Caribbean Community (CARICOM) Secretariat
 

REFORMING THE OECS : A PAPER FROM THE GOVERNMENT OF ANTIGUA AND BARBUDA, PRESENTED BY HON. LESTER B. BIRD,  PRIME MINISTER OF ANTIGUA AND BARBUDA TO A MEETING OF THE AUTHORITY OF THE OECS, GRENADA, SATURDAY, 28 APRIL, 2001
 
 

INTRODUCTION

The Government of Antigua and Barbuda is a founder member of the Organisation of Eastern Caribbean States (OECS). The Prime Minister of Antigua and Barbuda, Lester B. Bird, is the only survivor in Government of those persons who signed the Treaty of Basseterre on 18th June 1981 bringing the Organisation into existence. Indeed, the conceptualization of the Organisation originated in an address by Lester Bird to the former West Indies (Associated States) Council of Ministers (WISA) at a meeting in Antigua in 1979 when he lamented the movement toward independence by the WISA territories without establishing machinery for combining their resources to further their common interests. Over the years, the Prime Minister of Antigua and Barbuda has served on three occasions as the Chairman of the Authority - the only Head of Government to do so.

From 1968 until the Economic Affairs Secretariat of the OECS was merged with the Central Secretariat in 1994 - a period of 26 years - Antigua and Barbuda hosted first the Secretariat of the Eastern Caribbean Common Market (ECCM) and then its successor the Economic Affairs Secretariat. When the report of a Strategic Management Review in 1993 proposed the merging of the Economic Affairs Secretariat (EAS) with the Central Secretariat in the interest of cost reduction, the Government of Antigua and Barbuda readily agreed despite the criticism that the removal of the EAS from Antigua was an affront to national prestige. The Government of Antigua and Barbuda held to the position that the preservation of the Organisation was more important than to hurt national pride.

Throughout the entire existence of the OECS, the Government of Antigua and Barbuda is the only Government that has remained in office. Over that time, the Government of Antigua and Barbuda has given leadership to the Organisation that has benefited its work on behalf of all member states.

There is, therefore, no question of the Government of Antigua and Barbuda's commitment to the OECS.

NEED TO REFORM

After 20 years of existence, all organisations require review to ensure that they are relevant to current conditions in all circumstances. The Government of Antigua and Barbuda holds the view that there is need for a major reform of the OECS to ensure its relevance and value to all its member states. Therefore, the only concern of this paper is to explore ways in which the OECS can be reformed to ensure its relevance and value to all member states as a foundation on which future structures of greater cooperation could be constructed.

THE PURPOSE AND FUNCTIONS OF THE OECS: HAVE THEY BEEN MET?

The purposes and functions of the Organisation are set out in the Treaty under Article 3. Dealing with each in turn, they are:

To promote cooperation, unity and solidarity. There is no doubt that member states have been true to this requirement of the Treaty as is manifest, for example, by the support of the Leeward Island states in every international forum for the Windward Island states over the issue of market access to the European Union for bananas. In another practical way, this cooperation, unity and solidarity is demonstrated by the readiness with which Antigua and Barbuda took in thousands of Monsterratians since the catastrophe caused by the eruptions of the Soufriere volcano and the large number of workers in Antigua from OECS countries, particularly Dominica. However, while this is an obligation for the Treaty, its implementation is not dependent on the existence of a Secretariat or its several agencies.

To defend sovereignty, territorial integrity and independence. Again, there is no question that member states have been true to this obligation under the Treaty. Each member state has been vocal in international fora whenever the sovereignty and independence of any other member state has been threatened. Recent testimony to this is the position adopted by member states on the OECS's 'harmful tax competition' scheme and the Financial Action Task Force's list of non-cooperative jurisdictions in the prevention of money laundering. Member states have also worked closely together in the Regional Security System (RSS) to guard against drug trafficking and other threats to the security of the sub-region. However, this obligation of the Treaty has not been reliant on the existence of a Secretariat or its several agencies. Indeed, the machinery of the RSS is not an OECS institution.

To harmonize foreign policy. OECS member states have never effectively established the Institution by which foreign policy could be organised. In the twenty-year history of the Organisation, the Foreign Affairs Committee might have met twice. Indeed, the foreign policy of member states is not harmonized as is evident in the attitude to relations with the Peoples Republic of China and Taiwan, and to Libya. In any event, to the extent that there has been any attempt to "coordinate" rather than "harmonize" foreign policy, this has taken place in the council of the Caribbean Community and Common Market (CARICOM) for very good reason. The member states of the OECS are too small and lack the necessary muscle and diplomatic outreach to promote their foreign policy positions either on their own or together. They have depended on the collective strength of CARICOM whose member states are larger in population size and resources to advance those positions in which there is a shared interest. With regard to joint overseas representation, this has been found to be impractical however laudable the concept might be, and member states have moved away from it by their own volition. Therefore, this Treaty obligation has not been fulfilled and to the extent that member states have "coordinated" rather than "harmonized" foreign policy, they have done so under the umbrella of CARICOM rather than the OECS.

To promote economic integration. For a variety of reasons, not least of which was the accelerated pace to economic integration within CARICOM over the last decade, the OECS has been unable to promote economic integration among its member states. The early successes of the Eastern Caribbean Common Market (ECCM) in attempting to establish an allocation of industry scheme and other machinery for integration have each been eroded over time. In any event, the advent of the CARICOM Single Market and Economy (CSME) makes continued work in this area irrelevant. Economic integration will now be centred in the wider CARICOM area. This Treaty obligation is now outdated and there is task for the Secretariat to undertake with regard to economic integration of the OECS.

To pursue joint policies in 17 specific areas. The Treaty detailed 17 specific areas in which member states were obliged to "endeavour to co-ordinate, harmonise and pursue joint policies". These included, inter alia, Income Tax Administration, Customs and excise Administration, Audit and International Marketing of Tourism. Many of these subjects were not touched. The fault does not lie with the secretariat, nor indeed does it lie with member Governments. The reality is that pursuit of these areas requires money for studies and implementation that was not available to member states and continues not to be available now. One of the areas - joint marketing of tourism - was dismantled because of lack of confidence by national authorities in the capacity of a regional institution to promote their individual interests. Thus, the eastern Caribbean Tourism Association (ECTA) was disassembled. There has been success in a few of the areas that were detailed in the Treaty. These are: The Judiciary, Currency and Central banking and Mutual Defense and Security. In the areas of success, both the Judiciary and the Eastern Caribbean Central Bank are stand-alone institutions entirely independent of the OECS Secretariat. So too is mutual defense and security to the extent that this is met by the RSS.

It is worth noting that at the Second Meeting of the Authority of the OECS on 11th November 1982 at the Cariblue Hotel in St. Lucia, Lester Bird, as Chairman of the Authority called for the deepening of the economic integration arrangement of the OECS as a catalyst for pushing the integration of CARICOM as a whole. He identified eight goals that the OECS should pursue as follows:

"(i) The upgrading of the East Caribbean Currency Authority (ECCA) to a Central bank and the introduction of mechanisms to curtail the flight of capital from our economies;

(ii) The establishment of a Customs Union with a common Customs Administration including a common external tariff, common procedures and common documentation;

(iii) The establishment of a joint approach to a regime on the law of the sea including agreement on our territorial boundaries and the boundaries of our exclusive economic zone;

(iv) An intensification of the allocation of industry scheme and for introduction of binding mechanisms to ensure protection for industries allocated under such a scheme;

(v) An integration of similar productive activity among member states and joint production to maximise the use of our resources;

(vi) Improvement in export marketing and tourism promotion in order to increase foreign exchange earnings;

(vii) Definition of a clear role for the private sector in economic development and, in that context, the establishment of clear guidelines for foreign investment in our economies;

(viii) A commitment to adopt common policies and take joint action in the international community, particularly in relation to trade and economic matters".

As it turned out member states of the OECS were not as willing as Antigua and Barbuda at the time to advance the interests of the OECS as a whole in the way that was proposed. Apart from the creation of the Central Bank, very little else occurred. Indeed, there was reversal of the allocation of industry scheme and joint tourism promotion under the ECTA collapsed.

In summary, it is obvious that:

(1) There is a willingness by member states of the OECS to cooperate in a wide range of areas (through not everything) to promote their national interest and the interests of the sub-region. This is manifest through the success of the ECCB, the Judiciary, and the Common Civil Aviation Agency. These institution, unlike ECTA, survived because they are seen to bring "value added" to national structures and not to pose a threat to national capabilities. This is an important foundation on which to build for the future in a practical way;

(2) Lack of funds has constrained member states to pursue many of the joint policies in specific areas that they had envisaged when the Treaty was signed twenty years ago. It is unlikely that many of these areas can be pursued now given a constraint on finances. However, certain priority areas ought to be identified for future action, among these would be statistics, income tax administration and customs and excise administration;

(3) A genuine commitment to the CARICOM Single Market and Economy (CSME) renders any further work on economic integration of the OECS irrelevant;

(4) Foreign policy "harmonization" is not possible at this time and foreign policy "coordination" is better done at the level of CARICOM where the extra muscle of larger countries is beneficial to OECS states on those issues in which there is a shared interest.

THE ECONOMIC ENVIRONMENT AND ITS IMPACT

The current international economic climate is unhelpful to the countries of the OECS. Given the openness of our economies and our continued reliance on a narrow range of economic activities, the outlook for short-term improvement in the economies and financial situations of member states is not bright. The current recession in the United States, which is now making its presence felt in Canada and European Union, is unhelpful to our prospects for increased tourism and investment. When these factors are coupled with the limited market future for vital exports such as bananas for some member states, and the OECD's threat to the financial services sector of our economies, the picture grows bleaker.

Against this background all member states need to identify those areas in which spending is a priority domestically, regionally and internationally. In considering the regional scene, member states must be sure that there is no duplication of effort by the organisations to which they belong and they must also ensure that the activities on which they are spending scarce financial resources are relevant to their needs.

Antigua and Barbuda has come to the conclusion that it can no longer support the OECS Secretariat and its agencies in its present form, structure and functions. Like other OECS countries, Antigua and Barbuda contributes to the OECS, CARICOM and the RNM. The Antigua and Barbuda Government would like to see the Secretariat and its agencies reformed so that (a) there is no duplication with CARICOM or the RNM; and (b) the activities that are undertaken bring value to member states thereby strengthening the sub-region as a whole.

RESTRUCTURING THE OECS SECRETARIAT

In the context of the above discussion, Antigua and Barbuda proposes that the OECS Secretariat and its agencies be downsized and rendered more focused on matters that bring value to member states and enhances the worth of the Organisation itself.

Specifically, we propose:

(a) The Brussels Mission should cease to be a responsibility for the OECS Secretariat. The mission should become the responsibility of those Governments that use it and it should become accountable to them and directly funded by them;

(b) The Directorate of Civil Aviation (which is self-financing) should be removed from the Division of Functional Cooperation of the OECS Secretariat and made into a Civil Aviation Authority with legal status in each member state that subscribes to it. In other words it should become a stand alone institution such as ECCB and the Judiciary with Ministers responsible for Aviation being its Board;

(c) The Economic Affairs Division should be revamped and merged with the Legal Unit and made responsible for the following matters only: (i) preparing studies and briefing material for member states for negotiations within CARICOM on our participation in the Single Market and Economy, (ii) preparing data and other relevant material for the Regional Negotiating Machinery (to continue to be funded by the RNM) to advise on specific concerns of OECS member states in relation to negotiations with the EU and in the FTAA and WTO processes; and (iii) liaising with donors and coordinating a pool of experts (to be provided as far as possible by donors or funded by participating member states) who would be available to requesting member Governments in areas where individual Governments require the services of such experts but are unable to fund them on their own or utilize their time to the fullest capacity. These experts could include bank inspectors for the offshore financial sector, forensic auditors for customs and inland revenue department, legal draftsmen; experts on boundaries limitation in the context of law of the sea; advisors in police and prisons training and administration. In this way the work of the economic affairs and legal division would bring value to needs of national Governments while at the same time enhancing the OECS' joint positions.

(d) Reduce the staff size of the Corporate Services Division and merge it with the Division of Functional Cooperation. It will then concentrate on the current functions of the Corporate Services Division as well as (i) Sports Coordination, and (ii) Functional Cooperation matters such as Pharmaceuticals Procurement, the Natural Resources Management Unit and Education Reform as well as any new areas of functional cooperation that might be identified as a priority such as Statistics, Income Tax Administration, Customs Administration and common services in police and prisons.

(e) Establish a single shared office in Ottawa with individual High Commissioners and limited support staff and common services for those Governments that wish to maintain a resident mission in Ottawa. Other Governments could choose not to participate in the shared office and to appoint non-resident High Commissioners such as their Ambassadors in Washington in much the same way that High Commissioners in London are now accredited to Capitals in Europe. In any event, the High Commission would no longer be accountable to the Secretariat but to the participating Governments who would fund it directly.

(f) Move the revamped Secretariat to be housed in the ECCB's headquarters in St. Kitts where its staff will benefit from a close working relationship with the ECCB's Research Unit. Alternatively, leave the Secretariat where it is presently housed for the time being with no immediate plans for expenditure on a building.

COSTS AND PAYMENTS

Without access to the precise financial data on the OECS Secretariat and its agencies, it is difficult to cost the new structure and operations as proposed above. However, a rough estimate suggests that the costs could be reduced to approximately EC$6 million a year, a reduction of approximately EC$5 million per annum.

In this regard, it should be possible for all member states to agree to the automatic deduction of their monthly contributions to the Secretariat from its profits at the ECCB. Given the smaller sum of money than had been proposed under earlier schemes, it may now be possible for an automatic payment arrangement through the ECCB to be affected. Alternatively, a monthly standing order with a commercial bank in each of the member states could be established.

The proposal and the arrangements for payment would focus the Secretariat in a way that is both cost effective and financially manageable, while providing a strong institution with the resources necessary to carry out its mandate.

THE FUTURE OF THE OECS

In the 1982 St. Lucia statement referred to earlier, Lester Bird, as Chairman of the Authority, said:

"We in the OECS have a greater potential (than the rest of CARICOM) to realize those goals (of deeper integration). I do not remark that we, in the OECS, have a greater chance of deepening the integration process out of a sense of chauvinism, but rather from a recognition that the economic similarities among us lend themselves more readily to quicker movement. We have a common currency and we already share common institutions and common services".

It is the strongly held view of the Government of Antigua and Barbuda that the OECS still has the basic foundation on which the structures of deeper integration can be erected. But, these structures will not be built if the framework is shaky.

Therefore, the Government of Antigua and Barbuda is keen that the OECS should not simply be left in its current ailing state until finally it dies from neglect.

The people of our sub-region will not be encouraged to seek their salvation on the back of an Organisation that they do not themselves recognize and appreciate as a contributor to their development. Recent attempts at political union have shown that the people of our sub-region are not yet convinced that the OECS, as yet, holds out an acceptable framework on which they can build their future.

It is in this connection that Antigua and Barbuda would like to restructure the Secretariat and its agencies to make them more relevant to current circumstances and consequently more sustainable as a vehicle for the unity that, intellectually, OECS leaders know is imperative.

CONCLUSION

The Government of Antigua and Barbuda is not in favour of the Secretariat's suggestion of CARICOFF. It remains important that in a range of areas including sport and donor support for projects that the OECS should maintain its own identity. In any event, the Leeward and Windward Islands, notwithstanding their close relationship with CARICOM, have always had a separate cultural identity and a closer working relationship. It is important that in a globalize world, this identity and closer working relationship be preserved, especially if some form of closer union is ever to be achieved.

The Government of Antigua and Barbuda holds the view that if its proposals, or approximate variations thereof, are agreed by member states of the OECS, the Organisation will itself be enhanced while becoming more relevant to the needs of member states and the sub-region as a whole.

Further, the Secretariat will become more affordable and stand a better chance of getting the funding it requires from member states to carry out its mandate giving it stability and eliminating donor discomfort over its future.

The OECS will continue to maintain its identity and could deliver tangible benefits to its member states that would be quantifiable and obvious and which bring value to national institutions thus earning their full support.

The Government of Antigua and Barbuda strongly commends its proposal to the member states of the OECS and urges early implementation.

Grenada
OECS Authority Meeting
28th April, 2001
 

 
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