CARICOM members and the Secretariat itself are feeling the squeeze from increased fuel prices due to events in Iraq and Venezuela and CARICOM Secretary-General Edwin Carrington says this could get worse if war breaks out.
Briefing reporters yesterday at Colgrain House about the current round of meetings being undertaken in the run-up to the Fourteenth Inter-Sessional Meetings of CARICOM Heads of Government, Carrington noted that already one member state has indicated during recent budget talks "one of the factors limiting their capacity to contribute any increased resources to the Secretariat budget is the increasing price of oil."
If there was to be a war in Iraq, Carrington said, there would be bigger implications for the region as part of instability in the world. The impact on tourism, an economic mainstay for most Caribbean countries, would certainly be felt.
On the subject of oil prices, Economic Adviser to the Secretary General Dr Maurice Odle said one of the papers to be dealt with at the upcoming Council Meeting on Finance and Planning was the Caribbean's economic performance with particular reference to the potential impact of an oil price shock.
This paper would deal with the potential macro-economic balance of payments; employment wages inflation; and the micro-economic impact with respect to the various sectors that are energy-intensive and that would be adversely affected by any sustained oil price increase.
Stressing the importance of cushioning price increases, Odle said a recent United Nations report stated that for every $10 increase in the price of oil, world economic growth rate would fall by half a percent.
In relation to the situation in Iraq, Assistant Secretary-General with responsibility for external affairs, Colin Grandison said that the bureau of the Council on Foreign Committee Relations (COFCOR) would be meeting on February 2 to review the community's relations with traditional partners, in particular, the United Kingdom and the United States of America in view of the emphasis these major partners place on counter-terrorism and Iraq.
He said the council would also review relations with neighbours in Central and South America; the political instability in Venezuela; the issue of governance in Haiti; as well as the latest position on Belize's border issue with Guatemala.
He noted that some of the region's Prime Ministers have expressed concern about the negative impact on the region's economy if there was to be a conflict with Iraq. He noted that the experience of the region's tourism sector from the September 11 terrorist attack suggested a conflict in Iraq could once again impact on the travel and tourism sector.
Grandison said that as a result of problems in Venezuela, Haiti's oil price had increased by over 85% in the last few weeks impacting heavily on all sectors of the economy. He said the knock-on effect of increases in oil price on fragile economies was a deep concern to the region's leaders. (Miranda La Rose)