CARICOM: HEADS OF GOVERNMENT DISCUSS REGIONAL

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 000233

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL ECON EFIN ECIN TD
SUBJECT: CARICOM: HEADS OF GOVERNMENT DISCUSS REGIONAL
ECONOMIC CRISIS

REF: 2008 PORT OF SPAIN 397

PORT OF SP 00000233 001.53 OF 002


SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY

1. (SBU) Summary: CARICOM heads of government met May 24 in
Port of Spain to discuss a regional response to the economic
crisis. They encouraged member countries intending to
approach the IMF to do so sooner rather than later, but also
stressed the need for a medium-term regional approach to the
crisis. A task force was appointed to review member states,
financing plans and incorporate them into a regional program
prior to a hoped-for CARICOM heads of government meeting with
President Obama later in 2009. PM Manning announced the GOTT
would consider donating USD 80 million next year to the
CARICOM Petroleum Fund, perhaps putting this money under the
control of a restructured Caribbean Development Bank.
Manning also presented a paper on how to achieve regional
economic and political integration to the leaders of St.
Lucia, Grenada, and St. Vincent and the Grenadines, who had
agreed in August 2008 to advance toward this goal. End
Summary.


2. (U) Meeting for six hours May 24 in Port of Spain,
CARICOM heads discussed both immediate responses and longer
term regional solutions to the economic crisis buffeting
their countries. They agreed on the need for immediate
action, especially by states already facing serious financial
difficulties, but also stressed such action should be within
the context of a longer term regional strategy. The leaders
advised that all countries considering going to the
International Monetary Fund should do so as quickly as
possible, but President Bharrat Jagdeo of Guyana also
emphasized that CARICOM leaders should work out a common
approach before meeting with the IMF and the Inter-American
Development Bank. Manning agreed with Jagdeo, adding this
common approach would be the focus of a CARICOM proposal to
President Obama at their next meeting, expected later in 2009.


3. (U) CARICOM heads also urged the IMF to display more
flexibility, stating it should apply different standards to
developing and developed countries. Along these lines,
Belize PM Dean Barrow, CARICOM Chairman, announced the
formation of a task force to help member states develop
financing proposals to the International Financial
Institutions. The team will be led by Dr. DeLisle Worrell,
Executive Director of the Caribbean Center for Money and
Finance, and will include Derrick Latibeaudietre, Governor of
the Bank of Jamaica; Dr. Shelton Nicholls, Deputy Governor
of the Central Bank of TT; and Dr. Garth Nicholls, Senior
Director of the Research Division of the Eastern Caribbean
Central Bank.


4. (U) The assembled leaders also agreed that the Caribbean
Development Bank (CDB) should be restructured to become more
responsive and to serve as a vehicle for channeling all
development resources to the region. In line with this,
Manning announced the GOTT is considering donating USD 80
million next (fiscal) year to the CARICOM Petroleum Fund. He
indicated Trinidad,s willingness to put the petroleum fund
under the management of a restructured CDB, along with the
CARICOM Development Fund and the Consolidated Fund, improving
efficiency and allowing resources to be leveraged through
matching contributions from the region,s development
partners.


5. (U) As part of the conference, and following up on his
initiative begun last August (ref),Manning presented his
colleagues copies of a report by a task force on economic and
political integration headed by Professor Vaughn Lewis.
Trinidad and Tobago, along with St. Lucia, Grenada, and St.
Vincent and the Grenadines, agreed in August of 2008 to move
toward economic integration by 2011 and political integration
by 2013. Manning said the report would be made public May
30, after it had been presented to the cabinets of all four
countries. Manning added that the current economic situation
provides an impetus for greater political and economic
integration among countries in the region.


6. (U) Although the issue was not on the agenda, both
President Jagdeo and PM Ralph Gonsalves of St. Vincent and
the Grenadines raised Barbados, new immigration policy on
non-nationals, complaining it went against the trend toward
greater freedom of movement that should be part of increased
regional integration. Manning, for his part, stated that
Trinidad traditionally had been lenient with citizens of
other CARICOM countries.


7. (SBU) COMMENT: The decisions emanating from the May 24
meeting seem designed to help the region make a more
compelling case for IFI and donor support and also to prepare
for CARICOM,s hoped-for meeting with President Obama later
this year. Manning,s plan for economic and political union

PORT OF SP 00000233 002.29 OF 002


continues to draw lukewarm reactions from many countries, but
the smaller OECS nations seem at least willing to continue to
entertain the idea, perhaps in hopes of receiving benefits
from richer Trinidad.
Kusnitz