Pubdate: 17 May 1999
Source: Washington Report on the Hemisphere (US)
Copyright: 1999, Council on Hemispheric Affairs
Contact:  1444 I Street, NW, Suite 211 Washington, DC 20005
Fax: (202) 216-9193
Author: Roy Assanah


Since the 1960s prior to political independence from Europe, most
Caribbean economies have relied upon primary products, such as
bananas, and a sprinkling of services, such as tourism, to provide the
hard currency needed to service foreign debts and secure imported
necessities.  To supplement the area's income, much of the developed
world, such as the U.S. with its CBI and Europe through the LOME
agreement, offered these dependent nations preferential access to
their markets and lucrative aid packages.  However, this scenario is
clearly at an end as the Caribbean micro-economies ostensibly are too
prosperous to qualify for foreign assistance, which has plummeted in
recent years due to domestic pressures in both the U.S. and Europe. 
After a blistering U.S. campaign, the WTO recently ruled that Europe's
preferential banana regime violates free trade provisions by providing
unjustifiable quotas to such islands as Dominica, St. Lucia and St.

These events have highlighted the need for the Caribbean to quickly
create a global marketplace survival plan, just at a time when U.S.
interest in the region seems to be faltering, as evidenced by Madeline
AIbright's recent absence at a follow-up meeting with Caribbean
foreign ministers on May 13th in St. Kitts.  Despite the official U.S.
explanation that she was occupied by the crisis in Kosovo, Caribbean
officials argue that she was not too preoccupied to find time to see
other foreign dignitaries during the time period.  They believe her
absence has far more to do with their threats to pull the plug on
their so-called "ship rider" anti-drug cooperation agreements with the
U.S., because of what they consider to be Washington's single-minded
advocacy of Chiquita Brand's banana interests before the WTO.

According to the meeting's host, St. Kitts Prime Minister Denzil
Douglas, AIbright's absence was a severe blow to the Partnership for
Prosperity and Security, an agreement signed by President Clinton and
Caribbean leaders in Barbados some two years ago. Douglas argues that
while the agreement has increased security, the region's economy
remains anemic.  Caribbean leaders want a firm assistance plan from
the U.S. and Europe in the wake of the WTO banana ruling.  As the St.
Kitts meeting was occurring, the WTO deadline on the EU-U.S. beef
trade dispute came to head, leaving Caribbean officials to conclude
that their banana defeat was a precursor of a more tangled
Transatlantic trade epoch in which they will be losers.

PROPOSED REFORM PLANS In St. Kitts, Douglas called for Caribbean
leaders to better coordinate their foreign policies in order to play a
more pivotal role in the selection of sympathetic heads of the WTO,
the OAS, and the Commonwealth, who would be more likely to act on
their behalf.

Dominica's Prime Minister, Edison James, perhaps has the most to lose
from the WTO banana ruling, since his nation's economy earns about 60%
of its GNP from the fruit.

James recently made a whirlwind tour of European capitals, signing
agreements with distributors and chain stores interested in purchasing
Caribbean bananas.  Some U.S.- Caribbean analysts have argued that,
despite the alleged Albright rebuff, the Caribbean should try similar
tactics in the U.S.

In addition to suffering a nasty banana scenario, Caribbean economies
are also bedeviled by the throes of globalization.  Barbados Finance
Minister Allan Eustius recently said that major players in the region
do not want a free market regime and a level playing field as much as
they want a managed environment.  At a recent preparatory meeting for
a UN conference scheduled for the end of September, the region blasted
the larger countries and multinational corporations as being the real
winners from globalization. At a 1994 conference in Barbados, the
international community agreed to a program to attend to the needs of
the vulnerable Small Island Developing States (SIDS), such as those in
the Caribbean.  Local island leaders called for outside help based on
their limited economic base, lack of economic diversity, and
susceptibility to natural disasters.

Another assistance plan came from the Caribbean Development Bank (CDB)
and Barbadian Prime Minister, Owen Arthur, who called on the CDB to
lead the Caribbean economic reconstruction. The Bank has come up with
a 5-year, $1 billion plan to springboard the economies and help deal
with poverty. However, the CDB noted that the bank's traditional
donors are under siege to be less altruistic, calling for greater
savings and reliance upon the region's population.  As this discussion
was occurring, both Jamaica and Guyana, two of CARICOM's larger
nations, were reeling from intense labor unrest and rising crime
rates, which could have lasting effects on their debt-laden economies.

Roy Assanah 
(The author is a veteran diplomatic correspondent covering
the Caribbean.)
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MAP posted-by: Derek Rea