CHAPTER 1
Report of Symposium on EconomicTransformation and Job Creation:New Governance Challenges
The University of the West Indies in collaboration with theCommonwealth Secretariat convened a Symposium entitled "EconomicTransformation and Job Creation: New Governance Challenges" at theRegional Headquarters of the University of The West Indies from 30 Mayto 1 June 2012.
The Symposium was attended by representatives from the InternationalMonetary Fund (IMF), Inter-American Development Bank (IDB), pastand present political representatives from various CARICOM MemberStates, members of State Boards and Parastatal Organizations fromCARICOM Governments, the University of the West Indies and otherTertiary Education Institutions, and Trade Unions in the Caribbean.
The Representatives addressed the central issue from a number ofclearly defined yet interrelated perspectives. They first examined pastexperiences and what lessons could be learned from them. From therethey went on to look at what were the successful platforms that had beencreated in the past and how best these could be built upon. Also examinedwas the role which tertiary institutions had played and whether or not thisrole could be reshaped and redefined to meet existing and new challenges.In addition, they examined what were the current options for economictransformation and job creation.
It was against this background that the representatives determined toadvance some fundamental recommendations designed to form the basisof a policy Dialogue Paper for public dissemination and discussion ofall the issues relevant to the economic transformation of the Caribbeanregion and the attendant issue of job creation.
In their analysis of past experiences the representatives took noteof the fact that Governments in the region have in various ways beendealing with issues relative to job creation but only sporadically had theseGovernments been pre-occupied with resolving them.
A number of reasons were advanced for this. It was felt that the socialand political milieu historically was neither youth oriented nor predisposedto training them to take advantage of technological advances that wereimpacting on the region's economies. As low paying, labour intensivejobs were as a consequence replaced by high technology applications, thisserved to exacerbate an already difficult unemployment situation.
This advance in technology, often described as the Third IndustrialRevolution, required new thinking within the larger forum of a collectiveenterprise rather than in the more narrow confines of separate governmentinitiatives. In the absence of such new thinking within a larger frameworkcomprising, for example, other Governments in an associated network ofgovernance, national job creating endeavours such as import substitutionand incentives programmes have proven difficult to be applied.
Such difficulties, it was noted, were significantly increased in thefurther absence of social capital and social trust. The Representatives wereunanimous in their view that good governance was the key to effectiveeconomic transformation and consequently, to job creation. The qualityof leadership mattered, they asserted, and ought not to be influenced bywhat was seen as a pervasive "lax culture of implementing rules".
In addressing how best to build on the region's successes the Representativesdeliberately avoided attempting to catalogue such success. Instead, they tookthe view that the current age of information and technological advancesdemanded a new and different approach towards ensuring that any enterprise,private and government, was managed successfully.
Knowledge management was seen as the key to economic and socialdevelopment. For success to be sustainable, to be competitive and to createa solid platform for growth it had to be rooted in sound managementpractices that were informed and driven by centres of knowledge excellence.In this context human capital became more extensively utilized with aconsequential impact on job creation.
It was also in this context that the Representatives discussed therole which tertiary institutions and other centres for training as well asfor research and development should play in the process of economictransformation and job creation. It was felt that while Universities shouldcontinue their current role of expanding intellectual horizons, they alsoneeded to become more an integral part of society through a greaterinvolvement in the regional development process, through curriculumchanges and more seminars and symposia that directly address the practicalaspects of regional economic transformation.
The representatives noted that an essential pillar for success was theaspect of Research and Development. R&D for too long has been regardedas an expendable budgetary item and omitted in situations of financialcrisis. It was argued that it should now be considered a development issuevery much as education and health have found recognition and acceptanceas essential to national development.
As the representatives examined what were the available options foreconomic transformation and sustainable job creation they stressed theimportance of forging a stronger government private sector partnershipnot only with respect to such issues as financing, but also in the area ofskills and specialized training.
Concern was however expressed about the existence of a traditionalwall of distrust between the two entities which had to be broken down.Even as the representatives recognized the traditional separateness in theperspectives of the two entities, they were of the view that both ultimatelyserved the same ends. They reiterated the need to create a climate oftrust and an hospitable environment for capital and investment and forenhancing the productivity of people. They further stressed the imperativefor strengthening the anti-corruption machinery within agencies to ensuregreater transparency—including predictable judicial underpinnings—anda rules-based system that was applied fairly and predictably.
The representatives were of the view that their deliberations andparticularly the recommendations emanating therefrom could, withbenefit, be an input into what should become a regional discourse on thequestion of economic transformation and job creation. They accordinglyagreed to place these on record and requested the University of The WestIndies to seek to advance the discussions at a wider level.
To this end, they have prepared a summary document entitled:Economic Transformation and Job Creation: Policy Dialogue as an input intothese discussions.
CHAPTER 2
Resetting the CaribbeanDevelopment Agenda: Independenceand Epistemic Sovereignty
Kirk Meighoo
The theme of this Symposium—Economic Governance and JobCreation—needs to be placed against the background of our Independenceproject for a number of reasons. 2012 marks the 50th year of the endof the West Indian Federation—the entity through which most of theEnglish-speaking Caribbean was to attain independent nationhood—andthe beginning of the independence of smaller units, beginning withJamaica and Trinidad and Tobago in 1962.
Today, the region generally finds itself behind many othercountries which were previously economically poorer than us in the1960s—including Singapore, Malaysia, South Korea, Dubai, Qatar, andother countries of the Middle East. The independence experience of theCaribbean Community has not been uniform, of course—for example,Barbados has consistently performed significantly better than others forthe past few decades while, on the other hand, Guyana and Jamaica havefaced decades of deep structural problems. However, even CARICOM'slargest economy—petroleum-rich Trinidad and Tobago—faces serious,structural economic problems despite its long spurt of economic growth inthe 1990s and 2000s. To be sure, the global economic collapse of 2008 hashit CARICOM hard, and the process of recovery—where it is occurringat all—is slow and difficult.
The process of economic rebuilding requires political and intellectualfocus, and it is here, we argue, that the region—as a whole—is foundlacking. This has not always been so, and it is important to argue the casewhy we believe this to be so.
One of the main problems in achieving our recovery (and, indeed,the structural changes we arguably need) is the ceding of our epistemicsovereignty to others, that is, giving up our responsibility to autonomouslyinterpret the world from our own perspectives and priorities. Since theunravelling of the regional Black Power movement in the 1970s, theglobal recession of the 1980s, and the neo-liberal structural adjustmentreaction to the strategies of the previous decades, the region has apparentlylost its self-confidence to boldly define its problems for itself, except for afew scattered, heterodox voices.
It is important to note here that we are not arguing for any sort ofparochialism or xenophobic nationalism with regard to the outside world.Indeed, the Caribbean—by its very nature as the first appendages in theEuropean-dominated world-economy—has never been isolated from thewider world, and we do not ever think that it can (or should) be. Rather,this is an argument to take up the challenge once again to critically engagewith the wider world, from our own valid perspectives and vantage points,with our own development at the forefront.
Arthur Lewis and the Beginnings of InternationalDevelopment Theory
St. Lucian-born winner of the 1979 Nobel Prize for Economics, Sir ArthurLewis, has a special place in this story. Lewis was one of the pioneersof development economics and International Development Theory,honoured as such by the World Bank and others. He was part of thatgeneration of colonial West Indians who, before World War II, wentabroad to the UK to study and excelled there. Similar to many others,Lewis became involved in the Fabian socialist movement and had muchinterest in the many anti-colonial movements of the day, many of whoseleaders were also educated and resident for a time in the UK.
Lewis wrote sympathetically about the Caribbean-wide Labourupheavals from 1935 to 1938 in his Labour in the West Indies: The Birthof a Workers' Movement. In 1944, he wrote the important paper "AnEconomic Plan for Jamaica", and in 1950, "Industrialisation in the BritishWest Indies." In those papers Lewis undertook a systematic empiricalanalysis of West Indian economy and advocated a purposeful industrialmanufacturing strategy for the region, in opposition to the agriculturalbias of the colonial international division of labour (which was supposedlythe result of "free market" forces). In the process he turned British colonialeconomic policy on its head.
One of Lewis's allies during that period was Dr. Eric Williams, thefuture Prime Minister of Trinidad and Tobago, who was in those days, asenior member of the Anglo-American Caribbean Commission, and inthat capacity had championed and published Lewis's work.
At the centre of Lewis's analysis and strategy was employment andjob creation. It was the key problem that centred around everything else.Importantly, this work—grounded in an empirical analysis of West Indianeconomic issues—became the basis for the newly founded discipline ofdevelopment economics. Indeed, Lewis's work, "Economic Developmentwith Unlimited Supplies of Labour" (published in 1954), became one ofthe first classics in the field.
Following the "Lewis model", throughout the West Indies, IndustrialDevelopment Corporations were formed in the 1950s. In the 1950s and1960s, Lewis actually advised many Governments in the West Indies,and from 1960 to 1963 served as Vice-Chancellor of the University ofthe West Indies, during the period when the Federation of the WestIndies was in existence, and when Trinidad and Tobago and Jamaicalater gained their separate independence. It was a fitting component tothe impending Independence of the West Indies that the region wouldproduce its own economic model of development, which commandedrespect throughout the world. (Indeed, even today, though the modelhas been almost forgotten by West Indian policy-makers, it remains astaple in development economics, and even Bloomberg News reports onhow economists in China today use the Lewis Model to understand thetransformation of their economy and its changing dynamics.)
The Unravelling of the Lewis Orthodoxy
With the coming of Independence beginning in the 1960s, however, alsocame recession in the United States, both at the beginning of the decadeand the end. That arguably dealt a serious blow to the Lewis-based policythat had manifested itself as being dependent on foreign investment andexports.
At the same time, younger economists from the University of the WestIndies, eventually coming under the rubric of the New World Group, hadformed themselves as an opposition to the Lewis-inspired developmentorthodoxy, and formed branches throughout the Caribbean and in theCaribbean Diaspora. They were concerned about what they perceivedto be the failures of the Lewis model (criticising it as "industrialisationby invitation") and became associated with more radical transformationefforts, allying itself to radical trade unionists, Black Power ideology, variousforms of Marxism, in addition to a heterodox intellectual/professionalmovement. In development economics and international developmenttheory, these Caribbean theorists were important to the development ofthe "dependency" and "structuralist" schools of thought, which arguedfor a New International Economic Order and also for more active stateinvolvement in the economy. It had particularly strong influence in theUnited Nations system, through ECLAC and UNCTAD especially.
The upheavals of 1968-1972 throughout the region weretransformative, divisive and, many would argue, destructive. It was largelya movement of the young—becoming more educated, but experiencing thebrunt of unemployment—against what they perceived as an exploitative,neo-colonial system. At the radical extremes, it led to the "Co-operativeSocialism" of Burnham in Guyana from 1970, the Democratic Socialismof Michael Manley in Jamaica from 1974-80, and the Grenada Revolutionof 1979-1983. The Grenadian Revolution, in particular, created a serioussplit in CARICOM, and Heads of Governments refused to meet withideological foes, threatening the very existence of the organisation.
In Trinidad and Tobago, on the other hand, the labour-intensive lightmanufacturing strategy was abandoned in favour of capital-intensive heavyindustrial development, supplemented by large increases in governmentexpenditure in the local economy, made possible by the unprecedentedrise in oil revenues.
During this period up to the early 1980s, we wish to emphasise,the regional debates over development were largely based on essentiallyindigenously-developed models. The energy crisis of the 1970s combinedwith the deep economic recession of the 1980s, however, led to severe debtcrisesintheregion,withsomecountries—oncecalledthe"MoreDevelopedCountries" of CARICOM—arguably not fully recovering, even up totoday. It was during this period that the other developing countries of theworld—in Southeast Asia and the Middle East in particular—embarkedon their growth spurt and bypassed the Caribbean.
Neo-liberalism, IMF structural adjustment programmes, andother programmes from the international financial institutions anddevelopment agencies, began to take centre stage in the process ofCaribbean development. With this shift, the development discourse in theregion became dominated by the tropes of private sector-led development,divestment, liberalisation, privatisation, market-led reforms, free trade,deregulation, floating exchange rates, and expenditure reduction. Thiswas not a return to the Lewis model as some of the ideologues of the dayinterpreted it, but rather a return to the laissez-faire "free market" economicideology of the colonial period which Lewis explicitly opposed.
