By Kenton X. Chance
PROVIDENCIALES, Turks and Caicos Islands — President of the Caribbean Development Bank, Warren Smith on Wednesday argued that an intensified focus on international trade must be a central tenet of the Caribbean’s growth strategy.
He further said that the Caribbean Community (CARICOM) market is the obvious launching pad for the region’s deepened foray into the global marketplace.
“I am convinced that regional integration can be the Caribbean’s ‘secret’ weapon for
unlocking economic growth and enhancing the prospect of greater prosperity for our people,” Smith told the opening ceremony of the 47th meeting of the bank’s board of governors.
He said the urgency for the adoption of this strategy is occurring at a time when there is a clearly emerging trend towards inward-looking policy platforms and a retreat from globalisation in the United States, the United Kingdom and Europe — traditional trading partners of the Caribbean.
“The implications of this shift could be manifested in reduced international aid flows; diminished funding for multilateral development banks like the CDB; more difficult access to traditional markets; and the requirement to refocus on new export alliances and trading partnerships. Existing trading arrangements could disappear or markets become more difficult to access, necessitating policy shifts in the Caribbean,” Smith said.
He told the bank’s governors and other officials that foremost amongst these shifts would have to be an intensification of the process of making the region’s economies more attractive for productivity enhancing investments.
“It would also require a so far elusive resolve amongst our regional leaders to implement, in full and without further delay, all of the outstanding provisions of the CARICOM Single Market and Economy,” Smith said.
“In short, our region is calling on its leaders to have a laser focus on ‘doing what is right, not what is easy’”
Smith said that a closer embrace of CARICOM opens up the prospect for increasing trade, foreign exchange earnings and employment opportunities, principally for our trained young people.
He said the attractiveness of this strategy is substantiated by the achievements of several large, medium and small Caribbean enterprises, which have grown their businesses by moving cross border to other regional and international markets.
“However, for this strategy to work, the arrangements which are enshrined in the Revised Treaty of Chaguaramas have to be perfected,” he said.
Smith, a Jamaican economist, said that most of the 15 CARICOM jurisdictions have enacted the provisions to remove over 450 legal and administrative barriers that initially stood in the way of the free movement of goods, services, capital and labour in the region.
“The reality, though, is that the mere removal of restrictions doth not a single market make,” Smith said
He said the removal of such restrictions has not resulted in a sufficiently meaningful improvement in market access.
“This is because fundamental challenges still remain in the application of rules of origin, trade facilitation, the Common External Tariff, non-tariff barriers and the resolution of disputes.”
Smith said a second issue is that the Movement of Factor Act — which removes barriers to the rights of establishment — has not been enacted in many member states.
“The establishment of a single jurisdiction to allow for the equal treatment of business entities across CARICOM has also not been implemented,” Smith said.
He said these important mechanisms for supporting the development of regional enterprises by removing requirements for alien landholding licenses, for example, and eliminating the need for registering a CARICOM business in every jurisdiction in which it wishes to operate.
“Such actions add to the cost of doing business, both in terms of time and monetary value. They also hamper the extent to which some CARICOM businesses can penetrate regional markets.”
Smith said a third issue is that in 1995 CARICOM leaders finally agreed to the free movement, and consequent elimination of the need for work permits for a limited group of skilled workers.
“Over twenty years hence, where is our Region today?” Smith said, adding that a recent report by the CSME Unit noted that 10 categories of persons now have the right to seek employment in other CARICOM member states without the need for a work permit.
While legislation in the 12 CSME participating countries have all recognised the categories specifically identified in the Revised Treaty (Article 45), to date only Guyana and Jamaica have fully included the ten categories of workers in their respective Skilled Nationals Act, Smith said.
He said that in addition to the failure to enact the requisite legislation, there is the reality of a scarcity of skilled workers in the region to meet labour market needs.
“As such, regional companies are forced to fill vacancies with workers from outside of the region, through the work permit regime.
“There is, therefore, urgent need for closer alignment between our region’s education system and the skills’ requirements of the business community,” Smith said.