The chief executive officer and technical director of the CARICOM Private Sector Organization (CPSO) Secretariat, Dr. Patrick Antoine says discussions with regional leaders centered on the issue of affordability, as the Caribbean moves towards easing the high cost of living for its citizens.
Antoine, speaking to the Caribbean Media Corporation (CMC) following a breakfast meeting between private sector, trade union representatives and Caribbean Community (CARICOM) leaders, said that the event dealt with affordability ‘and how we actually meet the challenge of affordability in a number of ways.
‘The first way we looked at is how we do that by actually sourcing more efficiently, what we call import diversification, and this comes on the back of recognising that although we’ve done a lot of work in exporting and export diversification to other markets and different products, we’ve not put the same economic research and other energies into looking at how we look at sources of diversification on the import side for goods from various countries, from various sources. ‘
Antoine said that the second component was how do regional countries ensure that they do no further harm in terms of importing cost influences that would make it more difficult for the region to meet these challenges going forward.
He said in this regard, discussions centered on the International Maritime Organisation’s Net Zero Framework, which is proposed to cut greenhouse gas emissions from the maritime sector in deliberate ways by 2030 and then again by 2040, ultimately to reducing it to near zero by 2050.
‘What we’ve indicated to heads is that the implications of this for the private sector, particularly for the countries that are poorly served or serviced by the feeder maritime services, is really not benign.
‘And so we explained that we needed to look at what the price, cost and other implications were and other implications mean, the sustainability of these services into these countries that are already thinly serviced, some of them by one and two feeder lines.’
Antoine said that the discussions around that issue led the participants to look at what else can be done ‘and we looked also at the issue of intraregional sourcing in the discussion session’.
He said that this is something that builds on the commitments given by the regional leaders three years ago on the 25 per cent by 2025 initiative.
‘And then last year, we reviewed that and took it to 25 per cent by 2030, or some people call it 25 percent by 2025 plus five. And what we said is that in as much as we’re looking for these alternatives to reduce the cost of imports, we must ensure that the mandates that we have already agreed to, where there is action and activity taking place in relation to agriculture, and more recently in the industrial policy and strategy by CARICOM, that we do no further harm to those initiatives….’
He said that the idea is to ‘ring fence them even as we look at lower cost and more competitive and what we call more efficient sourcing options into CARICOM’ with the emphasis being not just about cost, nor just about the cost of logistics.
‘We recognised that the transit cost, what we call trade cost reports, were also something that we needed to focus on, because in many instances, these were higher in CARICOM than for the rest of the world.
‘We identified Jamaica as perhaps being a potential exception. But in all the countries, the port cost added tremendously to what was on the plate in the sectors and impacting the economies negatively.
‘So in the end, we came up with a sequencing of what groupings and what countries we figured were, from the analysis that is, the most ready for the region to engage in relation to the imports of agri-food products, and also manufactured products including chemicals and other such imports.’
Antoine said that while he would not get into the details ‘because a lot of the discussions we had was quietly among head,’ he nonetheless believes that the research ‘does show that the benefits to CARICOM from alternative sourcing without jeopardising our working and trade and commercial relationship with other important partners, such as the United States, was nearly US$600 million a year.
‘And I think the important thing is that we made it clear over and over that CARICOM would always have a very strong and deep trade relationship with the United States, given where we were located, and given the fact that there are many things that we are consuming and importing, that we can’t get more costs competitively from anywhere else, but that they are sources of growth, both for our economies, and interestingly for the economies across the hemisphere, Dominican Republic, Mexico, Brazil….’
‘So we’re looking at this holistically. We’re not looking at this as a beggar-thy-neighbour policy. We’re looking at this in terms of how we are able to have this tide lift all boats in a way that leaves none behind. And I think that was the message coming out of the session, and we were really happy that the heads turned out in their numbers, and the private sector as well.’
Antoine said what’s different is that there are now countries and products, ‘so we now know that we can source more cost effectively from the economic models, not because we believe it, to an extent of 10 or 15 or 20 or 26 per cent.
‘A lot of countries can reduce their import bill, quantitatively speaking, by an order of magnitude north of 20 per cent for the lines that we can get from elsewhere. So it’s not a message that we’ve delivered before in this way.
‘But if you ask me about the time frames, I think already some private sector firms are beginning to identify and benefit from the opportunity. So that’s happening. ‘
He said that there are countries that the region is already benefitting from such as Turkey with lower imports.
‘ What we want to do is to ring fence more sensitive and economically important sectors in production and trade in the CSME from a lot of this. But we still want to explore and harvest some of the opportunities from some of these countries.
‘The Dominican Republic offers some interesting options. Brazil offers other interesting options. Guatemala, some interesting options. Mexico, interesting options. Even Canada offers a number of interesting options.’
He said what a recent study has shown ‘is that it talks about the product, the country, the extent of the savings, and it does two things.
‘It says, look, this is the potential, but this is the expected, and the expected is what you’re asking about, because the expected says that we can harvest it in the short run. And in the short run, we’re looking at sort of within the next 12 to 24 months.
‘The medium term, where we’re saying we need to build out some more capacity and infrastructure in CARICOM, we’re looking at between two to five years. And it’s not a long time, because when we discussed the 25 by 2025, it was, I did say, three, about five years ago. And that time flies quickly.’
But Antoine said that the region has no option now ‘but to dig deep and put some of this infrastructure in place.
‘…we already have some good, solid infrastructure to build on. There’s the arrangements out of Jamaica, where along with Trinidad and Tobago, they’re the most connected ports internationally among the CARICOM states. (
‘ There’s also the port in the Bahamas, Freeport, that is well connected and the idea is how do we leverage all of these assets, not just in a parsimonious, stand-alone manner, but taking all things into consideration to help reorient where we source from, what product, where are the logistic type arrangements best located to, first of all, deconsolidate and to use the important feeder services in servicing our CARICOM markets.
‘This is a new day with new information,’ Antoine told CMC.