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Summit of the Americas Should Accelerate US Caribbean Policy

Beginning Wednesday, the Ninth Summit of the Americas could not come at a more critical time. The region faces a series of complex challenges: another hurricane season has begun, the effects of COVID-19 linger, and global fuel and food prices are on the rise. These headwinds come as fiscal space in many countries remains severely constrained.

Every country in the Americas is affected in one way or another, but no more than the fourteen members of the Caribbean Community (CARICOM). These countries have small markets and small populations; import food, fuel and medical services; and are primarily tourism- or commodity-dependent economies. The result is that as regional and global crises deepen, this group of small democratic states is at greater risk of economic decline, domestic instability and even democratic backsliding without increased support from its partners, start with the United States, which will host the event. for the first time since 1994.

Why is a group of small Caribbean states important to the United States and its interests? On the one hand, most CARICOM countries are stable democracies, an increasingly rare commodity in a hemisphere where authoritarian tendencies are growing. Located close to US shores, but also located in other parts of the hemisphere (Guyana and Suriname in South America and Belize in Central America), any spillovers of instability from more distant locations could impact direct to the United States.

CARICOM countries are also crucial to the US economy and hold key votes in multilateral forums that advance US regional and international interests. At the Organization of American States, for example, CARICOM holds 40% of the hemispheric vote. The region is seen as a vote multiplier in international organizations when the Community aligns with other regional bodies, such as the African Union. These countries also contribute one-third of Florida’s overall trade with the hemisphere, while small business owners in the region primarily purchase goods and services from American companies with a presence in Miami.

Given the important role the Caribbean plays for U.S. interests domestically, regionally and internationally, next week’s summit in Los Angeles is an opportunity to seek solutions to common challenges and implement necessary regional cooperation. to raise them. The Leaders’ Conversations – during which CARICOM Heads of State and Government will have the opportunity to speak with US leaders for a few days – are expected to refocus US policy toward the Caribbean (alongside that of the rest of the hemisphere), with the United States listening to the common challenges of CARICOM Heads of Government and addressing them through action.

Tangible announcements at the summit will be important, but what happens in the days and months that follow matters more. With growing geopolitical competition in the region, this will be a rare opportunity for the United States to reaffirm its long-term interest in a strong partnership with the Caribbean based on shared priorities and tangible results.

The key steps to success

First, relations between the United States and the Caribbean must be more frequent and consistent. Prior to the summit, United States attention to the Caribbean was unusually high, with several officials visiting the region and meeting with country representatives in Washington. But this level of commitment should not be an anomaly; it should be a plan. Some Caribbean ambassadors have already called for an annual US-Caribbean summit. The United States should go further by promoting even more regular diplomatic engagement, from high-level government visits to day-to-day interactions.

The upcoming CARICOM Heads of Government Conference in early July is an immediate opportunity for the White House. Another is to use public diplomacy to highlight positive U.S. activity in the region and strengthen cooperation in health and education. These interactions can help implement US policy by allowing people on the ground to assess the progress of ongoing projects and strengthen long-term cultural affinities shared between US and Caribbean citizens.

Second, with the upcoming announcement of a new climate and energy partnership with Caribbean countries, the United States should help build and strengthen the region’s institutional capacity. The Caribbean’s small populations and markets often mean there is a ceiling on the aid they can receive from international financial institutions and their allies, including the United States. Regional partnerships are effective, but more emphasis should be placed on developing domestic institutions, which would help US companies and international financial institutions allocate more funding to projects in the region (and be less dependent on support from external actors such as China).

The region can even become a model of future energy security, since many Caribbean countries are exploring renewable energies to accelerate their energy transitions while developing hydrocarbon sectors. Working with the Caribbean to balance fossil fuel revenues and invest in renewable energy and other cost-effective energy models can diversify the U.S. government’s approach to overseas energy policy to include the energy circumstances of all countries. .

Third, the United States will need to broaden the scope of the economic tools it has used to spur development in the Caribbean. Nearshoring is a growing priority, as is the development of the US private sector overseas. But both face significant hurdles due to the reduction of financial risks by US correspondent banks, as well as limits on the US Development Finance Corporation (DFC) working with middle- and high-income economies. Risk reduction, or the termination of banking relationships with Caribbean financial institutions due to money laundering concerns or low profit margins, limits access to cross-border transactions. As a result, Caribbean consumers cannot pay for goods from the United States, while American companies will not be able to pay employees in the region if the companies leave China and relocate to the Western Hemisphere.

Because it is home to many English speakers, is in a time zone similar to the US East Coast, and seeks to create more jobs outside of the tourism industry, the Caribbean holds significant outsourcing potential. Limiting risk reduction expands potential areas for US small and medium-sized businesses to move their operations to the Caribbean instead of competing with larger ones in Latin America.

And while most Caribbean countries are classified as high- or middle-income economies, that’s not an accurate representation of the challenges they face. Their small markets and debt-ridden economies make them disproportionately vulnerable to external economic shocks and unprofitable for large multinational corporations. Expanding DFC’s reach to allow the institution to work more with the Caribbean can help increase U.S. investment in the region and fund key infrastructure projects to ensure energy security, expand digital access or improve the resilience of critical structures such as schools, hospitals and government buildings.

Preparation for the Summit of the Americas has focused on the board game of who will sit at the table. But the event should not be held back for its guest list. Instead, this is a real opportunity for the United States to build goodwill and momentum to produce big wins for Caribbean citizens and, more broadly, for U.S.-US relations. Caribbean in tandem with the rest of the hemisphere. As global challenges increase in intensity, frequency, and complexity, the United States will need a strong neighbor in the Caribbean, while Latin America needs a stronger partnership with Caribbean countries. The road to this next phase must begin in Los Angeles.

Jason Marczak is Senior Director of the Atlantic Councils Adrienne Arsht Latin America Center.

Wazim Mowla is Deputy Director of the Caribbean Initiative at the Adrienne Arsht Latin American Center.

Further reading

Image: US Vice President Kamala Harris congratulates N. Nickolas Perry after being sworn in as US Ambassador to Jamaica in Washington, DC on May 9, 2022. Photo by Chris Kleponis/Pool/Sipa USA/REUTERS