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Discussion Paper Series - No. 17
This paper is a revised version of a paper presented at the Caribbean Regional Consultation on the Management of Social Transformations (MOST) Programme of UNESCO, Kingston, Jamaica, February 1997
Abstract
Contents
Fragmentation and diversity Size, population and income
Financial dependency Conditionality Rise of Asia and the Pacific
Human Development Poverty, unemployment, inequality Emigration Social cohesion V. Globalization and Competitiveness
Competitiveness
Telecommunications Organization and socio-cultural change
Local ecostress: environmental management capabilities
2. Reform of governance 3. Human resource development
5. Fostering of local entrepreneurship
7. Regional cooperation 1. The Caribbean: basic statistics
Charts 1. Population by languages
Boxes 1. Which Caribbean?
Figure 1 Managing Social Transformation in a Global Context Appendix Table A1 – Characteristics by group
Definitional issues The term "Caribbean" is used in different meanings so far as its scope and coverage are concerned (see Box 1). Caribbeans themselves tend to think of the region as consisting exclusively of the language area to which they belong. Hence, when anglophones speak of the Caribbean they are normally referring to the countries of the Caribbean Community (Caricom), the group of 15 predominantly English-speaking states (1) that includes all the former British colonies in the archipelago and the adjacent mainland. Formed nearly 25 years ago, Caricom has a sound background of cooperation in trade, external economic negotiations, education, sports, and culture. The recent admission of Suriname and Haiti to its membership means that it is becoming more truly representative of the non-Anglophone Caribbean. Caricom is also developing closer relationships with Cuba and the Dominican Republic. On the other hand, we have the Association of Caribbean States (ACS) that was formed by a Caricom initiative in 1995 (WICOM 1992). The membership of the ACS extends to all the states bordering the Caribbean Sea on the South and Central American mainland. This may be called the "Greater Caribbean" (ACE 1996), but it is also referred to as the "Caribbean Basin", a term which reflects the US perspective. The ACS’s Caribbean includes several countries also considered to belong to other "regions" : Mexico, Colombia and Venezuela, which are major Latin American players in their own right and the members of the Central American Common Market. On the other hand, most of the dependent territories in the archipelago are not yet members of the ACS. It is, therefore, both too extensive and too restrictive a definition for the purposes of this paper (2). "The Caribbean" in this paper, therefore, means all the islands in the Caribbean Sea plus four mainland entities with close historical and cultural affinity to the islands (see Box 1). This definition coincides closely with the membership of the Caribbean Development and Cooperation Committee of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). Basic statistics on size, population, income, and political status and external association for the region are provided in Table 1.
In geography and history, this region has certain features which distinguish it from the rest of the mainland. The numerous islands and cays are scattered over a wide area strategically located on the main trading routes between South/Central America and Europe/North America. Fertile land is abundant and there are mineral and hydrocarbon deposits. As a result, the region was the subject of intense military rivalry among the major European powers from the 16th-18th centuries, and of US occupation in the 20th century. Spanish settlement was followed by the virtual disappearance of the indigenous population, the spread of the sugar plantation system, the importation of slave labour from West Africa and subsequently of indentured workers from various parts of Asia. This experience has left a legacy of extreme political fragmentation and wide linguistic, ethnic and cultural diversity. With a total population of 37 million, there are 28 identifiable political entities in the region. 16 of these are independent states and 12 are dependent territories. Twenty-one have populations of under 1 million, and 9 have less than 100,000 inhabitants. Besides Caricom and the ACS, most of the independent states also belong to the African-Caribbean-Pacific (ACP) group of countries under the Lome Treaty with the European Union (EU). Several of the smaller islands are also grouped into the Organization of East Caribbean States (OECS). English-speaking countries are also members of the (formerly British) Commonwealth of Nations. Dependent territories are associated with Britain, France, Netherlands, and the United States under a variety of constitutional arrangements. Puerto Rico, Aruba and the Netherlands Antilles have a high degree of internal autonomy. Martinique, Guadeloupe and French Guiana are politically integrated with metropolitan France, some 7,000 kilometres across the ocean. In between these two extremes are the British dependencies, which have locally elected administrations with a British Governor.
Table 1. The caribbean: basic statistics
English is the official language of the majority of Caribbean states and territories but Spanish is the language of the majority of the population (Table 2, Chart 1). French, Dutch, and several Creole languages are also spoken. Ethnically, people of European and African origin predominate in the Hispanic societies, whilst African and Asian descendants are the majority in the English, French and Dutch speaking countries. There are also small Chinese, Jewish and Lebanese communities. Historically, fragmentation and diversity have been barriers to regional
cooperation and have prevented the emergence of the region as a cohesive
group in hemispheric and international relations. But there is a growing
movement towards cooperation across political and language barriers in
economic, environmental, and political matters. The positive aspect of
cultural diversity is that it has been a source of survival skills for
Caribbean people. It is also an asset in the tourist industry, in that
visitors can sample the Caribbean versions of Latin, African and Asian
cultures. Diversity should be seen as an asset whose potential can be more
fully utilized in the future.
Size, population and income The 28 entities exhibit wide differences in physical size, size of population, and level of per capita income. For example Cuba, the most populous Caribbean country, has about 1000 times the population of Anguilla. Guyana, with the greatest land area, is over 2,300 times larger than Aruba. Montserrat has over 120 times the per capita income of Haiti,. Such differences make it difficult to generalize about economic and social conditions across the region as a whole. Within the Caribbean, a distinction is often made between Caricom and non-Caricom countries. Yet Caricom members themselves show wide variation in size of population and income levels. Also, this distinction has the danger of obscuring possible points of similarity among Caricom and non-Caricom states. For this reason, we suggest a four-part classification of the entities in the region, using a combination of political, demographic and geographic criteria. First, since action by the state is a necessary element of coping with change, we distinguish the independent states from the dependent territories. Within the former we distinguish the larger island states, the smaller island states, and the mainland states. This classification into four groups is used for most of the tables and charts in this paper. Its underlying logic will become clearer as the analysis unfolds. The larger island states are those with populations greater than 1 million (3). These are Cuba, the Dominican Republic, Haiti, Jamaica, and Trinidad and Tobago which contain, between them, 79 percent of the region’s population. Their average per capita GDP (PCI) is under $1,000 and this places them, internationally, among the lower middle income group of developing countries. Trinidad and Tobago’s PCI is however, considerably higher than that of the others. Haiti, on the other hand, is a low-income country. The eight smaller island states all have populations of less than 1 million. They are the Bahamas, Barbados, and the six members of the OECS. This group has an average PCI over five times that of the larger island states that places them, as a group, in the upper middle income of LDCs. Together, they are only 3 percent of the Caribbean overall population. The three mainland states are Belize, Guyana, and Suriname. They are relatively large in land area, with 55 percent of the Caribbean total but with only 4 percent of the region’s population. Their PCI is about the same as that of the larger island states. Hence they, too, are lower middle income LDCs as a group. However, Belize’s PCI is somewhat higher than the others in this group. Finally, there are the 12 dependent territories. They have an average PCI of over $11,000, placing them in the high-income group of LDCs and their population is 14 percent of the Caribbean total. Puerto Rico stands out in this subgroup, accounting for 10 percent of the total Caribbean population and as much as 42 percent of the region’s total GDP (4). Broadly speaking, the Caribbean is divided between a group of larger island and mainland states which contain the majority of the region’s population and land area, with relatively low PCI and a large number of relatively small states and dependent territories with a small proportion of the population but significantly higher average per capita incomes. The higher incomes of the latter arise mostly out of a combination of small populations with favourable resource endowments and the economic benefits of dependent status or of sound economic management (see Box 2). It is also likely the data somewhat exaggerate the real differences in living standards of the populations in the different groups for the following reasons. First, to permit comparison we have used GDP rather than GNP data. GDP is likely to overstate the income actually accruing to residents by a wider margin in the dependent territories than in the independent states. This is because of the higher degree of non-resident ownership in the dependent territories. Second, the differences in PCI levels among the independent states are considerably narrowed when purchasing power parity (PPP) GNP data are used. For example the ratio of PCI of the richest to the poorest (Bahamas and Haiti respectively) narrows from 54:1 to 15:1 using the PPP measure (5). Third, there is the problem of income distribution: in fact quite significant proportions of the population live below the poverty line in some of the smaller island states (6).
Ecological, economic and political vulnerability is also a feature of the larger islands and mainland states. It is perhaps the one feature that all Caribbean societies have in common, irrespective of their economic and political status.
Trade dependency Economic vulnerability in the Caribbean is a result of the extent of trade dependency together with the vulnerable nature of the region’s export economies. Trade dependency is shown by high trade/GDP (8) ratios. These range from an average of 71 percent for the larger island states to 186 percent in the mainland states (9), with an overall regional average of 112 percent (seeTable A2 and Charts 6 and 7). It is not just the size of trade dependence that matters, however, so much as its specific characteristics. Most Caribbean economies depend on the export or one or a small number of resource products, and/or tourism. Merchandise exports continue to consist largely of primary commodities and other resource products. Such products account for more than 50 percent of the value of exports of goods in 13 of 20 economies for which data are available. The products vary: sugar in Cuba, Guyana, and to a lesser extent in several others; bauxite and its derivatives in Jamaica, Suriname and Guyana; petroleum and its derivatives in Trinidad and Tobago and in the Netherlands Antilles; bananas in St. Lucia, Dominica, Grenada, St. Vincent, Guadeloupe and Martinique; coffee in Haiti. Many Caribbean countries have prospered in the past by means of the export of these resource-based products. Future reliance on them to maintain living standards, and to encourage economic growth, is problematic. Primary commodities are the most stagnant sector in the growth of world trade. Trade expansion has shifted decisively in favour of science-intensive goods and knowledge-intensive goods and services. Primary commodities are subject to declining terms of trade with respect to manufactured goods. In the case of bananas, the preferential quota arrangements accorded Anglophone Caribbean exporting countries by the European Union seem likely to be dismantled as a result of a recent WTO ruling (10). This will undermine the livelihood of thousands of small producers in the Eastern Caribbean states. Earlier experience of Cuba with preferential arrangements for sugar exports, first with the United States and then with the Soviet Union, show how vulnerable exporting countries can be in this respect.
Some countries in the region have had success in developing exports of manufactures (Table 5). Puerto Rico alone exports $16 billion of manufactures annually. Success factors are duty-free access to the US market, relatively low-cost labour, generous incentives, and low political risk due to the island’s status as a US dependency. Other Caribbean countries obviously cannot match the first and the last of these factors. Trinidad and Tobago exports about $1 billion annually of steel, fertilizers and other energy-based and petrochemical-based products, as well as light manufactures. The Bahamas also exports significant quantities of chemicals. The most vulnerable manufactured exports of the region are garments and other light manufactures attracted by the combination of low-cost labour, generous tax incentives, and favourable tariff treatment by the United States on imports of products assembled abroad from US goods. With these advantages, the Dominican Republic and Jamaica developed a large garment export sector employing some 120,000 people by the early 1990s (Wilmore 1993; 1994). Barbados also became a significant exporter of light manufactures. These exports, especially garments, are now threatened by competition from Mexico, as a result of the North American Free Trade Agreement (NAFTA) coming into operation. Jamaica has lost over 9,000 jobs in the garment industry in the past two years. Caribbean and Central American countries have lobbied intensively for NAFTA parity for CBI countries, so far without success.
Financial dependency Another dimension of economic vulnerability is the relatively high degree of financial dependency of most governments in the region. The independent states rely heavily on multilateral and bilateral flows, and on commercial borrowing, to finance their capital expenditure on social and economic infrastructure. Many of the dependent territories depend on transfers from their metropolitan patrons to sustain public services and the infrastructure. As far as concessional credits for the independent states are concerned,
the end of the Cold War and fiscal stringency in the major OECD countries
have had a negative impact on the flow of funds. US aid has fallen sharply
as has the flow of credits to Cuba from Eastern Europe. Multilateral funding
has also fallen or failed to grow significantly, as attention shifts to
Eastern Europe and to sub-Saharan Africa. Some of the larger states have
reasonably good access to the commercial capital market, notably Barbados
and Trinidad and Trinidad and Tobago. At the other extreme countries like
Haiti and Suriname need overseas assistance to balance their recurrent
budgets. In short, governments need to develop the capacity to mobilize
domestic and external resources independently by improving tax collection
and administration machineries and external negotiating skills, whilst
expanding the tax base by stimulating growth.
Conditionality Recent developments have seen a tightening of financial and trade conditionalities
in the policies of the developed countries. Increasingly, market access
and financial assistance for LDCs is being linked to trade liberalization,
market-oriented policies and the downsizing of the state. In the case of
the United States these polices are carried out through the lending conditionalities
of the Inter-American Development Bank (IDB) and the NAFTA/FTAA/WTO processes.
In the case of the EU this appears to be the likely thrust of the revision
of the Lome arrangements. The new dispensation will seek to modify or eliminate
the non-reciprocal trade preferences characteristic of the Lome accord,
and to differentiate among ACP countries by subgroups or on a case-by-case
basis (EU 1996). This calls for a careful reformulation of negotiating
strategies with the EU (Lawrence 1997).
Rise of Asia and the Pacific Finally, the implications of the significant shift in the growth pole of the world economy towards Asia and the Pacific need to be considered. This is a region with which the Caribbean has few linkages in trade, investment, and economic cooperation; and which in turn has at best a marginal interest in the Caribbean. Hence highly proactive strategies of trade and economic diversification to this region will be needed. In conclusion, Caribbean countries face several challenges arising out of structural shifts in the world economy and the forces working for more open trading regimes. The main weaknesses are represented by certain primary product exports, preferential arrangements, and environmental vulnerability. The main sources of strength and dynamism are tourism and certain manufactures. Export diversification by product and market, and improving competitiveness in international markets, are the main tasks facing Caribbean economies in the global setting.
The urgency of the above tasks is underlined by negative trends in economic
growth and human development among most of the the larger island and mainland
states in recent years. A notable feature of this experience is the superior
growth performance of the smaller island states. Hence, income and human
development gaps in the region have probably widened in the past 10-15
years.
Economic growth As seen in Chart 8, there was a marked slowdown in economic growth among the larger island and mainland states in the 1980s and early 1990s (see Appendix, Table A3 for details) As already noted, these countries contain over four-fifths of the region’s population.
Human Development Up to the end of the 1980s, most Caribbean countries were performing well in human development relative to their level of per capita income. Twelve of the 16 independent states show a higher HDI rank than GDP per capita rank in the UNDP Human Development Tables (see Table 7). In gender-related development, 6 of the 8 countries for which data are available show a higher ranking than their human development ranking. The relatively good performance of Caribbean countries in human and gender development is due mainly to greater life expectancy and of educational attainment in most countries.
Chart 10. Change in global HDI ranks, 1991-1997
The trends should be viewed in the context of the widespread problems of poverty, unemployment and income inequality across the region as a whole (Table 8, Chart 11). Estimates of the proportion of the population living in absolute poverty are as high as 65 percent in Haiti, over 40 percent in Guyana and Suriname, and between 20 and 40 percent in 7 other countries (12). Excluding Cuba, for which data are not available, as many as 38 percent of Caribbean people are living in absolute poverty. The problem is shared by the East Caribbean states, where "significant portions of the ... population are in a condition where without targeted intervention and community-focused development, this goal (i.e. poverty eradication) cannot be attained" (Duncan 1997:2). A major contributor to poverty is unemployment and underemployment (13). Almost all Caribbean countries have double-digit unemployment rates, and there is the problem of the "working poor". Income inequality is also marked: the share of the poorest 20 percent of households in consumption varies from 3.4 to 7.1 percent in the 7 countries for which data are available. Where inequality is combined with low average per capita income, or high unemployment, or both, the consequences are evident in the incidence of poverty.
Chart 11. Poverty
One visible consequence of economic stress is the high rate of emigration from the region. A recent estimate put the net loss of population from the region at 5.5 million in the 1950-1989 period (Guengant 1993; cited in Samuel 1996:8) which is about 15 percent of the present population within the region. Haiti, Cuba, Jamaica and Puerto Rico each had close to 1 million of their native-born population living abroad at the close of the 1980s. In relation to the resident population, the overseas population at the end of the 1980s stood at 40 percent for both Jamaica and Guyana, 36 percent for Suriname, 23 percent for Puerto Rico, 21 percent for Trinidad and Tobago, 15 percent for Haiti, and 10 percent for Cuba. The Caribbean diaspora is now a major factor in the economic life of
the region. In several countries remittances from abroad already compare
significantly to the value of merchandise exports (14). Tightened immigration
controls and xenophobic pressures in the United States and the European
Union could see accelerated return flows of migration to the Caribbean
in the not too distant future. However, the potential of the Caribbean
diaspora as a source of capital, technology and business expertise is yet
to be fully tapped.
Social cohesion Besides pushing many Caribbeans to seek their economic improvement elsewhere, poverty, unemployment and inequality undermine the kind of social cohesion needed to manage change effectively and this is especially so where the lines of exclusion coincide with deep rooted ethnic and social divisions. They occur in the context of the intense exposure of the region's population, especially the youth, to affluent metropolitan life styles through the presence of a large tourist population and to a relentless diet of the cult of individualist consumerism, sex and violence, through satellite TV and other new technologies. This may undermine disciplined attitudes to study and work and contribute to the legitimization of antisocial behaviour. The juxtaposition of the above factors has provided a fertile breeding ground for growing involvement in drug abuse and in drug trafficking. The Caribbean has become a principal transshipment area in the South America-North America/Europe drug trade. Many states are grappling with an alarming rise in criminal violence, much of it drug-related. Drug trafficking has had corrosive effects on security and justice systems staffed by personnel who are overstretched and underpaid. It has exposed political systems to penetration and corruption. From the other side, it has given rise to pressures from the United States government for police powers within the sovereign air and sea space of the Caribbean (Abrams 1996; Paris 1996). In 1996-1997 most Caricom governments signed "Shiprider" agreements with the United States, giving that country’s armed forces the right to enter their sovereign sea and air space to pursue and arrest suspected drug traffickers. In recent years Britain and the Netherlands have removed locally elected administrations in dependent territories suspected of ties with drug traffickers. Hence many Caribbean entities are seeing an erosion of the limited sovereignty or autonomy they presently enjoy. There is a growing sense in the Caribbean of being at the mercy of forces, both economic and criminal, that are "too big" or "too hot" for governments to handle. This may be a factor contributing to the waning credibility of governments and the declining confidence in political systems, among the population in many countries in the region. At the same time, a growing sense of "Caribbeaness" is also discernible. This is attributable to a heightened recognition of commonality in history, culture, and especially of contemporary condition. But can the Caribbean cope? And if so, how?
We may sum up the dangers facing Caribbean societies in terms of possible marginalization from the growth points in the world economy, further political and social fragmentation intra-nationally and intra-regionally, and creeping loss of autonomy, defined as the capacity actively to shape their future development. Whether some or all of these societies can survive as viable economic, social and political entities into the first half of the 21st century is still an open question. It is in that sense that we characterize the region as comprised of "societies at risk". One scenario of the future is a region in which poorer households rely mainly on remittances from overseas family members to make ends meet; governments rely on financial assistance from metropolitan patrons to balance their budgets; and societies are under the military protection of the United States and the European Union. This can be called the "trusteeship" scenario. It may appear to be unduly pessimistic but in fact it is nothing more than an extrapolation of several current trends. On the other hand, we have the evidence of the creativity and talent of Caribbean people. For its comparatively small population, this is a region that has given rise to a remarkable array of outstanding personalities and performances in the fields of politics, the arts, sports, and culture (15). The issue of what is meant by "coping" is posed in this context. The term connotes a survival strategy: a series of defensive actions aimed at minimizing the adverse impact of external shocks, protecting what is already there. Used in this sense, it is essentially reactive and conservative. For the management of social transformation in a global context, coping needs to be given a proactive meaning and a strategic orientation. Development objectives of economic growth, human development, poverty reduction, social equity, good governance and local autonomy, come into play. The task then becomes that of pursuing these objectives in the context of the constraints and opportunities resulting from global change. For this, it will be necessary to strengthen the habit of viewing the world through the lens of the historical experience, contemporary reality, and long-term interests of the region's population. In short, the Caribbean will need to define itself and act in function of that self-definition, rather than responding to the definitions of others (16). For example, from the outside world the region is viewed alternatively as a "tropical paradise" or as a "problem area". Caribbean people are stereotyped either as carefree and fun loving, or as adept at illegal immigration, or as violent criminals. Of course, none of these images conforms to the complex reality of the region as it is experienced by Caribbeans themselves, nor does it adequately convey their aspirations. In the three sections that follow we develop this line of thinking by discussing responses to globalization and competitiveness, the infocommunications revolution, and the thrust towards sustainablity. These are used as specific examples of coping with economic, technological and environmental change. To preview the final section, we argue that there are certain "building blocks" generic to all proactive coping strategies, if they are to be successful. We sum these up as: commitment to equity and social cohesion, reform of governance, human resource development, strengthening of state capabilities, fostering of local entrepreneurship, science and technology policy, and regional cooperation and integration.
Globalization Many of the developments impacting on the region are manifestations of what is usually called "globalization". There are three aspects of this process that may be distinguished, each with its specific implications. First, there are the actual economic processes that are being "globalized": finance, production, trade and communications. These are driven by the global activities of transnational corporations (TNCs), by the global integration of money and capital markets, and by the convergence of computer and telecommunications technologies. So far Caribbean countries have participated in these processes mainly through the growth of tourism, assembly manufacturing, and modern telecommunications. But this participation has been highly uneven as between countries, industries, and socio-economic groups. To this extent, it exacerbates tendencies to regional and social fragmentation. One objective should be to ensure that this participation is more equitable and its benefits are more widely spread. Second, there is the policy component of globalization: trade, financial, and investment liberalization. This is effected through the obligations of the World Trade Organization (WTO) Treaty, the construction of hemispheric trading areas such as NAFTA and the EU, and the conditionalities of multilateral and bilateral funding agencies in their lending programmes. All independent Caribbean states have liberalized their economic environment in one way or another in the past 10 years. In some cases investment inflows and economic growth have increased (17); in others, the initial effects have been negative or disappointing (18). As noted, the NAFTA and WTO treaties have so far had negative consequences for the region's exports. Thus there is a pressing need to strengthen bargaining power and negotiating skills in external trade and economic negotiations, in order to improve the possibilities of more favourable outcomes. The third aspect of globalization is its legitimizing ideology. Key elements are the presumptions of the superiority of the "market" over government intervention in the economy, of the universal need for and applicability of "market-friendly" policies, and of the automatic benefits that will follow for countries that open up their economies to the forces of global competition. It is not always clear how far countries, especially developing countries, liberalize because they genuinely believe these precepts and how far they do so because of the pressures of aid, lending, and trade conditionalities. In any case there is the risk that policies that are premised on what is essentially a distorted view of reality will not necessarily be in the best interests of the region. For the reality of globalization is that the game of global competition is not among equals. It is dominated by giant firms, backed by their governments, who have in effect set the rules for their own benefit. Expansion of the coverage of the WTO Treaty to trade in services, international investment flows, and Intellectual Property, erosion of non-reciprocal preferences for developing countries, and international freedom of movement for capital but not for labour are visible manifestations of this reality. There is also a downside to globalization. One aspect is the marginalization of whole countries and socio-economic groups due to the operations of the "market". Associated with this is the globalization of inequality - within and between nations - of poverty, and of unemployment (UNDP 1995, 1996). Global communications and financial liberalization have facilitated the international spread of drug trafficking and drug abuse--the emergence of a globalized crime industry (Payne, 1996). In many countries interpersonal and inter-ethnic violence has grown to alarming proportions, social safety nets are withdrawn and state systems are weakened with the spread of market relations (UNRISD 1995). These phenomena are already present in many Caribbean countries (Girvan ed. 1997). The issue for the region is not whether to participate in globalization,
but how. Here, it may be useful to distinguish between an approach of active
as opposed to passive participation (19). We characterize as a "passive"
approach the policy package of across-the-board trade and financial liberalization,
deregulation of goods, services, and factor markets, privatization, and
the downsizing of the state. We suggest that an "active" approach would
emphasize the exercise of selectivity in the areas and sequencing
of liberalization policies, maximizing bargaining power in external negotiations,
and the selective development of competitive competencies in the economy.
The objective of the active approach is to achieve competitiveness in ways
that permit a steady rise in real wages and living standards for the population;
and, more generally, to participate in the world economy on terms consistent
with equitable development and good governance.
Competitiveness A crucial distinction between the two approaches lies in the way in which competitiveness is to be achieved. Both approaches recognize the importance of a stable macroeconomic environment, a competitive exchange rate, and a good infrastructure. Both assign the leading role in production and exports to private firms. In the case of the passive approach, however, competitiveness tends to be defined as the ability to offer transnational firms lower production costs and higher returns on their investment. The emphasis of Government policy is on guaranteeing low-cost labour, low taxes, and a liberalized economic environment. The active approach places greater emphasis on the development of human skills and of technological, entrepreneurial, and managerial capabilities in the state and private sector. These become the basis for developing competitive advantages among individual firms and industrial clusters, and at the level of the economy as a whole. It concedes the importance of cost/price competitiveness of producers in the ability to compete successfully in export markets. However it emphasizes the contribution of management efficiency, worker productivity and skill upgrading to improving cost/price competitiveness, in preference to cheapening the cost of labour through devaluations and wage controls. In addition, it pays considerable attention to the crucial role of non-price factors that are critical to winning and maintaining competitive advantages by firms in world markets. These include knowledge, skill, marketing and economic intelligence, product quality, production for specialized niche markets, management and organizational capabilities, and production flexibility (Best 1990; Dahlman 1993). The scope for the active approach to participation in the world economy is a task that demands the attention of researchers, governments, and all the social partners. Some possible lines of investigation are: Industrial Policy
Rapid advances in information and communication technologies, and their
growing convergence - the linking of computer systems through telecommunications
networks - portend the arrival of a new "techno-economic paradigm" (Perez
1985). For the Caribbean, three features of this development should be
considered.
Information services New opportunities in production and trade have been opened up by the growth of the global infocommunications industry, a massive complex worth $1.3 trillion annually, equivalent to 6 percent of world GDP (ITU:1995,1). This embraces a wide range of related goods and services: telecommunications services and equipment manufacture, computer hardware, software, peripherals, and related services, information services, and audiovisual services (ITU 1995:1). Caribbean participation in production has been confined almost entirely to data-entry and other information processing activities, now employing over 7,000 people in the region (Pantin 1995: Table 1). However, this is at the low-technology, low-wage end of the industry, where long-term survival prospects are threatened by the emergence of more advanced technologies, and by the growing locational advantages of proximity to customers. The need is to move rapidly into higher value information services which are more knowledge and skill intensive and more product differentiated and into software. The English-speaking Caribbean is relatively well positioned, by virtue
of language, education levels and location, to develop new export service
industries in these areas (Schware and Hume 1996). However, substantial
expansion in the supply of information professionals will be needed (Reichgelt
1996), as well as provision of venture capital and tax incentives for innovator
firms setting up in these areas (World Bank 1993b).
Telecommunications The "global information infrastructure" has emerged as a rapidly growing vehicle for the marketing and sourcing of goods and services, and for the delivery of new information services (20). Use of Informatics has resulted in new methods of competing in international markets: what was formerly the "best practice" is fast becoming the "standard practice". Access to this infrastructure will be crucial for producers and exporters in the region.
Chart 12. Telephone densities
Most countries also need to update telecommunications regulatory regimes. Though privatization has induced substantial investment in telecommunications networks, regulatory regimes have lagged behind technology, failing to address the functions of the system as a base for value added network services (Schware and Hume 1996; Girvan 1997). In the English-speaking Caribbean, telecommunications are a virtual monopoly of the British TNC, Cable and Wireless (21). Jamaica and the OECS countries have had major problems in the pricing and availability of the services provided to the data entry industry by C&W under its exclusive franchise. Coordinated or joint negotiation with C&W is a logical step (already proposed by Barbados and the OECS acting together). Wider technical cooperation among countries in the updating of regulatory regimes should be of value. Countries will also need to launch national computerization and informatics
programmes to facilitate access and use. Such programmes aim to (a)
computerize and network government administration, (b) spread the effective
use of informatics in business, especially small and medium enterprises,
(c) establish computer-aided education as an integral element in the school
curriculum, and (d) establish national information infrastructures to link
the public, private, and education sectors together and with the outside
world.
Organization and socio-cultural change Far-reaching changes in the organization of work and management practices are associated with the use of new information technologies in business organizations. Examples are just-in-time production, flexible specialization, use of electronic data interchange to effect coordination of production and marketing among widely dispersed firms, and use of network computing for design and strategic planning. Hence successful use of informatics by firms and countries is enhanced by socio-cultural change emphasizing cooperation and teamwork, non-authoritarian management styles, initiative, flexibility, responsiveness and willingness to change generally (Tapscott and Caston 1993). This could pose some problems in Caribbean cultures with their deeply entrenched adversarial and distrustful attitudes in labour relations; wide social distance and strong barriers to communication between management and labour; ethnic antagonism and distrust among workers; individualism and resistance to change generally. The kind of socio-cultural change that will be needed begins with heightened awareness, and the exercise of leadership by opinion-makers, educators, policy-makers and decision-takers. Innovative education, and incentives for "best-practice" organizations, may have a crucial role to play. This is an area in which multidisicplinary research is particularly relevant.
Small island ecosystems are recognized to be especially fragile as a
result of their small land mass and limited biodiversity. Together with
the relatively undiversified and highly resource-based nature of Caribbean
economies, this makes the region highly vulnerable to ecostress, whether
global or local in origin. Two main kinds of responses will be highlighted
here.
Global ecostress: international negotiation Probable effects of the global ecological crisis including changes in
climate, rise in the sea level, increasing intensity of hurricanes, world
food shortages, and rising international economic and political instability,
will impact with especial severity on small island developing states (22).
These countries have already come together to negotiate as a group in the
UNCED and SIDS Conferences. This allowed them to pool their bargaining
power and draw on a common fund of scarce scientific and technical information.
The need for this kind of collaboration will continue to grow with the
persistence, and possible worsening, of the global ecological crisis. Cooperation
in this area will need to be both intraregional and interregional.
Local ecostress: environmental management capabilities More immediate sources of ecostress originate in the drive to growth and development in the region in the past 30-40 years: expansion of industry, tourism and transport and the chemicalization of agriculture; rural-urban migration and the proliferation of formal and informal housing settlements; and population growth. The ecological impact of these developments includes large-scale deforestation, degradation of watersheds and of the coastal and marine environment, mounting unmanageability of sewage and solid waste disposal, and rapid deterioration of air and water quality in heavily populated areas. Some economic consequences have been a marked deterioration in the quality of the tourist product, steep increases in infrastructural repair and maintenance costs due to flooding, mounting health care costs associated with the effects of pollution, and notable deterioration in the physical quality of life in urban areas. Considerable technical information documenting the extent of these environmental problems has been accumulated in recent years (23). To a large extent, the technical solutions are also reasonably well known. The biggest challenges to environmental management lie in the complexities of the society-economy-ecology interaction: for example, where the livelihoods of poor communities are based on the use of non-renewable resources; or where environmental goods and services need to be valued adequately in order for investment decisions to be made. It is in these areas of intersecting knowledge systems that research is needed in order to provide the necessary information so that sound policies can be made. Among the issues which require attention are
In this final section we highlight seven broad, cross-cutting policy
areas which are common to all the tasks of coping with global change in
its different dimensions while pursuing internal development objectives.
We suggest that this list provides a more suitable framework for research
than that of dividing research tasks into the economic, the technological
and the environmental. The areas are categorized as foundation stones,
actors, and enablers (Box 1). Relationships with research and
with proactive strategies are shown in Figure 1.
A. Foundation Stones
Research on the reform of governance might focus on three main areas:
3. Human Resource Development Quantitative and qualitative improvements are required especially in Early Childhood Education, Primary Education, and Secondary Technical and Vocational Education. For example Governments need to accept financial responsibility for Early Childhood Education, for it is at this level that learning foundations are laid and inter-generation cycles of poverty and low educational attainment can be broken. At the primary level expanded resources are needed to attain 90-100 percent rates of functional literacy, numeracy, computer literacy at the Grade 6 level, and a minimum 60 percent rate of mastery of basic scientific and social concepts (Miller 1992: 41-80). The secondary level is also relatively under-resourced, especially technical and vocational education which still attracts low prestige in most countries. Given resource limitations in most Caribbean countries, research should
be directed towards the effective cost-delivery of education, and
the financing of education. The other area in which research can
make a contribution is in the content of education--curricula and
methods of instruction/learning, with an eye to the strategic importance
of scientific and technological education, creativity in problem-solving,
and teamwork, in the emerging techno-economic paradigm.
B. Actors
Several issues need to be addressed in strengthening the capabilities of the state: for example adequate remuneration and career paths, provision of facilities for continuous training and learning, and a culture of innovativeness and responsiveness. Perhaps the critical step will be acceptance of a social partnership framework in which the state provides leadership, with the private sector and civil society as legitimate and active partners. This ties up with reform of governance, and is an area in which research can make a contribution.
Entrepreneurial behaviour appears to be conditioned both by the proximate
variables of economic policy and the nature of public-private sector relations,
and by the contextual variables of culture and historical experience. Because
so much entrepreneurial behaviour is culture and country specific, "market-friendly"
policies that stimulate entrepreneurship in one environment may elicit
weak results in another; whilst interventionist policies that foster entrepreneurship
in one cultural and social framework may have disastrous results in another.
Hence detailed research is needed on the cultural and the policy variables,
that influence entrepreneurial behaviour in specific Caribbean environments.
Recent studies of the culture of entrepreneurship in Trinidad and Tobago
(Ryan et al 1995), and on innovative behaviour at the level of the
firm (Girvan and Marcelle 1990) indicate that useful insights can result
from this kind of research.
C. Enablers
S&T policy involves a range of activities: aligning goals for the S&T sector with broad national and regional strategies; S&T human resource development in technical and vocational education as well as the tertiary/professional level; public funding of strategic R&D projects; and incentives and financial support for private sector R&D and staff training programmes in new technologies. Key tasks for research in this subject area are:
7. Regional cooperation An institutional framework for regional cooperation already exists in the form of several organizations. The member states of the Organization of Eastern Caribbean States (OECS) cooperate across a wide area including trade negotiations and trade promotion, strategic planning and sectorial policy and planning, human resource development and training, finance, administration and public sector management, and bulk purchasing of pharmaceuticals. They also share ownership of the highly successful Eastern Caribbean Central Bank, and are working towards the establishment of an OECS Single Market. The Caribbean Community (Caricom) has served as a vehicle for trade liberalization and functional cooperation among its member states since 1973. Caricom recently admitted its first two non-English speaking members (Suriname and Haiti), and has close ties with the Dominican Republic, Cuba and Puerto Rica. Expansion of Caricom to include these three states would transform the community into a truly Caribbean body and provide a solid framework for trade and functional cooperation. Other institutions of broader regional cooperation include the Caribbean Development and Cooperation Committee (CDCC) of ECLAC; the Caribbean Group for Economic Development (CGCED) of the World Bank; the Association of Caribbean States (ACS); and the Latin American Economic System (SELA). Experience of these and other institutions show that there are many obstacles to closer regional cooperation which have to be overcome: competitive economic structures; limited scope for intraregional trade especially for the smaller, less industrialized economies; and differences in language, culture, legal arrangements, and perceptions of economic interests. Identifying such obstacles at the necessary level of detail, and the modalities of cooperation which might overcome them, will be a great challenge to researchers across the region. Finally, there is the issue of the meaning and limitations of "sovereignty" in the context of the contemporary Caribbean. Recent developments point to growing pressure on the already constrained political and economic sovereignty of Caribbean states. They include the maintenance and tightening of the US embargo on Cuba, the "Shiprider" agreements with the United States, the obligations of the WTO Treaty and the FTAA process, and the conditionalities of the multilateral and bilateral agencies. Do these developments indicate that the postcolonial state in the Caribbean has exhausted its potential as a vehicle of political and economic sovereignty? Does regionalism offer a feasible alternative for the pooling of "sovereignties" in responding to the challenges of hemispheric consolidation and of globalization? Can Caribbean societies develop the degree of shared vision and commitment to regionalism required to make it work? Research alone cannot provide answers to these questions; but it can, and should, contribute to this process.
Table A2. Trade Dependency
Abrams, Elliot 1996
Association of Caribbean Economists (ACE) 1996
Bernal, Richard L. 1997
Best, Michael H. 1990.
Dahlman, Carl J. 1993.
Duncan, Neville 1997
European Union. 1996.
Girvan, Norman and Gillian Marcelle 1990
Girvan, Norman and Wendel Samuel. 1993.
Girvan, Norman, ed. 1997.
Girvan, Norman 1997.
Goodland, Robert. 1991.
Guengant, J. 1993.
ITU (International Telecommunications Union). 1995.
Lall, Sanjaya 1995
Lawrence, Amanda 1997.
Levitt, Kari Polanyi. 1996.
Miller, Errol. 1992.
Pantin, Dennis 1995.
Payne, Douglas. 1996.
Reichgelt, Han 1996.
Ryan, Selwyn and Taimon Stewart, (eds) 1995
Samuel, Wendell 1996.
Singapore National Computer Board. 1992.
Schware, Robert and Susan Hume 1996.
Tapscott, Don and Art Carson 1993
UNDP. 1995, 1997.
United Nations. 1995.
United Nations 1996
UNRISD. 1995.
West Indian Commission (WICOM) 1992
Wilmore, Larry 1993
Wilmore, Larry 1994
Wong Seng Hon. 1992.
World Bank. 1993a.
World Bank 1993b.
1. Caricom also also has three associate members whioh are British dependent territories (see Table 1). 2. This is not to downplay the significance and potential of the ACS as an instrument of wider regional co-operation. 3. These are still small countries by international standards. The most populous is Cuba with about 11 million people. 4. It will be noted that the dependent territories themselves consist of one larger island (Puerto Rico, with a population of 3.6 million), 10 smaller island territories (with just 463,000 people between them); and mainland French Guiana. Merger with the three other groups would show the larger islands as having 92 percent of the region’s population and the mainland entities 77 percent of the land area. However there would be wide disparities in PCI levels within the groups. 5. The reader may wish to compare the PPP PCI data in Table 7 with the PCI data in Table 1. 7. The recent experience in Montserrat, whose 11,000 people have had their lives disrupted for the past two years by a volcanic eruption is instructive. Montserrat has statistically the highest PCI in the Caribbean, over $26,000. 8. Exports and imports of goods and services. For some countries, data are available for goods only. 9. Trade/GDP averages for subgroups are weighted by respective GDPs 10. This was in response to a protest lodged by the Government of the United States on behalf of the U.S. banana transnational companies, which wish greater market access in the EU for their bananas exported from Central and South America 11. Barbados still remains at the top of the human development rank among developing countries 12. Data for Cuba not available. 13. As Table 8 shows, however, poverty rates and unemployment rates are not always strongly correlated. 14. As a ratio of merchandise exports, gross remittances from abroad in the early 1990s were: 71 percent in the case of the Dominican Republic, 32 percent in Haiti, 29 percent for Jamaica, and 17 percent for Barbados (Samuel 1996: Table 6). 15. For example in political thought and action, the Caribbean has produced, among others, Toussaint L'Ouverture, Jose Martí, Marcus Garvey, C.L.R. James, Frantz Fanon, Fidel Castro, Eric Williams, Cheddi Jagan, Michael Manley, Walter Rodney, and Maurice Bishop; in literature, Nicholas Guillen, Aimé Cesaire, Derek Walcott, and V.S. Naipaul and in international sporting events, Caribbean athletes win medals at a rate which is out of proportion to the population while baseball and cricket teams have many successes. The world sings and dances to Caribbean music: soca and salsa, reggae and merengue, and Bob Marley. The tiny island of St. Lucia has produced two Nobel Laureates - Arthur Lewis in Economics and Derek Walcott in Literature. 16. Ref. the words of Marcus Garvey: "I want our people to think for themselves"; and the lyrics of Bob Marley: "Emancipate yourselves from mental slavery, none but ourselves can free our minds". 17. e.g. Guyana since 1993, Cuba since 1994. 18. e.g. Jamaica, where trade and financial liberalization was followed by hyperinflation, high interest rates, and a series of bank failures. 19. The distinction is suggested by Levitt 1996. 20. This is defined by the International Telecommunications Union as wired and mobile telephones, cable TV, and the Internet. The ITU estimates that 86 million new subscribers were added to the above services in 1994 alone (ITU 1995:1). 21. Cable and Wireless is the majority owner or managing minority shareholder in: Antigua, Barbados, Dominica, Grenada, Jamaica, Montserrat, St. Kitts, St. Lucia, St. Vincent, and Trinidad and Tobago. Source: CANTO (Caribbean Association of National Telecommunications Organizations), Library Education Resource Centre. 22. This has been recognized by the organization of the United Nations Conference on Sustainable Development in Small Island Developing States (SIDS), in 1994. The larger Caribbean island states, as well as the Caribbean mainland countries, were officially included in the coverage of the SIDS Conference. 23. For example, Country Environment Profiles have been prepared for most of the English-speaking Caribbean countries. 24. The same report estimates that, in most countries in the English-speaking Caribbean, less than 15 percent of primary school entrants at present have a probability of attaining Caribbean Examinations Council (CXC) English, less than 10 percent have a probability of attaining CXC Math, and less than 5 percent have a probability of attaining 4 or more CXC passes (World Bank 1993:45). 25. i.e. in the Schumpeterian sense.
Norman Girvan is a Professor of the Consortium Graduate School of Social Sciences, University of the West Indies, Mona, Jamaica (email ngirvan@uwimona.edu.jm). The author's main publications include: The Caribbean Bauxite Industry (1971); Multinational Corporations and Dependent Underdevelopment in Mineral-Export Economies (1971); Foreign Capital and Economic Underdevelopment in Jamaica (1971); Readings in the Political Economy of the Caribbean (edited, with O. Jefferson, 1972); Copper in Chile (1972); Dependence and Underdevelopment in the New World and the Old (edited, 1972); Corporate Imperialism, Conflict and Expropriation (1976); The IMF and the Third World: the case of Jamaica 1975-1980 (1980); Technology Policies for Small Developing Economies: a case study of the Caribbean (1983); Development in Suspense: papers and proceedings of the First Conference of Caribbean Economists (edited, with G. Beckford, 1988); Managing International Technology Transfer: a strategic approach (with K. Hoffman, 1990); Caribbean Ecology and Economics (edited, with D. Simmons, 1992); Working Together for Development: D.T.M. Girvan on Cooperatives and Community Development 1929-1968 (edited, 1994); Poverty, Empowerment and Social Development in the Caribbean (edited, 1997). |
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