Theme: Caught in a Global Hurricane Debating the Caribbean’s Development Challenges in an Uncertain World

This Conference is most timely and its theme, appropriately expressive of the daunting prospects facing the Caribbean as it confronts several challenges and prepares for the epic Fifth Summit of the Americas to be held in Port of Spain Trinidad and Tobago. The Summit is being planned and implemented as a CARICOM hosted event in Trinidad and Tobago. The Summit of the Americas process coordinated by the Government of Trinidad & Tobago in Port-of-Spain has made every effort to broaden the debate to include the Private Sector, Civil Society and Youth. The discussions at this Conference focus on topics that form and integral part of the agenda of the Summit of Americas and therefore provide a good opportunity for this esteemed forum to lend its highly respected voice to the debate of critical issues of relevance to the Caribbean and the Hemisphere.

In this regard, the pleasure is mine to bring you greetings from and address you on behalf of H.E Edwin Carrington Secretary General of the Caribbean Community who is unable to be here due to a very demanding schedule that goes beyond the boundaries of our discussions to day

But the boundaries of our discussions at this Conference are fathomless in scope and depth given the enormity of the challenges proscribed by the theme, Caught in the Global Hurricane: Debating the Caribbean Development Challenges in an Uncertain World. I have therefore chosen to construct the boundaries of my presentation to establish, albeit briefly, the elements of the global hurricane, to identify a few of the major development challenges and then, to provide a range of responses or coping mechanisms for the Caribbean Community which is currently moving towards the implementation of the CSME by 2015, recognising the variable geometry of integration that is configured to accommodate sub-regional groupings like OECS and other networks for trade and functional co-operation.

Elements of the Global Hurricane

The dimensions of this global hurricane on which I will focus are three-fold: the economic and financial meltdown, climate change and crime and security.

It is quite clear that the current global economic and financial crisis maybe likened to a global hurricane whose tidal waves portend to serious damages to Caribbean unless urgent countervailing actions for mitigation and adaptation are undertaken. It has already shaken the edifices of the strongest economies in the World, resulted in the collapse of a range of enterprises in the US, Europe, many of the emerging economies and also developing ones, more so due to the pervasive philosophy of liberalism that has proscribed the organization and management of international business and finance including the structures of governance within international and multilateral agencies that have nurtured liberalism and neoliberalism. These arrangements have no doubt established principles and rules for regulating the new global environment. At the same time it has stimulated the tensions and conflicts, among countries and regions due to the inequities and inequalities in application, implications and impact. The playing field is certainly not level.

Besides the financial crisis I could think of no better or more salient illustrations of issues that impact simultaneously and negatively on poverty, social relations, environmental degradation and economic development than those identified with Climate Change and natural disasters and with crime and security linked to illegal drugs, firearms and terrorism. They help us to focus on the causes and effects of the emerging and escalating crises (sic global hurricanes).

Over the last century, records have shown as anomalous warning of global atmospheric temperatures which have been paralleled by the growth of anthrogenic green house gases (GHG) and emissions. The Human Development Report (2007) identified 2o Carbon dioxide (CO2) as the threshold for climate change. It also explained why we have less than a decade to change course and start living within a sustainable carbon budget identified at 14.5 gigatonnes of carbon dioxide (CO2) per annum for the remainder of the 21st Century. Currently emissions are running at twice this level. If therefore these trends continue they will set in motion processes that can lead to temperature increases of 5o CO2 or above by the end of this century – roughly similar to temperature changes since the last ice age1.

It is also important to underscore that as greenhouse gases build up in the atmosphere, so have temperatures and sea level rises. The Postdam Institute in Germany has reported that sea levels have risen by an average of 1.8 mm per year since 1961, rising to 3.1 mm per year since 1993. This is a cause for great concern for the Caribbean, given that the Region is identified as one of the most disaster-prone regions in the world. The frequency of natural disasters in the Region and the significant costs both in terms of the loss of life and economic wealth indicate that every effort should be made to establish a mechanism to support the development of a climate change adaptation and disaster risk reduction mechanism to address the special circumstances in the Caribbean.

The global economic crisis is directly and indirectly connected to the concerns of crime, drugs and terrorism as illicit trafficking, transnational crime and terrorism involve activities that are festered by those who make fortunes by preying on the their fellow human beings. Just as the US government put together a massive 700 Billion toxic assets relief programme (TARP) to help stabilize its financial system and unfreeze credit markets, so too a similar massive and collective assault on drugs and crime in our hemisphere is required to stem their further escalation and further erosion of our security.

Just as the financial meltdown , which experts now admit was simmering since December 2007, quickly sparked into an economic recession and rapidly spread around the world producing systemic shocks to globalization, so is it possible that the smoldering cinders of drugs and crime fan the flames of ruin and destruction of humanity around the globe, of which Mumbai killings in late December 2008 and the terrorist attempts involving Sri Lankan cricketers in Pakistan are the latest outrage, since 9/11

So what are the Challenges and responses to these three elements of the global hurricane?

Strategies for dealing with the Global Financial Crisis

Already the effects of the global financial crisis are being felt in the productive and financial sectors2 in the Caribbean.

There are reportedly drastic fall offs in tourist arrivals and room occupancy rates, by as much as two-thirds in some locations. These have implications also for tourist related entertainment industries and complementary services like airline and taxi transportation as well as the construction industry. Consequently hotel owners in the Bahamas for example, laid off 1200 workers in the last six months of 2008 and 300 so far in the first two months of 2009.

In the non-food commodities sector for example, declining global demand and related fall in petroleum and petrochemical products have forced Trinidad and Tobago producers of ammonia, methanol and urea to shut down operations and bring forward maintenance work. In addition the state owned oil producer, Petrotrin, reported a loss of US $36 M in 2008, after recording a US$ 366M profit in 2007. In this context the Government has announced a downsizing in planned expenditure by US$900M as a result of the fall in crude oil prices below the US$70 threshold price on which government projections were made.

In Jamaica, all expansion projects in the Bauxite/alumna industry have been halted as foreign investment from both Alcoa and Rusal (USA conglomerates) have dried up. Interestingly President Chavez, of Venezuela is expected to take similar action. The Jamaican–Brazilian sugar divestment project has fallen apart as Brazilian purchasers have been unable to find a source of funding in the USA to close the deal. In Guyana, the timber and woodworking industries have also reported a slow down.

The Caribbean Community has not been passive in its approach to the crisis. As early as November 2008 when the Bureau of CARICOM Heads of Government met in Antigua and Barbuda, Members States were urged to take prudential measures in the areas of foreign exchange reserves, deposit insurance, capitalization ratio, local assets, ratio, cross border supervision and supervision of non banks such as insurance companies. It was understood at that time that Member States may need to seek multilateral assistance to engage in counter cyclical policies that may include changing the composition of bank lending toward more productive and export related activities, streamlining contingency planning with respect to the financial and non financial sectors and undertake public investment that facilitate production of tradable goods but at the same time aid the most vulnerable groups in the population This framework for action is most reasonable as a theoretical construct. Yet the tide had already turned as manifested in the collapse of one of two of the major financial conglomerates – CLICO and Stamford Associates - in the Region.

In practice the Bureau recognized the need for Member States to take concerted action in supporting the proposals of “certain like minded countries and institutions for systemic changes in the global and financial architecture” related to enhanced democratization, regulation, resource mobilization and disbursement. With respect to disbursement, it was argued that IMF resources related to the special drawing rights should be enlarged and that greater emphasis be placed on approaches for emerging adjustment requirements and less on deflationary and other stifling conditionality and quota contributions. The current quota-based approach results in grossly inadequate fund capacity to lend to small countries like the Caribbean.

In addition the Bureau urged the developed countries to adopt the outstanding prerequisites for assisting countries like those Caribbean to sustain viability in the face of global adversity.

    * First to realize the goal of aid commitment of 0, 7% of GDP;
    * Second, to reverse the practice of graduating out of concessionary borrowing category developing countries like those in the Caribbean based on mere per capita criteria; and
    * Third to orient the international framework for managing debt overhang at the international level, thereby accommodating economies that are susceptible to external shocks of the “global hurricanes” that especially affect small vulnerable economies, classified as highly indebted middle income countries.

Regional Climate
Change Advocating for Migation and Adaptation.

With regard to Climate Change it is clear to me that pursuing mitigation, adaptation and resource mobilization strategies are essential and require a regional approach if the Community is to succeed in the maze of Climate change negotiating theatres and agendas. For this purpose, the Caribbean Community Climate Change Centre was established as an implementation agency for the Region’s strategic framework and more recently, the CARICOM Task Force on Climate Change and Development was inaugurated to define and address the Region’s Climate Change agenda for the negotiations leading up to the 2012 Post-Kyoto Climate Change architecture as well as to provide support and representation for the Community with respect to critical sectors affected by climate change.

The Task Force has placed emphasis on Adaptation, Mitigation and Information and Communication. In this regard it has established close ties with the Alliance for Small Island States ably chaired by Grenada and which is currently preparing for further negotiations in the next sessions of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) and the Ad Hoc Working Group on Long-term Cooperative Action under the Convention in Bonn at this present time Our negotiators will address two issues:

    * What should be the global target for greenhouse emissions reductions post-2012;
    * Who should bear the burden for these reductions?

It must be recognized that energy and climate change policies are intricately linked to mitigation strategies which provide opportunities to diversify our energy portfolio, with respect to electricity generation, at the national and regional levels, The deployment of renewable energy technologies, such as wind, solar, geothermal and hydro-electric power and other sectors, such as the transport provides a good opportunity for the Caribbean through the R&D capability of its Universities to take the lead with the support of the private sector3.

In addressing the high-level segment of COP-14 in Poznan, in December 2008, United Nations Secretary-General, Ban Ki-Moon stated that while the world faces dual crises, namely the global financial crisis and climate change, investing in green technologies was one means of solving both problems at the same time. This view is being echoed by the new US administration which has made renewable energy a centrepiece of its economic recovery package.

A New Regional Architecture for Crime and Security

Turning to crime and security, the Caribbean Region, in particular the Caribbean Community is taking the necessary steps to avert the escalating crises, but not always achieving an appropriate level of success.

The Caribbean Region exhibits among the highest crime rates per capita in the World. The level of crime in some Caribbean countries, chief among which Jamaica, Dominican Republic and Trinidad and Tobago, are startling. Despite these challenges, concerted efforts are being made to combat the ill effects of drugs and crime. The collective response which preceded 9/11 but consolidated because of it, is fully illustrated in the establishment of the Task Force on Crime and Security in 2000, and the evolution of thinking that has now ingrained security as the fourth pillar of the Community along side economic trade, foreign policy relations and functional cooperation.

The design of a new architecture for crime and security in 2005 resulting in the institutionalization of the Council for National Security and Law Enforcement (CONSLE), the Security Policy Committee (SEPAC) and the Implementation Agency for Crime and Security (IMAPCS); these together with Regional Security System now headquartered in St Lucia provide a consolidated network that allows the Region to think and act collectively. While there are challenges mainly related to the lack of resources and facilities, the results of acting collectively are undeniably positive.

One outstanding example is the Security systems put in place for Cricket World Cup 2007 which ushered in a safe and secure zone for the thousands of visitors and dignitaries to the Caribbean over an eight week period. The legacy of world cup included the joint regional communications center, the advanced passenger information system and the regional intelligence fusion center - all pillars of a viable security mechanism that will no doubt be dealt with in greater detail in the panel dedicated to this subject at this Conference

What however must be highlighted are the efforts being made to give effect to its crime and security strategy by devising legislation and treaties to deal with border security, maritime regulations, and a justice protection system. In the final analysis effective implementation of these systems is subverted by external forces and circumstances beyond the control of the Region. The Caribbean is sandwiched between the largest producers of cocaine to the South and the largest consumer country to the North

How for example does the Region cope with the onslaught of returning deportees who have honed their criminal skills in the metropolis often with little or no ties to the Caribbean to which they are returned? How does the Region build capacity when such a large proportion of our skilled labour force tend to migrate to the US, Canada and Europe? How does the Region invest in the required infrastructure to combat crime when 75 percent of our tourists, according to UNECLAC, come from economies that are in recession?

It is clear that the policies to deal adequately with crime and security must be multidimensional in scope and must be reinforced by a spirit of international cooperation. After all, crime and security is an international problem requiring international solutions What the West Indian Commission wrote in 1992 is still valid today. It called on us: “to be active in promoting a system of international security that no longer holds the Region hostage to the vulnerability of smallness or jeopardizes its development through the need for major military expenditure"4. It was a call for a pan Caribbean approach to establish comprehensive strategic partnerships with extra regional forces as a deliberate regional security strategy.

The Primacy of Foreign Policy

What emerges out of the sketch of the elements I have identified with the global hurricane is that it is really global. Consequently the Caribbean Community is correct in advocating for a global solution.

The financial crisis for example which emerged in the third quarter of last year, affecting the banking system is now a global economic crisis affecting jobs and livelihoods. The Washington Summit in November 2007 agreed on a 47 point action plan. The London Summit scheduled for April 2 will bring together leaders of the world’s major economies. The demonstration of collective commitment and international cooperation and coordination is essential, if recovery is to be achieved. But the London Summit will only be meaningful if it comes up with a plan to significantly impact developing countries and the MDGs and if it adapts a package of measures to address the need of the poorest and most vulnerable countries. How poised and prepared is the Community to influence this process.

The interests of CARICOM are tied to the Community’s major objectives:

    * ensuring the improved welfare of its citizens through the adoption of social and economic policies that enhance and sustain its development.
    * preserving its territorial integrity and security in the face of transnational threats and ensuring public security at a time of rising crime; and
    * continued stability.
    * Exploring new options for trade and diplomacy

The major threats to the Community as we have seen result from:

    * transnational crime – illicit trafficking in drugs, small arms, persons, money laundering;
    * rising domestic crime;
    * the negative effects of climate change and natural disasters; and
    * vulnerability to external economic shocks and inimical policies of external partners.

These are fully recognized in the Fifth Summit of America process which clearly addresses the spirit of any regional and hemispheric agenda designed to respond to challenges from global crises. Its outcome document is intended to speak to the need for securing our citizen’s future by promoting human prosperity, energy security and environmental sustainability

At the same time, the international system is changing profoundly and rapidly. As the emerging nations rise, a dramatic shift in power is underway, most recently symbolized by the convening of the G20, and not as was traditionally the case, the G7 and the Bretton Woods institutions, to confer on the deepening financial and economic crisis. Though this power shift is essentially economic in nature, it does hold political, diplomatic and other consequences.

The hemispheric system is also undergoing its own deep changes as Brazil increasingly emerges in a strategic leadership role despite competition from the ideologically-tinged diplomacy of Venezuela. Notwithstanding this rivalry, regionalization is deepening with the establishment of institutions such as UNASUR that strengthens convergence among the Latin American countries.

The Caribbean Community itself is being drawn into this regionalization dynamic as illustrated by the recent Latin America and Caribbean Integration and Development Summit convened by Brazil, and the continued dynamism of the Rio Group which now embraces all the Latin, Central American and Caribbean countries with the recent admittance of Cuba. Non-traditional external actors - China, Russia and Iran - are also increasingly making their presence felt in the US’s immediate sphere of influence. The political and economic implications of the potential for transformation of a post-Fidel Castro Cuba and of the possibility of a thaw in US-Cuba relations also need to be assessed.

Despite the above geo-political changes, and the end of the unipolar period of the US on the global stage, the United States remains the single global power with unrivalled leadership and decision-making ability. The new US administration has already made clear its intention to pay closer attention to Latin America and the Caribbean. Consequently, the promotion and protection of its interests will continue to be a dominant factor in shaping the geopolitics in our Region and in the wider hemisphere.

CARICOM has put in place some mechanisms that can work It has identified counter cyclical and other mitigating policies announced by Caribbean Governments over the last few months, It has established a new crime and security architecture and has identified a climate change strategy. It has recognized that in all this a collaborative policy is imperative.

The main resources that CARICOM enjoys in advancing its interests are diplomatic in nature - the Community’s traditional position of taking the moral high ground on regional and international issues, the skillful use of brainpower, leveraging its friendly links with external partners, and advocacy. These must all be factored into the lifeline for riding the crests of the tidal wave to mitigate and overcome the global hurricane.

1     UN Human Development Report 2007
2     A detailed analysis has been undertaken by the Directorate of Trade and Economic Integration, Caribbean Community Secretariat, February 2009
3     Caribbean Community Climate Change Centre.  Draft paper on Caribbean Community Climate Change Strategy, October 2008
4     West Indies Commission.  Time for Action, 1990, p278
5     Drawn from a paper by the Directorate of Foreign and Community Relations, Caribbean Community Secretariat, CARICOM-US Relations : A proposed Strategic Approach, January 2009


CONTACT: piu@caricom.org