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EDITORIAL - Missing the point on CARICOM's relevance

Published:Thursday | April 26, 2012 | 12:00 AM

Both Gregory Mair and Brian Pengelley missed the point. In the event, they conflated symptom and disease.

Mr Mair, the shadow commerce minister, was, however, the greater offender. He transposed illogic into a cause for Jamaica's withdrawal from the Caribbean Community (CARICOM).

This newspaper has no objection to Jamaica reviewing its membership in the Community and deciding, after robust analysis, to leave. We should, however, not misconstrue cause and effect.

That, unfortunately, it appears, is the approach of Mr Mair, supposing he did not speak from the basis of emotion.

There is, of course, good reason for Jamaica to question the economic value of its membership in the 15-member CARICOM.

Behind the numbers

Last year, for instance, our visible goods imports from the rest of the Community were US$1.025 billion, an increase of 18 per cent on 2010. Jamaica exported only US$68 million, which translated to a trade deficit of US$957.2 million.

Significantly, 86 per cent of Jamaica's CARICOM imports were from Trinidad and Tobago, of which more than 80 per cent were for mineral fuels. Seventy-five per cent of all of Jamaica's imports from the Community were in this category. In other words, non-fuel categories of imports valued US$256.2 million. This is still a lot of money.

The first, and critical, issue to be confronted by Jamaica - but addressed by neither Mr Mair nor Mr Pengelley - is whether it can improve its competitive position in CARICOM, and how.

Mr Mair, the would-be minister, appeared not to have thought of the matter in his seeming despairing question about CARICOM's "benefit for the people of Jamaica".

Mr Pengelley, the president of the Jamaica Manufacturers' Association, says CARICOM is not working for Jamaica "at this time". His solution is an appeal to Jamaicans to buy local, rather than leaving the Community.

We, of course, have complained about governance failures in CARICOM. There are, perhaps, too, occasional unfair trading practices among some CARICOM members, in breach of the Revised Treaty of Chaguaramas.

Ditching CARICOM, though, won't fix our trade or current account deficits.

Fix the real problems

These are the result of Jamaica's failure, over the long term, to implement policies to create a competitive economy. Fiscal profligacy of Jamaican governments, for instance, which now shows a debt-to-GDP ratio of more than 130 per cent, meant heavy public-sector borrowing, at high interest rates, thus crowding out the private sector.

Risk-free investments provided by governments gourmandised on debt undermined a culture of enterprise. Add to these an inefficient government sector that encouraged corruption, poor education outcomes, low labour productivity, and high levels of crime. These help to weaken the competitiveness of the Jamaican economy.

We may, in the end, decide that CARICOM is not worthwhile. But the starting point must be fixing the fiscal problem, including undertaking tax and public-sector reforms that are now on the agenda. Lowering the cost of electricity to enhance the competitiveness of the economy is also important.

In the meantime, even as we robustly defend our interests in CARICOM, Jamaica should leverage within the Community those things in which it may have comparative advantage, such as services.

Whingeing self-pity won't do.

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