T&T and other small, developing island states in the Caribbean must overcome economic challenges like climate change and a lack of financing from global institutions if they are to develop.
This is the view of a former finance minister and a Central Bank governor Winston Dookeran, who spoke on the topic of Caribbean economic development and diplomacy in New Delhi, India at a forum hosted by the Research and Information System for Developing Countries. RIS is a New Delhi–based autonomous policy research institute that specialises in issues related to international economic development, trade, investment and technology.
Dookeran referred to one of his books “The Caribbean on the Edge” which details the economic and social problems that T&T and Caribbean countries face.
He quoted from international relations expert Professor, Anthony Bryan, who said that the book spells out strategies for small economies to navigate the waters that are threatening to become a category five storm.
Drawing upon some of his ideas in that book while speaking during his lecture in New Delhi last week, Dookeran lamented that the small, developing island states of the Caribbean do not have the financing to effectively deal with the fallout from climate change.
“Challenges in climate action, and the global financing of such action is a key concern facing society, more pronounced in the region because of its environmental vulnerability and fragility. Strategies to link funding of climate action with sovereign debt of national governments and with new capital for growth may require some new global rethinking of the issues and prospects. The UN’s Sustainable Development Goals (SDG’s) are clearly beyond reach, without a global initiative.”
He also said that small Caribbean island states face the “middle income trap” as the international economic system does not allow these states to compete fairly.
In 2007, a World Bank report coined the concept of the “middle-income trap.” At the time, the term was used to describe countries mostly in Latin America, Caribbean and the Middle East who, despite economic growth and falling poverty rates, were never able to become high-income countries.
“The international political economy today poses major obstacles to small countries being able to compete internationally, as their levels of productivity may have reached its limits The struggle to attain high income status for these countries caught in the middle-income trap may be elusive. This trap may reverse past development gains and induce security challenges, in a world already facing challenges. The need for a global social compact that links finance with security and peace initiatives is emerging as a high priority,” Dookeran said.
Another issue he spoke about was tax justice and this refers to ideas, policies and advocacy that seek to achieve equality and social justice through fair taxes on wealthier members of society and multinational corporations. To this end, tax justice often focuses on tackling tax havens and curtailing corruption and tax abuse by multinational corporations and the super-rich.
Tax justice has emerged as a global public good, fuelled by the stigmatisation of Caribbean countries as tax havens, Dookeran said, referring to a recent memorial address by prominent T&T and Caribbean economist, Marla Dukharan who commented on “how colonial legacies and current global economic policies have made it difficult for Caribbean countries to achieve economic sovereignty.”
Dookeran said that she, in a provoking lecture, called for global support for the UN Tax Convention to shift the power of administering “tax justice” from the OECD to the United Nations. In her words “for the Caribbean, there is a nexus between tax justice, social justice and climate justice which are at the core of the exercise of economic sovereignty. “
Another weakness of T&T and the Caribbean economies is poor infrastructure, which he said the region’s governments simply do not have resources to address.
“To confront the issue of global connectivity, the demand for resilient infrastructure, across the region in a digital era is clearly out of the grasp of resources of collective national governments in the region.”
Despite the challenges and the current global economic and power structure, Dookeran noted that the winds of change are blowing.
“The power structure of the world order is in transition and geo strategic change is on the agenda. The Caribbean is caught in not knowing where to turn or how to turn. Many, among the major powers see this as a binary choice, the Caribbean sees this as a diffusion that creates political stress. Professor of International Relations Andy Knight, says that the world is crying out for an alternative and he asks, could a world order that focusses on ‘ideas and ideology’ be decoupled from the military, economic and technological sources of power?’”
T&T’s High Commissioner to India, Dr Roger Gopaul who also spoke briefly at the forum, spoke highly of India as a rising global economic power with which small Caribbean economies are deepening trade, business and other ties.
Earlier this year, India’s Finance Minister Nirmala Sitharaman said that India is expected to overtake Japan and Germany to emerge as the world’s third-largest economy by 2027. Currently, in U.S. dollar terms, India is the fifth largest economy with a size of about US$3.7 trillion in nominal terms.
Gopaul said Prime Minister Dr Keith Rowley was in India earlier this year and also referred to Jamaica’s Prime Minister Andrew Holness as well as Guyana’s President who visited India recently to deepen ties in the areas of business and technology.
Gopaul used these examples to show that there is a shift in global power from the developed Western countries to the Eastern countries like India. The diplomatadvised that T&T as well as other countries in the region must also develope stronger ties with rising Eastern powers like India.
Dookeran who also spoke specifically about India’s rise said that the old relationship between India and the Caribbean may need to be updated given India’s rise as a global power.
