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PM: Caricom too slow in accessing preferential trading pacts

Jamaica Observer

PM: Caricom too slow in accessing preferential trading pacts

By Kimone Thompson, Features Editor - Sunday

26 June 2011

Prime Minister Bruce Golding has criticised the public and private sectors within Caricom for contributing to the region’s lagging development status by not taking advantage of existing preferential trading arrangements.

Using the Caribbean Basin Initiative with the United States and the Economic Partnership Agreement with Europe as examples, Golding said Caricom states in general have been too slow off the mark in catching up with globalisation and the opportunities it presents.

"President (Ronald) Reagan introduced the Caribbean Basin Initiative with certain preferential arrangements and everytime it’s to expire we go to Washington and we plead with them to extend it further and they have done so, but it would not have been unreasonable if they had said we are wasting their time because we have made such little use of it. The opportunities that are there have just remained unexploited," said Golding.

"We signed the EPA with Europe at the beginning of 2009 with duty-free, quota-free access to European markets... We have made very little use of those opportunities," he added.

"On the other hand, the Dominican Republic that piggy-backed with us in the negotiations have taken significant advantage because their exports to Europe in the first year alone jumped by 14 per cent.

"We’re just too slow, we’re just too unresponsive," Golding, a former Caricom chairman, lamented Friday at the 29th annual conference staged by the Institute of Chartered Accountants of the Caribbean at the Jamaica Pegasus Hotel in New Kingston.

The conference focused on economic development and presentations anchored in the example of Singapore, the southeast Asian city-state which moved from third world to developed country status.

Its achievement, according to visiting professor of Lee Kuan Yew School of Public Policy at the National University of Singapore, Henri Ghesquiere, was the result of a set of deliberate austere strategies employed by the Singaporean government from as early as 1960.

Ghesquiere, author of Singapore’s Success: Engineering Economic Growth, presented Friday’s keynote address — ’Third to First: Going the Distance’ — in which he outlined the major strategies employed by Singapore. They included trimming the public sector, cutting and sticking to the budget, creating and taking advantage of new opportunities and giving incentives to taxpayers.

"Grappling with ongoing change is ingrained in Singapore. There is an urge to constantly reinvent oneself and grasp new opportunities, to innovate, to learn in a rapidly changing world," the professor said, pointing out that the rise of China and India did not daunt Singapore.

"The leadership is paranoid about avoiding complacency. It cites the Darwinian dictum that even the strong will perish unless they adapt," said Ghesquiere. "History, Singapore’s elders remind us, teaches the harsh lesson that small city-states often fade and become irrelevant when they fail to rise to challenges. Standing still is moving backwards."

Judging from Golding’s comments, it’s the kind of change necessary for Caricom, but which the leadership has been too slow to chase.

Singapore is not without its problems, Professor Ghesquiere cautioned, but over the course of the past four decades it has emerged with an almost perfect employment record, a rate of inflation under two per cent, wages that have steadily increased after inflation, increased productivity, high rates of life expectancy, high quality health care, very low crime rates, political stability and social harmony.

The purchasing power of its GDP per person is US$50,000, higher than that of the United States.

In spite of his criticisms of Caricom and its lethargy, however, Golding called for developed countries to extend special treatment.

"I’ve used every opportunity that I’ve had to make the case that countries like those in the Caribbean need special and deferential treatment. No, I’m not amending that, and no, I don’t like handouts. But I do feel that the world has to recognise that some countries are in a peculiar position," he said.

To make his case, Golding cited the geographical vulnerabilities and natural disasters to which the region is exposed, the effects of the global economic recession occasioned by the fall-out on Wall Street, and the UN categorisation of Jamaica in particular as a middle income country, which cuts it off from certain support facilities available to developing countries.

"...Because of our vulnerability, we have had to borrow significantly to get through and therefore most of our economies are straddled with huge debt, and when you take that debt and look at what is available in the kinds of government expenditure and the kind of public sector support that is needed to support development in the region, we’re not much better off than many of the countries that are classified as poor, and therefore, I’ve been arguing that there needs to be a special regime for small island states like those in the Caribbean because of their peculiarity," said Golding.