On the eve of this weekend’s Summit Of The Americas, which opened earlier today in Panama, United States’ President Barack Obama sat down with Caribbean Community (CARICOM) leaders for a few hours in Jamaica yesterday to have discussion on what the American leader called “the unique opportunities and challenges this region faces”.
The agenda of the third United States-CARICOM Summit addressed cooperation related to improving the competitiveness of regional economies, strengthening regional security amidst growing concern about crime and other threats to public order and social stability, combating the negative effects of climate change, and developing alternative energy to reduce the region’s heavy dependence on expensive imported fossil fuels.
“This region has some of the highest energy costs in the world,” said Mr Obama in brief remarks at the opening of the summit taking the opportunity to announce a US$20 million Clean Energy Finance Facility for the Caribbean and Central America to encourage investment in clean energy projects. The facility is among a number of projects falling under Washington’s Caribbean Energy Security Initiative, which was the subject of a meeting last January involving Vice-President Joe Biden and Caribbean leaders.
The aim of the facility, President Obama explained, is to “mobilize private investment in clean energy projects”.
He added: “I am confident that given the commitment of the CARICOM countries and the US commitment, that this is an issue in which we can make great strides over the short term and even greater strides over the long term.”
The United States seems to be subtly presenting an alternative to Venezuela’s PetroCaribe programme under which several Caribbean countries import petroleum products at concessionary prices. This Caracas initiative, which has attracted criticism from Washington, was introduced by the late President Hugo Chavez at a time when world oil prices were skyrocketing and were putting tremendous pressures on regional economies. It has helped beneficiary countries.
It will be interesting to hear how indigenous regional entrepreneurs who have been blazing a trail in developing alternative energy technologies, like our own Williams Industries, will respond to this new Washington initiative. With the involvement of the United States’ Overseas Private Investment Corporation and other government agencies, American energy companies inevitably will be at the forefront. That is how America does business.
Some key questions therefore must be asked. For example, what will be the extent of the involvement of American companies? Will they have full or limited access to the regional market? What sort of competition does it mean for fledgling Caribbean companies that have neither the resources nor economies of scale to effectively compete against large American firms? Will it be a requirement that United States companies form partnerships with regional firms?
While American economic assistance is welcome, given the traditional scarcity of resources to support regional development, it is the responsibility of governments which commit their countries to participate, to ensure that indigenous entrepreneurs are not placed at a disadvantage. It should be a win-win for all. This is especially important in our case as Barbados is a recognized pioneer in alternative energy development.
Once our companies are assured fair access to opportunities for continued business growth, they can make a bigger economic contribution not only through selling on the local market, but also through exports that earn valuable foreign exchange. They will be contributing in a meaningful way to advancing the important regional objective of economic diversification.
Responding to a question posed by a participant at a Young Leaders Of The Americas Initiative which coincided with the summit, Obama cautioned the region “to make sure you look at what strings may be attached” when accepting foreign assistance. His comments, specifically in relation to China which has significantly expanded assistance to the region in recent years, emphasized the need for the beneficiary country to ensure such assistance is in its long-term interests.
The American president went on: “I would say the same thing about the United States. If we came in with an aid package to your country and we say, ‘We got this great deal, we are going to give you $100 million for such and such’, but if, when you evaluate the actual benefits, it’s US companies that are disproportionately benefiting . . . and . . . creating a situation which over the long term, the United States is making a whole lot of profits, but is not leaving behind a sustainable industrial base for ways in which that country can develop, then you have to evaluate and try to get a better deal.”
Good advice Caribbean countries should heed in evaluating Washington’s alternative energy development plan.