Another reaction, by energy policy-makers of the Caribbean region, to the very predictable crisis of increasing energy (oil and gas) prices, at the end of a one-day Special Meeting of the Council for Trade and Economic Development (COTED) held in Guyana on March 24, 2011. A media release acknowledged that the energy situation remained dire, for the net oil importing Members of the Community, given the recent surge in oil prices intensified by the ongoing political turmoil in the Northern African and Middle Eastern Region. “Having identified gaps and areas for strengthening, including those related to renewable energy and climate change issues, the Ministers mandated that the finalization of the CARICOM Energy Policy be expedited.A draft of the Policy was submitted to CARICOM Heads of Government in 2007”, the release said. Remembering that oil price peaked at US$145 per barrel in July 2008, raising questions, how long does it take to draft and implement policies and why is there not a regional strategic interlocking plan to address regional growth, inclusive of safeguards triggered by negative movements to protect essential (energy, water, health, etc.) infrastructure and not engage in crisis management. Individual dreams, though mostly focused on recognition and rewards, with each successful realization expanding into family ambitions and then further into national development, are the bricks that builds happy societies. Hence, policy-makers must focus on basic needs; nutrition and healthcare, education and security, infrastructure and utilities, transportation and communication, sport and culture, that allows and encourages each and every individual to dream and structuring those dreams, hopes and aspirations of the majority, into viable sustainable industries with well paying jobs, which also spawns vibrant communities. CARICOM (the Caribbean Community), charged with the responsibility to bring about social and economic unity among its member countries, has promised this togetherness, since 1973, to strengthen its negotiating power internationally (consolidating its foreign affairs cost) and hasten development (improving lifestyles) within, among and for the people of the region. While success raises numerous (security and economic overheating) concerns throughout the region, the tangible benefits far outweigh the risks, once the political will, behind such unity is strengthened with a clear common mission driven by a defined (CARICOM paradise found) opportunity. Guyana with its vast wet lands and forestry is ideal for large scale food production (crop and animal farming) but has focused more on its mining industries to generate faster foreign exchange earnings, than to expand a sound agri-business sector that could feed and reduce food import bills across the region. With the high cost of food worldwide, such a massive agri-business sector with mechanized farming, supported by reliable cargo transportation, can now supply fresh and frozen foods, at internationally competitive prices, to processing operations, chefs’ kitchens and retail markets throughout CARICOM, slowly changing consumption patterns (yam replacing potato) to boost regional produce. Trinidad & Tobago, whose economy focused mainly on oil exploration to petroleum refining, for many years burned off its natural gas component into the atmosphere as waste but now uses it to fire its electricity generation and other processes needing temperature changes, giving birth to a strong downstream manufacturing sector with numerous avenues for expansion. It therefore logically falls to this CARICOM member to actively negotiate internationally on all energy related issues, while providing the best supply terms and conditions, to power the electricity and transportation needs of its fellow members. Primary manufacturing of packaging materials and other inputs that require large energy usage to be competitive should also be at this location. Jamaica is presently the most diversified country in the grouping with strong nation brand recognition for its sport and culture, its light manufacturing and tourism products, while its private sector investments and international financial services stretches across the region. Ideally positioning Jamaica to lead the promotional strategies of the region, as it has done with its sport star Bolt, Reggae music, Jerk seasoning and the Sandals group (already expanded in many of the smaller territories), to internationally establish and protect (rebranding Air Jamaica to CARICOM Airways) the CARICOM brand. The smaller island countries, having lost their long standing preferential access for bananas into the European union, all depend mainly on tourism revenues and transportation links, the ecology and sport and culture events are their chief selling points, while the movement of people and cargo between these islands is their leading concern. Noting that the very lack of development and a much slower lifestyle is a positive draw to tourist accustomed to big city life and that, conferences although focused on a production agenda, tends to incorporate the opportunity for participants to relax or enjoy other alternative events. Food and beverage is the acknowledged primary economic driver in the tourism sector, hence the greater use of local chef’s creativity or market presentation, cheaper regional ingredients and energy cost will naturally lead to more retained earnings. Bringing these strengths together toward, cheaper food sources reducing imports, lower energy and manufacturing cost, brand management and of course, an integrated tourism product based on sport and culture, should not require a natural disaster, left to the democratically elected Governments (politicians whose job is to win the next election) or the public service (permanent employees who mostly guard their retirement benefits). The mandate of CARICOM compares to and should be seen, by all stakeholders, as a limited opportunity to benefit from structured mergers, where the case is transparently made showing how existing synergies can improve revenue streams and increase economies-of-scale to reduce cost, brokered by an incentive driven, expert and experienced negotiator and implemented by teams of heads of the existing agencies, over the initial transition period. The regional strategic plan must be motivated by economic statistics such as, Gross Domestic Product (GDP) per capita, comparing at every set stage of implementation, individual to merged GDP, with results tracked by (CARICOM Central Bank) the combined monetary policy agencies for the region, setting interest rates and using all available regulatory tools to manage the region’s single economy, noting that there is already an unofficial single currency operating within the region. The strategic plan will manage the movement of workers via taxation policies, such as local and regional tax rates, with a zero regional tax rate for workers working in their country of birth, and with the right corporation tax incentives by industry and sector guiding investment to preferred locations in the region, noting that strengthening filings and collections is the mission of the merged taxation agency (CARICOM Revenue Service). Visitors to the region should be granted access at any (CARICOM Immigration Service) port of entry and this validation is accepted at all other points of entry, noting that the opposite also applies. Many other public service agencies and institutions will merge to implement equivalent policies across the entire region. The model calls for a facilitating environment conducive to investment with a clearly articulated strategic plan detailing rules and regulations governing each sector and industry, geared toward sustainable eco socio economic development and an attractive annual return on investment. A CARICOM calendar of complementary events, targeting visitors with various interests, must be strategically planned and skillfully disseminated via the internet, foreign and trade missions to promote the entire region in a non-competitive fashion, but mostly to schedule production with greater accuracies for example, demands for regional foods driven by regional chefs (catering for scheduled events attracting specific numbers of visitors) will increase local farming and production, and stimulate the collective ecological social economy. This is a call for action, for regional leaders to appoint a negotiator or broker experienced in large scale international M&A activity, with access to existing CARICOM resources and individual countries’ public services, to implement and establish key regional agency mergers and shift the decision making process, to bring all parties together with deadlines that are not influenced by individual countries’ elections and milestones with enforceable penalties against member countries, which are also linked to the broker’s compensation. The region recently implemented similar processes by passing legislation through their respective parliaments to host “Cricket World Cup”, proving that with the right incentives it can be done. The time has come to unite and move from bureaucracy to business. Innovative opportunities to expand revenue streams through sport and culture, moving beyond icons generating appearance fees and promoting regional products internationally, are based on the use of nurtured talents of the citizenry and the ecology as background settings in full length movies and music videos, with standard industry practices governing licenses being employed across the region. A powerful suggestion for a CARICOM regional library to patent, owe and control, all intellectual property and imagery produced within this region, can structure and develop this industry and all its necessary support services, with a variety of contracted talents and a large collection of stage settings, creating numerous jobs and generating additional revenue. Such an agency can easily promote various events to full the tourism events calendar. Investment into this region has been and is being held back due to a simple lack of understanding of how investment decisions are made and prioritizing what is important. A professional prospectus, targeting institutional investors managing funds with a long-term outlook, based on competitive projected returns on investment, positive risk to reward analysis and a sound performance record, derived from a detail business plan that meets debt financing criteria, which is ultimately structured on a transparent and fully regulated economic model, connecting all relevant issues to a generally adopted CARICOM strategic plan. Hence, attracting investment, without Governmental support, for example, to expand the tourism room stock on an island that has poor transportation links, unreliable energy or water supply, high levels of illiteracy, endemic corruption and violent crime, is a non starter. An active CARICOM stock exchange is central in conveying the necessary confidence to investors, which creates a secure climate where trading is tightly regulated but effortless. It must also be emphasized that direct investment in agri-business, which ripples into the health (Food & Drugs) sector and affects the productivity of the workforce, is a cornerstone of the regional strategic plan, given that food drives tourism revenue, the main foreign exchange generator, which along with other foreign currency directly earned from export products, must be efficiently collected and made available to purchase the necessary new, eco-friendly and more efficient technologies, equipment and other inputs not produced in the region and to continue to attract more revenue generating visitors. The leaders of the region all knew, before gaining independence from colonial authorities that size matters, in establishing a diverse economy, maintaining a balanced ecology and addressing the normal ills (7 deadly sins) of society. CARICOM needs to deliver, NOW!
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
