UWI, Caricom not filling intellectual void
On several occasions we have lamented the intellectual void which prevails in Caribbean economic policy, despite the creativity shown in every other field of endeavour. This, we believe, is largely the cause of the individual national and collective regional failure to effectively respond to the global economic crisis and, indeed, the lack of macroeconomic resilience to the impact of the crisis.
Ideas about economic policy can originate from external or internal sources, but it is preferable that they come from indigenous sources, because there is a higher probability that they will take account of local economic, social, cultural and institutional circumstances.
Economic policy from external sources can be harmful. For example, the British colonial authorities sought to perpetuate the deleterious plantation economy in the Caribbean by vigorously discouraging any activity other than export agriculture. They had several so-called economic experts deny the feasibility of manufacturing until W Arthur Lewis refuted this fallacy and went on to suggest manufacturing for export as early as 1949.
Yet, economic advice from local sources can also be pernicious. Two glaring examples must be cited. The Socialist state-led economic strategies in Guyana and Jamaica in the 1970s, and the borrowing beyond repayment capacity in Belize, Guyana, Jamaica, Grenada and St Kitts.
The economic policies which have been persistently pursued during the last half of a century have either been overtaken by external changes in the structural operation of the world economy and the policies of developed countries toward the region, or exhausted their internal dynamic. In the former category are permanent preferential market and price arrangements, eg, the European Union banana regime and permanent financial aid.
The basis for soliciting aid has shifted from being newly independent countries (1960s) too being exploited by imperialism and multinational corporations to develop (1970s); too small to develop (1980s); too afflicted with natural disasters to develop (1990s); too underserved by remittances to develop (2000s); too affected by climate change to develop (the present) and too deprived of reparations to develop (immediate future).
In the latter category is the long-standing immutable concept of regional integration which has long ago exhausted the possibilities of integration among very small, undiversified economies. One wonders if there is either the political will or the imagination to modernise regional integration into a format which can boost economic development in the 21st century.
There is, however, some good news in the form of an initiative by the Caribbean Development Bank (CDB) to fill the intellectual void, a role abdicated by the economics departments of the University of the West Indies and filled by the Washington-based international financial institutions with the Washington Consensus.
The CDB, under the leadership of Jamaican Dr Warren Smith, has just published “A New Paradigm for Caribbean Development: Transitioning to a Green Economy” which we welcome for two important reasons: It is an attempt to fill the intellectual void on economic policy in Caricom, and the CDB has now ventured into the role of a regional economic think tank, a role no longer performed by the Caricom Secretariat.