KEYNOTE ADDRESS
BY DR. LEONEL FERNANDEZ
EXPRESIDENT OF THE DOMINICAN REPUBLIC
CO-CHAIR OF THE U.S. – CARIBBEAN EXECUTIVES’ CLUB

Inaugural Global Policy Briefing

U.S. – Caribbean Executives’ Club

February 1, 2001
  

REGIONAL POLICY PRIORITIES 

AND THE ROLE OF WASHINGTON

Thank you Philip for your warm introduction. Distinguished Congressmen, Ambassadors, representatives of the business community, dear friends at the CSIS, ladies and gentlemen, let me take the opportunity to express how excited and honoured  I am to be here tonight at the launching of this new visionary project, U.S. – Caribbean Executives’ Club, where we will reaffirm, once again, our unwavering commitment to improve the well-being of the Caribbean peoples and to strengthen the understanding and cooperation among the World’s most important economic, military and political leader, the United States, and the small, proud nations located in the Caribbean basin.

          I would like to begin tonight by asking a few questions.

Now that we are at the beginning of a new millennium, with the Cold War behind us, with a thriving digital revolution taking place, and with an economic and cultural globalization process changing the way we think, work and live, what are the Caribbean peoples’ hopes and aspirations? What are their fears and concerns?  What do they expect from a new Bush administration? What could this administration do to help them fulfil their dreams? And last, but not least, how can Caribbean nations contribute to the security and economic dynamics of its Northern neighbour?

With the end of the Cold War, a major breakthrough has occurred in the traditional relationship between the United States, Latin America and the Caribbean nations. No longer will ideology guide the principles and the essence of the way we relate to each other. No longer will military interventions take place in the region motivated by fears of a rival superpower take over in the area.

The end of the Cold War has redesigned the agenda between the United States and the Caribbean, with more emphasis on the issues of democracy, human rights, environmental protection, migration and deportation, trade, illegal arms, drug trafficking and money laundering.

But the end of the Cold War has also meant a benign neglect on the part of the United  States towards the Caribbean region. Security concerns have shifted over to other parts of the World, such as the Middle East, the Balkans, Iraq, North Korea, China and Russia

The Caribbean’s main agricultural products and raw materials, which include sugar, coffee, bananas, tobacco, rum and bauxite have become less valued commodities, and are readily available, sometimes even at lower prices, from other parts of the world. This has left the Caribbean countries without what has been for centuries their principle source of external revenue.

Globalization has brought trade liberalization, which, for Caribbean nations has meant, above all, the gradual loss and eventual disappearance in the long term of their traditional trade preference arrangements in the U.S. and European markets.

In the context of current  trends, let us consider the new challenges of the economic relationship and trade exchange between the Caribbean and the United States.

It is a fact that the US not only maintains a trade surplus with the Caribbean, but 70% of every Caribbean export dollar is spent in the United States, turning the region into the 10^th largest trade partner of the United States. Furthermore, it is estimated that this trade sustains over 300,000 jobs in the US and generates 16,000 more annually.

As we can see, the economic ties between these two partners are more vigorous and dynamic that, at first sight, we are usually aware of.

This leads us to the idea that, considered individually, isolated, Caribbean nations are of little significance for the U.S. economy, but as a region, it is a market, even more important than a country like France, attracting the interest of different types of U.S. corporations and business people.

The passage of the Trade and Development Act of 2000 by the U.S. Congress was welcomed by the twenty-five Caribbean and Central American countries that benefit from it. This bill has contributed to levelling the playing field  with Mexico, after the signing of the NAFTA agreement,  encouraging new investments and providing equal access to the U.S. market. The approval of this legislation gave a breathing space to the Caribbean textile industry, but we have to be fully aware that this is only a transitional solution for a limited period of time.

The great challenge will occur when trade liberalization imposes on us the obligation to open up our markets to foreign imports on a reciprocal base, and not on a unilateral access to U.S. and European market as it is of today. Will small Caribbean countries be able to survive and progress in this new globalized economy? Are the Caribbean countries ready to enter this new stage and what are we to do to make sure that it be so?

We must acknowledge that in spite of some common features, Caribbean islands have a diverse economy, and this diversity has implications for the design and implementation of a regional  integration strategy.

The Caribbean’s regional integration strategy has undergone significant changes. It was first conceived  as a joint endeavour  to protect the fragile, small size economies of the area. Through CARICOM, small island nations hoped to gain enough strength in order to negotiate with big,  powerful  nations. The strategy proved to be useful and it did give relief to Caribbean economies for a certain period of time.

With the coming of globalization, the scope of Caribbean integration has expanded. The larger countries of the area have joined the CARICOM countries in a new entity, the Association of Caribbean States (ACS), which has a stronger political representation and a greater negotiating capacity.

What the new Caribbean integration strategy has to take into consideration are the significant disparities that separate one economy from another in the region and the region in relation to the other economies of the Western hemisphere in order to introduce appropriate  compensatory measures.

In this sense it is important to learn from the European Union’s integration experience, which did not limit the concept of integration  to a mere trade agreement. Acknowledging the disparities among nations and regions in Europe, a special social cohesion fund was established to finance the needs of the less developed nations, level up the playing field among the players and insure the social conditions that would be able to support a smooth and successful integration process.

The economic and social transformations of Spain, Portugal and Ireland are good examples of what an integration strategy that takes into account the different economic development stages among nations can achieve in a relatively short time, when it is approached on a well thought and comprehensive basis.

It would be of great benefit for the Caribbean nations if their political and business leaders take a bold step and present a new agenda issue at the next Summit of the Americas, scheduled to take place in Quebec, next April, requiring a debate on the need for social cohesion funds that will allow the gradual disappearance of economic disparities and social inequalities among member States aspiring to a hemispheric integration, which is the aim of the Free Trade of the Americas Agreement.

It is evident is that in the future, through the effects of WTO and FTAA, being a small size economy will not be an excuse for not integrating regionally or on a global scale. It is an avoidable step and it is our responsibility, the responsibility of people committed to the Caribbean’s prosperity and progress, to make sure that it is carried out in an intelligent and productive way.

Within the new global economy the Caribbean islands will have to reposition themselves, armed with a new vision and a new competitive strategy. The challenge is to move forward by making better use of our traditional comparative advantages and by identifying and promoting new competitive advantages.

New niche markets need to be discovered and exploited. Production of non traditional export goods has to be introduced in national economies. Entrepreneurship must present innovative projects. Labour force needs to be trained according to new demands.

The shift from agricultural export production to a service economy, based fundamentally on tourism, free trade zones, telecommunications, banking, insurance and commerce  has played a significant role over the last two decades in helping upgrade the quality of life in the different nations of the region.

But now we have to move even further. The revolution that has taken place in the areas of information and communications technologies brings the opportunity to Caribbean nations to skip economic development stages and to leapfrog into  a new economic model sustained in a knowledge based economy.

The integration of information technologies into a national development strategy can mean the eternal dreamed opportunity of putting an end to the unfulfilled historical tasks of the industrial revolution and of becoming part of the new digital age.

To make this dream possible, Caribbean countries must concentrate on the development of telecommunications infrastructure, on establishing a regulatory framework, approving an intellectual properties' rights law and paying special attention to the education of the future workforce.

Besides the challenges presented to the Caribbean nations in their drive to be part of the new economy, there is a lot of work to be done in the area of the security of the region that affects equally the Caribbean countries and the United States.

It is well known that much of the drug that is consumed in the United States enters the country following the Caribbean route; and that many offshore banking operations are the result of money laundering transactions.

Massive illegal migration into the United States mainland is a by-product of deteriorating economic and social conditions and political instability of some Caribbean nations that no longer can offer hope to their citizens, who, by fleeing their native countries, create social tensions in the United States.

Political instability disrupts market dynamics, which affects the natural flow of the economy.

In this sense, I must say that Haiti and Cuba have been in the past and will continue to be within the new Bush administration, sources of great concern for U.S. policymakers.

There is no doubt, nowadays, that democracy is the only acceptable form of government, but careful thought should be given at the appropriate way of approaching democratisation in Cuba and Haiti.

It is my belief that isolation and a trade embargo on Cuba for the past four decades have been unsuccessful in trying to bring the Castro regime to its knees. It is time, therefore, to follow other paths.

Lifting the embargo would not only allow the Cuban people  access to world markets, but would also expose them to a new set of democratic ideas and values.

In the meantime, the rest of Caribbean nations are in the process of improving the quality of their democracy through free and fair elections, respect of human rights, strengthening of government institutions and economic and social reforms.

Of course, there are some problems to be tackled. Increasing crime rate must be confronted with energy, law enforcement agencies should undergo profound reform programs, the judicial system must act in a more speedy and fair way, government institutions should modernize and become more efficient when delivering public services, government officials should be held accountable for their promises and deeds, the media should inform in an unbiased and reliable way, civic organizations should remain depoliticised in order to truly represent the communities’ interests.

By working actively on these important issues, we would build foundations for societies where citizens behave  in a responsible manner and political leaders gain their trust and respect.

All these are new issues that can improve the quality of democracy and strengthen the civic culture. The new Bush administration  has a historical opportunity to give an added value of mutual interest and importance to the United States and the Caribbean islands, over the traditional bilateral agenda. We hope it can truly deliver, for that would allow the U.S. and Caribbean nations to be, at the beginning of the twenty-first century, great, trusted and respected partners in the achievement of our common dreams and turn our countries into a much better place to live.

Santo Domingo, febrero 2, 2001