Caribbean Trade Law and Development

Tag: economy

  • Re-invigorating CARICOM–Canada Trade in a Shifting Global Order

    Re-invigorating CARICOM–Canada Trade in a Shifting Global Order

    Alicia Nicholls

    On May 5, 2025 I had the opportunity and pleasure of being a panelist on the Canada Caribbean Institute (CCI)’s webinar entitled “Canada-CARICOM Relations in the Trump Era”.  In this blog post, I share and expand on some of the reflections I made at this session around the theme of reinvigorating CARICOM-Canada trade in this current global dispensation.

    While the US remains an important partner for Caribbean Community (CARICOM) countries, it is well understood in international trade and development circles that overreliance on any single market or partner increases exposure to geopolitical, economic and other shocks emanating in that partner. For the small island developing states (SIDS) of CARICOM whose economies are already highly open and vulnerable, diversifying trade and economic relationships is not a luxury, but a necessity. Diversification entails not only expanding south-south ties with Africa, China, and Latin America, as CARICOM countries have increasingly been doing, but also strengthening partnerships with long-standing allies like Canada. In this storm of uncertainty, Canada stands out as a stable and values-aligned safe harbour—a reality reinforced by the presence of a sizable Caribbean diaspora in Canada and a not insignificant Canadian diaspora presence here in the Caribbean, serving as bridges between us.

    The foundations of the Canada-CARICOM trading relationship stretch back to the colonial era when trade between the British West Indies and British North America (now Canada) involved an exchange of sugar, molasses, and rum for Canadian fish, lumber, and flour. That historical trade has evolved in structure and content, but the essence of mutual respect and cooperation remains. Today, our trade is anchored by the Canada Caribbean Trade Agreement (CARIBCAN)—a non-reciprocal preferential trade arrangement established in 1986 under which Canada grants unilateral duty-free access to eligible goods from Commonwealth Caribbean countries and territories. This covers most CARICOM countries’ exports to Canada, excluding goods in Harmonised System (HS) chapters 50-65 (mainly textile products) and goods subject to most favoured nation (MFN) tariffs of over 35%.

    CARIBCAN beneficiary countries or territories are Anguilla, Antigua & Barbuda, Bahamas, Barbados, Belize, Bermuda, The BVI, the Cayman Islands, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts & Nevis, St Lucia, St. Vincent & the Grenadines, Trinidad & Tobago and the Turks and Caicos Islands. Notably, CARICOM member States Suriname and Haiti are not CARIBCAN beneficiaries.

    The arrangement is unilateral which means that beneficiary countries and territories are not required to reciprocate by lowering duties on Canadian imports, reflecting the agreement’s original development-oriented rationale: to enhance the region’s export capacity, promote economic development, and stimulate regional integration. The arrangement is subject to a World Trade Organisation (WTO) waiver, which was most recently extended in 2023 for another ten year period (until 2033).

    Despite this favourable arrangement, CARICOM’s trade performance with Canada has seen signs of stagnation. According to data gleaned from ITC’s Market Access Map, bilateral trade between CARICOM and Canada was valued at just US $1.2 billion in 2024. This is relatively modest when compared to CARICOM’s trade volumes with other partners. Notably, CARICOM enjoyed a trade surplus with Canada until 2019, but that dynamic has since reversed and Canada now enjoys a surplus with the region. CARICOM countries’ margin of preference in the Canadian market has declined as Canada has concluded agreements with other partners and its tariffs have lowered. Moreover, utilization rates of CARIBCAN preferences vary significantly across countries, with some utilising the preferences for significant shares of their exports and others failing to capitalize on the access afforded. CARICOM’s share of Canadian imports has declined, from 0.17% in 2014 to just 0.09% in 2024. Conversely, Canada’s share of CARICOM’s imports also dropped from 2.5% in 2014 to 1.5% in 2024.

    Digging deeper into the data reveals more about what is being traded and where opportunities lie. CARICOM’s leading exports to Canada include gold, aluminum, methanol, rum and spirits, root crops and seafood. On the flip side, Canada exports oil, wheat, iron ores, medicines, and meats to the Caribbean. According to ITC’s Export Potential Map, there remains significant unrealized export potential—estimated at around $1.4 billion. Gold alone, in its unwrought, non-monetary form, represents a good portion of this untapped potential. There may also be scope to expand exports of products like Caribbean rum, especially as Canadian consumers seek alternatives to U.S. products, including spirits and other alcoholic beverages.

    On the services side, tourism, commercial services and transportation services form the bedrock of the Canada–CARICOM relationship. Canadian banks have a long history in the region and for Barbados, Canadian firms are the major players in its global business sector. Travel remains one of the most vital service links, with Canada emerging as the region’s second-largest source market in 2024, sending 3.3 million visitors—a 4% increase from 2023, although still below pre-pandemic figures. With Canadians traveling less frequently to the US due to geopolitical tensions between these two countries, there is real potential for the Caribbean to capture more of this outbound market through targeted marketing, improved airlift, and creative offerings such as multi-destination packages. The education link is also noteworthy. Many CARICOM nationals study at Canadian institutions, bolstering ties through Mode 2 (consumption abroad) services trade.

    In addition to bilateral trade and services, Canada and CARICOM share values that manifest in their joint positions on the multilateral stage on issues like climate action, support for the Sustainable Development Goals (SDGs), and championing on-going and badly needed reform of the rules-based multilateral trading system. As global multilateralism comes under increasing strain, these alignments become even more critical.

    Some concrete recommendations

    The 2023 Canada–CARICOM Strategic Partnership, launched at the Ottawa Summit, marked an important milestone. This framework creates a permanent mechanism for structured dialogue and coordination—a platform we must now leverage more ambitiously. There are several immediate and medium-term actions worth considering.

    First, we need to better understand and address the reasons behind the low utilization of CARIBCAN by firms in beneficiary countries and territories and ensure evidence-based interventions to remedy this. This might involve empirical research in partnership with institutions like the University of the West Indies. Technical assistance to help exporters meet rules of origin, the simplification of customs procedures, and the creation of digital trade platforms or business missions could strengthen small and medium-sized enterprise (SME) readiness. As most CARICOM countries’ exports (except those exempted from the baseline tariff) now face additional 10% tariffs in the US market where they might have entered either duty-free or reduced rates of duty under the Caribbean Basin Initative (CBI) programmes, some CARICOM exporters will be seeking alternative markets for their products and Canada’s market of 40 million people and where most CARICOM goods can enter duty-free under CARIBCAN, beckons.

    Second, the question of whether CARIBCAN should be modernized or replaced with a reciprocal but development-sensitive agreement must be considered seriously before it is up for renewal of the waiver in 2033. While negotiations for a reciprocal trade agreement began in 2007, they eventually stalled due to divergent priorities. Today’s changed global landscape may offer a window to revisit the idea, possibly with a WTO-compatible trade and development agreement better tailored to CARICOM and Canada’s current needs.

    Third, Canada and CARICOM could benefit from updating their bilateral investment treaties (BITs) to reflect contemporary standards. Most are older generation BITs which prioritise investor protection over promoting and facilitating investment for sustainable development. In the absence of the negotiation of an FTA with a comprehensive investment chapter, Canada and CARICOM countries with which it has BITs should consider renegotiating their BITs and integrating development-friendly provisions, environmental safeguards, and mechanisms that encourage responsible investment.

    Fourth, greater attention should be paid to emerging sectors like digital trade, creative industries, fintech, scientific research and development, and digital health. These are areas where Canadian and Caribbean firms can collaborate meaningfully, and where mutual capacity-building could lead to innovation and job creation. I am always reminded of and inspired by the story of Barbadian-born scientist, Dr. Juliet Daniel, who is doing significant cancer research in Canada. This shows that the possibilities do indeed exist, especially given the strong ties between many Canadian universities and The UWI here in the Caribbean.

    Fifth, Canadian tourism is on a growth trend towards its pre-pandemic levels but could be boosted not just through more aggressive marketing in Canada, but through product innovation and better coordination across the region. Multi-destination tourism packages, for instance, could offer Canadians a richer Caribbean experience while distributing tourism benefits more evenly within CARICOM.

    Finally, the new Canada–CARICOM Strategic Partnership should also be used as a platform for closer multilateral coordination, including on WTO reform to strengthen the rules-based multilateral trading system. Although the Liberal Party in Canada won the elections in the just concluded election, there is a new Prime Minister and it remains to be seen to what extent he will continue some of the work of his predecessor.

    In all of this, the Caribbean diaspora in Canada and the Canadian community in the Caribbean serve as vital bridges that can drive trade, investment, cultural exchange, and policy dialogue, and are important players and allies as we seek to strengthen this relationship.

    In a world increasingly shaped by geopolitical unpredictability and economic volatility, deepening our economic relationship with Canada is not simply a reactive response. It is a logical and strategic one. Canada is already a valued partner with shared values, historical ties and a demonstrated commitment to inclusive and sustainable development. But the current level of trade and investment does not yet reflect the true potential of this relationship. There is considerable scope for deeper growth.

    Let me thank the Canada Caribbean Institute for the great work it is doing on fomenting this relationship, including its advancement of thinking on forging deeper Canada-Caribbean ties in the backdrop of Trump 2.0, as well as some of the concrete policy recommendations it has highlighted in a recent blog post. In these headwinds of global uncertainty, we should view Canada as not just a buffer in times of crisis, but as a cornerstone in our efforts to build a more resilient, prosperous, and sustainable CARICOM. Strengthening this partnership is more than a policy option—it is a strategic imperative.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is an international trade and development specialist with over 15 years experience and is the founder of the Caribbean Trade Law and Development Blog.

  • US ‘Liberation Day’ Tariffs: What impact for the Caribbean?

    US ‘Liberation Day’ Tariffs: What impact for the Caribbean?

    Alicia Nicholls

    On April 2, 2025, United States (US) President, Donald J. Trump, announced additional ad valorem tariffs of 10% on goods imports from all countries, including Caribbean Community (CARICOM) countries, under his new ‘Reciprocal Tariff Policy’. In addition, some countries like Guyana, which have a merchandise trade surplus with the US, will face even steeper additional tariffs. This article discusses these ‘Liberation Day’ developments and what they might mean for CARICOM countries.

    The Reciprocal Tariff Policy

    Earlier this year, on January 20, 2025, President Trump signed a presidential memorandum outlining the broad contours of his America First Trade Policy 2.0, initiating an investigation into the root causes of the country’s “large and persistent” merchandise trade deficit. This was followed by a second executive order, the Presidential Memorandum on Reciprocal Trade and Tariffs issued on February 13, 2025, which ordered a review of non-reciprocal trade practices and their contribution to the U.S. trade imbalance. On April 1, 2025, the President received the results of these investigations.

    The executive order of April 2, 2025 entitled “Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that contribute to large and persistent annual US goods trade deficits” introduces the so-called Reciprocal Tariff Policy as a response to the national emergency supposedly caused by foreign trade and economic practices.

    Using presidential authority pursuant to the International Emergency Economic Powers Act of 1977 (IEEPA), this policy applies an additional ad valorem duty starting at 10% on imports from all of the US’ trading partners, effective April 5, 2025 at 12:01 am (EDT). For countries in Annex I, these tariffs will increase to the country-specific rates outlined in that annex effective April 9, 2025 (EDT). For Guyana, the only Caribbean Community (CARICOM) country on Annex I, its goods exports to the US will be hit with additional ad valorem tariffs of 38%.

    These tariffs are to remain in place indefinitely, until the President determines that the conditions warranting them have been “satisfied, resolved, or mitigated”. Additionally, the President has the authority to increase the tariffs if the countries retaliate. A narrow range of goods listed in Annex II of the Memorandum is exempt from the ad valorem tariffs.

    These new ‘reciprocal’ tariffs aim to address what the Trump Administration perceives as chronic non-reciprocity in the US’ trade relationships, hampering U.S. manufacturers’ ability to compete in foreign markets and thereby threatening American jobs, manufacturing capacity, and competitiveness. However, the methodology used to determine these tariffs has faced criticism. If it is to be a so-called ‘reciprocal’ tariff, the initial thinking by many of us in the trade policy community was that the US would match the tariffs charged by these countries on US imports. Rather, according to financial journalist James Surowiecki in a post on X and later confirmed by economists and the administration, the formula for calculating the additional tariffs appears to involve simply dividing a country’s trade balance with the U.S. by the value of its exports to the US multiplied by ½ to arrive at the tariff rate. This has led to some of the poorest countries in the world being hit with disproportionately high tariffs based on this dubious formula. Moreover, tariffs have even been imposed on small uninhabited territories like the Heard and McDonald Islands, reiterating doubts about the logic behind the policy and on the more humorous side, giving rise to a raft of penguin memes on social media.

    Possible implications for Caribbean economies and firms

    However, this is no laughing matter as all goods exported from CARICOM countries to the U.S. will now face the additional 10% tariff, except for Guyana which faces a country-specific 38% tariff. This makes the costs of Caribbean products more expensive in the US, although there is the argument that they will also be competing with goods from other countries which might be subjected to even higher country-specific rates.

    The US has a large trade surplus with the region on a whole, and with most Caribbean countries, with the exceptions of the commodity-exporting countries of Guyana and Trinidad & Tobago. Indeed, the US remains a key market for several important Caribbean exports, including energy products like oil, ammonia and methanol, as well as rum, textiles and other manufactured and agricultural products. Since the 1980s most CARICOM countries’ goods exports to the US are eligible to enter duty-free due to the Caribbean Basin Initiative and its constituent Acts. This is not a negotiated trade agreement, but a unilateral preferences programme which has enjoyed bipartisan US support because it benefits US manufacturing as the biennial US International Trade Commission (USITC) reports on the operation of the CBERA have consistently shown.

    In her latest article, noted Caribbean economist Dr. Kari Grenade outlined a variety of ways in which these developments could impact Caribbean economies, including inflation as since the Caribbean imports a significant volume of US goods, including essential foodstuffs, this could lead to rising prices on our supermarket shelves. Analysis by Tax Foundation shows that the Trump tariffs amount to an average tax increase of more than $2,100 US per US household in 2025. What does this mean for the Caribbean diaspora in the US? What does this mean for Americans’ travel to the region if US consumers will be paying more for everyday goods and will have less disposable income ? What does this mean for those countries in the Caribbean which depend on the US as a major tourism source market?

    What next? Firm and regional responses

    The tariffs have not yet come into effect, and it is likely that they could be halted at the last minute given the backlash and stock market volatility the announcement has caused. Nonetheless, it is imperative for firms and Caribbean countries to plan for them. For Caribbean exporters which rely on the CBI concessions, this may necessitate rethinking export strategies, possibly by shifting to non-trade market entry strategies to maintain access to the U.S. market, or by diversifying into new export destinations. For those Caribbean companies which rely on inputs imported from the US, they could face higher costs as US manufacturers pass on their increased costs to intermediate and end consumers. This means they will have to continue to diversify their sourcing. Some firms are already doing this.

    Retaliation is not a feasible option for CARICOM countries as we import much of what we consume from the US and already have high tariffs on imported goods. Where feasible, Caribbean countries could lower their applied rates on imported goods to help offset some of the pain consumers would feel.  Our other main options are diplomatic, preferably as a grouping. Caribbean governments have been engaging in diplomatic outreach to urge the US to reconsider the policy or at least provide carve-outs for small countries. In a recent article, Antigua & Barbuda’s highly respected Ambassador to the US, Sir Ronald Sanders, has called on the US to revisit these tariffs as they are against the spirit of the CBI and US-Caribbean relations, have human and economic costs and also imperil US strategic interests. Indeed, this policy will make the price of US goods more expensive and further incentivise importers in the region to source more regionally or internationally. Moreover, many Caribbean nationals have customarily gone to the US, especially cities like Miami and New York, to vacation and shop, contributing to the economies of those cities. Caribbean nationals will increasingly go to cheaper destinations like Panama.

    The ‘America First Trade Policy 2.0’ reinforces the need for us in CARICOM to accelerate efforts to expand our intra-regional trade and continue our trade diversification efforts. This is nothing novel and it is something we have long recognised. I listened to the speech of EU Commission President, Ursula von der Leyen earlier this week and found it noteworthy that the EU, a market of some 450 million people and with the economic heft to implement meaningful retaliatory measures also saw the salience of deeper integration and economic diversification to helping build its resilience and navigate this period of uncertainty. If deeper integration and diversification are important for the EU, they are doubly vital for us in CARICOM. After all, it is not just these tariffs we must contend with, but also the mooted fees to be placed on vessels which are Chinese made or are part of fleets which have a large number of Chinese-made vessels, which could impact many Caribbean countries.

    A broader concern is the pall this beggar thy neighbour trade policy by US as the world’s largest economy casts over the rules-based multilateral trading system and the World Trade Organisation (WTO) which it was critical in establishing. While the multilateral trading rules are far from perfect, they have provided a predictable and rules-based framework where, inter alia, countries agreed to bind their tariffs for tariff lines at specific levels, which ensures some predictability for exporters. However, what the Trump administration is doing is contrary to the spirit of the multilateral trading system and will set off a global trade war as major economic powers react with their own retaliatory measures. As history shows, this will possibly have deleterious implications for the global economy, and just a mere five years after the world was hit by the worst pandemic in 100 years.  This latest move heralds a more unpredictable, uncertain, unstable and unilateral era in global trade relations, one in which strategic diplomacy, regional cooperation and diversification will be key for CARICOM countries to navigate.

    Alicia Nicholls, B.Sc., M.Sc., LL.B. is an international trade specialist and the founder of the Caribbean Trade Law and Development Blog: www.caribbeantradelaw.com.

  • Caribbean-African Trade: The Unfinished Bridge

    Caribbean-African Trade: The Unfinished Bridge

    Ashley Williams, Guest Contributor

    The Premise

    History left a fracture where a bridge should have been. The Caribbean and Africa—two regions tethered by blood, yet disconnected by trade.
    For centuries, we have exchanged culture, music, and resilience, but not commerce at scale. That was by design.

    Today, we are positioned to correct that. Not as an afterthought, not as a side conversation, but as a deliberate economic force.
    The Caribbean and Africa are two sides of the same coin—one rich in resources, the other rich in financial infrastructure and global access.

    The question is not if this bridge will be built. The question is who will control its foundation.

    The Case for Reconnection

    For decades, Caribbean nations have been locked into trade cycles dictated by former colonial powers.  Our largest exports still head to North America and Europe.
    Our tourism models remain dependent on Western economies. Even our food supply is largely imported from outside the region.

    Africa, too, has been locked into extractive economic relationships—its vast resources flowing outward, while financial control remains offshore.
    China, the EU, and the U.S. have embedded themselves as dominant players in African trade. Yet, the Caribbean is absent. Why?

    Because we have not yet moved as a collective force. But when we do, the system changes.


    Strategic Synergies: What We Bring, What They Bring

    Caribbean economies are small but agile. We are financial architects. We design offshore structures, manage global wealth, and maneuver regulatory frameworks like second nature.
    Africa, on the other hand, is  a sleeping giant—a landmass of opportunity, with raw materials, energy potential, and scale.

    The synergy is undeniable. The Caribbean is the financial brain, Africa is the industrial body.


    1. Financial Infrastructure & Alternative Investment 


    The Bahamas is a financial powerhouse—one of the world’s most recognized offshore banking hubs. Africa is experiencing a fintech revolution, leapfrogging traditional banking systems.

    – Caribbean Strength: We control regulatory frameworks, offshore finance, and structured investment models. 
    – African Strength: Digital banking, mobile finance, and large-scale investment needs. 
    – Opportunity: A Caribbean-African sovereign wealth fund that structures investments in real estate, energy, and infrastructure across both regions. 

    2. Renewable Energy & Power Independence
    Both regions suffer from high energy costs and dependency on fossil fuels. Africa has solar farms the size of cities, untapped hydroelectric power, and access to rare minerals needed for battery storage. 

    – Caribbean Strength: Expertise in solar-powered desalination, grid management, and sustainable energy policies. 
    – African Strength: Raw materials, large-scale renewable energy projects, and battery storage potential. 
    – Opportunity: Co-owned energy companies** that provide off-grid power solutions for both regions—drastically reducing reliance on external energy suppliers. 

    3. Food Security & Agricultural Trade 
    The Caribbean imports **80% of its food.  That is a liability. Africa has the land and the output to close this gap. 

    – Caribbean Strength: Trade logistics, duty-free zones, and financial structuring. 
    – African Strength: Large-scale agricultural production, natural farming conditions. 
    – Opportunity: A direct agricultural pipeline, moving fresh, organic African produce into the Caribbean food supply chain. 

    4. Real Estate & Infrastructure Development 
    Both regions have a real estate boom, but capital access remains a challenge. The Bahamas understands luxury development and foreign direct investment. Africa needs urban expansion and commercial real estate projects. 

    – Caribbean Strength: Investment-friendly real estate laws, residency incentives, and luxury market expertise. 
    – African Strength: High demand for commercial and residential expansion. 
    – Opportunity: A Caribbean-African Real Estate Fund that funnels investment capital from both regions into large-scale developments.


    Breaking the Barriers: The Playbook 

    This is not a matter of potential, but of execution. The barriers are not structural; they are psychological and logistical.

    1. Trade Agreements & Economic Alignment 
    The African Continental Free Trade Area (AfCFTA) exists. CARICOM exists. The link between the two is missing. 
    Bilateral agreements must eliminate tariffs, streamline import/export regulations, and incentivize direct Caribbean-African trade flows.

    2. Direct Shipping & Air Cargo Routes 
    Right now, Caribbean-Africa trade requires detours through Europe or the U.S. That is not sustainable. We need dedicated trade hubs in The Bahamas, Barbados, and Jamaica to serve as logistical entry points for African goods. 

    3. Digital Trade & Blockchain Integration 
    Africa leads in mobile banking. The Bahamas leads in blockchain-friendly regulation. Smart contracts, blockchain-based supply chain verification, and digital trade platforms can bypass traditional barriers and create frictionless commerce. 

    The Bahamas as the Financial Bridge 

    The Bahamas is uniquely positioned to be the Caribbean-African trade epicenter. It is one of the world’s most respected financial jurisdictions, a tax-neutral hub, and a global player in wealth management and fintech.

    What must happen next? A formalized Caribbean-African Investment Forum. A platform that: 

    – Connects investors with African-Caribbean projects.
    – Structures investment vehicles for real estate, energy, and agriculture. 
    – Expands digital banking solutions to enable smooth financial transactions. 

    The Bahamas can lead this movement. Not by asking permission, but by building the infrastructure.

    Conclusion: The Shift is Inevitable 

    This is not just about trade. This is about rewiring the economic power flow. 
    For too long, both regions have been extraction zones—raw materials, cheap labor, offshore finance—flowing outward, never cycling back. 

    The cycle ends here.

    This is about control. Control of capital, control of supply chains, control of our economic future. 

    Africa is rising. The Caribbean is evolving. And when these two forces align, the game resets. 

    The only question that remains is: Who moves first?

    Ashley Williams is an attorney, strategic visionary, and key figure in the rise of The Bahamas and the founder of WilliamsAdvise.

  • Is the World Bank finally committed to an open and merit-based selection process? Only time will tell…

    Alicia Nicholls

    The current president of the Washington DC-based World Bank, Robert Zoellick, a former executive with Goldman Sachs, will be stepping down from the post in June of this year.  Per a tacit agreement between the US and European countries, all eleven presidents of the World Bank since the Bank’s founding in 1944 have been American. Concomitantly, a European has always headed its sister institution the International Monetary Fund (IMF).  This present World Bank selection cycle has seen an unprecedented challenge to US monopoly of the World Bank’s leadership to date. The US’ nominee, Dr. Jim Yong Kim, faces stiff competition from two nominees from the global South, Dr. Ngozi Okonjo-Iweala from Nigeria and the Brazil-nominated Mr. Jose Antonio Ocampo from Colombia.  Coming on the heels of the IMF’s managing director selection process last year when Europe retained its perennial grip on that institution’s leadership position, the question on everyone’s mind is whether this World Bank selection cycle will see a continuation of the status quo or whether either candidate from the global South will stand a decent chance of assuming the reins of this important international financial institution (IFI).

    The contemporary geopolitical and economic configuration of the world is much different from that which existed in the immediate post-World War II era in which the Bretton Woods institutions were born. The US, while still the world’s largest economy by GDP, now shares the world stage with several increasingly important poles of growth, notably emerging economies which have been the main engines of economic recovery. Yet the World Bank’s governance structure does not reflect this multipolar reality. Tired of the iniquitous status quo, the BRICS have been pushing for reform of the Bretton Woods institutions to reflect present-day economic realities and to allow developing countries a greater say in the international financial and economic system. While the BRICS have been successful in increasing their voting power in the World Bank, securing the top post has been a different story. Will this time be different?

    Brazil has nominated former Colombian Minister of Finance, Jose Antonio Ocampo, a US-trained economist who is currently a Professor at the Ivy-League Columbia University in New York City. In its communiqué of March 26th, the African Union  endorsed the candidacy of renowned Nigerian economist, diplomat and former government minister, Dr. Ngozi Okonjo-Iweala. Perhaps in an attempt to diffuse the calls for change, the Obama administration shied away from the usual choices of bank executives and bureaucrats and instead nominated the Korean-born US national Dr. Jim Yong Kim.  A medical doctor, Dr. Kim is the President of the prestigious Dartmouth College and is well-known for his work in fighting tuberculosis and HIV-AIDS throughout the developing world.

    It should be noted that all three candidates being considered are highly educated and tremendously qualified in their respective fields. All three were born in developing countries and educated at Ivy League universities in the US. That being said, Dr. Okonjo-Iweala’s impeccable qualifications and her vast experience should make her rise to the top of the pack.  Dr. Okonjo-Iweala is an internationally respected economist with a wealth of expertise in development issues at both the national and global levels.  She has spent more than twenty years at the World Bank until ascending to the post of Managing Director in 2007. She has also served twice as Minister of Finance and Minister of Foreign Affairs in her home country of Nigeria. It is therefore no surprise that Dr. Okonjo-Iweala was named as one of the 100 most powerful women by Forbes Magazine.

    Dr. Okonjo-Iweala as the World Bank’s new president would be a powerful symbol for gender rights. It would be the first time a woman, far less a woman from the global South, would be at the helm of this powerful but traditionally male-dominated global financial institution. A wife and mother of four, Dr. Okonjo-Iweala has been outspoken on gender equality and on the macroeconomic and social benefits of providing finance to women and of encouraging women entrepreneurship. In this regard, it is hoped that she would push for more gender-sensitive bank lending programmes.

    Perhaps, even more critically, it would be the first time a person from a developing country and an African nation, will be at the head of this institution. The World Bank is an important lender to developing countries and has the twin goals of reducing poverty and promoting development. Despite some of its good work, the World Bank, like its twin sister the IMF, has not always had the best reputation in the developing world, including right here in the Caribbean. During the 1990s, its structural adjustment programmes under the so-called Washington Consensus foisted austere market reforms and other neo-liberal policies on cash-strapped countries as conditionalities for loans. These policies included deregulation, privatization, cuts in Government expenditure (especially in social welfare) and liberalization of capital markets, which if introduced too quickly and/or without the supporting institutional framework could lead and have led to devastating consequences in the countries concerned and have had a disproportionate impact on the livelihoods of women and the poor. For a case in point, just watch the documentary Life and Debt for a vivid look at Jamaica’s experience with IMF-World Bank sponsored structural adjustment. Under a Okonjo-Iweala presidency, it would be hoped that there will be the genesis of a new era in the Bank’s dealings with the South, marked by less focus on free market ideology and a greater sensitivity towards the impact of policies on vulnerable groups in society such as women and the poor.

    However, Dr. Okonjo-Iweala’s candidacy faces two big hurdles. Chief among them is the Bank’s ‘democratic deficit’. It is the Bank’s 25-member Board of Executive directors which will ultimately decide the successful candidate.  As the largest economy among the 187 countries in the World Bank, the US has the majority of votes. By choosing a nominee, the US has shown that it will not go against its own strategic interests by supporting a non-American for such a key post.  Moreover, European countries, which hold the second largest block of votes, are unlikely to support a non-US candidate, especially given the US’ support for their IMF nominee last year. Additionally, Japan has already signalled its intention to support the US nominee.

    The only alternative would be for Dr. Okonjo-Iweala to garner unanimous developing country support. Therein lies the second problem.  The BRICS have been reticent about throwing their support behind a single nominee from the South and have so far not endorsed any of the three candidates. Last year the BRICS missed their opportunity to block the ascension of yet another European to the post of IMF managing director by their inability to unanimously agree on an alternative candidate, even though there were well-qualified non-European candidates.

    This crop of candidates will make unanimous developing country support behind a single candidate even more elusive. The Brazil-nominated Mr. Ocampo will probably enjoy significant support from Latin American countries. But as the US nominee, Dr. Kim is the clear front-runner for the job. Moreover, by choosing an Asian-American, a non-banker and a public health professional,  the US has picked a candidate who will undoubtedly garner support from many developing countries, including some Asian countries which have criticised the US’ monopoly of the World Bank leadership position. Despite being the best candidate, Dr. Okonjo-Iweala will have a tough, and some say, futile battle for the World Bank presidency.

    As the countries which rely the most on IFIs and arguably stand the most to lose from any turmoil in the international financial system, developing countries need to have a greater say in these global financial institutions. Is the World Bank truly committed to an open and merit-based process irrespective of nationality? Only time will tell.

    Alicia Nicholls is a trade policy specialist and law student at the University of the West Indies – Cave Hill. You can contact her here or follow her on Twitter at @LicyLaw.