Go Lean…Caribbean

Go Lean Commentary

The Caribbean has a serious problem with societal abandonment. Far too many of our citizens flee their Caribbean homelands for life in foreign countries. Most assuredly, the destination country is rarely, if ever, China.

They have 1.3 billion people inside their borders; we have 42 million in our entire region. China wouldn’t even notice us, our people and our impact. This is not the case in the United States, where 1 in 11 Black residents may be from the Caribbean.

Still our goal is not to make China notice. Our goal is to mitigate the reasons why our people may want/need to leave in the first place. We want our citizens to prosper where they are planted here at home, and not set their sights on migrating to China, or any other country. But still, we can get a lot of benefits from China, as in trade and … lessons learned from their nation-building. They are too big to ignore.

There are a lot of lessons, good and bad, for us to glean and apply here at home. This commentary is 1 of 6 from the movement behind the book Go Lean … Caribbean, in consideration of lessons from China. The other commentaries detailed in this series are as follows:

1. History of China Trade: Too Big to Ignore
2. Why China will soon be Hollywood’s largest market
3. Organ Transplantation: Facts and Fiction
4. Mobile Games Apps: The new Playground
5. South China Seas: Exclusive Economic Zones
6. WeChat: Model for Caribbean Social Media – www.MyCaribbean.gov

All of these commentaries relate to nation-building, stressing the community investments required to facilitate the short-term, mid-term and long-term needs of our communities.

There used to be a time when we thought of the “closed” country of China only as a country on the other side of the planet…

“I’ve got a whole in my heart that goes all the way to China…” – song by pop singer Cyndi Lauper from movie soundtrack for the 1988 film Vibes. – See Appendix VIDEO.

… but now, we must recognize China as a Super Power; one with a large domestic market and a huge international reach; see this Photo/Chart here.

How did this come about, apparently so quickly? In a word … Trade.

China has grown in the past few decades tremendously by “opening up” and adopting the tenants of this one economic principle, one that is also detailed and recommended for adoption for the Caribbean in the book Go Lean … Caribbean:

Voluntary Trade Creates Wealth: People specialize in the production of certain goods and services because they expect to gain from it. People trade what they produce with other people when they think they can gain something from the exchange. Some benefits of voluntary trade include higher standards of living and broader choices of goods and services.

This analysis of China’s trade development history is part of the technocratic activities needed in the Caribbean, to ensure our region becomes competitive. This effort is inclusive of the Go Lean book as it serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The branding “Trade” Federation “gives light” to this economic objective:

Optimize Trade in products and services.

Look at this news article here for a detail discussion on China’s recent history in world trade, their successes and some failures:

Title: How China’s trade concessions made it stronger

It’s still a mystery why.

In negotiations with the U.S. over WTO membership, China made nearly all the concessions. It agreed to cut tariffs, reduce subsidies, lessen the role of state-owned firms and eliminate barriers investment — in other words, to become more like the U.S. economy. All the U.S. did was end an annual renewal of China’s access to the U.S. market, which China’s allies in Congress won every summer, anyway. “Economically, this agreement is the equivalent of a one-way street,” President Bill Clinton said in 2000.

But freer trade with China had outcomes few predicted — especially a surge in imports to the U.S. and a huge U.S. trade deficit. Industries and workers around the U.S. were upended.

To understand what happened, look back to the 1990s. China’s opening to the world was progressing, but suspicion of Beijing ran high in Washington. The 1989 Tiananmen Square massacre made China’s human rights practices a big issue with lawmakers. Congress’s annual review of China’s trading status with the U.S.—what was then called “most favored nation”—became a way to pressure Beijing. While grand-sounding, most-favored status simply meant that China received the same tariffs as nearly every other U.S. trading partner.

From 1990 through 2001, Washington went through an annual theater. The president—whether Republican George H.W. Bush or Democrat Bill Clinton—renewed China’s favored status, and Congress had 90 days to disapprove the measure. Despite frequent threats issued by lawmakers, Congress never came close to overturning the president’s decision.

By the late 1990s, China wanted to join the WTO. To do so, it had to negotiate a deal with every WTO member. None was more important than the U.S., which in 1999, won concession after concession from China to remake its economy in the Western mold. What China wanted in return was an end to the annual most-favored status review. After lobbying by the Clinton administration, Congress agreed to lift the requirement.

“This is a great day for this country and I think it’s a good day for the world because we have opened the doors of trade” to China, said the Republican Speaker of the House Dennis Hastert at the bill signing ceremony at the White House in October 2000.

With lower Chinese tariffs, U.S. exports to China increased more than five-fold from $16 billion in 2000 to $92 billion in 2010. But U.S. imports from China soared far higher, from $100 billion in 2000 to $365 billion a decade later. The trade deficit ballooned.

Why?

Yale economist Peter Schott says that eliminating the most-favored status review gave a huge shot of confidence to Western and Chinese firms that the U.S. market would remain open to China. Investment in China soared from $47 billion in 2001 to $115 billion in 2010 as the country became an ever-larger export platform. Foreign firms also saw China’s vast population as a huge market to be served. “Policy uncertainty can inhibit investment,” Mr. Schott said.

A paper he wrote with Federal Reserve economist Justin Pierce cites a Mattel executive who explained that the toy company wouldn’t invest heavily in China if there was a chance the country could lose its favored trade status. While the risk was small, “the consequences would be catastrophic,” the executive said, because Mattel’s toy imports from China would have been hit with 70% tariffs.

But perhaps even more important than being considered a most-favored nation were the trade “concessions” that China made to get into the WTO. In the I-win, you-lose world of trade negotiating, a tariff reduction is considered a loss because it encourages imports and can endanger jobs. Cutting subsidies is also seen as a loss because it weakens the domestic firms being subsidized.

But the reality can be very different. China’s “concessions” made it a more attractive place to do business. Reducing tariffs made it much easier for Chinese and Western firms to set up factories in China, import parts, assemble them into final goods, and export them to the U.S. Reducing the role of lumbering, subsidized state-owned enterprises encouraged more competitive private firms to take their place in apparel, furniture and other industries. That made China a far more aggressive exporter.

“In hindsight, we missed the unintended consequences” of China’s trade concessions, says University of California at San Diego economist Gordon Hanson. “These were provisions we were pushing for. China wound up providing cheaper goods for the rest of the world. But we didn’t see the increase in U.S. exports to China” that the U.S. expected.
Source: Wall Street Journal – Columnist Bob Davis – August 13, 2016; retrieved August 25, 2016 from: http://www.msn.com/en-us/money/markets/how-chinas-trade-concessions-made-it-stronger/ar-BBvye3o

Considering lessons that we can learn from China, is it possible that the Caribbean, with a much smaller 42 million population base, can model some of China’s successes – and avoid their failures – to grow our economy further?

Yes, we can.

The Go Lean book explains how; it provides turn-by-turn directions on how to integrate the 30 member-states of the Caribbean region to forge an $800 Billion Single Market economy. In fact, this is inclusive of the prime directives of the Go Lean/CU roadmap:

• Optimization of the economic engines in order to grow the regional economy and create 2.2 million new jobs.
• Establishment of a security apparatus to protect the resultant economic engines.
• Improve Caribbean governance/administration/oversight to support these engines.

At the outset of the book, the roadmap presents the urgent need to enlarge our neighborhood and engage some economies-of-scale benefits to extend our market, economy and population. This was pronounced in this clause in the opening Declaration of Interdependence (Page 11):

viii.   Whereas the population size is too small to foster good negotiations for products and commodities from international vendors, the Federation must allow the unification of the region as one purchasing agent, thereby garnering better terms and discounts.

xxiv.  Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

The Go Lean roadmap signals change and empowerment for the Caribbean region. It introduces new measures, new opportunities and new strategies to grow our region. The goal is to reform and transform the economic-security-governing engines of the 30 member-states, collectively and individually so as to lower the “push-pull” reasons why our citizens emigrate. We simply want them to prosper where they are planted here at home.

We do not need 1.3 billion people to succeed; we just need best-practices.

The Go Lean book describes the best-practices as new community ethos, strategies, tactics, implementations and advocates. See a sample list here, as follows:

The Caribbean region needs to learn from the lessons from China; then we need to do the work, the heavy-lifting, to be able to better compete with them, and the rest of the world in trade and culture. This subject of China and our Caribbean trade empowerment has been directly addressed and further elaborated upon in these previous blog/commentaries:

China went from “zero to hero”, in terms of emergence as an economic Super Power.

This fast-paced growth brought growing pains with it – good, bad and ugly – these descriptors are also too big to ignore. Consider the experience in the VIDEO here which depicts the harsh reality of over-crowding in Beijing and the quest to de-populate: http://a.msn.com/00/en-us/BBvye3o?ocid=se

The Caribbean is arguably better, the best address on the planet in terms of terrain, weather, hospitality and culture. But, make no mistakes, our Caribbean region has many deficiencies, as in jobs and economic opportunities.

The end result of our deficiencies has been abandonment. The causes of “push and pull” is greatly related to economics. “Pull”, as in the perception that life is more prosperous abroad; “push” in that the remnant in the region experiences deprivations that causes further societal dysfunctions, blame-gaming and a “climate of hate”. The end-results of our deficiencies has been a loss to the brain drain, one estimate of 70%. Our societal abandonment rate is too big to ignore.

No More! It’s time for the Caribbean to go from “zero to hero”. Everyone is urged to lean-in to this roadmap, to make the Caribbean a better place to live, work and play. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

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Appendix VIDEO – Cyndi Lauper – Hole In My Heart (Vibes Version) – https://youtu.be/8QWXH89U6Jc

Published on Oct 11, 2013 – One of her best songs ever, a top ten hit in NZ, Australia and Japan…
Composer Richard Orange. Copyright Dick James Music Ltd./Universal Music.
No copyright infringement intended. All rights to (C) 1988 Sony BMG Music Entertainment.

• Category: Music
• License : Standard YouTube License