Friday, August 01, 2014
Caricom - accentuate the positiveAnthony Gomes
Despite the government's repeated confirmation that Jamaica would not be withdrawing from Caricom, an affirmation echoed by the Caricom Secretary General Irwin LaRocque during his recent visit, the dissension refrain continues unabated, driven mainly by uninformed opinion and a lack of understanding about the likely consequences, should such a reckless undertaking as withdrawing from Caricom be attempted.
After 39 years of invested experience in the regional group, there have been undeniable difficulties to be overcome, a characteristic of groups universally organised according to the democratic process. Granted, the time has come for a review of the Revised Treaty of Chaguaramus which is being conducted, that should eliminate some of the fundamental concerns and hopefully recommend a system of Caricom oversight, along the lines of the Time for Action report issued by the West Indian Commission led by Sir Shridath Ramphal, to ensure the future decisions of the Conference of Heads of Government are expeditiously and effectively implemented.
While Jamaica is still coming to grips with the latest domestic tax measures to be implemented, the celebrations for the nation's 50th anniversary of Independence have started, which seem to have given a boost to the society's insatiable appetite for ostentation. The latest model Jaguar car can be seen on the roads in Kingston, with nearly every other car being a Mercedes Benz, BMW or Range Rover. Paying legally for these high-profile vehicles in Jamaican currency is only part of the equation. It is left to the Bank of Jamaica to provide the hard convertible foreign exchange that is necessary to pay the foreign suppliers. It is self-evident that the country can ill afford this level of legitimate cosmetic expenditure in this time of crisis, when the debt to GDP ratio is reported by the IMF to be approximately 150 per cent, one of the highest in the world. In this land of white rum, ganja and a depreciating currency, citizens enjoy 10 public holidays which are usually stretched to around 12 days, which means that those who enjoy three weeks' leave a year work for only 11 months a year, let alone those in the public service whose leave terms defy consideration. In Portugal, three of their five national holidays have been suspended for three years due to austerity measures. It is obvious what needs to be done to bring excessive liberalism under control if Jamaica is to weather the economic storm. Forget about Vision 2030 for the time being, as with the existing debt overhang, the idea of attaining "Developed Country Status" by 2030 is becoming more remote.
The time has come to "Accentuate the Positive" and work towards solving the existing difficulties with Caricom and restore the trade balance with the Eastern Caribbean countries and Trinidad and Tobago (T&T) in particular. Ministers Anthony Hylton and Phillip Paulwell are currently discussing the supply of T&T LNG with that country's Energy Minister Kevin Ramnarine, and we eagerly await the outcome.
This frustrating conundrum with T&T is being closely observed by the private sector group, the Joint Caricom Working Group consisting of the Jamaica Chamber of Commerce, the Jamaica Manufacturers' Association and the Jamaica Exporters' Association. While agreements for the supply of LNG from third countries are necessary to guarantee future continuity of supply and are already being negotiated, the potential advantage of dealing with T&T is its duty-free status -- being of Caricom origin -- together with the short transit time of two to three days' sailing from Trinidad to Jamaica. Whereas a tariff could be applied on LNG from third countries to increase sorely needed national revenue at the border, it would not be possible for import duty to be applied to T&T LNG because of its Caricom origin. However, a domestic tax remains a possibility that would be WTO-compliant, but either way the gaseous LNG end product would have to generate a surplus by way of some form of tax levy and additional profit margin on sales, in order for the venture to be viable. No doubt the question of "waivers" will again arise!
The LNG issue is not unrelated to the problem of cheap electricity enjoyed by the Trinidadian manufacturing sector. When resolved, the effect would be to put Jamaican manufacturers and exporters on an "even keel" with their Trinidadian competitors, which could create a sea change in the way we do business in both goods and services in future with Eastern Caribbean countries. There are many other business aspects of Jamaica's trading relationship with the Eastern Caribbean states that would benefit from such a development, including additional "Trade Desks" established by the joint private sector initiative between Jamaica and Trinidad, to facilitate the hassle-free growth and development of future trade interaction.
Finally, the promised Export-led Trade Policy has had one of the longest gestation periods to date. It is expected the final version would be a "working document", not to become another shelf-borne trophy for adornment of the national library. If not excluded, the requirement for a mandatory three-year revision cycle would go a long way in keeping the policy current. Also, when critical of the convoluted language used, with the request for clear easily understood text, it was acknowledged thus: "that in promulgating our esoteric cogitations, while articulating our superficial sentimentalities, we would avoid platitudinous ponderosity". OK! Bring on the coffee!
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