EU support for region continues

THE recent announcement by European Union officials of an investment package for the Caribbean is good news all around.

Not only is the proposal a welcome piece of information by recipient countries, which are witnessing a slowdown in capital inflows, but the announcement of the Caribbean Investment Facility (CIF) also conveys the position that there remains support within the European Union for the Caribbean contrary to views in some quarters that Europe is showing a lack of interest in its former colonies in the region.

In launching the CIF, the EU officials said the facility will mobilise additional financing from European and Caribbean development institutions to support investment projects in this region.

The aim is to boost the potential for economic growth and to reduce poverty. The assistance could not have a come at a better time where the region is concerned. Still battling a global economic crisis, the islands, with the exception of Trinidad and Tobago, have witnessed a slump in investment flows on top of declining remittances over the past three to four years, as well as slowing economic growth. Investments are going to other areas, notably Asia, Africa and Latin America. This represents a big setback to the Caribbean since these islands require investments to finance projects in such areas as health, education, housing, highway improvements and other areas of the economy. Investments are also needed to create new business enterprises, expand existing ones and to provide a source of funding to small and medium sized enterprises that may lack the ability to secure funding on their own.  

In recent times, the impression has been given that Europe is turning its back on this region. Some believe that Europe has to get on with its own business of reviving faltering economies in the Union and to pursue agreements with some of the other major developed and developing countries. Both the Caribbean and Europe have had a strong relationship and for many years long after the islands ceased being colonies. It was intensified with the coming into being of the Lomé Convention which started in the mid 1970s and was renewed every five years. That facility offered the Caribbean (along with some other states in Asia and the Pacific) market access for tropical products, as well as financial assistance for projects across  the ACP group of countries. However, a changing global economic environment that demands reciprocity and trade liberalisation has altered that relationship, with trade preferences for sugar, bananas, rice and other commodities no longer guaranteeing  access as was the case previously. Some commentators, recognising that Europe does have its own fair share of problems, fear the continent is unable to do what was done previously.

The view therefore is that the Caribbean has to grow up in the changing world environment since the days of ‘sheltering’ the former European colonies are long past. However, at the launch of the CIF, EU officials said they remained committed to the Caribbean.

Last month the EU and the Caribbean Development Bank signed two agreements totalling about Bds$18 million to support CARICOM countries in their continued progress towards implementation of the EPA and the CARICOM Single Market and Economy (CSME). A statement on those signings revealed that in the case of the CSME, the aim is to provide capacity building to CARICOM member states in implementing the CSME at the national level. This seems to be a vote of confidence in the region for at least some time to come.