Mr. Mark Kerr-Jarrett, President of the Montego Bay Chamber of Commerce and Industry,
Other Members of the Executive,
Distinguished Guests,
Members of the Chamber,
Ladies and Gentlemen of the Media,
Ladies and Gentlemen.
First of all I would like to thank you for the honour that you have extended to me in my capacity as the Secretary General of the Caribbean Community to address you this evening. I would also like to thank you for the excellent hospitality which you have provided during my visit.
Mr. President of the Chamber, in your letter inviting me to this event you emphasised the importance of the CARICOM Single Market and Economy especially in light of the changes which will be heralded by the simultaneous external negotiations in which the region is currently involved. To address you on this issue you claimed that there was no-one better but I believe the real reason is that someone has let out my secret of how I feel about Montego Bay. Please do not let that other place hear about this!
However, if truth be told it is not only my love for Montego Bay that moved me to accept your invitation, though the timing was somewhat difficult. It is also the fact that one must never forget the role that Montego Bay has played in Caribbean integration and development. Indeed, it shares with Chaguaramas in Trinidad and Tobago, the historical honour of being the cradle of Caribbean regionalism. For it was here in 1947 that Caribbean Leaders truly embarked on the long road which was eventually to lead to the signing of the Treaty establishing the Caribbean Community and Common Market (CARICOM) at Chaguaramas in 1973 and which has brought us to where we are today- namely on the verge of establishing Caribbean Community including a Single Market and Economy. In between of course we had the false start of that “F” word – Federation of course!!
It is therefore not surprising that in a space of three months yet another major dialogue, involving the private sector, is taking place in Montego Bay on the issues surrounding Caribbean integration and development. It will be recalled that the Private Sector-led Caribbean Transnational Conference which took place at this very hotel in April this year, called on CARICOM Governments to accelerate the process of implementation of the CSME.
The international context in which the CSME is being established, as you rightly pointed out in your letter Mr. Chairman, is one which includes efforts to create at the same time, a hemispheric Free Trade Area of the Americas by 2005, negotiations for a new economic partnership agreement with Europe as part of the African Caribbean and Pacific Group of States by 2008, and continuous negotiations in the World Trade Organisation. The results of these negotiations will certainly change the market conditions as well as the rules under which international trade will be conducted in the future decades.
You indicated in your letter a need to know what these changes will mean to the citizens of Montego Bay (and indeed Jamaica) and for the way which you do business. But Mr. President, this is a banquet and in the scheme of things, I have to get my priorities right. Therefore, I will strive not to be guilty of causing indigestion by painting too bleak a picture of the future. Instead I will offer some advice on how you can take advantage of the new vistas which are being opened through the CSME and through the external negotiations as well as how to steel yourself for the challenges presented.
Ladies and gentlemen, the CSME is an arrangement among the CARICOM states by which they create a single enlarged economic space through the removal of cross-border restrictions resulting in the free movement of goods, of services, of persons, of capital and technology. Of critical importance also, it confers the right on CARICOM nationals, to establish business in any part of the Community i.e. in any CARICOM Member State, and to be treated in the same manner as a national of that State.
A critical consequence for the private sector, of the creation of such an arrangement is, and I quote Ms Gail Mathurin, – a name with which I am sure you are familiar here in Jamaica – that:
“If we create a single economic space here in the region, then our companies can form crucial alliances which will allow them to deal with that greater level of competition, particularly in third markets, and by harmonizing a lot of our economic policies, we then strengthen our investment regime, which in turn will help in competing in third markets, whether it be in goods or services.”
I could not have put it better myself though perhaps I may have said that “our companies must….” rather than “can form critical alliances”
Mr. Chairman, why are we so determined to form this single enlarged economic space? Let me illustrate. Jamaica by world standards is a small country in geographic size as well as in population. Yet until last week it was the largest CARICOM country in terms of population. Haiti has now made it the second largest. All the other CARICOM countries therefore are smaller than Jamaica. Some can even be considered micro. All have limited markets and resources. The intention of the CSME is that the combining of the markets and resources across the Region would make feasible a number of new production advantages and possibilities utilizing inputs, skills, capital, technology in and from other Member States; and facilitate the organization of joint production of goods and services involving enterprises in more than one Member State.
While these grand claims are being made in support of the establishment of the CSME, it would not be unreasonable if serious businessmen as you were to ask questions such as – Is the CSME likely to create more opportunities which would not otherwise be possible for producers, manufacturers, service providers and consumers, skilled persons, entrepreneurs and financiers? Is the CSME facilitating more production and more competitive production at that? Is the CSME increasing or safeguarding profits and incomes? Similarly it would not be unreasonable to expect that you, the private sector would buy into the process only if the answers to these and other similar questions are positive for the most part.
Mr. Chairman, Ladies and Gentlemen, there is on the immediate horizon, a splendid opportunity to test the possibilities for collaboration of the type which the CSME would provide. In 2007, our Region is scheduled to host the Cricket World Cup. Already there is a strong hint from non-traditional cricketing countries in the hemisphere that they are interested in being involved in the venture as their entrepreneurs have recognised the money spinning potential of this event. This possibility is indeed the reality although CARICOM countries are the only Test playing nations in this part of the world, because as you see the World Cup is awarded on a hemispheric basis and games are allocated on the basis of best possible economic returns. Given today's technology such games can profitably be held just about anywhere in the hemisphere and are certainly not limited to the traditional cricket test playing countries of the West Indies.
So therefore the challenge to you tonight is: how can you, the businessmen of the Region get together with your other Caribbean partners within the new Single Market and Economy, to provide on a regional basis, the services, equipment, facilities, accommodation, transportation and other requirements which the Organisers would need if we are to ensure that the Cricket World Cup truly comes to the West Indies. I can assure you that the West Indies Cricket Board and Windies World Cup (2007) Ltd, look forward with great interest to your response to the business opportunities which this event undoubtedly presents. This is but one example of the type of prospect which the Single Market and Economy brings.
But as your own Jimmy Moss-Solomon, a Grace Kennedy executive and now Private Sector advisor to the Regional Negotiating Machinery recently stated that the CARICOM Single Market and Economy though not a panacea is “an important practice match.” And as he so rightly stressed, “We are about to enter the world cup of international trade. The CSME is a dress rehearsal for relatively small domestic firms and industries before they begin to compete against large firms in the 34 -member FTAA.”
The CSME is therefore an instrument for grasping opportunities in the globalised world as well as a platform from which to launch the effective integration of our economies into the global economy as efficient and competitive players. For that purpose it also seeks through its industrial, agricultural and transport policies as set out in the new Treaty, a copy of which was just made available to the President, to provide the framework to achieve competitiveness in the productive sectors. It does so by setting out the key policies and related measures which should be introduced in Member States and at the Regional level.
As had been pointed out in the Caribbean Transnational Conference at this hotel, in April, the increase in trade flows, capital movement and movement of skilled persons resulting from the CSME would of course be made even more effective and profitable if there are improvements in transportation, information processing and communications. And here in Jamaica and in Montego Bay in particular, you would already have begun to see possible avenues for your own growing proficiency in the tourism, transportation and information services.
These service areas would better enable entrepreneurs and producers to look beyond national boundaries, locating or relocating critical parts of their operations to more advantageous locations in search for greater efficiencies and competitiveness. Herein lie opportunities for service providers in Montego Bay to consider other markets in Jamaica and the Region and included even extra-regionally.
Indeed during his contribution to the Budget Debate in the Jamaican Parliament earlier this year, the Prime Minister, Hon P.J. Patterson noted that some Jamaican companies were already beginning to establish a market presence in certain services industries within the Region. He stated, and I quote:
“This trickle, must grow into a flood. With a strong foothold in the CSME and with the experience gained thereby in exporting and market penetration, the Jamaican business community will be much better prepared to contend with competition from other producers within the FTAA, in any arrangement reached with Europe and in the global context, under the WTO.”
The integration movement has been both deepening and widening with the former being represented by the movement to a Single Market and Economy while the latter is represented by the entry of Haiti as a new member and of the Cayman Islands as an Associate Member (joining Anguilla, the BVI and TCI and with Bermuda actively considering its participation on the same basis.) The process has therefore opened significant market opportunities right on the doorsteps of Jamaica not only through the trade agreements entered into by CARICOM with Cuba and the Dominican Republic (in addition to those earlier established with Colombia and Venezuela), but also with the entry of Haiti as a Member of the Community joining Bahamas and Belize at the northern end of the integration movement. These arrangements together place Jamaica in a strategic position with its significant advantages in transportation and the preferred position it would enjoy in those markets to exploit the opportunities emerging from the integration process. The CSME would also serve to further enhance these opportunities and the place of Montego Bay as a major transportation hub and a dynamic business and tourism centre.
The CSME not only provides opportunities to be grasped but it is also a shield against the onslaught of the negative features of globalisation.
Mr. Chairman, Ladies and Gentlemen, we are sometimes tempted to believe that the changes in the global environment brought about by this phenomenon – globalisation – would have no impact on the way we conduct our businesses. I would like to give you a little example. It is bit of a joke. You know in Port of Spain we have these small vendors selling their little home made edibles on the street corners, particularly around the Queens Park Savannah, so in the night you can go liming and with your wife or girlfriend . A popular one of East Indian origin is called doubles. These two chaps were chatting. One of them telling the other that this globalisation thing don't bother him because he is not exporting and those big things. His friend insisted that he should watch out because he gathered that globalisation does not only affect big business and export business but even small domestic business. But his friend was not convinced.
About six months later he was passing by one night and saw his friend with his little table, flambeau, a box full of doubles and looking very worried. He asked what was wrong. He said “boy like this globalisation thing catch up with me. Nobody buying my doubles.” So his friend said ” where all the people?” He replied “look over there”. When his friend turned around and looked he saw three long lines. One going to KFC, one going to Mc Donald's and one going to Pizza Hut. His friend said, “I did warn you.” I wonder if we as a region have taken serious warning! We had better!
Perhaps one of the most influential ways in which CARICOM has sought to ensure that we have a secure place in the global economy has been to establish a single high powered Regional Negotiating Machinery to negotiate trade agreements on behalf of the entire Region in the international arena. That Machinery is currently headed by your own former Ambassador to Washington Dr Richard Bernal who succeeded the former Commonwealth Secretary General, Sir Shridath Ramphal and reports to the Prime Ministerial Sub-Committee on External Negotiations which is coincidentally headed by the Prime Minister of Jamaica. The objective of this Machinery is as much to ensure adequate protection of our sensitive industries as well as to win markets and opportunities for our new and dynamic enterprises. It is in all our interests that the Machinery succeeds in its objective and therefore it is all our responsibility to ensure that it is well supported and oiled.
Not withstanding all of the above, little will be achieved if our entrepreneurs -that is mainly you, the members of the Private Sector – do not recognize and take steps to ensure that your enterprises become more and more competitive. Never forget the well-known warning it is companies that compete not governments. The CSME does provide the framework and the opportunity for achieving the desired production and competitiveness levels, but the private sector has the responsibility to restructure to modernise, to ensure that there is strong and efficient management, to acquire new skills and to pay increased attention to research and development, all with a view to improving productivity and competitiveness. The days of reliance on preferences as the historical basis to all our economic structures are over and the search for niche markets must truly begin now.
Equally important is the necessity to recognise that labour is a key partner in the productive process and for achieving the objectives of improved competitiveness and enhanced productivity. It should therefore be treated as such.
Upgrading and restructuring, research and development, technology acquisition and human resource development are all costly and all require investment. Through the CSME more investment capital is likely to be attracted from outside as well as from within. Equally, the institutional arrangements of the Single Market facilitate the mobility of capital so that it could move to where it is more effective. The Caribbean Investment Fund is one such source established under the Community as well as the Euro 2 billion investment facility under the Cotonou Agreement won through the external negotiation process with the EU in which your Minister Hilton played such a prominent part.
Now, central to the effective functioning of the CSME and indeed to the attraction of investment is the Caribbean Court of Justice (CCJ) – the centre of the new additions to the institutional structure which also includes the Fair trading Commission, a regional standards and quality organization (CROSQ), a regional intellectual property office and a development fund. Time will only permit me a few words on the much-debated CCJ.
The Caribbean Court of Justice known in short as the CCJ is designed to be a court with two jurisdictions, an original jurisdiction to give certainty to the obligations rights and entitlements conferred by the treaty and in that regard to settle disputes arising therefrom as well as an appellate jurisdiction for both civil and criminal matters arising from the functioning of our courts, thereby replacing the judicial committee of the Privy Council. Of all the issues raised about the Court, two stand out – the need to avoid political influence in the choice and functioning of judges and the need for guaranteed financing of the Court. Both have been satisfactorily resolved, the former by means of a Regional Judicial and Legal Services Commission selected primarily by the private legal profession and in any case without any real participation of the political directorate of the Caribbean Community and the latter through the decision of the Heads of Government Conference just last week, for the Caribbean Development Bank to raise on the international capital market US$100million to establish a Trust Fund, the yield of which will be used to finance the operations of the Court – both actions taking the Court out of the political directorate.
The assurance which the Court will provide by the certainty and consistency by having a single institution interpreting the provisions of the Treaty, is a vital aspect of the confidence which investors, foreign including members of the Diaspora as well as regional, would need to make capital available for investment in the Region. In the same way the wider CSME would encourage the retention of our skilled human resources in the Region as well as attract home our students on completing their training abroad.
Mr. Chairman, the process of the establishment of the CSME now in train, must be accelerated as you member of the private sector so rightly insisted in the meeting here in April. To that end, the programmes for the removal of the remaining restrictions on the Right of Establishment, the Provision of Services and the Movement of Capital which came into effect in March this year, requires that Jamaica and all other Member States take the required national action now. There is no time to be lost for the Region as a whole the current restrictions, relate mainly to work permits, alien landholding legislation, company registration, discriminatory procedures and charges and Ministerial discretion. These relate together to about no more than 10 percent of the totality of possible services and are scattered across the various service areas and Member States. In the case of Jamaica, they relate mainly to work permits.
With respect to the Single Market for goods which the Common Market for the most part established, since the establishment of CARICOM in 1973, there are relatively few restrictions still in place.
Governments themselves have been engaging in restructuring and reorganising with a greater focus being given to macro-economic stability and creating an enabling investment environment and in institutional building to support new economic activity. The Treaty points to the need for the modernisation of government bureaucracies and closer public/private sector collaboration. It also points to the obligation for Member States to establish systems for the consultative processes and an effective public education, involvement and awareness programme.
This responsibility lies not only with the Governments however, and the Secretariat but with all sectors of the Community – indeed we are all in this together. This consultative process was given a huge boost in the past year culminating in the Civil Society Encounter: Forward Together which was staged in Georgetown, Guyana eleven days ago. In that exercise, unique to the Caribbean Community, national consultations were held in every Member State among civil society groups and those representatives from each country came to Georgetown to meet with Heads of Government at their 23rd Meeting last week. What a session that was!
Side by side, our Leaders and representatives of civil society exchanged views with no holds barred on the way forward for our Community and out of the discussion emerged a Statement of Principles known as the Liliendaal Statement to guide the process. It was one of our Community's proudest moments in recent times for which we have to give credit to the Hon. Prime Minister of Jamaica again, whose proposal it was way back in 1999.
In keeping with my promise when I began, I am striving to keep my priorities right and will not detain you much longer. In the circumstances, the following observations come to mind.
Choices, we have none, not really. The CSME may not be the complete answer but it is designed help us as a Community, to achieve the objectives which we have set ourselves. Its success depends in large measure on you, the private sector and how you take advantage of the framework which is being established. The regional and extra-regional threats facing our countries are real, believe me all too real. The key is to know the provisions of the various arrangements we negotiate internally and externally, and for all of us to take serious steps to exploit the opportunities which they provide.
Just three days ago, a young student about to enter University asked me what job opportunities would remain for her after she completed her studies given what she saw as the threats posed by globalisation and its effects on her country. I say to you now what I said to her then. The question is not who is going to provide for you but how do you use what you have to provide for yourself.
You members of the Montego Bay Chamber of Commerce and Industry will have the CSME and the various external Agreements as tools for your own advancement. Use them to provide viability and prosperity for yourselves, your country and your Region.
I interpreted your invitation to me here tonight not for a one-night stand but to commence a process of an ongoing relationship between your Chamber and the Secretariat of the Caribbean Community. If that is so I accept and I look forward eagerly to the continuation of this process for tonight.
I thank you.
