One Region
March 6, 2009
Engaging Canada

In the midst of a troubling global financial crisis, there is a little good news for the countries of the Caribbean. The region is to be one of the 20 “countries” of the world on which the Government of Canada will now focus its aid.{{more}}

The full list of countries, released by the Canadian International Development Agency (CIDA) on February 23rd, is seven African nations, five Asian countries, five Latin American nations, Ukraine, the West Bank and Gaza and “Caribbean”.

80 per cent of CIDA’s $1.5-billion bilateral programming budget, which represents about 53 per cent of Canada’s overall development assistance funding, will be targeted towards those countries.

Contrary to a story carried in a Guyana Newspaper on 26th February, Guyana is included in the “Caribbean” countries that will benefit from Canada’s refocused aid which will promote regional integration and regional approaches to common development issues and challenges. Canada has doubled its development assistance to the Caribbean, and is the largest bilateral donor to the region.

The point is that the government of Canada has begun to act on a commitment made in 2007 by its Prime Minister, Stephen Harper, to “re-engage” with the Americas, and this refocusing of its aid to include five Latin American countries and the Caribbean is being regarded as part of that commitment.

Two days after CIDA announced the refocusing of Canadian aid, a private consultation was held in Ottawa between Canadian officials and a few outsiders of whom I was privileged to be one. At that consultation, Canada’s Minister of State responsible for the Latin American and Caribbean area, Peter Kent, persuasively reiterated his government’s genuine desire to make a real and lasting contribution to the Latin America and the Caribbean.

On the day that Kent emphasised Canada’s commitment to the welfare of its hemispheric neighbourhood, a former Canadian Prime Minister, Joe Clark, writing in the Toronto newspaper, The Globe and Mail, declared that “a critical test of the response to the (current) global financial crisis is whether rich countries, including Canada, will look beyond their narrow national and economic interests”. Clark made the point that “virtually none of the “stimulus packages” in rich countries address this disproportionate impact on the poor world”, and he asked the question: “Why shouldn’t Canada focus on the growing crisis in the Caribbean, our own backyard”?

The “growing crisis in the Caribbean” to which Clark referred includes the fact that the economies of all Caribbean counties are hard-hot by “sharp declines in investment, remittances and aid but also calamitous declines in income from tourism”. Added to this is escalating crime promoted by drug trafficking and arms smuggling. As Clark points out, “murder rates in the Caribbean are higher than in any other region of the world, and assault rates … above the world average”.

Part of the reason for the Canadian government’s renewed interest in the Caribbean is the rapid increase in violent crime throughout the region, and the growing influence of drug lords. It is now widely recognised that the crime situation is frightening away investment, contributing to the migration of skilled people, creating refugees, corroding political stability and eroding democracy.

Quite rightly, Canada has been very concerned about promoting and safeguarding democracy throughout Latin America and the Caribbean, for while economic growth is vitally important to the enhancement of people’s lives, so too is the quality of governance under which they live.

Drug trafficking and crime thrive on conditions of poverty, unemployment and declining investment. In this connection, crime is intricately tied-up with development, and the former will not be dealt with effectively unless the latter receives attention.

The refocusing of Canada’s aid programme for the benefit of Latin America and the Caribbean comes not a moment too soon. And while it will be good for the Caribbean, it will also be good for Canada.

Canada is not a super power in the league of the United States, and while it is linked to the US geographically and economically, it does not have to try to match the areas to which the US provides aid, nor does it have to support all the causes that the US pursues. It should be conducting a foreign policy – including an aid and trade policy – that serves the interests of Canada and does the most good. Scatter-shooting its aid to far-flung countries, which are not desperate, limits the amount of money Canada can spend in areas where it can be most effective – the Caribbean and some Latin American countries are clearly such areas.

Stephen Harper and Caribbean Heads of Government attending the Summit of the Americas in April are scheduled to have a working breakfast. At that session, Harper will raise the matter of Canada and the Caribbean entering a formal trade and economic arrangement to replace CARIBCAN, the arrangement under which Caribbean countries enjoy duty-free access to the Canadian market for 83.2% of their exports.

A World Trade Organisation waiver, allowing CARIBCAN, expires in December 2011, and while trade between Canada and Caribbean Community and Common Market (CARICOM) countries is relatively small for both sides, CARICOM nonetheless enjoys a trade surplus with Canada averaging about $1 billion over the five years ending in 2006.

For Canada, trade in goods with CARICOM countries constitute a mere 0.02% of its total trade. Therefore, whether or not Canada concludes an FTA with CARICOM countries is neither here nor there for Canada economically. But, it would be a good opportunity for Canada to show understanding and commitment to its smaller neighbours by negotiating an agreement that places their development as a priority.

It will call for both sides – but especially Canada – to throw the rule book out the window and focus instead on an economic partnership agreement rather than simply a Free Trade Agreement. CARICOM countries would have little interest in the latter, and Canada could take pride in the former. It would begin to address what Joe Clark describes in the context of the current global financial crisis – but which is true of the entire present economic order – as the “disproportionate impact on the poor”.

Sir Ronald Saunders is a business consultant and former Caribbean diplomat.
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