(CARICOM Secretariat, Turkeyen, Greater Georgetown, Guyana) I bring greetings from the Honourable Prime Minister of Antigua and Barbuda, Hon. Winston Baldwin Spencer, the Minister under whom the energy portfolio falls. He sends his best wishes for a productive and engaging meeting. We meet today amidst tremendous global uncertainty. An uncertainty that over recent years, has been marked by our world limping from crisis to crisis, characteristic of the modern global environment.

Pressures on the environment, primarily global warming, caused by the Nation State’s quest for industrial and technological advancement; the increasing intensity of cyclones, frequent earthquakes and volcanic eruptions; interlocking fiscal and economic pressures; the rising cost of fuel and food which is eroding consumer spending; revolutions in the Middle East and North Africa; market speculation influencing the stability of currencies; and the spread of fear based on a potential meltdown of a Japanese nuclear plant are some elements of the present turbulent global environment.

It is within this unstable and uncertain global environment that the Revised Treaty of Chaguaramas establishing the Caribbean Community including the CARICOM Single Market and Economy finds itself. While the Revised Treaty recognized that globalization and liberalization have important implications for international competitiveness, it did not contemplate the magnitude of such global events and their consequences on the region’s economies. The preoccupation was on achieving sustained economic development through international competitiveness, coordinated economic and foreign policies, functional cooperation and enhanced trade and economic relations with third states.

Clearly, there is need for greater political and economic risk analysis and forecasting by the Secretariat to properly advise on the most appropriate Community policies and programmes that would adequately address the emerging issues facing Member States. Therefore, it is imperative that the Secretariat urgently deploy a comprehensive forecasting mechanism to protect and maintain the standards of living for our respective populations. Distinguish colleagues:

Today, more than ever, strengthened functional cooperation and the coordination of policies are required especially in light of the unfolding of events in Libya and Japan. Both have the potential of catastrophic consequences on the Community and therefore must be studied carefully. Of immediate concern are the security arrangements of the Community and the ability of friendly countries and donor agencies to continue their development assistance to CARICOM. The reality is that the Member States of CARICOM are at different levels of development, some with mineral resources, while others are dependent upon a mixture of agriculture and services to drive their individual economies. As small vulnerable economies, external aid provides a mechanism for CARICOM to overcome some of the challenges of development.

Distinguish Ladies and Gentlemen

These are not normal times, and as such we cannot ignore global events and their impact on the Community’s agenda. Therefore, we must ask ourselves, how will global events such as the crisis in Libya and Japan impact the economies of the Community? We must also consider how these and other events will impact our trading obligations with the EU and the CARICOM-Canada negotiations. One thing is certain, as in 2008, we are faced with increasing prices of fuel and raw materials. There continues to be increases in the international prices of wheat, oil, corn, barley and other essential commodities. As net importers, CARICOM is particularly vulnerable to these international price hikes.

In 2008, as a regional response, the Council for Trade and Economic Development (COTED) agreed to suspend the Common External Tariff (CET) for two years. This decision, along with national actions, helped to cushion the impact of the rising prices.

The last few months have been characterized by high and volatile food prices, and one of the primary reasons for the spike in prices is the escalation in the cost of fuel as a result of market jitters from the conflicts in the Middle East and North Africa. Additionally, the restrictions last year on wheat exports from Russia and the Ukraine; extreme weather events, links between food and energy as well as lower than projected harvest and stocks are to blame for a rise in the price of nearly all food commodities.

The rise in food prices along with the rise in the price of oil typically manifest in inflationary pressures causing a rise in the cost of living. This development is once again a point of serious concern and a challenge to the fragile slow recovery from the impact of the global fiscal and economic crisis across the region. While CARICOM may seek to mitigate the impact of these price shocks, it is recognized that there are very few policy options available to Governments that would eliminate or significantly reduce the impact of external shocks on the domestic economy.

Therefore, it is likely that the widespread escalation in international prices, coupled with the impact of the earthquake in Japan on export production and damage to its agricultural belt (rice production) will force an increase of global demand for certain commodities including fuel. The Community must consider strategies and measures that may help to mitigate these challenges on our domestic economies.

Therefore, I urge the meeting to consider the following actions in light of the different challenges now confronting CARICOM:

-  Decisive action in agreeing on a CARICOM energy policy, focusing on alternative energy options and technology;

-  The convening of an urgent meeting of the regular COTED to consider issues surrounding recent price increases in fuel and raw materials;

-  The consideration of additional national and regional initiatives aimed at providing relief ESPECIALLY THE MOST VULNERABLE. Both actions should run parallel to each other and should be lead by the appropriate Community Organ. Given the fragile state of the region’s economies, the COTED must also consider the following:

-  Develop policy options to mitigate the impact of the rising cost of food and oil including, but not limited to, consideration for the immediate removal of the CET on the list of items;

-  The urgent convening of a joint COTED of Agriculture and Trade Ministers to discuss the evolving global challenges on CARICOM; the elaboration of an action plan given the dynamics of the global challenges;

-  Development of a strategy of engagement with the international community particularly the European Union on assistance to cushion the impact of this new round of global difficulties (cost of fuel and price of food) and the consequential impact on the Caribbean; and ascertain the status of the 2008 EURO 1 billion fund made available by the EU to respond to the global crisis; and

-  Request the Secretariat to also convene a half day meeting with the region’s private sector on the fringes of the joint COTED Agriculture and Trade so that both the private and public sectors can discuss the impact of the global challenges in a constructive manner.

In conclusion, Distinguished Colleagues:

We do not have to look too far to see the impact of the rising fuel prices on our respective economies and people. It is therefore important that in considering the agenda before us, we contextualize our discussion by bearing in mind the regional and global realities. Thank you.

CONTACT: piu@caricom.org