IT’S AN ARTICLE OF ECONOMIC FAITH. It holds when the United States economy is battling a chronic illness, Barbados, Jamaica, the Bahamas, Trinidad and Tobago and their neighbours can expect a near-death experience.
The fallout from the global financial meltdown that began in the US in 2008 supports that contention.
For ever since the Wall Street debacle and the national housing nightmare triggered the “great recession” that began in 2007-2008, Caribbean states have been reeling from anaemic economic growth, bulging fiscal deficits and a mountain of debt.
But if economic turbulence in the US spawns financial calamity in the Caribbean, the reverse should be true, meaning a return to prosperity in America should herald a new dawn in the region, one in which a strong American economic tide lifts floundering boats in the archipelago of island nations and coastal states of the Caribbean.
But that’s not happening.
Last Tuesday night when US President Barack Obama delivered an eloquent and comprehensive State of the Union report to a joint session of the Congress, his upbeat tone about the country’s falling unemployment rate, its rising economic growth rate, rebirth of manufacturing, and a shrinking fiscal deficit, US Vice President Joseph Biden and the Democrats in the House of Representatives and the Senate were energetic cheerleaders.
That should have been good news for the tourism-dependent Caribbean destinations in the Caribbean which are being starved of foreign direct investment.
But that wasn’t the case, largely because there isn’t any strong evidence that the Caribbean and Latin America are reaping any significant benefits from the bright US picture. At least not yet.
Instead, all signs are pointing to economic trouble in Trinidad and Tobago, continued tough days in Jamaica, which is going through a stringent austerity plan with the International Monetary Fund; Barbados’ economic troubles mount; and The Bahamas is in a state of decline.
Small wonder that a major Canadian newspaper told its readers a few days ago that even the dramatic fall in global oil prices wasn’t of much help to the Caribbean.
“The recent downturn in energy prices is yet another blow to the broader [Caribbean] region,” stated Tim Kiladze, an analyst for the Globe & Mail.
“The unrelenting slide in energy prices has thrown Trinidad and Tobago into economic turmoil,” Kiladze wrote.
It’s against this unnerving background that Biden meets today with Caribbean leaders in Washington. At first glance, the session could easily be written off as being of the little consequence.
After all, Obama and Biden have been in control of the executive branch of the US government for six years, a time when Washington did little to help the countries weather the economic storm that hit them.
But it would be a serious mistake to dismiss the talks as nothing more than a photo opportunity designed to show the world that the Obama White House is paying attention to the declining economic fortunes of its neighbours.
For as St Lucian Clitus Springer, the Organisation of American States’ top energy expert, told BARBADOS BUSINESS AUTHORITY recently, any summit involving an American vice president and the Caribbean’s prime ministers and presidents should be considered important.
What a pity the Obama administration didn’t begin its pivot to the Caribbean and the rest of the Western Hemisphere much earlier. Had the White House extended a firm financial and technical helping hand two years ago the Caribbean would be well on its way to better days.
But all isn’t lost because as the wise ones in our midst say, “better late than never”.
When the officials sit around the summit table they should discuss a carefully prepared energy plan that contains clear objectives and timetables on which all sides can agree and implement.
In his State of the Union address, Obama spoke about the importance of tackling climate change at home. A somewhat similar message should be delivered to Biden by the Caribbean.
The countries of the area should lay out a blueprint for the financing and implementation of projects designed to help countries adapt to climate change and to mitigate the damage caused by acts of nature that routinely wreak havoc across the area.
Rebuilding after floods, storms, hurricanes and rising sea levels linked to climate change is costly and retards economic progress and social development.
Next, Washington should recognise that CARICOM and the Dominican Republic need its support if they are to “accelerate” the pace of the switch from the heavy use of fossil fuels to renewable energy.
For example, the Caribbean must expand its use of solar energy by introducing some of the latest sophisticated technology that allows the area to feed solar power into its national grids.
The benefit is clear: it would reduce the need to import so much foreign oil that currently runs into more than a billion dollars. Generating power from wind is another area in which the US can help by providing technical advice, equipment and investment.
A combination of greater use of wind and solar energy can save many states valuable foreign exchange. With Venezuela’s PetroCaribe initiative dying on the vine as the South American country’s economic woes mount, CARICOM member states with the exception of The Bahamas, Barbados and Trinidad and Tobago, which sidestepped the programme, must now look for a better energy deal. PetroCaribe is going to leave them with piles of debt that must be repaid.
We trust that the summit isn’t seen by Washington as simply a chance to bolster the administration’s foreign policy image in the Western Hemisphere in the run up to the Summit of the Americas in Panama in a few months’ time. It must produce tangible results.
What the countries don’t need is a useless photo opportunity.
