Last week, a Bloomberg article reported that Barbados is to be fire 3,000 public sector workers by March and freeze wages. The IMF apparently said that “urgent adjustments” are needed given Barbados’s debt to GDP ratio hit 94% in September. By comparison, a ratio of 93% forced Cyprus to seek an EU brokered bailout in March.
Finance Minister Chris Sinckler told lawmakers that the government risks “further hemorrhaging” of its reserves and the local currency’s peg to the dollar if nothing is done. “Weak exports and tourism arrivals, slow growth and expansive fiscal policy have led to a sharp increase in public debt and fiscal financing pressures,” the IMF said in a statement after a 10-day visit to the island of 288,000 people.
Unfortunately, Barbados is not alone. The Caribbean has seen eight debt defaults since 2003 in six countries, including Jamaica, Belize, Grenada, Dominica, and St. Kitts & Nevis. According to the UN, Barbados’s $3.7 billion economies will shrink 0.7% this year, while Caribbean economies expand 1.3%, which is half the rate of Latin America. But this situation comes as no surprise to anyone who has been observing the region. In the 1990s, the region reluctantly moved from a monoculture of agriculture (mainly sugar and bananas) to tourism. Despite much rhetoric, efforts to jointly market the region thru the Caribbean Tourism Organization (CTO) have gone nowhere, as individual territories bicker and compete with each other. At the same time, product quality continues to lag behind that of other regions. 1040 form Singapore
Whereas when the LOME convention / ACP arrangement was coming to an end in the 1990s, one could see tourism as the next logical step, what’s scary about where the Caribbean is now, is that there is no consensus on where else to go. Now with the EU in permanent decline and as the US continues its pivot to the Asia Pacific region, the Caribbean can no longer look ‘North’ for support. These days the Caribbean region can only get excited when China/Taiwan tosses trinkets; it’s a way in exchange for compliance in a certain international forum.
Earlier this week, the Financial Time’s YouTube channel published some videos on the Caribbean situation, all under the headline “paradise lost.” In the political realm, there is no regional leadership, just a series of failed institutions. Chavez is gone, and ALBA fades from memory. Trinidad’s government changed in 2010, putting in place an inward-looking administration and has abdicated all regional responsibilities. In the private sector space, Jamaica’s brands like Grace Kennedy, Digicel, and Sandals are the only ones that seem able to hold their own on the global stage. With the collapse of CL Financial, Trinidad’s conglomerates now seem gun shy and prefer to stay within the region. Even Guardian Holdings’ choice of new CEO suggests a regional rather than a global focus.
I grew up in the Caribbean, and I now live in South East Asia, so I cannot help but compare the 2 regions. Both emerged from periods of European colonial rule and now enjoy varying degrees of political and economic success. It points out the obvious to criticize Caribbean leaders as unrealistic in hoping to survive alone in a world where scale counts. It is a tragedy that started with the failure of the West Indies Federation in 1962. Some Caribbean politicians have spoken of Singapore as a model of what a small multicultural island with no natural resources can become. Unfortunately, in today’s world, the Singapore miracle is the exception rather than the norm, and no other tropical island has been able to emulate its economic success.
Last night, a Jamaican artist won the Voice. I am speaking about an American reality tv singing competition broadcast on NBC. I felt encouraged to see the way nationals from various Caribbean nations came together to support Tessanne Chin. As one Trinidadian supporter put it – tonight, we are all Jamaicans. That sentiment does give me hope. I believe that only when nationals move beyond narrow definitions of citizenship and see themselves as a part of a bigger region would they be able to elect leaders to take them to the next level. Until that time, some continue to delude themselves into thinking that they can make it without the support of their neighboring territories. Dream on.