The Week in Europe  By David Jessop
   
  Across much of the Caribbean, the private sector has what can best be described as an uneasy relationship with Government and the public sector. 
   
  To a significant extent this stems from unchanged or only slightly modified attitudes that have been carried forward from four or more decades ago. 
   
  Then the global consensus revolved around two competing ideologies: the free market capital driven model owned by Washington and the West and the state controlled model espoused by Moscow and the East. 
   
  In the Anglophone Caribbean most political parties, trades unions and the public sector grew up against this background taking as its model the beliefs prevalent at that time in United Kingdom. 
   
  The result, when mixed with complex and strongly held views relating to class, ethnicity and a belief that independence meant an end to foreign ownership, was the emergence of the view that the economic role of the state and public sector is superior to the role played by the private sector. 
   
  But since then the world has moved on, the global consensus has changed and Government, political parties, and the public sector have come to see their task as providing the private sector with an enabling environment in which commerce will thrive. Today the relationship in much of the world is one of uneasy partnership where government supports the private sector’s ability to be competitive in ever more open markets and as the driver of national economic growth. 
   
  While there are many variations of this new model, the broad thrust has been the same. In nations with as widely differing political philosophies as China, Dubai and Sweden there has been an acceptance that a key role of government is to change the business environment so as to enhance competitiveness. 
   
  Various economic reforms have been pursued. This has most usually involved opening markets, privatisation or the establishment of public/private partnerships, deregulation and tax reform. 
   
  Although there is now a kind of creeping protectionism as nations such as the United States, France and Italy and tension between regulators and companies that have quasi-monopolistic positions in the utility sector, the process of economic liberalisation has resulted to a significant extent in enhanced economic growth.
   
  In the Caribbean a central part of change has been market liberalisation, the creation of the Caribbean Single Market and Economy and the negotiation of new development oriented trade relationships such as the Economic Partnership Agreement with Europe.  Despite this some nations have been more reluctant than others to fully reform for reasons of ideology or because of entrenched public and private interests.
   
  But in all of this what still seems not be fully understood in much of the Caribbean is that it will not be government that turns such change to the national or regional advantage, but private investment and private sector led development.  Equally there are few politicians who will say unequivocally that the objective of integration and market opening is to create internationally competitive and structurally diversified economies in which the private sector will thrive.
   
  In part this is because serious doubts remain about the ability of much of the Caribbean private sector to take advantage of this assumed model of growth. 
   
  There are legitimate concerns remains about the ability of the private sector to make use of the potential opportunities of either a CSME or for example the opportunity that an Economic Partnership Agreement with Europe will provide. Much of the private sector remains averse to engaging in the competition implied by economic integration and trade reciprocity and is still locked into a form of xenophobic protectionism. 
   
  There are of course shining examples of large Caribbean companies. These are a relatively new Caribbean phenomenon. They have from a small domestic economic base become trans-nationals, trying to invest across the region but for the most part finding it easier to invest outside of the region into Latin America, Europe and even India. These are companies from Jamaica, Trinidad and Barbados that have ceased to be parochial or risk averse. So much so that some may even in the absence of any regional stock exchange choose before long to be quoted public companies on the New York or London exchanges.
   
  In those parts of the world that are succeeding and most particularly in Asia it has been the changed relationship between government, opposition and the private sector that has driven growth.
   
  For this reason much more attention has to be devoted to creating an environment, which motivates and nurtures entrepreneurship and the attractiveness for investment, both local and foreign. This will require not less or more government intervention, regulation or direction, but a different type of role for government. That is to say one in which the public sector must be complimentary, facilitating and eventually private sector driven. 
   
  This requires clear signs that national ownership is no longer a requirement for investment and ownership in any activity. It also suggests that the region has to escape from the immobile private sector/public sector discussion and forge a new collaborative partnership for continuous dialogue. 
   
  At a regional level, Caricom Heads of government relate to a single private sector entity. What is needed is for this to be something akin to a confederation of the powerful sectoral and national entities that represent the regions complex web of commercial interests. Such a body needs to well funded, sustainable and able to undertake research. It needs to be able to engage with all regional institutions and Government in a manner that involves a dialogue between equals
   
  In much of the rest of the world the old order has changed. Modern responsible and outward looking private sectors play a central role in national policy development.  While there are important exceptions the both the Caribbean private sectors in much of the region have some catching up to do. 
   
   
  David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]
  Previous columns can be found at www.caribbean-council.org
  February  24th, 2006
   
   
   

		
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