AN analysis last Friday by Barbados’ former Prime Minister Owen Arthur, on “The Global Economic Crisis: Role of the International Financial Institutions (IFI) in the Caribbean”, would make unflattering reading for governments of wealthy donor nations, the IFI, as well as the leaders of our Caribbean Community

It should be a must read — hopefully to inspire informed responses. The Caricom Secretariat should perhaps have copies available for all Heads of Government in time for their 31st annual summit that begins in Montego Bay on Sunday (July 4).

Arthur, who has just concluded a consultancy for the Community Secretariat and the European Commission on “the full integration” of the OECS and Belize into Caricom, made his analysis when addressing the 28th annual conference of the Institute of Chartered Accountants of the Caribbean in The Bahamas.

The address and meeting coincided with the start of the G20 nations summit in Canada as a follow-up to their historic London summit of April last year.

That was the occasion when unprecedented pledges were made for new funding to the international financial institutions to enable them to channel financial aid to the poor and developing nations to help recovery from the punishing global economic crisis.

Those pledges for new funding through the IMF and multilateral development banks totalled US$1.1 trillion to facilitate them, as Arthur noted, to carry out a vigorous programme for restoration of credit, growth and jobs to the world economy.

More than one year later, there has been no significant benefits to our Caribbean region from the pledges and allocations made, even as Caricom states continue to struggle to overcome the cruel consequences of a global financial crisis that originated in the jurisdictions of the rich and powerful, first in the US.

Owen Arthur, in referencing an observation by the Jamaican economist, Richard Bernal, that “the Caribbean has been more profoundly and adversely affected by the global crisis than the developed economies and most developing countries”, posed some questions as being relevant to how this region, and specifically Caricom, has been reacting to the challenges.

For instance, he asked whether this region has received the full measure of support promised by the world leaders at last year’s G20 summit in London? The answer, of course, is no.

Taken together, the reversal of the flows of foreign direct investment (which plunged by 42 per cent to US$5. 7 billion in 2009); reduction in the value of remittances (US$3 billion the previous year) and the significant decrease in receipts from exports of goods and services led to a situation where the regional economy was “effectively destabilised” between those two years.

While shortfalls by the international financial institutions have been articulated, so too were failures by Caribbean governments to access new borrowing facilities. For example, the IMF’s Flexible Credit Line (FCL)

No Caribbean country has drawn upon the FCL, which was identified as the facility for disbursing the bulk of new IMF financing without borrowing countries having to abide by hitherto onerous conditionalities. The question is: Why this failure?

In contrast, while the Caribbean has not taken advantage of the IMF’s FCL facility, into which some US$500 billion was pledged by the G20 to support economic recovery in the poor and developing world, countries in Latin America, Africa, Asia and Eastern Europe sought access with beneficial results.

Overall, as analysed by Arthur, given the magnitude of the financial requirements of this region, the limited nature of the new support provided by the varying initiatives of the international financial institutions have not benefited the Caribbean “in any major way” from the overall pledge of substantial additional funding” made at the London G20 summit.

Therefore, as he sees it, the Caribbean “where the greatest need exists, but where the least support has been received”, have the obligation to “champion” the call for honouring of the commitment so eloquently made at the G20 summit.

He, however, agrees that “it would lend credibility” to such a call “if we ourselves do much more to strengthen inter-dependence within our own region…”

According to Arthur’s logic, “where there is common threat, we must devise and pursue a common response”.