Ann-Margaret Lim, Contributor
CARRINGTON
WITH LESS than a month before the expected January 2006 introduction of the CARICOM Single Market (CSM), Ministers of Finance constituting the Council for Finance and Planning (COFAP), met yesterday in Kingston to discuss the CARICOM Development Fund (CDF), which is said to be in its final stages of construction by the Caribbean Development Bank (CDB).
The development of the fund is expected to cushion any shocks faced by smaller and more vulnerable economies and sectors within CARICOM, with the establishment of the CSM.
The meeting at the Jamaica Pegasus Hotel, is highly antici-pated, since to date, there has been no formal announcement of how the fund will be financed or structured.
At a COFAP meeting earlier this year, suggestions were made that compensatory figures of US$210 million or US$250 million, should be given to disadvantaged states. The suggestions also included grants and soft loans to be administered through the fund to sectors negatively affected by the proposed single market.
Another suggestion mooted was that each member state contributes 0.35 per cent of regional Gross Domestic Product (GDP) annually to the fund, following the model of the European Union's Structural Fund.
DIFFERENTIAL TREATMENT
CARICOM Secretary-General, Edwin Carrington, informs that this move would yield US$120 million; a figure that he says, is "probably well beyond the collective capacity of CARICOM at this point in time".
The Development Fund, Mr. Carrington explains, is part of the special and differential treatment proposed for the smaller economies constituting the Organisation of Eastern Caribbean States (OECS).
"The CARICOM countries have to build into the arrangement for a special and differential treatment for the OECS countries. That includes a Development Fund similar to the EU's Cohesion Fund from which Ireland benefited," he says.
However, as the CARICOM Secretariat discloses, there has been no financial contributions from either private sector or public sector interests to the fund, despite indications of interests, such as the one from the Caribbean American Chamber of Commerce and Industry (CACCI), made in late October.
Factors such as the 2005 Atlantic hurricane season, with a record number of 24 storms, last year's Hurricane Ivan, which caused US$1.7 billion in damage, increased regional inflation, rising gas prices and the fact that the CARICOM countries are all developing nation states, have been given as reasons for the slow reaction toward the fund.
Despite this, however, the call is being made to finance the Fund and get the CSME on its feet by Mr. Carrington, government repre-sentatives from the OECS, such as Antigua and Barbuda's Prime Minister, Baldwin Spencer and his Trade Minister, Dr. Errol Cort and former Caribbean Trade Negotiator to the World Trade Organisation and the International Monetary Fund, Sir Ronald Sanders.
In addressing the practicality of the fund in light of the Community's economic capacity, Jamaican economist, Michael Witter, who is head of the Economic Department at the University of the West Indies, advises JIS News that money for the fund could be sourced from outside of the group. "The group as a whole can access resources from outside of the group itself," he points out.
