The following paper is the outcome of a process of consultation carried out on behalf of the Caribbean Council for Europe (CCE) and the Caribbean Association of Industry and Commerce (CAIC) to develop a consensus among member and non-member private sector organisations throughout the Caribbean about the general goals of the Caribbean private sector to highlight the development needs of different private sector entities in the region in the context of European policy towards the Caribbean in the second part of Lomé IV and in a successor agreement after the year 2000.
Based on the oft stated belief in Europe and the Caribbean that the private sector is the motor for future regional development, it seeks to:
Despite some tentative steps towards the private sector in the first half of Lomé IV, Caribbean ACP governments and the European Commission have not yet demonstrated their full commitment to the principle of decentralised co-operation and private sector-led development either through making available funding for the private sector in a timely manner or through the creation of appropriate intermediary bodies to develop private sector programmes. The problem, as underlined by this paper, is that while the Convention places importance on the principle of decentralised co-operation and private sector-led development, in practice the Lomé mechanism continues to operate as a government-to-government agreement with the social partners in the private sector having a severely limited window of access.
In putting forward recommendations for a more effective partnership between the Caribbean and the EU which places the private sector at the centre of that relationship, the paper identifies a number of essential first steps that need to be accomplished. These include identifying new mechanisms to facilitate direct dialogue with the private sector as well as the creation of new intermediaries to deliver private sector programmes; the establishment of effective private sector windows for EU assistance; and new financial instruments to provide direct support to the private sector.
Section One restates the need for a new strategic alliance between Caribbean governments and the private sector and the adoption of a joint approach to Europe. Increasingly, with the globalisation of world trade and the new imperative to survive on the basis of international competitiveness rather than preferential treatment, the private sector will play a key role in enabling the region to attain sustainable development within the proposed Free Trade Area of the Americas. The role of the private sector will also become critical as bilateral and multilateral aid flows diminish and both regional and international investment become the principal source of capital accumulation. At the same time, the relative inexperience of the private sector in dealing with international development agencies suggests the need for a new inter-relationship with government and a joint approach to Europe.
Section Two assesses the specific needs of the Caribbean private sector. In focusing on the relative strengths and weaknesses of the private sector, the paper notes that, as a group, the Caribbean private sector is at a higher level of development than its counterparts in most other ACP countries, specifically as it relates to group coherence, vibrancy and the ability to formulate common positions on which to lobby regional governments. Some common weaknesses also exist across territories. These include a relative lack of technical expertise in national institutions, a lack of entrepreneurial skills in certain territories, a lack of access to long-term financing, the existence of weak private sector institutions and a poor physical and regulatory environment for private sector development.
To remedy these, there is a role for the EU in the development of schemes and programmes to assist entrepreneurs to keep abreast of technological and demand changes in export markets as well as provide assistance in product and packaging design. Special emphasis has also been placed on the development of new financial mechanisms that expand the role of the European Investment Bank (EIB), the Centre for the Development of Industry (CDI) and adapt mechanisms such as the European Community Investment Partnership Scheme (ECIP) to the needs of the Caribbean private sector.
National and regional private sector institutions (chambers of commerce, manufacturers associations and hotel associations) also share a common need for institutional strengthening. Proposals from a number of national private sector organisations call for programmes aimed at capacity building among staff to improve administrative efficiency and technical expertise and improve communication links across national and regional organisations to facilitate the development of a network of private sector organisations through which information can be disseminated and through which organisations can share the benefit of expertise and research in different areas.
Section Three explores possible new approaches to dialogue and future co-operation between the EU and the Caribbean which facilitate greater private sector involvement in the delivery and implementation of private sector programmes. Preliminary proposals explore the possibility of using the existing CARIFORUM mechanism as a forum to facilitate ongoing exchanges between regional governments, the private sector and the European Commission in the short term. While acknowledging that this may be resisted by Caribbean ACP Ministers, the paper notes that failing this, there will be need to establish a new mechanism which will create an additional call on regional co-operation funds.
Finally, in exploring possible new approaches to financing and programming, the paper underlines the need to devise new arrangements which will increase private sector access to Lomé resources and minimise the bureaucratic delays both on the ACP and EC side without appearing to undermine the recognised right of ACP States to determine their development strategies and models in all sovereignty. After some discussion of this issue at the time of the CCE/CAIC/EC Encounter in Brussels in July this year, it was agreed that the important thing was to identify eligible and credible financial institutions capable of working with the private sector for the timely delivery of private sector programmes.