CARICOM and Latin America
Bryan, Anthony T.
CARICOM and Latin America N ASSAU, BAHAMAS, WAS THE SCENE OF THE fifth Meeting of CARICOM heads of state from July 4-7, 1984.* The meeting was a notable attempt to resolve the conflicts...
...and diversified trade links...
...Complacent political elites have also avoided the long overdue internal restructuring of their social and economic order...
...Through its new Export Development Corporation, Trinidad is exploring new non-regional export markets...
...Mining, petroleum, finance and tourism have all proved flimsy bases for sustained economic advance...
...2. Fortune, August 22, 1983...
...Y ET CARICOM'S STAYING POWER CONTINues to surprise integrationists...
...Guyana continues to be barred from membership as a consequence of its diplomatic dispute with Venezuela over the Essequibo territory...
...THE OTHER SIDE of PARADISE FOREIGN CONTROL IN THE CARIBBEAN Tom Barry, Beth Wood, and Deb Preusch The first thorough investigation into the activity of the top international corporations in the Caribbean and its profound impact on the politics and economics of the region...
...Both Echeverria and his successor, Jos6 Lop6z Portillo, found a valuable ally in Venezuela...
...In Haiti, the assembly sector accounts for 12% of GDP and 35% of exports, but employs only one in 20 workers...
...But the CBI condemns the islands to a further period of "wooing and fawning" and holds out little hope that they will eventually alter their subordinate status...
...A further indication of the crisis of traditional trade patterns is the growing prevalence of barter: Guyana has bartered timber and building blocks for Trinidad's oil, and bauxite for Japanese cars...
...ISBN: 0-394-62056-9 Order from your bookstore, or directly from: Grove Press, Inc., 196 West Houston St., New York, N.Y...
...In 1960 its external public debt was a mere $6 million...
...4. Marc Herold, "Worldwide Investment and Disinvestment by U.S...
...b) it only identifies direct investment as 10% or more of voting securities...
...10014p RESIDENT REAGAN'S CARIBBEAN BAsin initiative (CBI) marks an attempt to halt the economic decline by shoring up the labor-intensive export industry...
...STRANGERS IN PARADISE 1. Figures are taken from Compilation of Corporations, (Albuquerque, N.M.: The Resource Center, 1984...
...The effort by a number of Caribbean and Latin American states to create a new regional economic system resulted in the formal launching of the Latin American Economic System (SELA) in August 1975, as well as a Multinational Caribbean Maritime Transport Enterprise (NAMUCAR) and a Latin American Energy Organization (OLADE...
...The debt crisis and the end of the 1970s oil boom have severely constrained the room for diplomatic maneuver by Venezuela and Mexico...
...As Jamaican Prime Minister Edward Seaga recognized, "Aid is not charity, it is business...
...Today's Caribbean may be the best visible example of the long-term damage wrought by both colonialism and neo-colonialism...
...and lobbying for the removal of OAS sanctions against Cuba...
...Venezuela identified the Caribbean as an area of market expansion and long-term security interests, and when the 1973 increase in oil prices hit the Caribbean, Venezuela was presented with a splendid opportunity to project a "Godfather" image to the region...
...Virgin Islands...
...Lucia, St...
...By 1978, almost every Caribbean head of state had made the pilgrimage to Caracas seeking economic assistance...
...balance of payments problems have severely affected regional production and employment...
...Joseph Collins, co-author, Food First "The 1983 invasion of Grenada dramatically brought to light how little we know of the Caribbean...
...In many countries, as much as 90% of exports and imports are extra-regional...
...As Thomas remarked on another occasion, "If at a national level the multinational corporations dominate, at the regional level they cannot do otherwise...
...The two more recent attempts at breaking the mold-Manley's Jamaica and Bishop's Grenada-resulted only in steps backward...
...In a necessary preliminary step before being granted full membership, the Dominican Republic and Haiti were-accorded observer status on a number of CARICOM ministerial committees...
...3 The limited resource base of each nation, particularly in the micro-states of the English-speaking Eastern Caribbean, makes a more meaningful level of regional cooperation the essential foundation of future development...
...The July 1984 CARICOM meeting in Nassau reciprocated the sentiment...
...42REPORT ON THE AMERICAS 42 REPORT ON THE AMERICASsoon followed suit...
...It is as if we have forgotten that no single territory can have a future on its own...
...Clearly these countries regarded OAS membership as a first step in forging a closer identification and cooperation with Latin America...
...Both bilateral and multilateral efforts have become less easy...
...Barbados and Jamaica joined the OAS in 1967 and 1969 respectively...
...CARICOM and Latin America N ASSAU, BAHAMAS, WAS THE SCENE OF THE fifth Meeting of CARICOM heads of state from July 4-7, 1984.* The meeting was a notable attempt to resolve the conflicts undermining regional trade and to patch up the political disputes ignited by the Grenada crisis of October 1983...
...IVEN THEIR DISADVANTAGES OF SIZE AND limited influence, the independent Commonwealth Caribbean states have made some striking gains whenever thay have acted in concert on issues of common political concern...
...6. U.S...
...Membership in regional organizations has been basic to the new era of cooperation...
...With the in*For a full discussion of the Venezuelan role, see Robert Matthews, "Oil on Troubled Waters: Venezuelan Policy in the Caribbean," Report on the Americas, (July-August 1984), pp...
...International terms of trade are only growing worse, and most Caribbean governments have proved reluctant to pay their bills or balance their budgets by halting the import of non-essential goods or increasing taxation...
...They include CARICOM itself, the U.N...
...An indispensable handbook for anyone interested in U.S...
...In Jamaica, the numbers employed in industry grew only 2% from 1960-77, while agricultural employment fell from 40% to 15%.3o The promise of factory jobs has proved illusory...
...Instead, they have opted for ruthless cuts in social service programs...
...The Caribbean integration movement faces its most critical test in 1984, as international recession, low commodity prices, declining tourism and tough borrowing conditions on international capital markets erode the capacity of the regional economies to earn foreign exchange...
...Multinationals: Implications for the Caribbean and Central America," (paper presented at Second Regional Seminar on Central America and the Caribbean, CRIES, Managua, Nicaragua, February 9-12, 1983...
...CARICOM has failed to deal with the problem of Caribbean fragmentation or mount any effective regional challenge to transnational control...
...Kitts-Nevis, St...
...CARICOM governments have been forced to adopt tough domestic policies in order to deal with their balance of payments problems...
...Department of Commerce figures fall short of quantifying the full extent of U.S...
...investment in the Eastern Caribbean...
...investment, not the resale value of the business...
...Y 1980, THE WEST INDIES HAD BECOME an archipelago of debtor colonies...
...In 1983 the Government Accounting Office examined a $58 million project to attract U.S...
...They do not include corporations located in Puerto Rico or the U.S...
...How has Latin America reacted...
...Discussions are already underway on the feasibility of broad cooperation agreements with the Andean Pact and with Brazil, and on expanding existing Mexico/ CARICOM accords...
...The trend toward broadly-based cooperation agreements has been encouraged by the January 1984 Quito Declaration, in which the Andean Pact--Colombia, Ecuador, Peru and Bolivia--gave high priority to closer ties with the Caribbean...
...The experience of the Dominican Republic is far from atypical...
...Another important step will be stricter regulation of TNC activity to create space for more internal economic links and the development of competitive local industries...
...Indeed, the islands' industrial development bodies have found themselves searching for companies to take the place of those who are leaving, rather than attracting additional manufacturing plants...
...Here is a book to correct that...
...The effort to accelerate autonomous regional economic development can be seen in common market arrangements...
...CARICOM's viability in the next decade depends in large part on its members' commitment to Latin American cooperation...
...Mexico also turned its eyes to the anglophone Caribbean around 1970, though largely for domestic reasons...
...T HERE ARE NO READY-MADE SOLU- tions to the range of problems that plague the Caribbean...
...Local AID officials could name just one company that had made so much as a tentative commitment to invest as a result...
...Though a common Caribbean identity remains elusive, the region has begun a search for closer ties with Latin America...
...the Dominican Republic, Colombia and Haiti have also responded with interest...
...d) it excludes the value of manage- ment, licensing and technology contracts...
...The response of the Caribbean nations has been to reassert the difficult path of regionalism...
...While passionate in its approach, this book also provides a veritable gold mine of facts and sources on the area, as well as finely drawn political and economic sketches of the islands...
...5. These U.S...
...Together, they found the Caribbean a promising arena for the joint expression of their anti-imperialist postures and economic initiatives...
...and (e) the figures include only direct investment, not the assets of foreign affiliates...
...Latin American and Caribbean nations to the present economic crisis...
...The authors transform a tremendous body of information into an enjoyable and lucid text which can serve both experts and the public at large...
...The lack of momentum in the region's economies is most evident in its failure to reduce its reliance on extra-regional trade...
...NOVEBER/ECEMER 1S44 NOVEMBER/DECEMBER 1984 43A Lovely Piece of Real Estate actually declined in many Caribbean countries over the last two decades...
...Most Caribbean states have now joined these multilateral attempts to confront problems common to the entire hemisphere from Mexico southward...
...Jamaica has exchanged bauxite and aluminum for U.S...
...CTIVE POLITICAL AND ECONOMIC RELAtions between the Commonwealth Caribbean and the nations of Latin America are fairly recent...
...Most notable among these was the 1980 San Jose Agreement, designed to offset Caribbean economic difficulties by supplying oil at discount rates...
...The political isolation of Cuba and its continued reliance on sugar exports stand in the way of any desire to emulate the single socialist experiment...
...in 1982 it stood at over $2 billion-a 340-fold increase...
...Steven S. Volk, Research Director, NACLA Available in November/ Softcover $9.95...
...Stronger trade, economic, financial and technical ties are widely seen as the key to a unified regional response by ANTHONY T. BRYAN is a professor at the Institute of International Relations of the University of the West Indies, St...
...Indeed, a number of bodies are conducting technical studies on a wide range of Caribbean/Latin American relations...
...If the political will to enact these changes is lacking, the prospects for major advances in the Caribbean economy are slim...
...government expenditure of $5,800 for each new job created-or almost three times the annual average per capita income of the Eastern Caribbean.34 Thirty years ago, Caribbean economist W. Arthur Lewis believed that Caribbean development would entail "a period of wooing and fawning...
...But the CBI has so far proved more bombast than substance...
...Sugarcane, microchips and blue jeans are shipped out...
...the removal of barriers to IDB membership for non-OAS members in the region...
...In short, the new OAS members hoped the body would offer them new scope for their development plans and a forum for influencing hemispheric politics...
...The isolation of one island from another, the lack of resources and the all-encompassing dependency they suffer are more complex issues to resolve politically than the inequitable land distribu- tion or military repression that have given birth to revolt in Central America...
...This has usually been a response to the strong pressures of the IMF and the World Bank, as well as private and government lenders, who are in a strong position to force structural and policy changes on the Caribbean economies...
...Trinidadian exports to CARICOM plunged by TT$121 million (approximately US$30.25 million) in 1983...
...The politics of regional integration have disappeared from the agenda of most Caribbean leaders," observed economist Clive Thomas of the University of Guyana...
...investment in the Caribbean for the following reasons: (a) the Depart- ment reports only the book value or historic costs of U.S...
...Separate trade and investment treaties with each island serve the interests of the corporations who benefit from inter-island competition...
...First came a firm pledge from Trinidad in 1967 to join the Latin American states in their increased drive for economic integration...
...Part of the problem lies in the very nature of the Caribbean region, its diplomatic projection and its sense of itself...
...21-51...
...Only with independence from Great Britain in the last quarter-century have matters begun to change...
...Economic Commission for Latin America (ECLA), and the Latin American Economic System (SELA...
...participation in regional marketing and trading associations...
...Nonetheless, not all the problems of the Caribbean can be attributed to the Queen of England and Uncle Sam...
...The "progressive" governments of Cuba, Jamaica and Guyana became prime targets for Mexican largesse...
...The power of the lending agencies to impose austerity programs has already brought violent consequences, notably the bloody clashes between troops and demonstrators in the Dominican Republic earlier this year...
...The third imperative will be to bring patterns of local consumption more closely in line with the domestic productive and resource base...
...While the OAS has been the main vehicle for promoting the Caribbean at a political level, other bodies, such as the Inter-American Development Bank (IDB) and ECLA serve a more directly economic purpose...
...He predicted that this era of subservience to foreign capital would give way to a new age in which Caribbean nations would become equal associates of the developed nations and their corporations...
...The region's combined debt--excluding Puerto Rico and Cuba-now stands at a staggering $18 billion...
...inputs and consumer staples are shipped in...
...The Caribbean nations have failed to commit themselves to regional integration...
...Grenada followed in 1975 and other newly independent states in the latter part of the 1970s...
...From 1970- 80, the external public debt of the region increased by 700%, while over the same period the value of exports and GDP did not even double...
...One possible strategy for reg- ional integration is more local processing of exports...
...Saul Landau, Senior Fellow, Institute for Policy Studies "Well organized, readable, and highly informative...
...Nor is there any evidence that the debt spiral is tapering off...
...Intra-regional trade wars, the attempts to ostracize Maurice Bishop's Grenada, and the willingness to submit to bilateral alliances with the United States are all examples of the Caribbean's dog-eat-dog mentality...
...Examples of their success are the admission of new states into the OAS...
...For the moment, economic change in the Caribbean looks set to continue on the same historic path that has taken it, in the words of one local economist, from "plantation" via "plantation modified" to "plantation further modified...
...Venezuela, Mexico, Brazil and Cuba have evinced the greatest enthusiasm for ties to the English-speaking Caribbean...
...This new openness is a far cry from the mistrust of the past...
...Historically, Commonwealth Caribbean concern for the outside world has not been marked by any serious interest in its Latin American neighbors--the result of the colonial policy of encouraging exclusive vertical relations with the European powers...
...Department of Commerce...
...As recently as 1975, Prime Minister Eric Williams of Trinidad and Tobago was denouncing Venezuela's "neo-colonialist" threat and warning against importing Latin American tensions into the English-speaking islands...
...The CBI has not even managed to place any appreciable sum of foreign investment in the Caribbean...
...CARICOM itself emerged in 1973 from its predecessor CARIFTA--the Caribbean Free Trade Area...
...In the process, they have sacrificed regional ideals for short-term domestic interests, a conflict that challenges CARICOM's integrity...
...By allocating aid to individual countries rather than to a regional multilateral program, the United States has undermined the already fragile unity of the Caribbean states...
...Only unproductive sectors-tourism, domestic work, trade and government services-have shown an increase in employment opportunities...
...3. Various issues of Survey of Current Business (Washington, D.C.: U.S...
...policy in the Caribbean...
...The activities of Venezuela and Mexico in particular have helped improve the bargaining power of the Caribbean states.* Venezuelan concern for the English-speaking Caribbean began with the Christian Democratic administration of Rafael Caldera in 1969 and increased under his Social Democratic successor, Carlos Andr6s Per6z...
...The balance of payments crisis has obliterated the potential of Guyana and Jamaica as regional markets, while Trinidad and Tobago (whose oil makes it the region's only viable industrialized economy) has imposed import restrictions in an attempt to stem the outflow of foreign reserves...
...Augustine, Trinidad...
...Department of the Treasury, The Operation of the Possessions Corporation System of Taxation, 1983...
...Though the CBI is touted as a "regional" approach, its effect is to fracture regional integration...
...In contrast to Latin America and the Spanish-speaking islands, long recognized as a diplomatic entity, the indigenous diplomatic community of the English-speaking Caribbean has been hazily defined...
...The July 1984 Nassau meeting breathed new life into CARICOM, with fresh joint approaches to the IMF and World Bank, and an agreement to revive CARICOM's multilateral clearing facility to provide $100 million in short-term trade credits...
...Their main motives were economic: the availability of capital and technical assistance from OAS agencies...
...citizens in the region...
...The GAO noted that even if the project were to produce optimum results, it would mean a U.S...
...Instead, they have looked outward for solutions, hoping that yet another fortuitous and temporary economic windfall would stave off disaster...
...Even Cuba's regional role-always one of demonstrated commitment to aid for progressive countries-has been neutralized since the invasion of Grenada...
...As these practices take hold, and as individual CARICOM states look for markets outside the region, faith in CARICOM by both government and private sector has declined...
...Instead, they are characterized by micro-nationalism and island rivalries...
...In their search for new economic links to take the place of their traditional colonial ties, other West Indian nations *CARICOM members are Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St...
...The key element in the CBI and similar AID-sponsored programs is bilateralism...
...crease in oil revenues, the petrobolivar became a potent instrument of foreign policy...
...The major nations of the English-speaking Caribbean (Jamaica, Guyana, Trinidad and Tobago) have each experienced an especially severe drop in intra- regional trade since 1980...
...Vincent and the Grenadines, and Trinidad and Tobago...
...Instead of exporting raw materials, the nations of the Caribbean might cooperate in refining the region's sugar, manufacturing aluminum from its bauxite, process its cocoa into chocolate...
...a Multilateral Clearing Facility collapsed because accumulated debts could not be honored...
...Most of the aid given to the Caribbean islands has aimed to foster more foreign investment and has bolstered the influence of the leading elements of the region's private sector...
...Intra-CARICOM trade continues to experience negative real growth...
...Newly elected President Luis Echeverria sought to project a radical foreign policy to deflect attention from the domestic unrest that followed the 1968 Tlatelolco student massacre...
...Since the 1960s, their relationship to Hispanic-Caribbean actors such as Venezuela, Colombia and Cuba has grown on the basis of geopolitical factors, the need for economic assistance and the mutual interest of both groups of countries in finding enhanced leverage in the North-South debate through the machinery of collective negotiation...
...the Caribbean Development Bank (CDB) complements CARICOM as a regional financial institution and acts as a subregional one for Latin America, with Venezuela and Colombia participating as non-borrowing members and donors of "soft" funds...
...These restrictions have targeted cheap goods imported from East Asia and then simply repackaged in the Eastern Caribbean with a "CARICOM" label...
...These measures also reflect declining export revenues...
...These initiatives were complemented by Trinidad's admission to the Organization of American States (OAS) in 1967...
...c) the $500,000 minimum investment standard does not include the many hundreds of small business ventures such as tourist shops and restaurants owned by U.S...
...Index...
...The first serious moves toward Latin America were made by the government of Trinidad and Tobago, which had long-standing political and cultural ties with neighboring Venezuela...
...then the pursuit of government and private sector cooperation through Trinidadian/ Venezuelan Mixed Commissions in 1967 and 1968...
...cars, and factory machinery for Guyanese rice...
...416pp...
Vol. 18 • November 1984 • No. 6
