Editorial | CARICOM digital proposal good for Jamaica

In its road map for the recovery and long-term development of Caribbean Community (CARICOM) economies in the post-COVID-19 world, Avinash Persaud’s commission points to the possibilities of the digital realm.

“The (coronavirus) crisis has forced the pace of the emergence of online marketplaces without a physical location,” they say. “This provides a unique opportunity to refashion the community as we would want it and start anew to create a new single market and the digital economy.”

This newspaper agrees. But, like the commissioners, we are concerned that by being too slow and too tentative, CARICOM might allow this opportunity to pass. That is why when regional leaders meet for their next summit in July, we hope that two important issues have been fast-tracked for assent and urgent implementation. The more critical of these is the commission’s proposal for a multitrack CARICOM, where if five or more members, or at least one-third of the membership, agree on an initiative, they can move ahead with its implementation between them, allowing others to catch up when they will. As we observed in our earlier endorsement of the idea, called “enhanced cooperation” by Professor Persaud’s group, this is a way to remove the inertia, or implementation deficit, that has long been a bane of CARICOM.

In this regard, the countries that are ready to create a single information and communications technology space within the community, including establishing a single regional telecommunications regulator, could act on it – presuming that there are five of them. This matter, encompassing the reduction of mobile roaming charges, has been stuck on CARICOM’s agenda for more than three years, despite it being, as the heads of government reminded in February, “fundamental to advancing the digital economy”.

MANIPULATE TECHNOLOGY

As is stressed by the commission, extracting gains from an expanding digital economy won’t materialise only by having the more advanced technologies. Rather, it is how well we can manipulate the technology and the data it processes to enhance value-added and push regional workers and economies higher up the value chain. That, notes the commission, will demand an “increased emphasis on training, upskilling and modern data regulation”.

“The online marketplace and the gig economy that has grown alongside it have low and high ends: wages in low-skill occupations are being pressed down by greater supply, and wages in high-skill occupations have been pushed up by increasing demand,” the commissioners say. Which was the point being made by Richard Byles (then head of Sagicor Jamaica, now governor of the central bank) two and half years ago when he was rounded on by the head honchos of the island’s business processing outsourcing operations for supposedly talking down their sector.

However, while upskilling is critical, CARICOM firms will have greater competitive advantage in the digital world if they are able to leverage a broader regional space, beyond their ‘home’ territories. For instance, as is noted by the commission, the annual budget for software for CARICOM’s tax, social security, and licensing departments is more than US$100 million, the vast portion of which is spent outside the region. The upshot: “Regionally, public- and private-sector demand for software development is substantial enough to support a regionally resident industry that will ensure that we share in the value-added part of the digital sector and not the commoditised parts.”

So, to stimulate activity in this area, the commission recommended efforts at software developed within CARICOM; the stimulation of regional software developers by awarding prizes for programme designs, with the opportunity for winners to tender on regional contracts; and “preferences for regional firms in the development of nationally sensitive systems, in a trade-compliant and diversity-supporting manner, and on national security grounds”.

Actions such as these, if they happen, will have to be underpinned by two other important mechanisms to make it easiest for firms to operate and move data across the region. Like other businesses, regional technology firms under the CARICOM treaty have a right of establishment in the community. But technical barriers can hamper, or slow, their ability to function.

MUTUAL RECOGNITION OF LICENSING STANDARDS

Hence, this newspaper supports the commission’s recommendation for the mutual recognition of licensing standards for certain professions. This should start with the urgent establishment, as the commission recommends, of an “intergovernmental committee to support mutual recognition agreements or common minimum standards to remove all artificial barriers against the free movement within the community of digital services”. Similar arrangements would also work for finance-related digital activities, except that where they require local capital, local establishment “should only mean that capital and maybe liquidity are ring-fenced locally, rather than (needing) an extensive physical presence”.

The second crucial initiative in what the commission refer to as “the elimination of digital frictions in moving data across borders” has to do with ensuring lower and competitive telecoms pricing in the community, which is why, since 2017, this newspaper has urged CARICOM to accelerate efforts towards a single ICT space and expressed our disappointment with the slow pace of the talks with regional telecoms on lowering roaming rates for mobile data.

Jamaica’s Government, we feel, has every reason to endorse and actively promote the commission’s recommendations. While the island has lagged regional partners in goods, it enjoys, on the face of it, comparative advantage in services, including a relatively large pool of skilled professionals, who might work digitally across the region.

In the circumstances, we are surprised that there seems to be no great excitement in either the Jamaican Government or the political Opposition for the Persaud Commission report. It, we believe, is good for CARICOM and better for Jamaica.