Bahamas Rejects the Creation of CSME

The Bahamas Rejects the Creation of CSME, thus Compromising CARICOM’s Integration Bid

At the Caribbean Community’s (CARICOM) annual meeting in St. Lucia on July 3-7, the Bahamian government declared that it could not participate in the Caribbean Single Market and Economy (CSME). Nevertheless, Barbadian Prime Minister Owen Arthur subsequently declared that the rest of the CARICOM nations would implement the provisions of the CSME by this December. Even if the CARICOM members realize this goal, their actions are unlikely to significantly boost their economies if the Bahamas, with the third highest per capita income in the Western hemisphere, does not participate. The Bahamas’ action was deeply disappointing for CARICOM's other members, since its advocates view the regional initiative as essential to the organization's future.

The CSME is an economic union similar to the EU, created to strengthen the economic clout of the small Caribbean member nations. Its pillars include the free movement of capital, goods, services and people, common economic policy and a common currency. The close cooperation initiated by the CSME promises to protect the small, geographically-bound Caribbean economies against the predations of the global market. It also aims to lower the prevailing cost of living in the region, as the fall of protectionist barriers will generate increased competition between internal and outside suppliers, hopefully resulting in lower prices. As described on the CSME website, “the emergence of mega trading blocs in different parts of the world and the development of the Free Trade Areas of the Americas, meant a Single Market and Economy became an urgent necessity in our region.”

The unanimous ratification of the CSME less the Bahamas, will likely produce a net economic gain for the Caribbean, but although the majority of Bahamian citizens, are not convinced it would benefit their country, some of their leaders worked to implement the policy regardless of public opinion. The Bahamas historically have rejected CARICOM’s economic integration efforts, but Prime Minister Perry Christie’s administration had signaled a change in this policy. However, on July 5, 2005 the Bahamian government declared that, “The Bahamas is unable to sign on to the Treaty and its provisions…the national debate in The Bahamas has been stopped on the question of the Revised Treaty and that the country is unable to go any further.” This failure was not due to any lack of effort by Christie’s administration. Foreign Minister Fred Mitchell barnstormed a CSME public relations tour as if he were President Bush talking up social security. He explained in a May 2005 address, “No country is an island…we cannot survive on our own without falling back from our position of being the third richest independent country in the whole western hemisphere.” In an interview with COHA before the government retreated from original position supporting the CSME, the Bahamian High Commissioner to the CARICOM nations, Leonard Archer, was optimistic that his country would approve the agreement.

Yet all the government’s efforts were for naught, as Bahamian public opinion remained overwhelmingly against the CSME. In particular, much of the public opposed the “free movement of peoples” provision relaxing inter-Caribbean travel and work regulations, claiming it would flood the country with illegal immigrants prepared to work for lower domestic wages. The other flaw in the CSME frequently cited in public debate was that the Bahamas trades very little with the rest of the Caribbean as it is, and closer cooperation with the other, weaker Caribbean economies would only hinder its own. As Zhirvago Laing, the former Bahamian Minister of Economics and Development and a leading opponent of the CSME explained in an interview with COHA, “Bahamians cannot see any medium-term benefits to economic integration with CARICOM…it would be more effective to initiate dialogue with the North.” The CARICOM nations aggressively moved to exempt the Bahamas from any provision of the treaty that Nassau opposed, but their efforts were to no avail.

One would conclude that the Bahamian rejection of the CSME would stymie CARICOM’s forward motion, since without the support from the region’s wealthiest economy, the CSME would appear to be fatally hobbled. However, despite the Bahamas’ stance, the rest of the CARICOM nations are pressing on. This week, Barbadian Prime Minister Arthur, the lead CARICOM head of government for CSME, stated “we will proceed to put in place all of the arrangements across the Region to create a Single Market by the end of this year.” With its participation, the effectiveness of the CSME is dubious, since the Bahamas’ abstention, arguably though it might be beneficial to the country itself, undermines the efforts for unified economic prospects for the rest of the Caribbean Community.

This commentary was preapred by COHA Research Associate Anita Joseph.

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