Business Page – Region to have a single Stock Exchange

Sunday, July  2nd, 2006

Introduction:

The region's leading private sector leaders have endorsed the agreement reached by the region's several stock exchanges to work towards a single Caribbean Stock Exchange. The endorsement came during a roundtable at a three-day high-level symposium on the Caricom Single Market and Economy (CSME) held in Barbados during the past week.

Representing Guyana at the roundtable was Private Sector Commission Chair-man, Mr Yesu Persaud, while the region was represented by the leaders of some of its top companies including Republic Bank, RBTT, Sagicor, Ansa McAl, Goddards, Grace Ken-nedy and Barbados Shipping and Trading, all companies with a major regional presence and some with an international presence as well. The business leaders spoke of the considerable opportunities offered by the CSME but also noted the considerable cost of operating in jurisdictions with different legal and regulatory requirements.

The host Prime Minister, an economist by training, was present and actively participated during the entire three days, while the Prime Minister of Trinidad and Tobago took part in the opening ceremony. Other countries of the region including Suriname and the OECS countries were represented at ministerial or ambassadorial levels. Guyana's only participation was through four private sector representatives, two persons form the Securities Council and one from the Stock Exchange.

It is unclear why no one from the Guyana Government attended particularly given that Minister Clement Rohee's portfolio includes responsibility for Caricom. Another disappointment was the absence of the representative of the Institute of Chartered Accountants of the Caribbean, whose members play a critical role as a service provider and who would be major beneficiaries of the removal of restrictions on working across the region. The ICAC's participation would have contributed to the articulation of some of the issues peculiar to the profession, including the absence of meaningful professional indemnity insurance, and accounting standards that are not based on the 'one size fits all' model.

The Jagdeo Initiative:

What made the absence of a representative from the Government of Guyana more pronounced and noticeable was that among the papers for presentation and discussion was one entitled 'Agricultural Transformation and Sustain-able Regional Economic Development,' referred to as the Jagdeo Initiative. With agriculture under stress, high rates of poverty in a number of countries in the region and a food import bill of US$1.5B in 2004, growing at an annual rate of 5% in the period 2000-2004, food security is a major issue. The initiative emphasises the question of food security defined by the 1996 World Food Summit as a situation in which all people at all times have both physical and economic access to sufficient, safe and nutritious food to meet all their dietary preferences for an active and healthy life.

Private sector possibilities:

One of the more exciting presentations to the symposium was made by the Inter-American Institute for Cooperation on Agriculture (IICA) representative, Bar-bados, Ena Harvey, who spoke on the immense economic benefits of tourism and agricultural and agro-processing linkages. Ms Harvey reported the successes of such resorts as Four Seasons, Nevis and CusinArt & Spa, Anguilla, which have added to their basic product hugely profitable visits to farms and nature places. Guyanese visiting the MMA Project, Kayman Sankar's rice fields or Guysuco's cane fields marvel at the scale and natural beauty of those places. Should they not consider exploring their locations as tourist destinations?

In the energy sector, participants were quite awakened to the possibility of pipelines to carry electricity across neighbouring countries of the region and the transformation possibilities which this offers. The amount of information that is available in the Caricom Secretariat is not only formidable but quite valuable as well. Caricom now needs to disseminate such information to the private sector for conversion into commercial ventures.

The efforts by Prime Minister Arthur to forge a constructive relationship with the region's private sector appears to be working extremely well, and the Caribbean Association of Industry and Commerce (CAIC) seems to be returning to the level of activity for which it came to be known when Guyanese Pat Thompson headed it several years ago. The present head, James Moss-Solomon of Grace Kennedy, is resourceful and energetic and with encouragement of Arthur has also established a regional Business Council to address the several policy and convergence issues which the private sector now faces.

Ambitious effort:

The symposium's success was largely due to the ambitious efforts of coordinator Guyanese, Dr Maurice Odle, Economic Advisor to the Secretary General, who brought together some of the region's best talents on topics and issues ranging from agriculture to oil, from finance to tourism, infrastructure to market access, human resources to competition and financial sector to cross-border transactions. For all the brain drain, the region still has an impressive array of talent.

The symposium also saw the launch of the Caribbean Trade and Investment Report 2005 (CTIR) prepared by a team of authors led by Dr Odle and a team drawn from within the Caricom Secretariat and persons from within the region. The report is wide-ranging and full of extensive statistics that will serve as useful research and planning tools.

Lead presentation:

The lead presentation was by Professor Norman Girvan of the Institute of International Relations of the University of the West Indies. Professor Girvan set out as the basic test of the value of the CSME whether it would enable the region to achieve what it cannot achieve separately - the extent to which it would enhance the region's "sense of collective security, collective identity and collective self-confidence in our ability to deal with the world on equal terms." He suggested that to capture the imagination of the people, the leaders need to put forward a vision that addresses the concerns of the ordinary people about their present and future hopes, a vision to which they can relate and in whose realisation they participate. He noted that leaders need to show how the CSME can be the instrument for the attainment of the vision and to draw up a credible road map for the implementation of the CSME.

According to Girvan, the objectives of the CSME on the economic front are "self-evident" - the building of an aggregation of economies that sustains its own growth, internationally competitive without preferential treatment, that affords a decent standard of living for all citizens and provides adequate opportunities for the advancement for young people who no longer live for the day when they can migrate.

Caricom Charter of Civil Society:

Girvan was critical of the entire region for practically ignoring the Caricom Charter of Civil Society adopted by the Heads of Government in 1997. He speculated that the non-binding nature of the charter may be the reason why no one bothers to prepare the national and regional reports required under it. While acknowledging that the failure reflected sadly on the governments, he felt that it reflected even more adversely on civil society for whose benefit it was intended.

He suggested that by giving the charter legal force, governments would be signalling their commitment to it, while ordinary citizens could have redress in the Caribbean Court of Justice. That would provide some indication to the citizenry that the CSME is more than just about economics. Indeed Girvan noted the risks to the environment where a number of reefs for example have lost some 80% of their living coral over the last twenty years, "an unprecedented rate of deterioration." Fisheries too are under threat from over-exploitation and/or habitat degradation, and Professor Girvan noted that in the eastern Caribbean countries catch per unit of effort has been in decline for the last twenty years!

While noting that not all the problems relating to the environment were within the region's control - and he specifically mentioned global warming - Professor Girvan called for a common environmental regulatory regime within which CSME activities will take place.

No new study:

Girvan argued against any new study on adjustment or diversification, two of the imperatives of the CSME, noting that there have been a large number of technical reports on the direction in which Caricom economies can be diversified, most of them saying the same thing - we must diversify, we must end the dependence on preferences, we must become internationally competitive, we must get into high-value goods and services and knowledge-intensive activities.

He cited as possible reasons for so little execution, low stakeholder buy-in with many programmes and projects being donor-driven, the tyrannies of the short-term and the election cycle, the permanent crisis-management mode in which the region seems to operate and the absence of regional and national executing capabilities.

Conclusion:

Business Page will return to the symposium and the CTIR in future articles, but concludes on one uncertain note about the region, and that is whether the OECS countries would sign on to the CSME from June 30, 2006 as they had indicated. Apparently the OECS states are concerned about the potential negative impact of the CSME on their economies and their access to the Regional Development Fund. Prime Minister Arthur was concerned that the fund could not be all things to all people, and its use was set out in the Revised Treaty of Chagaura-mas signed by the Heads in 2001. Any change of use would have to be done by a protocol amending the treaty.