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By Selwyn Ryan |
Port
of Spain, T&T, March 27, 2005: At a conference held last
week in Kingston, Jamaica, sponsored by the Sir Arthur Lewis
Institute of Social and Economic Studies, two views emerged about
the CSME and Jamaica's role in it. One was articulated by the
"Grand-Father" of Jamaican politics, recently turned
University "Don", the Most Honourable Edward Seaga,
and another by Dennis Benn, Norman Manley Professor of Governance.
The Panel was titled "Processes of Regional Governance:
The Agony of the 15". Seaga's considered view was that Jamaica was not ready for the CSME, and his arguments bear repeating. Jamaica, he observed, had a population of some 2.7 million people, the third lowest per capita income in the region, US$2,762, but the largest purchasing power of the 15 Caricom states. Seaga's first concern was with the number of legislative and regulatory steps that remained to be taken to enable the CSME to be implemented. He argued that 45 such steps were required, and that these constituted a daunting prospect for most countries, Jamaica included. The problem was even more difficult for countries such as Suriname and Haiti which have legal regimes that are different from what obtains in the Anglophone Caribbean.
Seaga noted that few countries are prepared to dedicate the parliamentary time and resources needed to be CSME-ready. They might of course be more inclined to do it if they were convinced that the CSME would yield positive economic gains. Alas, however, "as the time comes closer to the launching date, member countries are now making a final assessment of costs and benefits. This assessment obviously leaves a number of member countries well short of completion, such as Haiti, Belize, Antigua, Montserrat, St Lucia, St Kitts."
Seaga also argued that it was far-fetched to assume that the Caribbean Monetary Union (CMU) and a single currency will come on stream any time in the near future. "The creation of a Caribbean Single Currency is intended to facilitate regional trade. But the level of intra-regional trade is so small that the creation of a currency to facilitate a relatively miserly volume of intra-regional trade is ridiculous." Few countries have regional trade performances exceeding 10 per cent of GDP. These are Dominica, Grenada, Guyana and St. Lucia. Jamaica's intra-regional trade as a percentage of GDP is 5.7 per cent. Trinidad is 1.1 per cent.
Seaga notes that while Jamaica is the "centre-piece of the CMSE" in terms of a market for goods exported by other regional members, only about five per cent of Jamaica's total exports and imports respectively constitute intra-regional trade, figures which hardly justify Jamaica's involvement in the CMSE. It is highly unlikely that the Jamaican economy would become sufficiently competitive in the near future to enable it to achieve a better balance of trade. This is so because the costs of the inputs into Jamaican products are comparatively high compared with other regional producers.
Utility costs are 167 per cent higher. Lending rates, security (110 per cent), operating personnel (22-42) per cent), social costs and fringe benefits (93 per cent) are also high. All of these translate into higher production costs and reduce the competitiveness of Jamaican goods.
Seaga is equally sceptical that Jamaica would benefit very much, if at all, by participation in the FTAA. He noted that Jamaica benefited little from the Caribbean Basin Initiative which was an "all-win no-loss" option for Caribbean countries. "The CBI experience can serve as a proxy for the likely FTAA outcome in these circumstances as only a few products can gain favourable terms, mainly Trinidadian steel and Guyanese shrimps." Jamaica's growth points are in tourism and mining (bauxite), neither of which require CSME involvement.
Seaga's considered and inescapable conclusion is that the CSME is an "idea whose time has not yet come. It is superfluous to the real problems of economic development and a wayward diversion from more positive efforts .The pre-requisite for a dynamic CSME must be the creation of far greater product diversification among producing countries to minimise duplication and induce stronger economic stability in the four major countries". Seaga also argues that cheaper supplies of LNG from Trinidad and Tobago would not be dependent on CSME participation since a cheaper product was available from other sources such as Qatar.
Seaga describes the CSME effort as one designed to get a single pair of shoes to fit all feet. It will fit some but cannot fit all. "But those whose feet fit the shoe without agony should by all means, wear it!" In his view, the CSME shoe will pinch Jamaica's feet. The misfit of course has implications for the CCJ which Seaga considers to have been a colossal and expensive mistake, one that was "premature" and "unwise". What one now has are six highly paid judges who are far more qualified than required to handle trade disputes, with little or nothing else to do.
The other perhaps more elevated perspective offered was that the CSME is not merely about intra-regional trade. It was also about integrated production, investment and about the freer movement of the Caribbean people within their region. The views expressed from this perspective echoed the voices of Cari-enthusiasts such as the late William Demas and Michael Manley, and of the authors of the classic document of the Caribbean integration movement, The Dynamics of West Indian Integration written by Havelock Brewster and Clive Thomas. All of these gentlemen saw Caribbean integration differently from Seaga who would limit the movement to functional cooperation. They talked about trade and investment as well as about a "Caribbean civilisation" undergirded by a Caribbean citizenship coexisting with citizenship of the individual member states.
Michael Manley was critical of what he called the "unilateralist illusion" of those who felt they could make independent deals without reference to the rest of Caricom. As he told other heads of states, "the challenge is to understand that the Single Market is not a regional dream, but represents the very price of survival in today's world. Common tariffs, common taxation policies, common investment incentives, represent one part of the equation.... The positive facilitation of the free movement of investment capital represents another element. The truth is that we need our own transnationals which pull together the resources of Jamaica, Trinidad and Tobago, Guyana, Venezuela, Cuba and all the rest, and it is our duty to work ceaselessly to make it easier for these things to happen!"
It is a non-zero sum approach which I endorse.