FOREIGN EXCHANGE IS KEY
DENIS KELLMAN’S COLUMN- THE DEBATE
MARCH 15, 2006
This week I am forced to return to what I perceived to be the shortfalls in development. Our country Barbados has introduced systems that have worked well for the revenues side of the economy. These systems allowed the Government to have surplus Revenues and the private sector to have surplus profits. These results caused the players to ignore a significant point that I have been consistently speaking about.
I have said repeatedly that the foreign exchange is key and we have allowed ourselves to focus on revenue and not foreign reserves. Government also has to accept its responsibility as it relates to foreign exchange. Too many persons believe that Government’s role is to borrow and borrow without looking at the consequences of our habits.
International Organisations are formed to protect the interest of countries that have formed them. Lending to balance budgets is popular among developed states because they know that it leads to dependency. These countries operate to suit their plan. You would find that countries that have large reserves always find themselves having to finance an army and this is not by chance. These military forces are created to share the foreign reserves with other countries. It is also done to limit power.
If one only reflects, one would recognize that our major financing problems occurred after we had an army and it was not the oil crisis of ’73, but having to finance an army after the US was asked to vacate the premises at Harrison Point. This facility served us well and some still believe that the absence caused the problem in Grenada.
Small developing countries have to be careful how they behave in the international market, because they end up carrying large defense bills that erode their social bills. Defense bills replaced investments and created foreign debt and sometimes we need to look at our decisions on these matters. Most countries within the Caribbean would be better served if the concentration is on the Coast Guard since their biggest threats will be from the sea, because of the drug trade and realizing that most of them are islands.
Barbados is fortunate to have the best cotton in the world. Textiles are dominating fashion and everybody likes to wear the best, yet we find it very difficult to find a serious partner to carry forward our cotton industry. It seems to me that the developed countries believe that developing countries should only sell raw material to them to be processed, then for them to make significant profits and to behave as if it is their product.
These countries take the raw material transformed it to a lucrative product, bleed the market and when the demand slips, dump it on the producing countries and behave as if they did not benefit from the product.
Small developing countries must adopt the OPEC approach so that they can maximize the benefits from their products. Is it by accident that when we had the Cold War Days that trade was better for small developing states? We must ponder on these thoughts, because we have seen how oil is now being used within the Caribbean as a foreign policy tool. So significant is this foreign policy tool that some countries have even forgotten that they have signed on to the CSME.
The problem with CSME is that we do not understand the importance of building a strong base and we think more short term than long term. I sometimes ask myself what will happen to the Caribbean when Cuba and Venezuela are accepted again by America. I have no problem with Caribbean leaders having a foreign policy that involves Cuba, since it was the late Right Excellent Errol Barrow that gave us our foreign policy… “Friends of all, enemy of none”.
This foreign policy which I support 100 %, allows me to understand why we never sought full independence and one can easily understand the level of investment today due to the foresight of that great man. Some ‘Negrocrats’ would want us to change for the sake of changing. I believe that when you change a system you should be able to outline the reasons and benefits to be gained from the change. In 1966, it was known the benefits to be gained from independence and the reasons why we were going to be partially independent.
Our present state allows us to have a relationship with America without interfering with the one we always had with the Queen. This longstanding relationship with England and the EU should have worked in our interest to get our fair share from those countries that controlled our earnings and developed their countries at our expense. These leaders must stop asking for handouts and demand a part of the investment that was taken from these developing countries to retain their international status and to develop their countries.
Everybody knows the important role that sugar from the Caribbean played in advancing England. It is therefore strange that now the benefits of Free Trade are on our doorstep that we cannot get concessions from our “Mother” who helped to create us, held our earnings and lessen our development.
We sometimes take out anger on countries that we did not build directly and we behave as if it was America that controlled England. Our direct savings can be found in England and indirectly in America. Some of the resources that built America would have been from the sugar monies from the Caribbean, which meant that we have a longstanding relationship with America and should do nothing to destroy the goodwill that has been created.
All of the above was said to enforce the point that the present Government must carefully plan its foreign policy to get the greatest benefits from the goodwill created and should appreciate our history for what it is. A country that needs foreign goods needs to concentrate on foreign reserves first and then revenue or it will find itself without a foreign policy. How long can we continue to spend more foreign reserves that we earn?
Peace, love, unity, commonsense, faithfulness, humility, wisdom and understanding.
(Denis Kellman is the Member of Parliament for St. Lucy, Barbados)