| On the 28th of January
the governor of the Eastern Caribbean Central Bank,
Sir K. Dwight Venner, delivered a powerful message in
his 2009 Eastern Caribbean Currency Union Economic Review.
The main theme focused on the fact that in times of
economic uncertainty, it is far better for Caribbean
nations to act in a unified manner than to stand alone
or depend solely on ties to some of the more advanced
economies.
As the 2009 rescue
of the Bank of Antigua proved, collective action can
be quite successful in operation. In that instance,
regional Heads of State and Financial Ministers gathered
together and put together an effective plan to address
the situation. The meetings spawned several subcommittees
of the Monetary Council that have been tasked with
oversight on specific problems, such as the health
of the regional insurance sector.
This development could
represent the silver lining that exists inside of
every cloud. By learning to cooperate more fully with
each other, the Caribbean may finally be ready to
start moving away from a position of dependence on
the major economies, such as the United States, for
its very survival. Self-reliance is a very powerful
life lesson for any individual, and it applies to
nations as well.
According to Sir Venner,
in 2009 the Currency Union contracted by an estimated
7.4 percent due to shortfalls in tourism and construction.
A drop-off that large is certainly of major significance,
and if the trend continues it will take some of the
best minds in the region to come up with a long-term
solution should those revenues not return. The economic
crunch being experienced in the Caribbean has a global
reach, with all of the major economies suffering to
some degree. In the United States, rising levels of
unemployment, combined with surging home foreclosures
have put a serious dent in the housing industry -
a major contributor to that nation's GDP. With many
homeowners now 'under water' with their mortgage loans,
there is simply not as much money to be spent on trips
to warmer climes.
How long with this
global recessionary environment persist? No one really
knows, but the prospect of an immediate reversal in
the current year seem dim. This means that the spirit
of cooperation among the nations in this region will
be all the more important going forward. It should
be accepted as a challenge by the best minds in Caribbean
governments to come up with solid alternatives to
the lost tourism revenue. Other questions need to
be answered as well, such as how to collectively deal
with possible future shortages of energy, principally
oil.
As Sir Venner asserted
in his presentation, "The Currency Union consists
of very small states with limited fiscal space and
regulatory resources and highly stretched policy capabilities.
The critical lesson learnt in 2009 was the power of
collective action."
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