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H.E. Bharrat Jagdeo, President of Guyana

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H.E. Bharrat Jagdeo, President of Guyana SYNOPSIS OF FEATURE ADDRESS MADE BY HIS EXCELLENCY BHARRAT JAGDEO, PRESIDENT OF THE REPUBLIC OF GUYANA AT THE OPENING CEREMONY OF THE THIRD REGIONAL MEETING OF THE ACP-EU JOINT PARLIAMENTARY ASSEMBLY (CARIBBEAN), ON FEBRUARY 25, 2009, AT THE GUYANA INTERNATIONAL CONFERENCE CENTRE. INTRODUCTORY REMARKS: His Excellency President Bharrat Jagdeo welcomed the delegates to Guyana and underscored the delight of his Government and people to be hosting such an important meeting. President Jagdeo: Recognised the fact that the Meeting provided a rare opportunity for meaningful interaction among Parliamentarians from a diverse group of countries. Thanked the Parliamentarians for their support over the years in the region’s quest for a better relationship with the European Union. Noted that the productive interaction that takes place at the level of the Joint Parliamentary Assembly is exemplary in terms of achieving the kind of cooperation that is desired between the ACP and the EU. 2 Said that Guyana and the other ACP States are particularly mindful of the remarkable advocacy on their behalf by Co-President of the ACP- EU Joint Parliamentary Assembly, Mrs Glenys Kinnock, even at times when other European bodies may not be sympathetic to the ACP cause. ISSUES OF CONCERN TO THE REGION: In his address, President Jagdeo raised issues pertaining to the Global Financial meltdown, climate change, human trafficking in persons, money laundering, and narcotics trafficking, among other problems affecting Caribbean countries. The President mentioned some challenges that had a disproportionate impact on small economies, such as Guyana, and other parts of the Caribbean highlighting crime, the energy crisis, food prices, reciprocity and trade, the cost of borrowing and deferred investments. In the current international financial meltdown, the cost of borrowing is so high that it is already adversely impacting the Caribbean region. He also stated that Caribbean countries are very vulnerable to natural disasters, and a disaster like a hurricane can destroy an entire economy; these natural 3 disasters generally induce long-term disruptions because of the region’s limited financial and technical coping mechanisms. The many problems facing the region are magnified because of the size of the region and the concomitant limited financial and technical resources. Issues such as crime, the energy crisis, food prices, reciprocity in trade, cost of borrowing, and deferred investment all have a disproportionate impact on small economies. For example, consider the case where a developed country like the USA spends about five percent of its GDP on the importation of fuel while developing countries like Guyana spend between 25-40 percent of their GDP on importing fuel for energy consumption. Apart from being vulnerable to natural disasters, these economies are also affected by structural problems, narrow economic bases, the burden of debt, large fiscal deficits and being dependent on a single sector for an income. In addition, these economies are very open and are therefore exposed to the volatility of the market. The region does not have the capability to diversify its economies and even if we did, we are challenged by others from outside the region that can do it much better, cheaper and more efficiently. The region also lacks the institutional capacity to diversify. 4 The creation of wealth and new institutions takes time and these factors too affect the success rate of diversification. Real development cooperation will only be evident when there is greater understanding on the part of the developed countries of the challenges and peculiarities facing the ACP, and Caribbean countries in particular. That greater understanding must include an appreciation of the fact that developing countries must be able to address problems based on peculiarity of these small states, rather than act merely in accordance with how developed countries address similar problems. THE ECONOMIC CRISIS: Many of the solutions that are being proffered today are not original but have been opined before. The neo-liberal model is not working for developing countries, even for those that followed faithfully the prescriptions of the International Financial Institutions, as has been the experience of some Latin American countries. What is evident and pervasive in response to the economic crisis is a doctrinaire approach on the part of the developed world. These prescriptions have not worked, and so the need for a new financial architecture becomes compelling. Hence, the solutions lie in market and regulations, and while we cannot stifle the power of the 5 market, its inherent instability calls for appropriate regulations. This new model of MFI’s must include regional representation and a change in mandate. The new architecture must also bring about a change of the ownership structure while political decision must be removed from these institutions. The instruments of these institutions must also be re-examined. The new architecture must cater for the needs of the small countries as well, including easy and timely access to funds in times of disaster. The institutions must have a better reward system for staff. If the staff are rewarded and compensated for successes in the various countries, such a system would allow for a more sympathetic and country specific solutions to the problems of developing countries. ECONOMIC PARTNERSHIP AGREEMENTS: Guyana’s arguments are well known as to why the EPAs are not the best agreements. Some of the developed world’s strongest advocates of reciprocity in the EPA and of Free trade have moved to protectionism at the first sign of trouble, as with their current experience with the international financial 6 meltdown. And even if their legislature removes protectionism, they will practice it at the sectoral level. It begs the question therefore that if these developed countries breach open trade with their social safety nets and large per capita GDP, how then can the small developing countries countenance reciprocity in the EPA? Perhaps a call for a moratorium on the EPAs, until the world financial meltdown is resolved, is in order. There has been an erosion of the trust that was rooted and characteristic in the initial cooperation agreements between the ACP and the EU. Even in the Cotonou Agreement where it speaks about good faith negotiations, consultations and WTO compatibility, these issues were somewhat ignored in relation to the new EPAs. Hence, the need for us to study the issues before we seek to change them is instructive. The negotiations for the EPAs were affected by the fact that these good faith and consultation clauses in the Cotonou Agreement were ignored to a large measure and the ACP was hardly construed as an equal partner, as was evidenced by the threats for us to sign the new agreements by certain dates or face sanctions. The fact of the matter is that real partnerships do not begin with threats. 7 In the future, we have to ensure that we are a little less trusting in the ACP as we pursue agreements. The Joint Assembly is a good point for the two sides to start rebuilding the broken trust. Guyana’s opposition to certain aspects of the EPA is principled and only seeks to safeguard its and the region’s interest, in accordance with the action of other nations who seek to protect their trade and other interests. Mrs. Kinnock and many other ACP-EU parliamentarians must be commended for their support in ensuring that inclusion of clauses on the comprehensive review of the EPA shall be undertaken not later than five (5) years after the date of signature and at subsequent five yearly intervals, in order to determine the impact of the Agreement and the implementation of the EPA will pay due regard to the integration processes in CARIFORUM, including the aims an objectives of the CARICOM Single Market and Economy as outlined in the Revised Treaty of Chaguaramas. Implementation of the EPA is still a challenge in Guyana’s case. There is a whole range of supply side problems to address, for which there is no money. The institutional capacity is not available to add to the competiveness of our products. The banking system is shallow, the infrastructure is limited and these factors add to the cost of doing business. We therefore cannot produce more and take advantage of 8 the markets. These are all supply side issues that mitigate against us being able to take advantage of larger markets. We can also argue that the investments we need in our economy now are not coming because there is no money; and so, investment has dried up in our region. CLIMATE CHANGE: Climate change is a bigger problem than that the world financial crisis which threatens livelihoods. Climate change threatens life itself over time. Many countries are unwilling to make the deep cuts of about 25-40 percent on 1990 level by 2020, that would take us on to the path to limit the increase in global temperature to 2 degrees. The economics of climate change favours action now and the statistics, including those in the Stern Report, vindicates this fact. To address the problems of climate change, we need to spend the equivalent of one percent of global GDP per annum. If not, inaction will see us losing up to seven percent of global GDP in the outer years. The cost benefit analysis has been done and is in favour of spending the money to address climate change now. 9 ACP countries do not participate enough in the debate on climate change. Today, climate change is not merely an environmental issue, but an economic and developmental one too. Developing countries simply would not be able to spend large sums of money for adaptation and mitigation in the future from their limited budgets. While there is some debate in Europe on climate change, the issue must be taken more seriously at the levels of ACP and Caricom.
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