Honourable Prime Minister Samuel Hinds
Honourable Ministers of the Government
Leader of the Opposition
President of the Georgetown Chamber of Commerce
Members of the Diplomatic Corps
Members of the Private Sector Organisations
Distinguished Guests
Representatives of the Media
Ladies and Gentlemen,
Of the many invitations I receive to speak, I always make a special effort when the request comes from the private sector. This is so in large measure because I am convinced that economic integration processes, vital as they are to the development of our developing countries and to which I have devoted most of my professional life, cannot be successful without the active participation of the private sector. This address to the Georgetown Chamber is in keeping with this conviction.
I, therefore, want to thank you the members of the Chamber for tonight’s invitation, which I particularly appreciate seeing that this is for you really a festive occasion – your annual dinner and awards presentation. May I take this opportunity to congratulate those who will receive awards tonight which, I am sure, are all well deserved.
Further, I hope that my somewhat brief exposition on DOING BUSINESS IN THE CSME will serve as a suitable digestif to the excellent meal which we have just enjoyed.
Mr. Chairman, Excellencies, Ladies and Gentlemen, the last time I addressed this Chamber was in 2002. The theme then was CARICOM – What is in it for us? On that occasion I stressed “that we all need to realise that CARICOM is all of us…. And that what is in it for us is directly related to what‘s in us for it. In other words, what we put into it. As businessmen you more than anyone else know that your returns are in proportion to your effort.” On this occasion, I now ask you WHAT HAVE YOU INVESTED TO ENABLE YOU TO DO BUSINESS IN THE CSME?
From my vantage point, I can attest that the Public Sector of the Region has invested significant resources, time and energy in an effort to create an environment in which the Region’s private sector could not only do business, but flourish. I also have no doubt that more needs to be done as we try to ensure that the CARICOM Single Market and Economy is on a sound institutional and administrative footing for the benefit of, among others, the private sector.
Today, Ladies and Gentlemen, our Caribbean Community (CARICOM) can lay claim to having a functioning Single Market involving twelve Member States. Of course there are still some teething problems and differences to be sorted out but this still represents a ready market for goods and services of 6 million persons. The expected entry of Haiti would make it a potential Community market of 14 Million persons. And if one were to take into account the Community’s “market outreach” – that is markets to which certain Community products can have free or preferred access – there is potential for a market of more than 100 million.
But let us tonight focus on the Single Market simpliciter. This higher degree of regional integration was brought into force in 2006 by the Revised Treaty of Chaguaramas. Thirty-three (33) years from the signing of the Original Treaty of Chaguaramas in 1973. About the same time Europe took to move from its Founding Treaty of Rome 1957 to its Single Market in 1992 – 35 years! We have not done that badly in getting where we are today!
CRITICAL ELEMENTS OF THE SINGLE MARKET
There are four critical elements of the Single Market which promote the conduct of business in the Region.
Firstly, there is THE FREE MOVEMENT OF GOODS. This feature has long existed, as you know, even from the days of CARIFTA – no duty and no quotas on intra CARICOM trade in Community-produced goods. This is a foundation element of the Single Market. Currently, however, there are initiatives afoot in the Community to enhance this aspect of the integration process, through the creation of a regime for the free circulation of goods. This would mean that a product entering any Community Member State from outside of the Single Market will be subject to duty, only at the first port of entry regardless of how many other Member States it may subsequently enter. This can, however, raise certain concerns relating to revenue-sharing.
Of course, a Single Market is incomplete without common standards for goods and services. Accordingly, to facilitate doing business in the CSME, regional standards that conform to International Standards specifications – a matter which is critical to international competitiveness and export market development – is the responsibility of the CARICOM Regional Organisation for Standards and Quality (CROSQ) which is located in Barbados.
The second major, and indeed new feature, of the Single Market, is the provision for the FREE MOVEMENT OF SKILLED NATIONALS. This confers on various categories of skilled Community Nationals, the right to seek employment and to work throughout the Community without the need for a work permit. An important aspect of the Free Movement Regime is the requirement for the persons moving from one country to another to have a CARICOM Skills Certificate issued by the country of origin attesting to their qualifications.
The following categories have already been agreed on for Free Movement: University Graduates, Media Workers, Sports Persons, Artistes, Musicians, Nurses (non-graduate), Teachers (non-graduate), Self-employed Service Providers and persons establishing a business. The latter two categories are also allowed to freely move their Managerial, Supervisory and Technical Staff necessary for the conduct of the enterprise.
In order to make more effective this free movement provision, Accreditation Bodies are required to certify the skills. Barbados, Belize, Jamaica and Trinidad and Tobago have already established National Accreditation Bodies. Efforts are also afoot to establish a regional Accreditation Body.
The evidence to date that skilled nationals are taking advantage of these provisions is quite encouraging, if one is to judge by the number of Skills Certificates issued by Member States. By mid-year 2007, just over 5300 certificates had been issued with Barbados, Guyana and Trinidad and Tobago leading the way.
To further facilitate Doing Business in the CSME, Member States are looking towards expanding the categories of CARICOM nationals who should be granted the right of free movement within the Community. Accordingly, there is a number of proposals to expand the eligible categories to include, holders of Associate Degrees, holders of CXC ‘O’ Level certificates, Artisans and eventually all CARICOM nationals by 2009. To this end the Caribbean Vocational Qualification (CVQ) for the accreditation of Artisans has already been launched in Jamaica. Adhering to this timetable would of course be a major challenge.
The third critical element of the Single Market provides for the FREE MOVEMENT OF SERVICES. Member States have already removed most of the impediments that restricted the right to provide services across the Community. Indeed, regulations are being finalised in relation to some twelve or more service areas, including, nurses, medical practitioners, dentists, architects, engineers, pharmacists, etc.
There have also been initiatives for the creation of national Coalition of Services which serve inter alia, to further facilitate their free movement. For instance, it is my understanding that service providers from Guyana who wish to freely provide services throughout the Community, should register with the Guyana Coalition of Services and obtain certification from the Guyana Ministry of Foreign Trade and International Co-operation.
Further in this regard, those providing services are likely to have an easier first time passage through national Immigration if they were to provide evidence of their skill, and particularly if they have proof of registration and a skill certificate from their home country. Also, CARICOM nationals, establishing a business, would normally be allowed six months, in the first instance, to comply with the procedures and laws in the host country.
The piece de resistance for the business community is undoubtedly the FREE MOVEMENT OF CAPITAL which is intended to allow CARICOM Nationals to among other things:
– Freely transfer capital from one Member State to another;
– Have equal rights to purchase stocks and shares in any Member State;
– Have access to a wider source of capital; and
– Diversify investment portfolios
Much of this has taken place among Trinidad and Tobago, Barbados and Jamaica. For example, even without the regional stock exchange, which is yet to be established, capital has been raised by various firms in Member States, other than their home country, through stock offers. There is also in place among the three countries mentioned, limited arrangements for cross listing and trading of shares.
The equity market in the Community is, however, fairly weak and underdeveloped, owing partly to the dominance of the family firm culture. There are approximately 132 firms listed on stock exchanges in CARICOM countries. Of these, only 13, or close to 10 percent, were cross listed and cross traded. But very significantly in 2005, when statistics were last available, those cross listed securities represented almost 50 percent of total market capitalization in the Region, due to the fact that these related to the larger companies in the Region.
Of great relevance to the process of the movement of capital is the fourth critical element of the Single Market – the provisions relating to the RIGHT OF ESTABLISHMENT. This Right entitles the investor to access (not ownership) of Land, Buildings and Property for the purpose of the Investment being undertaken. In addition, arrangements are being made to facilitate registration of companies and other processes to support the establishment of enterprises by nationals across the Community. The arrangements include, for example, an online registry, which will serve as a central depository for information on companies operating within the Single Market.
These measures are important for the efficient functioning of the regional market, a market which now accounts for 20 percent of the total export trade of the Community. Of course, we are not as yet at the level of the European Union for which estimates indicate that between 60-65 percent of total exports of its Member States are within its borders. Our economies are small and our Single Market is not yet two years old but the potential for growth is clear.
One possibility for growth in your national share of the Single Market lies in the area of Government Procurement. Work in this area is in progress towards establishing a Protocol which when completed would enhance the opportunities available to you in the Single Market. Competition and competitiveness, however, would be the name of the game!
EFFECTIVENESS AND EQUITY
Ladies and Gentlemen, there are a number of supporting institutions and arrangements without which the above mentioned critical elements of the Single Market cannot function effectively or equitably. An important such aspect relates to the matter of Contingent Rights.
These Rights provide for spouses, immediate dependents and indeed the primary beneficiary, to have access to relevant social services such as, education and health care, in the country to which they have moved. This matter is currently engaging the attention of the Community for the development of a policy, with the ultimate aim of a Protocol being established to supplement the Revised Treaty.
Another important factor relates to the TRANSFER OF SOCIAL SECURITY BENEFITS. The Agreement for the Transfer of Social Security Benefits earned in your earlier countries of employment/operations is in place in all Member States, except Suriname.
There are two critical institutional arrangements also vital to the effective functioning of the Single Market – the Competition Commission and the Caribbean Business Council. The former seeks to avoid the abuse of dominant market positions, thereby ensuring that the benefits expected from the Single Market are not frustrated by anti-competitive business practices. This Commission will be inaugurated in Suriname early in the New Year.
The second relates to the Caribbean Business Council (CBC) which was launched in June 2006 and is intended to provide a single united voice for the private sector in its relations with the Councils and Organs of the Community. I urge the business community of Guyana to take an active role in the further development and strengthening of the CBC which has already been proposed as an Associate Institution of the Community.
Essentially, what I have outlined above are the prime elements of the Single Market. However, as you are aware, the Single Market is only a part of the Single Market and Economy. But as regards the nature, structure and operation of the Single Economy – that is for another time.
I now leave you to ponder the question with which I began. HAVE YOU THE MEMBERS OF THE GUYANA PRIVATE SECTOR INVESTED SUFFICIENTLY TO EXPLOIT THE OPPORTUNITIES PROVIDED TO DO BUSINESS IN THE CARICOM SINGLE MARKET?
A Merry Christmas and a Happy New Year to you and yours!
