Will Cuba change Caricom?

Sunday, July 05, 2015

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The agreement between Cuba and the United States to reopen or establish embassies in their respective capitals concretises the resumption of diplomatic relations and it portends the eventual full normalisation of relations.
Many believe that normal relations are still far in the future because of the continued application of the Helms-Burton Act and the Republican control of the US Congress. Yet, the lessons of US political history show that the change could happen overnight. Few foresaw that normalisation would have proceeded to where it is at this time.
A Republican administration could reverse its traditional stance because the Cuban vote in Miami is no longer a determining factor in winning the state, and indeed, the new generation of Cuban-Americans are not interested in returning to Cuba. Many favour normal relations with Cuba so that they can come and go freely to their ancestral home.
In addition, the corporate lobby, particularly the exporters of agricultural products, has been pressing to open the Cuban market. The American business community is salivating at investment opportunities in Cuba and as an export market.
Importantly, normal relations between Cuba and the US will change the Caribbean. The first impact will be on tourism, almost immediately in cruise ship travel. In a recent editorial we discussed the possible impact and the need to look for synergies.  
Beyond tourism, Cuba will become a growth pole attracting foreign direct investment, bearing in mind the size of the Cuban market and the educated low-wage labour force in Cuba. Foreign investment to Cuba could be at the expense of the rest of the Caribbean.
However, developments in Cuba could act as a catalyst to economic activity in the Caribbean, concentrated around Miami, Cuba, Jamaica, Panama and the Dominican Republic (DR).
The downside is that this could marginalise the rest of the southern and eastern Caribbean where the small island developing countries are already in a severe economic crisis, manifested in a mountain of debt.
Trinidad and Tobago will continue because of its energy resources, with possible loss of its manufacturing market in Jamaica as goods stream in from Cuba and the DR. Belize is already in the Central American orbit and will progressively recede from Caricom. Suriname and Guyana are resource-rich countries whose growth potential will be influenced by other factors internal and external. Haiti will continue its unique but uncertain struggle, hopefully towards economic development. Puerto Rico, already sinking in a quagmire of debt worse than Greece, will be hardest hit.
Caricom’s survival depends on whether it finally embraces the widening of the grouping moreso than the deepening of the Single Market and Economy which has run up against its natural limitations.
Caricom’s survival will also likely be as a political entity and not as an economic integration scheme. If its membership expands to include Cuba and the DR, then it will have a much larger critical political mass (20 million people).
The key to the future of Caricom is whether Cuba joins or stays out. If Cuba joins, then the DR and others, possibly some countries in Central America, would seek membership. If Cuba is not in Caricom, then the Caribbean could be split into a growing northern Caribbean and a southern backwater with Trinidad and Tobago being the exception.
Caricom should be seriously courting Cuba.


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