By Sir Ronald Sanders
United States, Friday June 7, 2019 – Once again, I have drawn attention to the danger
posed to countries of the Caribbean by the withdrawal of correspondent banking
relations (CBRs) from regional banks by global banks in the US.
As lead speaker at the opening of a Legislative Forum in the US House of Representatives on Capitol Hill as part of “Caribbean-American Heritage Month” on June 5, I told an audience representing the US Congress, the US Government, diplomats and US and Caribbean businessmen, the following:
CBRs are the life blood of global
commerce and human development. They are as vital to the world as are air
and sea transportation, telecommunications and the internet, and the fight to
end communicable diseases.
Without CBRs, nations will not be
able to pay each other for purchases of basic things such as food and medicine
and ordinary things like busses, trucks and motor cars.
Without CBRs, the global financial
and trading system would come to a halt, and affected countries will collapse
into poverty from which recovery will be costly both in time and money, but
more importantly in human life.
This grave threat has been hanging
over the Caribbean now for almost half a decade; and it shows no sign of
abating, despite statements to the contrary.
Right now, in many parts of the
Caribbean, most banks are reduced to having only one correspondent bank, and at
an extremely high cost.
Not only have the fees for these
CBRs reached prohibitively high levels, they are taking longer periods of time
to deliver services because of heightened scrutiny. Where in the past a
cross-border transaction could take two days, it can now take as long as two
weeks from our smaller indigenous financial institutions.
The cost of doing business in our
region is escalating, even as we try to cope with high debt, incurred largely
to recover our countries from disasters that have increased in frequency and
intensity, as a result of global warming and sea level rise that point like
daggers at the heart of the existence of many of our island states.
It is claimed – wrongfully – that
Caribbean countries have weak anti-money laundering and counter terrorism
financing regimes, and this is the reason why global banks in the US are
But, the two bodies, with the
authority to determine the quality and standing of the regimes in the
Caribbean, have judged most Caribbean countries to be in compliance with their
Those bodies are the Financial
Action Task Force and the OECD Global Forum. In some sectors of
financial services, Caribbean legislative and enforcement machineries have been
rated at a higher level of compliance than the US.
Nonetheless, the Caribbean faces
the real danger of being ‘de-banked’, and to be cut off from the world’s
trading and financing system, including not being able to pay for its imports
from the United States of America – the country that the region chooses as its
major source market.
I went on to point out that “if Caribbean economies diminish, the
consequences will be increased unemployment, enlarged poverty, increased crime
and the advent of economic refugees that will swell the numbers of those
gathering on the US Southern border”.
Earlier in the presentation, I had
stressed that while the United States suffers a trade deficit with many
countries and regions of the world, it enjoys a perennial trade surplus with
the 14 independent countries of the Caribbean Community collectively, that
increases every year. In 2015, the value of the US balance of trade
surplus was $4.1 billion; in 2016, it rose to $4.6 billion, jumping to $5.5
billion in 2017, and escalating further to $7 billion in 2018. That
money has provided profits for American companies and jobs for American people.
I also drew attention to the reality that, since the
1990s, US official development assistance to the region has steadily
declined. In 2017, a year in which the US enjoyed a $5.5 billion trade
surplus with CARICOM countries, the region, including Haiti, received a mere
0.9 percent of United States’ global allocation of official development
These figures were not mentioned in complaint. For every country in the world has the right to decide to whom it provides assistance; to what extent it does so; and for what purposes. But, since the CARICOM region provides the US with an escalating trade surplus every year, the US should have an interest in the economic growth and prosperity of these nations.
In the final analysis, if
Caribbean countries are unable to maintain a stable rate of economic growth or
if they decline, they will no longer be able to purchase goods and services
from the US, and the trade surplus which the US has continuously enjoyed will
shrink and so too will the revenues and jobs that it generates in America.
Therefore, there is a symbiotic
and mutual interest in the US-Caribbean relationship that must be recalibrated
to ensure that, as the ‘third border’ of the US, the Caribbean remains a zone
of peace and a stable economic and political space.
That means that the US and Caribbean countries should set – and measure their relations – in the mutuality of their interests. All issues should be discussed, including the hot button ones for the US, such as Venezuela, Nicaragua and even the role of China in the region, but they ought not to be the single prism through which relations are evaluated.
Today, most CARICOM countries are
stable; democracy and human rights are respected and upheld; the rights of the
individual and of businesses thrive; and the rule of law is maintained.
But these conditions are only
maintainable in conditions of sustained development.
Democracy, freedom and the rule of
law are fragile plants whose growth and strength must be watered and fed by the
nutrients of economic development.
The United States of America
cannot choose to move out of the neighbourhood any more than can Caribbean
countries opt to relocate elsewhere.
They each, therefore, have an obligation to recognize their mutuality of interests and to act on it.
Sir Ronald Sanders is Antigua and Barbuda’s Ambassador to the US and the OAS. He is also a Senior Fellow at the Institute of Commonwealth Studies at the University of London and Massey College in the University of Toronto.