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Aid and ad-hoc agendas create the tangled web of US-Caribbean relations

Sir Ronald Sanders

Sunday, February 11, 2018

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Much has been said about the Government of the United States of America cutting off aid to countries which do not support that country's position in international organisations. Other donor countries have the same view, although they do not express it in quite the same way, as the US Government now makes clear.

The US, of course, is free to direct its aid where it wishes, and is very much within its rights to show its displeasure with countries that take its money but don't support it. Aid, after all, seldom has moral considerations. Economic aid, in particular, was introduced in the world because it merged with the desire of rich countries to maintain access to markets of developing countries and to garner political influence over them.

The same was true of the Soviet Union, and it continues to be so for Russia and China today. Even developing countries, such as Venezuela, that have emerged as donors, are hardly motivated by altruism. Developing countries know that reality better than any.

It is worth recalling that the original demand of developing countries was not for bilateral aid but for improvement of the terms of trade and the establishment of multilateral institutions that would provide financing for their industrialisation. But most of the Western countries had no interest in altering the system to suit developing countries and, by so doing, weakening their own positions.

The function of aid in foreign policy, except in extreme humanitarian cases, falls into three broad categories:

• providing donors with a framework of legitimacy for intervention in the affairs of sovereign states;

• promoting influence over recipient states, including sustaining governments friendly to the donor; and

• fostering the political, security and commercial interests of donor countries.

Arguably, the exceptions to this general observation are the Scandinavian countries – Denmark, Norway and Sweden — which exercise no great power in the world but give generously to human development globally. They have met the UN target of 0.7 per cent of their gross domestic product (GDP) as aid — only Britain of the G7 countries has done the same.

While the US has not met the UN target, it is the world's biggest aid donor. In 2016, total US spending on foreign aid, including military, economic and humanitarian, was US$49 billion.

So, where do the 14 nations of the Caribbean Community (Caricom) stand in terms of being aid recipients from the US, and how vulnerable are they to cuts in US aid? The figures vary, making some Caricom countries far more reliant on the US than others.

In 2016, for instance, the 14 independent Caricom nations received US$437.6 million from the US — less than one per cent of the total US spend. But Haiti alone received US$376.7 million of that total; leaving only US$60.9 million to the other 13 Caricom countries. Of this remaining amount, Jamaica got the lion's share — US$28.9 million. The balance of US$32 million was shared among 11 countries. Guyana (US$9.6 million), Belize (US$8.6 million), Barbados (US$5.4 million), and The Bahamas (US$3.2 million) were the next principal beneficiaries.

At the bottom of the pile were: St Lucia (US$38,000), Suriname (US$232,672), Trinidad and Tobago (US$302,775), St Vincent and the Grenadines (US$612,000), Dominica (US$616,000), and Antigua and Barbuda (US$635,781). In the case of Antigua and Barbuda, 95 per cent of the funding was dedicated to the military, primarily for the interdiction of drug traffickers.

From all this, it can be seen that, apart from Haiti and Jamaica, Caricom countries are not huge beneficiaries of US aid.

The figures for 2016 have been consistent for over the last 10 years or more. There are, therefore, varying degrees of loyalty that the US would expect from individual Caricom countries.

Of further interest, 13 of the 14 Caricom countries have continued to be beneficial to the US as markets for its goods. In 2017, the US enjoyed a balance of trade surplus of US$6.08 billion with all Caricom countries except Trinidad and Tobago. The largest surpluses were enjoyed with The Bahamas (US$2.4 billion), Jamaica (US$1.7 billion), St Lucia (US$519.1 million), Barbados (US$470.8 million), and Antigua and Barbuda (US$413.5 million). The US trade deficit with Trinidad and Tobago was US$1.49 billion, but when that is subtracted the US overall trade surplus in goods amounted to US$4.58 billion.

The US balance of trade surplus with 13 of the 14 Caricom countries in 2017 is also consistent with the pattern of benefits to the US over the last 10 years or more.

Indeed, given that the US has provided $437 million in aid to all Caricom countries and gained from a trade surplus of $4.58 billion, the US has been an overall beneficiary of its relationship with Caricom countries, especially the smaller ones that received the least aid, but nonetheless gave trade surpluses to the US.

Measuring the capacity of the US to influence the Caricom area through an 'aid' prism is therefore inadequate and misleading. US aid has benefited a few countries and has been as much — if not more — for the advantage of the US than for the recipients.

For the US and the countries of Caricom to build a relationship of mutual support, a structured association is required with all of them. That structure could be an annual meeting rotating between foreign ministers and finance ministers to discuss and resolve matters of concern to the US and Caricom countries, not to the US alone.

And, every two years, the US president and Caricom heads of government should meet to develop areas and strategies for cooperation, including financing mechanisms (not aid) that address Caribbean needs for economic and social development from which US businesses and the US economy can benefit as participants.

That way both the US and the Caribbean could put themselves first.

Sir Ronald Sanders is Antigua and Barbuda's ambassador to the US, Organisation of American States, and high commissioner to Canada; an international affairs consultant; as well as senior fellow at Massey College, University of Toronto, and the Institute of Commonwealth Studies, University of London. He previously served as ambassador to the European Union and the World Trade Organization and as high commissioner to the UK. The views expressed are his own. For responses and to view previous commentaries: www.sirronaldsanders.com.

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