Thu | Apr 9, 2020

CARICOM heads to tackle correspondent banking threat

Published:Monday | July 4, 2016 | 12:00 AM
Chile's President Michelle Bachelet is slated to meet with CARICOM leaders.

From their boardrooms in London or New York, international banks could destabilise Caribbean economies if they decide to end their correspondent banking relationships (CBRs) with local financial institutions in order to reduce reputational risks and comply with international regulations against facilitating the funding of criminal organisations.

Under that acknowledged immediate threat, the leaders of 15 Caribbean Community (CARICOM) countries will today open their latest series of talks with a clear objective to come up with solutions to protect their vulnerable economies.

Already, Belize has faced a significant curtailment in the relationships its local banks have with large institutions in many other countries.

In a statement issued 72 hours before the opening of the 37th Regular Meeting of the Conference of Heads of Government, the CARICOM Secretariat noted that "if all correspondent banking relations are withdrawn, the region will be isolated from the rest of the world and will be unable to carry out some of the most basic of bank transactions".

It added that "critical services, including remittance transfers, international trade, and the facilitation of credit card settlements for local clients, among other services, will be affected".

Last year, the World Bank, in a survey, said "the Caribbean seems to be the region most severely affected".

That, along with mounting concerns in regional territories, has pushed CARICOM to declare that the action to end CBRs is "an economic assault tantamount to an economic blockade against member states".

The secretariat says this week's conference "will take stock of actions to date, and seek to advance the search for solutions to this matter".

In a February paper, noting that de-banking "threatens to strangle the supply lines of economic activity", Jamaican think tank, the Caribbean Policy Research Institute, recommended that "the Caribbean region needs to identify a leader to drive coordinated efforts to address this crisis".

Meanwhile, several other issues are expected to dominate formal discussions that will get under way tomorrow following today's opening.

Among activities to take place are meetings between President of Chile Michelle Bachelet and CARICOM leaders to discuss "a number of hemispheric and international issues".

The conference, being held at the Pegasus Hotel, ends on Wednesday.

Long-running, unsettled border issues between Guyana and Venezuela, and Belize and Guatemala will once again be on the agenda. Discussions will also take place on the plight of persons of Haitian descent rendered stateless in the Dominican Republic owing to a controversial 2013 Constitutional Court ruling.

Commonwealth Secretary General Baroness Patricia Scotland will also participate in the Georgetown meeting, where she will lead talks on debt write-offs in exchange for climate-change action.

Cuba-CARICOM relations and nagging regional issues relating to free movement and the CARICOM Single Market and Economy, will also get the attention of the regional leaders.

Dominica Prime Minister Roosevelt Skerrit, who is chair of the conference, is one of seven heads of government who will address the opening ceremony scheduled for the National Cultural Centre at four o'clock Jamaica time. The meeting could not be held in Dominica because of the natural disaster brought on by the passage of Tropical Storm Erika last year.

Both Guyana President David Granger and CARICOM Secretary General Irwin LaRocque are hosts of the conference.

The meeting of the CARICOM heads of government comes almost two weeks after the British vote to leave the European Union and concerns being raised about the implications on economic cooperation between the region and the EU and the loss of the influential British voice.

Jamaica Prime Minister Andrew Holness just last week launched a review of the country's place in CARICOM, which is opening this year's conference on its 43rd anniversary.

Leaders are also meeting days after the death of Patrick Manning, 69, former prime minister of Trinidad and Tobago and one of the region's longest-serving public officials.

The Gleaner's Jovan Johnson will provide comprehensive coverage from Georgetown, in print, online and on Power 106 FM.