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Guyana Times

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Saving CSME

January 18, 2016 By GuyanaTimes

In yesterday’s editorial, using data compiled by Professor Paul Clement, it was proposed that Caricom Heads of Government were forced to place the 1989 decision to create a Caricom Single Market and Economy (CSME) on pause, because of its failure to meet a series of deadlines for completion starting with the first one in 1993.

The failure, Professor Clement posited, was due to very ambitious policy proposals the leaders agreed to in their meetings, but were unable to implement in their individual territories. This “implementation gap”, in turn was the result of leaders proposing initiatives with an eye to their individual domestic electorate, which in turn rarely were attractive to every country in the regional grouping, but in the absence of a “filtering mechanism”, were still approved. The lack of implementation had a negative feedback effect since citizens began to view Caricom as a mere “talk shop”.

Professor Clement made a critical point in demonstrating that there was a vast discrepancy between the implementation rate for policies relating to a Single Market (62.3 per cent) and that for the Single Economy (6.4 per cent). As far back as 2003, a group of regional “wise men” headed by Sir Sridath Ramphal, in their report, “Regional Integration: Carrying The Process Forward” had suggested:

“The time has come, we believe, for executive responsibilities for core aspects of regional integration to be entrusted to a Caricom Commission of the kind through which the European Community has so effectively managed its evolution to the European Union – a Commission of the kind that the West Indian Commission had recommended in “Time for Action”.”

And we arrive at the threshold issue that is preventing our regional integration efforts to proceed further, even though in a world of evolving larger “sharks” of mega trading blocks, we stand in danger of becoming a permanent “sardine” because of our size. The Single Market was able to make progress because the decisions implemented did not reduce the powers of the individual leaders: they had to do with tangible effects such as lower prices for goods, that were immediately recognised by the electorates.

On the other hand, the creation of a Single Economy demands losing a certain amount of control and autonomy over vast areas of economic life, like, for instance, monetary and fiscal policies as well as patronage to local businessmen who may be funders of election campaigns. Trinidad had long been seen as possibly playing the role of Germany in the European Union, and playing a larger role in fostering the Single Economy. And this was one of Professor Clement’s proposals for accelerating the CSME.

However, other regional leaders have always been sceptical of playing second fiddle to Trinidad and Tobago and stoutly resisted policies proposed. With the collapse of oil and gas prices forcing T&T into an austerity programme, it is unlikely that it could play that role even if its leaders were willing. The collapse of the “Jagdeo Initiative” on fostering “food security” for the Region is an example at a more concrete level of the refusal of regional leaders to implement policies geared at creating a Single Economy, on account of what was considered as a possibly uneven distribution of burdens and benefits even though the Region as a whole would have benefitted immeasurably.

Two of Professor Clement’s recommendations that are most pertinent are: “Caricom adopts a partial integration approach to deepening regional integration… by first focusing exclusively on completing the Single Market ,then concentrating on completing the Single Economy.”

Secondly, “Caricom’s incremental approach on all fronts has not worked as anticipated. As a result, this paper recommends that the Caricom leadership seek out those arrangements, which have the best chance of succeeding and complete implementation on those fronts. This strategy would focus on delivering tangible benefits in a timely manner and take into account the actual implementation capacity of member states. For example, using all its available resources, concentrate on completing the CSM directives with the highest implementation rates.”