By CMC – From Observer Media Group

BRIDGETOWN, Barbados– Barbados Prime Minister Freundel Stuart won the political battle but loss the economic war in 2013.

His Trinidad and Tobago counterpart, Kamla Persad Biissessar set a record by losing four political battles in a year, while Grenada’s Prime Minister Dr. Keith Mitchell set another record by leading his New National Party (NNP) to a clean sweep of all 15 seats in the February general elections. This was the second occasion he had achieved the feat within a decade.

St. Kitts-Nevis Prime Minister Dr. Denzil Douglas defied calls to debate a motion of no confidence in his administration for a year even though the matter reached the courts and in Nevis, the Concerned Citizens Movement (CCM) defeated the Nevis Reformation Party (NRP) to take control of the Nevis Island Administration (NIA) after a year of wrangling in the courts over the validity of the last elections.

In Suriname, President Desi Bouterse dismissed calls to step down following the arrest of his son by United State law enforcement officials on drug trafficking and terrorist related charges.

But during the year, President Bouterse fired his Finance Minister, Adelien Wijnerman, because of the slow progress achieved in clearing government’s payment arrears. Since coming to office in 2010, Bouterse has replaced 10 ministers.

His record is perhaps matched in the Caribbean only by Prime Minister Persad Bissessar, who accepted the resignation of her embattled national security minister Austin Jack Warner, only to see him successfully defend the Chaguanas West seat in a by-election and form his own political party.

In Belize, Prime Minister Dean Barrow sacked his junior minister of Immigration Elvin Penner based on the fact that he “did not discharge his responsibilities with either the due judgment and balance, or the scrupulous regard for appearances, which the Prime Minister demands for all his Ministers”.

Dominica’s Prime Minister Roosevelt Skerrit continued to enjoy his honeymoon and birth of his new born son by taunting the opposition, which elected a new leader in Lennox Linton, with the possibility of an early general election.

Andrew Holness survived a challenge to his leadership of the main opposition Jamaica Labour Party (JLP), but his former prime ministerial colleague, Stephenson King, was not so fortunate in St. Lucia, bowing out to his former tourism minister Allen Chastanet.

A Brazilian court gave the green light for former Turks and Caicos Islands Premier Michael Misick to be extradited to his homeland to face charges arising from a Commission of Inquiry into alleged corruption and maladministration during his tenure in office.

Yet politics did not dominate events in the Caribbean in 2013, economics did.

St. Lucia’s Prime Minister Dr. Kenny Anthony summed up the economic situation perfectly when he said some Caribbean countries were refusing to face up to the impact of the global economic crisis on their countries.

“The tragedy of the times is that we are in the throes of a major crisis like the Caribbean has never ever experienced before, but we are refusing to face the reality that confronts us and all of us are engaged in one form or another of self denial,” Anthony said, challenging his regional colleagues to be honest about the “hard and unusual decisions” that must be made because of difficult global economic conditions.

“We don’t like frank talk. We don’t like open talk. We don’t like honest talk,” he added.

The Bermuda government laid it cards on the table by telling citizens that they should not expect the local economy to show much growth in 2013.

“Overall, the Ministry of Finance anticipates that Bermuda’s GDP (gross domestic product) will be flat to negative 0.75 per cent in 2013,” it said.

The Central Bank of Trinidad and Tobago revised the economic growth for the oil rich twin island republic saying it was now projected to grow by 1.5 per cent this year as against earlier predictions of 2.5 per cent

The test of Anthony’s frankness came early in the year when he warned striking public servants that bowing to their demands for a 15 per cent salary increase would force the island into the clutches of the International Monetary Fund (IMF).

Public sector trade unions had rejected an offer of zero per cent increase and a onetime payment of EC$1,000 (One EC dollar= US$0.37 cents). But the government said the counter proposal by the  trade unions would increase its wage bill by an estimated EC$55 million annually while the back pay associated with this proposal would cost about EC$40 million, “leading to a worsening of the current deficit of close to EC$100 million for this financial year.

“It also means that for every ensuing year, Government would have to borrow an extra EC$55 million just to meet the increase. This is clearly a path that a responsible government should not take,” Anthony argued.

In the end, despite street demonstrations, the public sector unions signed on the dotted line, accepting the government’s offer.

The nine-member Organisation of Eastern Caribbean States (OECS) has long relied on mono crops as well as the tourism industry for heir economic fortunes. But the Governor of the Eastern Caribbean Central Bank (ECCB), Sir Dwight Venner, said they needed, “to wake up and smell the coffee” and realise that the global economic crisis had exposed and exacerbate structural issues that had been hidden in the past.

“Let us get sensible, there is the politics in all of that, but in the end you have to do the maths,” he told the Dominica Association of Industry and Commerce (DAIC), noting that the private sector had a significant role to play in the newly formed Economic Union of the Organisation of Eastern Caribbean States (OECS).

Sir Dwight told the private sector officials “that’s the only game in town” and pretending that ‘we can solve things without doing the math is going to be a very frustrating exercise”.

It was a message not lost on Grenada’s Prime Minister Dr. Keith Mitchell, who has a doctorate in Mathematics.

He has had to present two national budgets to Parliament in 2013, stressing at all times the development of what he calls “the new economy” to deal with the socio-economic situation facing the Spice Isle.

The two essential building blocks of this new economy are fiscal and debt sustainability and the Grenada government has said it would present a strategy for the new economy in the first quarter of 2014.

But Mitchell insists the “Homegrown Programme” has been designed for Grenadians and was not a programme put together by the Washington-based IMF.

Caribbean people have long equated job cut backs, decline in social services and a cut in government expenditure with the abbreviation, IMF.

So when Barbadian voters kept with tradition and provided the incumbent Democratic Labour Party (DLP) a second consecutive term in power following a nerve jangling general elections in February, they would have been forgiven for linking the government’s announcement of public sector job cuts in December with a prescription ordered by the IMF as the DLP administration seeks to revive an ailing economy.

Their position may have been strengthened by the IMF report on Barbados following its annual inspection of the state of the country’s economy in early December.  The Washington-based financial institution noted that the Central government debt had risen to 94 per cent of gross domestic product (GDP) by September 2013; the government’s deficit is expected to rise to 9.5 per cent of GDP in 2013/2014; the government wage bill rose to 10.3 per cent of GDP in 2012/13 – “the highest in the region”; and, most worryingly of all, international reserves had fallen to US$468 million at end-October.

Despite the gloomy picture, Barbadians had taken comfort in the words of Prime Minister Stuart that his administration had always taken the position that, as far as possible, resorting to layoffs would be “a kind of last option when every other option has failed”.

Perhaps the first sign that all options had or were failing came when the government announced that it would no longer pay tuition fees for nationals studying at the University of the West Indies (UWI). The government’s message to students: free tertiary education was never intended to last forever.

But even as the debate raged as to whether or not the government would meet the economic fees for students, Barbadians were jolted by the announcement made by Finance and Economic Affairs Minister Chris Sinckler that the government would trim the public service as well as reduce by 10 per cent the salaries of ministers, government legislators, parliamentary secretaries and those considered to be a “political appointee”.

Sinckler said that the plan to cut public service jobs would result in the government saving as much as BDS$143 million (One BDS dollar = US$0.50 cents) and that the government had also agreed to institute a “strict programme of attrition” across the central public service, filling posts only where it is absolutely unavoidable, over the next five years, ending 2018-2019.

“This attrition is expected to reduce central government employment levels from approximately 16 970 to 14, 612 jobs – a projected loss of 2 358 posts; and savings of BDS$121 million. Over the current 19-month adjustment period public sector employment will be reduced by an additional 501 jobs with a projected savings of BDS$26 million,” he added.

The government said that the first 2 000 job cuts would take place by January 15, followed by others by March 1.

Despite assurances from Central Bank Governor Dr.Delisle Worrell that self confidence would help the island overcome  its economic problems, the international rating agencies like Standards & Poor’s and  Moodys Investor Services were not impressed, revising their outlook on Barbados that had “fallen back into recession”.

Former prime minister Owen Arthur suggested that the government consider cutting back on Cabinet portfolios as well as social entitlement programmes, while Opposition Leader Mia Mottley declared the island was in crisis.

“The decision to remove 3,000 public workers is the ultimate betrayal of the mandate of this government. We have heard over and over ministers say there will be no layoffs, there will be no sell offs before, during or after the election and the prime minister led the chorus,” she said, warning that the “storm is still coming” and that the measures being implemented would not stop the free fall of the Barbados economy.

For its part, the National Union of Public Workers (NUPW), which represents the majority of the 28,000 public servants, has submitted its own proposals to the government, including a reduction in the Value Added Tax (VAT) as well as a 30 per cent cut in the salaries of government ministers.

The NUPW is also calling on the government to consider the re-introduction of bus fares for school children as part of the new economic strategy to revive the ailing economy.

But the despite the criticism, the government has found support for its plan of action. Head of the Barbados Institute of Chartered Accountants (ICAB), David Simpson, said that apart from the retrenchments, the government would still have to outline a plan to stimulate foreign exchange earnings and improve the economy.

“I feel this is just the start,” he said.

If the Barbados situation was worrying, Jamaica has had a long relationship the IMF which continued in 2013.

The island signed a four-year US$958 million External Fund Facility (EFF) with the IMF and Prime Minister Portia Simpson Miller urged Jamaicans to remain focused as the country goes through what is perhaps its most ambitious and far-reaching economic transformation programme.

She likened the economic reform programme to working out a business plan, saying “I speak of creating a profitable enterprise for all our citizens.

“I always speak of the importance of ‘balancing the books while balancing people’s lives.’  This requires, among other things, placing emphasis on poverty alleviation and eventual poverty eradication,” she added.

By year end, the IMF was making public a letter submitted by the Jamaica government with Kingston acknowledging that while economic growth remained weak and unemployment “much too high” it was nonetheless confident that the benefits of the economic strategy now being implemented would “become increasingly evident over time”.

The government had also urged nationals to accept the stringent measures that would accompany the IMF agreement including increases taxes and the launch of a national debt exchange offer.

The Simpson-Miller administration also had to reach wage agreements with public sector trade unions and other stakeholders in order to maximise the benefits of the IMF agreement and its own economic programme and in its year end letter to the IMF said it remained “fully committed to meeting the objectives of the programme, as well as the specific targets set out in the April 2013 Memorandum of Economic and Financial Policies (MEFP), and its September 2013 supplement.

“In the fiscal area, the government will press ahead with implementing comprehensive tax reform, prepare and legislate the fiscal rule, and adopt a range of measures to strengthen public financial management.”

The political configuration in the National Assembly in Guyana, translated into economic problems for the Donald Ramotar administration in 2013.

Blacklisted by the Caribbean Financial Action Task Force (CFATF) after it failed to approve legislation to combat money laundering and countering the financing of terrorism (AML/CFT), the Guyana government watched helplessly as the opposition legislators used their one seat majority to block the multi-billion dollar Amaila Falls Hydro Power (AFHP) project.

Government described the opposition vote not to support measures aimed at raising the guarantee limit of loans for the development of hydro-electricity in the country as a “travesty against the people of Guyana”.

Finance Minister Dr. Ashni Singh said that the passage of Hydro-Electric Power (Amendment) Bill as well as the accompanying motion to increase the guarantee limit of loans, from GUY$1 billion to $150 billion (One Guyana dollar = US$0.01 cents) was necessary to ensure the continued development of the country.

But the opposition was not impressed and stuck to their guns, indicating that the local government reform bills were necessary before the holding of local government elections which were last held in 1994.

Dominica did not have that problem as it sought to further develop its geothermal energy potential in 2013.

Roseau remained buoyant about the prospects of developing geothermal energy for local consumption after hosting a two-day international forum that provided an opportunity for stakeholders to re-commit themselves to the project.

“One of the very important points that has come out of the two days of deliberation is that there is a reiteration of commitment and support by all stakeholders who were present for the geothermal project,” said Prime Minister Roosevelt Skerrit, whose administration has spent millions of dollars developing the sector over the past three years.

Not to be left out on the geothermal landscape, the tiny island Nevis announced that it had awarded the

Nevis Renewable Energy International Company, a consortium of international companies, an award to develop geothermal energy on the island.

“We were looking for the company that had the technical ability and the financial ability to deliver this project to the people of Nevis and I think that we would have done a good job of selecting this particular company,” said Alexis Jeffers, senior minister responsible for renewable energy and the environment.

The economic problems of the Caribbean in 2013 provided yet another opportunity for two of the world’s super powers, seeking to consolidate their relationship with regional countries.

On the heels of a visit to Trinidad and Tobago by US Vice President, Joe Bidden, China’s President Xi Jingping came bearing a three billion US dollar concessionary facility gift for eight Caribbean Community (CARICOM) countries.

“We did thank him for that very generous gesture. The three billion dollars are for infrastructure projects…in the region,” said Prime Minister Persad Bissessar, who hosted the Chinese and the regional leaders.

Dominica’s Prime Minister Skerrit said the facility comes at a time when “the Caribbean and indeed the world is challenged with all sorts of economic and fiscal issues.

Biden had described his discussions with CARICOM leaders as “frank and cordial” and pledged Washington’s assistance on a wide range of issues affecting the socio-economic development of the 15-member regional grouping.

Not to be outdone, Taiwan, which Beijing regards as a renegade province, pledged support for its handful of Caribbean supporters.

President Ma Ying-jeou, as he did in  St. Vincent and the Grenadines and St. Lucia, signed a joint communiqué with Prime Minister Dr. Denzil Douglas of St. Kitts-Nevis praising the Caribbean island for its friendship over 30 years and promising to lend assistance in areas such as climate change, renewable energy, tourism, education and infrastructural development.

The year 2013, will be remembered in the Caribbean for the ground breaking judgement by the Trinidad-based Caribbean Court of Justice (CCJ) as it relates to the free movement of Caribbean nationals across the region.

Two years after claiming she had been denied entry into Barbados and subjected to a humiliating experience by Immigration authorities, the Jamaican Shanique Myrie received a substantially lower figure than the one million Barbados (One BDS dollar = US$0.50 cents) compensation she had sought. But the CCJ ruled that Bridgetown had breached her rights when she sought entry into the country.

Myrie had alleged that when she travelled to Barbados on March 14, 2011 she was discriminated against because of her nationality, subjected to a body cavity search, detained overnight in a cell and deported to Jamaica the following day.

Myrie also claimed that she was subjected to derogatory remarks by a Barbadian Immigration officer and asked the CCJ to determine the minimum standard of treatment applicable to CARICOM citizens moving around the region.

On September 27 last year, Jamaica was granted leave to intervene in the matter.

Jamaica’s High Commissioner to Trinidad and Tobago and Barbados, Sharon Saunders, who was present in the court when the ruling was given, told the Caribbean Media Corporation (CMC) “my first reaction…is that in principle it has been a victory for Myrie and Jamaica because it has validated her claims and that was indeed the objective.

‘The award of damages that was secondary and in fact her costs will be met by the amounts announced. This I think is a landmark judgement and the court has been very fair. Of course in any court the burden is on evidence and clearly the court deliberated long and hard and this i think is an extremely good outcome”.

The CCJ in its judgment held that CARICOM nationals were entitled to enter CARICOM member states “without harassment or the imposition of impediment” and to stay up to six months.

The right was derived from the Revised Treaty of Chaguaramas and a 2007 CARICOM Decision made at the Conference of Heads of Government of CARICOM.

The court found that the right requires member states to give both “written reasons for the refusal” and to “advise them of their entitlement to access meaningful judicial review.”

The right can only be denied, the court said, when the visitor is an “undesirable person” or “one likely to become a charge on public funds.”

But less than two months after the court ruling, the issue of free movement flared up again after Trinidad and Tobago deported 13 Jamaican nationals.

The issue led to calls for an economic boycott of Port of Spain and it took the intervention of the foreign ministers of both countries meeting in Kingston to bring about a resolution.

A ruling by the Constitutional Court in the Dominican Republic that had the effect of rendering stateless, thousands of Dominican nationals of Haitian descent was roundly condemned by regional and international agencies and CARICOM took the unprecedented decision to put on hold, Santo Domingo’s application to join the 15-member regional bloc.

By yearend, the leaders of Haiti and the Dominican Republic were holding talks aimed at rectifying the situation, although it seemed the road ahead would not be an easy one.

Crime continued to have a serious effect on the socio-economic development of the region in 2013, as it has done over the past years.

Regional governments have complained about spending scarce resources on having to beef up security for their nationals. In Jamaica where more than 1,400 people were murdered this year, National Security Minister Peter Bunting acknowledged that the fight against crime seemed to be a futile endeavour.

“I am not embarrassed to say that right now as Minister of National Security, I am going through a kind of a dark night of the soul,” he said, noting that despite the efforts of law enforcement authorities “yet so little headway, such slow headway is coming out in the statistics”.

The opposition JLP demanded his resignation and by yearend renewed the call as the murder toll increased.

Murders continued to be a major headache for countries like Trinidad and Tobago, the Bahamas and Belize.

Death continued to stalk the Caribbean as the year came to a close. In St. Vincent and the Grenadines and St. Lucia, heavy rains and winds associated with a slow moving low level trough was blamed for at least 14 deaths in the two islands.

Prime Minister Dr. Ralph Gonsalves said that St. Vincent and the Grenadines would need “hundreds of millions of dollars” to fund the reconstruction effort, while in Dominica, which was also affected by the weather system, Prime Minister Skerrit put the cost at EC$45 million.

Prime Minister Anthony described the situation in St. Lucia as a “humanitarian crisis” and that the cost of reconstruction would run into “tens of millions”

Dominica’s deputy Prime Minister Reginald Austrie said that the damage caused in St. Lucia and St. Vincent and the Grenadines would impact heavily on the efforts by the sub-region to develop its economic union.

“We in the OECS region have been attempting to make strides in terms of improvement to our economies, improving in the quality of lives for our people and these activities and destruction only seek to reverse some of the benefits we have made.”

In 2013, the Caribbean lost a number of its personalities, including Dame Hilda Bynoe, Grenada’s first -ever native head of state, former president of the Barbados Senate, Sir Branford Taitt,  Alimenta Bishop, the mother of Grenada’s slain prime minister Maurice Bishop,  broadcaster, cultural activist and musicologist, Anthony “Tony” Laing of Jamaica, Justice Wendell Kangaloo,  a judge of the Appeal Court in Trinidad and Tobago as well as media personalities Ferdinand Frampton, the former general manager of the state-owned DBS radio in Dominica and Timothy Augustin James, the former St. lucia correspondent for the Caribbean News Agency (CANA) and the now defunct Montserrat based Radio Antilles. He had also served as the first director of the National Emergency Management Organisation (NEMO).

The Caribbean also joined the rest of the world in saying farewell to the Venezuelan President Hugo Chavez who died from cancer on March 5 and  nine months later, the South African anti-apartheid icon, Nelson Mandela, who died on December 5, at the age of 95.

For more on this story go to:

http://www.antiguaobserver.com/its-the-economy-caribbean/