De-risking: A Regional Avenue towards Financial Independence
Is the increasing approach by correspondent banks to de-risk financial institutions in select regions around the world, the Caribbean in particular, to be viewed as one of the final steps towards completing the independence of Caribbean states from Europe and the rest of the world?
If so, we must craft a response to this 'independence' by fully implementing the intent of the Caribbean Single Market and Economy and other regional economic arrangements, and truly agree on new ways forward to strengthen regional ties and position our individual small island states for growth.
Therefore, CARICOM's efforts to address the withdrawal of correspondent banking services, through the team being led by Prime Minister Gaston Browne of Antigua, is an initiative that all regional financial institutions should support. This, within the context of our dependency, as a region, on the global banking system to trade, which accounts for a substantial part of our earnings. Against that background, together we should strive to maintain our access to global financial systems, and reduce the threat to trading with the region.
However, to fully achieve this oneness, there are opportunities we can explore to give life to 'Project Caribbean' and create the context that will sustain our regional institutions and our independence.
CREATING FREE MOVEMENT
First, beyond negotiating as a single regional bloc, the Caribbean should create the space in which business people can meet and exchange ideas and drive a 'One Caribbean' hub for creativity and innovation. This should be supported by a common, secure immigration system to facilitate lawful movement between countries, similar to the free movement of Europeans across Europe. This would, in effect, be akin to a Caribbean 'Schengen' visa.
We should also recommit to regional transportation and telecommunications, particularly shipping and air links; and create the legal framework for easier movement within the region for our people.
In support of this fusing of our states and economies, we must also continue the efforts to identify efficient and secure ways to trade within the region by developing a regional payment system.
Persons in the region are already exploring and developing such a system, including young Gabriel Abed from Barbados, who has been experimenting with bitcoin technology to identify ways to move goods in the Caribbean. Therefore, we should invest in research to hasten the development of a viable system which will satisfy our economies.
We must also develop the ideas germinating in the Economic Commission for Latin America and the Caribbean to establish a regional financial institution in world markets to represent our institutions in the trading of goods and services.
As 'One Caribbean', we must work hard to remove the fear, and perceptions of fear, about the region in the developed world. We must repudiate the idea that our business models are outdated, and must be relentless in our implementation of anti-money laundering and counterterrorism financing strategies within the legal framework in our region and continue to demonstrate the highest levels of commitment to this process.
Our region must strengthen the process of exchanging information with our external banking and trading partners, and create a free flow of data so that, in the final analysis, we do not build a wall which will separate the developed world from the developing world.
Finally, a melding of our peoples and island states under one regional umbrella calls for a re-examination of the benefits of a single university within CARICOM, and to strengthen our commitment to support it financially, so that we can maintain a space in which our people can develop better understandings of our commonalities and trust for each other. Such understandings and trust will, in the end, support our exchanges and unified approaches as one region.
If we are successful with these initiatives, then we would at last realise 'Project Caribbean' a united region prepared to sustain itself and grow in the face of this new 'independence'.
- Earl Jarrett is general manager of Jamaica National Building Society. He presented some of these
ideas in a speech to the Caribbean Development Bank at the CDB's annual general meeting in Montego Bay on May 17, 2016.