By Claudette de la Haye.
Financial austerity is dead and the International Monetary Fund (IMF), World Bank and governments abroad MUST rethink the global economy if, retirees are going to survive. Sliding currencies depreciating at alarming rates of double digits annually will decrease buying power for many on fixed incomes.
Caribbean retirees with fixed incomes face an uphill battle of financial austerity given the global economic climate; increased energy prices, devaluation of state island nations and republic currency and sovereignty debut – not to mention Cost of Living Allowance Index (COLA) indexing annually. How do the elderly hedge against insurmountable odds and survive?
The average retiree residing in the Caribbean Commonwealth is barely making ends meet and with the social narrative turning towards devaluation of currency one cannot help but feel saddened and helpless that the very people whom have built a nation are left to poverty. For those retirees with transnational status and able to live abroad and weather the financial constrains outside the Caribbean then, they have a chance to hedge their retirement dollars in places like Canada where, this country has not been affected by the financial and mortgage debt crisis and where, Canadian governments have good energy policies in place. However, it you put all your eggs in one basket and retired in UK rest of Europe and USA the, you are only to well aware of the jobless rates, rising energy costs, lack of production and inflation due to the rising cost of goods on a pension.
Prior to the financial debt crisis in Dec 2007. Borrowing money to settle sovereignty debt was readily accessible but, nowadays nobody has the stomach to finance foreign debt. Jamaica for example, is the new Cyprus and Greek austerity.
Alas, Germany is so exhausted from bailing out the rest of Europe that they have declared austerity as officially dead. Case in point. Every Caribbean State Island Nation and Republic must now look to their own individual Trade Balance Deficits (Imports and Exports) Production, Labour etc., in order to raise their Gross National Product (GDP) and reduce it’s trade deficit by increasing indigenous good for export and earn foreign currency or face the possible devaluation of currency. Devaluation of any member of the
Caribbean Commonwealth will drastically impact the elderly population where goods and services will become cost prohibitive and in some cases propel them into irrevocable poverty within the realms of the outskirts of marginal society – left to wither – in some cases assume federal assistance or entitlements programmes to assist with daily living.
SOLUTIONS TO ELDERLY FINANCIAL AUSTERITY
Approximately, 3 years ago the Caribbean Community of Retired Persons (www.ccrp.org) was established to address this very matter.
Membership with CCRP costs JA$1,000 and you can senior discounts ranging from 10-25% locally and internationally abroad. As a perk even grand children can get in on the act and, with a little convincing procure these same discounts with grandparents assistance – just don’t tell anyone I told you to do this – discretion is the better part of valour when you redeem goods and services. On a more serious note as Caribbeans we cannot allow our present economic status decline let alone deteriorate any further.
Day-to-day and hour to hour it is incumbent of every Caribbean government, private and public sector and academia to forge its people to economic prosperity, trade internationally and earn foreign currency for the nation and reduce the trade deficit.
INERTIAS CAUSING COMMUNAL FINANCIAL AUSTERITY ISLAND TO ISLAND There are a mired of inertias causing financial austerity throughout the Caribbean. In attempt to identify them I have broken them down into the following categories;
GOV. POLICY CYCLE vs ENTREPRENEURIAL PRODUCTION CYCLE
In 2015 the Panama Canal is due to come on line and the Caribbean is going to have to compete exporting goods which will lend to the health of each currency. Timely exports and production cycles are dependent on good governmental policy – elimination of bureaucratic red tape for new start up companies is just the beginning. Government needs to streamline its scale of efficiencies with taxation and registration, Transportation issues can hamper expedition of goods to market; for example freight containers in Jamaica cost US$1,500 and take 20 days for clearance, Trinidad & Tabago cost US$800 per freight container and takes 7 days and Panama freight containers cost $600 and 11 days clearance through customs. And, if Jamaica dose not get it’s act together this is where Jamaica and others will get constantly beaten at productivity, production and export
Developing good energy policies is tantamount to reducing the cost of producing goods, as well as, improving labour costs.Caribbean State Island nations and republics MUST reduce their dependency fossil/hard fuels ie., oil, corn and gas and use alternative energies such as solar, water and wind. The proverbial 800lb Gorilla (capital of each country) sits on the eastern part of each island and if the sea level rises 2 inches it will wipe out each island’s capital city, financial district and presiding governments.
Every government must seek its economies of scale to allow business become very sensitive and fiscally reactionary to Global Futures Markets, increase production, streamline division of labour and ultimately allow profitability for growth.
PEOPLE: RURAL vs URBAN MIGRATION & JOBS People don’t want to live in the country they want to live in a town better still the city.
Therefore, in order to curtail rural migration to the city you must provide an infrastructure – that being education and jobs. For example, the tourist industry is notorious for sequestering visitors to onestop- shopping ie., getting food and lodgings, as well as, day trips to predetermined destinations. This does not allow someone from rural areas of the island (the country) to participate selling their indigenous goods (locally made artifacts) to tourists so, economically there is a disconnect not to mention issues of distribution of goods including cost of fuel. The solution is to create local Agritourism and cater to those that live in inner cities to come visit rural town on the weekends and encourage events of national interest. Here locals can sell their goods and ware thus stimulating their own economy and create jobs.
PUBLIC SECTOR vs PRIVATE SECTOR: Research & Development Research and Development (R&D) is the life blood of any business and Caribbean governments must quintessentially lock arms into the education of its people, spur productivity and continually reinvent supporting technologies to reduce the cost benefit analysis to bring goods to the market cheaper, faster without sacrificing quality at a competitive price.
Governments in the Caribbean must not sacrifice growth of GDP for internal political squabbling and corruption. Because we must engage our youth with sustainable jobs if we are to curtail the activity of violence. In turn it will help investor confidence both domestically and internationally but, also provide peace of mind to those transnationals who want to come back home and retire. Until our local governments put people first and, things second then, place experienced and disciplined entrepreneurs to execute public/private partnerships and academically matriculate themselves in economics.
Governments in the Caribbean need to equip themselves with the knowledge and an appreciation of how their decisions affect the respective population of Caribbean retirees living on fixed incomes.