INTRODUCTION

At the start of this new year, the Caribbean Basin Region is experiencing the most exciting of times. The burning question of -What is the Caribbean Basin Region’s place in the world and how are we going to get there? -, was emphatically answered by the impressive St. Ann’s Declaration, and embodied in the demonstrable and credible personal commitment of three regional Prime Ministers.

 The event was the Press Conference at the close of the Eighteenth Special Meeting of the Conference of Heads of Government of CARICOM on the CARICOM Single Market and Economy (CSME), which was convened in Port of Spain, Trinidad and Tobago from December 3-4, 2018. 

Our leaders declared that the time for action is now. And, our people have responded. The CARICOM Single Market and Economy (CSME) and the CARICOM Skilled Nationals Programme for the free movement of goods, skills, labour and services across the region, for the growth and development of regional economies, is on the move.

As the potential poster child for the aims and objectives of the CSME, the Trinidad and Tobago based Republic Financial Holdings Limited (RFHL), announced its goal of expanding its operations into Guyana, St. Maarten and the Eastern Caribbean territories, including Anguilla, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, by acquiring the assets of Scotiabank.

 The long-standing calls for an efficient and affordable regional transportation system should become a reality, after the February 2019 Thirtieth Inter-Sessional Meeting on Air and Maritime Transportation.

 Picture the ease with which the expertise and experience of the expanded RFHL staff along with their spouses and dependents, through the Protocol on Contingent Rights, can move around jurisdictions in the group, facilitating intra community investment and the creation of jobs through the flow of surplus funds in the region, said to be approximately US$ 47 Billion, from jurisdictions where they are held to countries where they are needed.

 Caribbean Airlines has launched its low fare Limbo and island hopper Caribbean Explorer services from February 2019, to five Caribbean destinations which has the potential for Grenada to surpass its success in achieving the historic milestone of 528,077 arrivals in 2018, and to increase arrivals in other Caribbean nations.

 Guyana and Ghana have signed an air services agreement, initiating the process to facilitate directs flights between both countries. Seemingly so distant in the past but now so easily within reach and on the horizon, is Africa, a market place of approximately one billion people for Caribbean products and services with Ghana, where RFHL have already signposted the way, as the hub for a vast vista of new tourist and cultural destinations for both African and Caribbean citizens, enjoying packages such as the Sandals Stay at one, Play at all  concept, which  whilst limited to one island at this stage perhaps in the future could be extended to all countries in the region.

 From July 2019, passengers and businesses from Suriname and the rest of the Caribbean through COPA’s Panama City hub and Turkish Airlines’ Istanbul mega hub, will have access to over 100 destinations in North, South and Central America, the Caribbean, Europe and Asia, at competitive prices.

 Our leaders articulated with strong conviction, that Caribbean integration is needed now more than ever before, given the dark clouds that are gathering, and accordingly have set out a very ambitious three-year timetable towards full, free movement of CARICOM nationals within one economic space by 2021.

 However, if we are to reap the benefits of the considerable and valuable promises from our leaders that would ensure the region’s long-term peace, economic prosperity and security, then there is a need to communicate openly and with regularity with our citizens on the aims, operations and achievements of the CSME. Indeed, the foundation for this necessity was laid in the Communiqué from the July 2018 Heads meeting in Jamaica, which urged Members to establish consultative mechanisms at the national level.

 Undoubtedly, the stakes are very high for the combined population of 18, 335,544 citizens who inhabit the 463,300 square kilometres of the Caribbean Community which, with its untapped resources and hidden treasures, present a very attractive space with enormous rewards for regional and international investors, and unforgettable adventures for our citizens and visitors.

 Understandbly, there are those who doubt our collective ability to achieve these goals, particularly in circumstances where the current framework is to be adopted only by countries that are willing to do so. However, our leaders have forthrightly recognised and openly acknowledged that our previous failures, if repeated on this occasion, could result in the break-up of the Caribbean Community. This is compelling stuff. Success has to be the only option.

 Indeed, the seriousness of the current approach towards the CSME could be seen in observations from CARICOM Secretary General Irwin LaRoque, of a contingent decision by the Heads for the implementation of sanctions, where agreed decisions are not honoured.

 Our leaders recognise the negative reputational and economic challenges due to compliance shortcomings which could militate against achieving the critically important aspirations of the CSME. These therefore should be addressed equally decisively and should line up with the strict timelines of the 2021CSME framework.

Yes, there have been historic, and there are ongoing, regional shortcomings in adhering to obligations that we have signed up to. However, key experiences from the past, such as legislation being enacted and gazetted within three days, and small countries with limited resources moving expeditiously to implement corrective measures, should provide sufficient motivation against being overwhelmed by the critical tasks that lie ahead.

THE CHALLENGES BEFORE US

 In charting the course to full regional integration, aided by a process of introspection and reflection, the Heads, in the Communique at the close of their meeting in Montego Bay, Jamaica, 4-6 July 2018, issued a veritable Call to Action which inter alia; 

1. Stressed that greater focus be placed on advancing those areas which would help to create enabling support measures for a competitive Single Market.

2. Urged Member States to establish consultative mechanisms at the national level.

3. Underlined the importance of enhancing the use of Information and Communications Technology in the fight against the illicit trafficking in narcotics and firearms, trans-border criminal activities and cyber-attacks.

4. Stressed the importance of working more closely with International Development Partners to assist the Region.

5. Encouraged that all legal instruments required to combat crime and enhance regional security should be urgently updated.

6. Encouraged Member States and the CARICOM Secretariat to allocate the necessary human resource capacity at the national and regional levels about the strategic role of strengthening and improving the availability of statistics for evidence-based decision-making and endorsed the framework of a Regional Strategy for the Development of Statistics (RSDS).

 In addition, The Right Honourable Gaston Browne, Prime Minister Antigua and Barbuda and Chairman of the CARICOM Council for Finance and Policy (COFAP), in September 2018, described developments in the regional economy and acknowledged the serious shortcomings which had to be addressed. These included;

• Procrastination in the efficacious implementation of regional policy initiatives and the need to advance and finalise relevant legal measures and instruments,

• The cumbersome bureaucracy for the conduct of business in the Community.

• Ongoing underperformance in terms of growth and development

• The strict fiscal constraints under which governments have to operate.

• Declining government revenues.

• Financing deficits which is exacerbated by overall decline in foreign capital flows.

• High levels of unsustainable sovereign debt and weak economic growth.

• Weak sovereign credit ratings which have severely reduced access to international private capital markets which if available, would be at increased borrowing costs.

• The graduation of member states to Middle Income Status.

• Natural hazards and climate change which bring with them the need to invest in damaged infrastructure.

• The costs and difficulties in moving people around the region.

• The deficits in bringing real changes in the lives of ordinary people

• The paucity in disseminating information on the decisions taken by governments to the people of the community. 

• The absence of reliable, accurate and up to date statistics to support policy development.

• The common difficulties and serious implications that the blacklisting or negative listing of our countries as non-cooperative jurisdictions continue to have on our financial services sector, which is a critical aspect of the region’s economic stability.

 Our leaders at the December 2018 Port of Spain were cognisant of the grave uncertainties of today’s world where;

• Small and developing countries of CARICOM were still feeling the effects of the global economic and financial crisis of 2009.   

• The de-risking and loss of correspondent banking crisis continue to bedevil our region.

• Governments were constrained by strict fiscal regimes with no possibility of providing subsidies to businesses which had to operate with efficiency, effectiveness and profitability.

• The need for regional economies to grow faster in order to withstand global changes. Forecasts within the international financial community indicate that the global economy will go into recession at the end of 2019 even as the region plans for a better more secure future. 

• The damaging effects of initiatives by the Organisation for Economic Cooperation and Development (OECD), namely the Global Forum on Transparency and Exchange of Information for Tax Purposes, the Base Erosion Profits Shifting and the Citizen by Investment Programme, and by the European Union (EU), namely the List of Non-Cooperative Jurisdictions for Tax Purposes and the List of High Risk Third Countries, which could destabilise many of our governments and our region in terms of our revenue generating capacity.

• The need to get it right by creating the environment in which businesses can grow in order to avoid institutions leaving the region

SOVEREIGN DEBT LEVELS

 It is recognised that countries in the Caribbean Basin Region continue to suffer the effects of the 2008/2009 global economic and financial crisis, which is evident from the high levels of sovereign debt, that continue to beset many jurisdictions.

 Debt to Gross Domestic Product (GDP) ratios above the sixty (60) percent threshold is considered as dangerous and unsustainable by the Bretton Woods Institutions, because the majority of government revenues are directed to debt servicing, with the residue providing considerable challenges for meeting the day to day needs of citizens.

 Indeed, the International Monetary Fund (IMF) has suggested that debt levels higher than fifty- six (56) percent of GDP in the region act as a severe drag on economic growth.

 The credit rating Agency Moody’s in 2016, categorised the growing sovereign debt levels in the region as a silent crisis, given that countries were forced to default on or reschedule their debts.

 As at the end of 2016, it is said that the debt to GDP ratio for twelve (12) countries in the region was above (sixty 60) percent.

 The July 2018 G20 Communique indicated their intention to continue monitoring debt vulnerabilities in Low Income Countries with concern as follows;

• Accurate and comprehensive debt data are essential in ensuring sound borrowing and lending practices.  

• We agree that building capacity in public financial management, strengthening domestic policy frameworks, and enhancing information sharing would help to avoid new episodes of debt distress in LICs.  

• We will work towards enhancing debt transparency and sustainability, and improving sustainable financing practices by debtors and creditors, both official and private.

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD) 2017 REPORT, FOREIGN DIRECT INVESTMENT AND THE CSME

 The United Nations Conference on Trade and Development (UNCTAD) Investment Report 2017 notes that the prospects for Foreign Direct Investment (FDI) in Latin America and the Caribbean in 2017 remain muted, as macroeconomic and policy uncertainties persist. Flows are forecast to fall by about 10 per cent, to some $130 billion. After suffering a significant contraction, the region’s economy is projected to return to weak growth.  

As per the UNCTAD Investment Report 2017, progress on sustainable development and lasting peace requires more investment in basic infrastructure, energy, water and sanitation, climate change mitigation, health and education, as well as investment in productive capacity to generate jobs and income growth. The investment needs associated with the Sustainable Development Goals, detailed in UNCTAD’s Action Plan for Investment in the SDGs, are enormous says UNCTAD.

 However, developments with global FDI flows which are critical to meeting economic development needs are described as especially troubling. In 2016, global flows of foreign direct investment fell by about 2 per cent, to $1.75 trillion. Investment in developing countries declined even more, by 14 per cent, and flows to LDCs and structurally weak economies remain volatile and low. Although UNCTAD predicts a modest recovery of FDI flows in 2017–2018, they are expected to remain well below their 2007 peak.

A CALL TO ACTION

A veritable and exciting Call to Action from the Caribbean leadership to the people of the Caribbean Basin Region was further developed in the outcomes of the September 2018 meeting of COFAP and embodied in a very serious approach of Prime Ministers Holness, Mottley and Rowley, as well as Secretary General La Roque, at the Press Conference on the St. Ann’s Declaration in December 2018.

 Our leadership made it clear that we have to move from talk to action with a sense of urgency which was imperative, if, as stated by Prime Minister Rowley who had set as one of his priorities, the revitalisation of the CSME, we are “to earn the respect of our people and be more respected by the rest of the world”.

 The Call to Action pointed towards the CSME being; 

• The most viable platform for supporting growth and development in the member states of CARICOM and was a solid basis for security cooperation, exchange of information, ease of doing business, ease of movement of capital, and an expanded movement of professionals.

• By 2021, one economic space with one market, with a single border, integrated security arrangements with the removal of all artificial barriers including tariffs.

• A community where the implementing institutions were efficient, responsive, agile in order to facilitate a practical approach to the integration movement, imbued with a new sense of relevance and importance and required to function and reviewed on a results-based management system within specified timelines.

• An environment in which businesses can grow so as to avoid institutions, leaving the region, including the ability of regional companies to grasp opportunities in the global market place and to grow outward.

• An economic space which would allow access for investment to the US$47 Billion dollars that are held in savings within the CARICOM community, with surplus funds in one market flowing to other markets in order to facilitate regional growth and development.

Indeed, testimony to this ethos is RFHL, which expanded its operations to Cuba and Ghana and is now in negotiations to acquire the operations of Scotiabank in the Eastern Caribbean Currency Union, (ECCU), Guyana and Sint Maarten. This follows in the footsteps of Jamaica’s National Commercial Bank which previously acquired the Port of Spain based Guardian Holdings.

IMPACT OF COMPLIANCE CHALLENGES

However, it should be duly noted that there are currently eleven (11) international initiatives which have negative reputational implications for our region globally, as their findings could pose serious additional challenges to successfully completing the ambitious agenda that underpins the journey to the CSME.

The implications of the current shortcomings in the levels of regional compliance with international standards and concerns about the RFHL/Scotiabank deal at the highest political and regulatory levels and by members of the public regionally, have the potential to stymie the outward thrust of regional companies.

Questions are being raised as to whether the risk profile of the jurisdictions where Scotiabank’s operations are up for sale and that of the region as a whole, could have been factors considered by Scotiabank in its decision to leave?

Indeed, Prime Minister Rowley said, “it was a little disturbing that Scotiabank – a Canadian financial group, was leaving the region and “that’s not a good thing.” … “It might be seen in the context of the owners taking a decision that banking in the Caribbean is not worth the trouble or the risk, so (it) might be interpreted as a voluntary de-risking. Because if the bank wasn’t bought by a local bank, it was quite possible they may have done something else, and so we have to look to see who else might find the Caribbean unattractive for banking.”

And indeed, since the RFHL/Scotiabank deal was brought into the public domain, India’s Bank of Baroda (BoB) on December 6th, 2018, sought bids from investment bankers to carry out the sale of its Guyana-based subsidiary, a decision which was part of a strategy to exit relatively less remunerative international markets by BoB.

It should be noted additionally, that the movement of surplus funds from one market in the CARICOM context, to other jurisdictions where they are needed to spur economic growth and development, could be adversely impacted by measures such as Public Statements on what action must be taken by countries regionally and internationally, because of CFATF and FATF processes, which monitor jurisdictions that pose threats to the global financial system.

These could include calls for the application of enhanced due diligence measures proportionate to the risks arising from the jurisdiction, or the encouragement of countries and the private sector to closely monitor the jurisdiction’s implementation of reform efforts, about identified deficiencies.

Additionally, COFAP Chairman Prime Minister Gaston Browne, noted that procrastination in the efficacious implementation of regional policy initiatives and the need to advance and finalise relevant legal measures and instruments were drawbacks that could impact the dual goals of mobilising resources within the community and attracting capital from new sources. So too would be the impact of challenges due to the rapidly changing international regulatory landscape in relation to the financial services sector and international tax matters.

THE ELEVEN INTERNATIONAL INITIATIVES IMPACTING THE REGION

In the early 2000s, the Financial Stability Forum now FSB, Financial Stability Board, the Organisation for Economic Cooperation and Development (OECD), and the Financial Action Task Force (FATF), placed several countries on their individual lists at the same time, with significant economic and reputational consequences.

Currently, a multiplicity of initiatives from international institutions and governments in the developed world, continue to pose serious challenges to the global reputation, economic well-being, prosperity, and national security of regional jurisdictions.

 These eleven international initiatives are as follows;

1. The Fourth Round of Mutual Evaluation Programme and Follow up process and the Financial Action Task Force (FATF) International Cooperation Review Group (ICRG) initiative

2. The Organisation for Economic Cooperation and Development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes

3. The Organisation for Economic Cooperation and Development (OECD) Residence and Citizenship by Investment (CBI/RBI) schemes/Common Reporting Standards

4. The Organisation for Economic Cooperation and Development (OECD) Base Erosion Profit Shifting (BEPS). Action 14 peer review and monitoring process

5. The European Union List of Non-Cooperative Jurisdictions for tax purposes

6. The European Commission List on High Risk Third Countries

7. United States Government through its International Narcotics Control Strategy Report (INCSR)

8. Transparency International's Corruption Perception Index

9. Amnesty International Report on Human Rights

10. The World Bank Ease of Doing Business Country Rankings

11. The ongoing De-Risking/Loss of correspondent banking relationships crisis

Critical to the above list are actions that have been and continue to be taken by private sector international banks, who perceive and conclude regional jurisdictions to be of “high risk”, based on the assessments and conclusions of these initiatives, and which have led to the ongoing De-Risking and Loss of correspondent banking relationship crisis.

In addition, the G20 July 2018 Communique noted as follows: We call for full, effective and swift implementation of the FATF standards. We call on FATF to further enhance its efforts to counter proliferation financing.

THE REGIONAL RESPONSE - ADDRESSING THE CHALLENGES

Our region is now at a critical juncture, and drastic circumstances require equally drastic solutions. However, all is not lost. We should not be daunted by these challenges, because our leaders recognise the dangers ahead and are calling all of us to action.

It is imperative that we must stay vigilant, given the resources that must be devoted to the plethora of these initiatives, and the attendant mission fatigue, that beset regional economies, and the real prospects of our region being cut off from the global financial system, given the ongoing impact of the de-risking and loss of correspondent banking relationship crisis.

The situation which now confronts the region, must be addressed, in the words of COFAP Chairman Gaston Browne, and in the recent remarks of the Honourable Carl Wiltshire Bethel, Attorney General, Commonwealth of The Bahamas, “through leveraging our collective creativity our talent expertise and resources to address the problems that bedevil us”.

Our leaders recognised that the Caribbean Region has been underperforming in terms of growth in the regional economy, hence the agreement on stringent measures and a three-year Work Plan, as the strategic options that are required to enhance performance in this regard.

The regional CSME and compliance agendas are inextricably intertwined with each other. It is strongly believed that if the seriousness of approach and absolute commitment of our leadership towards making significant progress on the regional integration agenda, were given in equal measure, to the regional compliance deficits, then assuredly enhanced levels of or indeed full compliance, will accrue.  

Support for this approach could also be drawn from the following words of Prime Minister Rowley who said in the context of Scotiabank selling its assets and operations to RFHL;

“It tells us that we need to make ourselves more attractive and become more resilient to ensure we have a banking sector that can withstand the conditions for international banking. Because the whole question of (the Foreign Account Tax Compliance Act) and the (Global Forum on Transparency and Exchange of Information for Tax Purposes), and whatever the penalties for being caught up in the risks of banking in today’s world, is causing larger banks in the metropolitan area to simply say, 'you colonials out there aren’t worth the trouble'. And that is something we need to pay attention to,”

Paying attention to and addressing the implications of the compliance shortcomings with the sense of urgency and decisiveness that they deserve, would require,

• “A cleaning of the cupboards, and a discarding of both lethargy and delay, which can no longer be the order of the day”, drawing on the words of Prime Minister Mottley. 

• Clear plans, which will include strict timelines, real time monitoring of progress with timely calls for progress and enforcement measures, which could include sanctions in the event of non-compliance.

• The use of modern information technology tools and platforms that will allow for real time or monthly monitoring and reporting on performance, and the dissemination of pertinent information on implementation of decisions taken at government or regional level.

•  A modern global communications and advocacy strategy will allow the leadership with particular reference to the CSME, “to make the regional Action Plans understandable and to convince the Caribbean people and the wider world that the region’s leadership are finally serious about taking long overdue action.”  

On both fronts it must also be made clear to all regional stakeholders that “if action is not taken now and delivered within the agreed timetable, the CSME will break up and the region and the women and men in the street would be significantly poorer for it,” as stated by Prime Minister Rowley.

The region is now four years into the Fourth Round of Mutual Evaluations and based on the results of the Mutual Evaluation Reports (MERs) adopted as final thus far by the CFATF, there is a strong likelihood that countries in our region will continue to be monitored through the current FATF International Cooperation Review Group (ICRG) initiative. The mediocrity of enhanced follow up or FATF ICRG is dangerous, not acceptable, nor in our collective best interests.

Our leaders, at the September 2018 COFAP meeting, recognised the common difficulties and serious implications that the blacklisting or negative listing of our countries as non-cooperative jurisdictions continue to have on our financial services sector which is a critical aspect of the region’s economic stability.

Recently, similar sentiments were voiced in The Bahamas by The Right Honourable Hubert Minnis, Prime Minister of The Bahamas, The Honourable Peter Turnquest, Minister for Finance and Deputy Prime Minister of The Bahamas, The Honourable Carl Wiltshire Bethel, Attorney General of The Bahamas and The Honourable Brent Symonette, Minister for Financial Services, Trade and Investments and Immigration of The Bahamas, who have all expressed their commitment to doing all in their power, as a Government, to establish whatever is necessary, to ensure that the Commonwealth of The Bahamas complies with international standards in the areas of concern.

This call could be discerned from the following views of the Honourable Carl Wiltshire Bethel, Attorney General of the Commonwealth of the Bahamas, in an article appearing in the Bahamas Investor of July –December 2018, under the theme, “Adapting to Changing Times” as they relate to the new mandate of the Government of the Commonwealth of the Bahamas, which have been echoed in one form or another by other political leaders in the region; 

• “the Bahamas like so many international financial centres, stands at a cross roads. We can do nothing and become the maudlin old man of the Caribbean, tearfully muttering the words of ‘Auld Lang Syne’ to an empty cup, or we can embrace change, make it our own and rise to the challenges posed. Irresolution, foot dragging, and delay are not options; well enough is no longer good enough.

• The very real threats of blacklisting, consequent reputational damage and the loss of correspondent relations through the de-risking initiatives pose clear and present dangers.

• The government is therefore determined to make all changes necessary to dramatically improve the ‘Ease of Doing Business’, to remove any clouds of regulatory uncertainty, and to restore to our jurisdiction the primacy and prestige it once enjoyed in financial circles and so richly deserved.

• The creation of a new architecture of legal supervision and compliance is a time consuming and onerous task, which must be undertaken and driven to completion, after due consultation and with the consent and involvement of all industry players and civil society.

• These steps are necessary, not only to meet global expectations, but also to do everything necessary to ensure that the Bahamas itself is safe from the perils of terrorism, money laundering and other serious criminal activities.

• The Bahamas is committed at the highest political level, to taking all reasonable and necessary steps to modernize our jurisdiction, and to achieve necessary full compliance with international best practices in the provision of financial services.”

 CONCLUSION

In the early 2000s The Bahamas was placed on the list of the FATF, OECD and the FSB. So intense were the reputational and economic implications, that The Bahamas created a special Secretariat and spent between US$35-50 Million to be removed from the three lists.

As was the case then, equally decisive action is required immediately, and much more so now, given the number of initiatives which have negative implications for the region. Current economic challenges such as over extended sovereign indebtedness in some jurisdictions, militate against making expenditure decisions at the historic levels taken by The Bahamas.

The reputational and economic impact of being placed on negative lists have been and will continue to be significant. Our collective reputation is also impacted negatively when the international media carry reports on the arrest of a former Government Minister in Miami, the arrests of well-known and successful business men, one holding a key senior executive position in the Chamber of Commerce of a regional jurisdiction, with large quantities of drugs, newspaper reports in Miami on alleged corruption concerning a large infrastructure project in one of our jurisdictions.  

Considering all the above, the Caribbean Basin Region must adopt radically different approaches to effectively addressing the challenges emanating from the international community that currently confront our countries and new initiatives that could be launched in the future.

Rather than being reactive, our region needs to be proactive in seeking to influence the course of events that threaten to bedevil our economic development, stability, long-term peace and security goals. There is still a lot of work to be undertaken across the region, so rather than being discouraged, let us collectively respond with vigour and purpose for our collective success.

Prime Minister Mottley, who has responsibility for implementing the CSME, is on the move, extending an invitation to Jamaica, at the annual investment conference, organised by the Jamaica Stock Exchange, to invest in the Eastern Caribbean and Barbados. The banner headlines of the Jamaica Gleaner on January 25th ,2019 encapsulate the essence of what should be the regional response. “We welcome Mottley’s warm embrace”, it proclaimed boldly and urged “that it is in Jamaica’s interest to be at the forefront of these efforts”. 

 At the other end of the Caribbean, Republic Financial Holdings Limited announced that the group recorded profit attributable to shareholders of $350.5 million for the quarter ending December 31, 2018, which represents an increase of $10.5 million or 3.1% over the corresponding period of the previous financial year. As at December 31, 2018, RFHL's total assets stood at $72.5 billion, an increase of 3.6% over the total assets at December 2017 and 2.9% over September 2018. Stellar results indeed, as it moves forward with its acquisition plans in Cayman Islands and around the Caribbean, that should be emulated by other regional banks and companies. 

Prominent Trinidadian businessman Arthur Lok Jack, speaking at a University of the West Indies (UWI) forum on the economic implications of the withdrawal of Sandals from Tobago where it was going to build a resort, called on Government to exit several businesses in which it is currently involved including the sale of gasoline. He said: "Government has to get the hell out of private sector business." 

Additionally, at the same forum Louis Lewis, Chief Executive Officer of the Tobago Tourism Agency Limited, noted that “Somebody has to develop a very aggressive foreign direct investment strategy to get some of those people who can tick all of those boxes -world recognised, great volume generator, to cause you to get a higher yield to get tourism in Tobago for all the reasons we’ve heard from the beginning”, which he believed Sandals had done, towards helping raise the tourism profile in Tobago.

 Alas. such was the scale of the publicity surrounding the Sandals affair, that considerable effort will have to be pursued to mitigate the negative fallout and to assuage the potential reticence of high profile regional and foreign investors to consider the island as a potential tourist destination.    

And, as at the time of writing, on the diplomatic front, seven miles away from Trinidad and Tobago where the turmoil in Venezuela is presenting significant potential challenges to regional plans on the CSME, it appears, as reported in the Daily Express, that the CARICOM stance of non-interference and non-intervention is emerging as an important component and bearing fruit in the quest for solutions to the seemingly intractable Venezuelan problem “The two days of intense diplomatic engagement (at the United Nations (UN) by the CARICOM delegation) appear to be bearing fruit,”. Uruguay has called for the multi­lateral meeting of interested nations, including CARICOM, Mexico and some members of the Lima Group. A situation that needs constant monitoring given the geopolitical implications.

This is not the time for trepidation and doubt. The time for focussed and sustained action, as we collectively move towards success, is now. All public and private sector CARICOM institutions and enterprises must function to the highest standards in the service of our citizens, visitors and investors who move around the region.

 A tremendous amount of goodwill towards this region continues to be available from our longstanding friends and allies, who stand ready to provide tangible support in a variety of ways and are prepared to continue working with us towards achieving success. The time for engagement, drawdown on available donor facilities and timely implementation towards full compliance without any further delay is now.  In similar fashion as Prime Minister Mottley, we have to move and to do so on many fronts.

And, as the Point Guard monitors and coordinates the plans and actions of the team and advances the ball whilst calling the plays that will drive us to success both on the CSME and compliance fronts, we, no matter on which side of the field we are playing, should be nimble in our responses, looking beyond umbrage and sensitivity, by demonstrating maturity and a readiness to accept and implement in a timely fashion, plans emanating from constructive criticism, when the demands of accountability are made, so that collectively, we eventually win the game.

 And yes, we can do it. Donc on y va, ou manos al a obra. It’s time to work with all available hands on deck.

The Regional Work Programme towards the CSME provides inter alia for;

• Recommendations for Reform, Annex I.

• Addressing Compliance Levels with the eleven international initiatives at Annex II.

• Three-year Action Plan on the CSME Annex III.

ANNEX I - Recommendations For Reform

In this regard, the Work Programme for addressing the compliance challenges that are currently besetting the region and are essential towards a successful CSME are as follows:

1. Facilitate endorsement of the view that compliance with international standards should be considered in national, regional and economic security terms.

2.  Develop for the consideration of the CARICOM Heads of Governments, a Global Advocacy and Communications Programme which will include as a priority, outreach to the G7 and G20 countries on the implications of their mandates to the international standard setting bodies, for the Caribbean Basin Region. 

3.  Establish a Ministerial oversight mechanism to urgently improve and monitor compliance performance with all eleven initiatives, which will include Attorneys General, Ministers of Finance, Trade/Industry and Investments, Financial Services and National Security.

4.  Develop and sustain with a sense of urgency, a strong Culture of Compliance at every strata of society in every country across the region, and will include Presidents, Governors, Parliamentarians, Parliamentary staff, Heads of all Political Parties, Prime Ministers, all Ministers, Permanent Secretaries, all Public Sector Officials at all Ministries and State Enterprises including the Auditor General, Regulatory Bodies, all Private Sector Entities, Trades Unions and the Public at Large.  

5.  Develop and establish programmes for deployment of the required human and financial resources to the increasingly complex and resource intensive national compliance function.

6.  Develop an individual Action Plan for each country using modern information technology tools and platforms, to evaluate, monitor and report on steps to address the identified shortcomings in relation to each of the eleven initiatives that are impacting the particular jurisdiction and the region.

7.  Undertake Public Education and Awareness Raising Campaigns on all the initiatives that are impacting the region, the attendant negative implications, the current state of play for each country and the steps being taken through the Action Plan to address and reverse the situation.

8.  Develop and implement a national, regional and international communications/advocacy strategy, particularly with the regulatory and investment communities globally, to articulate the positive things that each country and the region are accomplishing, including the rectification of outstanding deficiencies, to improve the perception of the region.

9.  Rebrand the image of, and market individual countries and the region, in terms of compliance, and a safe destination for foreign direct investments. This will include the establishment of the region as a hub for the development and use of cutting edge, pioneering technologies and bringing them to market.

10.  Assist countries to develop a serious approach to and guide them through the demands of the Fourth Round Mutual Evaluation Programme, Follow-up and FATF International Cooperation Review Group processes with particular reference to commencing preparations for the Assessment process at the earliest opportunity. In this regard, particular reference is made to commencing preparations for the Assessment process at the earliest opportunity and adopting a regional approach where relevant in cases such as the ECCB jurisdictions who are yet to be assessed and the Dutch speaking countries, which is of heightened importance given the implications of the Scotiabank/Republic decision. Priority will be given to the countries who are currently listed under each initiative, and those that are to be assessed under the CFATF Mutual Evaluation Programme during 2019.

11.  Encourage countries to embrace the use of modern Information Technology Tools to enhance the efficiencies with which all aspects of the Programme are undertaken, with reference to the strengthening the financial system, the Financial Intelligence Units and the Designated Non-Financial Businesses and Professions (DNFBPs), which are at the heart of the national AML/CFT architecture. 

12.  Assist countries to take full advantage of the opportunities provided by the Risk Based Approach for compliance with the FATF Recommendations and develop National Risk Assessments in a timely fashion within the context of the Fourth Round Mutual Evaluation Programme.

13.  Enhance national data capturing mechanisms with the benefit of modern information technology platforms and tools to assist jurisdictions to demonstrate effective compliance with the FATF Recommendations and the requirements of all standard setters, through relevant, accurate, up to date and easily accessible and empirical data, to demonstrate the efficacy of their national systems.

14.  Utilize the strengthened data systems, to support the basis upon which countries determine economic policy and to negotiate facilities with the International Monetary Fund and The World Bank and in their dialogue with potential foreign direct investment partners.

15.  Deepen and entrench a detailed understanding of the FATF Recommendations through Public Education and Awareness Raising Campaigns, as well as the delivery of sector specific Technical Assistance and Training for Regulators, Self-Regulatory Organisations and Reporting Entities.

16.  Assist countries to expedite the pace of AML/CFT and other reform programmes for all the eleven initiatives through updating existing and drafting of new legislation and applicable systems.   

17.  Provide financial institutions with appropriate programmes to achieve operational efficiency and effectiveness with respect to capital adequacy, asset quality, management effectiveness and efficiency, earnings quality, liquidity management and an effective compliance programme, utilising the risk-based approach both in terms of safety and soundness and compliance.

18.  Transfer to and develop competencies of managerial and supervisory level personnel to deal with operationally weak and/or failing departments and/or financial institutions.

19.  Establish robust private sector participation including regional organisations such as the Caribbean Association of Banks, Indigenous Banks, Bankers Associations, Caribbean Business Council, Chambers of Commerce and Self-Regulatory Organisations for Accountants and Lawyers, and other Industry Groups, in the national and regional compliance functions, in all the eleven initiatives. This could facilitate the objectives of the COFAP and the CARICOM Commission on the Economy, to mobilize financial resources from within the community and attract capital from new sources. 

20.  Advocate for a strong and ongoing partnership between the public and private sectors, including international private sector players, in addressing issues of national and regional importance, such as arriving at national consensus, as well as facilitating the determination of national policy, on any national issue on which there is dispute, such as dealing with fiscal challenges relating to high levels of sovereign debt. 

21.  Establish wherever relevant and/or necessary, the appropriate mechanisms and draft the required statutory instruments, in the interest of good governance, accountability and transparency, relating to the public finances of the country, requiring any outgoing government, to provide to any incoming government, a complete listing of all public expenditure, to include all statutory bodies,  government corporations and contingent liabilities, and a record of the accounts detailing the country’s national debt situation, accompanied by the appropriate documentation, within the period prescribed, but not more than three weeks, following the conduct of a  general election, for all such expenditures incurred, at least six months prior to a general election. 

22.  Establish and sustain research capacity to monitor international developments within fora and organisations such as the G7, G20, OECD, FATF. FSB, European Commission, IMF, WB, in order to keep abreast of and anticipate initiatives and their impact on the region so as to inform and prepare the Caribbean political directorate, to guide domestic public policy and protect the national best interests.

23.  Advocate at the highest political levels, that the region should urgently take all reasonable and necessary steps to modernize our jurisdictions, and to achieve necessary full compliance with international best practices in the provision of financial services.

ANNEX II - Country Compliance Levels With The Eleven International Initiatives That Are Impacting The Region

ANNEX III – Three Year Action Plan On The CSME

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