THE IMPACT OF THE SEPTEMBER 11 TERRORIST ATTACK AGAINST THE UNITED STATES ON THE CARIBBEAN POLITICAL ECONOMY
(Text of Lecture by Dr. Odeen Ishmael, Ambassador of Guyana. This lecture was sponsored by Clark Atlanta University and held at Spelman College, Atlanta, Georgia, on November 28, 2001)
Posted November 29th. 2001
Madam Chairperson, Faculty members, students, ladies and gentlemen.
I am deeply honored to make the inaugural presentation in this Public Lecture Series sponsored by Clark Atlanta University (CAU). I am delighted to learn that Spelman College and Morehouse College are also collaborating with CAU in this enterprise; and I am particularly pleased that the premises of Spelman are being used for this inaugural presentation. This is not because I don't like the CAU and Morehouse; I have had the pleasure of visiting those two institutions before, but I never had the opportunity of coming to Spelman. And furthermore, it is very important to note that Spelman is a ladies' college!
As you are aware, this lecture series forms part of the project on "Democratization and Conflict Resolution in Guyana", which CAU developed in partnership with the University of Guyana. The Organization of American States has stated its support for this project which last March received an International Development Partnerships Activity Award from the United Negro College Fund.
But this project could not have moved forward without the initiative and determination of Dr. Cedric Grant, former Ambassador of Guyana, who as a professor at CAU, has worked most diligently to establish a partnership with the University of Guyana. I salute Dr. Grant and commend him for his initiative in developing this project which, I am sure, will prove to be very beneficial to Guyana.
Ladies and Gentlemen,
Our world entered a new era on September 11 with the terrorist attacks on the United States of America. As we consider the subject of conflict resolution, we are faced with the challenge to determine whether we can find any logic behind those gruesome attacks. Reason surely will be tested to the highest degree in such an exercise.
The Caribbean region suffered directly from the attacks on the World Trade Center and the Pentagon. Over 100 of its nationals died in the attacks, but so far, only a few remains have been recovered. Many Caribbean communities here in the United States, and people in the Caribbean countries themselves are still in great distress over these deaths, and over the thousands of other lives lost in these devastating attacks.
I want to utilize my time this evening to discuss the economic, social and political impact these attacks are now having on the Caribbean region, particularly the countries which form the Caribbean Community (CARICOM). In this presentation, I will also examine the actions taken by the CARICOM Governments to deal with the critical situations that have developed. In addition, I will inject a Caribbean Muslim perspective regarding the September 11 events and their aftermath, and will conclude by expressing some views on the impacts of the those events on debt burden, security and international financial aid on the region.
THE ECONOMIC FALLOUT
Let us look first at the economic fallout. It is easily understandable why the Caribbean is affected by the events of September 11. The countries of the region, in particular the northern Caribbean consisting of Belize, Jamaica and The Bahamas, are physically close to the US, and in a large way they, as well as the rest of the Caribbean, are integrated to the US through people contact, trade and investment flows.
The countries across the region, especially those that rely largely on tourism and financial services, have already been feeling the impact in a very immediate way and with grave consequences mainly on their economies.
The tourism sector in the affected countries has already begun to operate below normal levels. The situation has worsened because of low occupancy rate of some hotels, which, even before the crisis, had fallen to 20 percent. Every day there are cancellations because people are not bothering to travel. As a result, many persons employed in the entertainment and hotel industries in the countries that rely heavily on tourism have been laid off. And with less money circulating as a result of the sliding tourism sector and possibly tighter controls on the offshore banks, many persons in The Bahamas, for example, who had made banking their profession, have now joined the ranks of the unemployed.
For Caribbean tourism, the last two months were disastrous, as American tourists stayed at home after September 11. The recent crash of an American Airlines plane departing for the Dominican Republic has compounded the situation. Barbados, which is less dependent than its neighbors on the American market, expects to receive about 30 percent fewer tourists to the end of this year. The small island states of the Caribbean - the Organization of Eastern Caribbean States - may be even more seriously affected.
The winter tourism begins next month, and around Christmas time we will get a better picture as to what is the immediate future of tourism. Already bookings are scanty, even at heavily reduced room rates. The hope now is that cruise operators will transfer ships from the Mediterranean and thus adding some substantial increases in visitors from Florida.
But even this may not be too helpful since cruise ships compete sharply with island hotels, often charging drastically reduced rates. Further, tourists on cruise ships do not spend much money when they go ashore. And now the cruise operators are demanding that Governments pay for divers to inspect hulls for bombs while, at the same time, insisting on lower port charges.
Currently, the situation remains uncertain. In a worst case scenario, 75 percent of American and Canadian tourists would not visit the Caribbean in the initial weeks, but we hope the situation will improve over time. The islands with a significant proportion of US tourists relative to UK tourists would be more vulnerable. Hence, Barbados may still do better than The Bahamas. A workable statistic for the worst affected countries is a 25 percent decline in tourism revenue over the next 12 months. This will work out to a 4-10 percent decline in the GDP growth rate.
In a best case scenario the region would actually benefit from a permanent redirection of yachts and cruise vessels to the safer waters of the Caribbean. Looking ahead, the tourist trade may slowly recover, but at the expense of resorts in the eastern Mediterranean and Indian Ocean which are now regarded as "danger regions" for tourists.
With regard to air transport, at present US airlines are reportedly running at about 60 percent of volume before September 11. Caribbean airlines - Bahamas Air, Air Jamaica and BWIA - have experienced significant loss, but unfortunately will not benefit from the bailout packages like the US carriers are getting from the US Government.
In the area of financial services, the Caribbean has offered fairly sophisticated financial services through many jurisdictions to the rest of the world. But financial services are also under scrutiny since September 11. An OECD Financial Action Task Force had earlier listed a number of Caribbean countries as not possessing proper financial practices, and it is obvious that pressure would be placed on these Caribbean countries to tighten these measures.
The uncertain political and economic climate since September is expected to impact all economies since virtually all major sectors of Caribbean economies, e.g. transport, tourism, agriculture, manufacturing, mining and finance, depend on ready access to the US. These setbacks come at a bad time. Sugar, rum and bananas, the Caribbean's agro-industrial mainstays, all face stiffer competition than in the past. There could also be some decline in foreign direct investment and difficulties in raising international finance. If a recession starts in North America and Europe this would significantly reduce demand for the region's products, particularly its already high priced tourist product and commodities. At the same time, with a global recession, capital flows to the region are also certain to go into further decline.
Some economists made predictions, just after September 11, that oil prices would rise. But so far this has not happened. Actually, oil prices have been declining because of the decrease in demand owing to the fact that people are traveling less since September 11. Thus, Trinidad and Tobago, the largest Caribbean oil producer, has not been able to gain a windfall, but has actually been earning relatively less from its oil resources over the past few months.
We also expect problems in the area of maritime transport. Insurance most likely will increase, and the obvious result is that there will be higher freight cost for many of the goods imported from the US. This will also be affected by increased security costs at international airports in the Caribbean.
Non traditional agriculture produce will have to undergo long delays because of check in procedures. This could cause much of the perishables that are transported from the Caribbean to North America to be affected. Guyana is already experiencing this problem.
The entire Caribbean region will also be negatively affected by the drastic reduction of remittances from their nationals who live in the United States. Jamaica will be particularly affected in this respect. With people beginning to lose their jobs because the US economy is going into crisis and recession, the Gross Domestic Product (GDP) of many developing countries will feel the impact heavily because of the reduction in these remittances.
Meanwhile the illegal drugs business remains as a booming enterprise in the Caribbean. Record seizures in October included 1.2 tonnes of cocaine in Jamaica, and 1.5 tonnes in Belize. Some analysts believe the flow of drugs across the Caribbean has increased by 25 percent. One of the reasons is that since September 11, the United States has withdrawn some radar-carrying AWACS planes from airborne drug patrols, and pulled coastguard vessels northwards. More rigorous inspections of vehicles crossing Mexico's border with the United States, and searches of ships off the American mainland, mean that drug smugglers are likely to rely on island-hopping routes.
And it is felt that as America concentrates on fighting terrorism, emphasis is being relaxed on combating the demand factor in the United States. This gives encouragement to drug producers and dealers to send more narcotics to supply the still lucrative market in the United States.
RESPONSE OF THE CARICOM GOVERNMENTS
How has the Caribbean region responded to the terrorist attacks? On October 11-12, the leaders of CARICOM met in Nassau, Bahamas, and after intense discussions, issued a declaration against terrorism and a resolution on measures the region would jointly undertake to protect their economies from the economic fallout of September 11.
The declaration recognized that terrorism is a global problem requiring a concerted and resolute global response. The leaders re affirmed their commitment to work with the international community in the multifaceted fight against terrorism in accordance with international law and conventions. Accordingly, they pledged their support for the efforts to bring to justice the perpetrators, organizers, and sponsors of these terrorist attacks, and expressed full support for any concerted action by the international community to eliminate terrorism. They also agreed to ensure that their territories, institutions and their citizens, are not used in any manner to facilitate the activities of terrorists or to undermine national and regional security. To this end, they mandated a review of all relevant regional and international conventions in order to ensure the widest possible adherence to them by CARICOM governments. They agreed to give the highest priority to the enhancement of existing national legislation relating to security in all its dimensions and to the enactment of new laws, as required.
To improve the region's economy and to enhance security and combat terrorism, the leaders decided to do the following:
1. Provide through the Governments and private sector a US$18 million major tourism promotion and marketing development campaign centering primarily on the USA, UK and Canadian markets.
2. Convene the Tourism Summit on the 8 9 December, 2001 in The Bahamas;
3. Enhance aviation security involving both the airports and the airlines, and heighten security at airports, seaports, and borders.
4. Consider immediately for adoption and implementation a range of pertinent international conventions and protocols to address the issue of international terrorism;
5. Coordinate greater collaboration among regional security services, particularly in intelligence gathering, analysis and sharing, with a focus on combating crime, illicit drugs and terrorism;
6. Work out an agreed framework for operational cooperation among the security services, to meet the immediate and long term responses;
7. Present a request by the region through a CARICOM Head of Government to the European Union for emergency financing under the Convention between the African, Caribbean and Pacific countries and the European Union.
8. Send a high level regional delegation to approach the Inter American Development Bank with a concrete plan of action relating to the region's emergency financing needs in light of the devastating impact on the region's economies;
9. Convene urgently a meeting of the Caribbean Association of Regulators of International Business to discuss the implementation of UN Security Council Resolution No. 1373 of 28 September 2001, which, among other things, compels Member States to criminalize the funds of any of their nationals supporting terrorist activities, and to freeze the assets of persons or entities associated with such activities;
10. Support the creation of mechanisms, mainly for the aviation and hotel industries in the Region, in order to mitigate the burden of high insurance and re insurance costs, and so provide protection above the limits that commercial insurers are willing to offer; and
11. Convene a working group to develop proposals on incentives to insurance companies to facilitate the strengthening of their capital reserves.
THE CARIBBEAN MUSLIM PERSPECTIVE
Ladies and Gentlemen,
I will now give a Caribbean Muslim perspective on the September 11 events and their aftermath. The Caribbean is highly multi-cultural with people of diverse religious beliefs. Muslims in the region are very distressed, like everyone else, over the September 11 terrorist attacks on the United States.
There are three Caribbean countries that have substantial numbers of Muslims. These are Guyana, Suriname and Trinidad and Tobago. Guyana and Suriname are member-states of the 56-member Organization of the Islamic Conference.
In Guyana, national Muslim organizations have made statements denouncing the terrorists and these have been widely publicized. However, they did express reservations over military action in Afghanistan on the grounds that civilians would be killed in the conflict.
I do not need to repeat the fact that terrorism and the murder of people have no relationship with Islam. I must remind you hundreds of Muslims died in the attacks, including some from Guyana. It goes without saying that those who commit those acts claiming they have done so in the name of Islam are usurping the name of the religion to cloak their sinful deeds.
We have been hearing and reading comments in the media which insinuate that Muslim religious leaders have not been coming out openly to denounce Osama bin Laden and his supporters. Such comments are totally untrue. Statements denouncing bin Laden, as you know, hardly make the news; statements by those who give him solidarity are given high publicity, even though those who make such statements do not speak for the overwhelming majority. I am a Muslim, and let me state categorically that people of the likes of Osama bin Laden and the Taliban do not speak for me or for the Muslims in my country.
Muslims have received bad media coverage since September 11. The acts of small anti-American groups have been given wide publicity, and all Muslims are branded with the same iron by those who believe the views and actions of these small groups are supported by all Muslims. Recall, that on September 11, the TV stations in the United States showed groups of Palestinians rejoicing on the street. That was big news for the media. What the media refused to show were the much larger groups of Muslim Palestinians going to mosques to pray for the victims, and the long lines of people donating blood to assist the injured. In times like these good deeds by the majority rarely make good news for the media houses. The TV news also showed us anti-American demonstrations in Pakistan, but deliberately refused to show the demonstrations by greater numbers supporting the actions against the terrorists and the Taliban regime in Afghanistan. Such biased reporting to the American public acts to poison peoples' minds against all Muslims.
Certainly, there are some extremists who have distorted Islam and have presented it in a form stripped of its humanity and spirituality. These extremists have been using it for their own political agendas and radical views. Unfortunately, the rest of the world, in attempting to rationalize what occurred on September 11, have tried to explain it by blaming Islam.
It is very important for people to educate themselves about Islam to understand that it is a religion of peace, compassion and tolerance and that it is not a threat to world peace. People cannot afford to remain ignorant of this.Ignorance itself is a disease, and it becomes infectious if the affected persons do not receive regular doses of positive knowledge.
Even in the Caribbean region, in small societies where everybody knows each other, suspicions have been generated. In Trinidad and Tobago, for example, there has been some finger-pointing at the small Muslim group, the Jamat al Muslimeen, who, as some of you will recall, staged a short-lived coup in July 1990 and actually overthrew the government headed by the then Prime Minister A. N. R. Robinson. Allegations have been made that this organizations has been funded by Libya which the US has categorized as a country promoting terrorism. The September 11 events naturally raised the specter of a Muslim threat to stability in Trinidad and Tobago, and there was a report in the Trinidad and Tobago media that Prime Minister Basdeo Panday claimed that the organization was planning a coup against the Government.
The Jamat al Muslimeen is not a large mainstream Muslim organization; yet its actions of 1990 are being painted on all Muslims in Trinidad and Tobago, although the great majority of Muslims in that country are not followers of the Jamat's religious ideology and political aspirations.
In the Caribbean, Muslims do not see the current situation in Afghanistan as a war between the West and Islam. There is a simple explanation for this. Caribbean Muslims are part of the West. They are westernized culturally and politically, and fully assimilated in the mainstream of western values while maintaining a healthy respect for traditionalism. They can in no way support the extremism and barbarity and the backward religious ideology and practices of groups like the Taliban.
Ladies and Gentlemen,
I now move to look at some of the additional pressures which Caribbean countries, and indeed all poor developing countries, are now facing.
The Deportee issue
First of all, there is the issue of criminal deportees. As the Caribbean countries implement more stringent security measures to combat terrorism, their security forces are overloaded with additional pressures to monitor criminal deportees being sent back to these countries by the United States. As many of you would know, in October last, the United States placed visa sanctions on Guyana because it felt that my country was moving too slowly in issuing travel documents for 113 criminal deportees. I do not want to go into the issue of the morality, or immorality, of dumping these persons back into my country when they were initially accepted into the United States free of any criminal record. But in any case, we are obliged to receive them in Guyana because they are Guyanese citizens.
We have since issued 105 of these documents - the others will be issued when we receive photographs and supporting documents from the INS. Despite reaching the benchmarks set by the United States, the United States has not yet lifted the visa sanctions, by which government workers and their families are not being provided with visas to enable travel to the United States. We hope that the United States will lift these sanctions as early as possible.
Meanwhile, our Police have to keep an eye on these deportees, while at the same time look out for persons trying to undermine national and international security.
I use Guyana as an example on this issue, but clearly other Caribbean countries' security forces are facing similar pressures in monitoring criminal deportees and trying to control increasing crime, some of which is accounted for by the entry of some of the very deportees into the business.
I must mention, too, that the Caribbean region forms an extensive third border of the United States. This border is monitored in different ways by the security forces of the Caribbean, and it is obvious that with the need for advanced surveillance, Caribbean Governments are now forced to divert increasing amounts of their budgetary resources to providing this security at the expense of their social and economic programs.
The Debt Burden
I want to examine briefly the issue of the debt burdenand how I think it may be affected by the September 11 events. I have a fear that with emphasis now being placed on combating terrorism and its economic fallout, the international financial institutions and the more developed countries may pay decreasing attention to addressing the issue of debt, which is a major problem for poor countries including Guyana. But we cannot afford to shift this emphasis, since the debt burden itself is a terrifying problem. In a sense, it is a form of economic terrorism which has for decades affected the lives of millions in Africa, Asia, Latin America and the Caribbean.
Shakespeare told the story of the Merchant of Venice who made a bond to pay back his debt with a pound of flesh. But the creditor was forced by the law not to take this repayment because the debtor would also lose his blood, which was not part of the original bargain. Today, the debt-ridden countries are paying back their pound of flesh, but unfortunately their life blood is also being taken away from them in the form of hundreds of thousands of little children who die year after year of hunger, disease and malnutrition. This is because poor countries use their money to service the debt, when it could have been used to provide food and medicine to save these innocent lives and also to foster economic and social development.
We must remember that the debt that the current governments have to pay pack was not created by them, but by previous regimes, many of which were never democratically elected by the people. In those periods, some of them were dictatorships which were heavily funded by the multilateral financial institutions (MFIs) and the developed world. These repressive regimes used those funds to tighten security measures to repress their citizens and thus stifling democracy. However, by constant struggle, the repressed people were able to win democracy and replace those regimes by democratically elected governments.
The irony is that the democratic governments are being forced to pay back the debts they never created. And because they have to do so, they generally do not have enough resources to meet the economic and social developmental needs of their citizens. Thus the cycle of poverty continues. And some anti-democratic and unscrupulous groups take advantage of this situation and try to destabilize the society in a variety of ways, including the use of terrorism to achieve their ends in removing a democratically elected government.
The slow pace of debt relief by the MFIs, and the developed world (which attach a great deal of conditionalities on the debt-ridden countries) is not helping at all to promote and defend democracy. The MFIs made some bad loans to bad regimes, but they are demanding that current successor democratic governments service these debts despite the detriment they cause to their economies.
The terrorist attacks and their aftermath have certainly disrupted the world, and particularly for us in the Caribbean region. But the problems that we face did not begin after September 11. September 11 just escalated them, but I want to believe that our economic problems are now receiving greater attention from the MFIs and the donor countries. But will the multilateral financial institutions and the developed donor countries provide much needed developmental aid to the Caribbean? I cannot really be sure if they will be able to deliver developmental funds to meet our immediate needs. They may feel it is more important to give priority to divert funds to assist other countries the US feels are more strategic to its security interests. Also, we are already hearing of the need for financial support for the rebuilding of Afghanistan and support for Pakistan. Since donor funding is not infinite, it is fair to say that funding will be diverted to that region at the expense of countries of the Caribbean which are seen as peaceful and not militarily strategic to the ongoing war against terrorism.
Ladies and Gentlemen,
Sometimes, out of negatives, positives do arise. The threat of recession in the United States is now giving more emphasis on gold as a more favorable commodity for saving. Already the market price for this mineral, which has been suppressed for the past three years, is now climbing upward. Gold producing countries, including Guyana, may benefit from this, and already some producers are planning to expand their production capacity.
But more important, there may be political benefits. Pressures on the economies of Caribbean countries are now widely seen as having external origins, and political leaders, from different political parties, will be forced to cooperative address the situation and come up with some bipartisan agreements. In my country, where there has been political polarization between the two major political parties, there have been positive advances, even before September 11, and both the President and the Opposition Leader meet from time to time, formally and informally, to address economic, political and administrative issues of national importance. With more pressures on the society expected to develop as a result of the fall-out from the events of September 11, political exchanges, as are taking place in Guyana, should be encouraged by the masses, not only in Guyana, but in all the countries of the Caribbean.
Our entire world changed drastically and dramatically on September 11. The effects of the attacks on the World Trade Center and the Pentagon are felt throughout the world, and especially in the Caribbean. All of us have to take stock of our new situation and become entities to combat terrorism in whatever way we can do it. For us in the Caribbean, we have to work much closer together to revitalize our economies. We have to do so or we will all go down together. We are all involved.
This realization brings to mind the words of Guyana's national poet, Martin Carter, who nearly five decades ago wrote the following poem, "You Are Involved":
I have learnt:
today a speck
tomorrow a hero
hero or monster
you are all consumed!
a jig shakes the loom;
like a web
is spun the pattern
all are involved!
All are consumed.
Thank you for this opportunity to address you in Atlanta.
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