I extend a warm Antiguan and Barbudan welcome to all of you.
A special word of welcome to representatives of the United Kingdom Department for International Development (DFID), the Spanish Agency for International Cooperation for Development (AECID), and the United Nations Development Programme (UNDP), which have willingly and generously provided financial support for this Symposium. I am indeed heartened by the level of support given and the representation of these agencies here today. It augurs well for the collaboration and cooperation which we are forging.
Last July, I proposed, and got the endorsement of my colleague Heads of Government to convene this Regional Symposium on Services to develop a Regional Policy and Strategy for the further development of the Services Sector in the Community. The context was the formation of the CARICOM Single Economy on which we are working feverishly to establish by the year 2015.
The global environment in which my proposal was juxtaposed was a lot different then. At that time, we were grappling with the shortages in food production, the spiraling of food prices, the attendant inflationary pressures on the rest of the economy and the increased potential for social unrest. The price of oil was also rising out of control. I was then the Chairman of the Community, and the Conference of the Heads of Government spared no effort to deal with these difficulties.
No one, or to be more accurate, very few persons saw a looming financial crisis.
Indeed, the leading international financial and development institutions had predicted a growth of 3.3% in the world economy in 2008 and further growth in 2009 of around 3.6%. These predictions were made against strong and steady growth in the world economy in 2006 and 2007 reported at 3.9% and 3.6%, respectively.
The World Bank had even predicted that developing countries would enjoy growth in excess of 6%, and that the share of developing countries’ imports would be more than half the growth in total imports.
Today we are operating in a drastically different environment. Food prices have leveled off although they have not dropped to the pre-2008 level; the price of oil has fallen from a peak of US$155 per barrel to below US$60.00; the global financial market has severely weakened; and the world economy is into recession. Remittances from developed countries to developing countries have decelerated and now seem to be diminishing. The outlook for 2009 is negative and that for 2010, although positive, is highly uncertain. Governments around the world are implementing stimulus packages of varying types, both to weaken the recessing forces as well as to ensure that the duration of the recession is very short.
We here in the Caribbean are under severe pressure. The crisis has negatively affected important economic sectors in the Region. The most severely affected are tourism and related services, construction, the financial sector, the oil, alumina and aluminum industries, and public administration. Governments have been contending with falling revenues as credit has become tight and our financial sector has been placed under the threat of collapse of major players.
In particular, the financial sector in Antigua and Barbuda has been placed under stress due to the collapse of a regional financial conglomerate and, as one of our major offshore banks became the subject of investigation by the Securities Exchange Commission of the United States of America.
Mr. Chairman, I have stressed the above to highlight the fact that CARICOM economies are very vulnerable. We can practise the highest level of Governance, enact and enforce the best regulatory framework and continuously strive to maintain the high standard of living for our people to which they are accustomed. However, the current environment clearly shows – indeed it reinforces the reality – that our economies, our way of life, our social services, and governance are not impervious to external shocks over which we have no control.
What we have control over though, is our opportunity to work together as a people to meet these ever present challenges.
I say this based on our achievements to date.
In 1965, three of our Heads of Government met here in Antigua and Barbuda and agreed on an economic and social framework to advance their peoples. That framework was CARIFTA and our national hero Sir Vere Cornwall Bird Snr. was among the three regional visionaries. By 1973 other Heads of Government had joined the arrangement and this gave birth to the Treaty of Chaguaramas which established the Caribbean Community and Common Market (CARICOM).
In July 1989, the CARICOM Heads of Government, meeting in Grand Anse, Grenada, confronted with the twin phenomena of trade liberalization and increased intensity of globalization, and recognizing the need to remain competitive, decided to deepen the regional integration movement into a Single Market and Economy (CSME). The Heads at Grand Anse had the vision of a CSME which would be a means of achieving sustained economic development, fully aware of the need for the free movement of skilled persons, the primary importance of human resource development to the modernization of the regional economy, and their necessity in realizing the then new opportunities arising in the services sector. It must be recalled at that time, there was no free trade in services and there was no free movement of service providers and of skilled Community nationals.
This decision to create the CSME will ultimately lead to the existence of one market of approximately 15 million persons whose annual total output will be in excess of US$50 billion of which more than 70% will be from Services. In addition, more than 66% of the employed persons would be in the Services Sector.
Twenty years after Grand Anse, we are again at another important juncture in our regional integration process, where we are giving focused attention to the very important Services Sector, and I am more than pleased as CARICOM’s Lead Head of Government with responsibility for Services to be Patron of this Symposium which seeks to:
(i) outline the vision for Services in the CSME;
(ii) develop the outline and elements of the Draft Strategic Plan for Services in the CSME; and
(iii) develop a Plan of Action for the next five years.
The agenda for the next three days seeks to:
(i) provide you the service providers with a better understanding of the regional regime for Services, the rights which you are entitled to, as enshrined in the Revised Treaty of Chaguaramas, and the work which is taking place to facilitate trade in services;
(ii) establish the linkages among investment in, production of, and trade in services;
(iii) facilitate detailed discussions on the wide range of services with the expected output of identifying the elements of the Draft Strategic Plan for the sector; and
(iv) chart the way forward, given our current economic circumstances, and taking into account the medium- and long-term prospects.
This Symposium has its own challenges. These include:
(i) catering for such a wide range of diverse service sub-sectors, each of which has its own unique and peculiar challenges and opportunities;
(ii) completing the tasks which have been set; and
(iii) meeting the expectations of all participants.
These are separate to the challenges associated with the formation and operationalisation of the CARICOM Single Market and Economy, which my colleague Heads and I are confronting, and these include:
(i) ensuring that all Community nationals, including the man on the street, reap the intended benefits;
(ii) opening up the regional market to the service providers of third countries as we have done with the recently concluded Economic Partnership Agreement (EPA) between CARIFORUM States and the Member States of the European Community; and
(iii) minimizing the adverse effects of the current financial crisis on our peoples.
Ladies and Gentlemen, while agriculture and manufacturing will remain important for the regional economy, for many of our Member States, the Services Sector is our future. Tourism and Financial Services have been our traditional export services. But the non-traditional sub-sectors provide new opportunities for further services exports within the Region and extra-regionally. We therefore have to make the Services Sector work for us. As Governments, we have the responsibility to provide the enabling environment and other incentives for the development of the Services Sector.
You, the private sector operators have to do the rest to make it happen. You therefore have to organize yourselves, particularly in the newer areas, just as our traditional Sectors have or are doing to their advantage. The current initiatives to establish Coalitions of Services Industries have resulted in eight such bodies to date and it is urgent that the private sector in those Member States still without National Coalitions complete the process as soon as possible, and that includes Antigua and Barbuda. National Services Coalitions will provide support to their members to better position them to increase their competitiveness and enhance exports of services.
Similarly, the work being done to harmonize domestic regulations for a number of Services Sectors must be completed to give the necessary support and confidence to service providers and consumers alike.
I am convinced, given the wide range of skills and the level of expertise gathered here today, that we are more than capable of addressing these challenges. I pledge my full support for this work and I will return on Friday to personally receive your recommendations during the final session of your deliberations.
I wish you every success in your endeavours and I pray God’s blessings on the proceedings.
Again, I say welcome.
I thank you.
