CARICOM wants 'level playing field'

The Caribbean Community (CARICOM) has called on the international community “to level the playing field” as it relates to the treatment of offshore financial jurisdictions in small developing countries.

CARICOM is also warning that thousands of persons in the region could “slip back into poverty” as a result of the global economic and financial crisis.

The CARICOM Secretariat in Guyana said it has conveyed the region’s concerns as well as its views on the related reform of the international financial architecture to the just concluded G20 summit in London.

It said the 15-member grouping has called on the international community “to level the playing field with regard to the treatment of the offshore financial jurisdictions in small developing countries.

“This was important because of the limited scope for structurally dependent economies to diversify their economies. Moreover, the countries in CARICOM were encouraged to diversify into services not only by local advisers but, also, by the international community who suggested that services were the best alternative to real sector production.”

Apart from the financial problems facing the Trinidad-based conglomerate C L Financial, CARICOM acknowledged that “the region was also hit by the effects of the ponzi scheme-like operations in United States banking subsidiaries whose impact was severely felt in Antigua and Barbuda and St Vincent and the Grenadines”.

It said CARICOM is further concerned about the worsening economic crisis, pointing out that “hundreds of thousands of persons may slip back into poverty if the crisis persisted for another 18 months. The Community was of the view that it would be hard pressed to contain the crime situation, which was already grim as a result of the drugs and related guns trade,” the Secretariat said.

The global financial crisis had also affected the region’s tourism sector “which has experienced a dramatic decline in arrivals and low occupancy rates in spite of reduced rates.

“Tourism-related local productive sectors have also been negatively affected as well as airline and ground transportation. The crisis has also meant layoffs in some of the region’s larger industrial, financial and service enterprises, slow down or the shut down of businesses in several member states.

"Large investment projects which were on the verge of being initiated have come to an abrupt halt in some of the member states,” the Secretariat said.

It said that while member states remain focused on devising “counter cyclical measures to mitigate the effects of the crisis and exploring means of strengthening their financial regulatory frameworks...they had not lost sight of the origins of the global crisis and the need for reform of the international financial architecture that serves the interest of both developed and developing countries.”

CARICOM said that the reforms were of particular interest to member states arguing further for the need for special treatment to be accorded to highly indebted middle income countries (HIMICs) “who found it difficult to grow out of their debt without special assistance from the international community, because of a number of structural vulnerabilities.

“The Community further argued that CARICOM countries should not be graduated out of access to concessionary loans on the basis of mere per capita income, particularly since such a level of income may not be sustainable.”

-CMC