Prepare for impact of Brexit but don’t panic, CARICOM told
Posted in: Regional News | 30 June 2016 | 2944
KINGSTON, Jamaica, Thursday June 30, 2016 – A University of the West Indies (UWI) forum held yesterday to discuss the impact of the UK’s pending exit from the European Union brought some advice for CARICOM – prepare for the potential fallout. At the same, there’s a suggestion that there won’t be any crisis.
During the forum, the UWI Vice Chancellor Sir Hilary Beckles offered recommendations to CARICOM in response to the development, popularly referred to as Brexit.
He said that CARICOM must move as a matter of urgency to reinvent the scenario post emancipation, which saw Caribbean indigenous people networking freely across the region.
Sir Hilary urged CARICOM to avoid a wait and see approach, and immediately establish, with the UWI, a Task Force to research, monitor and report on the weekly developments that will take place over the next two years.
It’s important, he said, that leaders in government and the private sector have access to factual, detailed information on an ongoing basis in order to guide their thinking and decisions.
The Vice Chancellor stressed that the university is already in the field on every relevant front and can become the agency through which leaders are provided with the information and insights to craft the Caribbean journey through the changing environment.
His second recommendation is that CARICOM set up a Regional Research and Development Fund in order to facilitate innovation within the private sector that is required to strengthen entrepreneurship.
Commenting on the failure to take advantage of the opportunities of the Economic Partnership Agreements with Europe, Sir Hilary noted that the regional economy is at a stage where it can only compete at the level of innovation, and it is failing to do so because of inadequate research and development within production.
The UWI Vice Chancellor contended that the region “must also strengthen the conversation around and renegotiate the various agreements that can strengthen and expand the CARIFORUM (EU Economic Partnership Agreement), including pacts negotiated by the African Caribbean and Pacific States (ACP) which the Caribbean has not taken full advantage of over several years and the Community of Latin American and Caribbean States (CELAC).”
Sir Hilary noted that even before the Brexit vote, the EU had graduated most Caribbean countries, with the exception of Haiti, into a mid- income designation level “that denies us the support we are entitled to”.
In this regard, he said CARICOM should insist that a vulnerability index should be used instead to more accurately gauge the needs of the various countries in the region.
“Britain has skillfully managed its relationship with this continent over the past 800 years. They refused to fund our plans for a Federation and left 80 percent of our people illiterate when they finally granted us Independence in 1962. That sent the entire Caribbean into hyper-spending mode to clean up the mess and now we have insurmountable fiscal problems. Instead of financial help we were offered preferential treatment for our raw materials. Then Britain joined the EU the 1970s, leaving behind the Caribbean and CARICOM. We had the same discussion then as we are having today – what are we going to do now?” Sir Hilary queried.
“You are well positioned as strategic leaders to help steer the region on the right path”, he told newly appointed chairman of Jamaica’s CARICOM Review Commission, Bruce Golding who was on the panel.
Golding said that while the exit by Britain from the EU may have some impact on the Caribbean he did not think it would reach crisis proportions.
He predicted that “the British economy will take some blows, possibly even go into recession, but I don’t think it is contagious.”
The former Jamaican prime minister pointed out that Caribbean trading with Europe has been “at best anaemic” in the recent past and even then, there has typically been more activity with countries other than Britain.
“In any event, most of the agreements we have signed are with the EU and not Britain and these should not be adversely affected,” he said, noting that new agreements may have to be negotiated with Britain, in due course.
However, Golding added, “these arrangements will not absolve us from the need to fix our own domestic problems.”
British High Commissioner to Jamaica, David Fitton , another panelist said he did not see why there would be a negative change in the relationship between Europe and Caribbean as a result of the exit, but noted that “Britain has been one of the main champions of the Caribbean at the EU and the Caribbean must work very hard to maintain those trade relationships that have benefitted them over several years.”
Meanwhile, Executive Business Development & Research, Jamaica National Building Society, Dr. Dana Dixon, predicted that Brexit will have “profound implications for Caribbean businesses”.
Noting that immediately following the vote, the British pound depreciated by over 10 per cent and plunged to its lowest value in 31 years and stock markets were negatively affected”, Dr. Dixon added: “Brexit has caused all of us to look at our investments in sterling and our exposure. We are concerned about remittances, which for Jamaica is approximately 16.7 percent of our annual GDP, and there is a real threat to tourism earnings, especially for countries like Barbados which is a prime destination for British tourists”.
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