Editorial

Our region is feting when we should be fretting

Sunday, August 19, 2012    

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THE Washington Consensus is the nomenclature that describes the principles of market fundamentalism which were supposed to be the prescription for producing economic growth in developing countries.

This dogma became the theology of the Washington-based International Monetary Fund (IMF) and the World Bank. But more than this, it was the rules of global capitalism laid down to the developing countries by the powerful developed countries of the Western world.

The Caribbean was hesitant to swallow the medicine because this was not the way that developed countries and the newly industrialised achieved economic development. In response, the purveyors of this doctrine chided the Caribbean for not adopting this programme and did everything to wean the region from permanent special and differential treatment and the insatiable appetite for foreign aid.

The Caribbean was viewed by the Western powers with mild annoyance because, while democratic, they were reluctant to do the so-called right thing in terms of economic policy. But the returns from tourism, tax havens and, unfortunately, drugs allowed the Caribbean to lead a charmed life. Ironically, these industries service demand in the Western powers.

There is now a New Washington Consensus which apparently means abandonment of the Caribbean until it is regarded as coming to its sense by learning the hard way. The Western powers have run out of patience with our region, and in exasperation have decided to let things crash before coming in through the IMF, the Paris Club and the bond rating agencies.

The original Washington Consensus was created by the Western powers, but the New Washington Consensus has been created by the Caribbean. The Western powers find no value in imperialism in the Caribbean, nor do they lack empathy for small islands being forever developing states. They can afford to adopt this stance towards the Caribbean because it is too small to matter. This is not Greece or Ireland.

The governments of the region run some of the most heavily indebted countries in the world as reflected in debt/GDP ratios of well over 100 per cent. They either cannot or will not pay their debt as St Kitts, Grenada and Belize have shown. Guyana and Haiti are least developed countries that depend on grants and perennial debt cancellations. Barbados is in denial, having been downgraded by the rating agencies, and adamantly refuses to contemplate an agreement with the IMF or an exchange rate adjustment (at least until after the general election).

Jamaica, already having done the Jamaica Debt Exchange, is experiencing a deteriorating economic situation because of taking too long to complete the negotiations with the IMF. St Kitts and Antigua/Barbuda teeter on the verge of economic implosion which will happen as soon as the money from Chavez, Taiwan and China dry up.

Trinidad and Tobago, the region's only viable economy, makes a mockery of being serious about capitalising on nature's natural resource bounty.

Common to all governments in the Caribbean is the ability to deny reality. If we do not take life seriously, do not expect anybody to take us seriously.

'O God, bwoy, dey feting when they should be fretting.' Let us repeat: The New Washington Consensus is self-inflicted.

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