Salutations
I congratulate the Board of the Jamaica Stock Exchange (JSE) and its General Manager, Mrs. Marlene Street-Forrest for organizing what portends to be a most exciting Conference.
The timing is opportune as the Caribbean struggles for survival in a changed and most uncertain global economic environment and as the international community struggles to help Haiti rebuild after the devastating earthquake of January 12, 2010.
I consider this Conference to be both visionary and timely.
You have the opportunity to infuse a new impetus into the decision taken by CARICOM Heads of Government in Grand Anse, Grenada, in 1989 to create a Regional Capital Market.
When I handed over to the Conference of CARICOM Heads in 1992, the results of Jamaica’s remit to bring together the then three existing Stock Exchanges, I made it clear that was merely a first stage.
The process was to have continued and it did for a while, but it has come to a halt. The need for the Caribbean to finance an increasing portion of its development now makes a restart of that work an imperative. I accepted the award you kindly bestowed on me last evening in the sure hope that you will take on the challenge to create the kind of Regional Capital Market which will foster not only the development of the original members of CARICOM, but the newest Member State, Haiti with this obvious need for capital for reconstruction and development.
In this, your Sixth Regional Conference on Investments and the Capital Markets, you have chosen as your Conference Theme, “The Revival of the Fittest.” This is most apt as you gather an array of institutions engaged in raising long-term capital and directing such capital into profitable long-term investments.
You have correctly opted to focus on Haiti – “An Uncut Diamond: Rebuilding the Country and the Potential Economic Benefits”. The international community has conceptualized its support to Haiti as a means to “jumpstart sustainable social and economic development through reconstruction, investment, employment and income generating infrastructure projects. The carry forward and the sustaining and expanding of the development possibilities are clearly the responsibility of Haiti and in particular, its private sector. However, both the state and the private sector of Haiti have been weakened significantly with the earthquake of January 12, following as it did on the hurricanes and other natural disasters of the previous five years.
Haiti has chosen a path towards development through integration and collaboration with its Caribbean neighbours.
Why is the Rebuilding of Haiti a Priority for the Caribbean
The rebuilding of Haiti has to be a priority of the Caribbean. There are some fundamental and mutually reinforcing reasons for this. The first relates to Haiti and the people of Haiti in their historical and current contexts. The second springs from the potential to drive the Caribbean development.
As a full member of the Caribbean Community (CARICOM), positive developments in Haiti can create the potential for positive growth across the entire region. On the other hand, instability in Haiti has the potential to represent instability in the rest of the region. Social and economic unrest in Haiti can, therefore, impact negatively on the entire region.
The earthquake wreaked havoc on the population, economy and ecology. Today we need no further reminder than the loss of lives of more than a quarter of a million persons; that 1.6 million people have been displaced to temporary shelter and nearly every public building destroyed. For purposes of today, we assess the economic losses at US$8 billion, with 70% suffered by the private sector – mainly micro, small and medium sized businesses; and massive infrastructural, institutional and administrative capacity losses including schools, hospitals and clinics.
To these losses of January 2010, one should add to the damage caused by hurricanes and tropical storms in the previous five years to appreciate better the economic condition of the population and take into account the trauma and psychological state of the citizens. We need not only to rebuild, but build back safer and better.
There is an overarching sentiment of the need for a rebirth, a rejuvenation, redevelopment, physical reconfiguration of Haiti.
There are those of us in the Caribbean and the Diaspora, who look to the 2nd Renaissance of Haiti – a rebirth of hope and self-confidence among Haitians; a rebuilding of institutions of health, education, social services and justice; and a Haiti that is sustainable, just and equitable.
That rebirth will require substantial investments in Haiti over the next 10 to 20 years, but without this we will never break the cycle of human tragedies which that Nation has suffered throughout the ages.
The Potential for Haiti to Drive Caribbean Development
The prognosis for the global economy over the next two to three years is, at best, guardedly optimistic. It is accepted, that production and employment will stagnate or decline in relation to 2010.
The OECD in November projected a 2.4% growth in the Gross Domestic Product of its members and UNCTAD projected 3.1% growth for the global economy in 2011. These projections would have been made without taking fully into account downside risks such as rising energy and food prices; the increasing pressures in the Euro Zone as more and more members are forced to adopt tight fiscal policies; the backlash against austerity measures in an increasing number of countries, including the Arab world, Africa and Western and Central Europe; the extensive flooding in larger countries such as Australia and Brazil. These risks are encouraging some to project a continuation of the severe crisis – a reversal of the modulating movement felt in 2010.
Whatever the global projections, however, Caribbean economies will remain in crisis for the next 2-3 years. The exceptions might be Guyana and Trinidad and Tobago, the latter if oil prices continue to increase. Ironically that could worsen the situation for all the other States.
The international economy has moved structurally against the small, primarily resource-based and petroleum energy dependent economies in the Caribbean.
The Caribbean Region, therefore, needs a game changer. Haiti, could be that game changer. The immediate challenge is how to realize that possibility.
Haiti’s Action Plan for National Recovery and Development of March 2010 had estimated that approximately US$11.5 billion would be required for the public sector side of the reconstruction process. The work currently underway in the Ministry of Planning to refine the Action Plan in fact puts the estimates much higher. The private sector requirement will be even greater if recovery and growth are to proceed at an acceptable rate.
The Private Sector in Haiti, complemented by the private sector in the rest of CARICOM, needs to have the institutional and human capacity to generate and allocate billions of United States dollars.
The Action Plan identifies and prioritises investment opportunities in agriculture, light manufacturing including garments and textiles, tourism and other services, construction (housing, physical infrastructure such as schools, hospitals and clinics), energy and transportation, social infrastructure and facilities for education and health, as well as cultural and sporting activities.
These investments are not just for the Haitian market but for the CARICOM and international markets. Haiti has been given duty free and quota free access for a list of products which it requested from CARICOM. Haiti also has special access for certain products to the United States market under the HOPE programme and the EU market under the “ Everything but Arms” programme. These open opportunities not only for Haitians but other CARICOM investors.
The challenge is for CARICOM investors to take advantage of these opportunities.
The Caribbean Private Sector Responsibility and Opportunity
The regional private sector from the very beginning showed interest in partnering with their Haitian counterparts but found it difficult to find bases for action. In that regard, a CARICOM private sector delegation participated in a CARICOM-Haiti Private Sector Forum in Haiti last July.
The participants were overawed by the potential opportunities but concerned about critical gaps such as the absence of :
– Mechanisms to facilitate networking and partnering among potential investors in Haiti, in the rest of CARICOM and in the Diaspora;
– Mechanisms for mobilizing capital: in particular loan funds and export credits and guarantees on terms that would make CARICOM investors, service providers and suppliers competitive with counterparts from developed economies with governmental support mechanisms and
– Arrangements for generating systematic information on business opportunities including for technical services and consultancies.
In respect of loan financing, the Prime Minister of Haiti requested I as the CARICOM Special Representative, should coordinate the development of a CARICOM-Haiti Fund to facilitate the Caribbean Private Sector investment in Haiti. A technical group is in the process of designing an open-ended, not-for-profit entity to mobilize and manage funds in a sustainable manner. The fund will be directed primarily to small and medium-sized enterprises investing in the priority sectors identified in the Action Plan using a variety of investment instruments.
The fund will operate in partnership with other bodies such as Development Banks and Export-Import Banks. It will concentrate its resources on interventions of less than US$20 million.
The fund has a target of US$1 Billion but can commence operation with US$100 million. It will garner resources through contributions from CARICOM States, Bilateral and Multilateral Agencies, Global Funds, Public and Private Foundations and individuals, including the Diaspora.
In light of the volume and types of financing required, I can see major possibilities for our Commercial banks, our Development Banks, Export Import Banks, and the Stock Exchanges.
We will need to collaborate in finding creative ways of making the financing available to facilitate trade and investments. The CARICOM/Haiti Fund is an ideal vehicle to be considered in that regard.
Conclusion
The region needs a major thrust forward.
The rebuilding of the new Haiti will create opportunities in virtually all areas and could provide that thrust of which we speak. It will require new systems and new technologies. And most importantly it will require strategic alliances and partnerships among all actors – those in Haiti, those in the Caribbean and those who belong to the Caribbean Diaspora.
My challenge to you all, Caribbean investors and facilitators, is to organize yourselves, to take advantage of this opportunity.
That others are lining up to do just that, is no secret.
Right now, CARICOM is allowing the undertakers to commence the preparation for the burial of the Single Market rather than inviting the skills and energies of those who can nurture the infant.
The disaster in Haiti and the huge sums which have been pledged for its reconstruction open wide the doors of opportunity for the entire Caribbean spectrum- businesses, academia, consultants, entrepreneurs, construction, creative artists to escape from the tunnel and emerge into the light of growth, prosperity and the social well being of all those who occupy the land, who traverse the seas and who breathe the refreshing air of our Caribbean space.
