Size matters
There has been some discussion as to what size the population of a small country should be in order to ensure that its economy remains dynamic. The examples of Singapore and Hong Kong suggest between 5 and 7 million. Nations that are much smaller than this are at a disadvantage.{{more}}
Their domestic market is tiny and they lack the resources to operate a broad-based economy. They tend to rely very much on a single major industry.
Barbados and the OECS, for example, are heavily dependent on foreign tourism. This is understandable. Globalization has swept away our protected markets for commodities. Yet, we have to export something in order to get the foreign currency to pay for the many imports we need. Tourism, the export of a service, is what we have managed to do best so far. However, as we all know, from folk wisdom, as well as economics, you should not put too many of your eggs in one basket. Diversification is necessary.
We need not only to maintain our tourist industry, but also to have other sectors such as agriculture, manufacturing and mining. It is virtually impossible for tiny economies of 200,000 or less to achieve this level of diversification. Collectively, however, through the Caricom Single Market and Economy (CSME), with its 7 million people and greater diversity of resources, the prospects are much better.
In embarking on Carifta/Caricom we set off in the right direction, but perhaps too hesitantly. In fact, at one stage, some wanted to put the entire integration movement on hold. It took the financial crisis of 2008 to show us the error of our ways. We then recalled some integrationists of longstanding, Brewster, Girvan and others, to suggest ways of reviving the movement. They have recommended regional programmes involving agriculture, energy and transport. They have also suggested how the programmes can be funded and implemented.
It is not clear what action has been taken so far as regards these recommendations. More heartening has been the news that there is a Bajan entrepreneur starting a 30,000 acre farm in Guyana and that country has offered another 10,000 acres to Trinidad. That is more land than there is cultivable acreage in many islands in the OECS.
Shale gas is now available in large quantities in the USA, making imports less necessary. This should incentivise Trinidad to push for a regional energy policy, bearing in mind the Petrocaribe agreement with Venezuela and the need to develop renewable energy sources.
Tourism will continue as a major industry with Caricom playing its part in many ways. There have already been calls for more regional tourism. The Caribbean Development Fund is helping to finance SVGâs new airport which will boost visitor arrivals. Trinidad will continue to sell its manufactures throughout the area. Labour will move to where the jobs are.
We should not exaggerate our problems with regional migration. With 7 million people in 400,000 square kilometres, the CSME is not exactly overcrowded. Ever since the abolition of slavery, people have been moving up and down the arc stretching from Antigua to Guyana. Even before that, in 1797, a major component of SVGâs population was unceremoniously removed to Belize. We have a common heritage, for the most part speak the same language, and many of our leaders went to the same university. It is indeed fitting that the Jamaican minister who handled their recent immigration spat with Trinidad and Tobago was A.J. Nicholson. Nicoâs credentials as a Caribbean person are impeccable. He spent much of his time at UCWI, Mona, in the company of students from the other countries, including the former Secretary General of Caricom, Edwin Carrington. He was among the many, though not enough, Jamaicans who supported the Federation during the referendum of 1961.
With the debt overhang, budget deficits and natural disasters threatening to overwhelm us, it is hard to focus on the big picture. Sooner rather than later, however, we will have to do so and set aside the pettiness and insularity that have for so long bedevilled us.
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