The Caribbean rum industry has recently made a remarkable advance towards maintaining its competitiveness in the important market of the European Union (EU). It has secured a grant of 70 million Euros (about 76 million US dollars) from the European Development Fund for the modernisation of distilleries and for undertaking rum marketing campaigns in Europe and for other associated development projects. Moreover, the industry’s representative body, the West Indies Rum and Spirit Producers Association (WIRSPA) has been entrusted with management of the programme. David Jessop, the Executive Director of the Carib-bean Council for Europe, points out in his lecture “The Caribbean Experience with Rum” (on which this editorial relies heavily) that this is perhaps the first time that the “EU and ACP commitment to make non-government entities full partners in the delivery of development” has been implemented. WIRSPA will thus help to administer the grant.
The Caribbean producers are expected to match each dollar of aid either from funds raised by share issues or from concessional loans. The overall aim of the project is to enable Caribbean rum to compete effectively in the liberalized EU market.
The breakthrough consists in securing a new advance in EU thinking namely the recognition by the EU of the need to provide transitional funding support (as distinct from development assistance) for export industries in developing countries which are jeopardized as the EU market is liberalised.
In his lecture Jessop has described the remarkable many-faceted campaign which the rum producers undertook to achieve this breakthrough. His lecture provides a case-study in contemporary diplomacy in which governments, the private sector and NGO’s have worked together.
But first a notation on the significance of the rum industry for the region and for Guyana. Rum has from the earliest times been part of the ambience of the Caribbean. Jessop sums up its economic significance as follows: “It provides employment for 10,000 people and indirectly supports the livelihood of many more. The industry is the fourth largest non-service sector earner of foreign exchange after sugar, bauxite and bananas. It provides each year over US $250 million in foreign exchange and excise duties in the countries in which it operates”.
The approximate figures for Guyana are estimated as follows:- (1) the distillery sector provides employment directly and indirectly for some 2,000 persons and thus supports an estimated 10,000 persons; (2) it probably ranks fifth as a foreign exchange earne; (3) its foreign exchange earnings amount to the equivalent of about 4 billion Guyana dollars; (4) it pays in excise taxes about an additional billion dollars.
The WIRSPA realised at an early stage that as producers in a small industry they had to form strategic alliances especially with those groups which were hostile or indifferent to their objectives. Accordingly it built an alliance with its traditional competitors, the French rum industry in the French Caribbean islands, Martinique and Guadeloupe. Similarly they sought to build awareness and understanding of their problems in the European parliament as they knew that the most powerful body of all and ultimate decision-maker, the European Commission would listen to Parliament.
That was only the opening salvo. Jessop identifies, as the campaign unfolded, the following measures: The WIRSPA (1) met regularly with the Permanent Representatives of EU Member states in Brussels, providing them with briefs; (2) met with senior members of the British and French governments who were known to be sympathetic; (3) established an “intelligence” capacity so that they could keep early track of relevant developments; (4) briefed journalists and NGO’s in the EU; (5) ensured that Caribbean ambassadors in Brussels were kept fully informed; (6) engaged in direct dialogue with the ACP Secretariat to ensure that ACP States who were not rum producers understood the issues; (7) helped to create an informed public opinion in Caribbean states; and (8) worked closely with Caribbean negotiators and the RNM on establishing back channels to the European Commission.
This whole complex network was arranged by a small group which included WIRSPA’s Chairman, Patrick Mayers, the then Head of the Caribbean Regional Negotiating Machinery (CRNM), Sir Shridath Ramphal, the head Caribbean Trade Negotiator, Jamaican’s Foreign Trade Minister, Tony Hylton and from time to time Yesu Persaud, Chairman of DDL and other senior executives from DDL and the regional industry.
Jessop concludes his important lecture by listing the lessons learnt from the WIRSPA experience in the form of pointers or maxims which must support not only trade negotiations but, one may add, other arenas of diplomacy.
One general lesson which must be drawn from the WIRSPA campaign and should be emphasised editorially is that governments cannot leave such negotiations to the CRNM, however effective that body is. There is an essential role for governments and the Producer Associations.
Guyana and Caricom diplomacy (as is perhaps the case with other small states because of the constraints of resources) is focused narrowly on government-to-government relations while Guyana and other small states have developed high competence in multilateral diplomacy within formal international organisations as at the UN and in mobilizing solidarity within the once powerful Third World Movements. That route is no longer sufficient. Now, especially in the Western World, power and consequent decision-making is increasingly dispersed to include NGO’s and the private sector and autonomous agencies. Hence Caricom and Guyana’s diplomats must learn to work with their own and foreign NGO’s and private sectors and the ad hoc networks which now so often determine issues. There is urgent need for what has been called Track II (two) diplomacy through which one can mobilise the support of groups such as Jubilee 2000 which have demonstrated that they can influence their governments and shape domestic public opinion on such issues as debt relief or development assistance.
David Jessop’s Sunday column has for a long time helped to keep public opinion and indeed decision makers in touch with the global negotiations. Now a further debt is owed to him for making accessible a description of the steps in a complex pattern of successful negotiations.
A revived Foreign Service Institute (FSI) should therefore see the need for wider diplomatic training, no longer limited to young diplomats but other government officials, the private sector and NGO’s including the trade unions.
One last but important question namely the position of rice in the lucrative European Market. The rum negotiations have clear lessons for rice. While the rice industry did not enjoy preferential prices in the EU market, it once secured higher prices indirectly by marketing through an Overseas Community Territory (OCT), Curacao at runerative prices which led Guyana to a buoyant and expansive period in rice production. Now, while Guyana it is reported still exported 120,426 tons of rice last year to the EU, prices are at a level insufficiently remunerative for the rice industry as presently organised.
The question of rice exports to the EU is apparently not being given the required attention. A mooted EU grant to the rice industry of 70,000 Euros ($70,000 US dollars) has now been reportedly reduced to $25,000. There is intense competition for uncommitted EU funds. The rum industry campaign shows convincingly that such earmarking of funds will not be maintained unless there is sustained lobbying. Even though the beneficiaries in the case of rice would in practice be limited to Guyana and Suriname (rather than the Caricom and Caribbean states as in the case of rum) a strong case can be made for the higher grant in view of the fact that the collapse of or curtailment on the rice market will have a harsh impact on the huge numbers of persons, mostly rural families, who make a living in rice and on society as a whole. In view of the structure of the industry modernisation would require difficult programmes of re-education.
A diplomatic and lobbying campaign is needed for rice on similar lines to that so successfully mounted for rum. Rice does not yet have a well organised and funded umbrella organisation such as WIRSPA but surely this is a deficit which should be made good by government.