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Economist Calls For OECS Trade Policy Change

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DAVID JORDAN a UWI and USA trained Trade and Economic Policy Economist and a former Director of International Trade and Investment in St Lucia, has suggested that the governments of St Lucia and the other OECS should revisit the trade licence arrangements and areas of economic activity reserved for nationals in the respective member states.

Said Jordan: “These instruments which have their beginnings from as early as the 1974 era, have served their specific purpose and need an overhaul. In most instances these instruments are now deemed weak and no longer relevant in a globally changing environment to guide the economic development of the economies of the OECS which are now more services industry oriented”.

Jordan, who provides business advice to both the private and public sectors, noted that these instruments were designed to work in tandem with a trade regime of the day, which promoted a policy of import substitution and restrictions on trade in goods and Investment, while attempting to promote a local private sector investment thrust and business environment.

He added: “These policy instruments were designed so as to govern how non-national entities interfaced and integrated with the respective national business environment.”

Jordan is an advisor to Giordano Associates Ltd., an independent business consulting firm based in St. Lucia with international affiliates within the Caribbean.

Jordan contends that these instruments serving over 30 and 40 years, had proven archaic and were currently also poorly managed. Coupled with this, an important beneficiary – the private sector – had been silent and negligent and ceased advocacy to preserve the wholesomeness of the instruments and their relevance.

“These instruments have hardly experienced any fundamental change in an environment which has had to react and adjust to a World Trade adjustments and the regional CSME. While he had praise for the architecht (s) of those instruments which were complementary and appropriate several years ago, he provided a critique of those trade licence instruments and areas reserved for nationals in the region saying they were inadequate to address the needs of a new liberalized regime and the approaches in the OECS region to adapt to recent phenomena, such as Economic Citizenship programmes.

Joran identified a few areas, like the growth and development of the distributive trades sector as an example. The sector had grown contributing to the growth of the GDP but this had come against an expense of seeing indigenous family businesses in the region, experiencing challenges even dissolution while non-national ( indigenous ) business continued to grow at a faster phenomenal rate. He argued that the appropriate capital sourcing mechanisms should be a major complementary mechanism by the development banks of the region , to enhance the growth of the areas reserved for nationals ( if the indigenous businesses would benefit from a window of opportunity to survive ).

“It has not been easy for the indigenous investor in recent times post the period of the adoption of liberalization of trade and the advent of CSME and globalisation policies”, Jordan said adding that similar arguments could be raised for all of the sectors. He advocated seeking new sources of capital including the IADB, and other non traditional diplomatic sources of funding to propel the private sector. Jordan wants to stimulate the debate and is ready to challenge private sector and public sector officials in the OECS, in particular “that the efforts at the respective national levels ought to be and should be the promulgation and the engagement of relevant policy instruments that make it mandatory to pursue an Investment focus in a more strategic manner.

Jordan is an advisor to Giordano Associates Ltd., an independent business consulting firm based in St. Lucia with international affiliates within the Caribbean.

1 Comment

  1. The only relevant thing that was said in all that was presented up there was the dissolution of mechanisms like CSME. Everything else is still very 20th century in outlook. Nothing else is really actionable, novel or 21st century relevant.

    It is highly ludicrous to discuss development issues in our neck of the woods, without bringing in the multiplicative factor of the material content or make-up of the productive sectors in the real economy (That part of the economy that is concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets).

    Look at the evidence. We see consolidation in the distributive trades and financial sector, mainly in banking and insurance, with companies headquartered in TNT.

    CLICO has ruined thousands of lives around the region. Like Trade Confirmers and the Multi-lateral Clearing Facility, there was absolutely no foresight in incorporating a regulatory CSME authority to protect the capital interests of CSME buyers of financial services with a rigorous anti-trust provision embedded in that loose agreement. CLICO played pac-man and havoc with the insurance industry. The buyers of their services paid the price.

    Today, it is still like Errol Barrow, a CARICOM architect said: “Who will buy my white sand; who will buy my gray sand”.

    The existence and percolation of economic activity in CARICOM and CSME have not, by and large, touched POSITIVELY the lives of the majority of the common people on a regional basis.

    Domestically, our country bookie minded politicians as so-called leaders, focus on capital projects to coincide with elections as symbolic manipulation. That is regarded as doing what is good enough not to commit “political suicide”. People are lulled into complacency that the government of the day is working for those who elected them, largely predicated on the basis of peasant “rum and corned beef” issues as campaigning platforms. Real and meaningful development gets the usual short shrift.

    If we might turn our attention to POSITIVE lessons from Singapore and the ASEAN, instead of the pettiness of our national obsession with country-bookie vote-catching issues, maybe the existing downturn and spiral economic contraction embedded in our deep-seated country bookie outlook, from typical Saint Lucian politicians who continuously bubble to the top, might be avoided in the future.

    We must hasten to abandon the empty rhetoric of a simplistic acknowledgement or espousal of “free trade”, for trade in value-added exports (using continously and domestically homegrown human capital formation) with a value-dded product focus, and not just seeking low-wage hospitality and banking services — controlled by largely government-subsidized foreign-owned capital. Right now, if the majority of those operating in the real economy fail to adopt and focus on value added in their production, Saint Lucians, irrespective of whoever is, or becomes PM, are doomed to hard struggling lives, wallowing in the blissfully ignorant but politically-designed mediocrity, for many many decades to come.

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