Robert Buddan
A FEW issues of recent weeks have brought the FTAA and the CARICOM Single Market and Economy (CSME) to public attention. In a speech to the Rotary Club, U.S. Ambassador to Jamaica Sue Cobb, sought to convince the Caribbean that its interests lie more with the United States than with countries like Brazil, Venezuela and Argentina, which have taken the lead on a more Southern strategy toward the FTAA.
CARICOM stands in the camp of these Latin American countries and its votes give it great influence. About the same time, Opposition Leader Edward Seaga cast doubts about the benefits Jamaica can receive from CARICOM's SME. Mr. Seaga says that Jamaica is not competitive enough and might not benefit from the single market although he has not said whether Jamaica should go it alone or join up with the US and the FTAA, and which side of the FTAA debate Jamaica should stand with.
THE SINGLE MARKET: A STRATEGIC CONCEPT
It is important that we understand the strategic concept of the CSME and its relation to hemispheric free trade, to appreciate it. In 1989, CARICOM became one of the first regional organisations outside of Europe to declare in favour of a single market and economy. It was a prescient decision. Since then SMEs have become popular goals of many regions under the concept of open regionalism.
In 1991/92, George Bush announced his New World Order and hemispheric free trade was one of its objectives. This took the form of NAFTA in 1994 and now there is the impending FTAA. CARICOM was developing in parallel. In 1992, The West Indian Commission recommended the establishment of an Association of Caribbean States (ACS), more a zone of cooperation among 24 countries, than an intended SME. Now CARICOM is on the verge of an SME of its own.
The growth of the free trade idea was born of a strategic conception. Michael Manley, an intrepid regionalist, and Carlos Andres Perez, former president of Venezuela, came up with the idea of building a free trade area from the south to the north, that is, from the Caribbean and South America to North America. The Manley-Perez idea was not to counter the Bush scheme as much as to provide an alternative movement that could better guarantee protecting the interests of developing and small states.
The objective was to negotiate free trade on terms that developing and small states could accept among themselves in case the US scheme proved unfriendly and unacceptable; and to build a bloc of countries that could negotiate from strength with the U.S. about the terms of a hemispheric free trade agreement of both North and South. In fact, countries like Jamaica and Trinidad tried to walk two roads at once - negotiating an acceptable NAFTA agreement (which did not materialise) while working on building a southern strategy, which continues to evolve.
Manley and Perez have left the scene but their strategic conception remains relevant and workable more than a decade after being conceived. It has materialised in two forms. One is the Association of Caribbean States, a zone of cooperation on tourism, transport, sustainable development and natural disaster, among 24 countries of the Caribbean and Central America. The ACS was established in 1994. The other is the continuing negotiations toward a FTAA, that is supposed to be concluded by 2005.
Manley and Perez have been proven right about two things. One is that cooperation among a wider, Greater Caribbean, as Norman Girvan calls it, is possible. The other is that the countries of the hemisphere do need to combine to craft their own terms for a developmentally-friendly FTAA.
The countries of the south have complained about the U.S. version of the FTAA on certain grounds. It does not sufficiently address the concerns of small states; it does not provide for a period of non-reciprocity but seeks to fast-track the FTAA; it does not sufficiently address issues of subsidies to certain American industries like agriculture and steel. It is for such reasons that the present process of FTAA negotiations is being complicated and Mr. Patterson is doubtful that the FTAA can come into being by 2005.
CARICOM AND COMPETITIVENESS
Michael Manley had said that Jamaica must use CARICOM as an opportunity to improve its competitiveness if it was to be able to compete with the wider world. Pat Francis of JAMPRO said the same thing, that "the Government of Jamaica is gearing up to fully exploit changes being made through the Caribbean Single Market and Economy and use the CARICOM market as a springboard to generate the economies of scale and scope to penetrate the entire FTAA region". To this end the National Industrial Policy was launched in 1996 aimed at "building competitive advantage" in key sectors. It conceives of the sectors in terms of strategic clusters, each representing a growth pole to catalyse development. It is not true to say that Jamaica is not and cannot be competitive in the CSME.
Already there are indications of the island's growing competitiveness. Three Jamaican companies are among the Caribbean's top ten listed companies. Grace, Kennedy Company is in fact seeking to list on the Eastern Caribbean stock exchange in response to demand. It is Jamaica's leading exporter to the Caribbean where it has markets in 22 countries.
JAMPRO says that Jamaica leads ten Caribbean countries in information and technology outsourcing. Berger Paints (Jamaica) is the largest manufacturer and distributor of paints in the English-speaking Caribbean. The Caribbean Cement Company has out-competed imported cement to recover the Jamaican market. The Minister of Finance reported data in Parliament showing that Jamaica's competitiveness in the sugar and bauxite industries has improved. Studies show that Jamaica can be competitive in the world market in bananas, hot pepper, cocoa and papaya. It is for the private sector to fully respond to the charge that it cannot compete in the CSME. Warren McDonald of Berger Paints has shown that companies can compete. His company had to put up with a number of competing paint brands in Jamaica and credits the company's performance to strategic management, proactive plant modernisation, improved efficiencies and an uncompromising commitment to high quality products and services. His company has succeeded where others in manufacturing have not.
It is not true to say that Jamaicans cannot compete in the region and the world. Jamaicans compete in soccer, cricket, tracks, swimming, netball; in academics, literature, music, art and craft, and we have shown the political skill to lead the regional movement, a process in which Prime Minister Patterson is the senior statesman and is widely recognised by other governments for his contribution. While I don't want to get into insular arguments about which island is best at what, the record clearly shows Jamaicans to be dominant or amongst the most dominant in the fields above.
DEBATING COMPETITIVENESS
To properly debate competitiveness, regionalism and development options, we need to be informed from the many CARICOM reports, and reports of government agencies like JAMPRO. In addition, a number of books have been published by UWI academics and are readily available through local publishers like Ian Randle. Some very useful ones are: Don Harris (1997), Jamaica's Export Economy: Towards a Strategy of Export-led Growth; Alvin Wint (1997), Managing Towards International Competitiveness; Frank Rampersad (1997), The New World Trade Order: Uruguay Round Agreements and Implications for CARICOM States; Ann Weston and Usha Viswanathan (1998), Jamaica After NAFTA: Trade Options and Sectoral Strategies; Dennis Benn and Kenneth Hall, Globalization: A Calculus of Inequality; Benn and Hall (2000), The Caribbean: Trade and Investment Report; Marie-Claude Derne and Keith Nurse (2002), Caribbean Economies and Global Restructuring; Lucio Sarno and Mark Taylor, The Economics of Exchange Rates. These books show that the debate has long moved past whether Jamaica can be competitive to why it should be and how.
The Jamaican economy looks more competitive now than even a few years ago. Bear Sterns has said that the outlook for foreign direct investment in Jamaica looks better than it has for a long time, and explanations of the stock market boom cite profitable companies, investor confidence in the economy and lower interest rates. The Jamaican Cluster Competitiveness Project "is dedicated to the notion that Jamaican firms can thrive in the new era of total competitiveness". In fact, the size, diversity, capital base, FDI inflows, infrastructure, economic reforms and corporate re-engineering make Jamaica one of the three countries set to be among the most competitive in the CSME. Most of the CARICOM countries are not even ready to join until next year.
A more comprehensive basis has to be found, than the one Mr. Seaga offers, before anyone can say that the Jamaican economy cannot compete. The CSME itself offers the best opportunity to build competitiveness and it is there that we should concentrate while we prepare to take on the FTAA and the world. There is no other option.
Robert Buddan lectures in the Department of Government, UWI, Mona. E-mail: Robert. Buddan@uwimona.edu.jm.
