CARICOM calls for innovative ideas to finance SIDS development

Go Lean Commentary

“The pot calling the kettle black” – Old adage

It seems so out of place for Irwin LaRocque, the CEO of the Caribbean Community (CariCom) to lecture other nation-states on how they should restructure their finances, considering the fact that the CariCom organization admits that their own finances are ‘in shambles’.

But still, the purpose of this commentary is to first applaud Mr. LaRocque for identifying better options (in the news article here), and then to direct his attention (and by extension, the entire Caribbean and the rest of the world) to a published ‘better option’ for SIDS financing: the book Go Lean … Caribbean.

Title: CARICOM Secretary-General calls for innovative alternatives to finance SIDS development

SIDS Photo 1APIA, Samoa — Even as the Small Island Developing States (SIDS) examined the issue of financing sustainable development for SIDS in Apia, Samoa, CARICOM secretary-general Irwin LaRocque has suggested the need for new and innovative alternatives.

Moderating a side event titled “Financing for Sustainable Development in SIDS”, during the four-day international conference on Small Island Developing States, LaRocque said there may be a role for innovative public and private financial instruments such as counter-cyclical loans, which temporarily halt existing debt service payments when shocks strike.

He highlighted financing instruments such as the Caribbean Catastrophe Risk Insurance Facility (CCRIF) that provide cash flow support immediately following an insured catastrophe, as well as financing opportunities presented by the recent rise in South-South cooperation.

He stated: “Emerging donors have become increasingly important sources of both aid and loan finance for many Small Island Developing States. This development — which looks set to continue — provides SIDS with important opportunities to secure new and additional sources of development finance, as well as opportunities to learn from other countries’ recent development experiences.”

“It is important to foster greater transparency in such flows, and to ensure that debt sustainability concerns are also kept in view,” the Secretary-General cautioned however.

Continuing on the issue of resource mobilization, LaRocque acknowledged that improving domestic resource mobilization capacities was also important. He informed that several SIDS have established special funds or programmes to channel more domestic resources to environmental and conservation programmes but, despite progress, challenges remain, and for many SIDS, domestic investment will need to be supplemented by international funding given the high up-front costs of many investments.

According to the Secretary-General, financing for development to reach set multilateral development goals required innovating instruments to mobilise domestic and international development funding that involve traditional and non-traditional donors, so as to increase private sector investment and public-private capital flows in support of development.

Noting that the overall financing needs for SIDS were not only large, but were also “very difficult” to quantify based on their level of vulnerability and exposure to external shocks, the CARICOM Secretary-General said that the Caribbean had been plagued with losses equivalent to over one percent of GDP to natural disasters since the early 1960s. He referenced Saint Lucia, St Vincent and the Grenadines, and Dominica in which losses were estimated at US$108 million for St Vincent and the Grenadines and US$99 million for Saint   Lucia in December 2013.

He added that while Official Development Assistance (ODA) and climate finance were important sources of funds for many Small Island Developing States, the proportion of overall aid allocated to SIDS was small, on the decline and heavily concentrated in just a few countries. .

“Suffice it to say, more financing will be needed to support not only countries’ long-term development, but also to address sudden major shocks such as the extreme weather events,” he said.

The Secretary-General stressed that the debt challenges facing many SIDS were compounded by the stance of the multilateral financial institutions regarding access to concessional resources by those states classified as middle income developing countries.

“The use of the narrow criteria of per capita gross national income in excess of US$1,035 (in 2013) to confer ‘middle income status’ on developing countries does not take into account the peculiar vulnerabilities, economic fragilities and lack of resilience of many SIDS including those in the Caribbean,” LaRocque also said.

The Caribbean Community had a high-level delegation at the conference which included Freundel Stuart, Prime Minister of Barbados; Dr Keith Mitchell, Prime Minister of Grenada; Dr Denzil Douglas, Prime Minister of St Kitts and Nevis, and ministers of government of CARICOM member states.
The Strategic Plan for Caribbean Community (2015-2019) can be found here:

Family Photo of the Third International Conference on Small Island Developing States

The foregoing news article strongly identified the need for public and private financial instruments which are innovative compared to the status quo. This point aligns with the book Go Lean … Caribbean that presents a 370-page roadmap for re-booting, re-organizing and restructuring the economic, homeland security and governmental institutions in the Caribbean region. Government revenue/finance issues are covered in great details in the roadmap; the following is just a sample of some of the innovative government funding/revenue products featured in the book:

Re-insurance sidecars
Marketable Warrants
Tax Liens

The ‘shambled’ state of CariCom has frequently been featured in previous Go Lean blog/commentaries. As sampled here: EU willing to fund study on cost of not having CARICOM Jack M. Mintz: All is not well in the sunny Caribbean The Future of CariCom CARICOM Chairman to deliver address on reparations Caribbean leaders convene for CARICOM summit in St Vincent CariCom Agency CARCIP Urges Greater Innovation

The Go Lean book delves into innovative ideas for funding member-states’ treasuries. The book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). While federal governments normally bring a new level of governmental overhead and thus a new thirst for public finances, this one is different. The CU pledges to “give, not take”. This pledge is embedded in the Declaration of Interdependence, pronouncing as follows, (Page 12):

xiv. Whereas government services cannot be delivered without the appropriate funding mechanisms, “new guards” must be incorporated to assess, accrue, calculate and collect revenues, fees and other income sources for the Federation and member-states. The Federation can spur government revenues directly through cross-border services and indirectly by fostering industries and economic activities not possible without this Union.

The Go Lean book posits that the “whole is worth more than the sum of its parts”, that from this roadmap Caribbean economies will grow individually and even more collectively as a Single Market. This roadmap advocates the optimization of the economic and security engines and projects that the region’s economy will grow from $378 Billion (2010) to $800 Billion in a 5 year time span. The natural result of this effort is that government revenues can and will grow.

As related in the roadmap, the 3 CU prime directives include the optimization of the economic engines, establishment of a security apparatus to protect the resultant economic engines, and also the improvement of Caribbean governance to support these new engines.

The Go Lean roadmap therefore accepts a mission to re-structure facets of Caribbean governance with these pronouncements at the outset of the book, in the Declaration of Interdependence, as follows (Page 12):

xiii. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

The book purports that many of the revenues systems (such as identified above) are too complex for many individual Small Island Development States (SIDS) alone, and so the CU would be better suited to provide the economies-of-scale necessary for efficient deployment. This is part-and-parcel of the technocracy of the CU.

The following details from Go Lean…Caribbean the community ethos, strategies, tactics, implementation and advocacies to deploy efficient and effective government revenue options:

Community   Ethos – Lean Operations Page 24
Community   Ethos – Cooperatives Page 25
Community   Ethos – Ways to Improve Sharing Page 35
Strategy –   Customers – Member-State Governments Page 51
Strategy –   Agents of Change – Technology Page 57
Tactical –   Fostering a Technocracy Page 64
Anecdote –   Turning Around the CARICOM construct Page 92
Anecdote –   “Lean” in Government Page 93
Implementation   – Ways to Pay for Change Page 101
Implementation   – Ways to Deliver Page 109
Implementation   – Ways to Foster International Aid Page 117
Advocacy –   Ways to Improve Governance Page 168
Advocacy –   Better Manage the Social Contract Page 170
Advocacy –   Revenue Sources … for Administration Page 172
Advocacy –   Ways to Foster Technology Page 197
Advocacy –   Ways to Foster e-Commerce Page 198

According to the foregoing news article, there is a preponderance of SIDS to look to the international community for aid. The Go Lean book describes this dependent attitude as “parasite” and instead advocates for change: a more “protégé” approach.

The Go Lean book calls on the Caribbean region to be collectively self-reliant, to act more proactively and responsively for our own emergencies and natural disaster events. This means better, more efficient governance.  A previous Go Lean commentary demonstrated how governments can be transformed through technology and efficient deliveries, by highlighting a review of the relevant book by the California Lieutenant Governor and former Mayor of San Francisco Gavin Newsom: Citizenville – How to Take the Town Square Digital and Reinvent Government.

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for these types of innovative changes described in the book Go Lean … Caribbean. The benefits are too alluring to ignore: dawn of new governing and economic engines… and dawn of new opportunities. With some success, this would simply mean: a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!


Share this post:
, ,

Leave a Reply

Your email address will not be published. Required fields are marked *