On Friday l6, in two days time, the Caricom Heads of Government will be meeting in a special session in St Lucia to consider "the economic situation of the Community and its impact upon the lives of their people".
This one day summit is of momentous significance. It is the first clear public recognition by Caricom Heads of the grave economic situation in which Caricom is mired and the need to give consideration to it as an over-arching issue of higher and prior importance than the mechanisms of the regional movement with which they are usually preoccupied.
What is at stake is no less than the survival of several Caricom Member States as reasonably viable states. At this minute three states are at risk. Dominica to put it bluntly is bankrupt, unable to pay its bills, including its public servants. Antigua and Barbuda is surviving through measures of doubtful legality such as the diversion of Health Schemes funds into the budget through the compulsory purchase of Treasury Bills. In St Kitts/Nevis economic growth has slowed to a standstill. Nor is the situation limited to the OECS states. As Secretary General Carrington pointed out at his press conference last week Wednesday, even comparatively strong economies such as those of Barbados and Trinidad and Tobago are in trouble. Barbados is in recession and Trinidad is already carrying a budget deficit of l.5 billion TT dollars as a result of the decline in oil prices.
At the Summit here in Georgetown early in July at which the decision to hold the special St Lucian Summit was taken, the Heads declared their awareness of the depth of the problem which has arisen in large measure from external factors outside their control. They appointed a Technical Team to advise them on two aspects namely (l) a programme to revive the regional economy and to build a foundation for future development and (ll) proposals for a regional stabilisation programme including a stabilisation fund.
When they sit down together in St Lucia, Heads of Government will have to confront certain foreign affairs realities their implications of which up to now they seem to have happily left to their foreign ministers. The first is that they lead countries which are now of no special significance to the major powers, as they once were when the Caribbean was of high geo-strategic significance during the cold war. While they may not fit De Gaulle's unkind categorisation as rocks in the blue Caribbean sea, it is certain that Caricom states do not any longer command attention.
It is worth remembering that when President Clinton took office the Heads of Government of the larger states were invited together (not separately as in the past) to visit. The OECS States did not even get a look in. Gone were the days when a Prime Minister of Dominica was flown directly to the White House to breakfast with President Reagan.
Second,Caricom states are being chucked out of the centuries old colonial economic relationship, including preferential markets in which their economies were nurtured and must confront quite soon the harsh realities of the globalising/liberalising world.
Prime Minister Owen Arthur has characteristically described this adjustment situation unforgettably, as follows:
"The first is to properly appreciate the time dimension of the adjustment. The advanced, industrialised countries have over the course of the past fifty years through an effort spread across 8 rounds of multilateral trade negotiations gradually but efficiently and effectively made the adjustments to their fiscal systems and their real economy to prepare themselves to participate fully in the present phase of globalisation... The Caribbean will be expected to successfully carry out over a period of ten years a process of liberalisation which has taken the advanced economies over fifty years to master.. The second qualitative aspect of the economic challenge which faces the region is the sheer magnitude and scope of what has now to be undertaken in a very short period with very limited resources to correct long-standing social and economic deficiencies to accommodate the competitive pressures arising from globalisation".
It is against the background of such uncaring trends and exactions that the Caricom Heads must consider from whence funds could be procured for a Stabilisation Fund and a programme to revive the regional economy. The prospects are not good. When Caricom tried to establish an Investment Fund some years ago, there was little interest and less funds forthcoming. At present the Caribbean Development Bank (CDB) must raise US $l00 million for the establishment of the Caribbean Court of Justice on the basis of financial independence and substainability. The CBD is now seeking the services of a consulting firm to examine some financing options.
Who will support a Stabilisation Fund? Such funding is almost certainly beyond the capacity of the region even including Trinidad, although Prime Minister Manning has already pledged his support. A Stabilisation Fund, as it is understood, may be expected to perform similar functions to IMF loans. Nine Caricom states have in the period June l979 - February 200l had access to various kinds of IMF loans. As such lending (and that of the World Bank) include elements of surveillance and control to which the major donors to those institutions attach the highest importance, such powerful donors might not look favourably on a Stabilisation Fund controlled from within Caricom. On the other hand, the Inter American Development Bank which is still relatively immune to some aspects of political direction may be responsive to a request to provide funds for on-lending.
But there is another promising prospect which should be urgently explored. The Commonwealth Heads of Government meeting in Australia in March this year in their Coolum Declaration in welcoming "the ground-breaking proposal from Africa to tackle poverty through the New Partnership for Africa's Development (NEPAD) pledged to use their best efforts to support similar partnerships in other regions of the Commonwealth. (NEPAD, it should be explained, has been described as a comprehensive integrated strategic framework for the socio-economic development of Africa. The plan has been conceived and developed by African leaders).
Arguably there is no other region anywhere in the world which more embodies and institutionalises Commonwealth values than the Caricom region. Canada has long played the role of friend at court for Caricom States. Caricom Heads meeting in St Lucia should therefore at once seek Canadian assistance in initiating Commonwealth assistance for a Caricom recovery plan very much smaller in scale but similar to NEPAD.
Reasonable viability of its members is essential if Caricom is to continue. Without it Member States will be unable to pay their subventions to finance the secretariat (this may be already happening) or to participate in the Single Market and Economy or support new institutions like the CCJ.
But it also cuts both ways. Nearly all states have some deficit in statehood, be it in the area of territorial security or cohesion of its society or in economic viability but this is particularly so in the case of small states. Caricom should therefore increasingly function as a 'mechanism' for helping to make good the statehood deficits of its Member States. It is already doing so particularly in the area of internal cohesion as in the cases of the Guyana and St Vincent and the Grenadines election crises, in the St Kitts/Nevis Constitutional crisis and currently (together with the OAS) in Haiti.
If Caricom Heads squarely face the issues involved and decide in St Lucia to initiate urgent work on a regional recovery plan and the establishment of the Stabilisation Fund, the regional movement would have taken a great step beyond the current preoccupation with market integration.