Governor Francis said that CARICOM Central Bank Governors conducted a study on the impact the single currency would have on the region and advised heads of CARICOM that it would not be a feasible move to make
"Why? Because there isn’t sufficient economic convergence between the countries of CARICOM to sustain a common currency," Mr. Francis said
Governor Against CSME
By Candia Dames
Nassau, The Bahamas
17 May 2005
There is no sound economic reason why The Bahamas should join the CARICOM Single Market and Economy (CSME), according to Governor of the Central Bank Julian Francis.
The show’s host, Wendall Jones, pointed out that, "There are those in the political directorate in The Bahamas as well as in other countries in the Caribbean who would say that if we do not participate in CSME we might as well not be a member of CARICOM."
Mr. Francis said this might very well be true.
"I suppose that in time if we were not to join the CSME my guess is that CARICOM would not see any particular interest in continuing its administrative and political partnership with The Bahamas," he said.
"But to the extent that these things are driven mainly by economic considerations, I would say so be it."
The CSME debate has taken on new life in recent weeks, with several prominent figures coming out in opposition to the agreement.
The growing public outcry coincides with an educational campaign launched by the government and spearheaded by the country’s Minister of Foreign Affairs, Fred Mitchell.
The government has already said that The Bahamas would request certain reservations before joining CSME.
These include opting out of the free movement of people; the Caribbean Court of Justice at the appellate level, the Common External Tariff, and the single currency and monetary union.
While on the show, Governor Francis said that three years ago, the CARICOM Central Bank governors conducted a study on the impact the single currency would have on the region and advised heads of CARICOM that it would not be a feasible move to make.
"Why? Because there isn’t sufficient economic convergence between the countries of CARICOM to sustain a common currency," Mr. Francis said.
Asked whether the governors’ view has changed in that regard, he said, "If there has been any change I would say that Trinidad has become a bit further removed from the average of CARICOM economically. Jamaica also has in a negative sense, and The Bahamas of course has continued its development.
"That leaves the East Caribbean and Barbados. I don’t think that there has been anything that would have happened which would cause the governors to think differently."
Last week, a former Governor of the Central Bank of The Bahamas also came out strongly against CSME.
In a letter to the editor, Sir William Allen said there is no logical justification for The Bahamas to be a part of this single economic space, "because no one has yet identified one benefit which could only be achieved through our sign-on."
He also said that Minister Mitchell is wrong to equate CSME with the Free Trade Area of The Americas.
"This is the reason it would be helpful for the debate if it were led by a ministry or an institution which has a better understanding of the difference between a free trade area, and a single economic space- and this is not a red herring," Sir William said.
He also said, "The economic divergence between The Bahamas and the rest of the region is of such magnitude that it seems readily accepted that it should be granted temporary exemptions from key provisions of the arrangement defining this common economic space.
"No one, not the Minister nor anyone else, can know how the participation would affect The Bahamas’ economic situation, first- in terms of the impact of the provisions to which it will have to adhere, then in terms of the anticipation of the end of the exemptions it may be granted- and finally in anticipation of where the evolving harmonization within this common economic space may eventually lead."
But Bahamas High Commissioner to CARICOM A. Leonard Archer recently said in an interview with The Bahama Journal that any suggestion that the reservations would be "temporary" and The Bahamas would eventually be forced to adhere to all provisions of CSME is incorrect.
Mr. Archer said that The Bahamas may opt out of certain provisions of CSME for as long as it chooses.
He expressed disappointment that so many prominent and well-educated Bahamians are spreading "misinformation."
Mr. Archer also said The Bahamas would benefit tremendously from joining CSME.
"We are part of a global economy. We have applied to join [the World Trade Organization]. We have been negotiating the FTAA. Joining the CSME first provides us with certain advantages of going into WTO and FTAA," he said.
"There are also economic reasons: increased investment in The Bahamas; increased trade with the rest of the Caribbean; we could access goods and services from the Caribbean more cheaply or more economically than we are accessing them now."
