Exorcising Caricom’s ghosts

Talk of Free Trade  left  delegates attending the third Euromoney and Latin Finance Caribbean Investor Forum jaded and disillusioned. The issue became a flash point after the session “Forging Ahead” which primarily dealt with how FTAA will impact on the Caribbean and which also looked at how regional economies can work together to compete for investment in an increasingly global economy.

One delegate noted that the four percent Jamaican tax put on goods entering the country was inimical to free trade and was roundly condemned as styming the pace of the Caribbean Single Market and Economy (CSME). Mark Golding of Hart Muirhead  was critical of his government’s new trade tax and questioned how that was going to help the free movement of trade.“Why is this permissible in the context of the CSME,” he said in an interview and suggested that the Caricom Secretariat needed to be strengthened to deal with this sort of thing. “How can we move forward ?” he said. “Business people,” he said, “must have some sort of redress when unilateral decisions like this are taken.”

The conference was held at the all-inclusive resort, Casa de Campo, in the Dominican Republic (DR) from May 7-10. Among the sponsors of the conference were, Guardian Holdings Limited (GHL), RBTT, the Commercial Bank Association of the Dominican Republic and Indotel, DR’s telecommunications authority. Other co-sponsors were, Bear Stearns, Jamaica Money Market Brokers (JMMB), Standard Bank Group, and Cap Cana, a billion dollar mega tourism project being built in the Dominican Republic. Dr Aleem Mohammed, Chairman of SM Jaleel said the Jamaican tax had a significant impact on his business and expressed grave doubts about the future of free trade within the region. He wondered how the Caribbean was going to cope with FTAA when Caricom could not get its own house in order.“Where are we going?” he asked and suggested that Caribbean leaders seek to develop economies of scale to deal with FTAA. On the panel discussion, “Caribbean Finance and Funding,”Junior Finance Minister Ken Valley noted that developed countries were not buying into special or preferential treatment for developing countries.

Responding to the criticism that nobody in Caricom wanted to give up anything, Valley said TT had set up a $50 million fund to help fragile economies.  He acknowledged that a sticking point was how to pull together economies that were at various stages of development.  Valley said when it came to trade, he did not support the theory that “one size fits all.” On one delegate’s charge that regional goverments were the main hurdle to free trade, Valley charged that Caricom had done quite a lot. It was the private sector that needed to catch up.  Caricom delegates were of the unanimous view that countries were putting up uncessary hurdles to trade. Ambassdaor Myles Frechette.

President & CEO, Council of the Americas, was blunt when he told his audience in his address that Caricom had no choice but to get into the river of Free Trade. His anology rubbed the wrong way Kris Astaphan, Executive Vice President, AIC Limited and Deputy Chairman, NCB Jamaica. Astaphan reminded his audience that a river flows only one way. Gary Voss, Chairman, Caribbean Association of Industry and Commerce, took the view that  the Dominican Republic had created an enabling environment for foreign investment. While Latin America was off and running, Caricom was furthest behind, he said. On the CSME, Voss charged that it as very far away and doubted that regional leaders would meet its deadline. With CSME on the slow burner,  investment inflows were not likely to materialise, he warned.

He was scathing in his criticism of the Caricom Secretariat, saying that it had no executives; nobody was in charge of tourism, marketing and finance. He charged, too, that the private sector was dysfunctional, noting there were 10 different private sector organisations who did not speak to each other. His advice was that now was the time to work together to create a facilitating environment to take Caricom forward and  maintained that the game had changed. He gave his own view on the liquidity problem plaguing the region. There was, he said, more money than projects.  Why? “Because big business was waiting to see how the FTAA was going to pan  out and depending on how that went, make their acquisition or investment.” Central Bank Governor, Marion Williams, made the case for capital and people to cross the region freely, noting that success must rest with the Caribbean Single Market and Economy (CSME). She observed that if free trade issues aren’t resolved then Foreign Direct Investment (FDI) could end up elsewhere.

She warned that  Caricom needed FDI to stimulate growth. In his keynote  address to delegates at the opening ceremony, Jamaica Prime Minister PJ Patterson was critical of the concern showed by developed countries for developing marketing economies, describing this as  “token” and “peripheral.” He said the prevailing view in 2003 was that the contagion of poor growth was spreading to developing countries, leading to adjustment problems. He sounded a note of caution when he asked, “How much longer can poor countries remain at peace ?” He also spoke of the perils of the drug trade and a migrant population. What was needed, he said, was immediate investment for economies to grow. “We have to find ways to get FDI in...we have to boost investment levels,” he said.  “We must find ways to do it.”

Professor Compton Bourne, President, Caribbean Development Bank (CDB) also spoke about coping with international competitiveness, noting that economic diversification was needed if Caricom countries were to see growth. Bourne took the view that people must be able to invest in each other’s capital markets, something needed for the smooth running of the CSME. Responding to a question from the audience on the CSME, Bourne said government needed to address structural balances in the CSME so that no one country remains disadvantaged. All integrationist schemes only work when trade, labour movements and capital are allowed to do their work,” he said. Trade, he believed, can only seen as a limited approach to integration.