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Talking with the US president and investors about globalisation

Jamaica Gleaner

Talking with the US president and investors about globalisation

By Robert Buddan

3 June 2007

In two weeks (June 19-21), CARICOM Prime Ministers will meet with President George W. Bush, in Washington. CARICOM officials will also meet with the Caribbean diaspora at the Conference of the Caribbean: A 20:20 Vision.

These meetings aim to establish a new trade partnership, probably a CARICOM-US Free Trade Agreement, after the failure by the hemisphere to agree on a Free Trade Area of the Americas (FTAA), and because of the imminent end of the Caribbean Basin Initiative, for which a successor o agreement is being sought. They will consider broader diaspora issues as well.

Ministries of foreign affairs and trade and the Caucus of CARICOM Ambassadors have been holding consultations with the region’s private sector, civil society, and the diaspora to formulate an approach to those discussions and the ensuing negotiations to determine the kind of trade agreement we should have with the United States.

Questions arising include, how much liberalisation can we afford and what sectors are not negotiable; how to make up for revenue lost to customs as a result of free trade; what areas of the economy are best to attract foreign investments and in what partnerships; how to protect biodiversity, workers’ and women’s rights in these agreements; how the small and micro business sector can benefit; and how jobs can be created.

CARICOM must also consider the kind of world order that is emerging. Trade is negotiated but world orders are not. Forces not at the bargaining table (corporate strategies, technological innovations, world prices for raw materials, availability of global resources, national and sectoral interests and their lobbies), condition the longer-term patterns of trade and investments that shape the world economic order. It is these forces that we collectively refer to as ’globalisation’. We must therefore have a sense of where globalisation is going, to know how we can best fit in and benefit most.

Bad Globalisation

Fidel Castro believes that the world energy crisis is now shaping the world economic order. The search for biofuels is at the heart of this new world economy, led by the United States, and recently revealed in Bush’s policy fo energy sources to reduce America’s dependency on oil.

Fidel argues that Europe and the United States are far short of the agricultural lands they need to provide agrifuels. Consequently, "the supply of agrifuels will have to come from the South, from capitalism’s poor and neo-colonial periphery". Neither the United States nor the European Union has available land to support an increase in food production and an expansion of the production of agrifuels at the same time.

A number of consequences arise that are consistent with the fears about neoliberal corporate globalisation. Deforestation will occur to make way for more crop production for agrifuels. As forests are removed, desertification increases. Global warming, already a real threat, gathers greater momentum. Water scarcity increases. All of these are a consequence of the replacement of agricultural food-producing economies with agrifuel economies in the South. Hunger spreads among billions of people.

Multinationals spend billions of dollars to buy land and create biofuel agriculture in the South. Just as they created the old sugar plantation economies based on slavery to their benefit, they will create a new agrifuel economy in the periphery. They will control more land and more agriculture in the South. At the same time, they will protect their own agriculture for food and agrifuel industries at home through trade protection and subsidies, as they are doing now. As more crops are used to create fuel and less to grow food, food prices will increase, as is already evident, compounding the problem of hunger among the world’s growing population.

A prediction of 2006 held that automobiles would absorb the largest part of the increase in grain production, as grains are converted into ethanol to create flexi-fuel motorcars.

Good Globalisation

Caribbean governments and societies are better prepared to negotiate and position the region for globalisation than they were between the 1950s and 1980s when they sought to attract trade and investments.

There is more consciousness of trade and investments that are environmentally and socially responsible, with more active civil society bodies pressuring the world system towards sustainable development. There are laws and agencies that are better able to protect national rights. Societies are no longer passive victims of foreign investments that want profits at all cost, thus the failure of the FTAA to catch on.

But equally important, and as a consequnce, is the fact that more foreign investors are showing a sense of corporate responsibility.

Take these Jamaican examples.

Charles Broomfield is a developer with Negril Peninsula Resorts Limited based in London. They plan to invest US$500 million in what would be the largest mixed-use eco-tourism project in Jamaica. They have presented an environmental impact assessment study, something not required 60 years ago when our bauxite industry was being developed. That is an important difference. But Mr. Broomfield said that one of the reasons Jamaica was chosen was because the country offered the richest cultural experience, and he has a passionate love for the island.

In November 2006, the eight Spanish companies in Jamaica announced that they would establish a Jamaica-Spanish Foundation that would contribute to nation building. They would place priority on community development, the environment and sustainable tourism. Hotel construction, as we know, is subject to the regulations of the National Environmental Protection Agency (NEPA). The Spanish investors say they want to be considered a part of the Jamaican society. They intend to practice corporate social responsibility, and promote the development of the Jamaican economy.

A few weeks ago, Christopher Anand, the managing director of Tavistock, which is investing US$2 billion to US$4 billion to build Harmony Cove, reminded us that environmental experts are involved in that project. But he also said that he was excited by the investment because Jamaica was a great country, the people were optimistic, there would be business spin-offs for a variety of companies, and government’s own investments gave cause for confidence to investors to come to Jamaica. Anand spoke of the Jamaican people, their vibrancy, optimism and welcoming attitude and the profound effect they and the culture had on visitors.

What these examples indicate is that, unlike the investors of the past, newer ones are more likely to identify with the people and culture, have a sense of social responsibility, understand the importance of sustainable and community development, are working with environmental authorities, and realise that Jamaica’s goodwill and welfare are important to their success.

In fact, these factors make the Caribbean diaspora a natural source for investment. They already identify with the region and its hopes for development and cannot be regarded as ’foreign’ investors. This should be one of the main messages of the Conference of the Caribbean. The diaspora can make globalisation good for the Caribbean.

This is the kind of globalisation that we must encourage with American and other partners since not all of them are converts. The traditional mentality of the investor must change. He must see that countries are not just markets. They are about people and people will make their investments profitable. Our trade negotiators and publicists must use this message to make globalisation good for the Caribbean because globalisation is upon us, anyway.

Robert Buddan lectures in the Department of Government, Mona,University of the West Indies. Email: