Waking up to economic realities

What a pity that Prime Minister Gonsalves didn’t make it to the meeting of the CARICOM regional Task Force on the economic crisis, held in Jamaica earlier this week. While he must have taken advantage of modern technology to provide his input, his presence would have added to the quality of the interactive exchange, but in addition, from a purely informational standpoint, Dr. Gonsalves on his return would no doubt have provided us via the customary Media Conference, with a far more detailed report than we are liable to get from the regional media. We can only hope that after conversing with his colleagues, he would still try to offer us a comprehensive insight.{{more}}

Such an insight is badly needed, here in St. Vincent and the Grenadines and the rest of the region as well for there is widespread lack of understanding of how close we are collectively in the Caribbean to the edge of the economic precipice. Yes, we talk glibly about “the global economic crisis” but it sometimes seems as if it is peripheral to us all. Far from it! We are as much in deep as those countries we hear complaining loudly. It is not by chance that the OECS leaders and Central Bank Governor Sir Dwight Venner organized the interactive media discussion on the crisis two weeks ago. It is one way of getting us to sit up and pay attention as well as educating us about the scope and depth of the problem we face. Those leaders, the Eastern Caribbean Central Bank and the CARICOM Task Force must be complimented for their initiative. In the same vein, the local Chamber of Commerce is demonstrating positive leadership in sensitizing its members to the enormity of the situation facing us. Keep it up!

There must be no illusion that the economies of the Caribbean countries, with the possible exception of Trinidad and Tobago, are under enormous strain, a fact not always appreciated fully by our people. To make matters worse, in some countries, both government and Opposition try to play politics with the situation, the one downplaying the extent of the crisis and the other using it to point fingers and apportion blame. That is a deadly game in which there are no winners. We have to put the facts straight before our people. The combined effect of the global recession, its consequent negative effects on tourism earnings and the inflow of funds (either through remittances or foreign direct investment) are having its toll on our durable and hitherto stable EC dollar. The economy of Antigua and Barbuda, for instance, is in dire trouble with the government finding difficulty in meeting its wage bill. But Antigua is a major participant in the eastern Caribbean Currency Union and if its economy comes under strain, so will our dollar, compounded by a sharp drop in revenue from tourism in St. Lucia, St.Kitts, Grenada and here in SVG. Add to this the stresses brought about by the CLICO/British American crash and you get a true picture of just how precarious the situation is. This caused CARICOM CHAIRMAN, President Jagdeo of Guyana to urge that the OECS countries be supported “because if they don’t receive it, they could have a problem in the whole currency union”.

That is the reality which emerged from the meeting of the Regional Task Force in Jamaica. It was pointed out for example that some countries don’t have the means to finance more than three months worth of imports, and that the levels of debt in the region are approaching unsustainable levels. This high level of debt is draining scarce resources away from development purposes in order to service the debt. Recognizing this, the task force has agreed that CARICOM countries should make joint approaches to the International Financial Institutions (IFIs) for multilateral debt relief. Currently, these institutions such as the World Bank and IMF have “graduated” these Caribbean countries to middle-income status meaning we do not qualify for the most concessionary terms on loans. But this ignores our critical vulnerability as is now being brought out in the crisis. So countries like ours have been trying to find “windows” in the IMF where the threshold is low enough to enable access without onerous terms. It also means that we should play a more vigorous role in advocating major structural changes in those institutions.

In addition to the IFIs, Caribbean countries are seeking funding and development assistance from non-traditional sources-the Middle East, from the Asian “Tigers”, Mexico, Brazil, Venezuela. This led to acceptance of the Petro Caribe agreement with generous repayment conditions for fuel. But even oil-rich Venezuela has its limits and has proposed a tightening of the repayment schedule. Jamaican Prime Minister Bruce Golding, whose cash-strapped country benefits from this arrangement has said that this is another area where CARICOM should act together in approaching Venezuela for a more convenient solution.

It is amazing that faced with the type of crisis now confronting the region, there are some among us who are so out of touch with reality and stuck in the Dick Cheney-John Bolton time-warp that they openly oppose dealings with Venezuela on ideological and backward political grounds. It is either they don’t understand the nature of international politics and the scale of the crisis facing us, or they mistakenly believe that an anti-Chavez campaign will bring them narrow political rewards. President Chavez is sometimes his own worst enemy in terms of somewhat injudicious public pronouncements, and his actions at home are not always going to meet the approval of us all. One therefore has every right to express views to the contrary, but that does not mean that on a state-to-state level, we should have no relations. Friends are not those who heap you with pious platitudes about “freedom” and “democracy” but those who assist us in solving our real problems of poverty. Venezuela has clearly demonstrated that, as PM Golding of the conservative Jamaica Labour Party recognizes. In Dominica, a member of ALBA, Opposition leader Ron Greene, who has been critical of some aspects of Dominica/Venezuela relations, has just come out in the Budget debate for Dominica remaining in ALBA, only he would like to change the focus. In St. Lucia, not a member of ALBA, Foreign Minister Rufus Bousquet has come out in favour of that country becoming a member.

Yet there are those, in this country in particular who have chosen the most backward approach to international issues and daily flood the airwaves with vitriolic statements against Chavez, Cuba, Iran, Libya etc. They do a great disservice to their listeners and expose the poverty of their politics. One does not have to agree with every domestic policy of Amedinejad to have relations with Iran. Criticize his policies and actions if you will, but he is not Iran. He is certainly not the first leader to be accused of stealing an election. If my memory serves me right, a certain George Walker Bush was similarly accused. I can’t remember hearing howls of protest over our friendly relations with the United States, then. We must stop “playing down the wrong line”, as they say in cricket, or “barking up the wrong tree”. The economic crisis, poverty and development must be our focus.

Renwick Rose is a community activist and social commentator.