The special Caricom Summit held in Castries, St Lucia on the l7th August is of historic importance as it revitalised the community by bringing it back to its origins. It took emergency action, among its several decisions, to provide an immediate programme of assistance of US $20 million to Dominica in devising and implementing a programme of stabilisation.
It will be recalled that the decision to hold the emergency Summit was taken at the Georgetown Summit early in July when the Heads of Government considered the “depths of the economic situation” and the need for special measures to deal with it. Dominica had been hardest hit and teetered on the brink of bankruptcy, in so far as that word could be applied to a state.
However providing emergency assistance for Dominica could not have been easy as all Caricom Member states including Guyana and even Trinidad and Tobago are in the throes of various degrees of budgetary stringency or difficulty. This hard decision clearly derives from the conviction that community must mean standing ready to help each other in situations of crisis. The group of Caribbean experts who had advised Caricom in charting the way forward in l980 had in their report (January l98l) at its very beginning, asserted that:
“The roots of the Caribbean Community are not buried in doctrines of integration economics. Caricom is not just the product of regional economic planning.
Responsive as it is to the economic and political realities of the post-war world Caribbean regionalism is the outgrowth of more than 300 years of West Indian kinship - the vagaries of the socio-economic political history of a transplanted people from which is evolving a Caribbean identity”.
The emergency assistance for Dominica responds to the awareness of kinship.
Moreover unlike most other Caricom decisions it impacts immediately on the lives of the citizens of a member state, Dominica, who may therefore reach a special sense of the value of the community.
In Castries, the Heads of Government realizing that other Member states are either confronting or might soon be confronting similar situations as that of Dominica, also agreed to establish a Regional Stabilisation Fund for the region as a whole. The idea is that this fund will be funded by regional central banks who will invest in it a very small part of their reserves now being held overseas and at the same rate of interest. This proposal to utilise the region’s own funds which are now benefitting projects in foreign countries is an important advance in creative self-reliance.
The idea is not new. The Wise Men’s report already quoted report records that “in l976 an Interim Balance-of-Payments Mutual Support Facility was established on the understanding that, once the necessary operating experience was gained, it would be transformed into a Permanent Facility or Caricom Stabilisation Fund”. Nothing apparently came of that initiative and the Wise Men felt that idea might be premature in view of the skewed distribution of foreign exchange reserves and the magnitude of the foreign exchange gaps of Jamaica and Guyana.
However the circumstances are now less unfavourable as at least there are no Member States mired in situations as Jamaica and Guyana then were.
In Georgetown in July Heads of Government had also and importantly committed themselves to the “elaboration of a programme to revive the regional economy and to build a foundation for further development”.
After the meeting in Castries the Heads issued by way of a Communique the text of a framework for stabilizing and transforming Caribbean economies. But despite the high sounding phrase about transforming Caribbean economies used in the document the framework reads like the all too familiar IMF prescription.
Thus the framework inter alia speaks of immediately reviewing expenditure commitments to determine which could be postponed or terminated, developing mechanisms for the collection of outstanding or current revenues; establishing an open and transparent public finances management system; giving urgent attention to reducing the level of outstanding debt and restructuring the terms of commercial borrowing, examining the operations of public enterprises and considering which may be privatised; examining the tax structure and administration in order to enhance efficiency; examining the structure of the public sector in an effort to reduce significantly the cost of government and so on.
It was agreed in Castries that Member states where applicable would undertake the abovementioned exercises. However such exercises are essentially a concern with housekeeping or good management. They do not go any significant way towards what the communique calls steps towards “a comprehensive programme of policy reform to address problems generated by trade liberalisation and in preparation for participation in free trade arrangements such as the Free Trade Area of the Americas”.
The imperative overarching requirement is for urgent steps towards the formulation for the region of a plan/programme (call it what you wish) which would try among other things; (l) to enhance as far as possible the efficient production and export prospects of the regions’s traditional commodities (including sugar and bananas and other agriculture) and manufacturing and tourism which later may be experiencing not only a downturn but a market shift: (ll) to search for new markets especially in the South mindful of Nyerere’s insight that the developing world, if there is the political will, can be its own vast market; (lll)to promote new products for export to the region and further afield. To such concerns must be added other elements including human resource development. For this task of producing what would be a strategic plan for the region it will be necessary to mobilise not only bureaucrats but a wide range of the intellectual and business and management skills of the region.
Given current realities it is most unlikely that any individual member states of Caricom will be in a position to attract in the future the required level of economic assistance and investment and appropriate market access. Only a regional plan will attract attention in a world indifferent to small and weak states.
What happened in Castries is that Heads of Government having taken historic decisions in providing emergency assistance for a Member State and in settling on hard measures for the establishment of a Stabilisation Fund, dodged the commitment which they had set themselves in Georgetown, namely to set in hand measures “for the elaboration of a programme to revive the national economy and to build a foundation for future development”.
Nevertheless, the Castries Summit was of particular importance as it marked an important return of the Caribbean Community to its roots in a common identity.
One must now wait to see whether such decisions as were taken will be implemented or will be subject to what Vaughan Lewis has called the familiar (Caricom) process of decision disintegration.