Call for Addressing Inequality, Unsustainable Debt and Socio-Economic Disparities
By Reinhard Jacobsen
Caribbean leaders have joined the United Nations in calling for solidarity and increased funding, as some of the world’s most vulnerable countries scale up their efforts to combat the COVID-19 pandemic. At a virtual summit in Kenya’s capital city, Nairobi, they have highlighted the need for “a truly global response” to the pandemic which is devastating the economic systems around the world, particularly impacting 79 African, Caribbean and Pacific states. They also are stressed the need to “strengthen the multilateralism for development”, and engage “our institutions to consider innovative solutions”.
Addressing the virtual extraordinary Intercessional Summit of the Organization of African, Caribbean and Pacific States (OACPS) on transcending the COVID-19 pandemic, Prime Minister Andrew Holness said on June 3: “The flaws in the current international financial and economic system must be remedied.” He said this would require the international financial system facilitating the channelling of public and private credit flows into productive development capital.
Holness added: “Together we must address global inequality, unsustainable debt and socioeconomic disparities. In this regard, the intra OACPS collaboration including south-south cooperation can become an effective tool in building stronger social systems and infrastructures.”
The OACPS must mount a strong advocacy campaign for access to emergency liquidity support of developing countries with vulnerable economies.”
Barbados Prime Minister Mia Mottley, who is also the chairman of the 15-member regional integration grouping, the Caribbean Community (CARICOM), renewed her call for multilateralism and a global leadership initiative that brings together not just governments, but other people of influence, insisting that it is the behaviour of individuals that has to change.
Mottley told the virtual summit in Nairobi that “the recovery of economic growth and jobs in one country cannot be achieved without recovery or economic growth in other countries that provide either the goods or alternatively purchase the goods”.
“In other words, we must recover together, and we must protect our future prosperity by protecting the interests of all of us,” said the Barbados Prime Minister. “This is the only way that the world can move forward in solidarity.” Truly global recovery requires to leave no country behind in the recovery process and that the necessary tools to achieve this recovery are made available to all countries.
“Then we can at least guarantee that support. We have to ask ourselves, are we going to act as if our interests are served by maximizing profit and hoarding vaccines for the wealthy or more powerful nations?”
The Barbados Prime Minister said that CARICOM and by extension the Caribbean Forum (CARIFORUM) grouping, which includes the Dominican Republic are especially vulnerable to the impact of COVID-19, not just in terms of the number of cases and regrettably, those deaths that have happened, even though there are few in comparison to other regions.
“It is the economic impact that is going to be. Our greatest challenge for the Caribbean is that it is the world’s most trade and travel dependent region. Tourism represents close to or more in some instances of 50 per cent of gross domestic product (GDP) and also employment.”
She said that the actions taken by members of the global community and ourselves to contain the spread of the pandemic are resulting in the most substantial contraction in economic activity since the Great Depression and the riots in the 1930s, noting that the cut is disproportionately deeper.
Mottley said: “We find it almost impossible … to do both with respect to the protection of lives and livelihoods in the circumstances in which we find ourselves globally. We simply do not have the fiscal space to marshal an economic stimulus the size and scope that are developed partners can secure or that we need.”
Mottley said the Barbados-based Caribbean Development Bank (CDB) has forecast a collapse in Caribbean economies, with declines in some countries ranging from as low as 11 per cent to as much as 30 per cent in those tourism-dependent countries.
She said the economic contraction makes this region out utterly explores, and the projected decline across many of these countries mirrors that of the economic decline of many European countries during World War Two.
“That decline then led to a Marshall Plan being settled to ensure that those states did not become failed states. We ask our brothers and sisters to take note of this fact and to recognize that this can no longer be the subject of politely listen to speeches and repetitive pleas to a world that is not yet hearing or not yet seeing us.
“Our small states have been suffering from high debt and low growth for decades, and we believe that they should be mature and relevant conversations for middle income, small island developing states across the globe as it relates to our debt obligations in the midst of this pandemic.
“We will either have an orderly restructuring of debt or at the very least, a debt moratorium that provides certainty for both borrower and lender. Or we will have a disorderly unravelling that will create a crisis both within our countries and the financial markets,” the CARICOM chairman added.
She said the region was facing the pandemic even as it faces the fact that this is hurricane season.
She said that the challenges which now confront the OACPS membership due to this pandemic are a true test of the spirit and the letter of the revised Georgetown Agreement and the guiding tenants of the organization” which are based fundamentally on the principles that we have heard so much about and will continue to hear about solidarity, unity and partnership”.
She told the summit emergency fiscal measures, emergency fiscal measures, including debt relief, are needed to relieve the pressure on the highly indebted states of the Caribbean and avert another crisis of deep and long term impoverishment of our people.
“And I am not speaking for barometers because we have fundamentally restructured most of our debt. I am speaking from my brothers and sisters in the region whose profile as countries have too high a debt to GDP ratio and who have little room to manoeuvre, even as we, therefore, battle with the social and economic ravages of COVID.” [IDN-InDepthNews – 04 June 2020]
Note: This article is based on two reports carried by CMC, the Caribbean Media Corporation. CMC is the Caribbean region’s leading multimedia organisation dedicated to excellence in communication services.