A recent article by Guyana-born diplomat, Sir Ronald Sanders should attract the attention of all governments, policymakers, opposition parties and interest groups in the Caribbean.
This masterpiece from Sir Ron paints a scary picture of what confronts virtually all of the islands in the region in the face of a worldwide recession that is showing no signs of let up in the near future.
The situation is compounded by recent statistics coming out of
Britain itself, which shows that the British economy is not expected to show any signs of growth and recovery in the next two years. The United States itself is in limbo with its own economy.
The Sir Ronald commentary, which is included in this week’s issue of THE NEW TODAY is forecasting that many Caribbean islands might soon be forced to follow Jamaica and seek rescue from the International Monetary Fund (IMF) in light of their inability to service the ever increasing National debts.
The Portia Simpson-Miller-led People’s National Party (PNP) government in Kingston has not been able to manage Jamaica’s worsening debt situation and is left with no other choice but to enter an IMF-administered programme that many Jamaicans are familiar with given the turbulences in that country in the 70’s and 80’s.
As Sir Ron concluded, many of the other islands in the Caribbean are on the brink and very soon some of them which are already heavily indebted to foreign creditors will be forced to bury national pride and seek bail-out packages from the fund.
The medicine that the IMF usually prescribes for one country might be virtually the same for all of the others depending on their own particular situation and circumstances.
The harsh reality facing the Simpson-Miller government is that it can expect nothing less than a package of measures that will hit at many of the country’s social programmes to help cushion the poverty of the already poor in the society.
The prospects will also not be good for the private sector as the government will no longer be generous in terms of the kinds of incentive packages to be offered to foreign investors that are badly needed to inject new monies into the economy.
The state-run bodies will most likely be told in no uncertain manner that government subsidies will become a thing of the past and the private sector will have to honour their financial commitments to the State.
The downside is that Jamaica has added debt at the rate of $299 million per day or $12.5 million per hour, or $207,000 per minute or, finally, almost $3,461 per second.
Another article, which puts into context the harsh reality of the complex situation facing the economies of many of the small and vulnerable states in the region, is one from our own Dr. Brian Francis who is a Senior Lecturer in Economics at the Cave Hill Campus in Barbados of the University of the West Indies.
Dr. Francis is contending and quite rightly so that the move to globalisation by the major powers in the world has resulted in the economies of the small vulnerable States becoming intertwined and as the saying goes when the U.S makes a little sneeze then our part of the world will soon catch the cold.
In one of his most recent articles, Dr. Francis said: “Government’s intervention aside, stimulating economic growth and development during a global recession can only result from increasing consumer and investor confidence in the local economy. Failure in that regard can only redound to more and more economic turmoil. The European experience is a good living example of this. From all available reports, the growth prospects for Europe as a whole in 2013 is extremely weak.
“Given all of the developments taking place in many of the economies, consumer and investor confidence are low. It is for that reason that many businesses continue to stockpile inventories to the staggering level of $475 billion in 2012, according to Bloomberg. Clearly, then, if domestic economic activity in Europe declines in an environment that is not being assisted by external factors, where would economic growth come from?
“We in Barbados and the rest of the Caribbean should look toward Europe, learn from those countries’ experiences, and be determined to put mechanisms in place to avoid a similar pitfall.
“In the absence of any real global economic recovery on the horizon, stimulus for growth and development in Barbados can only come from the domestic side. And that is the simple reality facing us as a people and nation”.
The above is quite telling for us as a region and should not be taken lightly.
Most of the islands in the Caribbean are grappling with an acute debt situation.
A lot of the debts are of a commercial nature and so the question of debt forgiveness from a foreign country is out of the question.
Can these countries continue to borrow and most importantly from whom with the hope of stimulating their already battered economies with the hope of trying to turn things around?
If this is not possible then the only available solution is to get some kind of a fairy tale godfather to give them a more than generous financial package to help wipe out their respective debts.
Is this likely? If not and rather sooner than later – it will be off to the IMF for a package with some of the same bitter medicine that Jamaicans will soon be experiencing in order to try and help cure the badly wounded patient.
Today is Jamaica’s turn and tomorrow it can be any of the other sister countries that help to make up the Caribbean Community and Common Market in light of their prevailing circumstances.
This is why the Sir Ronald Sanders article is a must read for all of the peoples in the Caribbean who are concerned with happenings in their respective countries.