Robert Buddan, Contributor
I HAVE been highly critical of international credit rating agencies and the superficial methods of their rating systems.
This spawned a trend among countries, such as those in Asia, to develop their own credit rating agencies rather than rely on western agencies that use World Bank/IMF criteria of what constitute sound macro-economic management. Such agencies only want to know how profitable a country is to western investors. In 2004, the CARICOM region launched its own credit rating agency, the Caribbean Information and Credit Rating Agency (CariCRIS). This is a very welcome development. We should now move in the direction of developing rating systems for the region in other areas.
CariCRIS is different from western agencies like Standard and Poor's because it does not rely on the periodic visits to Ministries of Finance by people who don't live here and know anything about the economies of the region. It relies on information from Caribbean people who run the region's private sectors the actual investors and market players who take the risks and intimately know the environments in which risks and credibility are assessed. They know each other and have information that goes beyond bland statistics.
Furthermore, rather than concentrating on government policy and macro-economic data, doubt, inflation, budget balances all of which are important, CariCRIS looks at the economy itself, and its microeconomics performance. they assess the credit standing of companies, which after all, is what is ultimately important to international and specially
domestic investors. This leads to another difference.
CariCRIS provides information and risk ratings useful to foreigners, but more importantly, its information serves the interests of local and regional investors.
With the approaching CARICOM Single Market and Economy, this is obviously important. CariCRIS will allow more Caribbean people to invest in their own regional economies. The western agencies are incapable of providing credit ratings for the upcoming CSME as an entity. CariCRIS will allow Caribbean investors to rebalance the historical bias of the region's economies towards foreign capital so that investor information favours regional capital.
RATING PRESS FREEDOM
CARICOM institutions should follow-up to establish other institutions that can allow us to rate ourselves on social and political dimensions as well.
Take this current example. 'Reporters Without Borders', a French-based organisation, has just released its 2005 ratings of press freedom around the world. Jamaica is ranked at 34, a 12 - place drop from last year. This is the country in which UNESCO chose to celebrate World Press Freedom Day in 2003. The Minister of Information has expressed exasperation. He said, "I don't know what more levels of freedom could be required on the part of legislation or government action". 'Reporters Without Borders' only included ratings for two CARICOM countries (Trinidad and Jamaica, not counting Haiti). We do not therefore have a CARICOM comparison. Furthermore, different 'rating agencies' have different things to say. In May 2005, the World Press Freedom Review gave Jamaica a 'strong' rating on press freedom.
Some NGOs like Freedom House benefit from shadowy sources of funding and have their own axes to grind. A report in May 2005, titled ''Reporters Without Borders' Unmasked' by Diana Barahona said that 'Reporters Without Borders' "is on the payroll of the US State Department and has close ties to the Helms-Burton Cuban exile groups". It makes Cuba its number one target.
Another report titled, 'Reporters Without Borders Fraud' says that the organiser's founder admitted that it received money from the National Endowment for Democracy, founded by Ronald Reagan, and funded in part by the State Department. We must be careful about these so-called 'democracy' and 'human rights' organisations, what their motives are, and who funds them. At least in CARICOM we would have our own standards of transparency and accountability.
RATING HUMAN DEVELOPMENT
Caribbean designed rating systems for human development would require the region to keep comparable data. Too many CARICOM countries have 'not available' for many social, economic and political data. Countries like Barbados, it is said, do not like to publicise their business. Jamaica is one of the best among developing countries for publishing a wide variety of data. This is why Jamaica is much more widely studied and why international organisations have so much to say about Jamaica and so little to say about most other CARICOM countries.
This brings us to the latest Human Development Index. Jamaica only appeared to decline because of a new measurement used for infant mortality. Jamaica has no control over the indicators and measurements used and while the Report covers all countries, all countries do not submit up-to-date information on social indicators, and in some cases, the data does not exist at all. If governance is going to be standardised and made comparable across CARICOM, then all members should be required to establish properly reporting planning institutes, something that Jamaica established 50 years ago, the first in the English-speaking Caribbean to do so.
One is not questioning the credibility of UN data since the member governments themselves submit these but there is need for governments to fully provide social data to give a better profile of CARICOM societies, especially if we are to plan regionally.
In January 2005, for instance, Jamaica published its National Millennium Development Report through the PIOJ, which the UNDP called a high quality report. It reported on Jamaica's progress towards meeting targets of the UN's Millennium Development Goals. I wonder how many CARICOM countries have produced their own national report.
RATING CORRUPTION
Transparency International and Amnesty International have much to say about corruption and human rights around the world. By the standards they use, the reports they rely on, and the measurements they employ, developing countries are always ranked below the developed ones.
Yet again, not all reports agree. 'Reporters Without Borders', for example, ranked the U.S and certain other developed countries below Jamaica on press freedom. Our comfort with that seems to indicate that we are happy to use the U.S. as the standard by which we rate ourselves. When combined with the fact that the U.S. employs the death penalty, Jamaica should not really be too far behind the U.S. on civil rights and liberties. We can go further. Since 'Reporters Without Borders' measures a country's activities beyond its own borders we should take note of the fact that over 2,000 firms from 66 countries, mainly from developed countries, have been implicated in a global scandal.
The U.S. has been accused of creating private jails in different countries for people it calls terrorists and who it has been holding at Guantanamo Bay, some without formal charge and many without trial. Even Amnesty International calls this a human rights scandal. The U.S., France and Canada allegedly overthrew an elected regime in Haiti. Canada has been implicated, directly and indirectly, in many human rights atrocities in Haiti. France has been facing weeks of riots by youths complaining of discrimination and racism. How does all of this fit with the rating systems of western organisations? Caribbean countries do not overthrow other governments, wage war on other people, jail them illegally, suppress their press, or engage in ethnic cleansing. Do we get any credit for being law-abiding states in the international system?
The Caribbean must agree on what its common standards should be and establish its own measurements. We cannot let others judge us by their double standards.
Robert Buddan is a lecturer in the Department of Government at the University of the West Indies. You can send your comments
to robert.Buddan@uwimona.edu.jm.
