Photo by Nasik Lababan 

Decisions taken at the G7 summit in relation to China will become an issue the Caribbean will have to respond to. David Jessop believes that the coming chill in relations between the West and China will make finding solutions to the problems the region faces more challenging.

Can the Caribbean avoid being caught up in the accelerating east-west struggle for global influence? Is the region likely to find itself in a bidding war, ‘dancing to the rhythm of dollar diplomacy’, as Jamaica’s former Prime Minister, Bruce Golding, has suggested? 

Reading the communiqué from the recently held G7 summit, it is hard to avoid the conclusion that the consensus arrived at by wealthy western nations on relations with China and Russia, the promotion of shared values, and investment in post pandemic economic recovery, will not be used to attempt to seduce the region.

Although the meeting held in England’s far Southwest touched on multiple issues, it is the future approach agreed towards China and its Belt and Road Initiative, and on corporate taxation which will likely become the most complex future issues that Caribbean governments must now respond to. 

Despite differences between the US and EU about the detail, there was, according to US officials, a common recognition of ‘the threat’ China posed. 

In the final communiqué and at subsequent press conferences, it was made clear by President Biden and others that the G7 intend trying to counter China’s growing global influence. Their objective is to offset its economic rise by offering developing nations an alternative infrastructure plan. This is intended to rival Beijing’s 2013 Belt and Road infrastructure and trade Initiative in which Jamaica, Trinidad, the Dominican Republic, Cuba, and many other nations are already participating.

The plan, President Biden said, is to create “a values-driven, high-standard, transparent financing mechanism” that will provide and support projects in four key areas: climate, health, digital technology, and gender equity. 

Reflecting this, the communiqué makes clear that the G7 will ‘continue to consult’ with its international partners on what it describes as ‘competition in the global economy’ and ‘collective approaches to challenging non-market policies and practices’.  The document links such new initiatives to spelt out concerns about respect for human rights and fundamental freedoms.

The approach is a belated recognition that China’s rise to global economic preeminence is likely, and a fear that its values, system of government, and growing military strength may eclipse the global reach and influence of the US and its G7 partners: Canada, France, Germany, Italy, and Japan, plus the European Union.

Although the details of the G7’s proposed ‘Build Back Better World Partnership’ initiative have yet to be spelt out, it would appear to involve in the first instance the creation of a high level G7 committee to consider according to President Biden, how to “meet the more than US$40 trillion needed for infrastructure in the developing world”.

The emphasis will be on infrastructure investment in low- and middle-income countries and in Africa. It will also involve other nations in seeking to ‘orient development finance tools’ to address climate change; health systems and security; digital solutions; and advance gender equality and education. It will involve, the communiqué suggests, ‘strategic partnerships’ that are market led, involve private sector capital, and support from national and development financing institutions. 

After the summit, President Biden chose to place the initiative in the context of a contest “not with China per se”, but with “autocrats, autocratic governments around the world, as to whether or not democracies can compete with them in the rapidly changing 21st century”.  

The inference is that by placing support in the context of values and competition for influence, the G7’s leaders and those attending a subsequent NATO meeting have begun to frame the parameters of a new sort of cold war.

China’s response has been rapid and unequivocal. “As a group composed of developed countries, the G7 should contribute more to helping developing countries accelerate their development rather than drive conflicts and divergences to disrupt the process of global economic recovery”,  China’s Foreign Ministry spokesperson, Wang Wenbin, told a press briefing in Beijing. “Any attempt to meddle in China’s internal affairs, undermine China’s sovereignty, or tarnish China’s image in disregard of basic norms of international relations is doomed to fail” he added. 

Writing recently in the Jamaica Observer about a coming cold war, former Prime Minister Golding, recognised the problem the G7’s new thinking poses for the Caribbean. He noted that Washington  is ‘almost certain to insist on loan, grant and investment conditions designed to discourage recipient countries from engagement with China’s Belt and Road’. Observing the significantly greater leverage the US has in the region, he suggested that the Caribbean needs to start thinking now about how it responds to ‘this new struggle between two economic superpowers with both of which we have comfortably enjoyed such good relations’.

At their meeting, the G7 also agreed to continue trying to reach consensus on a global minimum tax of at least 15% on a country-by-country basis through the G20 and OECD, with the objective of reaching agreement this July when G20 Finance Ministers and Central Bank Governors meet. 

The measure is aimed, the US says, at ‘reversing a 40-year race to the bottom’ in relation to where tax liability is due. However, the initiative potentially threatens to undercut Caribbean fiscal sovereignty, every economy in a region where countries attract investment through low corporate taxation and tax holidays, and end legitimate business structured through the region’s offshore financial centers. In doing so, it raises serious questions about future Caribbean growth, sustainability, job creation and the ability to fund education, health care and social provision, at just the moment the region is struggling to address worsening pandemic related indebtedness.

How quickly any of what the G7 has proposed will materialise, remains to be seen. This is because of the sheer complexity of implementation, its financing, and maintaining unanimity, when a possible return to Trumpist, America first unilateralism in 2025 has begun to be factored into medium term thinking in Europe about China, global trade, and US reliability.

By virtue of its location, smallness and need for development, the Caribbean will continue to struggle to be the mistress of its own destiny unless it can achieve unity of purpose, new thinking, a clear vision, and real time execution. The coming chill in relations between the West and China will make finding solutions to the problems the region faces more challenging. 

These are the themes that this column will now explore as after 26 years of continuous publication it moves from being weekly to monthly.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

June 25^th, 2021

Photo by Executium 

This year has seen the Bahamas and the Eastern Caribbean introduce Central Bank Digital Currencies (CBBCs) . Other nations are expected to do so soon. David Jessop believes that CBBCs could revolutionise Caribbean financial transfers, engage the unbanked, and do much to encourage intra-regional trade.

In less than three months’ time, El Salvador intends becoming the first country in the world to make Bitcoin its official currency alongside the US Dollar.

The country’s President, Nayib Bukele, a populist and media savvy disruptor, says that his decision will generate employment, enable the financial inclusion of tens of thousands of the country’s citizens who operate outside the formal economy, and enable its large diaspora in the US and elsewhere to send money to their families more cheaply. The idea is that the government will guarantee convertibility to dollars at the time of transaction through a US$150mn trust fund created at the country’s development bank BANDESAL.

Others are far from sure how this will work. 

The IMF says it needs to assess the legal, financial, macroeconomic and regulatory problems that may occur in relation to the US$1bn loan it is considering, and the World Bank has expressed an unwillingness to assist in implementation given Bitcoin’s ‘environmental and transparency drawbacks’. It is also unclear how the country will manage the risks inherent in its volatility: Bitcoin peaked in March at 58,734 to the US Dollar before falling back to around 39,091 this month.  

Paradoxically, El Salvador is taking this uncharted course just as regulatory authorities around the world are exploring how they can manage the risks posed by cryptocurrencies.

In the last few days, the Basel Committee on Banking Supervision, the primary global standard setter for regulation by central  banks, has said that it is consulting on a proposal that would see digital currency assets placed into two differently managed groups. Cryptocurrencies, such as bitcoin, it said, will be subject to ‘a new conservative prudential treatment’ while others will be eligible for treatment under the existing Basel Framework for banks

The announcement follows an unrelated decision last month by the Financial Stability Committee of China’s State Council which announced it would ‘crack down on Bitcoin mining and trading behaviour’. Subsequent commentary in China’s state media made clear that its financial institutions must not participate in or facilitate cryptocurrency transactions and criticised the profligate use of energy for Bitcoin mining. Though not stated, these developments may relate to work the country’s Central Bank is undertaking on the creation of a digital currency and electronic payment system for a  Digital Yuan that may eventually be promoted as a global reserve currency.

A further indirect blow was struck when the US Department of Justice challenged the assumption that crypto currencies are secure.  Using blockchain analysis, it seized back 63.7 bitcoins worth US$2.3mn, paid by Colonial Pipeline to ransomware hackers by obtaining in an undisclosed way the private key needed to access the money.

These developments affecting the future of unregulated cryptocurrencies suggest that the innovative, balanced, and progressive approach being taken towards digital currencies by Caribbean nations have real value.

It has long been evident that the Caribbean needs to modernise and speed up its creaking, largely conservative banking and payments systems in ways that embrace the unbanked and rural communities, works around the region’s fragmented geography, and helps citizens cope during a pandemic and during  post disaster recovery.

The challenge has been how to do so in a manner that is developmental in a region of multiple currencies, reduces the relatively high cost of transactions, remittances, and monetary exchange, embraces tourism, and supports the growing pressure on banks and businesses to respond to complex international anti-money laundering and terrorism financing requirements.

What now sets the Caribbean apart from those seeking to use or promote cryptocurrencies is the development of what are known as Central Bank Digital Currencies or CBDCs. These provide an electronic record in the form of a digital token that represents in virtual form, a fiat currency, issued and backed by a government or regional financial authority. 

This year has seen the Bahamas and the Eastern Caribbean introduce two such currencies. 

The first was the Bahamas SandDollar, a CBDC issued by the Bahamas Central Bank, which can be used for transactions on mobile phones. A few months later, the East Caribbean Currency Union (ECCU) launched a digital EC Dollar pilot project known as D Cash.  This involves Antigua, Grenada, St Kitts, and St Lucia, developing a digital payment platform backed by the Eastern Caribbean Central Bank, which, after a twelve-month assessment, is expected to roll out the initiative in all eight ECCU nations. 

Other Caribbean countries are also exploring the use of digital CBBCs. They include Belize and Jamaica which hope to have fully operational systems in place by 2022, Haiti which intends developing a pilot programme, and Barbados which has been using since 2017 a ‘synthetic’ CBDC issued by a third party, backed 101% by notes and coins, supervised by the Central Bank and the country’s Financial Services Commission. However, this has yet to progress to a Central Bank issued CBDC. Suriname too has explored a CBDC, and Cuba is considering the role of cryptocurrencies and CBDCs for the additional reason that their use may enable transactions that US sanctions have made it hard to undertake

There is also potential interest elsewhere. Speaking recently at a virtual conference in the Cayman Islands, the Caribbean economist, Marla Dukharan, has suggested that as a world-class jurisdiction that is entrepreneurial, progressive, and forward-looking, it should be exploring technologies that help to distinguish it from others. 

More generally, Ms Dukharan who also works with Bitt, the Barbados-based Fintech company that helped develop D Cash and other Caribbean digital currencies, says that future initiatives have to come from policy makers and those with an interest supporting socio-economic development since CBDCs are unlikely to be of interest to the non-indigenous banking sector in the region.

She believes that Government, private sector and cross border transactions for trade and remittances can be made much more affordable and efficient. “Policymakers have the potential to completely change the way business is conducted”, she stresses. “I am proud that the Caribbean is becoming the world’s Central Bank Digital Currencies hotspot, supportive of financial inclusion, compliance efficiency, and less informality. These are important considerations especially for the Caribbean”.

She is right. Carefully monitored Central Bank regulated digital currencies could in a decade not only revolutionise Caribbean financial transfers, but do much to engage the unbanked, encourage intra-regional trade, and even facilitate the reconceptualisation of the Caribbean Single Market and Economy. 

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

June 18^th, 2021

Photo by Erebus

Guyana and Suriname are about to experience levels of development most countries can only dream about. David Jessop believes that what is lacking is any debate about where further finds might lead, and what the environmental, economic, and geopolitical implications might be.

It is not often that well-resourced and politically powerful companies such as ExxonMobil and Shell suffer historic defeats. However, last month, in different ways, both oil majors saw activist shareholders and environmentalists cause them and the international energy sector, to have to think hard about what the future holds for hydrocarbons.

On May 26, a small hedge fund, Engine No 1, which held a 0.02% shareholding in Exxon worth about US$50mn, led a powerful dissident shareholder group to propose the election to the main board of the oil giant, four alternative nominees. Two with proven track records in creating significant earnings for energy companies and strong environmental credentials, were elected immediately, and a third was confirmed to its board a short while later.

At issue was whether Exxon, a massive global corporation valued at about US$250bn, could by adjusting its business strategy respond to rapidly changing global thinking about combatting climate change, and in doing so, improve its financial performance. In contrast to many other oil majors, Exxon has chosen up to now, industry analysts say, to spend its resources on boosting output, based on a belief that oil and gas demand would continue to grow. 

What was telling in Exxon’s case was that Engine No 1 was able to obtain the support of major asset  managers including BlackRock, reportedly Exxon’s second-largest shareholder, on the basis that the three new directors would bring ‘fresh perspectives and relevant transformative energy experience’ in the coming energy transition.

Coincidentally, a second significant setback for the global energy sector came on the same day in a ruling in the Dutch courts in relation to Royal Dutch Shell. There, a court ordered that it must deepen its planned greenhouse gas emission cuts, ordering Shell Group ‘and the suppliers and customers of the group’ to reduce by 45% by 2030 its carbon emissions from 2019 levels.

In a case brought by Milieudefensie on behalf of more than 17,000 Dutch citizens and six other environmental groups including Greenpeace and Friends of the Earth Netherlands, Shell had argued that it had already  set targets consistent with limiting global warming to the more ambitious target of 1.5 degrees Celsius contained in the Paris Climate Agreement. But since the ruling, the company’s Chief Executive, Ben van Beurden, has said that despite disputing the judgement, Shell will rise to the challenge and “in a way that remains purposeful and profitable” seek to accelerate further its emissions strategy.  

The two separate but related events coincide with renewed US and Chinese interest in achieving global agreement at COP26 in Scotland in November on the delivery of measures that ensure adaptation and resilience in response to climate change; and growing climate related environmental activism, legal challenges, and consumer led pressure. 

This is all happening just as the economic and geopolitical map of the of the Caribbean is being redrawn by the finds made by ExxonMobil and others off Guyana and Suriname, and the possibility of new prospects off the coasts of Barbados, Grenada, Trinidad, and the Dominican Republic.

This potentially places more nations in the Caribbean, in the apparently paradoxical position of becoming major energy producers in a region that is tourism dominated, deeply concerned about global warming and sea level change, and the dangers posed by carbon emissions.

Much of the recent environmental focus in and on the region has been on the extraction of undersea oil and related issues such as licensing, spillage, gas flaring, and the impact on marine life and biodiversity, but this is likely to change.

Consumer activism, both domestic and international, are becoming commonplace, and in the years ahead may rapidly move to onshore projects that the newfound oil wealth will bring.

In an indication of where in Guyana’s case oil extraction may take it, President Ali and his ministers have recently outlined some of the land-based projects under active discussion. 

These include an energy corridor linking Brazil’s northern states of Roraima and Amapá, with Guyana, Suriname, and French Guiana to share electricity: a project, for which the IDB produced in 2016 an ‘Arco Norte electrical Interconnection’ baseline study which proposes the generation and exchange of renewable energy between the four nations.  Other plans involve a significant expansion in Guyanese agriculture to ‘feed the region’; a deep-water port to facilitate shipping and act as a logistics hub for the Americas; the full development of the road linking Georgetown to Brazil’s land locked northeast; and new infrastructure developments enabling the development of other industries in an environmentally  sensitive region.  

All such projects in the Guianas are of course challenging, but if professionally managed in their development, execution, and operation, they could see Guyana and Suriname becoming sustainable development models for the Americas, and an example of what might be achieved in the dying decades of big oil.

For this to happen, it will require not just transparent and publicly accountable decision making, licensing processes and regular environmental audits, but a more pro-active approach to the questioning that will come from civil society, globally connected environmental lobbies, and investor and consumer activists in the US and Europe.

In an indication of this, the World Wildlife Fund Guianas recently called for a full environmental and social assessment of the oil and gas sector in Guyana and Suriname in order to give decision-makers and the public an objective view of what is happening. The WWF argued that this will not just benefit stakeholders’ understanding of the issues but co-create with Governments and the companies concerned long-lasting and sustainable solutions that are less costly and conflicting. 

Unfortunately, much of what has been written in the region and beyond about the potential for new-found hydrocarbon and mineral wealth, obscures a more important but largely lacking intra-Caribbean debate about where further finds lead, and what the environmental, economic, and geopolitical implications might be.

After years of exploitation, Guyana and Suriname deserve the development they are about to experience. However, this should not be at the cost of becoming carbon emissions exporters, the environment, or the region’s desire for a low-carbon, sustainable future.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

June 11^th, 2021

Photo by Braňo 

It is quite possible that as the year goes on, Cuba and Argentina enter into a production agreement for two of Cuba’s COVID-19 candidate vaccines, if certified for use. David Jessop writes that the region should be proud that a relatively small Caribbean nation may soon be able to supply a self-developed vaccine to the Americas and the wider world.

Just over a week ago, Argentina’s Health Minister, Carla Vizzotti, and her Cuban counterpart, Dr José Angel Portal, signed a letter of intent that may lead to the joint production in Argentina of some of the vaccines Cuba has developed against COVID-19. The collaboration will be, the letter says, for ‘the immunisation of the population of Cuba and Argentina, as well as of the countries of Latin America and the Caribbean’. 

Symbolically, the outline agreement was initialled at the headquarters of the Cuban medicines’ regulatory authority, the Centre for State Control of Medicines, Medical Equipment and Devices, which is expected to rule very soon on the efficacy and licensing of Cuba’s Soberana 02 and Abdala vaccines.

According to Dr Vizzotti, the idea is not just to fully develop, produce and apply the vaccines for Latin America and the Caribbean, but also to provide inputs, explore the possibility of purchasing, enable the support required to scale up production, and more generally to expand the possibility of research in other areas of health, science, and technology. 

The announcement came a few days before the Pan American Health Organisation’s (PAHO) Director, Carissa Etienne, called on the world to intensify efforts to improve the region’s access to vaccines, observing that more than 1m people in Latin America and the Caribbean have died from COVID-19.

“This pandemic is far from over, and it is hitting Latin America and the Caribbean severely, affecting our health, our economies, and entire societies. Yet only about 3% of our citizens have been vaccinated”, she said in a statement.

Congratulating countries that have indicated their willingness to donate tens of millions of excess vaccine doses and calling on other countries to follow suit, PAHO’s Director urged nations with extra doses to consider donating a significant portion of these to the Americas.

Dr Etienne stopped diplomatically short of asking the obvious question: Why when China has been donating and selling its vaccines in ever larger quantities in the Americas (165m doses at least) in countries from Chile to Trinidad and the Dominican Republic, has it taken the US so long to respond to requests from its neighbours to release some of what it has promised?

As this is being written, President Biden has just announced that the US will distribute, largely through the WHO’s COVAX facility, 25m of an available 80m doses of its vaccines globally, of which 6m are destined for 12 large Latin countries plus Haiti, other CARICOM nations, and the Dominican Republic. 

Despite US officials having earlier said non-attributably that the Biden administration planned to prioritise sending COVID vaccines to Latin America and the Caribbean because of its concern about Chinese and Russian vaccine diplomacy, President Biden has wisely emphasised that the US response  was “not to secure favors or extract concessions” but to save lives.

How in practice the 6m US vaccines will be divided up in Latin America and the Caribbean will be explained in due course. However, the need in Peru alone where just 6.2% of the country’s 33m people have been vaccinated, evidences that what is now needed is a joined up apolitical global response.

In this, US politics aside, Cuba together with Argentina undoubtedly have a vital role to play. 

If as seems increasingly likely, at least two of the 27 COVID-related products Cuba has at different stages of development are certified nationally and are then approved by the WHO for wider use, the Caribbean and Latin America will have a vaccine of its own. Moreover, it will be available at a low price – or in some cases for donating – through a commercial strategy, that “combines humanity and its impact on world health”, according to Vicente Vérez, the Director General of Cuba’s Finlay Institute.

Much more will be known in August about the venture now being considered between BioFarmaCuba, the business that manages Cuba’s biotechnology and pharmaceutical Industries, and Argentina and others in Latin America, when Argentina’s President, Alberto Fernández, and President Díaz-Canel meet in Havana. 

Notwithstanding, so concerned about the vaccine deficit and future variants have governments in the region become, that some like the Dominican Republic have begun to explore the possibility of developing domestic capacity to produce under licence, vaccines developed in Russia, Europe, China, and the US.

If as many epidemiologists and public health experts around the world now believe, a mutated virus may be with us for many years to come, requiring regular booster shots, then Argentina and Cuba’s ability to meet a part of the demand, will have a value that goes far beyond the significant economic returns this might create. 

Cuba is estimated to earn annually about US$6.3bn from its biotech products produced at home and in other parts of the world from its proven world class biotechnology and research. If together with Argentina and others, Cuba can now earn more by rolling out its COVID related products and the research it has begun into emerging COVID variants, this will do much to offset the US sanctions that are driving down the Cuban economy and creating real suffering and hardship for the Cuban people. 

What is much less clear is what the Biden Administration may then say about a country that it recently determined a non-cooperating ‘sponsor of international terrorism’ or about Cuba’s continuing global medical support.

The provision of health care and vaccines should be beyond politics. They are matters of morality and humanity, especially at a time of global crisis and a stubborn pandemic. There is more than enough room in what Cuba likes to describe as ‘our Americas’, for all proven certified vaccines. 

The Caribbean should be proud of the fact that a relatively small nation may soon be able to bring a self-developed vaccine to the Americas and the wider world.

David Jessop is the Editor of the electronic newsletter Cuba Briefing and a consultant to the Caribbean Council and can be contacted at david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

June 4^th, 2021

Photo by Fernando Jorge

The pandemic has proved conclusively that without tourism much of the Caribbean economy is unviable. Echoing a recent IDB report, David Jessop asks whether the basic product of sun, sea and sand is sustainable?  

Sometime in the next twelve months, when the pandemic is fully brought under control in North America and Europe, visitors will return to the Caribbean in significant numbers. Once that begins to happen, governments, conscious of tourism’s ability to drive rapid GDP growth, will encourage the fastest possible restoration of pre-pandemic arrival levels. 

This is understandable, but begs two seemingly perverse questions: Is the basic Caribbean tourism product of sun, sand, and sea, sustainable, and can the region remain competitive once present pent-up global demand is sated?

Unlike most Caribbean industries, tourism has grown in a haphazard unintegrated manner, powering its way from the 1990s on, to dominate much of the Caribbean economy. This happened as arrangements for agriculture and commodities were attenuating, disposable income was growing rapidly in North America and Europe, and governments were happy to regard tourism as an alternative, seemingly limitless way to rapidly generate economic growth and new revenues. 

The pandemic has proved conclusively the critical role the industry now plays in the wider Caribbean economy. 

This suggests there is now the need to consider strategically how in future a wider product offering might encourage not only linkages with multiple sectors, but also catalyze rural development, grow transferable skills, and support newer industries in ways that better balance national economies.  

Some nations like Jamaica and Barbados already understand this, but others that are also tourism dependent have not.

Helpfully, a recent report published by the Inter-American Development Bank (IDB) makes a start in identifying some of the post pandemic responses required if the industry is to innovate and adapt its product to meet changing global demand and retain greater value.

Launching the 20-page report, ‘Imagining a Post-COVID Tourism Recovery: A Regional Overview’, Olga Gómez, the IDB’s lead tourism specialist, makes the important point that it is no longer enough to depend on what she describes as “the lure of beaches”. 

“Tourism destinations”, she says, “need to invest in improving their competitiveness, aligning their tourism products to the broader local and global economic trends, and exploring new and traditional emerging market segments”. 

The report outlines both a short- and longer-term agenda for recovery and change in the areas of safety, market intelligence, product adaptation, and easier regional access for visitors from the region’s main markets. 

On safety strategies it proposes a common approach, intra-regional coordination, and a common brand for safe Caribbean destinations. To better understand the changing market, it suggests that sectoral  analysis requires more than the use of traditional statistics, and should additionally consider real-time travel bookings, tourism expenditure data, and consumer sentiment surveys.

IDB’s short report also suggests that public and private sector policy and investment agendas should give greater priority to meeting the changing preference of travellers for nature-based tourism and experience related travel. This, it observes, makes it more important that the region protects its natural assets, environmental sustainability, and adapts to climate change.

When it comes to adjusting the tourism product to new consumer preferences, IDB’s tourism team argue for the development in the medium to long-term of new tourism products to match evolving global tourism demand; including a greater emphasis on eco-tourism, cultural tourism, remote working tourism, educational tourism, and retirement tourism, in the latter case linked to well-being and medical tourism. 

With this in mind, it proposes the sector should place greater emphasis on the preservation of natural, cultural, and heritage attractions as ‘an essential element to improve tourism competitiveness’.

IDB also places stress on other changes it believes are necessary to ensure that Caribbean tourism fully recovers and remains competitive, including improved supply chain efficiencies, better destination management, and the recognition that the adoption of  communication and information technologies are not optional, but ‘an immediate necessity’.

Unusually, the report looks at business travel. It observes in relation to The Bahamas, Barbados, Guyana, Jamaica, Suriname, and Trinidad that this represents a surprising 19% of all travel there, compared to the global average of 22%. The Bank’s tourism analysts are however uncertain about which business travel segments will be permanently affected, as many companies are expected to continue with teleworking. More positively, the report notes that the pandemic has created a new niche demand for temporary longer-term Caribbean stays enabling remote working by professionals.

Helpfully, IDB updates its Comprehensive Tourism Dependency Index to show that of the world’s 15 most tourism dependent economies, eight are in the Caribbean. They are led by Aruba (ranked first in the world) with The Bahamas (6th), Barbados (11th), and Jamaica (13th) now joining their list. The others are Grenada (4th); Antigua (5th); St Lucia (7th); and Dominica (9th);  with Belize in 15th position.

There is much that IDB does not address, particularly in relation to how a longer-term demand led approach to tourism might see supply side adaptations retain the economic and social benefits a more holistic approach to tourism development could enable. 

As previously noted by this column, the pandemic offers a unique opportunity to assess how a region with billions of dollars invested in fixed tourism infrastructure might establish new linkages that go far beyond agriculture and fisheries, able to stimulate, for example, new services-based industries located away from urban centres. 

What is now needed is a thorough going analysis that explores how the pandemic may have structurally changed travel and tourism, and how a more strategic Caribbean approach might adapt and reposition the industry so that it better facilitates long-term domestic growth.

IDB believes that volatility will persist in the Caribbean’s path to full tourism recovery, and could take between 2.5 to 4 years, requiring firms and workers to be offered continuing support.

Common sense suggests that while everything possible should be done by governments and the industry to facilitate tourism’s short-term recovery, its economic dominance requires a detailed analysis of the existing model’s sustainability, and the sector’s ability to drive more broadly based prosperity. 

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

30 May 2021

Photo by Alonso Reyes

Several US cruise lines have said they will sail out of the Caribbean this summer. David Jessop believes that the need for a strong post pandemic economic recovery requires the region to find ways to ensure cruise ships home port in the Caribbean for a part of every year. 

Will the decision by several US cruise lines to home port in the Caribbean this summer become a permanent fixture, or is it just a temporary work around? 

The widespread suspicion that it is the latter, was succinctly voiced in one recent online posting on Tribune242’s website in The Bahamas: ‘These cruise people aren’t coming here because we’re such an attractive destination to home port in. They’re coming here because they think we’re a bunch of dummies who will do anything they say, and they don’t have to put up with ironclad safety travel restrictions’. 

For Government and the tourism industry, however, the test will be whether home porting arrangements agreed for this summer can be retained or whether the cruise lines will simply return to Florida when the pandemic and the strict US hygiene restrictions on sailings out of US ports end. 

In normal times, the principal reason for choosing a home port relates to ease of passenger access from a line’s principal markets and proximity to the locations included in cruise itineraries. It also depends on the ability of a port to be able to provide the support, fuel and supplies the lines require, and a country’s willingness to facilitate the movement of crew.

Other requirements relate to port infrastructure and efficiency, an ability to handle a large number of passengers simultaneously, the availability of local transport and other passenger services, security, proximity to an international airport, and more generally a satisfactory regulatory and fiscal environment. For these and other reasons, Florida has developed over time as the location of choice for the principal US lines that sail into the Caribbean.

Uniquely, however, several pandemic related factors have created a window of opportunity this year for the Caribbean to change its relationship with cruise lines through home porting.

Firstly, the cautious approach being taken by the US Centers for Disease Control and Prevention (CDC) means that it may well be November at the earliest before cruise companies are able to resume near normal sailings out of the US to the Caribbean. Before then its ‘Conditional Sailing Order’ requires a phased approach to the resumption of cruising, involving simulated voyages with volunteers for those lines that cannot meet its requirement that almost all passengers and crew on each sailing are fully vaccinated. 

Secondly, a politically driven legal challenge by the Governor of Florida against the CDC is underway. This relates to the Centre’s requirement for mask wearing while boarding cruise ships.  Florida State law now bans the use of digital health passports and forbids businesses to base entry on vaccination status. The issue, which the courts have sent for mediation, has seen Norwegian Cruise Line’s CEO Frank Del Rio indicate that it may move its ships out of Florida and observe that it “can operate from the Caribbean for ships that otherwise would have gone to Florida”. 

And thirdly, some Caribbean governments and port authorities have sought to demonstrate during the pandemic that they have the facilities the cruise companies require by offering safe haven to the many idle cruise ships moored in Caribbean waters. Some like Barbados have additionally gone out of their way to demonstrate they are a ‘trustworthy partner’ by continuing to honour pre-existing provisioning and other obligations, while helping facilitate humanitarian support and arrangements for the repatriation of stranded crew.

All of which has caused several cruise lines to consider what they had largely previously resisted: home porting some of their vessels in the Caribbean. 

In recent weeks Royal Caribbean, Norwegian, MSC, Seabourne, Crystal, Viking Cruises, Celebrity, and others have announced that they will be variously homeporting this summer season in Antigua, the Bahamas, the Dominican Republican, Jamaica, and St Maarten, bringing significant new economic benefit to each of the ports and countries concerned. 

At best this should offer new commercial opportunity to local suppliers, employment, and the wider hope that cruise visitors sailing out of Caribbean ports will subsequently return for a longer stay. 

As Lisa Cummins, Barbados’ Minister of Tourism and International Transport observes, Barbados and other Caribbean governments have wanted to see for some time more homeporting operations and hope that the incorporation of pre- and post-stay vacations will encourage cruise passengers to return. The island also intends using the experience to develop a southern Caribbean cruise alliance for summer itineraries based on Barbados.

Caribbean tourism is structured in such a way that hotels and others onshore bear the brunt of the sector’s tax burden, contributing heavily to destination improvement initiatives and local social causes, and by helping to market their destinations, and enhancing and protecting the environment.

That is why this column has pointed out before the need for a cruise industry that is genuinely Caribbean focused and developmental rather than just using the region to benefit the owners of the big cruise companies. Home porting would be one way of proving this, and if viable and popular with passengers should become an annual summer feature of sailings in the Caribbean. 

Unfortunately, over decades the cruise lines have proven to be fickle commercial and developmental partners, playing off to their advantage one country against another, raising well-documented concerns that range from the environmental to the extent to which they leave revenue behind.

It is true that in times of crisis the cruise lines can be a good corporate partner as they recently demonstrated in St Vincent, but they should be doing more. They need to be wholeheartedly engaged. 

Apart from better protecting the region they make use of, they should be assisting the development of the Caribbean tourism product, supporting local business, and playing a direct role in post pandemic economic recovery. 

The home porting of some ships each summer would demonstrate this.

This is the moment when there ought to be a much wider regional discussion on what it would take post-pandemic to incentivise the use of summer home porting hubs in the region and to explore whether ‘multiporting’ around larger islands should be encouraged. It would also be a good time to attract the owners of the large number of smaller ‘expedition’ cruise ships now under construction, better suited to smaller ports, to locate permanently in the Caribbean.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

May  23, 2021

Photo by The World News

The CARICOM Commission on the Economy put forward last year a number of genuinely radical proposals on how the regional integration process might be resuscitated. David Jessop suggests that if set aside it will be time to ask if CARICOM and its single market has any long-term future? 

The appointment of Dr Carla Barnett as the next Secretary General of CARICOM should be an inflection point; a moment when the institution, and more importantly its member states rise to the challenge of delivering the post-pandemic decisions that could propel the regional integration process into the 21^st Century.

Whether Dr Barnett, importantly the first woman and the first Belizean to lead the regional institution, can negotiate a way out of the organisation’s inability to act because of its lack of executive authority, candidly explain, or find a way around commitments that are made at summit after summit and then not delivered by its member states, time will tell.

However, it would be good to assume that her appointment is rather more than ‘historic’ and will have real substance when she takes up the post in mid-August. 

There can be few institutions globally which have been the subject of so conspicuously ignored or set aside reports and recommendations provided over decades by the best, most thoughtful, and respected individuals in a region.

The latest, presented last October by the CARICOM Commission on the Economy, succinctly summarises the thinking and recommendations of its Commissioners, eight from the region and two of high international standing from elsewhere. It is now the subject of an implementation plan being developed for consideration by Heads of Government in July.

The report takes a radical approach that seeks to circumvent the normal reasons given for the lack of implementation: funding, external inequities, and a lack of political will. 

Instead, the Chair of the Commission, Professor Avinash Persaud, observes in a prologue that while these challenges are real, what the Commission is recommending initially requires no new external financing, and if adopted could provide a platform for a larger and faster growing Caribbean Single Market and Economy (CSME).

To this end the report makes a series of practical suggestions aimed at spurring regional development in ways that recognises change in future might be on the basis that groups of member states implement and develop what is agreed regionally at different paces. It proposes a minimum of five countries or a third of member states take forward proposals in ways that encourage a two or more speed CARICOM to gradually become a genuine single market and economy.

This common-sense, economically interesting but politically and even emotionally difficult solution, although distant from the high ambition of the CSME, offers a way out of the present implementation impasse. This is especially so when linked to the Commission’s other recommendations on connectivity, education, a larger regional role for the private sector, genuine free movement, and alternative approaches to inter-regional transport. 

When it comes to free movement, the Commissioners offer a radical solution: any CARICOM citizen should be treated in all fifteen states as if they are a skilled national with the right to stay and work if they have more than two digitally verified Caribbean Secondary Education Certificates or their equivalent. They argue that this might provide an incentive to overcome the presently low levels of attainment in many of the region’s schools and provide a basis for improving the region’s skills pool.

The report also recognises that accelerating learning online must not be just about providing a tablet, but ensuring good digital freely available educational content, an affordable internet, and an acceptance that a successful teacher in one Caribbean nation should be able to teach online in another. 

The Commission suggests that ‘prioritising public infrastructure expenditure makes sense’. This, they write, should include all that is needed to develop a regional digital economy that can leap the legacy of history in a world that no longer sees all opportunity as being tied to a physical location.  

The report in effect proposes a single Caribbean or at least a CARICOM digitally enabled economy which enables the region to develop a skilled well-trained workforce operating within a well-regulated single environment able to drive transformation and provide equity of opportunity.

Apart from stressing the importance of a reduction in the rates charged for moving data, the Commissioners make the point that there is no reason why a new interconnected regional economy should not respond to public and private sector demand for software development by encouraging a resident industry.

There is much more. The report puts forward practical ideas for private sector led investment in resilience, and for the freer movement of services and cross border capital flows. When it comes to transport, it observes the need for a network of privately run and owned unsubsidised fast ferries, using new technology in ways that integrate sea and air transport into a single comprehensive network.

It links the obvious and focuses on the practical. The region cannot, it says, ‘have a single market and economy if people, goods, services and data cannot travel easily, frequently and inexpensively’. 

Put another way, the geographically fragmented and underpopulated Anglophone Caribbean will never succeed or attain unity unless it is able to develop connectivity in a manner that enhances the educational standards of all, enables free movement, and supports a viable regional capital market.

For Heads to agree to the report’s most significant recommendations will require a new mind set, foresight and a commitment to delivery. Hopefully, the pandemic will have focussed minds and made clear that the region cannot successfully recover and insert itself into the global economy if it does not now demonstrate first through its own actions what intends to do to speed up development. 

If the region’s leadership accept a two-speed region and what is proposed on free movement it will mean that in future, geography, politics, newfound wealth, economics, and nationalism will likely determine which nations decide to travel together. For this reason, the report requires much wider Caribbean debate and dissemination, and at the very least publishing on CARICOM’s website.

No doubt Dr Barnett made clear her expectations of her new role as Secretary General. 

What better way to implement a post pandemic recovery than for Heads to agree that they and she take forward together some of the key measures the Economic Commission proposes. If they do not, and let the Commission‘s relatively limited but low-cost far-reaching proposals go the way of the Golding and Ramphal reports, it will be hard to avoid asking bluntly whether CARICOM and its single market has a long-term future?

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

May 14^th, 2021

Photo by FLY:D

When the Caribbean finally emerges from the pandemic a key task will be to upgrade its connectivity. David Jessop argues that governments and the private sector will also need to focus in parallel on becoming fully cyber secure.

If the pandemic has demonstrated anything it is that much improved internet connectivity, reliability and security have become unavoidable priorities for the Caribbean.

Since March of last year when governments, enterprise and much of the world all but closed their doors to transacting business in person, the region has only been able to function because of the relative ubiquity of the internet and the ability to operate online. 

Although much of the region has high levels of connectivity – the website, Internet World Stats, indicates a 60.1 % penetration rate last year for the region as a whole – the rate is notably much lower in Haiti, and surprisingly parts of the French speaking Caribbean. However, this is not to say that providers across the region have systems able to provide the coverage, stability or speed required to allow the Caribbean to compete globally, e.government, or to support the services industries that might make more competitive a geographically fragmented region remote from its major markets. 

COVID has more than made the case for regional economic recovery to focus in part on building the infrastructure for affordable 5G coverage, and the speed, capacity and connectivity required to spur efficiency, diversification, and better governance.

While the geopolitical debate will continue to rage over who is going to provide and fund Caribbean 5G services, just as important is the growing global cybersecurity threat from a range of hostile actors.

Understandably, Caribbean governments and businesses do not discuss in detail the nature of the provisions they have made or are planning to protect critical infrastructure, key sectors such as banking and financial systems, let alone national security.

However, the rising level of potential threat to Caribbean Governments and enterprise and the need for every nation in the region to develop much stronger cyber defence capabilities is apparent in the increasing number of references in the statements and communiques that follow regional, and international meetings.

Of these the most explicit mention came after this year’s virtual UK-Caribbean Forum. A communiqué recognised the critical role cyberspace plays in the economic, social, cultural, and political life of the region, noting Ministers’ emphasis on the importance of protecting critical national infrastructure and the need  for an ‘effective and proportionate’ domestic response. An action plan made clear that Britain will support Caribbean capacity building and provide practical help to Caribbean agencies making use of the UK’s widely acknowledged advanced cyber expertise and capabilities.

That the threat in a Caribbean context is real, and actually and reputationally damaging should by now be beyond doubt.

In February it became clear that Jamaica had suffered a massive data breach that had exposed the immigration and COVID-19 records of hundreds of thousands of people from North America, Europe and elsewhere who had used its Jamcovid-19 app. 

Whether this resulted in the exfiltration of such information for malicious use is unclear, but it was a wakeup call. Prime Minister Holness subsequently insisted that plans for building cyber resilience in Jamaica must be accelerated. This would, he said, result in  the construction of ‘a robust governance framework and infrastructure for cybersecurity’ within ‘Plan Secure Jamaica’.

This involves the development of a new National Cybersecurity Strategy, the creation of a new Cyber Academy, inter-agency cooperation, external support, and establishing a cross government cyber analysis team. Separately, other ministers have acknowledged that the country is undertaking with Israeli support the development of cyber-systems for ‘constant monitoring’, legislative changes and a training component for the military. 

Jamaica’s aim is to ensure all government websites and networks are compliant with international standards and best practice, an approach that coincides with increasing instances of malicious cyber-attacks directed at governments and private entities worldwide.

Of these, the most staggering example has been the revelation that the US Government, NATO, the European Parliament and about 16,000 other government and larger company systems worldwide were compromised in December 2019 through the hacking, principally of the network management system Orion, using a product from SolarWinds. The supply-chain attack, which went undetected for over a year, appears to have provided access in ways that are reportedly still proving hard to discover because of the sophistication of the hacker’s methods of entry and exit. 

So serious has the breach been that apart from imposing new sanctions on Russia, the alleged perpetrator – Washington says it is “highly confident”’ that state linked hacker ‘Cozy Bear’ was behind the “broad-scope cyber espionage campaign” –  it is expected that President Biden will shortly sign a new cyber executive order. This will establish a basis for corporate reporting of cyber breaches, the systematic investigation of cyber events, and establish standards for software development. 

Notwithstanding, cybersecurity should not be seen as just an issue for governments.

A recent PwC Global CEO Survey found that among Caribbean CEOs, 67% per cent said the issue was their leading concern with many pointing to a significant increase in incidents in 2020, including ransomware attacks. A consequent 50% reported increased spending of 10 per cent or more in response.

Because of the overriding economic implications now and for the future, ensuring regular security audits, penetration testing, and forensic investigations involving both local and international partners should be seen as a joint public-private responsibility.

As ransomware attacks on UK hospitals and schools, cyber related attempts at poisoning the water supply in Florida, and the threats and blackmail against large companies such as Sony Pictures all demonstrate, no one is immune from risk whether an attack comes from terrorists, organised crime, or a malicious state actor. 

This is the time when every Caribbean Governments, their agencies, and regional businesses should be thinking about how they respond jointly to the increasing threat. They need to be more pre-emptively aware of their vulnerability, the implications for a regionally connected digital society, and the need for robust legislation, that also ensures the protection of individual’s rights and the use of their data. 

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

May 7^th, 2021

Photo by Sam Moqadam 

Much of the Caribbean is still struggling to obtain vaccines against COVID-19. David Jessop writes that by sharing some of the 60m spare doses it has available, the US would powerfully signal its interest in a renewed partnership.  

Vaccine inequity has become a matter of deep global concern.

The issue, the WHO’s Director-General, Tedros Adhanom Ghebreyesus, told a recent meeting of the UN’s Economic and Social Council (ECOSOC), is “the challenge of our time”. Unequal global distribution, he said, is not only a moral outrage, but economically and epidemiologically self-defeating.

In the year or so following the declaration of the pandemic, the absence of equitable global supply is borne out by statistics which show just how unevenly and sparsely COVID vaccines have been distributed to the world’s population. 

According to Our World in Data, a research-based publication linked to Oxford University, as of 27 April 1.06bn doses of various vaccines had been given to 570m people globally. Its figures suggest that about 7.3% of the world’s population of 7.79bn have so far received at least one dose of a vaccine. However, epidemiological experts reportedly say that more than 75% of the world’s population will need to be vaccinated to bring the pandemic fully under control.

When the numbers are detailed by country, Our World’s figures show that the vast majority of those receiving vaccines live in advanced or upper-middle income countries, in vaccine producing nations, and in countries with large populations. 

While some Caribbean nations, most notably the Cayman Islands, Aruba, and Montserrat, have fully vaccinated significant percentages of their population, vaccine roll out in most of the independent Caribbean lags far behind. 

Although the vaccination reporting dates vary, One World’s freely available tables indicate that the share of the Caribbean population receiving at least one dose of the COVID-19 vaccine varies hugely from country to country. Its data indicates that Antigua has administered at least one dose to 30 per cent of its population; Barbados and Dominica 25%; St Kitts 22%; Guyana 14%; St Vincent 13%; St Lucia and Grenada 11%; Belize 10%; the Dominican Republic 9%; Suriname 6%; The Bahamas 6%; Jamaica 5%; and Trinidad 2%.  

These are of course snapshots and need to be treated with a degree of caution as they do not for example account for variations in population size, the different financial arrangements governments have entered into with commercial suppliers, those now starting to receive vaccines through the WHO’s COVAX facility, the variation in the receipt of vaccines from donors including China and India, or their subsequent sharing between nations.

In addition, in St Lucia’s case the reporting date was in March while all the others were in mid to late April. There are also no figures for Haiti or for Cuba. However, in Cuba’s case it is well advanced in the final phase of trialling four candidate vaccines of its own, and President Díaz-Canel has said that if as expected its Soberana 02 and Abdala vaccines are proven efficacious and licensed, the entire population will be fully vaccinated by the year’s end.

With these caveats, what is apparent is that if Caribbean economic recovery is to begin this year, employment be restored, tourism return in a significant way, and a viable path found out of the pandemic, many more vaccines need to be made available very soon.

This is particularly important as the Caribbean’s recovery could be eclipsed as this year goes on.

The WHO believes that rapidly spreading new variants plus the inconsistent and premature easing of public health measures in some nations threatens new spikes and waves of infection towards the end of this year, requiring booster shots for all those at risk.

In an indication of this, the British Government has just announced that it has purchased 60m doses of the BioNTech/Pfizer vaccine for a further campaign this autumn for the most vulnerable. It was, the country’s health secretary suggested, the best way to remain “safe and free” while the disease is brought under control across the world.  

For the Caribbean, the issue of vaccine supply is not just to protecting public health, but to longer term economic recovery and stability. 

The hope now must be that the region will be included in a US programme to share about 60m US-made AstraZeneca two and one dose vaccines that it does not need, which are either warehoused or still in production.

Trinidad’s Prime Minister, Dr Keith Rowley, as chair of CARICOM has discussed this with senior Biden Administration officials in the White House, and leading figures in the US Congress. However, it remains uncertain where the vaccines will go, or how they will be divided up.  So far, Dr Rowley says of the response, “a commitment was received that once the policy of redistribution is readied CARICOM will not be ignored.”

What this in practical terms this means must be uncertain given the numbers internationally still waiting to be vaccinated, the continuing global shortage in supply, and the crisis in India.

Vaccine availability in the Caribbean was a key issue when CARICOM Foreign Ministers held their recent positive first encounter with the new US Secretary of State, Anthony Blinken. It was also the subject of a recent letter from Antigua’s Prime Minister, Gaston Browne to President Biden in which he warned that the ‘overwhelming’ economic impact of the pandemic could lead to instability on the US’s third border.

For both the Caribbean and the US, a safe and COVID-secure Caribbean ought to be seen as a mutually beneficial manifestation of partnership, reinforcing economic recovery led initially by the safe return of tourism.

In seeking a favourable response from the US, the Caribbean has significant allies in Washington. In recent weeks, many airlines have recognised that their recovery will not be led by high yield international business travel but by suppressed demand for leisure travel to warmwater destinations. Likewise, the cruise lines ought to be natural mutually interested partners helping make the case for the value of shared US-Caribbean economic recovery.

If the Washington really wishes to demonstrate partnership and offset vaccine diplomacy in the Caribbean of the kind that China and Russia are now engaged in, this would be a good time to indicate its position on vaccine supply. Even if the response is measured at first, the Biden administration should indicate how it might help up to the end of 2021. This would not only send a powerful signal but would be of mutual economic and strategic benefit.   

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

2 May 2021

Photo by Caleb Perez 

A few days ago, CARICOM Foreign Ministers had a first meeting with their new US counterpart. The emphasis was on inclusivity and partnership. David Jessop suggests that this should be the moment when the US develops an integrated programme that supports Caribbean recovery and long-term development.   

Perhaps the most important aspect of the short statement issued in Washington after a first two-hour meeting last week between the new US Secretary of State, Antony Blinken, and his CARICOM counterparts was its emphasis on inclusivity.

In contrast to the failure of the Trump Administration to demonstrate any sense of partnership with the region and its preference for divisive transactional coalitions of nations willing to support its thinking about Venezuela, Mr Blinken made clear that Washington will now work with ‘all countries in the region’ to strengthen co-operation and coordination.

CARICOM’s Secretary General, Irwin LaRocque, best summed up the significance of the meeting. In his brief opening statement, he noted CARICOM Foreign Ministers’ sense of optimism at “the resumption of interaction between CARICOM as a region and the US at this high level”, observing that this had once been a regular feature of the relationship.

The meeting in the form of a virtual roundtable confirmed the overriding issues: management of the COVID-19 pandemic, vaccine supply, regional economic recovery, the need for access to concessional development financing based on vulnerability, co-operation on increasing climate resilience, migration, strengthening security, democratic values, and human rights. As such it set the scene for a substantive future dialogue.

While time will tell how the relationship improves and where the future fault lines lie, the emphasis was on the positive, and a commitment to advancing co-operation. 

Venezuela and China will undoubtedly continue to figure prominently in bilateral discussions, but the emphasis in this first encounter was on the concerns of the region.

Mr Blinken’s agenda and tone contrasted markedly with the tenor of comments made last month by Admiral Craig Faller, the Head of the US Southern Command. Speaking in the context of Latin America and the Caribbean he told the Senate Armed Forces Committee that the US was intent on counteracting Chinese and Russian influence in the hemisphere.

When it comes to China, Admiral Faller, a Trump appointee, told Senators: “We can’t let them prevail here in our neighbourhood”. 

Speaking about the Caribbean and Latin America, he suggested that China sought regional economic dominance and that its influence was quickly growing in the hemisphere. It is, he said “working on over forty port deals, dishing out significant loans for political and economic influence, pushing for IT infrastructure, and engaging in predatory practices like illegal, unregulated and unreported fishing”. He also criticised China for using vaccines in some countries to leverage deals for Huawei’s 5G telecommunications systems.

No one doubts that the Biden Administration has such concerns about China’s influence in the Caribbean and the destabilising situation in Venezuela, but what is now needed is a more thoughtful exploration of why the Caribbean has turned to others for support. 

US self-interest aside, common sense suggests that if the US wants stability and security on its southern seaboard it needs a policy that is holistic, integrated and which address why the region has gladly accepted Chinese development assistance.

Many of the answers as to what should happen next are contained in a recent short paper ‘Reimagining the US Strategy in the Caribbean’ published by the Washington based think tank, the Centre for Strategic and International Studies (CSIS).

It proposes linking existing US initiatives into a single comprehensive long-term strategy toward the Caribbean. This would involve, CSIS suggests, a reimagined Caribbean Basin Initiative that includes services, the broadening of the US-Caribbean Security Initiative beyond its present focus on narcotics interdiction and transnational crime, and the expansion of the range of activities potentially available through the 2016 multi-year US-Caribbean Strategic Engagement Act.

Specifically, the paper suggests US investment in diversification to build resilience, support for sustainable projects in the blue economy to create new forms of employment, seeing the region as a target for energy investment and engagement in the context of climate change, and creating opportunities for both development and nearshoring. As a part of an integrated strategy, it also proposes the US does more through education to develop knowledge-based economies, addresses the gaps in digital access, and by incentivising investment in infrastructure, meets US concerns about China’s role in the region. It also stresses the importance of involving the Caribbean’s large diaspora in US reengagement.

What CSIS and others are recommending is a practical, integrated, hands-on approach that involves the private sector, the region, allies, and multilateral institutions in a concerted long-term response that judiciously mixes economic, security and development strategy in support of growth, prosperity, and stability in the region. 

This is not rocket science but requires a joined up whole-of-US-government response. It also needs Caribbean governments and strong non-governmental voices from the region and Diaspora with viable solutions and, a plan and reach, to convince legislators, officials, and the US private sector that there can be mutual gain from a new approach.

A few days ago, President Xi Jinping told the annual Boao Forum for Asia that to create “a future of shared benefits” the world requires “consultation on an equal footing”. “We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world. What we need in today’s world is justice, not hegemony”, he said. 

If the US is truly concerned about offsetting or balancing China’s multifaceted support and influence in the Caribbean, it must address the idea of shared benefits, reimagine the partnership, recognise the appeal of President Xi’s words, and in response design well-resourced, integrated regional programmes in partnership with the region. 

The pandemic may now threaten the region with a hard to recover from form of economic long-COVID, but it also provides the opportunity for the new US administration to respond in a holistic way that shows that its relationship with the region really matters.

Mr Blinken’s demonstration of commitment and his stated willingness to engage with his US colleague cabinet secretaries on the issues raised is welcome, but what is needed is a long-term integrated programme for the Caribbean that jointly addresses the issues discussed.   

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

April 25^th, 2021

Photo by Art Rachen

Although the volcanic eruption in St Vincent has cast a temporary shadow over tourism in the South East Caribbean, the regional outlook is brightening. David Jessop reviews the statistics and recent statements about the sector’s role in the region’s post pandemic economic recovery.

Recently published visitor arrival figures indicate that Caribbean tourism has started down the long road  to recovery. Following a disastrous 2020 during which governments closed borders to try to halt the spread of COVID-19 and months when the sector all but ceased operations, visitor numbers are now slowly increasing.

According to Tourism Analytics, the Aruba based consultancy which publishes tourism arrivals figures on a rolling basis, stopover visitors to the island Caribbean excluding Haiti declined by 66.1% from 23m in 2019, to 7.8m last year. When it comes to this year, however, its website indicates that a gradual turnaround is now underway. When available stop over figures for the first three months of this year are compared to January, February, and March of 2020, the pre-lockdown period when tourism was still booming, its statistics indicate that visitor arrivals are slowly beginning to recover.

What Tourism Analytics figures evidence is that, led by the Dominican Republic, the USVI and Puerto Rico, the worst may now be past for some of the independent Caribbean’s largest tourism markets.

Speaking about this recently, Andrés Marranzini, the Executive Vice President of the Dominican Republic’s National Hotel & Tourism Association, Asonahores, told local television that he expects this year to see 4m visitor arrivals, the same as in 2019. As the proportion of those vaccinated in the country’s main source markets proceeds and vaccine rollout accelerates locally, he said, the next 18 months “could see one single high season”. Mr Marranzini warned, however, that this would require the Canadian, the EU and British governments to allow a resumption of travel to ‘safe’ destinations. 

His optimism coincided with equally positive but more conservative comments by Héctor Valdez, the country’s respected Central Bank Governor. He told  an IMF meeting of Western Hemisphere Central Bankers that the favourable outlook for the country’s economic recovery in agriculture and manufacturing was “supported by the positive signs that are being observed in tourism”. In his remarks Governor Valdez observed that the country’s 5.5 to 6% forecast growth rate for this year was supported by the Bank’s projections that the country would receive 3.5m visitors and that its recovery would boost construction, manufacturing, and commerce.

In a similar vein, Jamaica’s Minister of Tourism, Edmund Bartlett, said last month that Jamaica is projecting long stay and cruise visitor arrivals this year at 1.6m and related earnings at US$1.8bn. Although the figure, which is predicated on a recovery in the US market, is well short of the 4.3m visitors and US$3.64bn the country received in 2019 it would represent a significant turnaround. 

The view that better times are ahead for tourism are shared by Adam Stewart, the Executive Chairman and CEO of Sandals Resorts International, who says that the company is already seeing a 65 to 80% occupancy rate in the coming months in its hotels across the region. 

Mr Stewart told the Mayberry Investors Forum, “I think for sure the worst is behind us. Once the first vaccination was approved we’re seeing a huge correlation between people being vaccinated and consumer confidence”. He suggested that from May on, aggressive vaccination programmes being undertaken in key markets such as the United States and UK, and high levels of pent-up demand would drive tourist arrivals to the region.

Encouragingly, the Caribbean Tourism Organisation (CTO) is forecasting a 20% increase in arrivals this year over 2020 and a similar uplift in visitor expenditure which it estimates to have fallen between 60 to 80% in its member countries last year. 

It cautions, however, that Caribbean performance in 2021 will depend largely on the success of the authorities in the region’s key markets and the Caribbean in controlling the virus. It believes that  international travel confidence may not begin to pick up until this summer and may be modified by citizens in key markets being required to vaccinate before travelling abroad.

In contrast the outlook remains bleak for the return at scale of cruise tourism which remains subject to a ‘no sail’ order by the US Centre for Disease Control and Prevention.

Speaking recently, Cuba’s Prime Minister, Manuel Marrero, said about tourism’s return, “people want to travel the same or more than before, but things will never be as they were”. “Now, the most successful destinations will be those that have known how to take advantage of this time of paralysis to innovate, to do things differently”.

Mr Marrero, a former Minister of Tourism, told the country’s tourism executives that future success will depend on their understanding that the sector is a locomotive for the economy, and that they must significantly redesign tourism. This would involve, he said, ensuring COVID-safe conditions, offering service and cuisine of quality, providing universal internet connectivity, adapting marketing to be social media oriented, and  further diversifying the country’s tourism offering away from the beach.  

“We are seen as a sun and beach destination, but the strength of our culture makes us different” as does the “varied nature” of the Cuban tourism product. We have to guarantee the highest quality in all tourism products that we offer in the country, both to the international and domestic markets”,  he said.

The signs are optimistic, but all concerned also recognise that the sectors fortunes can change suddenly as the impact of natural events such as the recent volcanic explosion on St Vincent or the more active than usual hurricane season that has been forecast for this year.

Land-based tourism has a greater capacity than any other economic sector in the region to support post pandemic recovery, because it can deliver rapidly an externally led financial stimulus that touches the economy as a whole. If treated thoughtfully, tourism and its recovery will play central post pandemic role to play in generating future regional prosperity and growth.

Measures taken now that ensure the sector’s safe recovery this year are therefore vital. Nevertheless, just as important will be governments and the industry giving greater consideration to measures that will make the Caribbean product sustainable, diverse, more socially relevant, and globally competitive far beyond the sector’s predicted full return by the end of 2022.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

April 18^th, 2021

Photo by Elena Mozhvilo

The relationship between Britain and its Caribbean overseas territories has been relatively stable over a long period. However, voices in some have begun to argue for new approach to address what is seen as an increasingly brittle, unequal relationship. David Jessop explores changing attitudes and options. 

Last month Britain published two significant post-Brexit policy documents setting out its future thinking on foreign policy, defence, security, and development. Both referenced in general terms the importance to the UK of its fourteen Overseas Territories located around the world.

The relationship was encapsulated in the suggestion that shared interests ‘bound together’ the citizens of the United Kingdom, the Overseas Territories and Crown Dependencies, “giving us an advantage in an increasingly competitive global environment and a distinctive and influential voice in the world”.

Whether this view is mutually held is unclear. 

Speaking recently to some in the Caribbean Overseas Territories and others elsewhere who take an interest in their future, most suggest that although the ties remain beneficial, the relationship is eroding. They caution that a new, more modern, and autonomous form of partnership may better serve those who live in Anguilla, the British Virgin Islands, the Cayman Islands, Montserrat, and the Turks and Caicos.

The sense is that developments in the last few years have raised significant questions about the way the UK is seeking to manage the relationship. 

They cite the uncertainties created by Brexit; the now unclear representational relationship between London and the EU on overseas territories matters such as ‘harmful tax practices’ and development assistance; continuing friction over public registers of beneficial ownership for offshore companies; unsatisfactory financial arrangements for post disaster relief; and interventions by London on social issues which undercut locally elected governments. They suggest that all are contributing to a sense of disaffection, particularly among the young and better educated.

There is also a view that the time has come to move beyond what some in a Caribbean context regard as a form of ‘soft colonialism’.

They believe that in the absence of alternative voices in the UK, a 2019 House of Commons Foreign Affairs Select Committee report, ‘Global Britain and the British Overseas Territories: Resetting the relationship’, is unduly influencing the Conservative Government’s thinking about the nature of the relationship with the Caribbean Overseas Territories. 

The suggestion is that strong cross-party support for its recommendations has led Whitehall to seek greater control and encourage convergence with UK policy. They also believe that British Ministers have concluded that the overseas territories offer a politically useful way to help define the expression ‘Global Britain’ on issues including security, the environment, and global financial probity.

To be fair there are other voices and opinions in Britain’s overseas territories in the Caribbean. 

The older generation tends to be innately conservative, there are significant concerns in some territories about governance, corruption and policing, many expatriate residents want to preserve the status quo and to have a vote, and in some, opposition parties see electoral advantage in short-term criticism of aspects of the relationship. There are also wider concerns in the independent Caribbean about the implications for the sovereignty of elected governments in sister nations.

This all suggests that the future challenge will be to achieve some sort of consensus on a long-term approach that recognises change is inevitable, and region-specific solutions will be required to two basic issues if the relationship is to be redefined.

The first revolves around the diverse nature of the UK’s Caribbean Overseas Territories and the need for options for advancement other than the present binary choice between dependency and independence. The second relates to how a new partnership might be forged between the UK and its Caribbean Overseas Territories which identifies a process that leads to greater autonomy and that accepts that the idea that a ‘one size fits all’ approach is no longer relevant.

This may not be easy as unsurprisingly a wide range of opinions also exist about future options. 

At one end of the spectrum there is a view that the region’s overseas territories should have directly elected representation in Westminster in one or both Houses of Parliament. The idea would appear to suggest eventual integration and a relationship closer to that of the French départements and régions d’outre-mer which see Martinique, Guadeloupe and Guiana directly elect representatives to the French National Assembly.

It is a view largely dismissed by those at the other end of the spectrum. They believe this would diminish the identity and specific concerns of the 159,000 people who live in the UK’s Caribbean overseas territories, causing governments and regulation to be more likely to follow London’s thinking. A more rational approach they suggest, would be to respect the changing circumstances in each territory by offering an overall road map which enables alternative forms of constitutional advancement; gradually leading, some believe, to the eventual option of country-specific forms of ‘Free Association’ with Britain. 

This they argue might be achieved through a process of constitutional reform leading eventually to the UK retaining a coordinated, defined responsibility for defence, security and foreign relations, while overseas territory citizens in the region might, if required, benefit on a non-reciprocal basis from the transnational provision of services such as healthcare, education, and social welfare.  

Senior figures point to a recent practical example of how a more advanced relationship might work. They say that the willingness of the UK to provide vaccines and supplies to the Caribbean Overseas territories while leaving to them to take all the steps necessary to address the pandemic locally was wholly positive and welcome. They however caution that this is far from the case in other areas relating for example to aspects of Brexit where the level of consultation has been minimal or non-existent and the sense of partnership absent.

Although the UK relationship with its Caribbean overseas territories has been relatively stable over a long period, there are now a growing number of voices arguing for fresh thinking to overcome what one UK academic described in a recent paper as an increasingly brittle relationship. 

Early this year, Cambridge University’ Centre for Science and Policy held a workshop on the future of the UK’s overseas territories after Brexit. It concluded that a re-examination of the expectations on both sides was required and greater clarity needed about the relationship. 

A good starting point for the UK overseas territories in the Caribbean might be an island-led informed discussion involving academia, civil society, government, and opposition, to clarify what they, as opposed to Britain, might expect from a more advanced, more equitable future relationship.

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

April 9^th, 2021

Photo by Jurica Koletić

In recent weeks Britain has spelt out its thinking about post-Brexit relations with the much of the Caribbean. David Jessop writes that while the desire to reinvigorate and broaden its partnership with the Caribbean is to be commended, much will depend on a sustained commitment to implementation.

There is an old saying that you wait ages for a London bus and then two (or even three) come along at once. It is not an expression, as far as I am aware, that has ever been applied to policy statements affecting UK-Caribbean relations. 

However, in the space of just fourteen days four documents have appeared that will in one- or another-way guide future relations between a stand-alone Britain and the Anglophone Caribbean. 

The most specific of these is a joint communiqué on the outcome of the tenth UK-Caribbean Forum held virtually on 18 March, and more importantly its accompanying action plan. Both documents were agreed by Ministers just as Britain was unveiling its long-term post-Brexit security, development, and foreign policy strategy and separately, explaining how the UK intends responding militarily to changing global threats 

Although the latter two documents only touch indirectly on issues affecting the long-term UK-Caribbean relationship, they are of relevance as throughout they address shared concerns including the changing geopolitical and economic order, climate change, the environment, sustainability, values, and security. Both also reference the Overseas Territories in ways that imply the UK will remain locked into the region for the foreseeable future.  

The defence review, ‘Defence in a Competitive Age’, additionally indicates a permanent if limited UK naval presence in the Caribbean, a joint  approach with allies to counter narcotics interdiction, security, and humanitarian issues, and as the international order changes, greater military emphasis on science and technology based respoinses.

The implication is that post-Brexit the Anglophone and Hispanic Caribbean relationship with Britain will adapt as the UK’s global preoccupations change.

Helpfully, region-specific short to medium term responses can be found in the two documents summarising the outcome of the UK-Caribbean Forum. Together they propose ways to ‘maximise the opportunities presented by the post-COVID-19 and post-Brexit realities’.

The Forum’s communiqué ‘acknowledges’ the many problems now facing the Caribbean including the ‘multidimensional challenge’ caused by COVID-19, the region’s concerns about access to vaccines and medical supplies, the need for post-pandemic concessional financing, the challenge of long-term indebtedness, and the consequences of de-risking by international banks.  It recognises too the region’s vulnerability and the threat posed by climate change. 

It breaks new ground in two new areas. 

The first is in accepting the need to right the disgraceful wrongs suffered by those in the Windrush generation living in the UK. As such the joint communiqué formally recognises the central importance of the Caribbean Diaspora in UK-Caribbean relations. 

The second relates to the Caribbean and Britain’s shared security interests, addressing the potentially critical economic, political, and societal role cyberspace now plays in Caribbean life. In this context the future relationship will involve UK support with threats to cyber security, the protection of critical national infrastructure, the development of the region’s cyber security capacity. 

The communiqué also publicly commits the Caribbean and the UK to working together ‘to share intelligence, facilitate training, exchange expertise and techniques’ when it comes to tackling ‘threats from terrorism and serious and organised crime’ and to deliver ‘meaningful cooperation’ on common security concerns.

Beyond this, what fundamentally sets this Forum apart from the nine others that preceded it, is a detailed two-year action plan running up to the next full meeting in 2023. This separate document commits CARICOM and British Ministers to a remarkable number of deliverables, enabling civil society to determine the extent to which a real post-Brexit Caribbean partnership exists.

Strikingly the two-year plan creates what it describes as ‘realistic commitments’ with a standing agenda for quarterly review between the London-based Caribbean High Commissioners and the British Minister responsible for relations with the region. Unusually, the document adds that such meetings ‘will agree joint action in cases where specific objectives are at risk of not being met’ and require ‘a full audit of achievements’ against the plan after the first year and prior to the next Forum.

Other commitments made include Britain making the case internationally for the Caribbean to benefit from vaccination roll-out in part ‘to restart tourism’; arguing in multilateral fora for Caribbean access to concessional and other soft loan packages to support post-pandemic recovery; holding a Chiefs of Defence Staff conference in 2021; and supporting the establishment of a Caribbean Military Academy in Jamaica.

On trade, the Ministerial, Parliamentary and Civil Society dialogues envisaged in the CARIFORUM-UK Economic Partnership Agreement (EPA) are to develop a trade plan this year; a new UK-Caribbean business-to-business round table will be established; greater use of UK export credits will be encouraged; a UK Minister will participate in the EPA Joint Ministerial Council; and trade and investment will be encouraged on a two-way basis, as will services exports.

CARIFORUM ministers have also signed up to ‘meeting fully’ global standards for tax transparency and anti-corruption measures, and building regional cyber capacity supported by a dedicated UK regional cyber security officer based in Jamaica.  

There are also other commitments relating to gender-equality, climate change, the Windrush compensation scheme, and even to a monument to the Windrush generation.

Much will now depend on ministerial will, and the sustained and genuine commitment of officials on both sides. Quite how this will work is unclear. Caribbean ministers have little ability to ensure their CARICOM counterparts deliver the joined-up approaches required, and successive UK governments have had a mixed track record when it comes to retaining the interest of its ministers. 

In due course, a better understanding of how the UK will now relate to the Hispanic Caribbean and Overseas Territories will also be required, as will comparative figures for trade and investment flows as one measure of success. In addition, Caribbean nations will need to decide what future weight they intend placing in areas that overlap with  arrangements the region has or is seeking with the EU, the US, China and others.

Despite this, if the new approach genuinely finds ways that include business, the diaspora, women, and young people, and accountably ‘reinvigorates, redesigns and strengthens’ the Caribbean partnership with Britain, it is to be commended. 

David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

March 28^th, 2021

Photo by Artur Tumasjan 

The British Government has just published a forward-looking post-Brexit integrated review of  its security, defence, development, and foreign policy objectives. David Jessop highlights its main features and some of its implications for the Caribbean. 

What global role should a post-imperial, post-Brexit Britain play? Can it reinvent itself in a manner that convinces a population increasingly divided by education, age, race, location, and inequality, let alone the wider world, that it can or should continue to try to punch above its weight?

In his recent book, ‘Britain Alone – the Pathway from Suez to Brexit’, Philip Stevens, the Director of the Editorial Board of the Financial Times, argues that for the last sixty or so years Britain has struggled to identify its place. Successive governments, he believes, have been unable to respond objectively and accept that Britain cannot remain ‘frozen in history’. This has resulted, he says, in a failure to honestly address its weaknesses, resulting in ‘overreach’ and a ‘consistent refusal’ ‘to align the perception of Britain’s standing in the world and the diminishing resources it can generate’.

His perspective and analysis charts the route from ‘winning’ World War II, through the Suez crisis, to Brexit: an uncertain journey that has brought Britain once again to try to redefine its future, raising indirectly questions about how regions like the Caribbean should respond to a still significant but now much changed traditional partner.  

A few days ago, Britain’s Conservative Government published ‘Global Britain in a competitive age’, a much-delayed integrated review of its future security, defence, development, and foreign policy. The 114-page document outlines how Britain intends establishing a new space for itself in the world, and why it believes this strategy and its values will keep it at the international top table, and able to thrive economically.

Setting aside the post Brexit rhetoric, the document is detailed and forward looking. For the most part it provides a thoughtful expert-led, high-level overview of how the UK intends using its now standalone status to develop new initiatives and relationships.

It seeks to divide the UK’s future approach into large areas of geostrategic importance including the Indo-Pacific, the Euro-Atlantic, and East Africa, paying scant attention to the EU27 or the Commonwealth. Instead, it identifies specific countries which it sees as critical in relation to its trade and security interests, naming traditional partners such as the US, Germany, France, Ireland, Australia, India, Canada and Nigeria, and others such as Vietnam and Indonesia, nations it regards as being of future importance.

The intention is that the UK will ‘sit at the heart of a network of like-minded countries and flexible groupings, committed to protecting human rights and upholding global norms’, while continuing to be ‘the leading European Ally’ of the US within NATO, providing collective security resources in the Euro-Atlantic region.

Many of its future preoccupations coincide with those of the Caribbean: the changing geopolitical and economic order, climate change and the environment, sustainability, and security. 

The strategy briefly observes in relation to Latin America and the Caribbean that Britain will continue to develop a strong set of partnerships based on ‘shared democratic values, growth, free trade and mutual interest in tackling serious and organised crime, and corruption’.  In contrast, the Overseas Territories are referenced throughout in relation to shared interests in security, governance, biodiversity, and the environment, suggesting that for the foreseeable future the UK will remain locked into the region.   

In what from a Caribbean perspective should be seen as a precursor to future trade competition in the UK market from large Latin nations including Brazil, Argentina, Chile, and Colombia, the document indicates that a closer and multifaceted partnership is envisaged with each.

In this context, Prime Minister Johnson went further when answering questions in Parliament on the review. The UK, he said, is looking to build closer trade relationships with Mercosur, the countries of the Trans-Pacific Partnership (CPTPP) and ASEAN, indicating that the Caribbean and other high-cost producers of agricultural and agro-industrial products may in future find it hard to compete on the UK market.

The biggest takeaway in the review involves a turn to Britain’s east and the geographically distant Indo-Pacific region. By 2030, the document says, the UK intends being deeply engaged there ‘with the broadest, most integrated presence in support of mutually-beneficial trade, shared security and values’. 

In this context it designates China as a ‘systemic competitor’ and ‘the biggest state-based threat to the UK’s economic security’, making clear that the UK has the grand if questionable ambition of offsetting Chinese economic assertiveness in the Indo-Pacific region to significantly grow its trade.  

Other significant changes include the formal recognition that Russia presents the ‘most acute direct threat’ to the UK; a promise to restore eventually, possibly in a more UK-centric form, the £4bn (US$5.6bn) Britain recently cut from its aid budget; and an interesting new emphasis on accelerating science, research, and  technology to maintain global competitiveness. It also addresses the real possibility in the next few years of a chemical, biological, radiological, or nuclear terrorist attack and contains a startling and so far unexplained decision to significantly increase the number of nuclear warheads the UK possesses.  

What the report is short on, however, is any attempt to explain how this new global ambition is to be paid for. Missing too is any consideration of the likely reaction of China, a country with a vastly larger economy and military reach, or how Britain intends strengthening its trade ties there while attacking its democratic and human rights record. The document also fails to describe how the UK will balance its turn to the Indo-Pacific against its existing Euro-Atlantic commitments or how Washington might react in either case.  Disturbingly, the review says almost nothing about how Britain will relate in future to its neighbour, the EU, given its proximity, importance as a trade partner and shared strategic interests and values.

For the Caribbean, a region with strong ties to the UK, the integrated review deserves close reading. It  raises important questions about how the Anglophone and Hispanic Caribbean and the overseas territories should in future relate to a changing Britain and where their own interests lie: questions which next week’s column will explore. 

David Jessop is a consultant to the Caribbean Council and can be contacted at

david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

March 20^th, 2021

Photo by Simon Maage

For many in the idea of building a wall or a fence wall to halt migration is not just discriminatory, but largely unworkable. David Jessop writes that if the decision by the Dominican Republic to construct a ‘fence’ along its border with Haiti is to be understood, it needs to be better explained across the region. 

Building barriers to halt cross-border migration can cause serious reputational damage.

The example that most readily comes to mind is the former US President’s contentious promise to build a wall along much of the 2,000-mile US-Mexico border. Others include the Berlin Wall which divided the east and western parts of the city to stop East Germans from fleeing a morally bankrupt state, the much more recent Hungarian ‘border barrier’ which aims to halt migrants travelling northwards, overland, mainly from Middle East conflict zones, and the West Bank wall or ‘separation fence’ constructed by Israel, it says to halt terrorism, but which many Palestinians see as a means of segregation.

In each case, and others less publicised, the principal objective is or was to construct a physical barrier to halt the movement of economically disadvantaged people or refugees, but few if any have or had associated programmes addressing the economic or social issues driving those on the less privileged side of such obstacles.

For many in the region it is one of many reasons why the idea of a wall to halt migration is not just discriminatory, but largely unworkable. 

It is also why tens of thousands of Venezuelans continue to flee the harsh conditions at home arriving largely unimpeded by sea in Trinidad and the Dutch speaking Antilles, or by land in Guyana and Suriname, and Haitians continue to make the perilous sea voyage north landing if fortunate in The Bahamas, Cuba, or a neighbouring overseas territory.

Now, however, the Government of the Dominican Republic, following consultations with the Haitian Presidency, is to construct what will be the region’s first ‘fence’ along parts of the two nations’ 234-mile mainly-mountainous border.

Although reported to be a ‘wall’, what the Dominican Republic’s President, Luis Abinader, told the country’s Congress on 27 February was that it will be a monitored security fence along parts of its border to curb “illegal immigration, drugs and the flow of stolen vehicles”. Combined with a now substantially enhanced military and security presence, it is also intended to suppress the transit of small arms, and individuals of concern to the wider region and the US. 

Subsequently, the Foreign Minister, Roberto Alvarez, confirmed that the Dominican Government is in discussion with Spanish and Israeli companies to construct a fence at an estimated to cost of over US$100m. Eventually intended to cover 112 miles, it is expected by the end of this year to cover around 19 miles in areas of easy cross border access. Alvarez said that the overall project would see the construction of a “technological and physical” dual and single border fence involving modern monitoring methods including sensors and drones. Other comments by Enrique Garcia, the Director of the country’s General Directorate of Migration, suggest that the fence will involve an integrated approach involving motion sensors, “facial recognition, fingerprints, infrared cameras [and] equipment for the military and other security”.

The idea will undoubtedly appeal to many Dominicans and have political resonance with the country’s ultra-nationalists who believe that the country cannot continue to receive any more migrants than the estimated 0.8m already there from the country’s hugely poor and increasingly unstable neighbour.

Despite this, some in opposition such as Gustavo Sanchez, spokesman for the Dominican Liberation Party (PLD), believe that “rampant poverty” will see Haitians continue to seek alternative ways to cross the border. Others suggest tighter controls may cause people traffickers to become active, corruption to spread further in the security forces and judiciary, and see many would be migrants displaced to other destinations.

If the fence is ever to meet its objective of managing migration both the Dominican and Haitian governments will need to deliver rapidly not just the accompanying measures that President Abinader, and the President of Haiti, Jovenel Moïse, agreed at the start of the year, but in the longer term with international support somehow deliver a Haitian economic and social revolution. 

What the two Presidents agreed in January is a start. Meeting in the border zone they agreed to address irregular migratory flows, improve cross border trade, establish maritime boundaries, and to jointly develop public health and environmental programmes. In a  joint statement issued at the time, the two Presidents committed to delivering, in part with external financing, programmes addressing some of the most challenging issues that for decades have created friction between the two countries.

Of these, early progress has been made on planning an energy interconnection that will enable Haiti to take surplus Dominican energy generated from renewable sources, the first of several hospitals is under construction in Haiti, cross border investments are again being discussed, and a process has begun that will identify all Haitian citizens in the Dominican Republic to include them in the Haitian civil register.

What so far is missing is any real attempt to explain this and the longer-term overall objective to the many critics of the Dominican Republic in the anglophone Caribbean and elsewhere who remain concerned about the country’s migration policy. 

Instead, in the case of CARICOM, instead of conveying how the ‘fence’ and planned joint development  programmes with Haiti are linked and reflect President Abinader’s recent statement “we want a mutually beneficial relationship with Haiti”, the stress continues to be on improving trade. 

Speaking recently at a media lunch, Foreign Minister Alvarez reportedly emphasised that CARICOM was of ‘utmost importance’ to the country’s trade balance as it sold more in 2018 to its 5.5m anglophone neighbours than to the 45m living in Central America.  “We are going to establish deep links with CARICOM”, he was quoted as saying.

While there is much that Haiti, the Dominican Republic, and CARICOM can accomplish though trade and much more to gain by working together, this will first require a willingness to address the negative perceptions that exist.  

A good starting place to allay such doubts would be for the Dominican government to explain in detail, not just through occasional ministerial, diplomatic, and private sector exchanges, how the initiatives President Abinader is developing with Haiti will be developmental, joined up, and sustainable.

Without this, the public and private narrative in CARICOM about the Dominican Republic will not be about trade and opportunity, but likely continue to focus on Haitian migration, perceived racism in the treatment of migrants, and now the construction of a ‘wall’.

David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

March 14, 2021

At their recent summit CARICOM heads of Government agreed multiple regional responses to address the looming post-pandemic economic crisis facing the region. David Jessop asks whether this time they will overcome past implementation failures and fulfil the promises they have made. 

A little over a year ago this column observed that the pandemic will pass, but noted that more telling will be the way in which the region responds to the impact of a virus-induced recession.

At the time, it was apparent that once the most immediate and pressing regional tasks such as  vaccination had been achieved, an economic recovery plan should be developed that pays particular attention to the region-wide structural shortcomings that the pandemic has shone a light on.

At its most obvious, the pandemic has pointed to the absence of a region-wide integrated approach to food security; CARICOM member states’ continuing failure to address the logistical and infrastructural challenge of having efficient intra-Caribbean shipping and air transport links; the importance of tourism; and shortcomings in the region’s IT infrastructure and connectivity. It has underlined the need to act decisively to encourage investment in e.commerce and e.governance which the COVID crisis has proved to be central to future efficiency. 

The pandemic has also highlighted the failure to address the already well understood Caribbean Single Market and Economy (CSME) implementation deficit, and the need for much improved region-wide procurement and inter-operability if the region is to be able to respond to future crises in a unified way.

On 24 and 25 February Caribbean Heads of Government, meeting virtually, recognised that the region now needs to move rapidly to address these issues in the context of the looming post pandemic economic crisis that will face the Caribbean once most citizens are vaccinated, and the time comes to engineer recovery. 

In this respect three outcomes from the recently held intersessional are particularly striking.

The first is the much discussed and reported on failings of the regional integration process and the need for all governments to address and implement the measures necessary to have a genuine Caribbean Single Market and Economy (CSME).  On this the communique was forthright.

Expressing concern about the continuing lack of  progress on implementation of the CSME it noted that to ensure recovery, Heads “agreed to review urgently the entire consultation and decision-making processes at all levels in the effort to establish the most effective strategy for effecting increased levels of implementation”. They also urged all CARICOM states to remove non-tariff barriers between each other to boost the region’s economic output, and to simplify administrative procedures relating to the free movement of people. 

The second is the recognition that unless structural problems that should have been remedied long ago are not swiftly addressed, recovery may be a long way off. 

It was agreed that the Prime Minister of Barbados, Mia Mottley, will lead a review of implementation and Finance Ministers will meet no later than the end of March 2021, to resolve issues outstanding on the still awaited CARICOM Financial Services Agreement, the Regional Securities Market, and the Community Investment Policy and Credit Reporting. In addition, COTED, CARICOM’s Trade Council, was “urged” to expedite and make recommendations by July on creating a single ICT Space, reducing roaming rates, enhancing broadband access, and exploring the creation of a single regional telecommunications regulator. Heads also “instructed” COTED (transportation) to take the actions necessary to create “an effective air transportation system”, build maritime capacity for the transportation of agricultural produce, and review existing port facilities to support intra-regional cargo.

And the third is the long overdue recognition by government that the private sector in the region, if enabled, can deliver many of the desired outcomes. 

In a line about the role of the private sector that seems to put to bed many years of public-private dissonance, the communique observes: “the region is depending [on it] to fuel the recovery of its economies and which need[s] to be fully engaged at both the national and regional levels”.

In a similar vein, Head’s placed stress on the private sector’s role in developing a joint CARICOM tourism policy aimed at restoring “revenues, employment, foreign exchange retention and currency stability”.  An “iterative” emergency tourism plan was agreed, a subsequent more detailed policy and strategy will be delivered before the third quarter of this year, and in future the words ‘West Indies’ will be used to market the Anglophone Caribbean through a Tourism Reserve Fund in part supported by “willing Member States”. Put another way, the pandemic has dramatically proved private sector led tourism to be existential to most CARICOM states’ future economic recovery and viability.  

Other private sector related outcomes may see the creation of a “commercial” food security strategy through a strategic public-private partnership involving long-term private funding.

Having over many decades observed CARICOM in action – if that is the right word –  and seen the post summit enthusiasm of Heads then turn to dust, it is hard not to by cynical about the latest decisions. 

Many, myself included, will say they have heard it all before and will observe that over decades, lacking executive authority and the transfer of sovereignty from governments, CARICOM continues to suffer the post-summit paradox of Caribbean Heads, becoming unwilling to act, see implementation through to the bitter end, or determine accountability. That said, there is every indication that the pandemic and the need for a politically joined up response makes this crisis completely different, not least because a failure to deliver economic recovery may redound on the whole Caribbean political class.

Spurred by a potentially disastrous economic collapse, it would seem that all member states recognise that unless key issues are addressed now, they could consign the region to a hard to resolve long-term economic crisis.
This time, the option of ‘business as usual’ is unlikely to be available as much has changed globally, requiring industry and governments in the Caribbean to think differently.

The pandemic offers an opportunity to rethink the Caribbean economic model, and to explore alternative ways in which smallness and fragmentation can be overcome through integration. There is no shortage of viable solutions.

At issue is whether CARICOM as presently constituted is the right vehicle to deliver the long overdue structural changes that COVID-19 has highlighted, and whether Heads are able to fulfil the promises they have made.  

David Jessop is a consultant to the Caribbean Council and can be contacted atdavid.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

7 March, 2021

Photo by John Cameron 

Safely restarting tourism is arguably the biggest economic challenge facing most Caribbean governments. David Jessop believes that despite the difficulties involved, tourism’s return can only happen once significant numbers of at-risk citizens and key workers are vaccinated, and a viable vaccine passport scheme is in place for visitors. 

From Russia to Singapore, nations around the world are considering providing citizens who have been vaccinated against COVID-19 with digital immunity certificates for domestic and international use. Their principal objective is to stimulate national economic recovery and a gradual return to normality. 

Such ‘vaccine passports’ may, however, come to play an important role in the restoration of international tourism as more people in wealthier nations are immunised against COVID-19.  

Significantly, Israel, having vaccinated 30% of its citizens and over 80% of those in older age groups, is now negotiating bilateral protocols to establish vaccine passport corridors for those wanting to holiday in Greece and Cyprus. 

Elsewhere, the African Union Commission is developing with the continent’s health authorities a ‘My COVID Pass’ for travellers, allowing for the mutual recognition of COVID-19 test results and vaccines; the European Council, at the request of some member states, is considering ‘passports’ as a way to support EU economic recovery; and in Britain a high-level Cabinet-led task force is to report soon on the issues involved. At the same time, the aviation industry through IATA has begun trialling a multifunctional ‘Travel Pass’ for airline use that may be rolled out soon.

Despite this, the development and use of immunity certificates is complex and contentious, raising  practical and ethical issues. 

Technically, the development of a COVID-19 vaccine passport involves placing a validated secure machine readable QR code on a mobile phone. However, the real-world challenges involved in achieving this are considerable. 

A recent academic study published by the Royal Society in London describes in detail the issues that every state would need to address before any COVID-19 passport system is introduced for international use. 

Vaccine passports for travel would have to reveal in a receiving country if the holder is protected from illness and unable to transmit the virus; show vaccine efficacy; be subject to international acceptance; and detail whether the vaccine given is effective against new or emerging variants. It would also have to be easily portable, interoperable, affordable, and have a clearly defined use.  Any such passport would also have to be secure, legal, ethical, and non-discriminatory.

Professor Melinda Mills, the Director of the Leverhulme Centre for Demographic Science, one of the study’s authors, says that that a clear understanding of the use to which any such passport is put is essential. Is it, she asks, a passport to allow international travel, or should it be initially used to allow a holder greater freedom at home?  

She is concerned that vaccine passports require a level of agreement on the science of immunity and could “inadvertently discriminate or exacerbate existing inequalities”. Professor Mills also raises significant legal and ethical questions, for example relating to the denial of travel to those who are vaccine-less or lack a mobile phone. 

What the Royal Society report makes abundantly clear is that if any vaccine passport is to be universally viable it requires international standardisation and to follow the lead of the World Health Organisation (WHO).

The WHO, however, continues to caution against ‘immunity certificates’. Despite this, it has begun to explore the issue, recently convening a group of experts to define specifications and standards for a digital vaccination certificate that could facilitate vaccine monitoring and ‘support cross-border uses’. 

Although the group has yet to report, it is already apparent that any WHO related smart vaccination certificate will have to meet multiple criteria and will, as it says, need to be ‘coordinated, time-limited, risk-based, and evidence-based’ when it comes to international travel.

If as many epidemiologists believe, mutants of the virus could be with us for years to come, vaccine passports coupled with the now urgently needed region-wide roll out of vaccines and then later, booster programmes, will become essential.  

What happened in much of the region over Christmas and the New Year makes the point that without both, Caribbean tourism and the wider regional economy are unlikely to recover sustainably. 

After the positive early regionwide suppression of the virus in 2020, the holiday period saw many countries in the region experience a surge in infections from both imported cases of the virus and local indiscipline. This occurred even though visitor arrivals numbers remained very low and the thousands of cruise passengers who normally visit for hours were absent.

The consequence was that governments in both the region and its source markets have since adopted travel restrictions that are antipathetic to the rapid return of the 31.5 m stay over visitors and 30.2m cruise landings the Caribbean saw in 2019.

Without widespread immunisation and vaccine passports it is therefore hard to see how the industry’s viability and tourism’s broader economic role can start to be restored, let alone the high intensity contact necessary to welcome every visitor so they can safely interact with sellers of services and the wider community. 

Hopefully, as WHO’s list of certified vaccines increases, and if Cuba’s Soberana 02 vaccine proves efficacious and becomes available through the WHO’s COVAX facility, it will be possible before the year’s end to have vaccinated significant numbers of at-risk Caribbean citizens, key workers, and others deemed essential to economic recovery. 

In the meantime, Governments, the industry, and the Caribbean Public Health Agency (CARPHA) should be considering jointly responding to the various logistical, commercial and ethical issues raised by travel vaccination certification: not least because pent up demand among vaccinated consumers in the region’s principal source markets may soon surge, driving the rapid introduction of travel passports and global competition for visitors. 

To fully restart tourism and end the stop-start approach now being seen across the region will require not just a review of the confusing melange of entry requirements that now exist and their variable enforcement, but new thinking about how in future countries intend testing, tracing, and responding to the high volumes of visitors the region has previously seen. 

The region’s meagre resources and over dependence on tourism, suggest that this will mean the development of safe travel bilateral corridors from North America and Europe utilising digital vaccine certification. 

David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@stagingcaribbean.wpengage.uk

Previous columns can be found at https://www.caribbean-council.org/research-analysis/

February 28, 2021