Can the 2008 EU Cariforum Economic Partnership Agreement (EPA) still be made to work to the region’s advantage, or is its economic promise fading? To a significant extent the answer to this question is about how best to encourage a private sector response.
Unfortunately, despite exhortations and endless meetings and seminars in the region, it is hard to find any evidence that any new use is being made by the private sector of the trade and investment aspects of the agreement, other than in relation to the improved access it offers in the area of commodity exports.
The response, if any view at all is expressed, is for the most part disinterest or a belated awareness that, in manufacturing in particular, many enterprises are too small and are not export ready. In contrast, the few that are making progress, make clear they would have sought such opportunities anyway and now want far more focussed company-specific forms of support in the region and externally than, for instance, general study tours.
What is however clear, EPA or no EPA, is that there are many new opportunities for the private sector that could fundamentally change the Caribbean’s economic trajectory.
It is possible to identify and catalyse business in areas such as ICT; medical science; hard and soft security; value added agriculture; branding and marketing; environmental protection; offshore supply and servicing relating to oil and gas recovery; high value fisheries and aquaculture; alternative energy; transhipment expertise in relation to port development and the enlarged Panama Canal; the use of Europe’s new overseas territories decision for encouraging manufacturing through the cumulation of goods for export to Europe; back office and advisory services to international investors; creative industries; and global distribution.
Knowledge based opportunities also exist, irrespective of the size of a nation, for instance in the creation of information hubs that group together specialists able to provide detailed analysis and information. There are also real opportunities to build research centres, science parks and intellectual hubs around the Caribbean’s less than business oriented universities; while quality education at regional universities is a saleable global product in itself.
Who then should energise the private sector, encourage awareness of these and other opportunities and act to catalyse new business relationships?
At present the private sector landscape in much of the region is barren. There are few outward looking, viable, let alone dynamic private sector associations, while some national associations in Caricom have taken on a quasi-political role. There are some outstanding exceptions in the services sector or representing value added industries and some quite special individuals; but they cannot alone drive, on a regional basis, new private and public sector thinking about opportunity, what might build competitiveness in small nations or deliver programmes.
Moreover, and regrettably, there is no longer any single body that can genuinely claim to represent the multifaceted nature of the private sector across the region. Former Prime Minister Arthur’s idea of a vibrant Business Council as a formal body of Caricom has faded and regional associations have been weakened to the point of invisibility. In short there are few private sector partners to work with other than the big companies which largely look after their own needs.
Sitting at the centre of this challenging situation is Caribbean Export. Although established with European funding as an agency to promote exports, it became in 2011 the recipient of €32M (US$40M) from the EC to help promote private sector competitiveness and innovation in the context of the EPA. It has recognised that if it is to achieve this, it has to play a greater role part in changing thinking about what is involved in generating exports and attracting investments and joint ventures.
Its new thinking and its potential to do so became particularly apparent during a recent series of events in Europe sponsored by European agencies, culminating with a business forum in London at the time of the London Olympics. Speaking about the agency’s role, its Executive Director, Pamela Coke-Hamilton, makes clear that she believes that the private sector has the most crucial role of all in taking advantage of the EPA. The agreement, she suggested, while not an end in itself, provides a very important foundation for the region to build on and utilize its access the European market.
She makes clear that for the private sector to take advantage of the opportunity, new more focused mechanisms are needed. These include making targeted market information available to Caribbean enterprises; a greater emphasis on branding to retain a presence in markets at higher levels in the value chain; and close engagement with industry clusters, type of support is required by emerging sectors.
She says that the agency is also now looking at other creative ways to improve its services, including how best to measure the return on investment from development funding; the accumulation of better data to support market interventions; and developing mentoring programmes that enable private sector champions in the region or externally, as it were, to invest in others.
What is emerging is that Caribbean Export has come to recognise that if the region is to succeed in not just making use of the EPA but developing the Caribbean’s overall export potential it and its counterparts at a national level have to behave differently and find significantly more professional, tailored and measurable ways of supporting business development.
At the heart of the challenge of private sector led development are issues and characteristics that many development agencies within and beyond the Caribbean find difficult: picking winners, having profit as one of a number of measurable outcomes, and better understanding that the private sector rapidly develops efficiencies when faced with challenges.
What remains unresolved in the Caribbean but not so in most other parts of the world is the issue of selecting those who can achieve in business, and fostering and supporting them to the benefit of regional and national economic growth.
In all of this, what is missing is a strong genuinely representative counterpart business advocacy group able to advise Caribbean Export, the Cariforum Implementation Unit and others from a genuine private sector perspective; one with a seat at the table in international trade negotiations, ensuring that what happens is demand led.
In the end the issue, like so many other in the Caribbean comes down to who will challenge the status quo, break the mould of the way in which the region presents itself to the world and consider new approaches that look to the future.
Previous columns can be found at www.caribbean-council.org
