Guyana: Victory for CARICOM?

By Wazim Mowla*

David Arthur Granger, Former President of the Republic of Guyana.

David Arthur Granger, Former President of the Republic of Guyana/ Flickr/ Creative Commons License (not modified)

The Caribbean Community (CARICOM) played the critical role in bringing Guyana’s five-month political impasse over the March general elections to an end – without compromising on its longstanding principle of non-intervention – but the threat of broader international sanctions was certainly key. The grouping, which has 15 member states and five associate members, conducted the vote recount, demanded by all of Guyana’s opposition parties, and certified that Presidential challenger Mohamed Irfaan Ali of the People’s Progressive Party/Civic (PPP/C) won. After local and international stakeholders accepted the legitimacy of the recount, CARICOM’s institutions and individual leaders were increasingly forceful in calling for the incumbent President, David Granger, to concede defeat.

  • The initial tabulation of votes gave victory to Granger but was contested as fraudulent by the opposition parties and international observers. A high-level CARICOM team of Caribbean Prime Ministers brokered the recount agreement between Granger and opposition leader Bharrat Jagdeo. CARICOM sent a three-person team to scrutinize the recount and produced the widely accepted elections observation report, which the Caribbean Court of Justice (CCJ), an institution of CARICOM, upheld. Granger refused to concede, however, accusing CARICOM of interfering and showing bias. He launched scathing attacks on CARICOM’s current chair, St. Vincent and the Grenadines Prime Minister Ralph Gonsalves, who joined other CARICOM leaders in speaking out against the then-government.
  • CARICOM was not alone in demanding that Granger accept the election results. In mid-July, U.S. Secretary of State Pompeo called on him to “step aside” and announced restrictions on the U.S. visas of “individuals responsible for or complicit in undermining democracy in Guyana.” During an Organization of American States Permanent Council discussion on the Guyana crisis several days later, Secretary General Luis Almagro forcefully called for the incumbent administration to accept the recount, in which OAS observers also had a role. He said that “Guyana’s democracy remains hostage” to Granger and individuals doing his bidding.

The prime ministers who spearheaded CARICOM’s efforts in Guyana emphasized the organization’s interest in protecting democracy throughout the region, which they saw as threatened by Granger’s behavior. After the CCJ ruling on the recount, Chairman Gonsalves stated that there was a “rogue clique within Guyana [that] cannot be allowed to disrespect or disregard, with impunity, the clear unambiguous ruling of the CCJ. The time for decisive action is shortly.”

  • Keeping U.S. unilateralism at bay – consistent with CARICOM’s fundamental principles of non-intervention and sovereignty – was another important reason for CARICOM’s activism. Gonsalves saw an opportunity to promote CARICOM as a viable and sovereign organization that was capable of solving problems within its own community. He and other CARICOM leaders privately expressed concern that the longer Granger and his supporters refused to leave office, the more likely the Caribbean would see history repeat itself in the form of U.S. intervention.

CARICOM was heavily invested and influential during the crisis, and its leaders clearly deserve great credit for getting Granger to step aside so President Ali could be sworn in on August 2 and inaugurated last weekend. The long delay, however, suggests that the organization did not have enough leverage by itself to force Granger’s hand – and that pressure from the Commonwealth of Nations, the OAS, and the United States was also decisive. The additional foreign actors acquiesced in CARICOM’s authority in Guyana’s situation and based their actions on the organization’s elections reports and the CCJ ruling. CARICOM was vindicated in its insistence that the Guyana crisis remain a “community affair.”

  • If Granger had not conceded, CARICOM’s credibility and ability to hold its member states accountable during periods of democratic backsliding would have faced damaging blows. The organization would have faced an existential decision – to push even harder and potentially exceed the mandate of its Civil Society Charter, or to pull back and lose credibility. Under such a scenario, the United States and the OAS would eventually have escalated pressure, and Guyana probably would have achieved its transfer of power. But CARICOM and democratic institutions throughout the region would have emerged weaker. As Ali’s inauguration brings this stage of the Guyana crisis to a close, CARICOM has passed the test, with some outside help, and validated, for now, its fundamental belief that problems should be solved “in the family.”

August 10, 2020

* Wazim Mowla is a graduate student at American University, specializing in Caribbean Studies.

COVID-19 in the Caribbean: So Open, so Vulnerable

By Bert Hoffmann*

rows of empty beach chairs in Jamaica

Beach in Jamaica/ Marc Veraart/ Flickr/ Creative Commons License (not modified)

In the Caribbean, the COVID-19 crisis hits some of the world’s most open, specialized economies, forcing the region to rethink its development model. Eleven of the world’s 20 most tourism-dependent nations are in the Caribbean. The collapse of this sector leaves the import-dependent island states extremely vulnerable beyond the immediate health crisis and beyond the social and economic fallout from the current “shelter in place” rules and lock-down measures.

  • For most Caribbean nations, tourism is by far the most important economic activity. In small states like Barbados, St. Lucia, Antigua and Barbuda, and the Bahamas, tourism makes up more than 40 percent of GDP. In bigger countries like Jamaica, it accounts for more than half of exports and employs almost a third of the workforce. Many in the tourism industry cling to hopes of a speedy recovery, but this is not likely. Travelers’ confidence in cruise ships and exotic flight destinations will not fully rebound before vaccinations against the virus become readily available. Not only the low season this summer is lost, but also much of the crucial winter season.
  • The pandemic is also going to slash remittances from Caribbean emigrants. Most states have sizeable diaspora communities, and money transfers from abroad are a vital part of their economies. Unlike in the aftermath of hurricanes, migrants in the United States, Europe, or neighboring islands are affected by the same crisis. Many will also cancel visits “home.”

Current social policy measures may be able to mitigate some of the hardship, but foreign exchange buffers are hardly sufficient to maintain these on such a scale over a long time. Largely agricultural countries decades ago, most of the region today imports more than half the food they consume – seven CARICOM countries even more than 80 percent. With global supply chains and food production in the United States disrupted, imported food prices will rise. Reviving local farm tradition passes from a “romantic” niche concern to being a key issue of social policy.

  • In the Caribbean’s non-sovereign territories, the crisis underscores their population’s dependence on the welfare systems of the United States, France, the UK, and the Netherlands. At the same time, it casts a spotlight on persisting inequalities. Puerto Rico, for instance, has only one-fourth of intensive care unit beds per capita than the U.S. mainland, despite its much higher share of elderly residents.

The coronavirus crisis is bringing to the fore a number of long-term challenges for the Caribbean. If left solely to the logic of comparative advantages, the region’s world market integration tends to be one of specialization, not diversification. The downside is a high vulnerability to external shocks. In recent years, “resilience” became part of the vocabulary of Caribbean policymakers in the context of climate change, not to face global economic or health shocks. The current crisis demands thinking of “resilience” as a development goal in an even broader sense.

  • The pandemic also highlights the extent to which the Trump Administration takes the United States out of the game of soft policy approaches, and China finds a field left wide open. Beijing’s shipments of medical supplies and protective wear are a small investment, but they have a big impact in countries of some 100,000 inhabitants. Taiwan is also providing face masks and soft loans to those that still recognize it diplomatically. In contrast, what Washington seems to care about more than anything else is that the Caribbean nations should not accept Cuban doctors in to fight the disease.

April 20, 2020

* Bert Hoffmann is a Lead Researcher at the German Institute for Global and Area Studies (GIGA) and professor of political science at the Free University of Berlin’s Latin American Institute.

Hurricane Dorian: Silver Lining for Caribbean Unity?

By Wazim Mowla*

Men loading supplies onto a helicopter

CBP AMO agents deliver food and water to severely damaged Fox Town on the Abaco Islands in the Bahamas, in the aftermath of Hurricane Dorian Sept. 6 2019 / Wikimedia / Public domain / https://commons.wikimedia.org/wiki/File:CBP_Food_and_Water_Delivery_to_Bahamas_after_Hurricane_Dorian_(48693139732).jpg

Hurricane Dorian, which lashed the Bahamas for 68 hours in early September, revealed the severe limitations on Caribbean countries’ ability to  respond to increasingly brutal storms – an awareness that appears likely to contribute to greater regional cooperation.  Wind gusts of 220 mph, up to 15 inches of rain, and storm surges 23 feet above sea level caused more than 50 deaths, and 600 people are still missing a month later. Although the Bahamas opened 14 of its main islands for tourism soon after the storm, the economy has suffered major setbacks.  An estimated 80 percent of the fishery infrastructure is damaged in Grand Bahama, and close to 100 percent on Abaco Island. The country also suffered a large oil spill – more than 5 million gallons.

  • Dorian’s destruction is not without precedent in the Caribbean. Hurricanes Maria and Irma two years prior caused a combined total of $140 billion in damages and killed more than 3,000 people. While hurricanes have always afflicted the region, warm ocean temperatures in the Atlantic – raised by greenhouse gases trapped in the water – have made them more likely to develop into a category 4 or 5.

Caribbean countries were quick to respond to the Bahamas’ needs both individually and through the Caribbean Community’s (CARICOM) institutions. Individually, the national governments provided $1.7 million for recovery efforts and medical supplies. Some also sent soldiers, officers, and personnel to the Bahamas, including 100 soldiers from the Trinidad and Tobago Defense Force and 120 members from the Jamaica Defense Force. Others placed police officers on standby Bahamian internal security needed them and sent small teams of technicians to help restore water, medical, and phone systems.

  • As a regional collective, CARICOM also provided assistance. The Regional Security System, based in Barbados, dispatched more than 30 officers to the Bahamas; the Caribbean Development Bank issued $200,000 for relief aid with a $750,000 loan soon to come; and the Caribbean Disaster Emergency Management Agency (CDEMA) coordinated relief updates and logistics. The University of the West Indies has provided psychological, family, and social support and medical assistance to victims and evacuees.

These actions, however, fall far short of the Bahamas’ needs. Karen Clark & Company’s risk modeler estimates that the country will face close to $7 billion in damages alongside the already high volume of missing persons. On its own, the region does not have the capacity or the financial capabilities to assist more than it currently has. For example, the Caribbean Development Bank’s total of $1 million is already matched or dwarfed by countries outside the Caribbean. India provided $1 million to the Bahamas after Dorian (separate from a $150 million line of credit, announced at an India-CARICOM summit Prime Minister Modi held in New York last month, for cooperation programs to combat climate change).  USAID and the Department of Defense have pledged a combined $34 million. Relief efforts are further stunted because countries in the Caribbean have relatively small populations and limited economies, so they cannot expend large sums of resources or personnel to the Bahamas.

Dorian has overall benefited regional unity and cooperation, even though some neighbors have criticized Nassau’s decision to forcibly repatriate Haitian migrants living in camps destroyed by the storm. In addition to expressing solidarity and providing assistance, CARICOM countries appear to be moving toward a consensus about the implications of climate change for their region, possibly creating a new, almost existential area of cooperation among them, including a strengthening of decades-old – and under-utilized – mechanisms such as the Regional Security System (RSS). At the moment, only seven of the fifteen full member-states in CARICOM have signed the RSS agreement. CARICOM alone isn’t going to sway international opinion on the urgency for combatting climate change, but greater unity among its members will certainly help. Hurricane Dorian will not be the last strong storm to devastate the region.

October 21, 2019

* Wazim Mowla is an MA candidate in the School of International Service and Research Assistant at the William J. Perry Center for Hemispheric Defense Studies.

The Caribbean After the Hurricanes: What Path for Recovery?

By Daniel P. Erikson*

A group of man clear debris

Residents and volunteers begin clearing debris from Hurricane Irma on St. Maarten. / NLRC / Flickr / Creative Commons

This fall’s historically fierce hurricane season reminds us once again that the Caribbean remains extraordinarily vulnerable to natural disasters – especially in the lucrative tourist sectors – and needs to move beyond tourism.  The services sector in the Caribbean may serve as an important source of economic growth, but only if the region begins to take advantage of opportunities in banking and financial services; call centers and information and communication technology; off-shore education and health services; and transportation.

  • While the impact of Harvey, Irma, Jose, Katia, and Maria in U.S. states like Texas and Florida has received wide attention, the small island nations of the Caribbean have also been left to contend with extensive damage to infrastructure and loss of life that has resulted in thousands of newly homeless and dozens of deaths. Irma struck the tiny nation of Antigua and Barbuda as a peak-strength Category 5 storm, and Prime Minister Gaston Browne estimated that 95 percent of the properties on the smaller island of Barbuda were destroyed.  Irma then raked across the U.K. territories of Anguilla, the British Virgin Islands, and the Turks and Caicos, the French territories of St. Bart’s, Guadeloupe and St. Martin (including the Dutch half of St. Maarten).  Cuba also suffered as the storm swept across its northern coast and ravaged the third-largest city, Camaguey.  Then, just as Hurricanes Jose and Katia rattled the islands only to retreat as minor threats, Hurricane Maria strengthened into a Category 4 storm that ravaged Dominica and the U.S. territory of Puerto Rico with winds exceeding 150 mph, devastating local infrastructure and knocking out the power grid, possibly for months to come.

Clearly, the focus of the near-term will be relief and recovery efforts, as these small islands seek to cope with the enormous damage.  But rebuilding a stronger and more diversified service sector may offer the best path towards a sustainable and much-deserved recovery for the people of the region.  Several years ago, the Centre for International Governance and Innovation in Waterloo, Canada, asked me to assess what steps the Caribbean islands could take to diversify their economies away from an over-reliance on tourism to create a more sustainable future.  The lessons of that study, Beyond Tourism: The Future of the Service Industry in the Caribbean, remain relevant today.  The bottom line:  Expanding the competitiveness of the Caribbean services sector beyond tourism is a way to draw on regional strengths and broaden the basis for economic growth.

The hurricanes have dealt a tragic and costly blow to the Caribbean, but the reconstruction efforts may also provide an opportunity to build back stronger and more resilient economies.  While the damage is still being assessed, it is already clear that the lives of tens of thousands of people who live on these islands will never be the same and that property damage will extend into the billions.  The recent damage to Puerto Rico from Hurricane Maria will likely jolt those figures substantially higher, while some of the smaller, remote islands hurt by earlier storms may be uninhabitable for weeks to come.  French President Emmanuel Macron and the King of the Netherlands traveled to the region to show solidarity with their afflicted citizens, while the United States deployed teams to assist in disaster relief and deployed over $1 million in aid to the smaller affected islands – and is beginning to launch a major relief effort in Puerto Rico as well.  Once the challenges of treating the injured and assisting with basic human needs are met, much of the early reconstruction effort is likely to focus on rebuilding tourist infrastructure.  This will be necessary, but not sufficient, to create a full recovery.  Caribbean leaders have increasingly recognized that developing globally competitive services industries offers one way to retain high-skilled workers and mitigate the risk of external shocks to the tourist sector. During the Obama administration, Vice President Biden made a major effort to deepen U.S. investments in the Caribbean’s energy sector, and new sources of financing through the Inter-American Development Bank, the Overseas Private Investment Corporation, and private U.S. companies could similarly lead to a major push to modernize services-related infrastructure throughout the islands.  Future storms cannot be prevented, but a more diversified services sector will help the islands to navigate the challenge of reconstruction more effectively.

September 28, 2017

* Daniel P. Erikson is managing director at Blue Star Strategies in Washington, DC, and previously served as a White House and State Department advisor on Latin America during the Obama Administration.

Preparing the West Indies for the Demise of PetroCaribe

By Thomas Andrew O’Keefe*

ariwriter / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

ariwriter / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

The English-speaking Caribbean nations – whose heavy dependence on imported diesel and fuel oil to generate electricity has placed them among the most heavily indebted countries in the world (on a per capita basis) – will face massive headaches if PetroCaribe collapses.  They eagerly signed up for the Venezuelan initiative, which sells them petroleum with one- or two-year grace periods and long repayment schedules ranging from 15 to 25 years at 1 or 2 percent interest.  Participating countries can even pay with products or services in lieu of hard currency.  In the case of Guyana, Haiti, Jamaica, and the Eastern Caribbean mini-states, PetroCaribe’s financing scheme represents an estimated 4 to 7 percent of their annual GDP.  The worsening economic turmoil in Venezuela, however, raises serious concerns about PetroCaribe’s future.  According to recent media reports, PdVSA, the Venezuelan national petroleum company, is shortening repayment periods and increasing interest rates.

No doubt this is one reason why the Obama administration launched the Caribbean Energy Security Initiative (CESI) in June.  CESI seeks to diversify the Caribbean’s energy matrix away from its current heavy reliance on fossil fuels by using Overseas Private Investment Corporation (OPIC) loans and credit guarantees to encourage private sector investment in renewable energy.  It is premised upon the Caribbean’s huge potential to generate energy from the sun, wind, geothermal sources, and maritime currents.  In the past, the principal bottlenecks to harnessing these abundant resources have been hefty startup costs and small populations that make it difficult, if not impossible, for the private sector to recover profits within a reasonable period of time.  Although the initial capital investment for solar- and wind-based technology has dropped considerably in the last few years, it is unrealistic to expect Caribbean nations to make a full switch to renewable energy resources anytime soon.  A more realistic, short- to medium-term alternative is to make greater use of natural gas.  Although still a fossil fuel, gas is more efficient – and therefore the generated electricity is less costly – than fuel oil and diesel.  Moreover, electricity generated from natural gas emits 70 percent as much carbon dioxide as oil, per unit of energy output.

The shale gas boom in the United States generated by innovations in hydraulic fracturing has led to calls to lift restrictions on U.S. natural gas exports to those countries with which it does not have a free trade agreement.  The Caribbean is potentially a major target market of this natural gas in liquefied form (LNG), but this would be a big mistake.  Lifting restrictions on exports will inevitably raise natural gas prices in the U.S., thereby hurting consumers and putting the nascent revival of domestic manufacturing at risk.  It would also require building expensive LNG offloading and regassification facilities in the West Indies, which would run up against the same economies of scale limitations (except in Jamaica and Hispañola) that have undermined a mass transition to renewable energy.  A more realistic alternative is to revive plans to build a natural gas pipeline from Trinidad and Tobago to Barbados, and then up through the Eastern Caribbean.  Proposed back in the early 2000s, it was scuttled with the appearance of PetroCaribe in 2005.  Trinidad and Tobago has ample reserves of natural gas; at one point before the shale gas revolution it was the largest source of imported LNG in the United States.  The pipeline would link islands with populations of under 100,000, where LNG is economically unviable, with the more densely populated French dominions of Guadalupe and Martinique.  It would also help revive the floundering Caribbean Common Market and Community (CARICOM).

* Thomas Andrew O’Keefe is President of San Francisco-based Mercosur Consulting Group, Ltd.

Caribbean Integration: Necessary but Elusive

By Victor Bulmer-Thomas*

Embed from Getty Images

The dream of Caribbean solidarity has never been in greater peril.  Norman Girvan, who died on April 9, was committed to the cause of Caribbean integration all his adult life, including during his time as Secretary-General of the Association of Caribbean States.  Born and raised in Jamaica, he saw no contradiction between Jamaican nationalism and Caribbean solidarity.  After steady progress from CARIFTA (a free trade area formed in the 1960s by a number of former British colonies) to CARICOM (a customs union formed in 1973 by all British ex-colonies and many colonies) to a commitment starting in 2006 to build a Caribbean Single Market and Economy (CSME), regional integration has gone backwards.  The CSME was never completed; a ‘pause’ in its implementation has been introduced by the Heads of Government and the famous Regional Negotiating Machinery (RNM) – itself formed to promote Caribbean unity in international agreements but then largely dismantled.  Suriname (in 1995) and Haiti (in 2002) have joined CARICOM, but the Dominican Republic is still outside after 25 years of discussions.  Cuban membership is still a distant dream, and the only non-independent state that participates today is the British colony of Montserrat, with a population of 5,000.  CARICOM may in theory represent much of the Caribbean population, but Haiti – its largest member by far – is not in the CSME.

Countries outside the Caribbean have reacted in very different ways to the region since the end of the Cold War.  The European Union (EU), three of whose member states – France, Holland and the United Kingdom – still have territorial ties to the Caribbean, has negotiated an Economic Partnership Agreement (EPA) with CARIFORUM (CARICOM plus the DR) that will in due course give the EU unrestricted access for almost all goods and services.  The agreement has generated very little enthusiasm in the CARIFORUM states despite the improved access for some of their goods and services in the European market.  Venezuela has persuaded most oil-importing countries to join Petrocaribe, but only a handful (Antigua & Barbuda, Cuba, Dominica, St. Lucia and St. Vincent & the Grenadines) have been attracted by the more ambitious ALBA.  The United States, a colonial power itself in the region thanks to Puerto Rico and the Virgin Islands, still offers asymmetrical trade privileges through the Caribbean Basin Initiative (CBI) and its related acts, but some of these provisions will end in 2020, and it is far from clear what will replace them.  Canada, which established CARIBCAN (similar to the CBI) in 1986, is negotiating its own version of the EPA with a broadly similar set of countries, but the negotiations have stalled recently.  Only China appears to have made huge advances in the region through increased exports and major foreign investments despite several of the countries that still recognize Taiwan.

All integration schemes, as Norman Girvan would have been the first to recognize, involve a balance between widening and deepening.  Through its premature commitment to a CSME, the member states of CARICOM took deepening too far.  At the same time, widening – necessary to negotiate with outside powers – has not gone nearly far enough.  It is a scandal that the Dominican Republic remains outside and that so little has been done to embrace Cuba despite the good political relations all states have with the island.  And the non-independent territories, as numerous as the independent states, should not be overlooked.  France and the UK have dropped their objections to closer ties between their territories and CARICOM, and the Dutch territories are largely autonomous already.  Even the U.S. territories would welcome closer links.  And when relations between Cuba and the United States are normalized, as could happen quite soon, it would be in the Caribbean’s interests to have fully embraced Cuba first.  That is an outcome that Norman Girvan would have strongly welcomed.

*Dr. Bulmer-Thomas is a professor at the University College London Institute of the Americas, fellow (and former director) at Chatham House, and author of numerous books, including The Economic History of the Caribbean Since the Napoleonic Wars (2012).