Regional News>Getting Serious About CSME Stabroek News editorial

When Guyanese awake on New Year's Day, 1st January 2006, almost certainly no one will think about the CARICOM Single Market and Economy (CSME). But it is on that day that Guyana will become part of the CSME.

The anniversary of membership of the CSME is not likely to be commemorated in future years, but it is an anniversary which could turn out to be second only in importance to Independence Day.

The CSME could open up for Guyanese investment and job opportunities which could transform the country through rapid development. But there are also risks and possible economic dislocations which could lead to unforeseen hardship and difficulties. Hence the need for a well informed and deliberate approach to the implementation of the CSME.

A Guyanese man fishes from a canal along North Road in Georgetown. Guyana expects its agricultural sector to benefit from the terms of the CARICOM single market. PHOTO BY LEONARDO BLAIR

The high importance of the CSME is not understood as it is being seen as just another phase in the development of the regional integration movement. After all we have first had Carifta and then the Common Market and now the CSME.

But CSME is not just a third stage. It is different in kind like boiling water turning into vapour. It is not another step, it is a quantum leap.

On January 1, 2006 five legal regimes will be put into effect to permit the free movement through CARICOM of goods, services capital and certain skills. It will also confer rights of establishment of enterprises on Caribbean nationals across the region. Or to put the latter more concretely any Guyanese entrepreneur, any Barbadian or any CARICOM citizen will have a right to land, will be free to establish an enterprise in any other CARICOM state without having to seek permission to do so and will be entitled to be given no less favourable treatment than that given to an entrepreneur of the state.

The crucial difference between the CSME and the earlier trade integration mechanisms mentioned above is that a large and rapidly increasing areas of economic activities will no longer be subject to direct decision-making or intervention by member governments except in terms of the usual regulations such as health, security etc., but will be governed by the rules and practices hand out in the CSME. Moreover the rules will have the force of law and are enforceable by the Caribbean Court of Justice in its original jurisdiction.

But why have the CSME? The short answer is that the CSME is an absolutely necessary response to an increasingly hostile international environment which threatens the economic viability of Caricom States. The current sugar crisis is only one example of this, for other Caricom member states it is bananas and clothing industries.

The CSME is an act of collective self-reliance. It provides a comparatively safe regional market capable of expansion for regional goods and services.

SECTORAL DEVELOPMENT
In this connection P.M. Arthur of Barbados, the Caricom head who has been entrusted with responsibility for CSME matters speaking in London in June at the First Caribbean Business Forum on the CSME made the point that strategically, the Caribbean must use the provision for co-ordinated sectoral development "to address in a coherent way, the reform and restructuring on a regional basis of its traditional industries (such as sugar production) which face insurmountable problems if their prospects are viewed only from a domestic vantage point."

Already the Caricom market is taking one third of Guyana's sugar production and when refined sugar comes on stream it should be able to sell even more in the regional market. The similar figure for rice is one fifth of total production. As is well known the Caricom rice market has been subject to incursions of foreign rice. Under CSME arrangement it will be possible to invoke the jurisdiction of the Caribbean Court of Justice to ensure that this does not happen, with consequent expansion of Guyana market share. In the field of non-traditional production including such products as biscuits and furniture there is an already valuable and expanding Caricom market.

The potential of the regional market is that already being demonstrated. Indeed foreshadowing the CSME arrangements there has been expansion in intra overall regional trade. Over the ten year period 1993 to 2003, Caricom's intra regional exports have risen from EC$1.3 billion to over $3 billion or from 9% of total regional exports to 23%.

And it is further noted that the European Union has stated than objective of the Economic Partnership Agreement (EPA) now being negotiated with the Caribbean is that EU assistance should in the context of the EPA be utilised to develop the regional market as an alternative to preferential markets elsewhere, preferential markets one may add now under threat of erosion.

IMPORTANT OBJECTIVE
But there is a second and equally important objective of the CSME. As a grouping of small states Caricom will always and in addition need extra-regional markets. The CSME will provide the mechanism to facilitate and promote the pooling of regional capital and entrepreneurial and other skills and resources to enable the establishment of large scale perhaps pan-Caribbean enterprises capable of competing in international markets. Moreover at all levels the CSME will foster the essential habit of competitiveness.

The CSME has been sixteen years in the planning. To give effect to provision of the Revised Treaty of Chaguaramas in order to bring the CSME into being will require an estimated 79 legislative and administrative steps by each individual member state including Guyana.

The CSME consists of two eventually interlocking parts, first the set of measures to bring the Single Market into effect and second another set of equally complex measures to bring the single economy into effect. Caricom Heads of Government have decided that for the time being the "Economy" component should be deferred until 2008. The Economy component includes such maters as monetary and fiscal policies.

There should be but if it exists one has not so far come on it, a Citizens Guide to the CSME. The only publication of this kind of which one is aware is a short but excellent two page statement. "Understanding CSME" buy Mrs Arlette King which appeared in "Bank Notes", the staff magazine of the central Bank of Barbados. Some of its points are adapted and condensed below:

"At this state freedom of movement is limited to certain categories of persons namely a UWI graduate (doubtless includes graduates from other regional universities including University of Guyana) media workers, musicians, artists, sport persons, managers, supervisors, service providers or entrepreneurs. Such persons will be able to travel to any of the 15 member states and to take up employment without the need for a work permit and enjoy the same benefits and rights as those given to the nationals of that country, an investor will be free to buy shares in any member state or to move his/her funds from one member state to another without prior authorisation. This means that you will be able to buy shares in the best performing companies in the region and increase your investment returns. In the same way that an individual can choose to resettle in a country where there is need for his/her particular skill, companies would be free to set up businesses in the country with the most favourable economic conditions for their goods or wherever they have a competitive advantage. This would result in greater diversification of skills and improved efficiency and competitiveness of firms in the region. The CCJ will ensure the fair and equitable application of the CSME laws and will be responsible for the implementation and effective operation of the CSME, ensuring that all the benefits outlined above are realised and that Caribbean peoples and governments adhere to the provisions of the Treaty."

WARNING
The Guyana manufacture/producer will have available to him/her the markets in every other Caricom member states with the same easy access as he/she has to their own Guyana market, subject only the health and similar regulations which obtain. And if he or she is being denied access he or she will have ultimate recourse to the CCJ which will ensure that the market is open to him.

But there is a corollary The manufacturers/producers/service provider in every other Caricom state will have the same unfettered access to the Guyana market. And if it turns out that the Guyana producer services provider fails to equal the competition in design, quality, price etc., there will be no protection, the Guyana firm will go out of business - as will be the case where the Guyanese firm competes successfully for market shares in other Caricom states.

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