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The Harsh Effects of Being Less Well-off

Make ends meetThroughout the Caribbean, people feel less well off.  The only people who may be exceptions to this general sentiment are those in Guyana whose per capita income (now US$3,410.00) has increased in recent years. 

But even in Guyana, the per capita income level is so low - higher only than Haiti (US$760.00) in the Caribbean Community - that any perception among the majority of doing better is marginal.



Unemployment has risen in several countries affecting families across the board. They either have less collective income or those fortunate enough to be employed have to contribute to the survival of those without jobs.

Disposable incomes for all have declined as higher costs for utilities and higher income and value added taxes devour increasingly larger portions of wages and salaries.

Again with the exception of a small number of countries, the decline in real family incomes has adversely affected the construction industry with a decelerating effect on economies.  The construction of individual homes or housing schemes is a provider of jobs and has a multiplier effect on economies stimulating economic growth.

Because of tight constraints to make ends meet, families are less willing to take on mortgages that they might be unable to repay. In any event, Banks and other financial institutions are themselves reluctant to lend for anything but projects that have the most secure collateral.  Many of them are already holding mortgages and loans that are in default of payment by their customers.  They are finding difficulty to recover their money even if they repossess properties.

Businesses, faced with contracting domestic markets in several Caribbean countries, have also been wary of investing in expanding existing businesses or creating new ones. Hence, they too are making no contribution to industries such as construction, and they are treading lightly in incurring additional debt and in taking on more employees.

A serious consequence of all this is a shrinking middle-class in many Caribbean countries and an enlarging poor and near-poor.  A grave consequence is the increase in violent crime by some who are most deprived – probably linked to drug trafficking and addiction. In the past, Caribbean countries have been most concerned about the negative impact of such violent crime on foreign investors, but the problem has escalated to distress local communities.  A big growth industry in the Caribbean is security services and it will grow even more in the adversity of the present economic circumstances.

Yet while Caribbean countries individually are in this grip of economic and social hardship to one extent or another, collectively the region is rich in real terms both in natural and human resources.   If the resources of the Caribbean community were harnessed for the benefit of the region as a whole, a halt could be brought to the current decline and a process of steady improvement could begin.  There is, however, a reluctance to do so.  Instead there is a resolute insistence by governments to deal with the problems in a national context only – a major component in most cases is beseeching and borrowing.

Well-mind advocates for “national solutions” even suggest that to look at regional options is “time wasting” and “distracting”.  But, those who advance this argument have not explained how the majority of small Caribbean economies would overcome their physical smallness; the smallness of their domestic economies; the severe restraints on raising money on the international capital market to build much needed infrastructure; and their individual lack of capacity to bargain in the international community for better terms of trade, credit, and investment.  Even Guyana, Belize, Jamaica, Suriname and Trinidad and Tobago with their bigger size and greater natural resources cannot by themselves overcome these obstacles.

To overcome them, resources need to be combined for a common good; production needs to be integrated to make best use of resources – human and natural; sovereignty needs to be pooled both to bargain more effectively and to become attractive to investors and to international lenders.


It seems that many governments of Caribbean Community (CARICOM) countries are not ready to collaborate to make themselves more competitive in production; more attractive for investment; and more worthy for credit.  Therefore, perhaps the time has come for a smaller coalition of willing countries to embark on such a course separate and apart from the rest of CARICOM countries.  In doing so, none of them would be required to give up their nationhood or national control of their borders; their culture; their legislatures; their taxes or their local environment.   

Not all decisional areas raise issues of the same political prominence in every country. It is possible to separate out some on which action might move ahead by countries that are willing to participate.  In other words, a coalition of the willing could establish a more customized approach, based on interests and capacities.  Such an initiative, while bringing benefits to the participating states would help to re-build confidence among the Caribbean people through the demonstration that regional integration makes good sense.

Among the collaborative enterprises that the “willing” could consider are specific areas of investment in one or more country to which the participating states could stand as joint borrower, joint owner and joint beneficiary.  These could focus on energy, value-added manufacturing, food production and tourism.

Individual Caribbean countries may not be considered acceptable risks for loans and investment, particularly in today’s market, but a combination of them would be an attractive proposition.  Not many areas of the world offer the backing of a wide range of commodities and services that the Caribbean has: bauxite, manganese, asphalt, oil, gas, sugar, rice, nutmeg, coffee, cocoa, a variety of fruits, flowers, animal, poultry, fish, forestry, gold, diamonds, tourism, financial services, and the potential for geo-thermal and solar energy.
    
Each country has resources, but by themselves, except for oil, gas and gold, they are not sufficient to attract major investment or to provide access to capital on the international market.  And even in oil, gas and gold, capital investments are less attractive when the risk is being taken in one country alone and where only one government is the borrower or acts as guarantor.

Of course, governments must devise national solutions to all their problems, not only the economic ones.  This calls for innovative ideas; for practical plans and creative management; and for implementation capacity.  But, Caribbean governments are fortunate in having a further string to their bow – regional collaboration.  Both paths should be pursued simultaneously.

There is nothing to lose, and there would be a good shot at curing some of the ills that now befall each country without exception.

Sir Ronald Sanders is a Consultant, Senior Fellow at London University and former Caribbean diplomat.

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8 Comments In This Article   

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@ RAWLSTON POMPEY

#8 SlyThatGuy » 2014-01-21 01:17

I addressed RAWLSTON POMPEY because he took it upon him self to interpret or explain the meaning of Sir Ronald Saunder's remarks, as if what he said were difficult to understand. But I kind of sensed you were especially bringing paragraph 3 to our notice and describing it in more detail--you said it summed it up frighteningly--becau se you were trying to stir up trouble; to get the people excited and angry against the UPP government for the dreadful condition the economy is in.
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SlyThatGuy

WHY ME?

#7 RAWLSTON POMPEY » 2014-01-20 19:03

SLY,
Why address " ...Pompey" of your " ...consciousness of the fact that the entire Caribbean nation is up against poverty or economic hardship?" [Para 1 of your comment].

Why not Sir Ron?

You have certainly produced " ...several disagreeable ***lets."
Prepared to assist you with production.

Watch my thumbs. Best wishes SLY.
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RAWLSTON POMPEY

@ RAWLSTON POMPEY

#6 SlyThatGuy » 2014-01-20 12:47

No, POMPEY, I am not confused; you are! Where in the discussion did I claim that you made reference to any particular administration or organization? Where did I accuse you of doing or saying anything wrong? I simply stated that it would be unfair if you (whether now or later) would try to lay the blame on the UPP government for the situation. It was just an advance warning because some bloggers were already holding the UPP responsible for the financial struggles they were facing as a result of the recession we're in. Now why do you think I should direct a concern to the author of the opinion? His point of view may be of great value to you, but it's not important to me. The author's opinion or point of view is how he feel about the situation, but that doesn't necessarily mean that his belief holds all the answers to CARICOM financial problem. Don't think that because you were a former police commissioner you know what Sir Ronald Sanders proposed is the solution to CARICOM financial problems.
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SlyThatGuy

STATE OF CONFUSION

#5 RAWLSTON POMPEY » 2014-01-20 07:15

Please SLY,
Where in the comment does it make reference to particular " ...administration and/or organization?"

ABSOLUTELY NONE.

Why not direct your concerns to the author of the opinion SLY?

Merely reflecting partially on that which " ...Sir Ronald Saunders" has reasonably expounded-" ...REGIONAL CHALLENGES" and how they might be approached that people might be " ...Well off if they are to make ends meet."

Please, let not your mind be confused and/or thoughts place you in a state of confusion that may lead to " ...verbal friction."

Take warning from our friend " ...OBS."
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RAWLSTON POMPEY

RE: The Harsh Effects of Being Less Well-off

#4 SlyThatGuy » 2014-01-20 00:02

Yes, the countries of the region need to pool their resources in order to halt the decline and give way to improvement, but it's easier said than done. I think pooling resources is going to be a real difficult thing to do--and, by the way, I don't blame those governments who are not ready to collaborate--because the Caribbean Community (CARICOM) treat each other like strangers, like they don't belong together. My belief is that there can never be a sense of oneness until people from the Caribbean Community can travel freely to any country within the community and remain there indefinitely.
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SlyThatGuy

@ RAWLSTON POMPEY

#3 SlyThatGuy » 2014-01-19 22:31

POMPEY, I'm fully conscious of the fact that the entire Caribbean nation is up against poverty or economic hardship but, most importantly, I understand that this is due to the fact that we're going through a period of temporary economic decline--a problem stems from the global market collapsed some five (5) years earlier. So if people in the Caribbean do feel less well-off than they were years before, it's expected. But I would consider it unfair though if you're going to use this situation to announce or assert that this UPP government caused the financial misery and that things would have been much better under the ABLP/ALP government.
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SlyThatGuy

INTERESTING DEPICTIONS

#2 RAWLSTON POMPEY » 2014-01-19 08:42

Good Day Sir Ron,
You speak to " ...National Solutions and Innovative Ideas," Dr. Isaac Newton spoke to " ...Toxic Leadership" [Saving the Caribbean], regional leadership seemed not to be listening. Press on.

It has been said that " ...A picture is worth a thousand words."

That which you have articulated, may be vividly seen from Caribarena's depictions " ...An empty pocket and a tearful Piggy."

Seemingly, selling this " ...Piggy with tears streaming from its eyes," may not even " ...Make Ends Meet."

Caution to " ...OBS," lest you risk amputations, be careful where you may " ...step with your feet."

Paragraph 3 summed it up frighteningly.

This means -POVERTY; ...economic hardship, inescapable financial misery and utter despair."

Even so " ...Man must Live" [Mighty Arrow].

To my friends " ...SKYE, OBS, SLY, CIROC and Wisdom," have a nice day.
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RAWLSTON POMPEY

Collaboration etc

#1 JD » 2014-01-19 07:43

I wish we could make it happen.
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JD

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Sir Ronald Sanders

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on Small States in the global community.

 

 

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