David Jessop
A LITTLE OVER a week ago, the Barbados Prime Minister, Owen Arthur, addressed a large gathering of investors and tourism industry professionals. They were attending the Caribbean Hotel Association and Caribbean Tourism Organisation's ninth annual investment conference. His theme was the Caribbean Single Market and Economy (CSME).
Much of what he said sought to identify the genesis of the CSME and its positive implications for the free movement of skills and capital. His remarks also included a number of important references to the future role of tourism as the largest
contributor to regional development and as a catalyst that transforms other sectors. However, more
interestingly, he chose to use the event to float an idea that could place the region's private sector on a new and formal footing within the Caribbean Community.
Prime Minister Arthur told his audience that the creation of a single Caribbean economy could not be accomplished by actions of the State, but only by "the intense and sustained involvement by the private sector, the labour movement and the institutions of the civil society in the formulation and implementation of the programmes for economic
cooperation and harmonisation".
STRONG CARIB BUSINESS COUNCIL
Private sector bodies in the Caribbean, he noted, are generally not supported by the potential
general membership. "We need," he said, "a strong Caribbean Business Council to be created to spearhead the involvement of the private sector in all matters
concerning the implementation of the CSME".
Such a council, he proposed, "should be formally defined as one of the associate institutions of the Community under Article 22 of the Revised Treaty (of Chaguramas) and should have clearly defined functions to enable it to relate to and participate in decision-making by the other organs and bodies of CARICOM."
In practical terms, what Prime Minister Arthur was proposing, was the creation by the region and its private sector, of a Caribbean business council as an associate institution of CARICOM, formally on a par with the University of the West Indies, the Caribbean Development Bank or the Secretariat of the Organisation of Eastern Caribbean States.
GROUND-BREAKING IDEA
This is an important and groundbreaking idea that warrants exploration and debate within all of the region's associations that are representative of private sector interests.
Present arrangements whereby a single underfunded private sector body with a limited membership appears for little more than fifteen to twenty minutes before Caribbean Heads of Government is hardly a practical way for the entities that will either make or break the single market to relate to those who provide the regional environment for economic development.
The vast range and diversity of private sector concerns that now exist in the Caribbean require the emergence of an umbrella institution that can, through a properly funded federal or confederal structure, bring together the region's sectoral associations, chambers of commerce and national private sector entities.
One of the less-recognised
regional developments of the last decade has been the rise of the Caribbean multinational. While such companies are still few in
number, a significant number have progressed from national and regional ambition to becoming investors in Latin America, the U.S., Europe or further afield. These are companies such as GraceKennedy, Jamaica Producers, Angostura, Sandals, SuperClubs, CL Financial, Demerara Distillers or Goddard Enterprises.
Better known are the intra-regional activities of companies that are invested across the anglophone Caribbean, and in some cases, into the Hispanic Caribbean as well. These include companies such as First Caribbean, Neal and Massy, Sagicor and Ansa Macal.
A third category are those
companies that have a limited local economic base usually because
of the small size of the domestic market in relation to the high utilisation of plant necessary to be profitable. They are by definition significant exporters of goods and services. These would for instance include virtually all of the region's rum
distillers and the hotel sector. It would also embrace single-location companies in the information
technology or garment sector, taking advantage of special access provisions in a market such as the U.S.
Beyond this, there are companies in the telecommunications, financial services, mining and energy sectors that, to a significant extent, are externally controlled even if locally registered or owned. And finally and most importantly in terms of numbers, there are the vast majority of Caribbean companies operating mainly within their national market. These are normally very small, involved in small-scale manufacturing, distribution, retailing or agriculture and have concerns that are for the most part quite different to those of the larger companies.
CARIB VEHICLE
Despite differences of scale, all Caribbean companies need a vehicle that can develop with government positions that contribute to the development of a CSME, facilitate the creation of a regional capital market, enhance regional competitiveness, address the detail of trade liberalisation and debate the
many other matters on which Government and private sector
interaction is essential if the regional economy is to flourish.
In the late eighties it was common to hear politicians and officials
suggesting that the motor for
development in the Caribbean was the private sector. Much of this
language followed from the end of the cold war and the evident
bankruptcy of Soviet economic thinking. At that time, multilateral institutions, development agencies and many others saw the freeing of private enterprise, privatisation and a diminished role for the state
as offering the best chance for
accelerated growth.
Since then, the world and the Caribbean has moved on. The
central role of enterprise is recognised if not always welcomed. Governments have established regulatory environments to curb excess. The link between negotiations on trade policy and the survival of whole industries has become a matter of regional importance. And the significance of a regional enabling environment that enhances competitiveness in the face of global competition is better understood.
The private sector too has changed. Successful companies of all sizes in the Caribbean have adopted the best-business practice from North America and Europe, become efficient, made profits, paid significant levels of tax and for the most part, have become important and responsible regional citizens.
Establishing a regional Caribbean business council would enable a formal and continuing debate with governments on the basis of
partnership on matters of common concern.
Prime Minister Arthur's remarks should be seen as a challenge to the Caribbean business community. If private sector associations and companies across the region do not take up, debate and agree rapidly on how to respond to his far-sighted proposal then they will have lost an historic opportunity and done themselves and the region a great disservice.
David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop @caribbean-council.org.
