Can the private sector generate regional growth?

When CARICOM Heads of Government met in Antigua earlier this month they had held a ‘frank and enthusiastic’ exchange with selected leaders of industry and commerce.

Who was present, whether this included the organisations that represent the region’s leading economic sectors, or how those present were selected, was not reported; but the objective, CARICOM suggested, was to encourage their involvement in stimulating growth and buttress the desire of Heads for greater private sector investment, public-private partnerships and an improved business environment.

Much of the discussion revolved around the vexed issue of what is known as the enabling environment – the ease of doing business free from regulatory and other constraints - with the business representatives arguing that without Governments improving this, it would be hard to unleash entrepreneurial energy, seek out new opportunity and encourage greater pan-Caribbean economic activity.

According to the communiqué, Heads, ‘remained committed’ to creating such an environment and encouraged the business leaders to invest in agriculture and energy, as well as to give serious consideration to establishing a Caribbean Private Sector Investment Fund.

How realistic or deliverable any of this is, let alone whether those present truly believe in the commercial viability of such solutions, or are in any position to deliver given the extraordinary constraints of operating in the CARICOM business environment, is far from certain.

Unfortunately, without dramatic Government reforms and an end to economic nationalism and protection, the probability is that most Caribbean Governments are unlikely to ever create the open enabling environment for Caribbean entrepreneurs that might turn countries into future equivalents of Ireland, Iceland Singapore or even Mauritius.

Most of the region is still not at the starting point for dramatic private sector led growth. The tiny 5.5m English speaking market remains at different levels of development; the private sector largely consists of micro-enterprises; without contiguous borders and poor transport links there are better opportunities for productive investment outside the region; infrastructure, extractive industries and tourism depend on external investors; poor educational standards and a lack of global competitiveness hold the region back from developing newer service oriented industries; and there continues to be a disinclination to focus on, defend and support in every way possible those sectors where the region could have a future comparative advantage such as tourism, rum and the creative industries.

For these reasons and the region’s failure to create an executive mechanism that might bring into being a genuine single market and economy, the parts of the Caribbean private sector that might be in a position to help engineer regional growth have largely moved on. They have become bottom line and shareholder centric, and as with modern business everywhere, largely deaf to the rhetoric of government.

They have also recognised that future opportunity lies wherever it may be: think Sir Kiffyn Simpson’s investment in up to 40 000 acres of Guyana’s Upper Essequibo region to produce rice, corn, soya, cow beans, guar and bamboo for export, or GraceKennedy’s US$26m recent acquisition of La Fe Foods Inc in the US, or Vicini’s investment in steel production in Trinidad through Metaldom. These companies and others have already embraced the fact that globalisation, private equity or deals that leverage tax advantage, represent the future.


Despite this, the theme of the Caribbean private sector delivering change has become of such significance that almost every single academic paper of note on the regional economy acknowledges its central future role.

In his stimulating paper on convergence published by UWI in 2013, and interestingly soon to be published in China, Winston Dookeran, Trinidad’s Foreign Minister notes that future development in the region requires not just partnership across what he describes as the whole Caribbean sea space but also between the public and private sectors. He believes that this requires inclusiveness and co-operation emphasising equality and equity. Central to this regional space, he suggests, is aligning the logic of politics (inclusiveness, co-operation) with logic of economics (production integration, competitiveness and distribution).

In a similar way in his recent book ‘Globalisation, Trade, and Economic Development’, Ambassador Richard Bernal makes clear that any new private sector led approach will take place against the background of a dramatically changed global environment. ‘The extreme globalisation of the world economy’ he writes, 'means there is really only one market and that is global ...and national economies regardless of size and level of development are subject to the dominance of capital accumulation’.

Countries, he argues, must therefore engineer a business environment that can extract the maximum benefits from the global economy while minimising effects harmful to the national economy.

And in a report for the European Commission not in the public domain an author makes clear that the lack of impact of the Cariforum EPA is because it does not seek to address government’s core domestic regulatory space affecting the cost of doing business private sector growth (financing, energy, utilities, transport and logistics) suggesting there will always be a limit to what nay FTSA can achieve.

What all this suggests is that business and government in the Caribbean are now operating in different environments. The biggest players that can move economies, invest internationally, or seek opportunity in new ways or in new areas; while the smaller often micro-enterprises that cannot escape their immediate economic environment suffer stifling constraints, wait on government to change the enabling environment.

The real question is therefore whether the large Caribbean private sector is any longer interested in leading regional economic growth or whether the new generations of businessmen and women running such enterprises, who are increasingly trained in some of the world’s best business schools, have ceased to think in the same way as their regional predecessors, who felt they still had a stake in change and governance.

What seems to have happened is that as governments have failed for all sorts of reasons to deliver public sector reform, deregulation, fast response times and flexibility, so that large corporations have had to look beyond the Caribbean’s borders or at borderless modes of activity while small enterprises have atrophied within small economies.

Put another way the logic of politics and power in the Caribbean now so at odds with the logic of economics that the chances of regionally led private sector growth may have become a pipe dream.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org)

China will cast a huge shadow as Japan meets CARICOM

The word will not be spoken in any formal speeches and it won’t be mentioned in final statements and declarations, but it will be talked about in the corridors and it will be at the back of everyone’s mind as Japanese Prime Minister Shinzo Abe visits five Latin American and Caribbean (LAC) nations from July 25 to August 2. The word is “China”.

Animosity between China and Japan has been steadily increasing over the last few years and relations are now tense at best and hostile at worst. From the Chinese side, according to Professor Zhou Yong-Sheng at the China Foreign Affairs University, “Japan can develop as a military superpower and boss around the region again.” He adds, “China is no longer the country it is was 120 years ago and, therefore, Japan should not commit the folly of starting a war with its western neighbour.” Those are fighting words and there have been skirmishes in both the sea and air over claims to sovereignty of five small islands known as the Senkaku in Japan and the Diaoyu in China. This had led to a military build-up in Japan that has been criticised by China on almost a daily basis. The heat generated over this was fanned into a flame by the Prime Minister’s insistence on visiting the Yasukuni shrine that venerates Japan’s war dead who China regards as invaders and from the World War 11 occupation of Chinese territory.

The Japanese leader is visiting the five LAC nations in the wake of a very successful visit by Chinese President Xi Jinping in which he signed agreements that exceed US$10 billion with Argentina, US$5 billion with Venezuela, and US$1.8 billion with Cuba. Additionally, Xi offered to extend a line of credit of up to US$10 billion to members of the Community of Latin American and Caribbean states (CELAC) and to create a US$20 billion fund to finance infrastructure projects in LAC countries. China is also LAC’s second largest trading partner after the United States of America. In 2013, trade reached US$261 billion of which China enjoys a surplus. Nonetheless, Chinese investment, particularly in infrastructure, has helped to boost economies in LAC countries, including the nine Caribbean Community (CARICOM) countries that have diplomatic relations with China.

The Japanese Prime Minister is very keen to boost trade with Latin America and the Caribbean which, while it nearly doubled over the past decade, still accounts for just 5 per cent of Japan’s foreign trade. He will also want to expand Japan’s stock of foreign investment in LAC which is now lagging behind China at US$60 billion.

The name of the game is two-fold. The first is economic and includes access to LAC resources, such as oil, gas and minerals, as well as investment in large infrastructural projects that would give Japan a sizeable return. In this regard, Chile, Colombia, Brazil and Mexico are the main targets. The second part of the game is political influence particularly in Japan’s quest for a non-permanent seat on the United Nations Security Council (UNSC) for which elections will be held in October 2016. In both cases, Japan comes up against China.

While China is one of the five permanent members of the UNSC, it has been openly campaigning against Japan’s candidacy for the single UNSC seat that will be available to Asia. Japan is contending with Bangladesh whose candidature China avidly promotes in order to block Japan.

It is because of the vote for the UNSC that Japan is particularly interested in meeting the 14 independent CARICOM nations in Trinidad and Tobago on July 28. If they all vote for Japan, Prime Minister Abe would be delighted.

And that is where the challenge and the opportunity arise for the 14 independent CARICOM states. For the five that do not have diplomatic relations with China (they are tied to Taiwan), supporting Japan poses no challenge at all, but the others do have to be mindful of the consequences of supporting Japan for the UNSC. Dealing with this issue will call for skilful diplomacy.

The opportunity for the 14 independent CARICOM nations is the face-to-face meeting with Prime Minister Abe. It presents an opportunity to bargain in the region’s interest just as the Japanese leader will be seeking benefits for Japan.

On the economic front, like China, Japan has been pledging large regional aid and investment packages to Africa and Southeast Asia, the value of which are US$43 billion and US $20 billion, respectively. It is unlikely that transactions of such sizes will be extended to all of the LAC countries. The LAC nations are a low priority for the Japan International Co-operation Agency (JICA) which provided only US$450 million to the entire region in 2012. This means that the CARICOM countries got only a fraction of that total.

It would be worth drawing that reality to Prime Minister Abe’s attention even as CARICOM leaders describe the plight of their economies and the restricted space in which they operate because of rules made by institutions in which Japan has a powerful voice. The face-to-face meeting with the Japanese Prime Minister offers a golden opportunity to remind him that his country has enjoyed a sizeable trade surplus with CARICOM countries for many years – a trade surplus that is greater than the amount of official development assistance Japan provides.

The value of the trade surplus may not be huge in Japanese terms, but it is large for CARICOM states.
Additionally, the meeting with Mr Abe also provides a chance to lever support from Japan in critical areas such as: providing help to address debt (many of the CARICOM countries now have a debt-to-GDP ratio of over 60 per cent); active support in the Organisation for Economic Co-operation and Development and the Financial Action Task Force for compensation for the high costs that result from compliance with their rules; financing for Climate Change adaptation; advocacy in the IMF and World Bank to make CARICOM states eligible for concessionary loans; and more Japanese investment in renewable energy and infrastructure.

Over all these discussions, of course, China casts a long shadow.

(Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries at: www.sirronadsanders. com)

The BRICS and the Caribbean

As this is being written a series of summits have been taking place in Brazil which may have a lasting effect on the way in which the Caribbean and other small indebted nations come to address their future.

The first and perhaps most significant of these meetings took place between Brazil, Russia, India, China and South Africa (the BRICS) on July 16 in La Fortaleza. The atmosphere surrounding the meeting, which brought together the Presidents of the five countries concerned, suggested that much of what was discussed and announced was intended to confirm the gradual emergence of a new world economic and possibly political order.

The message was that here were five relatively new world economic powers – there are, of course, others – that are beginning to put in place institutions that might determine an alternative economic order. That is to say, one that does not necessarily embrace the way in which Washington, Europe and more generally the other members of the OECD see the world and its future.

For the Caribbean this has obvious attractions, not least because one of the new powers, China, has become a significant regional development partner, the major investor in infrastructure, and the funder of Chinese private sector led ventures across the region.

Of particular interest in Brazil was the announcement that the BRICS will establish a new development bank based in Shanghai to rival the IMF and the World Bank.

The objective of the group in setting this up is to establish a counterweight to Western-dominated financial institutions in the form of a new development body able to fund infrastructure projects, and a reserve fund to support economies facing currency and balance of payments crises.

The New Development Bank, as it will be known, will have capital of US$50 billion with each country contributing US$10 billion, while the reserve fund will have US$100 billion at its disposal. Once established, it is likely to become a mini-IMF with China being the biggest overall contributor. The effect will be, though a form of geo-political competition, to gradually bring to an end the post Cold War consensus on what constitutes economic orthodoxy and the present dominant approach taken by the US, Europe and Japan in existing international financial institutions.

As such the establishment of the new bank and the thinking that goes with it attempts to reconstruct the post Second World War global financial infrastructure and rebalance world power in a way that offers different assumptions about development, and a break with the type of conditionalities on economic development that have prevailed since the Bretton Woods agreement was signed in 1944.

In this context China took the unusual step before President Xi arrived in Brazil of releasing a document setting out its global development policy.

This China State Council policy paper makes clear that China’s approach will be South-South in nature and that China will not impose any political conditions or interfere in the internal affairs of the recipient countries, respecting, it says, “their right to independently choose their own path and model of development”.

Unusually, the policy paper includes specific language on the Caribbean that makes clear that it has been actively implementing the assistance measures agreed at the 2011 Third China-Caribbean Economic and Trade Cooperation Forum.

By the end of 2012, the document notes, China within this framework provided the Caribbean with concessional loans totalling 3 billion Yuan (approximately US$1.5bn) mainly for the construction of infrastructure projects. It also observes that it has trained over 500 officials and technical staff for the Caribbean and held courses on earthquake and tsunami early warning and monitoring systems. China said it had also built schools in Antigua and Dominica, sent medical teams to Dominica, trained local medical staff, and carried out technical cooperation in agriculture and fisheries with Dominica, Grenada and Cuba.

As to China’s overall objectives, the document indicates that its longer term development goal is to endeavour to build moderately prosperous societies in “an all-round way” and that it remains on a global basis “committed to realising the Chinese dream of national prosperity and renewal, and happiness of the people.”

Just as tellingly, given that the Chinese leadership only ever says what it means, President Xi made clear last week in an address to the Brazilian Senate that China intends through CELAC (the Comunidad de Estados Latinoamericanos y Caribeños) promoting a “strategic alliance” with the Latin America and Caribbean region. “Our objective is to strengthen and take a leap forward in China’s relations with Latin America and the Caribbean,” he said.

This is language that goes far beyond what China has said previously and paradoxically seems to place it in a BRICS-Caribbean context, as a first among equals.

These are all developments that were scarcely conceivable a decade ago.

However, away from the media excitement surrounding the emergence of the BRICS as a new global power bloc, less certain in practical terms is whether its members, and specifically China, will be prepared to make the compromises necessary for an effective multilateral approach, and whether the BRICS will be able to bury their political and military differences and jealousies.

While the developments in Brazil last week do not as yet do much more than herald the potential of a new world order, it does raise difficult questions for the OECD and the prescriptive economic approach its members have developed unchallenged since the collapse of the former Soviet Union.

For the Caribbean it is yet another challenge in relation to future positioning. Governments will have to consider how and where to insert themselves into not just the expanding and overlapping relationships implied by the various meetings in Brazil, but also decide how to balance this with traditional relationships, the political potential of CELAC, the bilateral economic significance of China, the growing importance of more proximate neighbours in Latin America, and the smallness of much of the Anglophone part of the region.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org)

The New Development Bank: What’s in it for small economies?

It is news that should awaken the World Bank and the International Monetary Fund (IMF) from their complacent attitude toward developing countries. It is also news that should confirm to the G20 that what used to be the G7 – a group of the seven industrialised nations – no longer controls the world’s financial affairs.

On July 16, Brazil, Russia, India, China and South Africa (BRICS) established the New Development Bank and alongside it a Contingent Reserve Arrangement (CRA). The two institutions will serve the needs of the five countries for financing infrastructure and industrialisation, and to provide support in the event of a balance of payments crisis.

The New Bank will be headquartered in Shanghai, with India as its President for the first term of six years. It will be capitalised initially with US$50 billion. Each BRICS member state will subscribe an equal share. The CRA will be funded with US$100 billion. China is contributing the largest share of about US$41 billion while Russia, Brazil and India will put in US$18 billion each and South Africa US$5 billion.

The creation of the New Bank and the CRA is motivated by frustration with the pace of reform of the IMF and the World Bank to give a greater voice to the BRICS. In the Fortaleza Declaration after their meeting in Brazil, the five BRICS leaders – Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, China’s President Xi Jinping and South Africa’s President Jacob Zuma – stated that international governance under its current structure and power configuration show increasing signs of losing legitimacy and effectiveness.  They said: “The BRICS are an important force for incremental change and reform of current institutions toward more representative and equitable governance capable of generating more inclusive global growth”.

The BRICS are also concerned that the new vision for global economic governance, articulated by the G20 in 2009, has not materialized. And, while Brazil’s President Rousseff was careful to say that the world should not see the Bank and the CRA as a desire by the BRICS to dominate, she made it clear: “We want justice and equal rights. The IMF should urgently revise distribution of voting rights to reflect the importance of emerging economies globally”.

Whether the New Bank and the CRA remain open only to the BRICS or they widen their lending to all other developing countries, their establishment signals that it cannot be business as usual for the World Bank and the IMF, and that decision-making in the G20 will have to change.

BRICS represent 42 per cent of the world’s population and roughly 20 per cent of the world’s economy based on GDP. Total trade between them is US$6.14 trillion, or nearly 17 per cent of the world’s total. Importantly, together they are the world’s largest market and their combined GDP grew by more than 300 per cent in the last 10 years. Those are not figures to be scoffed at, and the BRICS have now shown that they are serious about demanding change.

Other developing countries, including those in CARICOM, should applaud the BRICS for creating their two new institutions. They have all endured the harsh terms, rigid conditionalities and unyielding dictates of the IMF and the World Bank. They would welcome any move that rattles the Washington-based institutions, which are controlled by the US and Europe, and encourages them to reform and to be more flexible in the treatment of developing countries that are confronted with crises.

At the same time, the BRICS would make a serious error if they kept the Bank and the CRA as a closed shop for their subscribing members only, or for other large developing countries such as Mexico and Indonesia that might be encouraged to join. For the two new institutions to command support from the wider community of developing countries, they should not repeat the mistakes of the IMF and World Bank.

The New Bank could be a much needed source of financing to developing countries for infrastructure, industrialization and productive development that many nations, such as those in the Caribbean Community (CARICOM), are now denied. Except for Haiti, CARICOM countries (13 of them) have been ‘graduated’ from access to concessional financing by the World Bank. The CRA could also allow developing economies to draw on pooled reserves in the event of balance of payments crises on terms that are more appropriate and more sympathetic than those now applied by the IMF.

Risk management, a high-quality loan portfolio that improves development but keeps default to a minimum, surveillance and profits are all crucial to any bank’s successes, and they will be vital to the New Bank’s survival – so standards will have to be high. But within those important parameters the BRICS should devise ways in which they could allow other developing countries, particularly small and medium-sized ones, to buy into the New Bank and the CRA on terms they can afford.

Arrangements should also be made for borrowings by developing countries on less onerous and more sympathetic conditions than the requirements of the IMF and World Bank.

In other words, the BRICS institutions should create competitive conditions for lending that would cause the Washington-based financial institutions to soften their criteria for lending and their terms and conditions, thus giving developing countries particularly small and vulnerable economies, more acceptable access to financing and a better chance to survive and prosper.

While the IMF and the World Bank may be aroused by the BRICS creation of the New Bank and the CRA, they will continue to be influential players in the wider world economy. It is significant that the BRICS remain members of the IMF and World Bank where, undoubtedly, they will use the alternative of their new institutions to try to leverage larger voting shares for themselves.

Small economies, in particular, should not be left as mere spectators to the competition between the Washington-based financial institutions and the newly created BRICS Bank and CRA.

(The writer is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries: www.sirronaldsanders.com)

A plan does not guarantee delivery or success

A little over a week ago, CARICOM Heads of Government met in Antigua. The highlight, which was widely reported in the regional media, but largely ignored by the world beyond, was that CARICOM is to have a strategic five-year plan.

Speaking about this, the incoming CARICOM Chair, the new Prime Minister of Antigua, Gaston Browne, described it as ‘a crucial element in the community’s reform process’ involving ‘reform of its institutions and restructuring of the secretariat’. For the plan to succeed, the Secretary General, Irwin Laroque said, it will require a high level of co-operation and co-ordination between member states, the institutions of CARICOM and the Secretariat. There will need to be, he noted, a responsive governance structure, clear lines of accountability and partnerships with all stakeholders, including the private sector, labour, civil society and youth.

It is easy to be cynical about yet another CARICOM decision suggesting a new start. But perhaps given the amount of work that want into developing the plan, CARICOM and those attending the 35th summit should be granted the benefit of the doubt in the hope that there will be a sustained commitment and implementation of what is proposed at the level of the member states.

The problem is that the absence of any detail makes it hard to be either truly supportive or critical.
In this sense Caribbean Heads may be their own worst enemies. Not only has CARICOM as far as I can tell not published its plan, but the language used is so off-putting and low in content that it is hard to evince any great enthusiasm.

According to Prime Minister Browne the 2014-2019 plan will seek to “reposition the Community and identify priorities and activities that would meet the challenges of the international environment”. In CARICOM’s own words the plan identifies ‘eight integrated strategic priorities and key areas of intervention: building economic resilience; social resilience; environmental resilience; technological resilience; strengthening the CARICOM Identity and spirit of community; strengthening community governance’ along with ‘co-ordinated foreign policy, research and development and Innovation’. In other words all you might expect of any modern state.

But what has not been said is exactly what this means in practical terms, who will deliver it, how and when.


Worryingly too, the statement issued by the CARICOM Secretariat at the conclusion of the meeting contained an important caveat. It made clear that the priorities and arrangements to be put in place across the region will have to take into account the resource limitations, both human and financial, across the implementing agents.

In the real world, in business, in better managed academic and NGO circles, there would be in any strategic statement of this kind some indication as to how the executive authority involved – in this case a multitude of sovereign governments facing in different directions – intend delivering what has been agreed; a clear and publicly available time line; details of the deliverables to measure performance against; and the clear allocation of responsibilities.

While it is quite possible that the plan does all of this and that a public document will emerge that will enable the Caribbean people and the wider world to measure the language agreed against the probability of delivery and performance, past experience, while being no guide to the future, suggests this far from certain.

Most Caribbean governments are struggling to keep their economies afloat and few have time to focus on desirable but largely optional extras.

There are enormous complexities in successfully addressing the issues suggested by the CARICOM plan.

Countries in the region are at differing stages of economic development; most of the region does not have contiguous borders so cannot benefit from economies of scale; the transport links that exist are poor and expensive; most politicians look inwards and are focussed on domestic survival strategies; and almost every nation has different foreign policy objectives, and in reality is going it alone.
There are also other issues of importance.

The Caribbean is now engaging seriously with the rest of the hemisphere in which it sits, and irrespective of externally led interest from the wider world, new partners in Central and South America may offer new and better integration opportunities.

There needs to be a new leadership that is able to encourage delivery through passion, inspiration and concentration on results rather than through rhetoric. The media need to be less parochial, ask serious questions and find new ways to see the region.

Far more importantly perhaps, the idea of a plan has emerged as global centres are changing and an educated younger generation no longer thinks in the same way about the region, its institutions, geographical boundaries, sovereignty or planning.

This is not to say that the Caribbean and CARICOM have ceased to be relevant, but that the internal, external and generational dynamic has changed so dramatically since the body’s inception that trying to embrace a plan may be surrounded by too many uncertainties to be sure succeed.

I would like to be wrong and wake up on or around January 1, 2020, and see a well- integrated stable and secure group of Caribbean nations experiencing growth, with high levels of employment, an education system relevant to the future, a dynamic private sector, and a new type of leadership better equipped to deal with a multi-faceted and now constantly changing global environment.

While it is good that the region is attempting to develop a narrative about its future, so far it is not clear what this is, whether the plan amounts to a convincing vision or if this can be expressed in language that individuals can easily relate to, or more importantly judge where they would wish to see themselves 20 years from now.

As Cuba has found planning has many shortcomings. Following its recent comprehensive national consultation, subsequent agreement, the publication of national guidelines, and careful implementation, its government is finding delivering a social and economic plan complex and difficult, despite the centralised nature of the Cuban system.

While there may be a case in some nations for top-down government approaches ,what CARICOM seemingly envisages is likely to be much harder to deliver in open economies where to a significant extent change is driven by the market and many hard to forecast global factors.

No doubt CARICOM will be saying more about how it intends proceeding, but what would be tragic if in developing a plan Caribbean Heads of government fail, and come to be seen to have inhabited a parallel world to those who have to live in it.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@ caribbean-council.org. Previous columns can be found at www.caribbean-council.org)

Why join the Commonwealth?

The Institute of Commonwealth Studies at London University held a colloquium on Thursday July 10 on the subject of “Why join the Commonwealth?”. I was invited to be a lead speaker. What follows below is a very much shortened version of my remarks given the space restriction of this column.

In recent time the relevance of the Commonwealth has been widely questioned. Many critics claim that the association is marginal to the interests of the majority of its member-states and that it has become virtually unknown among their peoples. In part, this is why the question arises of why join the Commonwealth.

But, far from having no role the 53-nation Commonwealth is today more needed than it has been since its heyday of fighting for an end to racism in Southern Africa, the independence of Zimbabwe under majority rule, the freeing of Nelson Mandela and the ending of apartheid. It is up to its leadership to make it relevant again; the potential and space for a role certainly exists.

It is more than a cliché to remind that the membership of the Commonwealth is representative of the world. It is drawn from every continent; it embraces every race and every religion; it is made up of big countries and small ones; it encompasses rich nations and poor ones. Further, its member-states are also members of virtually every regional, economic and trade organisation in the world. But, even more importantly, in the inter-governmental Commonwealth and its councils, leaders of all its member-states have access to each other for free and frank discussion in ways that are without equivalent in any other organisation.

Quite realistically, the Commonwealth is a network of networks; decisions made within it have the scope to resonate globally and to cause an impact beyond its own councils. That is the considerable ‘soft’ power that the Commonwealth has when used purposefully.

It should be noted that its present 53 member states, including Britain, chose to be part of the Commonwealth voluntarily, and to remain part of it. Two of these member states – South Africa and Pakistan – were withdrawn from the association by their governments at the time, but subsequent governments brought the countries back into the grouping. Obviously, they recognised that the association has value for them.

Two other countries were withdrawn from membership – Zimbabwe and The Gambia. In the case of Zimbabwe, President Robert Mugabe’s government violated Commonwealth values regarding democracy and free and fair elections. When the Commonwealth sought to suspend Zimbabwe from membership because of this infraction of its rules, President Mugabe withdrew Zimbabwe from the association.

Last year The Gambiam President Yahya Jammeh withdrew his country from the Commonwealth because, according to his Information Minister, he no longer wished to “associate with Great Britain” and “will never be a party to any institution that represents an extension of colonialism”. Strangely, The Gambia did not break relations with Britain. By contrast, the government of Tanzania, under President Julius Nyerere, did not withdraw from the Commonwealth in 1965 when it broke diplomatic relations with Britain over the latter’s failure to act against the Unilateral Declaration of Independence by Ian Smith’s regime in Rhodesia (later Zimbabwe). Nyrere kept Tanzania in the Commonwealth declaring, rightly, that it was not British.

The Commonwealth is not “British”, and it has not been British since 27 April 1949, when the Heads of Government declared their countries to be “free and equal members of the Commonwealth of Nations”, ending the term “British Commonwealth” – and establishing both the voluntary and equal nature of membership.

Before any government contemplates joining the Commonwealth it would have to take account of the criteria for membership established by Commonwealth leaders in 2007. Among the criteria are: an applicant country should, as a general rule, have had a historic constitutional association with an existing Commonwealth member, save in exceptional circumstances; the country must demonstrate commitment to democracy and democratic processes, including free and fair elections and representative legislatures; the rule of law and independence of the judiciary; good governance, including a well-trained public service and transparent public accounts; and protection of human rights, freedom of expression, and equality of opportunity; and the country should accept Commonwealth norms and conventions, such as the use of the English language as the medium of inter-Commonwealth relations, and acknowledge Queen Elizabeth II as the Head of the Commonwealth.

Joining the Commonwealth now is, therefore, a rigorous process and it is unlikely that, notwithstanding expressions of interest by two countries (South Sudan and Burundi), there will be any expansion of Commonwealth membership in the near future. The only exceptions to this general observation would be Zimbabwe and The Gambia where, if their governments were to rectify their record with respect to adherence to Commonwealth values, they would undoubtedly be welcomed back into the fold.

At a very practical level the Commonwealth is a very cost-effective form of diplomacy for all of its members large and small.

Consider the campaign at the moment by New Zealand for a non-permanent seat on the United Nations Security Council. Commonwealth countries are a special focus of New Zealand’s campaign, as they would be for all large Commonwealth countries, such as Australia, Britain, Canada and India, when they seek support for a cause or a candidate in the international community. Fifty-three Commonwealth votes matter. So too does the influence of those 53 countries, speaking up in organisations throughout the world of which they are also members.

The Councils and meetings of the Commonwealth are cost-efficient means of a country – big or small - maintaining relations with 52 other countries that could be of help to them.

For small states, the importance of the Commonwealth lies primarily in the access Summit meetings give leaders of these small countries to leaders of some of the world’s major powers on an equal basis. No other international or multilateral organisation affords them such an opportunity. But beyond access, the Commonwealth also delivers research and advocacy vital to the interests of small states.

The Commonwealth’s research on Economic and Development issues, and its advocacy of agreed positions on debt, on trade facilitation, on development financing, on Global Warming and Climate Change gives every member country resources most do not have on their own, and advocacy many could not afford on their own.

Today, there are great issues that confront the world: high unemployment and restlessness of frustrated young people; growing antagonism between and within nations based on religious grounds; hegemonistic tendencies by powerful countries toward their neighbours; competition between nations for resources that are becoming scarce; an enlarging gap between rich and poor countries.

The Commonwealth of Nations cannot solve these problems, but given its diverse membership, it can make a great contribution to their solution if its diversity is managed effectively by its leadership.

(Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries: www. sirronaldsanders.com)

Changing investors’ perceptions

Living in the Caribbean it is quite possible to imagine that the world sees the region and its economic fortunes in an unchanging light. As a consequence it is sometimes hard to understand how rapidly external sentiment can change.

Nothing demonstrates this better than two Caribbean events in London in the past ten days at which engaged groups of individuals from the business community participated at levels not seen for some years by the countries concerned.

The first was a seminar on Cuba’s new investment law and the opportunities being made available in sectors from biotechnology to tourism and the Special Economic Development Zone at Mariel. The second, a week later, was a series of meetings around a visit by Jamaica’s Minister of Transport, works and Housing, Omar Davies, at which large financial institutions and major European companies were able to discuss the countries infrastructural plans for ports, roads and railways.

In both cases there was a genuine engagement after years of scepticism and a sense of new found change and opportunity.

In the case of Cuba, the interest was sparked not just by the new foreign investment law, but also by an awareness that the US Chamber of Commerce and significant US and EU figures had begun to visit and speak positively about change and new business opportunity in that country.

When it came to Jamaica, again the story was of new opportunity and the feeling that, against the odds, the country was successfully delivering its IMF economic adjustment programme.

Again a visit played a role.

In a demonstration of confidence, the IMF’s Managing Director, Christine Lagarde, visited Jamaica on 27-28 June.

During her visit, her commendation of government, opposition and civil society for their commitment to reform Jamaica’s economy and for the actions they had taken was particularly well received externally in relation to a country that is perceived to have a history of failing to stay the course politically on delivering IMF programmes.


In so publicly praising Jamaica she sought to make clear that both the IMF and the country were light years away from the negative press that both the institution and Jamaica received in 1980s when the body was widely criticised for not taking the social or political impact of its policies into consideration when designing economic reform packages for recipient nations, and for this and other reasons a period when Jamaica came close to the edge of political instability.

During her visit Ms Lagarde also sought to demonstrate that in the Caribbean, where the Fund has programmes in Grenada, St Kitts, and Antigua, and is closely monitoring economic developments in Barbados, the Dominican Republic, the Bahamas, Belize, Dominica and St Lucia, that it can help achieve success in small island states, especially if there is a consensus on the need for a changed approach to economic management.

Implicit in her remarks and presence in Jamaica was the message that, despite criticism and doubts in the region, the Fund and its members were sensitive and sought to find socially responsible ways of helping governments manage programmes, especially in small economies where the dynamics are different.

In Jamaica’s case there was an additional but just as important message. Her visit and words of support were intended to bolster the national consensus between Jamaica’s government and opposition and within civil society and to encourage all parties to remain solidly behind delivering a socially difficult programme if the island is to become globally competitive and experience long term growth.

During her visit she had the opportunity to meet with representatives from the private sector, trade unions and the opposition, telling them that she had been impressed by the high degree of consensus on the need to reform the Jamaican economy. Referring to the island’s Economic Programme Oversight Committee she said: “This broad support for the reforms has been essential and will need to be maintained to ensure continued progress and confidence build-up in the economy.”

Her visit came as Jamaica moved into the second year of a four-year programme of accessing US$948.1m under an IMF Extended Fund Facility agreement. This runs through to 2016/17 and seeks to create the conditions for sustained growth through a significant improvement in the fiscal and debt positions and competitiveness.

Ms Lagarde said that the IMF’s overall objective in the region and elsewhere is to bring about sustainable and inclusive growth and that it is paying special attention to the needs and concerns of small states. The Fund, she said, saw its role as a partnership, and was engaged in capacity building and providing technical assistance and training in order to create stronger financial management systems.

Her visit to Jamaica was not of course without criticism. A number of individuals in academia and the opposition expressed concern that not enough account was being taken of local disquiet about the IMF programme’s effective devaluation of the Jamaican dollar; the social impact of the wage freeze for public-sector workers; the introduction of new taxes; or the difficulties associated with encouraging the local private sector to invest at home. Other suggested that the whole process could fall apart as the future of the PetroCaribe arrangement whereby Venezuela provides oil on hugely subsidised terms remains uncertain.

Despite this, Jamaica’s ability to meet the terms of its programme has dumfounded its critics, with the country meeting successive IMF targets and introducing fiscal measures and regulations that are likely to significantly help the country in encouraging future investment and its ability to compete.

While often painful and difficult, change based on consensus, allied to what amounts to an international vote of confidence by high level visitors, can quite rapidly turn around perception and generate internationally a degree of optimism amongst those who form investment opinion.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www. caribbean-council.org)

CARICOM: Arrest ‘bun-wuk’ before it spreads

“Bun-wuk” or “Fiyah-d-wuk” are two names for a troubling phenomenon that has recently emerged in certain countries of the 15-nation Caribbean Community (CARICOM). Unless it is nipped in the bud by practical measures to address the growing difficulties associated with youth, it is bound to spread like wildfire with troubling consequences throughout the region, given the predilection for copy-cat behaviour particularly among young people.

The term “bun-wuk” was explained to me recently by Dr Ralph Gonsalves, Prime Minister of St Vincent and the Grenadines. His country was about to get its first taste of it. Apparently originating in Trinidad and Tobago, “bun-wuk” translates into “burn work” and it is an event, created by young people, to stop work at 1 pm on Fridays and to revel thereafter throughout the week-end. Subsequently, I learned that the happening had already reached the shores of Barbados under the rubric “Fiyah-d-wuk” – literally “fire work”.

As if the timing of 1 pm on Fridays, when the period for productive work is not yet over, is not bad enough, the promoters of “bun-wuk” on St Vincent were scheduling their event for 1 pm on Wednesday. Should that occur, it would clearly result in many of the employed participants being unfit for work on the following Thursday after an afternoon and evening of partying. Dr Gonsalves was rightly troubled at the cost to his country’s already besieged economy. His concern should be shared by all leaders of CARICOM countries to which this infection will undoubtedly spread and whose economies can ill-afford the wastage that will ensue.

The question with which every Caribbean society has to be anxious is: what motivates this phenomenon, particularly when it occurs among youth who are not only unemployed but also those that are employed? I do not pretend to know the answer. In that regard, the call on July 1 by the Prime Minister of Antigua and Barbuda, Gaston Browne, for CARICOM to establish a Commission on Youth Unemployment is both welcome and timely, particularly if such a Commission can provide answers and solutions.

In making the call in his inaugural statement as Prime Minister and as Chair of the Heads of Government Conference, Browne said: “We have a population – mostly young people below the age of 30 – that want to see change; to widen the scope of opportunity and to broaden the space for their aspirations. In many of our countries, unemployment is high – and highest among our young people; bright able-bodied men and women. Just as the young people of my country are eager to end the old ways; to tear down the barriers to their growth; and to march forward, so I suspect are the youth of most of our countries. If nothing else, their restlessness should make us realise that the sensible option for creating such space and widening such scope resides in our interdependence on each other. The alternative is their frustration. That frustration will result in their rebellion within our borders or their exodus to shores outside our region taking their talents that we urgently need”.

At the time of writing, the Conference is not yet over, but it is to be hoped that all Heads of Government responded positively to Prime Minister Browne’s proposal and agreed to the establishment of the Commission on Youth. Funding the work of such a Commission will add to the burden of already cash-strapped governments – a problem to which the Prime Minister alluded. Nonetheless, he has identified a major dilemma for all Caribbean countries – one that is amplified by the “bun-wuk” phenomenon in which even employed youth opt not to work. Delaying action on it might prove to be very costly to the fabric of all Caribbean societies. In this connection, the Commonwealth Secretariat, the World Bank and the Inter-American Development Bank should be encouraged to provide grants and technical assistance to facilitate the Commission’s work, which, once done should be made public with action taken by governments and others, including trade unions and the private sector.

A recent book entitled The Political Economy of Caribbean Development by a scholar of Caribbean affairs, Matthew Bishop, details the issue of unemployed youth. While the book, published by Palgrave Macmillan, is centrally concerned with shedding light on the political economy of the four territories in the Eastern Caribbean Bishop, its section on youth points out that “the predicament in which the Eastern Caribbean youth currently finds itself is deeply troubling, and is reflected in a lack of educational attainment, exclusion from the employment market, and, to differing extents, fears surrounding drug use and assimilation of North American and consumerist cultural mores”.

Bishop studied four Caribbean islands for purposes of comparison – the French territories of Guadeloupe and Martinique and the independent countries, St Lucia and St Vincent and the Grenadines - and he concluded that the burden of unemployment “falls disproportionately on the young”. With regard to youth unemployment, he observes that “when (very high unemployment) befalls significant numbers of young people, the exclusion that it provokes can be debilitating in a lasting way which differentiates their plight from that of older generations”.

Against this background, the Antigua and Barbuda Prime Minister’s call for a CARICOM Commission on Youth is opportune. He located his call “to widen the scope of opportunity and to broaden the space” for the aspirations of youth squarely in deeper integration of CARICOM countries by saying: “if we are to go forward, we must move together offering our people a shared space in all our countries, and the scope to grow while contributing to national and regional development”.

As the outgoing Chair of CARICOM, Prime Minister Dr Ralph Gonsalves, declared: “National solutions are at best partial; and a concerted regional approach is required to improve our economies, create wealth and jobs, and manage much better our fiscal and debt condition, and strengthen the social safety net for those who are disadvantaged”.

The phenomenon of “bun wuk” with all the indiscipline and disregard it entails should also form part of the Commission’s work on how the region addresses the problems associated with youth. No CARICOM country can bear the decline in productivity that the phenomenon presents any more than it can allow unemployment of its young people to persist. “Bun wuk” must be arrested but the space and scope for youth employment must also be created in the region as a whole.

(Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries: www. sirronaldsanders.com)

Quantifying a changing relationship

Trying to describe the overall outcome of the Eighth UK-Caribbean Forum, the biennial government to government dialogue that took place in London on June 16/17, is far from easy. On the one hand it is clear that this ‘summit’, which was intended to reset Britain’s relationship with the Caribbean, had a number of clear and important deliverables. On the other, it is hard to assess quite where this once special relationship in almost constant flux for more than fifty years, will be in another twenty.

So much so, that even the UK seemed uncertain about how to portray its nature and substance. As it began, a short notice appeared on the Foreign and Commonwealth Office website that characterised the relationship as ‘unique’ and as being based on friendship, mutual understanding and shared values.

This Forum, however, was different compared to any previously held, being much more focussed on deliverables, with it being accepted that virtually nothing had resulted from the thirty one action points agreed at the last one in Grenada in January 2012.

As an overall theme, the eighth had as its objective building a stronger partnership able to enhance Caribbean economic growth, competitiveness and prosperity, with particular attention being paid to energy security, the development of skills and education, and the ways in which more might be done to tackle security concerns.

When it came to energy and education there was a meeting of minds.

It was agreed that the UK will support technical assistance that will catalyse a regional gas market. For their part, Caribbean governments continue to explore the regional potential for natural gas and other forms of sustainable energy as an alternative to imports of fuel oil. It was also agreed that the UK will share its experience of managing renewable energy systems through private sector-led mechanisms relating to smart grids, and better distribution and energy management systems. Britain also offered to work with regional regulators and utility companies to encourage utility reform.

The other area in which the two sides found a high level of resonance was in relation to education and skills. In an interesting recognition of the need to support the Caribbean prepare for the world of tomorrow, the Forum agreed that both sides would explore, with partner organisations such as universities, think-tanks, civil society, cultural organisations, and the private sector, establishing programmes that bring together young leaders from the UK and Caribbean in business, entrepreneurship, civil society and academia to develop their leadership potential and exchange experiences.

On security, while there was agreement on the problems posed by organised crime, the Caribbean made clear that capitals would have to decide whether to accede to Britain’s request to implement, as the communiqué put it, reciprocal asset-sharing agreements, automatic tax information exchange arrangements, exchanging criminality data, and effective extradition regimes.

However, what became clear during the meeting was that many of the most immediate issues for the Caribbean, such as the need for new terms of engagement between small states and larger developing and developed economies, and help to address the graduation of much of the region out of development assistance, were matters on which Britain would only agree that greater consultation would be required.

Much the same held true when it came to Caribbean concerns about the impact that UK visa policy is having on business persons and entertainers seeking to benefit from the services opportunities in the Economic Partnership Agreement with Europe, or continuing Caribbean concern that Air Passenger Duty was having a negative impact on Caribbean tourism, despite the welcome development earlier in the year that resulted in the UK tax on flights to the Caribbean being reduced.


Speaking to Caribbean Foreign Ministers during and after the event to try to understand from a Caribbean perspective how they saw the meeting, it was clear that they had a sense that the approach of the United Kingdom had changed.

But beyond its welcome but essentially short- to medium-term offers of functional support, the Forum for them seemed to confirm, perhaps intentionally, the existing perception in the region that the future role of Britain will be very different.

While they welcomed what they saw as a new realism and a willingness to focus on specific concerns especially education and energy security, they seemed individually uncertain about where this more limited approach will take the dialogue in future. The sense was still of family, but one in which a benign parent had retired and was looking forward to helping the grandchildren.

Gone, they felt, were any previous assumptions about the relationship; but while the cultural ties remained strong, its future depth seemed less certain. Some observed that the UK was trying to identify a new role for itself within a limited budget, so that when it came to issues of real concern it was unclear whether the UK was prepared to make a difference. The point was also made that the role of the public sector in generating growth in small societies was not well understood by British Ministers as being of importance. Others felt the new approach was driven by the recognition by both sides that the Caribbean now had many other partners to work with.

Although helpfully Caricom published on its website the opening remarks for Caricom by the Chair of its Committee on Foreign Relations, Carolyn Rodrigues-Birkett, Guyana’s Minister of Foreign Affairs, at this eighth Forum, there were no public speeches opening or closing the event.

Instead the only part open to a broader audience was a well attended session on investment to which a business audience was invited and another with professionals in the Caribbean’s UK Diaspora at which UK politicians for the main parties and representatives from the Caribbean answered questions on UK-Caribbean relations.

To monitor what happens next and avoid what happened to the decisions coming out of the Grenada Forum it was agreed that the two sides will meet again in the Caribbean in 2016 to review progress.

The Eighth UK-Caribbean Forum made clear that the relationship the nature of the engagement with the UK continues to change and has become more functional and pragmatic. If the Caribbean has any interest in making it different, it has few options left the most prominent of which must be finding ways in which its future leaders in all parts of society engage the new and successful generation in its UK Diaspora interested in and able to lobby on policy, and make a difference as British citizens.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@ caribbean-council.org. Previous columns can be found at www.caribbean-council.org)

Human trafficking: The US should help not hector

Human trafficking is a despicable, dehumanising and exploitative practice that is rightly described as ‘modern day slavery’. That its principal victims are women and children, who are not only stripped of their rights but also of their humanity, is a stain of disgrace on governments that fail to act to stop the perpetrators.

Trafficking in Persons (TIP) is an umbrella term for the act of recruiting, harbouring, transporting, providing, or obtaining a person for compelled labour or commercial sex acts through the use of force, fraud, or coercion. The United States government has adopted a Trafficking Victims Protection Act that describes this practice in different terms, including involuntary servitude, slavery or practices similar to slavery, debt bondage, and forced labour.

To be fair to many governments – particularly in small countries with limited resources – they are not all fully aware of the extent of the practice or of the myriad ways in which it is carried-on, including the voluntary participation of some of its victims at the beginning when they have no understanding of the snare in which they eventually are entrapped.

In this connection, questions have to be raised about the right that the United States government has abrogated to itself to produce an annual Trafficking in Persons (TIP) report that identifies and brands countries in four tiers based on what the US State Department says is “information from US embassies, government officials, non-governmental and international organisations, published reports, news articles, academic studies, research trips to every region of the world, and information submitted to tipreport@state.gov”.

The four tiers into which the US categories countries are: Tier 1 – governments fully comply with the minimum standards of a US law – the Trafficking Victims Protection Act (TVPA); Tier 2 – governments do not fully comply with the TVPA’s minimum standards, but are making significant efforts to bring themselves into compliance; Tier 2 Watch List (WL) – governments do not fully comply with the TVPA’s minimum standards, but are making significant efforts to bring themselves into compliance, and (a) the absolute number of victims of severe forms of trafficking is very significant or is significantly increasing; there is a failure to provide evidence of increasing efforts to combat severe forms of trafficking in persons from the previous year; or (c) the determination that a government is making significant efforts to bring itself into compliance was based on commitments to take additional future steps over the next year; Tier 3 – governments do not fully comply with the minimum standards.

Of the 14 independent countries of the Caribbean Community (CARICOM), Dominica, Grenada and St Kitts-Nevis are omitted completely from the US 2014 list, although St Kitts-Nevis was named as a Tier 2 WL country in 2013. Therefore, they are not now identified as being compliant nor are they judged to be non-compliant. The reason for their omission is not stated.

Of the remaining 11, four of them – Bahamas, Barbados, St Lucia and Trinidad and Tobago – are listed in Tier 2. The remaining seven are on the Tier 2 Watch List – Antigua and Barbuda, Belize, Guyana, Haiti, Jamaica, St Vincent and the Grenadines and Suriname.

Additionally, Barbados is the only CARICOM country that is identified as not being party to the ‘Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children’. This is surely not a deliberate act on the part of the Barbados government, and it would do well to rectify this situation.

The US government deserves commendation and appreciation for the vanguard position it has adopted against TIP whose victims are, invariably, desperate and vulnerable women or children with no capacity to resist. But, while US Secretary of State, John Kerry, said that the US annual TIP “Report is not about pointing fingers”, that, unfortunately, is precisely what it does. The effect of identifying countries in the three lower tiers 2, 2 Watch List and 3, is to stigmatise them even where governments are genuinely concerned about the issue but lack resources, both human and financial, to tackle it comprehensively. Small countries are confronted with declining economic prospects as a consequence of reduced aid, unfair terms of trade, pressure on their main productive sectors and a raft of demands to establish costly regulatory and enforcement machinery. To these already trying circumstances must now be added the machinery for tackling human trafficking.

Of course, every government, including governments of small countries, must join in the fight to stop TIP, but richer countries – especially those who stigmatise others – should contribute to the financial costs of doing so. In this regard, constructive engagement with governments of financially-strapped small and least developed countries to help them would be infinitely better than the government of one country branding them as non-compliant.

A further dimension to the problem of the US government producing a report that slots countries into categories determined by the US only, is that such a report lacks global authority and scrutiny. And, it is not as if there is no United Nations entity dealing with the problem.

The UN Office of Drugs and Crime (UNDOC) is engaged with the criminal justice element of human trafficking and its mandate could be expanded both to produce a global report on the actions of every government, and to provide technical and financial assistance to small and vulnerable countries and less developed states to help bring them into compliance with standards set by the UN.

Rather than being the world’s unilateral enforcer on this issue – as in many others – the US might find that a genuine multilateral approach would be far more productive. A multilateral approach would remove the one-country ‘big stick’, and, instead, establish internationally agreed standards backed up by financial resources for implementation.

To the extent that they can manage it – all countries and especially those in the Caribbean that have suffered slavery and indentured labour – should work together to eliminate human trafficking from the region. At the same time, countries like the US should help not hector.

(Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries: www. sirronaldsanders.com)

Being honest about the ACP

Two weeks ago, on ACP day – an event to the best of my knowledge not widely celebrated – an
unusually frank and honest lecture was delivered at the European Centre for Development Policy Management (ECDPM). This is the Europe-based strategic think tank with a positive and long-standing reputation for being supportive of the countries of the ACP.

What was said was unusually challenging and valid, in that the remarks, albeit delivered in a personal capacity, came from someone who is widely known and respected across Africa, the Caribbean and Pacific, and in EU government circles, because of his deep commitment to the importance of development policy and the nations of the ACP: Geert Laporte, the Deputy Director of ECDPM.

Mr Laporte’s approach was to ask some fundamental questions about the future validity of the ACP as an institution.

Instead of posing the usual question about the desirability of the 79 nation ACP group continuing, he asked whether there was any realistic or feasible basis on which the ACP could be considered to have a future role in relation to ACP-EU cooperation in global governance.

His question was particularly relevant as this has been the recent focus of an ACP Eminent Persons Group and an Ambassadorial Working Group trying to determine the future orientation of the ACP, which beyond its present focus on commodity matters faces an uncertain long-term future.

Why Mr Laporte’s remarks were interesting is that he asked the type of questions that are rarely mentioned in public by governments, politicians or those who are wedded to institutions that are of declining relevance to a much changed world.

Setting aside the subtleties of some of what was said* Geert Laporte asked three fundamental questions.

Firstly, on which global issues has ACP-EU collective action had a major impact; which global issues covered in the ACP-EU partnership have moved to other fora over time; and if there had been a real convergence of interest between the ACP and the EU enabling  both parties to turn global processes to their joint advantage?

Secondly, he asked whether the ACP offered added value on global themes in ways not covered by other institutions, and to what extent it was the best grouping to serve the global interests of its members.

And finally, he questioned the extent to which the ACP-EU partnership plays an important role in furthering the EU’s ambitions and strategic interests.

His response was to consider the ACP from the perspective of current reality rather than through the optic of history or the more normal subjective rhetoric of solidarity, shared interests and partnership.

Tellingly, he pointed out that in the past few years most of the ACP’s roles have been taken over by other international organisations and groupings.

“Security, peace, migration, democracy, and human rights are no longer primarily addressed through the ACP-EU framework”. These global issues have moved elsewhere, he suggested. They were now largely dealt with through the regional or continental fora of the nations of the ACP, he said.

He noted too that the ACP’s economic and trade related roles are being gradually taken over at a regional level and that interaction between the ACP and EU at an official and parliamentary level was waning, with few European Ministers attending ACP-EU Council meetings.

He also questioned whether in comparison to the turn of the century, non-state actors still had an interest. He suggested, for example, most ACP businesses now argue that there is greater opportunity in Asia.

He also asked why it was that if the ACP had validity, it was unable to fund itself and what would happen if European Development Fund support was to disappear.

Geert Laporte’s paper, although not likely to be popular in some parts of the ACP, is above all
realistic and honest.

As Suriname will discover when it takes the position of Secretary General in 2015, if the ACP is not demand led after 2020, or can establish a clear role that delivers positive results, then it is simply living on history and shared experience and will be able to add little if anything to its members’ desire for economic growth and political influence.

The ACP was at its zenith in the latter part of the Cold war, offering the former colonial powers and the transatlantic alliance a bulwark against Soviet communism. Its ability to deliver on its collective interests came largely in relation to negotiating arrangements with Europe that were in the broadest sense preferential. Today in a multi-polar world in which overlapping interests and organisations, and constantly shifting issues-based alliances, it is hard to see what practical value the body can offer its members or Europe not covered by others.

Why China, Brazil or any other emerging powers should want the ACP as an interlocutor also seems questionable when it is clear that both nations have defined approaches to Africa, the Pacific and Caribbean as separate strategic entities, and are now embedded in the G77 and other ascendant international organisations.

As Mr Laporte argues, the time has come for the group to be ‘VERY REALISTIC about its future’ (his capitalisation), what it could do and what it better not do as a group, with the EU or with other nations.

The reality is that the ACP members now have little economic commonality in that it membership includes middle-income countries, less developed countries, and vulnerable, fragile and failed states, making collective action less likely.

Put another way, the message is clear: as with a company, so with a modern state and the institutions to which it belongs. Demand, competitive advantage, a positive brand and having an unique selling point are the prerequisites for survival.

Above all, if the ACP has validity, it should be able to mobilise its own resources from its own member states. If it does not, as sad as it is to write this having lived through much of ACP history, it is an organisation past its time.

Geert Laporte suggested some alternative areas in which the ACP might reinvent itself to offer something of substance in the global arena. It is a part of an argument that seems to owe more to politeness than conviction.

Mr Laporte’s remarks can be read in full at http://ecdpm.org/publications/challenges-global-governance-emerging-world-order-acp-eu-relations-2020/

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org)

Who rules from financial services rules?

On May 29 the Caribbean Financial Action Task Force (CFATF) issued a public statement in which it said that it “recognises Guyana as a jurisdiction with significant AML/CFT (anti-money laundering and counter terrorism financing) deficiencies”.  

That’s fair enough since Guyana is the only Caribbean Community (CARICOM) country that has not adopted AML/CFT legislation and other measures that have been arbitrarily stipulated by the Paris-based Financial Action Task Force (FATF) and supervised by the International Monetary Fund (IMF).

However, in calling on its member-states “to implement further counter measures” against Guyana, CFATF made the absurd statement that it “considers Guyana to be a risk to the international financial system”… absurd because if all the financial transactions and the assets of all the banks in the Caribbean were to be added-up, they would not account for 1% of transactions and assets in the international financial system.

Therefore, Guyana, which has no offshore financial sector – unlike, for instance, the Bahamas, Cayman Islands, Barbados and the British Virgin Islands – could not possibly account for even 0.1% of the transactions and assets of the international financial system.

What possible threat could Guyana, with such a minuscule sum, pose to the international financial system? It is akin to suggesting that a gnat could fall an army of elephants. Nonetheless, the FATF will now tell the world to blacklist Guyana for all financial transactions.

As a former Chairman of CFATF, I see no value in that organisation, which is supposed to be representative of the interests of its member-states, including Guyana, over-exaggerating the effect on the international financial system of small countries that, for whatever reason, are not able to implement all of the onerous requirements of the FATF.

The FATF is the hand-maiden of the rich countries of the world, with a vested interest in the compliance of all other jurisdictions with onerous and costly rules that are arbitrarily made and that are enforced by measures inconsistent with international law, including countries such as the United States of America (US) extending the enforcement of its own laws into foreign countries.

The membership of FATF now consists of 34 countries, including China, Brazil, India and South Africa (CBISA) that it was convenient for the original members to let in given their new economic status. FATF membership is denied developing countries not considered ‘strategically important’.

The rules on matters such as tax competition, money laundering and terrorism financing were made before the CBISA nations joined, but even they have done little or nothing to alter the ‘one-size-fits-all’ approach of the FATF and its sister grouping, the Organisation for Economic Cooperation and Development (OECD) that also has 34 members. Significantly, the CBISA nations found membership of that body to be a step too far if they wished to maintain their ‘developing country’ credentials.

The OECD countries, particularly the US, have used the terrorist events of 9/11 to institute far-reaching measures on countries around the world. While these measures have been pursued in the name of combating laundering of drug-related money and financing of terrorism, there is little doubt that financial institutions in the US and in major financial centres such as Britain have been the principal beneficiaries of the enforcement of rules that push financial services in competing jurisdictions out of business.

In a new and serious development, from July 1 the US Foreign Accounts Tax Compliance Act (FACTA) will compel financial and non-financial entities in foreign jurisdictions, including in the Caribbean, to share information with the American Inland Revenue Service (IRS) on “accounts held by US persons or by foreign entities in which US persons hold substantial ownership interests”. If they fail to do so, the “IRS will cause these correspondent banks to withhold 30% of monies being transmitted to financial institutions outside of the US”. In other words, 30% of all transactions will be withheld whether they involve US persons or not.

Governments in the Caribbean have accepted FACTA and many of them are now adopting legislation to give legitimacy to it as they have done with the FATF rules on AML/CFT. Just as there was little collective action by Caribbean jurisdictions to negotiate compensations for the costs of implementing AML/CFT measures, there has been acquiescence in implementing FACTA even though compliance will add to the already heavy burden on governments and financial institutions.

Of course, every country should co-operate in combating serious crime, but not at a cost disproportionate to the risk they pose. The OECD and FATF countries in relation to the AML/CFT measures and the US in relation to FACTA should provide compensation for the high costs that the governments of small countries and their financial institutions face. Their offer of ‘technical assistance’ is grossly inadequate and, usually, means placing their own people into the machinery of other governments, but avoiding the financial resources needed.

An authoritative study by the Commonwealth Secretariat (Sharman and Mistry 2008) revealed that costs of ‘the regulatory regime have been rising much faster than any associated tax or fee revenue gain, or the overall growth” of the financial services sector. The Commonwealth study is also explicit
that Tax Information Exchange Agreements that are an integral part of the AML/CFT measures do not compensate small countries “for the expense they must go to in bolstering OECD countries’ tax revenues”.

Guyana’s political parties should adopt the AML/CFT legislation or the country will be blacklisted to its detriment by the FATF. That is the reality of coercive power. For the Guyanese to continue to fight each other is to play someone else’s game by someone else’s rules.

Small countries such as Guyana and the rest of the Caribbean cannot singly resist the bludgeoning of multilateral organisations like the OECD and FATF, nor can they individually challenge the US. But, they can together make a case for compensation – a case in which they could form alliances with countries, equally affected in other parts of the world, to take the issue as far as the General Assembly of the United Nations if necessary. Right now, the law of the jungle prevails and the mighty rules.

In Guyana the political parties are fighting over the content of AML/CFT legislation, but they are missing the woods for the trees. The real struggle is an international one – and that struggle should also be CFATF’s on behalf of all its member states.

(The writer is a Consultant, Senior Fellow at London University and former Caribbean Diplomat. Responses and previous commentaries: www.sirronaldsanders.com)

The UK, the Caribbean and a changing relationship

Every two years the British and the Caribbean governments meet with the objective of moving forward a relationship that has become much changed.

This time it is the UK’s turn to host the event at Lancaster House in London on June 16 and 17. This is the grand UK government facility where in the 1960s and 1970s the Caribbean negotiated the constitutions that brought independence to almost every Anglophone Caribbean nation.

Attending what will be the Eighth UK-Caribbean Forum, will be almost all Caribbean Foreign Ministers, Britain’s Foreign Secretary, plus other ministers and assorted officials.

In contrast to previous meetings – the last one was in Grenada – this will have a significantly lower profile, with no sessions open to a wider audience, no set piece opening or closing session, and no participation by the UK’s European or North American partners.

Despite this, the event remains of significance as its overall outcome and any follow up will demonstrate the nature and future trajectory of the UK-Caribbean relationship.

Importantly, at least as far as the UK is concerned, the event takes place with Cariforum, so includes the Dominican Republic which has become a partner of increasing economic and regional security significance to Britain.

Although the event will involve difficult exchanges on aspects of the political relationship, there will also be discussions on alternative approaches to helping resolve the region’s energy problems, and a new and welcome focus on education and exploring ways in which the UK might be able to play a role in supporting the region prepare its young people and future leaders for a world in which new skills and thinking are required.

There is also a business forum that will encourage UK investors and enterprises to take a greater interest in the region, and a meeting with British Parliamentarians with an interest in the Caribbean region. In addition there is a collateral event, also at Lancaster House, that will bring together invited members of the Caribbean Diaspora to debate with British politicians and foreign ministers issues of concern with the objective of greater community involvement in developing UK thinking about the Caribbean.

From a British perspective, the overarching interest is for the Forum to identify ways in which the relationship might be adapted to respond to its changing objectives and economic limitations at a time when the Caribbean region has new partners that are prepared to support infrastructural development, investment, and provide new forms of development assistance.


Its hope is that the Forum will result in greater co-ordination and identify how it might better support the region’s needs in relation to energy, education, private sector led growth and regional security, while helping identify the skills needed to enable the region to increase its capacity and competitiveness; all within a partnership that emphasises core interests and shared values.

For the Caribbean the issues are more specific, challenging and difficult. They revolve around reparations, the recent graduation of much of the Caribbean out of development assistance, the problems associated with vulnerability and smallness, and are about visas and migration.

As with so many events involving the Caribbean’s traditional interlocutors and trade partners the meeting would therefore seem to start with a mismatch between aspiration and reality.

Although the world’s sixth largest economy, Britain’s role on the world stage is diminishing and as a consequence its priorities have changed. It still sees the Caribbean relationship as special, but in future as increasingly being soft power based; there are important exceptions, largely relating to security, investment and some geo-strategic concerns. In contrast much of the Caribbean still seems to see the relationship as delivering in one or another way material forms of support.

The consequence is that unless this divide can be bridged and there is a willingness to overcome bureaucratic inertia on the Caribbean side, the relationship is likely to suffer continuing disappointments for both, reinforce the view that the other is not delivering, and result in those bilateral relationships that work taking precedence.

The litmus test will be whether this event has a practical outcome that looks forward with enthusiasm, and if what is agreed on paper is ever followed up on, or delivered.

One aspect that neither side seems to have fully understood is that the future of a more soft power oriented relationship will be that, to a significant extent, this will have to be driven by people to people contact, whether though business and investment on a two way basis; those in Britain’s increasingly middle class and professional Caribbean community whose role in moving policy has largely been ignored; via philanthropy; and through financially stable academic, NGO and business institutions able to deliver programmes that cement non-government ties and hold the collective memory about the relationship. All of this has a cost that seems less and less likely to be met.

One consequence of diminishing resources for civil society is a significant imbalance between the UK’s substantial representation in the region and Britain’s ability to successfully deliver outreach in the UK. Put another way the UK’s image in the region exceeds its capabilities and may disappoint despite its many excellent and engaged younger high Commissioners and Ambassadors.

Today Britain’s focus is on thematic approach to foreign policy, on major markets, on global security and on securing the transatlantic relationship. Its politicians are driven by the twenty four hour rolling news agenda and complex domestic political issues in ways that at times seem to give precedence to perception and marginalise many of the difficult issues that touch small states.

For its part the Caribbean has failed to weave its requirements into a whole that places the region in a new contextual framework, as a distinct grouping of states with a clear and common agenda that can be linked with the global interests of traditional partners and their acceptance of multi-polarity.

Let us hope that the UK Caribbean Forum helps develop new thinking and starts to define where the region or individual nations might be twenty years from now and enables the UK to reset and redefine its role within this context.

(David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www. caribbean-council.org)

Stop cursing CARICOM as darkness; it is a light not yet fully turned-on

Dr. Franklin Johnston, a strategist, project manager and advisor to the Jamaica Minister of Education, wrote a column in the Jamaica Observer of May 30 in which he basically contended that the Caribbean Common Market and Community (CARICOM) and the Caribbean Single Market and Economy (CSME) are the constructs of “Anglophone black people” and not in the interest of Jamaica.

Rooting his contentions in anti-colonialist sentiment, he stated without evidence that CSME is a “clever fiction inspired by the Brits, aided by Cabinets, and sustained by well-paid, unaccountable regional civil servants”. He sets-up both CARICOM and CSME as hostile to the economic well-being of Jamaica. Further, he claims that “CSME zealots” all come to live in Jamaica; “we (Jamaica) are the big name brand”; “CSME disrespects us” (Jamaicans); and “we (Jamaicans) are small with a big brand and balls to match and need no union to prosper, but CSME controls us by making the arcane and distant familiar; “the phrase English-speaking Caribbean means zilch as CSME does not work”; and “Jamaica is the largest nation in CSME, so we are its backbone – finance, market, innovation, brand value, yet we are the poorest member”.

Dr. Franklin is a welcome voice to the discussion of CARICOM and CSME – the exchange of views is imperative as all sections of the Caribbean Community work to improve and enhance the benefits of CARICOM for the people of all member-states. But, welcome should not be misconstrued as acceptance of the legitimacy of the arguments. It is regrettable, for instance, that among the “Anglophone black people” who are accused of keeping “a colonial legacy alive” by constructing CARICOM and CSME would be radical Caribbean thinkers and leaders such as Michael Manley, P J Patterson, Norman Girvan, Louise Bennett, Arthur Lewis, Vaughan Lewis, William Demas, Eric Williams, Errol Barrow, Owen Arthur, C Y Thomas, Havelock Brewster, Shridath Ramphal, Alister McIntyre, T A Marryshaw and Ralph Gonsalves. The resistance of all these men, who were at the centre of the creation of CARICOM and CSME, to colonialism in all its forms, is well-known. It is a terrible slur to denigrate their magnificent efforts on behalf of the entire Caribbean. It has to be assumed that ardour for his argument temporarily blinded Dr Franklin to veracity.

As for CARICOM and CSME being “clever fictions inspired by the Brits”, Dr. Franklin denies a long history of agitation and advocacy for unity in the Caribbean by Caribbean people stretching back to the 1930s when their basic objective was to be rid of the British in an arrangement of independence by a unified Caribbean. While, after the 1961 referendum in Jamaica, the West Indian goal of joint independence was shattered, the reality that none of the countries could survive alone remained and inspired the creation of CARICOM and CSME by Caribbean development economists, political scientists and historians. While Britain regards greater economic integration of the Caribbean as important to the well-being of the people of the region, it is not alone in this view – the United States, Canada, Mexico, Venezuela, Brazil, Russia, India and China also hold this view based on the small size of the economies of the region and the benefits that could flow from integrated production and joint financial strategies and negotiations.

It is most unfortunate that Dr. Franklin, who advises the Jamaica Minister of Education, attempts to create a divide between Jamaicans and the people of other Caribbean countries by promulgating a false doctrine of Jamaican superiority as reflected in his remarks: “we (Jamaica) are the big name brand”; “CSME disrespects us” (Jamaicans); and “we (Jamaicans) are small with a big brand and balls to match and need no union to prosper, but CSME controls us by making the arcane and distant familiar.

The people of other Caribbean countries greatly admire the accomplishments of Jamaican musicians, athletes and thinkers. Indeed, when Jamaicans compete in international spheres in all endeavours, Caribbean people root for them as one of their own. But, Dr Franklin should recall that little St. Lucia with a population ten times smaller than Jamaica’s has produced two of the Caribbean’s three Nobel Prize winners in Arthur Lewis and Derek Walcott – the other being V S Naipaul of Trinidad and Tobago; Brian Lara of Trinidad and Tobago (with a population half that of Jamaica’s), remains the cricketer with the highest number of runs in Test cricket; and the leadership roles played in the international community by persons such as Guyana’s Shridath Ramphal and Grenada’s Alister McIntyre are cause for pride by Caribbean people as a whole.

Dr. Franklin also asserts that “CSME zealots” all come to live in Jamaica”. Quite what he means by this statement is not clear, but if he is stating that Caribbean persons are migrating to Jamaica, the facts do not support him. While there are nationals of CARICOM countries who work in Jamaica under the skilled nationals certification programme, the number is minuscule in comparison with the number of Jamaicans who have migrated to countries such as Antigua and Barbuda. Further, in contradiction to the inference that Jamaicans play little role in Caribbean integration, the heads of several important Caribbean institutions are Jamaicans committed to the regional ideal. These institutions include the Caribbean Development Bank, the Caribbean Export Development Agency, the Caribbean Development Fund and the Caribbean Disaster Emergency Management Agency.

As for the trade relations of Jamaica in CARICOM, while the unfavourable balance of trade surplus with one country – Trinidad and Tobago – is often cited as detrimental to Jamaica, the largest portion of the cost of Jamaica’s imports is oil and gas which Jamaica needs in any event and would have to purchase elsewhere. Jamaica enjoyed a large trade surplus with 7 of the 13 CSME countries in 2012. And, while Jamaica should be doing better in the export of goods and services, it is not because CSME does not provide the opening; it is because the private sector there has not taken sufficient advantage of the opportunities, including integrating its production with resources from other CARICOM countries. Further, Jamaica is the largest importer of CARICOM products because it has the largest population at 2.7 million people – twice the size of Trinidad and Tobago, and larger than Guyana, Belize, Barbados and seven countries of the Eastern Caribbean. And, contrary to Dr Franklin’s claim, Jamaica is not the poorest country in CARICOM in per capita income, and it is one of the richest in natural resources.

Little is achieved by blindly cursing CARICOM for any of the woes that Jamaica faces – some of them could have been alleviated by active participation in making CARICOM and the CSME work more effectively; a fault which Jamaica shares with all CARICOM countries.

(Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat. Responses and previous commentaries: www. sirronaldsanders.com)

Sanctions and the Caribbean

Sanctions and large fines are becoming the weapon of choice for the United States and others as they seek ways to stop nations facilitating trade or financial transfers that touch countries they are engaged in a political dispute with.

The issue is becoming more acute as huge fines and restrictions placed on international banks threaten to stop what can be the quite legal free flow of funds to nations regarded as transgressors of rules
relating to tax, money laundering, terrorism or international organised crime.

The issues are complex as the administrative approach being adopted in some cases intentionally confuses quite proper objective concerns about illegal payments with subjective considerations based on political judgements.

Although so far not subject to the huge fines that a number of international banks are now facing, the Caribbean and its financial sector is now under intense scrutiny and can no longer expect to be immune from the effect of increasingly invasive extraterritorial legislation.

The longest running and most questionable example is the US trade embargo on Cuba and the way that the US Treasury is now inter-preting the legislation. Through a series of complex and difficult to unravel US laws such as Helms Burton, and the continuing inclusion of, by its own admission, the hard to justify US designation of Cuba as a terrorist state, the US authorities have been extending their pressure internationally on the Cuban Government.

They have done so by taking legal action against international banks operating in the US and the threat of extradition of their executives.

So serious has this become that in Europe, despite it being illegal to comply with such external trade legislation, many of the continent’s largest banks have not only withdrawn from undertaking any transaction that even vaguely involve Cuba, but have shut down individual’s bank accounts
and recalled loans out of fear of huge fines on their operations in the US.

At its most serious is the announcement last week of a fine of US$8-10 billion on the French bank, Banque Paribas, for allegedly violating US sanctions and anti-money laundering rules. Washington has said that between 2002 and 2009 the bank made hidden transactions in US dollars to Cuba, Sudan and Iran and other nations against which the US has sanctions. If the French bank concerned admits its guilt not only will it cease to be able to clear US dollar transactions, but so big is the fine that it will lose its credit rating, its profitability, and have to raise new capital to meet European banking requirements.

The French Government is concerned about the impact of this and the broader political implications.

Its President, Francois Hollande, will raise the issues with the US President and may halt transatlantic trade negotiations. The country’s Foreign Minister has declared Washington approach “unfair, unilateral and irrational”.

According to research undertaken by the Financial Times, such US pressure on foreign banks has become so pervasive that they now occupy 12 of the top 20 places in a league table of post economic crisis penalties levied by US authorities. Just as strikingly, foreign banks now account for 27 per cent of the $96.4bn of the fines and settlements that US authorities have levied for a whole range of financial misdemeanours since 2008.

In the context of Cuba, there is a growing suspicion in Europe that as US corporations begin to take a greater interest in the future investment and trade opportunities on the island – the powerful US Chamber of Commerce led a small delegation from major US corporations to Havana last week – they are actively encouraging the US Administration to more strictly enforce US extraterritorial legislation in order to exclude European and other international corporations from investing in or trading with Cuba.

The sanctions issue, as far as the Caribbean is concerned, is also manifesting itself in other ways.

The approach of the OECD – the grouping that brings together the world’s richest and most developed nations – and which blacklists nations that have not passed the required Anti-money Laundering and Combating the Financing of Terrorism legislation, could soon halt many financial transactions across the whole Caribbean region.

Although the rest of the Caribbean is compliant with OECD rules, Guyana’s failure to do so, which is fundamentally a reflection of domestic politics, has resulted in its referral by the Caribbean Financial Action Task Force (CATF) to its parent body, the OECD Financial Action Task Force (FATF) in Paris and almost certain retaliation.

The CATF, an organisation of twenty-seven Caribbean Basin jurisdictions, said on May 29 that Guyana’s posed “a risk to the international financial system” as a result of its not meeting agreed timelines. It therefore called on members to implement counter measures to protect their financial systems “from the ongoing money laundering and terrorist financing risks emanating from the country” and formally referred Guyana to the FATF.

What is clear is that the measures that will follow – enhanced due diligence; enhanced or systematic reporting of financial transactions; refusal to permit the establishment of subsidiaries or branches or representative offices in Guyana; limiting business relationships or financial transactions with Guyana or persons in our country; and other measures – will rapidly impact on the whole region if the rest
of the Caribbean does not respond by isolating Guyana to protect their own financial systems and to remain in compliance.

The issue of sanctions at a Caribbean level is also complicated by the use of offshore financial services such as those offered by the BVI or Cayman to international investors. For instance,  restrictions imposed by the G7 on Russia following the annexation of Crimea has resulted in the freezing of some Russian-owned Caribbean-held assets and transactions, and the imposition of reporting requirements on Russian use of the UK’s dependent territories.

There are also a growing number of other forms of regulation or legislation, such as the US FATCA, which impose reporting requirements for tax purposes on the region in relation to accounts held by US citizens overseas. These too are becoming a challenge to Caribbean financial institutions and governments in terms of compliance.

Extraterritorial legislation, sanctions and their deployment are set to become more contentious.

For most people it is acceptable in a globalised economy to control and regulate financial flows, halt criminality and enhance tax revenues so that states can fund their social commitments. However, measures such as those relating to Cuba, where sanctions have become a means of protecting economic self-interest or political objectives, are not.

David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org