The Sixth Special Meeting of the Council of Ministers of Finance and Planning (COFAP) began here on Tuesday with Antigua and Barbuda Prime Minister Gaston Browne noting that it has taken Caribbean Community (CARICOM) countries “far too long to finalise the instruments which have been before our Councils for many years”.
Browne, who is chairing the closed door one day meeting, said that the deliberations continue the conversation started last July on the menu of macro-economic support measures to complement the functioning of the market infrastructure for the CARICOM Single Market and Economy (CSME) which regional countries recognise as the platform for growth and sustainable development.
“We also recognise that sustainable development can only be achieved if we all grow together. To this end, we must seek to harness the collective resources of the region – financial and natural resources as well as our human capital for the benefit of the Community. “
Prime Minister Browne said that region countries have determined that they have a shared future and this perspective prevails throughout the Revised Treaty of Chaguaramas which sets out the rights and obligations accruing to CARICOM nationals, both individuals and businesses, as they participate in the CSME.
“Given our individual size, our limited resources and interdependence, our very survival depends on us continuing on this journey towards a single market and economy or run the risk of being marginalised from the global trade, economic and financial systems.
“While we have made progress with respect to the single market, we need greater focus on advancing the single economy, particularly in those areas which would help to support a competitive single market,” Prime Minister Browne said, noting that financial development is a critical factor in achieving sustainable economic development.
He said that the majority of member states are constrained in their quest for development by weak economic growth and high levels of unsustainable debt.
Browne said the CARICOM region is regarded as one of the most heavily indebted regions in the world, noting that at the end of 2017, the average debt level in the region exceeded 70 per cent, with the majority of countries having debt to gross domestic product (GDP) ratios exceeding the international benchmark of 60 per cent of GDP.
“Moreover, our countries are extremely vulnerable to natural hazards and climate change events as evident in the considerable damage caused by the 2017 hurricane season. Declining government revenues and the need to pursue fiscal consolidation measures limit the ability of these member states to invest in the economy.”
Browne told the COFAP meeting that the financing deficit in the region has been exacerbated by the graduation of member states to middle income status and by an overall decline in foreign capital flows. He said weak sovereign credit ratings have also severely reduced these countries’ access to the international private capital markets.
“Our financial co-operation initiatives are therefore aimed at mobilizing financial resources within the Community and on attracting capital from new sources by enhancing the fiscal and investment regimes.
“It is against such a background that it is imperative for us to pursue urgently the efforts to advance the necessary legal measures to complete those initiatives. It is taking us far too long to finalise the instruments which have been before our Councils for many years.”
But Browne said that even as the region procrastinate, outside forces are also contributing to the challenges facing the Caribbean.
“The financial services sector in CARICOM States is part of our diversification efforts and is a significant revenue stream in assisting our development thrust. It is now under threat as it confronts the rapidly changing regulatory landscape in the sector and international tax matters.
“We are concerned that such organisations as the Financial Stability Board, and the OECD (Organisation of Economic Cooperation and Development) are claiming to set global standards without countries such as ours having a voice in the process.
“While the CARICOM States are supportive of global initiatives to promote greater tax transparency and more responsible tax practices, we continue to be concerned about the extent of the reforms that have been demanded and the ambitious timeline for executing such reforms. “
Browne said that the meeting here will discuss the region’s approach to the European authorities, as a Community, to advocate against the unilateral demands made by the European Union Council against the threat of blacklisting and withdrawal of European development support to the region.
“The required reforms have significant implications for the future of the financial services sector in many of our countries. We therefore require time to determine and examine the options for reform that are available to us in accord with our national and regional goals and objectives.
“Further, there appears to be a move away from multilateralism as some countries seem unwilling to comply with the dictates of globally recognised standard setting bodies. This is happening at a time when the vulnerability of small countries has become more pronounced. “
Browne said that the rise of unilateralism is manifested in the willingness of some countries to embrace their own brand of economic nationalism which seeks to place their own interest above that of a shared interest in promoting global development.
But he warned that this is not a sustainable path as such action threatens to dismantle regional and global power-sharing and arbitration mechanisms that serve the international community well and ensure some degree of equity and fairness for all countries.
“Colleagues, the task before us is particularly challenging given our limited resources. I therefore urge that as we consider the various issues before us, we commit to leaving here with workable solutions to realize the promise of CSME as we seek to create better opportunities for our citizens.
“Our success depends on us leveraging our collective creativity, talent, expertise and resources to address the problems which bedevil us. I have every confidence that we will be equal to the task,” Browne told the meeting.
The COFAP meeting is one of two CARICOM meetings to be held here this week.
On Wednesday, Prime Minister Mia Mottley will address the opening of the ninth Prime Ministerial Sub-Committee on the CSME.
The organisers said that prior to adopting the agenda and discussing some procedural matters during the CSME meeting, CARICOM leaders will focus their attention on Stakeholders Perspectives and Recommendations for an effective CSME, including objectives and priorities; free movement of persons; the role of the private sector and labour; as well as public awareness/ education programme.
“They will also seek to address some macro-economic support measures, namely a review of the establishment of the enabling support measures for a competitive CSME, and some priority elements; specific key considerations for CSME effectiveness; consultation mechanisms; establishment of a single jurisdiction and single registration for companies; and the definition of a CARICOM national,” they said in a statement.
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