The Organisation of the Eastern Caribbean States (OECS) – comprising the Windward and Leeward Islands – was formed in 1981 to promote functional co-operation among its members and contribute to their sustainable development.
The member states continue to confront special developmental challenges due to their inherent vulnerability as small island developing states e.g. natural disasters, high dependence on international trade, high cost of public service provision.
These challenges were compounded in the wake of the global economic and financial crisis of the last quarter of 2008. Over the past twenty years the grouping’s economic growth rate averaged between 1 and 3 %.
Also extremely worrying are the high levels of youth unemployment (app 38%) and the palpable anger which is now coming from members of that group. The seeming hopelessness which is coming from this section of the population is not a good sign for the way ahead.
The above challenges also serve to highlight a very fundamental and worrisome experience in the economic and social lives of the OECS: the inability of our people and countries, both individually and collectively to reach our full potential.
Whilst the OECS states have made substantial progress since independence and have become in many ways mature liberal democracies, there hasn’t been a profound transformation of the economies or advancement in the process of social development throughout the communities.
There is also a growing cynicism about the political arrangements and style of politics. This clearly is a direct result of the inability at this juncture to transform the economies and to deliver on all the promises made over the years to the people of this region.
A fundamental and encompassing policy that was envisioned to treat with the various challenges and overall development of the OECS is the orthodox approach to integration. However, although integration is necessary it is not a sufficient condition for attaining our socio-economic objectives.
Since integration has not delivered fully on the economic front the current integration model and process, as well as its implementation, must in some way be flawed.
In the region there are two (2) integration arrangements operating side by side with common membership.
The CARICOM arrangement encompasses all countries while the OECS is a subset of the wider arrangement.
The OECS is however a much deeper arrangement which has been upgraded to be an economic union.
It can be argued that the success of the OECS is a necessary though not a sufficient condition for the success of CARICOM for two (2) reasons. Firstly, if the OECS with its much closer and deeper arrangements, which include a common currency; common judiciary; common procurement policy for pharmaceuticals cannot succeed, then the chances for CARICOM doing so are that much less.
Secondly, a much more closely coordinated and economically advanced OECS with substantially increased per capita incomes, removes the stigma of being, “poor relations” and provides more economic opportunities for firms and citizens from the More Developed Countries within Caricom (MDCs).
In the circumstances, the major question for the OECS is how to address this major issue of self-sustaining development which has to do primarily with achieving high levels of human development in a measured and constructive manner.
The answer lies in the implementing, as a matter of urgency, the Revised Treaty of Basseterre which was ratified on 21st January 2011.
This treaty provides the political, economic and administrative framework and architecture for executing the substantial adjustment required to achieve the socioeconomic development of the economies of the member states.
The economic union provides the political space and the economic environment to treat with one of the fundamental structural issues that has dogged the OECS countries throughout their economic history and marred their relations with the other countries of the region, that is, critical mass.
This has manifested itself in the high cost of government and the extremely small size of domestic markets.
These binding constraints on both the public and private sectors have seriously affected the growth potential of each country.
The contrast in possible outcomes can be seen in two (2) arrangements. The banana industry in the Windward Islands was established on the basis of the production capacity in all four (4) islands which made the shipping and marketing more cost effective.
Also the sharing of central banking arrangements has produced an effective instrument of monetary policy.
The treaty explicitly sets out the framework of a state by identifying the essential elements of such an entity, that is, an Executive, a Legislature and a Judiciary.
The real game changer is the Legislature, which is selected from the elected members of the National
Assemblies and, which in the first instance, acts as a filter for legislation in restricted areas to be agreed by the Executive.
The legislature secures the participation of two (2) critical actors in the integration process, namely opposition parties and the public.
In short, integration will now become an open subject at the national and regional levels and should therefore gain more support.
The new arrangements will also establish in effect a dual system of government and governance. At the regional level, there will be supranational and functional cooperation structures while at the national level there will be the national government and local or community arrangements.
One of the critical factors in creating the governance arrangements is that there is effective political responsibility for national/regional matters and that there are political incentives to ensure that the authorities are fully engaged.
The result of these arrangements/considerations would be the creation of more representative, but efficient and effective processes, which would lower the cost and increase the productivity of the state.
As espoused by the revised treaty a single financial and economic space would be created. Having established a single space, the combined goals of the space must be ascertained by public discussion and consensus, hence the importance of the regional legislature.
The proper functioning of the legislature requires determining a balanced allocation of time spent on regional and national matters, as this has been one of the main impediments to the advancement and success of integration in the region.
The socio-economic transformation will require a rate of growth of between five (5) and seven (7) percent over a period of at least ten years to double per capita incomes in the OECS.
This rate of growth will be able to address the unemployment and poverty levels and maintain and improve the human development indices.
This is the moment for the OECS countries to mould into a State Nation. This is “a grouping of separate sovereign states that pool their sovereignty and resources and coordinate their policies as an instrument for collective decision making and collective action to achieve the goals of socioeconomic development”.
This would give them the political, technical and administrative capacity to collectively address the threats to their sovereignty and future prospects. By consolidating their independence, sovereignty, and nationhood they move dynamically and organically to a more perfect union among themselves.
It is time for the establishment of the Union of Eastern Caribbean States.