“The only constant in life is change.” In today’s turbulent world the words of Greek philosopher Heraclitus have never been more apt. Elections, shifting global alliances, redrawn trade lines and a slowing global economy – 2020 will be a year of change and the Caribbean must evolve and adapt accordingly. STAR Businessweek breaks down the external shocks that are likely to impact the region over the next year.
Election fever
In 2020 America will be gripped again by election fever as voters go to the polls in early November. Whether it’s a win for the Republicans or the Democrats take back power, one thing is certain: the country will become even more polarised. This divisive rhetoric and uncertainty is bad for business, bad for the global markets and potentially bad for the Caribbean which has typically enjoyed a close relationship with its superpower neighbour.
The Democrats are still a long way from picking their candidate but it’s fair to say that whoever the nominee, taxes will be a central issue. A hardline stance from Democrats will be punitive for high net worth individuals – a prime market for many areas of the Caribbean which rely heavily on foreign investors in sectors such as real estate, energy and tourism.
If the current efforts to impeach Trump are unsuccessful and the controversial leader takes another term, the US State Department will continue with its current Caribbean agenda which focuses on co-operation in energy investment, trade, educational and health initiatives and security. It’s the latter that has been a particularly hot button issue for Trump’s administration which doubled down on protecting America’s borders, from both illegal immigration and security threats. If the Caribbean cannot get a handle on its escalating crime, the region could face more tourism warnings and harsher restrictions over travel, work or study visas for the diaspora.
The adversarial relationship Trump has cultivated with China will also impact the Caribbean further if his tenure continues, with the two powers attempting to carve up the region through investment, diplomatic overtures and development assistance. The Trump government has shown a marked softening in its stance towards Taiwan, which sets the stage for greater investment in Saint Lucia, Taiwan’s strongest ally in the Caribbean.
In November, a US-Taiwan business delegation visited Castries to explore private sector opportunities.
Trade and investment could benefit, but a second presidency for Trump will likely also deepen political divisions in the Caribbean. The backlash from his closed-door meetings with four Caribbean leaders in March 2019 was a powerful sign that not only are most Caribbean leaders reticent to work with the US President, they are also vocal about condemning those that will, such as Saint Lucia.
As America gears up for one of the most contentious elections in the country’s history, both parties will be heavily focused on the US electorate and Caribbean policy is expected to take a backseat. When the dust settles, however, the leader in the White House must acknowledge that the US needs the Caribbean and it is imperative that the relationship with its ‘third border’ must remain cordial and mutually beneficial.
Brexit battle
It has been a tumultuous year for Britain as the country lost and gained a prime minister, held countless talks with European leaders and inched forward with a Brexit agreement. Last week, Prime Minister Boris Johnson solidified his mandate when he won the General Election with a substantial majority, giving him the impetus he needs to close out the Brexit saga.
What does all this mean for the Caribbean? Despite dire predictions, not much. Britain has had plenty of time to prepare for an EU exit and, despite the headlines, has not entirely wasted that time in political in-fighting. The former European trading giant has been steadily renegotiating and redrafting its existing trade deals to try to lessen the impact on business when it eventually cuts loose from the continent. In March the UK signed a series of ‘Post-Brexit’ trade deals with Caribbean nations, including Saint Lucia, that essentially preserve the status quo.
In terms of tourism, the fluctuation of the British pound has led to a drop in visitor numbers from the UK. A finalised Brexit paves the way for more stability which will steady the pound over the long term, leading to an uptick in visits and real estate investment.
Arguably those most affected by events overseas will be the British Caribbean diaspora. These immigrants will now find themselves more restricted in terms of European travel and less able to access European opportunities in employment, education and business. Brexit will also give the UK more power over its immigration policies and this could potentially disrupt longstanding arrangements with its former colonies.
The rise of MENA
They may still be dominating the conversation but Western superpowers are on the wane and 2020 is set to be the year of emerging markets.
The Middle East and North Africa (MENA) region is becoming increasingly important for the Caribbean as it looks to diversify its foreign relationships, minimise its reliance on the US and move away from its tired role as a US-Chinese turf war. MENA investors have already expressed interest in new and lucrative niches such as renewable energies and infrastructure.
Of prime importance will be the Dubai 2020 Expo which kicks off in October and runs until April 2021. The event is the first world fair in history to take place in the region and will welcome almost 200 countries. Organisers expect around 25 million visitors during the six-month event and many Caribbean nations, including Saint Lucia, will have a presence, hoping to introduce themselves to business partners, tourists and government stakeholders.
North Africa is also on the Caribbean’s radar. In November the Organisation of Eastern Caribbean States announced the appointment of Ian Queeley as OECS Ambassador-Designate to the Kingdom of Morocco amid moves to deepen links with the Kingdom. OECS Director General Dr Didacus Jules commented: “Morocco is a long-standing friend of the Caribbean and ours is a partnership built on a foundation of south-south co-operation, mutual interest, values and hopes for a better tomorrow in the face of many existential challenges such as climate change, nationalism and shifting global alliances.
“The appointment of Ambassador-Designate Queeley is a defining moment in our quest to build upon the already strong bonds of co-operation with Morocco across the tourism, education and agricultural arenas.”
