|Commentary: The independence experience of the OECS and prospects for the future - Part 1|
|Published on September 20, 2012||
Email To Friend Print Version|
By Dr Ralph E. Gonsalves
Prime Minister of St Vincent and the Grenadines
This extensive paper, which will be published in several parts, is an edited version of a longer document which formed the basis of a presentation made on August 24, 2012, by Dr Ralph E. Gonsalves, Prime Minister of St Vincent and the Grenadines, at the closing session of “the Fifty-Fifty” Conference of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) of the University of the West Indies in Kingston, Jamaica. Among other things, the publication excludes the section on “the Grenada Revolution” (1979 – 1983) which is amply covered in the prime minister’s autobiography entitled The Making of ‘the Comrade’: The Political Journey of Ralph Gonsalves.
This paper contains, too, the essence of Dr Gonsalves’ discussion on the subject “Rethinking Policy to Address Low Growth and High Debt: The Economic Challenges Facing the OECS/Caribbean” on September 04, 2012, at a recently-concluded “High Level Forum” sponsored by the International Monetary Fund, the Caribbean Development Bank, and the Central Banks of CARICOM member-countries at Port-of-Spain, Trinidad and Tobago.
The ideas of Dr Gonsalves, contained in this paper, are well-known to those who have followed his speeches and writings, especially his Budget Addresses, his United Nations Speeches, his Addresses to CARICOM and OECS, national and international gatherings, and his various publications over the past dozen or so years. They constitute what he calls “a compelling narrative” for socio-economic development. He weaves history, philosophy, literature, economics, law, politics, sociology, policy-making, public administration, governance, and more, into his integrated narrative.
Part 1: Introduction and Basic Socio-Economic Facts
I am truly honoured to have been asked to address you on the subject of “The Independence Experience of the Organisation of Eastern Caribbean States (OECS) and the Prospects for the Future
”. I shall speak not only of the OECS as a regional integration entity, but also broadly of its seven member-states (Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and the British colony of Montserrat) and two “associate members” (the British colonies of Anguilla and the British Virgin Islands). I shall make my presentation within the context of this Conference’s overall theme: “Critical Reflections in a Time of Uncertainty
Dr Ralph E. Gonsalves, Prime Minister of St Vincent and the Grenadines
The “independence experience
” of the OECS member-countries runs from the time of Grenada’s attainment of formal, constitutional sovereignty in 1974. Over the subsequent seven years, the other five independent member-countries of the OECS became sovereign nation-states. The Treaty of Basseterre establishing the OECS was itself signed on June 18, 1981. The Revised Treaty of Basseterre Establishing the OECS Economic Union was signed on June 18, 2010, and was ratified by January 21, 2011.
The terrain of structural low-growth and high-debt economies of the Caribbean, including the member-countries of the Organisation of Eastern Caribbean States (OECS), and the attendant socio-economic challenges, has been repeatedly traversed by social scientists and policy-makers. Thus, much of what I have to say about the socio-economic condition of the Caribbean, especially the OECS, and the prospects for the future would be familiar. Still, by clearing the decks, redefining the problems and issues, rethinking the old paradigms, and attempting to fashion creative solutions, it is hoped that the on-going conversation on the challenges at hand and possible ways forward would be reinvigorated. In all this we must start with the facts as they are, not what we imagine them to be.
First, however, a few words about the quest for an appropriate or relevant theory of economic development for the micro-states of the OECS. In 1969 – 1970, a group of economists and other social scientists from the University of the West Indies (UWI) largely from “the New World” School of political economy had a cursory crack at it. In a study of the economy of St. Vincent and the Grenadines, these social scientists averred that while perspectives from classical, neo-classical, Keynesian economics or their variants may provide useful insights, they were inadequate as explanatory frameworks for what the UWI theoreticians labeled “a stationary village-state
” in a condition of subsistence equilibrium punctuated by the disequilibria of limited grants, remittances from abroad, and market subsidies for export agriculture, mainly bananas. Indeed, the UWI analysts held that “development theory
” generally also did not contain heuristic explanatory frameworks. They insisted that these micro-island economies were “sui generis
”, requiring their own especial explanatory theories and prognoses. In fact, these very UWI social scientists stylised the facts in their description of the “stationary village-state
” and were themselves in a vain search for a theory of explanation. The quest for that adequate theory of explanation is still on. As always, I reiterate, it is sensible to begin with the facts and an inventory of possibilities and limitations for the OECS member-countries.
The member-countries of the OECS have an aggregate population of approximately 630,000 over a total land area of 3,070 square kilometers. Dominica is the largest geographically with 751 square kilometers; Anguilla is the smallest with 91 square kilometers. St Lucia is the most populous with a population of 172,000; and volcano-ravaged Montserrat has the smallest population: 6,000.
It is important, thus, at the outset for us to acknowledge, in summary form, the basic socio-economic facts about the member-states of the OECS. Each member-state is:
1. A small resource-challenged, structurally dependent, open economy, which is prone to natural disasters and ranks very high in the league tables of disaster-prone countries internationally. Each of these factors constitutes profound economic constraints or limitations. Economic shocks are not merely episodic for member-countries of the OECS; they are a permanent feature of their make-up.
2. So small in terms of acreage that extensive agricultural production is constrained. In St Vincent and the Grenadines, for example, available agricultural land for cultivation is roughly 20,000 acres or one-fifth of a total land acreage of just over 100,000 acres; the bulk of the remainder of the lands consists of forests; commercial and administrative buildings; hotels and other tourism facilities; physical infrastructure assets for production; schools, hospitals, clinics, cultural and sporting facilities; and houses.
3. Possessed of an economically-active population which is but one-half of the very small population overall. For example, in the most populous state of the OECS, St Lucia, the economically-active population is about 80,000; in St Vincent and the Grenadines, it is 50,000. The rest of the population are too old to work, too ill to work, too young to work, or are at school. Labour productivity is comparatively low by international standards. Compounding all this is an unemployment rate of some 20 percent of the population.
4. Hugely dependent on capital flows from overseas whether by way of foreign direct investment, grants or loans, and remittances.
5. Constrained by the very limited domestic market or internal demand. Each OECS-member country is quite dependent on external source markets for trade in goods, tourism, and services generally. The internal demand, by itself, is unable to produce a sufficiency of surplus resources to drive economic, infrastructural or social development.
6. Subject to the vagaries of international trade to an extent which makes each country very vulnerable. For example, the diminution or virtual cessation of market preferences for the Windward Islands’ agricultural commodities, including bananas, has shackled the agricultural sector because of the lack of its international competitiveness. A similar situation has befallen St. Kitts and caused the collapse of its sugar industry.
7. Marked by an insufficiency of well-developed tourism infrastructure. In the case of two member-states, Dominica and St Vincent and the Grenadines, there are no international airports as yet; the full flowering of tourism is thus restricted. Dominica has recently extended its airport to facilitate night-landing; and St Vincent and the Grenadines is currently building an international airport, at a cost of US $265 million or approximately 30 percent of its Gross Domestic Product (GDP); the largest single capital project since conquest and settlement is being constructed in the middle of the worst global economic crisis for 100 years.
8. Possessed of limitations in its private sector, especially regarding its size, the unavailability of a sufficiency of competitively-priced credit facilities, the comparatively high cost of electricity, the lack of a sufficient creativity and risk-taking, and public sector inefficiencies. All of these limitations constrain optimal economic development.
9. A middle-income country geographically close to the USA, with highly sophisticated and expensive consumer tastes, generally-speaking. This joinder of circumstances fuels a very high level of expenditure on imported goods and services and therefore provides challenges to the sustainability of the country’s external account, especially since there is not a corresponding level of export of goods and services. Our flawed diets contribute significantly to chronic Non-Communicable Diseases (NCDs) diabetes, hypertension, cardiac and renal problems, ill-health generally, and an unnecessarily large food import bill. In all of this, we ought to note the relevant facts: In 2010, the per capita GDP of the Eastern Caribbean Currency Union (OECS minus the British Virgin Islands) was EC$19,811 or US$7,337; Anguilla’s stood at EC$47,896 or US$17,739 and Antigua and Barbuda, EC$36,016 or US$13,339 at the higher end; and at the lower end: Dominica, $17,081 or US$6,326 and Grenada, EC$18,679 or US$7,157. The per capita GDP of St Vincent and the Grenadines in 2010 was EC$19,323 or US$7,157. Indigence in the OECS is low (under 5 percent of the population), but poverty levels hover between one-fifth and one-third of the population in each member-state.
Each OECS member-country has a very sound bundle of Human Development Indices (HDI) touching and concerning, for example, education, health, housing, access to public utilities (water, sanitation, electricity, telecoms), and social safety nets. Antigua and Barbuda and St Kitts and Nevis are in the top 20 percent of the countries internationally assessed in terms of the United Nations’ HDI and the other independent member-countries of the OECS are in the top 40 percent in the HDI league table.
10. Plagued by the malaise of growing violent crime, including an increasing incidence of homicides.
11. Encumbered by high levels of public debt. The Debt-to-GDP ratios of four of the independent member-states of the OECS (Dominica, Grenada, Antigua and Barbuda, St Kitts and Nevis) range from 90 percent to 170 percent. Antigua and Barbuda, Grenada, and St Kitts and Nevis are currently on International Monetary Fund (IMF) programmes; Dominica was on a similar programme for much of the first decade of the 21st century. St Lucia and St Vincent and the Grenadines have Debt-to-GDP ratios hovering around 68 percent.
12. Challenged by declining secular rates of economic growth. In the 1980s to early 1990s, the OECS member-countries, as a whole, had average growth rates of around 5 percent during the heyday of market subsidies for bananas, grants, and generous concessional loans. Since then the comparative average growth rate has been around 3 percent punctuated by episodic spurts. From the time of the world economic crisis of 2008, and continuing, economic growth rate has declined, and remains flat around an average of one percent for the year 2011.
13. Enveloped in a cycle of a high level of net migration. Indeed, in St Vincent and the Grenadines, for example, net migration exceeded the natural increase in the population in the inter-censal period 1990 to 2001. Data indicate that this trend has accelerated since then, due largely to the hugely enhanced programme of education and training of our nationals, large numbers of whom migrate overseas and enter the chain of the international division of labour at higher levels than their predecessor migrants. This migratory trend is observable in every member-state of the OECS. The diaspora is increasingly becoming an important resource to be tapped for developmental purposes.
This array of basic socio-economic facts and considerations play themselves out in especial ways at this time of global economic crisis and uncertainty; regional economic slow-down or contraction; on-going stresses and failures in several critical regional financial institutions such as banks, insurance companies and credit unions; enormous challenges in the fiscal condition of governments; the fall-out from natural disasters, and multiple socio-economic, and even political, difficulties on the domestic front in several countries.
It is evident that the challenging socio-economic matrices, and connected phenomena, in the member-states of the OECS flow from pre-existing structural vulnerabilities and the history of the region’s political economy. The structural and historical condition of small, resource-challenged, disaster-prone, dependent, open economies is exacerbated, and the circumstances further negatively impacted in innumerable ways, amidst opportunities and possibilities, through the multiple relationships with monopoly capital overseas.
Next – Part 2: The Global Situation
here to receive daily news headlines from Caribbean News Now!
HOMELAND SECURITY, SAFE HOUSES, SIMON BLOW YOUR HORN HORATIO WILLIAMS, SAFE HOUSE AGENT.
GONSALVES, very good but there is a place for everything, and here is not the place for such a speech or commentary at this time. I am sure you hope that your post will act as a smoke screen, will take our minds off the evil and wrong that is going on, and has gone on. Well it doesn't, so take your lectures and talks and poke them where the sun doesn't shine.
What we currently want to know about is the issue of passports to foreigners, some of whom speak little or no English.
Details of names and where they hailed from is to be published.
We also want to know about the following
IN 2001, YOU GONSALVES ISSUED OR CAUSED TO BE ISSUED A DIPLOMATIC PASSPORT TO A VINCENTIAN CANADIAN MAN CALLED REUBEN MORGAN, HE WAS NEITHER A DIPLOMAT OR EMPLOYED BY THE SVG GOVERNMENT. SUBSEQUENTLY IN 2004, MORGAN WAS ARRESTED AT A LONDON AIRPORT CARRYING A KILO OF COCAINE IN HIS LUGGAGE, HE WAS TRAVELING ON THE VERY SAME DIPLOMATIC PASSPORT THAT YOU GONSALVES HAD APPROVED OR ISSUED TO HIM.
MORGAN IS A RELATIVE OF OUR ATTORNEY GENERAL JUDITH JONES-MORGAN, SHE WAS TRAVELING TO THE SAME FAMILY DESTINATION AT THE TIME AS REUBEN MORGAN, BUT ON A DIFFERENT FLIGHT.
SEEING AS HE HAD THE DIPLOMATIC PASSPORT FOR FOUR YEARS BEFORE HE WAS CAUGHT, THE QUESTION MUST BE ASKED, HOW MANY TRIPS BETWEEN SVG, CANADA, LONDON AND OTHER DESTINATIONS DID HE TRAVEL USING THIS PASSPORT DURING THESE FOUR YEARS.
NOW GONSALVES YOU HAVE HAD EIGHT YEARS TO THINK ABOUT THIS, WHY DID YOU ISSUE HIM WITH A DIPLOMATIC PASSPORT.
JUST A SIMPLE 50 WORD REPLY WILL SUFFICE, NOT A MILLION WORD LOAD OF CRAP.
WHILST WE ARE TALKING PASSPORTS, I AM SURE YOU REMEMBER THE WIKILEAKS REPORT OF FEBRUARY 3 2006, BECAUSE YOU FEATURED IN IT. YOU WILL NOTE THAT AMBASSADOR KRAMER REFERS TO ISSUE OF PASSPORTS TO THOSE WHO ARE NOT ENTITLED TO THEM.
¶10. (C) Comment: The increasing availability of campaign funds to Caribbean political leaders, combined with a lack of legal control over how the money is raised, makes for a troubling situation in a region where many turn a blind eye to corruption. A few hundred thousand dollars, a pittance to a wealthy business person in Barbados or the Cayman Islands, could buy a great deal of influence in one of the small, economically troubled countries in the region. Some of this influence may be purchased to further legitimate business concerns, but as in the case of marijuana growers, or even "the bearers of passports to which they are not entitled", the influence could be used for more nefarious purposes.
GONSALVES, TELL US ABOUT THE MILLION U.S. DOLLARS IN CASH, WHERE DID THAT COME FROM?
TELL US ABOUT THE MILLION US$ SHARE OUT, HOW WERE THE RECIPIENTS CHOSEN?
NOW WHAT I SUGGEST IS, YOU TAKE YOUR CURRENTLY POSTED SPEECH IN PERSON UP TO CANADA, THEY WILL LOVE TO SEE YOU. A WELCOME AWAITS YOU.
AND GONSALVES IF YOU THINK THIS IS DISREPECTFUL, ITS MEANT TO BE, BECAUSE YOU DESERVE NO RESPECT.
In 2010, a bag full of cash, US dollars turned up at the NCB bank, a million US to be exact, or there about. The bank was asked to change the money into EC$s, after due consideration the called FRANCIS and told him to take the US$s away, refusing to change it. Days and weeks afterwards ULP relatives and friends began turning up at banks with smaller sums of US money and banking it. A ULP government official walked about with a huge roll of US$ bills in his pocket, removing it occasionally to pay bills in bars and shops.
GONSALVES has failed to give a credible answer about where that money came from.
That amount of money comes via banks, money transfers that can be checked for legality, not in an old bag. Only dirty money comes in an old bag.
Whoever gave it, did they expect it to be shared out among the ULP hierarchy?
GONSALVES, here is the evidence of why Visa restrictions on SVG have been imposed by Canada. You should get your arse in gear and get yourself up to Canada, try and personally straighten out this mess.
Citizens believe you are frightened to go to Canada because of the charges brought against by the Canadian Human Rights lawyer, who said you sexually assaulted her. It is noted that since she made this claim you have never been to Canada. If you have other reasons for staying well away from Canada, tell us why, we will be happy to listen with an unsympathetic ear.
Citizenship and Immigration Department Canada
A key reason why the government has imposed visa requirements on St. Lucia and St. Vincent is unreliable travel documents. In particular, criminals from these countries can legally change their names and acquire new passports. In some instances, people who were removed from Canada as security risks later returned using different passports.
There has also been an unacceptably high number of asylum claims from St. Lucia and St. Vincent, with about one and a half percent and three percent of the population of these countries making asylum claims in Canada over the past five years.
ALL OF THIS IS MORE IMPORTANT THAN POSTING THE COMMENTARY "The independence experience of the OECS and prospects for the future - Part 1" POSTED AS A SMOKE SCREEN AND AS SOMETHING TO BOOST YOUR OWN EGO.
JUST QUIT THE CRAP AND DO YOUR JOB IN A PROPER MANNER, I AND OTHERS ARE FED UP WITH YOUR BEHAVIOR, I SEE YOU AS A LIABILITY TO SVG AND A BURDEN WE CAN DO WITHOUT.
PETER, AKA BRIAN ALEXANDER, YOU ARE FULL OF CRAP.
Brian, the nonsense you are doing, is not going to be tolerated any longer.
I could act, and surprise you, but I will not do that. (I will be more than fair to you)
I will tell you in advance, to your face, what I will do, and I will tell you exactly how you will respond, because I KNOW YOU LIKE A BOOK.
I will play you like the keyboards. (Get it? "Keyboards?")
Look Brian, here is one example. You have 3 posts on the same article above, like you enjoy seeing your "name" in print. Why is that necessary? YOU ENJOY OVERKILL?
HERE IS WHAT I AM GOING TO DO, AND HERE IS WHAT YOU ARE GOING TO DO.
I will tease you and taunt you....like one may tease a dog.
You will bark and snarl -- like that angry dog that dislikes being teased.
I know that you are NOT intelligent, and I want all the Caribbean News Now readers to perfectly understand that as well.
I will not tell them.
You will demonstrate that to them yourself.
The more you talk, the more you will expose your pitiful, dumb, empty self.
I will get you to reply and respond several times per day and the readers will determine for themselves just how stupid you are. ...Just like that rabid dog.
I know that you have a dumb, thick skull, so I have to rub it it in real good.
We would like to help you, but you are way past redemption, so you have to hit the floor first.
Brian, you will make a complete ass of yourself, and we will sit back and admire the nonsensical display.
COOEEEEEEEEEEEEE! SIMON BLOW YOUR HORN HORATIO WILLIAMS, anger control, you must pratice anger control. You become so offensive when your angry.
Homeland Security, safe house provider
HAaaaaaaaaaaaaaa HAaaaaaaaaaaaaaaaa, you very stupid pratt.
D. Markie Spring :
I also read with interest Allan Palmer’s analysis!
Palmer, I am in agreement with your comments in the 3rd paragraph as the same thought came to me. All we have seen is a reenactment of the IMF and World Bank’s statements. Some of which I have commented on prior to his submission. There is nothing original in his publication, but tremendous efforts were place in conceptualizing what these institutions and individuals have put forward, into an SVG stronghold and excuse for failure. As a matter of fact, we have not heard what PM had done in the past to curb the horrendous economic meltdown or what he intended to d in the future – good observation Palmer!
Under your agriculture assessment, Palmer, I will have to agree also. However, I won’t repeat what you have said already; instead, I will make further assessment of the degradation of Agriculture in SVG. It seemed as though the PM does not recognize the importance of agriculture to our economy. I have reason for saying this since they allowed the Banana Industry to vanish.
The PM spoke eloquently about natural disasters that are affecting agriculture. At the time of Hurricane Tomas there were hardly any crops to be destroyed’ everything was almost to the point of no recovery. Everyone knows failing to capture the potential of agriculture in our economy is like Saudi Arabia doing nothing about its abundance oil. For us to have sustained agriculture we must seek to diversify this sector of our economy.
Moreover, the same natural disaster that is affecting our agriculture industry is the same disaster that affects our tourism industry in which the PM seemed to be focusing right now.
The CIA in their assessment of SVG’s economy stated that the current government is unsuccessful in introducing new industries necessary for economic growth and sustainability. They also stated that agriculture is an important criterion in the country’s economic activities; hence, the 20 percent unemployment rate.
Under labor productivity, I am also in agreement with Palmer that the unemployment figures are unacceptable. The PM is could be correct in his assessment of the people who are not in the work force. I believe PM when he said that some of these people are too sick to work – considering the deteriorating medical infrastructure.
When it comes to the GDP the PM is quoting the country’s GDP (Power Purchasing Parity - PPP) and per capita, which is different from the GDP (nominal) and per capita. What they won’t tell us is that the GDP (nominal) is just $700 million dollar (estimate). If you look at the GDP equation part of it is private consumption in which remittance plays a big role. Remittance has an extra ordinary role in SVG’s GDP.
I ask the PM - Do you think that Karl Marx has the answer to the world economic recovery?
Peter, looks like Mister WILLY trying to wriggle 'imself outa the deepened PIG-STY ?
Simpleto 'simon', you have completely proven yourself to be an UNAPOLOGETIC FRAUD - - - you have absolutely NO CREDIBILITY LEFT - - - Nil, Zilch, 'nada.
You are now soundly forelornly like my neighbour's dog [really], who would race to my fence whenever my neighbour is newly arrived, BARKING ROBUSTLY, suddenly, on no other provocation or reasonable stimulus - - - IN ORDER TO SHOW 'HE MASTER THAT HE WAS DOING 'HE JOB ALL ALONG.
So, you, as Ralphie's USEFUL IDIOT, according to MARXIST DICTUM, ARE BACK ON THE JOB - - - AGAIN. Well, Papa Doc done tek notice. So, you could go away, and lie down quietly again. Maasa dun see.
Mister WILLY, little piggy... PIGGY WILLY ?!
IF PIGGY ATTENDED AND GRADUATED FROM CAMBRIDGE, Allan, then he Mr. WILLY the piggy might then be 'brighter' than maasa, Communist ralphie.
Would Simpleto 'Simon' Anderson be NOW PUBLISHING the list of all the GENERAL SECRETARIES OF THE SVG BANANA GROWERS' ASSOCIATION to let our patient, long-forebearing CARIBBEAN NEWS NOW readers SEE ABSOLUTE PROOF that one SIMON ANDERSON WAS A GENERAL SECRETARY OF THE SAID SVG BANANA GROWERS ASSOCIATION in truth, and the STEVE_HUGGINS is in error and ill-informed ?
Or, will 'SIMON ANDERSON' continue to be regarded as a sad, woe-begotten, FRAUD.
NOW, IF simon was really WILLY, as them guys are intimating ... POT OF A DIFFERENT KETTLE ?
SHALL SIMON ANDERSON, or the fraudulent creature falsely claiming to be him, be FOREVER KNOWN AS SIMON THE FRAUD ?
OR, mr. willy the piggy on mr. gonsalves'...er, Mr. TIBBS' FARM, along with Mother Hen. Could it be Mr. Joe's farm, along with Miss Tibbs, Mother Hen... What was the goat's name, again?
No, nat the PIG, WE DONE KNOW HE 'AREADY.
WILLY, the piggy, the hog, the swine, STILL ENDEAVOURING TO UNMANNERLY, PIGGISHLY, UNCOUTLY, HOGGISHLY, ARROGANTLY, SWINE-ISHLY threaten people on this site ???!!
And, making further FRAUDulent claims ?!
SVG-BGA Fraud, SVG-BGA FRAUD, SVG BGA FRAUD
Piggy, the WILLY
WILLY, THE PIGGY. Thanks fuh telling arwe.
..........."THREE BLIND MICE"
BOSS HOGG, MARKIE SPRING AND BRIAN ALEXANDER.
So they lie, so they thief.
Markie Spring thief from a Priest and lied about pre-election violence.
BOSS HOGG escaped from the Mental Home and they still looking for him.
Brian Alexander is being watched by the Police for th*eft at PH Veira.