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Posted: Monday 27 January, 2020 at 12:24 PM

Brantley comments on de-risking, graduation at meeting with Pompeo

Minister of Foreign Affairs Hon. Mark Brantley
By: Stanford Conway, SKNVibes.com

    BASSETERRE, St. Kitts – AT the recently-held round table discussion with US Secretary of State Mike Pompeo and a number of Caribbean officials, Foreign Affairs Minister of St. Kitts and Nevis, the Hon. Mark Brantley highlighted two major problems that are affecting the region.

     

    The meeting with Pompeo, which drew adverse comments in some quarters, was held last Wednesday (Jan. 22) at the Pegasus Hotel in Kingston, Jamaica.

    “Mr. Secretary, I believe that we are naturally in a difficult period in our region, and one of the concerns certainly that we have had in our region is this ongoing issue of de-risking, and that is a phenomenon where many of our correspondent banking relationships, mostly United States-based banks are withdrawing from the region, seeing the region as high risk and as a consequence, leading to a phenomenon of de-risking as we are calling it,” Brantley told Pompeo.

    He stressed that leaders in the region see it as a grave and present danger to their countries’ economies, that, “for example, the cruise industry which is largely dominated by US players is at risk if the Caribbean region is not able to do banking”.

    Brantley opined that if the situation continues and not arrested, the region and its inhabitants would be cut off from the international banking sector, which would result in their inability to trade and to pay for goods and services.

    The Foreign Affairs Minister noted that one of the difficulties the region has is that a lot of those matters - such as de-risking, its attendant consequences, blacklisting -  are largely handled through the US Treasury.

    From this perspective, Brantley made reference to one of the USA’s founding fathers, Alexander Hamilton, who was born in Nevis, stating: “That has been a concern in terms of – Hamilton had the other gift. I wish he was around today, I think he would be very helpful - but one of the concerns of course Excellency, is the ability to influence what clearly is a private sector initiative and we think that largely comes from the sense that the Caribbean is a high risk area for business.”

    He reminded the gathering of the Caribbean being the third boarder to the US.

    “We think that we are definitely within the zone of the Americas that is clearly relevant and critical. The fact that we are here today having this conversation is demonstrative of the commitment to that relationship, and we really would like to see a greater interest of the Unites States to this particular problem that we are experiencing.

    “We think that this blacklisting phenomenon, which then leads to this reputational damage which in turn leads to the threat of de-risking, runs the real risk for us of derailing any economic gains that we would have made.”

    In an effort to substantiate his point, Brantley lamented: “I think when our economies are derailed and the consequences are what my brother from Belize have described, we see mass migration because there is less and less reason for people to stay at home. There is no opportunity for them to make it and to survive at home, and so we would want to draw this to your attention and to invite, certainly, the State Department to engage with us in a more active way, and perhaps speak to Hamilton’s successors at Treasury to try and assist in that regard.”

    Commenting on the subject of Graduation, Brantley stated that with the exception of a few, all those at the round table discussion are being told by international agencies that they had graduated. 

    “Many of us feel that we aught still to be in primary school but we’ve been told no, we’ve graduated, and the difficulty that that poses Mr. Secretary, is that we are therefore cut off from accessing certain concessional lending, certain loans and financial instruments that we need for our development.”

    He pointed out that one of the issues on which the region has strongly advocated, is that there be some amelioration of the current sterile mechanism employed for assessing its status as middle income or high income countries.

    “We take Bahamas for example, which has long enjoyed a tradition of being one of the higher income countries of the region, and therefore ineligible for overseas developmental assistance.

    “One storm, Dorian, swept through the Bahamas and, what was perhaps a high income area in the Bahamas, Abaco and those islands were decimated,” Brantley said.

    He also referred to what Hurricanes Maria and Irma had done in Dominica, Antigua and e rest of the region, stating that “I say that to say that in our region we are just one storm, one catastrophe away from disaster in most cases. We do not have the landmass where we can say that we are moving to a safe zone”.

    Brantley explained that whenever a storm comes to the Caribbean, some countries are decimated and regional leaders feel that the international community do not responded in a positive way.

    “…and by continuing this sterile measure GDP per capita, it ignores the reality that we are in an extremely vulnerable position where our gains can be wiped out sometimes in the space of hours in wind and rain,” he added.

    The Foreign Affairs Minister also highlighted Haiti’s plight.

    “Haiti, my colleagues are here. They’ve had earthquakes, they’ve had other catastrophes that have set them back considerably, and I think this is an area we would really like to see some intervention at the highest levels.

    We have advocated for a vulnerability index to be part of that analysis, so that the Caribbean region is not locked out of developmental assistance and international aid.”

    He told Secretary Pompeo that that was an important point because it leads to what he had called a debt trap for many in the region, because they seek to rebuild after disasters. 

    “Often times,” he said, “we are forced to go to the market to borrow often times at commercial rates which pancakes on to our debt, leading then to an over burden of debt, which in turn results in us using most of our budgets to service debt instead of providing the essential services such as education, health etc. to our people.”

    In concluding his presentation, Brantley told the US Secretary of State that he would like to urge his government to take a look at the de-risking system and the graduation mechanism.

    “It is something I think that would be beneficial to us in helping us to build our own resilience and our own capacity to respond, and certainly we feel that this would augur well if we can address those issues and to do so collectively.

     
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