Private sector leaders to participate in Caricom heads meeting
The Treaty of Chaguaramas is to be amended to allow private-sector representatives and trade unions to participate in meetings of the heads of government of Caricom, Barbados Prime Minister Mia Mottley revealed on Wednesday.
“We have ... agreed that the private sector and the labour movement must become associate members of Caricom,” she said, noting that the decision was made at a recent meeting of the heads of government in Trinidad.
“If you want to have a successful single market and economy, we have to have the players that affect growth. Those are the people who control capital and control labour. And to that extent, therefore, the revised Treaty of Chaguaramas will now be amended to be able to allow a representative body of the private sector and Caribbean Congress of Labour to attend all Caricom heads meetings going forward,” Mottley said.
“In my view, this is one of the first steps towards a new objective of being able to lock growth in the region,” said the Barbados prime minister.
“Other regional institutions like the University of the West Indies and others are associate members and can attend these meetings but not those who are responsible for fuelling growth,” said Mottley, while addressing the 14th Regional Investments and Capital Markets Conference of the Jamaica Stock Exchange.
Caricom, originally the Caribbean Community and Common Market, was established by the Treaty of Chaguaramas, which took effect on August 1, 1973. A revised Treaty of Chaguaramas establishing the Caribbean Community, including the Caricom Single Market and Economy, was signed in 2001.
Mottley also batted for the mobilisation of savings in the Caribbean to unfold and unleash growth in the private sector and a concomitant expansion of the economy.
“Recently, I had cause to ask the governor of the central bank (of Barbados) to advise me as to what was the collective savings within Caricom, and the number was US$47 billion,” Mottley said.
“We have a mismatch between the savings that we have and the paucity of investment that is taking place in the region. We have to find a way of fixing it,” she added.
The Barbadian prime minister said part of the problem was that governments in the last few decades have crowded out the private sector, but that problem was fading as Jamaica, St Kitts, Belize, Grenada and now, Barbados have confronted them with debt exchanges because they could not continue to use private savings to finance large government activities.
“But what happens now to a system where governments retreat from that level of financing from the savings of the private sector is that we then find ourselves confronting the reality that those savings have to find somewhere to go,” she said.
Mottley said there is now a banking system that, structurally,is more interested in issuing mortgages, consumer loans, and car loans.
“And when we look at the underlying issues, the truth is that the capital adequacy ratios necessary for the issuance of mortgages are significantly lower than the capital adequacy ratios necessary for the issuance of loans to finance working capital of companies or commercial activities,” she said.
“In the UK and the developed world, they have a range of other instruments that can finance their companies. In the Caribbean, other than Jamaica, there are very few other options available,” Mottley added.
She said the JSE had done a credible job in being able to lead the way but that even that entity hadsome way to go “with respect to how do we better able mobilise the savings of our population to be able to finance the growth of our companies, which can fuel the growth for our countries.”
“These are the issues that confront us, and as you can see, some of it is structural and some of it requires deep policy considerations if we are going to see the shift that allows us to unleash the US$47 billion in private savings,” said the prime minister.
“I’d like to suggest that the region cannot be having a problem with growth, cannot have anaemic growth without coming together to be able to see how best we can move across borders to be able to allow instruments and bonds distributed in one Caricom territory to be marketed and used by citizens and entities in other Caricom territories,” Mottley said.
“There must be common minimum standards of issuance and standards for sale of instruments. If we don’t have that, we are not going to unlock the surplus savings in each country,” Mottley added.