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Trouble in the Caribbean: A Reminder to Washington to Think Local


Beyond the beaches and posh resorts, much of the Caribbean is plagued by drugs, gangs, human trafficking, and broke governments still struggling to rebuild after Hurricane Sandy. As the IMF’s Arnold McIntyre says, the entire region “faces its most formidable economic challenge since independence.” The FT has more:

Although ferocious storms cause periodic devastation, the fundamental challenges are political and economic. Irresponsible government spending has compounded the problem facing uncompetitive Caribbean states. Simply because of their small size, the economies have to import most of their basic goods and are always vulnerable to any shocks….

The result has been decades of stubbornly high budget and trade deficits, financed by borrowing. “We have adopted a tradition in these islands that the government’s role is one of largesse … and patronage,” says Mark Brantley, opposition leader in St Kitts and Nevis. “Governments have continued to borrow and spend with no attention to fiscal sobriety.”

With the US heavily engaged in the Middle East and Asia, and with the Caribbean islands’ European former colonial masters consumed by their own economic problems, China has seized the opportunity to step in.

China … has become increasingly influential in Caribbean capitals. The initial trickle of aid was tied to accepting Beijing’s “One China” policy and breaking off relations with Taiwan. The reward took the form of sparkling new cricket stadiums that were built and paid for by China. But David Jessop, the head of the Caribbean Council, a consultancy and think-tank, argues that Beijing’s policy has recently evolved markedly.

“The past couple of years its money has been redirected from financing small vanity projects to large scale investments and a heavy Chinese presence on the ground,” he says. “It is distinctly different from a few years ago and appears to be more strategic in its intent.

The US, it seems, isn’t paying attention to what’s going on in its own back yard. It should be. As the Castros move toward the exit and the time when the US and Cuba might resume normal relations draws closer, the economic situation for the rest of the Caribbean darkens. Tourists are sometimes the only things holding these island economies together.

It appears the US does not have much of a regional policy in its own neighborhood. Rampant globalism has us thinking Big Thoughts about far-off places, but proximity still counts.

[Chinese flag image and Caribbean beach image courtesy of Shutterstock]

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  • Andrew Allison

    More to the point, ours is among the governments which have continued to borrow and spend with no attention to fiscal sobriety! During the 20 years prior to 2013, there was $45.9 trillion of federal government spending and a mere $38.5 trillion paid in taxes. (see:
    For just how long do you think this can continue?

    • Jim Luebke

      We’d better get that under control fast.

      The “secret of success” for maritime powers has been a strong economy. This economy has traditionally supported subsidies to foreign powers (think Prussia during the Napoleonic wars) to advance diplomatic interests.

      If China can do it and we can’t, we’re declining and they’re rising.

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