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Revisiting the Caricom ATM

Thursday, April 7, 2016

Now that the economic slide has finally been acknowledged, T&T needs to prepare for more studied resort to the Caricom ATM as at least one important element of the economic rescue effort.

Detractors stuck in reflexive remembrance of the ill-fated Caricom Multilateral Clearing Facility (CMCF) of the late 70s and early 80s would do well to break out of their 30-year-old tabanca.

The credit support provided under the CMCF, mainly by T&T and Barbados, contributed toward the stability required by some of the smaller economies to both facilitate a level of development and ensuing growth in intra-regional trade from five per cent of all trade at the advent of the Facility to 13 per cent by 1996.

It was, in a sense, a case of enlightened self-interest on our part. Give with one hand and earn with the other. And, through it, T&T manufactures grew exponentially, even prompting fears that the quality and price of our goods had put a damper on the ability of regional partners to develop their own competitive products.

The emergence of the Caricom Single Market helped address protectionist instincts in defiance of the essential, non-reciprocal nature of the relationship and to bring order to trading systems that can bear the mark of inequity.

The essential aim of single market conditions has always been to accord equal status to all goods and services and the people and entities that provide them. This is something that has the potential to produce net value to a country such as T&T with a manufacturing sector that has faltered but is much better placed than any other in the region to manage the challenges of far more open market conditions.

Don’t ask the politicians about this, most don’t have a clue, ask the entrepreneurs who have taken advantage of the opportunities that have emerged. Up and down the Caribbean, there are T&T manufacturers, traders, bankers, insurers, professionals, sales people and other service providers successfully pounding the pavements.

We have been earning with the other hand at an increasing rate over the years. In 2009, this country sold more than US$1.4 billion in goods and services to its Caricom partners. In 2012, this reached close to US$1.7 billion. In the coming years, manufacturers are hoping to draw even more regularly from the Caricom trade ATM as the oil and gas money dries up.

It is true, as has been suggested by the experts, that many more opportunities are going abegging in the hemisphere and the Caribbean has also not caught sight of the Promised Land so enthusiastically embraced by our politicians under the Economic Partnership Agreement (EPA) with Europe. I have also not recently heard anything particularly exciting, in our under-developed non-energy sector, to emerge out of other international agreements or any of the several high-profile pilgrimages to the grandmother lands over recent years.

For now, about 16 per cent of what we produce goes to Caricom markets while the rest, comprising mainly endangered energy-sector exports, goes to volatile markets in the rest of the world, North America in particular. Our misfortune in the oil fields is benefiting consumers in the region who are now beginning to pay less at the gas pump and on their electricity bills.

It is also difficult to have a discussion about tourism development in T&T without focusing on the fact that Caricom visitors—the ones routinely harassed at the airport—account for one of the more reliable sources of short-term visitors.

In 2014, more than 23,000 Guyanese visited this country to shop, do business, visit friends, play mas’ and to otherwise have a good time. Their country’s economic growth rate in recent years has outstripped the rest of the region and there is reason to believe that the pace will be maintained over time.

For some reason, the statistics of the xenophobes have focused more on immigration guesswork than on a clinical analysis of the visitor spend by the fourth largest group of visitors to T&T. New investments by T&T businesses in Georgetown must also be based on high expectations by people who are observing the growth trend.

Drawdowns on the tourism ATM, will increasingly rely on revenues generated from regional visitors—including curious Jamaicans who do not flock to T&T in great numbers and have no real reason to settle en masse in a country that offers less and less by way of viable livelihoods.

Our politicians have proven to be the least reliable purveyors of information on the Caricom project and have been among its worst friends. Sooner rather than later, the Finance Minister will realise that the non-reciprocal nature of the single market arrangements are a greater benefit to T&T innovation and entrepreneurship than it is a challenge.

Those across the political aisle would also do well to recall the words of their founding father who once described the Caribbean Court of Justice (CCJ), the judicial arbiter of the regional project, as having the potential to “complete our sovereignty” as Caribbean nations.

In both camps, the Caricom project is unfortunately not recognised as having the kind of value envisaged by the framers of the Revised Treaty of Chaguaramas who, in the process, designed a veritable ATM for all depositors of social and political goodwill, T&T included.


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