News from Trinidad & Tobago read: "Caribbean Community (CARICOM) leaders met in Port-of-Spain this past Tuesday and agreed to the formation of a Commission on the Economy as they seek to revive the ailing economies of the 15-member regional grouping."
CARICOM Commission on the Economy, said Kamla Persad-Bissessar, who chaired the CARICOM Bureau meeting, "should address the priority areas for fiscal sustainability, resource mobilisation as well as critical economic infrastructure services, particularly energy and ICT (Information Communication Technology)."
What should we understand from these big words strung together? What actually does the Chair of the CARICOM Bureau mean?
The 'priority areas for fiscal sustainability' presumably means revenue and expenditure projections and potential outcomes, including such policies as subsidies, that Caribbean governments can manage over time without recourse to borrowing and, eventually, the IMF.
'Critical economic infrastructure services, particularly energy and ICT', apart from the two areas specified, one guesses shall include roads, bridges, ports and the like. Does it include education and health, for instance? Are these economic infrastructures as US President Barack Obama suggests when he sells his Affordable Care Act (Obamacare)?
CSME in neutral
And why should we believe this commission, even if it does a fantastic job in preparation of its findings and report, shan't suffer the fate Shridath Ramphal so aptly described of CSME observing that regional leaders had "put the gears of CARICOM Single Market in neutral and the gears of CARICOM Single Economy into reverse".
And how, if at all, shall this commission differ in objectives from the Caribbean Growth Forum (CGF)? The CGF describes itself as a joint initiative by the Compete Caribbean Program, the Inter-American Development Bank, the World Bank and the Caribbean Development Bank, and supported by the Canadian International Development Agency, the United Kingdom's Department for International Development, CARICOM Secretariat, and the University of the West Indies.
Are we flailing around aimlessly, in search of solutions to endemic problems we haven't truly identified, not defined and thus don't understand?
It is interesting to recall that Trinidad's foreign minister is of the view that the "CARICOM integration as a process has reached its limits".
As Guyana's Stabroek News observes: "If anything, the CARICOM project is as alive with possibilities as it ever was. It is, perhaps, the region's leaders who have reached the limits of their imagination and political will to implement the Single Market and Economy and advance the integration process."
Both the theory and historical record of economic growth have,
for at least half a century, confirmed to us that technological change is one of the most critical drivers of growth.
Trade is, of course, a critical partner in this outcome. Domestic and international trade create effective demand for expanded output that investment and technological change provide.
During the days of the plantation economy, British protectionism in the sugar trade allowed investment, and technical change leading to historically unprecedented booms accompanying periods of high exports. Notions of economic convergence notwithstanding, this region has never regained such growth experience, even with the advent of minerals and tourism as exports.
So why do we suffer low growth with fiscal insufficiency? First, our returns on investment are too low. Second, levels of technology adoption and adaptation are entirely inadequate. Third, too much income generated in these economies, for a variety of reasons, do not attract taxes. Fourth, the notion of free markets, which we have bought hook, line and sinker, is a complete fiction — simply consider the US Farm Bill which includes subsidies, crop insurance and the like.
Caribbean farmers can't compete against imports - not because they are inefficient.
Fifth, levels of corruption are too severe, involving massively significant loss of potential revenues to the coffers of governments. Aspects of the meltdown in Jamaica of mid-1996 and Trinidad and Tobago, Barbados and the OECS of January 2009 are but two examples. Readers may pick and choose from among the ones that make it to the news.
Simple low-lying fruits, subject to policy intervention, are deemed too difficult to tackle. We suffer from the misplaced view that technology creation is too expensive for us even to contemplate. Thousands of youth walk around fully armed with smartphones. How many apps have we created? Our medicinal plants and herbs are literal goldmines of neglected opportunity.
So we should really hope some of these issues might be addressed and wish this commission well. Hopefully, its 30 representatives shall include the expertise to consider some of these problems and mechanisms to address them.
Wilberne Persaud, an economist, currently works on impacts of technology change on business and society, including capital solutions for innovative Caribbean SMEs.Email: email@example.com