Despite the economic hardships Caribbean countries face, it is important that regional countries work together to overcome the difficulties, said Dr Dillon Alleyne, economic affairs officer and deputy director, Economic Commission for Latin America and the Caribbean (Eclac).
"The Caribbean economies are at a crossroad and the global system of production and distribution has changed with serious consequences for countries for countries that are unable to make the structural transformation necessary for improved competitiveness," he said.
Alleyne, who presented an academic paper, was speaking on May 16 at Eclac's office, Chancery Lane, Port-of-Spain, at a symposium where economists gave opinions on a paper by Foreign Affairs Minister Winston Dookeran.
In March, Dookeran presented an academic paper on Introducing the Convergence Model of Integrated Production, to the meeting of Representatives of Regional Integration Bodies on the Conference on Sustainable Development in Latin America and the Caribbean in Bogota, Colombia.
Alleyne referred to the main thesis of Dookeran's paper.
"Dookeran argues that despite the gloom, there is strength in unity, but that such unity must embrace the whole region of Latin America and the Caribbean," he said.
In his presentation in Colombia, Dookeran said: "If we are to survive, there exists no alternative option to co-operative effort involving all the nations in Latin America and Caribbean region."
Alleyne described Dookeran's economic ideas for the Caribbean region as "thought provoking."
"Dookeran's ideas represent a thought-provoking response to the current difficulties faced by the Caribbean economies and offer a strategy for improving the economic and social conditions in the sub-region," he said.
Alleyne said Dookeran recognises the challenges are global and that low growth, escalating debt and huge fiscal deficits are several of the woes these countries must address.
He referred to Dookeran's scepticism about "mainstream" international institutions, like the International Monetary Fund (IMF), World Bank and the Inter-American Development Bank (IDB), and the measures they use which cannot help develop meaningful strategies for the region.
"Dookeran argues the need to develop policy buffers that are internally generated and externally supported and hints at the need to develop indicators that better reflect the multi-dimensional vulnerabilities of small states. He also focuses on the severe fiscal challenges faced by the Caribbean, which, as a consequence, limit the fiscal space and, particularly the space for the service economies."
Pillars of economic integration
Alleyne said Dookeran's vision on regional economic integration rests on three pillars: a new approach to regionalism which focuses on the wider hemisphere; an emphasis on capability building through co-operation and not just a focus on trade and markets; and a strong focus on production integration and competitiveness.
"Consequently, he proposes a new convergence model that appears to involve initially the integration of sectors among the resource-rich countries of the Caribbean and those of Latin America. Dookeran is confident the model will deliver a competitive region with vibrant capital flows, good infrastructure, an enhanced role for the private sector and increased diplomatic leverage in the international community."
Alleyne agreed with Dookeran's proposition, saying the limitation of trade was echoed in the United Nations Development Programme's (UNDP) report, in which it is argued the liberalisation of trade does not ensure human development and expanding trade does not always have a positive or neutral effect on development.
He said if small Caribbean countries are to benefit from trade, there must exist certain social and institutional conditions.
"Trade liberalisation alone on its own has not been sufficient to deliver robust economic growth to Caricom member states. The solution as suggested was a concerted effort on the part of the region to address productive diversification and systemic supply side constraints," he said.
Alleyne made reference to Dookeran's proposal that the resource-rich countries, like T&T, Guyana and Belize, could be the focal point for developing a regional integrated economy.
"Dookeran suggested that the mechanism for convergence will require bringing together capital and scale economies and the resource-rich Caribbean countries would play a crucial part in this process."
Alleyne questioned whether Caricom has the capacity to carry out and support greater economic integration.
Despite this, he said, Dookeran is against creating a new structures outside Caricom to support these initiatives.
Dookeran's position
Dookeran in the presentation in Colombia said: "The region is at a defining juncture in its history."
"We are all painfully aware of the marginalisation of small states. Persistent low growth, escalating debt, huge fiscal deficits and high unemployment, but are some of the woes many states have to address in this current environment. United we stand, divided we fall."
To combat these problems, Dookeran said: "Despite this dismal picture, we must remind ourselves there is strength in numbers. If we are to survive , and far more to flourish for the advancement of our peoples, there exists no alternative option to co-operative effort involving all the nations in Latin America and the Caribbean region."
He said coming out of the 2008 financial crisis many small Caribbean nations have been constrained in their ability to respond to domestic policy and to deal with the external economic shock.
Dookeran criticised the IMF, World Bank and other international financial bodies for failing to meet the needs of small developing countries, saying they measure the small economies merely in terms of "arithmetical ratios."
"Ratios do, indeed, reflect the realities, but do not prescribe a suitable course of action for our countries. What is required is the adoption of innovative approaches," Dookeran argued.
He used the example of hemispheric bodies like the Community of Latin American and Caribbean Nations (CELAC) that have assisted in investment initiatives.
"The 2011 Caracas Action Plan adopted by the inaugural CELAC summit in Venezuela in December 2011 calls for activities aimed, inter alia, at the creation of tools to improve financing capabilities of the intra-regional trade," Dookeran said.
