(Economic and Social Development), Commonwealth Secretariat

Feature Address
Building the Resilience of Small States: A Strategic Vision
for the Caribbean
Deodat Maharaj, Deputy Secretary-General (Economic
and Social Development), Commonwealth Secretariat
Port of Spain, Trinidad and Tobago, 5 to 7 May 2015
Honourable Prime Ministers, Honourable Ministers,
Excellencies, Distinguished Ladies and Gentlemen and
Members of the Media.
A pleasant good afternoon. It gives me great pleasure to be
present at this forum today and to be able to have this
conversation with you on this splendid Port of Spain
afternoon.
I wish to thank and congratulate the Government of
Trinidad and Tobago, the University of the West Indies and
the United Nations family in Trinidad and Tobago and other
partners for hosting this much needed Forum and we in the
Commonwealth are happy to be involved as well. I am
especially happy to be here in the land of steelband,
calypso and chutney, the land of the hummingbird, Minshall
and Naipaul.
This is the land of the great West Indian thinkers CLR
James, Lloyd Best, Dr Eric Williams and the quintessential
Caribbean man, William Demas. It is also my land and
though I will not even dare contemplate being considered
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in the same category of these giants, I can certainly state
that like so many of you, my love for this region of ours is
no less.
I am grateful for the chance to share some thoughts on how
we can possibly think a bit differently about the region and
perhaps to suggest some ideas on the Caribbean we want by
2050. In terms of the session, I will speak for about 20
minutes followed by Dr. Moore and we will leave about one
hour for what I hope will be a nice interactive dialogue. I
am pleased to also recognise the consultancy team for this
Caribbean Vision 2050 project who are:
•Dr Winston Moore, a national of Barbados and senior
lecturer in Economics at UWI Cavehill who specializes in
economic modelling;
•Sylvia Charles from Dominica is a consultant with expertise
in economic development issues and she worked on
Grenada’s Strategic Plan and currently she is President of
the Women of the Americas ;
•Ryan Peterson from Aruba is a professor in innovation
economics at the University of Aruba;
•Christine Clarke a national of Jamaica is a lecturer in
Economics at UWI Mona;
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• Marsha Atherley-Ikechi from Barbados works in the area of
environmental engineering and utility regulation, and our
other energy consultant who could not be present today is
Tom Rogers who is a Barbadian resident and a lecturer in
energy at UWI Cavehill;
•Anthony Clayton resident of Jamaica is the Alcan Professor
of sustainable development at UWI Mona and
•Eleanor Joseph, a national of Saint Lucia, is a youth
worker and community activist.
The work has been led by Denny Lewis Bynoe who Heads
our Small States team at the Commonwealth, a national of
Barbados. As you can see, we have a team of consultants
who will respond to some of the issues you will raise (A very
Caribbean Team), I daresay, the gender balance is right.
Similarly, to address the challenges, we need a collective
Caribbean approach.
Perhaps it will be useful to situate our discussions in an
appropriate development context and it is best to start by
noting that economic growth in the Caribbean has been
slower than other regions. Since 2000, while the real per
capita growth rates in developing countries averaged
around 4.31 percent per annum, the comparable figure for
CARICOM was just around 1.9 percent.
And as I stand before you today, seismic shifts are also
taking place in the global development landscape. We are
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seeing the emergence of mega regional trading blocs such
as the transatlantic and trans pacific trading partnerships.
This will exclude 160 countries representing an estimated
80% of the world’s population.
Our concern in the Commonwealth is that in this
architecture, where is the place for the small islands and
countries of the Caribbean- Barbados; Grenada; St Kitts and
Nevis; St Vincent and the Grenadines; St Lucia; Dominica;
and yes, Trinidad and Tobago? Quite simply, the answer is,
there may not be a place.
Let us look at the trade data for a moment. For this region,
trends in trade show that its share of global trade has
decreased from approximately 0.24% or just one quarter of
one percent in 1990 to 0.16% in 2013. If we look at the
CARICOM region excluding the oil and gas producer Trinidad
and Tobago, the mere fraction becomes even smaller if this
is possible to imagine.
Without Trinidad and Tobago, the region accounted for
0.17% of World Trade in 1990, which has since decreased to
0.08% in 2013.
When you look at the debt data, the news quite frankly as
presented yesterday is discouraging. The natural beauty of
the region masks the fact that it is one of the most heavily
indebted regions on the planet.
Nine of our member countries have gross debt to GDP ratios
greater than 75% with 3 countries having public debt levels
greater than 100%. This is unsustainable and development
cannot take place with these crippling debt burdens with
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loan financing and lack of access to concessional terms only
exacerbating this troublesome reality.
For good measure, I will add our susceptibility to natural
disasters and economic shocks and we all know what
happened with the tourism sector immediately after 9/11.
We also know that Hurricane Ivan damaged 70% of the
homes in Grenada, destroyed 30% of them; and the total
damages stood at USD1 billion or equivalent to two years
GDP!
So in essence we can move from high income to middle
income to zero income in a few hours.
Just briefly moving to citizen security with a quick
overview of the data. In terms of crime and violence we are
not doing to well as a region with some of our countries
having amongst the highest per capita homicides rate in the
world. The Bahamas stands at 29.8 per 100,000 citizens and
Jamaica, 39.3 per 100,000 nationals.
Just for your information, the homicide rate for the UK is 1
per 100,000. So the rate in Jamaica, for example, is about
forty times higher than in the UK, while the rate in
Barbados – a relatively low-crime society by Caribbean
standards – is still over seven times higher than in the UK.
Based on current trends, the modelling exercise we
commissioned has indicated that it is possible by 2050, that
the smaller states of the Eastern Caribbean can have rates
of homicide similar to those currently being reported and
experienced in Jamaica. If we do not make progress in
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tackling crime, there will be countries in our region that
could be amongst the most violent on this earth by 2050.
As Caribbean people, we always think about bequeathing a
legacy to our children and the next generation, our
treasured assets. That is just our way. My view is that with
60% of the population considered as young people, they are
not the future, but the present.
Let us for the moment take an unscientific approach and I
seek the forgiveness of Dr. Watson in this endeavour as we
look at one variable to get a flavour of our legacy to the
prized assets, the young people of the region.
Let us see how they are doing in terms of employment
where youth are at a much higher risk of being out of work
with teenagers having the highest unemployment rates. In
Barbados, individuals aged 15 to 19 years old face an
unemployment rate 5 times higher than adults with their
unemployment rate at 47% compared to 14% for those aged
20-44 years old. In St. Lucia, 40% of the unemployed were
younger than 25 years old in 2011.
If we only look at the initial data I presented and do not
consider some advancements made, a reasonable person
may conclude, that we in the Caribbean are in a race to the
bottom… and we are winning.
However, there are some positive signs as well.
Having observed and been involved in the development of
the region, I am pleased to note the advances that we have
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achieved. We need to build on the progress made to launch
the next steps towards a strengthened vision for the region
of the Caribbean we want by 2050.
Our experience has shown that we do indeed have a limited
ability to withstand or bounce back from adverse shocks as
we have done in the past be these external shocks or
natural disasters. The Commonwealth’s research on
assessing vulnerability and building resilience highlights key
gaps in economic, social and environmental management
across the region. Governance has also been identified as
an important component to resilience building strategies
and for this reason the Commonwealth is focusing its
current efforts on better understanding and supporting the
development of enhanced governance systems across its
small states members starting with the Caribbean.
We are also making progress in improving the efficiency of
our economy. In the latest report by the World Bank’s
“Doing Business 2015: Going beyond Efficiency”, 50 percent
of economies in the Caribbean implemented at least one
reform making it easier for local entrepreneurs to do
business—12 reforms in total, a historical high for the
region. Though one can also note that in the same report
the highest ranked country was Jamaica which stood at 58.
Most of our countries trailed behind whereas Mauritius had
a ranking of 28. They are getting something right.
The region is one with the youngest population in the
Commonwealth sphere. I was in Antigua not too long ago
addressing the region’s Youth Ministers Meeting, recognising
our young people as an asset to the region. The Caribbean
region is already producing outstanding young people, one
of whom I had the privilege of meeting at a recent
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Commonwealth Youth Ministers Meeting in Antigua and
Barbuda. Due to her entrepreneurial achievement, Nolana
Lynch from Trinidad and Tobago was awarded the Caribbean
region winner of the 2015 Commonwealth Youth Awards.
Compared to other regions, we have relatively matured
regional institutions, we generally think about ourselves as
West Indians and Caribbean people and have a generally
good track record on collaboration as a region with cricket
being a good example of how we once collectively
expressed ourselves as a people. It was also good to see the
result of the just concluded Kensington contest where we
prevailed and tied the test series. Sir Hillary and Professor
Sankat, our University of the West Indies, my Alma mater is
another example.
Notwithstanding these efforts, we still face many
challenges as noted earlier, and we need to act to ensure
that we have continued and sustained developmental
progress.
There is an imperative for change if the
Caribbean is to fulfil its development aspirations or indeed
survive as a viable entity.
Based on what we have heard since yesterday, I am
convinced that the development model for the region
cannot be based on a business as usual scenario if we are to
deliver on our development goals. It is said that one
definition of madness is doing the same thing over and over
expecting a different result.
The challenges we face have serious ramifications for the
future development and growth trajectories of the
countries within the region and must be addressed.
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Based on the modelling work we have done, the projections
show that inaction or if left to business as usual, countries
in the region will have debt to GDP ratios above 100
percent and in some cases, exceeding 200 percent.
Interest expenditure is likely to become a major drain on
public finances in the future, further reducing funds
available for development. Therefore, we have to move
away from decision-making based on expedience and
convenience and where political imperatives trump
everything else.
In pursuit of an inclusive and sustainable development for
our Caribbean member states, I propose that we aspire
towards a new Vision for the Caribbean by 2050, a strategic
framework that recognises the Caribbean as peaceful,
prosperous and inclusive, its people creative, enterprising
and resilient, fully engaged in, and benefiting from,
development within the framework of effective institutions
that guarantee human rights and social justice.
Possible elements can include:
1.Goal 1 - A creative and enterprising economy in which
innovation is the driver – aimed at supporting the region to
effect a transition from low value added economic
activities to ones that are driven by local creativity and
enterprise, including the public sector. Business has to be
the engine of growth and we must link ourselves to Global
Value Chains.
2.Goal 2, youth fully integrated into national development –
recognising our young people are valuable and creative
assets, working with them as development partners towards
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Vision 2050 and with every household having a university
graduate by 2050;
3.Goal 3, with a stable society where people are safe,
secure and prosperous. A goal that is premised on the
development of networks, institutional links, community
based interventions and monitoring, and knowledge
sharing. We need to re-energise our regional approach to
the social challenges that are faced in the Caribbean;
4.Goal 4, environmental sustainability mainstreamed in the
development process – an important element considering
that the natural environment including The Blue Economy is
a major element of the attractiveness of the Caribbean;
5.Goal 5 - A region built on clean, resilient energy systems
that make use of plentiful, local renewable resources and
are capable of providing stable supplies of energy to all
sectors of society – aimed at promoting energy security and
resilience, minimizing the region’s carbon footprints.
Indeed, we must be ambitious, a Caribbean that is powered
by renewable energy by 2050.
I am sure there are others related to Governance and
institutions both at the national and regional levels but we
wanted to look at a few as a basis to initiate a conversation
and to support a long-term vision for the Caribbean we
want by the middle of the century.
When taken together, these elements could address some
of the major challenges that are common to the region and
that require regional efforts to solve.
The framework
offers strategies that will seek to: balance the concerns of
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survivability today and sustainability tomorrow; recapture
the potential of the young people across the Caribbean;
renew and re-energise the focus on the need to secure the
energy requirements of the region; and, the need for a
truly transformational system of governance across the
region whilst strengthening systems that safeguard against
corruption and ineffectiveness.
The consultancy team will have the chance to speak about
their work so I will like to focus on just a few policy options
starting with The Blue Economy.
I was in Samoa last September attending the SIDS Global
Conference and we in the Commonwealth fully support the
SAMOA Pathways and the call made for great recognition of
the vulnerabilities of small states, and support for SIDS in
building their resilience. However, after listening to all the
presentations and thinking about the notion of SIDS, I
thought it might be useful to look at some data that can
help us think through this issue and perhaps turn the
standard assumption on its head.
Let us walk through some data for a moment.
As we know, Barbados has a land area of 430 sq. kms but
we may not know that it has an ocean space of 200,000 sq.
kms; St Lucia has a land area of 616 sq. kms but a maritime
zone of 15,260 sq. kms; Grenada’s land area is 344 square
kms and an ocean space of 27,500 square kms; When you
look at Trinidad and Tobago, it has a land area of 5,198 sq.
kms and an ocean space of 79,000 square kms.
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In the case of the Bahamas, its land space is 13,900 square
kms and an ocean space of 684,000 sq. kms. We are
currently supporting Bahamas to extend their continental
shelf which if successful will result in an additional 200,000
sq. km of ocean space giving it a total maritime zone
covering approximately 884,000 sq. kms compared to its
land space of 13,900 square kilometres.
To my mind, we need to get out of the prism that imprisons
us into thinking that we are small island states and
sometimes miss, what is most obvious. We could also think
that we are medium or big ocean states as is the case of
The Bahamas. It is in this context, we in the
Commonwealth will like to propose an emphasis on The
“Blue Economy” – embracing the concept of an oceanbased economy as a mechanism to realise sustainable
growth. The premise being that the oceans can play a
pivotal role in tackling the longer-term socio-economic and
environmental challenges.
The Blue Economy is potentially of major value to all
Caribbean countries – the opportunity to create more value
out of existing and new resource streams cannot be
overlooked. This must include both existing benefits and
uses, such as fisheries and shipping. Among the
opportunities identified as having potential in the Blue
Economy are marine fish farming, renewable energy,
seabed minerals and marine biotechnology.
The Commonwealth Secretariat has been working with a
number of countries in the region in this regard and will
continue to do so. National Ocean Policies have been
prepared for several countries including St Kitts and Nevis,
St Vincent and the Grenadines and The Bahamas.
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A few countries have recognised the potential of the Blue
Economy and are moving ahead at a fast pace. The recently
elected Government in Mauritius has established a Ministry
dedicated to the Oceans. Mauritius’ neighbour, Seychelles
just recently established a new Ministry, The Ministry of
Finance, Trade and the Blue Economy. We need to act
quickly before, yet another opportunity is lost.
Secondly, we will like to suggest a stronger focus on the
diaspora from two standpoints, firstly that of the diasporic
economy on which some studies have already been done
and secondly from the perspective of remittances. On
remittances, when we think about the issue, we do not
ordinarily reflect on the cost of remittances. We have been
advocating and Turkey as the President of the G20 on 14th
April at the Commonwealth La Francophonie/G20
Development Dialogue made a renewed commitment to
bring down the cost of remittances from 10% to 5%.
This may seem nominal or unimportant. However, in 2014
the region received an estimated $5 billion in remittances.
Assuming the figure is constant for the next ten years, a
reduction in the cost from 10% to 5% could result in an
additional $2.5 billion injected into Caribbean economies.
For this to happen, sustained advocacy is required in
ensuring that this G20 commitment is met. This is another
concrete and specific area where additional financing can
be injected into economies of the region without resorting
to a cap-in-hand policy.
Again on the issue of remittances and this is linked to the
diasporic economy, when you look at the data for
Bangladesh which received an estimated $15 billion in
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remittances in 2014, 40% of those resources went into
investment and not consumption. We need to reflect on
this and imagine, or reimagine how our remittances can be
structured accordingly and more effectively leverage our
diaspora as investors and networks. There are some good
signs in this area with Antigua and Barbuda recently
establishing a Diaspora village.
Again on the theme of innovative financing, we will like to
table two specific initiatives on which we are working that
can benefit the Caribbean. The first is a Small States Trade
Financing Facility to help our entrepreneurs access trade
financing through a system of guarantees. We are also
aware that there is indeed funding for Climate Finance.
However, oftentimes our jurisdictions do not have the
capacities to unlock the financing. Consequently, we are
tabling a proposal to establish a Climate Finance Skills Hub
which is intended to help countries unlock Climate Finance
in the Caribbean, Pacific and Africa. Work is underway on
these two initiatives and support will be required from
member states to get both approved at our forthcoming
Heads of Government meeting in Malta in November 2015.
We also recognise the need for financing to deal with
shocks.
On energy, less than five percent of energy generated is
currently renewable, and less than 20 percent of the
private sector is energy efficient in the region. This has to
change and we need to have a towering vision to be 100%
reliant on renewables by 2050. There is no other option.
For young people, entrepreneurship is a key driver of
human capital, unleashing the economic potential of youth
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and promoting sustainable growth and development. 18
percent of new and emerging businesses are owned by
young people in Latin America and the Caribbean—some
distance behind Africa with 30 percent youth-owned
businesses. The consultancy team will speak to this issue
during the dialogue.
The evidence collated by the team indicate strong
prospects for the region – with the appropriate policy
intervention, and commitment, we can have a better
trajectory. However, only with the right institutional
arrangements and leadership. The time for the politics of
expedience and convenience has come to an end. Too much
is at stake.
To make this a reality, our efforts leading to 2050 must be
underpinned by enhanced levels of support from the
international community. For small states, international
support is required in: accessing resources, on favourable
terms to fund critical infrastructure projects; and filling
capacity gaps that hamper their ability to cope with
emerging economic, social and environmental issues.
This is where organisations like the Commonwealth can play
a role in global advocacy. However, this should not take
away from the fact that this is our region and we have to
accept both responsibility and ownership in addressing the
challenges and finding solutions.
I therefore hope that we will use this session to deliberate
on these issues, and to identify concrete next steps towards
implementing targeted solutions. As a Commonwealth, we
are committed to supporting the region in the planning for,
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and realising a Vision for the Caribbean we want by 2050
built on resilience.
I thank you!!!
Allow me to welcome Dr Moore to make his presentation.
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