Today's CARICOM meeting in St Lucia will address the mounting problems that regional economies face and President Bharrat Jagdeo has warned that the solutions may end up causing more pain initially.
President Jagdeo on Wednesday attributed the woes of the regional economies to the loss of the banana market, the fallout from the September 11 attacks, the lack of competitiveness of the tourism industry and the harm caused to the financial sector by the Organisation for Economic Cooperation and Development's (OECD) strictures.
Another worry is the risk to the traditional sectors such as rice and rum posed by the upcoming negotiations for the Free Trade Areas of the Americas, the World Trade Organisation and the Cotonou Agreement. These he said are not all that sympathetic to the traditional sectors of the region's economies.
As a result of the negotiations in these arenas, he told a press conference at the Office of the President "rice is facing problems, sugar is facing problems, rum etc. These are all things that we do in most of the economies in the Caribbean. That is why we have the problems".
"All the traditional sectors that we earn most of our revenue from, get most of our employment from, they are in serious difficulties and not so much because of what we have done but because of decisions that are taken in boardrooms very far from where we live (which) have this huge impact on us. That is why we are where we are today."
President Jagdeo said that the CARICOM Special Meeting, which he will chair in St Lucia today would address the challenges the economies face and the possible measures to address them.
But he cautioned that the solutions would likely cause more pain, as some countries already have high unemployment and unfortunately the external environment is unhelpful.
The President observed that International Monetary Fund programmes would not provide enough funds for some of these countries to cover the fiscal gaps without some restructuring.
He observed "if we are looking to do some restructuring using the resources from the region itself, many of those countries that traditionally are capital exporters like Trinidad and Tobago, the Bahamas and Barbados have difficulties now too."
President Jagdeo said that these are the countries that would contribute to a regional stabilisation fund and though there have been some pledges "one doesn't know what the magnitudes of those pledges will be and whether they can really address the combined fiscal deficits of the OECS (Organisation of Eastern Caribbean States) countries.
He said that Guyana was a light in the economic gloom as the government has been able to expand its capital programme with some capacity to increase wages, keep the exchange rate stable, maintain reserves at a high level and still meet some obligations from its revenues.
The President said that the country at mid-year had met most of the targets it had set itself but still had to be very vigilant and he hoped that the political environment would not act as a further brake on development.
However, he stressed that in economic terms there could be no oasis in a desert because of the linkages and that the country would be affected by the economic plight of its sister CARICOM states. He said that the recession in Barbados could affect the country's market for non-traditional exports. Similarly the economic downturn in the United States and Latin America could affect markets for a whole range of goods.
At the meeting the following day, which he will also chair, President Jagdeo said that he and his colleagues would address issues to push the realisation of the CARICOM Single Market and Economy.