation, and trade competitiveness. This was the opportunity to move the goalpost beyond generalizations to specifics.
I also wanted to hear more about how Caribbean integration will deliver a people-centred vision of development. In its 47 pages, the sector that receives priority is the private sector, a vital stakeholder but by no means the only one earmarked by all international institutions as equally deserving of attention, such as women, young persons, marginalized groups, and the poor.
And finally, I wanted some acknowledgment that we are at a tenuous stage in our integration process where the internal threats are arguably as potent as the external ones. Will Jamaica leave CARICOM, and will the OECS countries find accommodation for their successful integration process within the CARICOM framework? These are also developmental issues that the Report does not mention.
It may be unfair to have expected answers to every looming question I hold, but the Commission’s Report does leave some issues open. But that, I suspect, was always the intention of the Report and on that score it has certainly succeeded. I invite every concerned and well-meaning CARICOM citizen to read the Commission’s Report and play your part in making Caribbean integration a shared project for us all.
Dr. Jan Yves Remy is Deputy Director at the Shridath Ramphal Centre for International Trade Law, Policy and Services (SRC) at the University of the West Indies’ Cave Hill Campus (Barbados). For more information about the SRC, visit us at www.shridathramphalcentre.com