How CARICOM should lead global initiative

IN HIGHLIGHTING the potential long-term fallout for Caribbean economies from the COVOD-19 pandemic, Barbados’ Mia Mottley has called for a global initiative to repurpose the Bretton Woods and related institutions, to better respond to the crisis faced by the world’s most vulnerable countries.

“If there is one thing I’d like to see coming out of this is a global leadership initiative,” the Barbadian prime minister, and Caribbean Community (CARICOM) chairman, said in an interview with CNN’s Christiane Amanpour. “… We used World War II to create a number of vital institutions … which we are relying on. But we also need to repurpose these institutions, and in having a global initiative to make sure we are really reacting to what is real.”

This newspaper agrees with Ms Mottley on the need for global action to reorder international priorities in the face of the intellectually void hollering of multilateralism by America’s Donald Trump.

However, any new global formulation in the Caribbean, particularly CARICOM, must not be passively dragged along by the tide of events. The 15-member group should, even at this stage, be aggressively defining the parameters of a new global order, for which they must build consensus among the region’s citizens.

We already know, broadly, what the problems in the Caribbean are, whether those directly related to COVID-19, or long-standing structural issues. For instance, with global economies largely on shutdown, and the Caribbean’s critical tourism industry frozen, regional output is projected by the International Monetary Fund (IMF) to be 6.2 per cent in 2020. In at least one CARICOM country, tourism, directly and indirectly, accounts for over 60 per cent of gross domestic product (GDP). In several others, it ranges from above 30 per cent to over 40 per cent.

At the same time, the Caribbean is among the most highly indebted regions of the world, with an average debt-to-GDP ratio of over 65 per cent. The most indebted CARICOM member is Barbados, with a ratio of 119 per cent. In Jamaica, the debt is now around 92 per cent of GDP. However, most Caribbean countries are shut out from most concessionary financial arrangements by multilateral institutions because of their categorisation as middle-income economies. At the same time, the mostly small island or coastal states of the Caribbean face, among other dangers, existential threats from global warming and climate change.

The issue now is solutions.

It is against this backdrop that this newspaper proposed a coordinated CARICOM public health response – which, to a significant extent, is happening – to COVID-19, as well as a joint engagement of the world to deal with the deeper structural issues. We, however, do not expect, in this process, cap-in-hand mendicancy from CARICOM. Rather, the initiative has to be founded in the hard logic of mutual interests between this region and other parts of the world, including developed countries.

ANALYSIS OF ECONOMIC IMPACT

In this respect, it is disappointing that the most readily available analyses of the economic impact of COVID-19 on the Caribbean originate from institutions outside the region, such as the IMF, World Bank and the Inter-American Development Bank, rather than regional agencies and academies. We had hoped for robust, data-driven outputs from, say, the Sir Arthur Lewis Institute of Social and Economic Studies at The University of the West Indies, the Caribbean Development Bank, and other regional bodies, to help shape an informed CARICOM drive towards the global leadership initiative, for which Ms Mottley hopes. The indigenous institutions may have done, or are doing, the work, but, unfortunately, haven’t been as open to the public with their data-specific outcomes.

Ms Mottley, in her CNN interview, referenced the small island states of the South Pacific which, like those in the Caribbean, are endangered by climate change. They, too, would benefit from the initiatives proposed by CARICOM’s chairman. It would make sense, therefore, that these countries are drafted to be part of a CARICOM-led coalition that also includes Africa and kick-start a global reform movement. The proposed CARICOM-Africa summit, which Ms Mottley had planned for this year, looks, in this context, an increasingly sensible idea.

The opinions on this page, except for The Editorial, do not necessarily reflect the opinions of The Gleaner.