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  • Caribbean Reflections on Soft Power

    Caribbean Reflections on Soft Power

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    Jo-Ann Hamilton, Guest Writer

    What do China and the United States have in common? Global influence? Economic Hegemony? Let’s throw Qatar and Iceland into the mix. Any thoughts? The answer is soft power. China invests globally in infrastructure around the globe often in countries largely ignored by the international community. The Chinese government also gives away millions in scholarships to students around the globe to be educated in its Chinese universities.

    Whilst traditionally the Americans have often wielded hard power in the form of military might, they have also pioneered the concept of soft power through their powerful media business, namely American cinema. Silicon Valley’s technology in the form of Facebook, Google and Twitter are just a few examples of the American brands associated with innovation and the American entrepreneurial spirit.

    Qatar’s regional and international influence is being channeled through its state-funded global media network, Al Jazeera. The creation of the Qatar Foundation is the mini state’s approach to developing itself into a knowledge based economy whilst at the same time sharing this knowledge globally.

    Lastly, there is Iceland, a small nation in Northern Europe. Unlike its powerful neighbours the UK and other countries in the EU it wields no great power. What it does have is a clever and innovative approach which sets it apart as a leader in fields as diverse as science, computer research and public health. They are not too dissimilar to its other Northern European neighbours, such as Sweden and Finland who are global leaders in the area of sustainability.

    But what does this have to do with the Caribbean? The Caribbean is usually on the receiving end of soft power. What can the region do to leverage its soft power? How can it persuade and influence both collectively and individually to position itself as players in the global economy?

    Brand Caribbean.

    Brand Caribbean must be carefully orchestrated by each individual nation within the region but first it must gain significant buy-in from the citizens of each nation, who tend to possess a silo-ed pride. Like any good branding campaign, Brand Caribbean must position itself as being a source of inspiration, changing the world, doing good and developing its people.

    One great example of this is in the United Arab Emirates. Its Vice President Sheikh Mohammed bin Rashid Al Maktoum, who is also the Emir of Dubai, recently released his UAE strategy for the Future, in which he stated,

    “ As a nation, we have always been forward-looking and planning for the future, which has been a key driver of our success. With our future planning model, we will serve as a model for the world. The citizens of the UAE are our most important resource in building our future. To nurture their skills, we will strengthen education and training initiatives.”

    This is a brand based on upliftment, where collaboration, strategy, education and an investment in its human capital is key to its success.

    Brand Caribbean must speak with one voice and with a unified message. One may ask how can an entire Caribbean region which is so nuanced and diverse speak in one tone? How can this be achieved? The answer is simple, if the Caribbean region has a strong desire to propel itself and its people into the future, it has no choice. With the right leadership, enthusiasm, patience, confidence and discipline nothing is impossible. This is not a job solely for governments, but for the region’s intellectuals, culturalists, innovators,
    entrepreneurs and changemakers, both at home and in the diaspora.

    “Leadership is the capacity to translate vision into reality” Warren G. Bennis

    Brand Caribbean should be infused in every aspect of our wider societies and communities, leaving no one behind and promoting a society for all. So, what exactly is Brand Caribbean? Brand Caribbean is the representational self image of regional pride and ambition, which will lead the region beyond sun, sand and sea. Many reading this will think, the Caribbean is not a superpower, it is not wealthy, it has no military might or
    massive oil fields. Yes, this is all accurate but the beauty and brilliance of soft power is that it requires introspection, depth, emotional maturity and intellect. It is not measurable by any international standard it is merely a way to gain influence by using what you have. It is based on being who you are and begins with where you are.

    Soft power affects behaviour, it changes attitudes and perceptions, which in turn attracts the right kind of attention and visibility. This power is influential and stems from knowing one’s own worth. Unlike relational power it does not seek to position itself by comparisons to a wider authority or through deference but through self efficacy and knowing that it indeed has something unique to offer the world.

    Singapore is a small first world nation in South-East Asia, which was 50 years ago a member of the third world club. It was once dismissed as a nation barely surviving. Today it boasts world class universities, and is a global finance, commerce and trade hub amongst other notable things. It holds many firsts and exists in a world of superlatives.

    “The most valuable of all capital is that invested in human beings.” Alfred Marshall

    The Caribbean is the “Green Queen” which makes her a region for innovation on all matters sustainable from renewable energy to agriculture to fashion and all in between. She boasts the world’s best athletes, with a legacy spanning cricket, baseball and track and field. She has a vibrant literary, music and theatrical culture and she is a land of many people, living together for the most part peacefully resulting in every hue and cultural mix imaginable to the human race.

    This makes her an example for diversity and cultural capital of all forms. Each nation has
    something special. Her unique selling points are capable of solving some of the world’s biggest problems where the environment and diplomacy are concerned. Her music, art and culture can act as a hub for innovation centering peace and conflict resolution. Her diaspora is vast, therefore scope and reach are unlimited.

    In the end the biggest convincers of Brand Caribbean are not outsiders but those inside the
    community. We must first become our own early adopters and appreciate the diverse cultures, values and traditions we bring to the world.

    What do all of the Caribbean nations have in common? There are no low costs reliable ferries or planes offering multiple daily services throughout the region. Island hopping is extremely difficult and in some cases impossible. In many instances most Caribbean nationals do not travel inter-regionally. If we do not know ourselves how can we set goals for our region and make decisions which enable and have a long lasting impact? If soft power rests on ideas which are appealing, how can this be accomplished if we don’t know each other? In the end what we think of ourselves, is much more important than what others think of us. May our self esteem lead us into a new era, where our region leads with soft power.

    Jo-Ann Hamilton is a Caribbean-born, globally active freelance writer, UN Women Global Champion, consultant and the founder of SecretBirds which empowers women and young girls through entrepreneurship. You can follow her on Twitter at @JAlexandrHamil and read more of her work at SecretBirds Headquarters.

    The views and opinions expressed herein are solely those of the guest author and are not necessarily representative of those of the Caribbean Trade Law & Development Blog.

  • De-Risking remains “a key priority”, according to US Treasury

    De-Risking remains “a key priority”, according to US Treasury

    Alicia Nicholls

    De-risking remains a “key priority” for the United States’ (US) Department of the Treasury. This is according to Acting Under Secretary for Terrorism and Financial Intelligence in the US Department of the Treasury, Mr. Adam Szubin, in a key note address delivered at the American Bankers Association/American Bar Association’s annual Money Laundering Enforcement Conference held in Washington DC November 13-15, 2016.

    The withdrawal and/or restriction of correspondent banking services as part of banks’ de-risking efforts has been a growing problem internationally, with small states in the Caribbean appearing to be the most affected, according to a World Bank study published last year. For small open economies, the loss of correspondent banking relationships threatens to sever their access to global trade, finance and remittance flows. Belize in particular has been seriously impacted by de-risking as even its Central Bank has seen some of its CBRs severed.

    Responding to those who highlight that the current regulatory environment is prohibiting  financial inclusion, Mr. Szubin noted that “we at Treasury firmly believe that expanding access to the financial system and protecting it from illicit activity are mutually reinforcing goals that can and must be addressed simultaneously.”

    He went on to discuss what the Treasury found were the reasons why some international banks were reassessing their business relationships:

    • Correspondent banking is a low-margin business in a global banking environment that has seen many multinational banks reassess their global strategic footprint, cut costs, and reallocate capital.
    • Heightened prudential standards following the global financial crisis
    • There are often very real concerns about the risks presented by anti-money laundering and countering the financing of terrorism (AML/CFT) compliance

    It should be pointed out that Caribbean-based research on De-Risking and Its Impact found that “[banks’] decisions are based on a complex of factors, including the cost of compliance with laws and regulations, and is an unintended consequence of decisions taken by the official sector in globally systemic countries.”

    It is also worth noting that no CARICOM state is currently on the CFATF’s watch list, not even Belize which has been the most affected. Therefore, the view of Caribbean countries as “high risk” is unfounded. Another issue is that US banks themselves have highlighted the need for better regulatory guidance on de-risking, which shows that ambiguous regulations are indeed part of the problem. A good step is the Joint Fact Sheet entitled “Joint Fact Sheet on Foreign Correspondent Banking” released by the US Treasury and US regulators this August.

    Mr. Szubin then outlined the following ways in which the US is dealing with the problem:

    • On-going engagement with the private sector, foreign jurisdictions, money services businesses, non-profit organizations, including with the Caribbean
    • Ensuring that the global standards in place are well understood and implemented consistently and effectively e.g: release of its Factsheet clarifying that Knowing your customer’s customer – KYCC is not required
    • Treasury’s Office of Technical Assistance offers technical assistance to roughly 18 countries, including a number of countries impacted by de-risking
    • Information sharing and he gave an example of Mexico

    Mr. Szubin called the perception that banks are taking an indiscriminate approach to terminating, restricting, or denying services across entire sectors as “inaccurate and overblown and not, in fact, what most institutions are doing in terms of best practice”. This, however, has not been the experience of some banks in the Caribbean which have had their correspondent banking relationships severed without a concrete explanation and often with only a short notification period. Bank of America’s abrupt termination of its relationship with Belize’s largest bank, Belize Bank, is perhaps the most glaring example.

    Mr. Szubin did, however, encourage banks “to continue to take the time and effort to assess your controls and the risks presented by individual clients and where you cannot manage effectively that risk make conscientious decisions.”

    It is, however, comforting to know the US Treasury has reiterated its prioritisation of the phenomenon of de-risking, which bodes well for Caribbean governments and other stakeholders as they continue their lobbying on this issue.

    The full remarks may be accessed here.

    Alicia Nicholls is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • WTO: G20 Trade Restrictions remain high, despite slowdown in new measures

    WTO: G20 Trade Restrictions remain high, despite slowdown in new measures

    Alicia Nicholls

    Despite a slowdown in new measures, existing trade restrictions among the G20 countries remain high. This is according to the World Trade Organisation’s (WTO) latest Report on G2o Trade Measures (mid-May 2016 to mid-October 2016) released November 10, 2016.

    Some of the key findings of the sixteenth edition of this Report are as follows:

    • A total of 85 new trade-restrictive measures were implemented by G20 economies during the review period (mid-May to mid-October 2016).
    • This is an average of 17 new measures per month
    • The good news is that this is a decrease  from the 21 per month imposed in the previous reporting period (mid-October 2015 to mid-May 2016)but the WTO also cautioned that this is actually a return to the trend level for new trade-restrictive measures since 2009.
    • Of the 1,671 trade-restrictive measures (including trade remedies) recorded for G20 economies since 2008, only 408 had been removed by mid-October 2016.

    As noted by the WTO, these  findings are of concern given the slowdown in global trade flows and the continuing economic uncertainty in the world economy.

    The WTO in its recent downward revision of its trade forecasts is now predicting 1.7% growth in world merchandise trade volumes in 2016 (down from its previous forecast of 2.8%), the slowest rate of growth since 2009, and lower than global GDP forecasts of 2.2%.

    I would also add that President-elect Trump’s tariff-happy rhetoric does not bode well for the future reduction of trade restrictive barriers if he does go through with his promises.

    The WTO therefore noted that:

    “It is imperative that G20 economies — collectively and individually — re-double their efforts to deliver on their commitment to refrain from taking new protectionist measures and roll back existing ones.”

    The full report may be accessed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

  • What does a Trump presidency mean for Caribbean Tourism?

    What does a Trump presidency mean for most Caribbean countries’ largest foreign exchange earner? Secretary-General of the Caribbean Tourism Organisation, Mr. Hugh Riley, explores this issue in his latest blog post. Have a read here!