2021News

Reimagine CBI, or China will take the lead in the Caribbean

The Center for Strategic and International Studies (CSIS) calls for the United States to increase its engagement in the Caribbean region to avoid China emerging as the preferred partner in the region. The CSIS has published a 10-page report motivating to reimagine the US approach to the Caribbean region. The focus is on the promising opportunities and diverse focal points for engagement of the 17 countries that are part of the Caribbean Basin Initiative.

The report looks into achievements through the Caribbean Basin Economic Recovery Act (CBERA) and the US-Caribbean Basin Trade Partnership Act (CBTPA). The United States is the Caribbean’s largest trading partner and, in turn, the Caribbean is the United States’ sixth-largest trading partner, with US$35.3 billion flowing between them each year. The Dominican Republic is the only CBI country to have a bilateral free trade agreement with the United States (CAFTA-DR).

The new outlook recommends actions in sectors such as energy, manufacturing, and tourism and services. CSIS sees a bright point in new developments in the energy sector. Renewables have caught on in response to the high, volatile energy costs resulting from their dependency on imported oil, say the researchers. “The Caribbean holds enormous potential for a green energy transition given its abundance of solar, wind, volcanic geothermal, and (in limited settings) tidal and hydropower opportunities,” stresses the report.

Aside from trade, the report looks into opportunities in digital transformation and manufacturing. It emphasizes the challenges of transnational crime given the region’s strategic geographic location in regards to the United States and drug source countries such as Colombia and Mexico.

The report focuses on the presence of China in the region. It states: “The Caribbean is a hotspot for regional power competition between the United States and China. China has nearly US$70 billion of foreign assistance funds active in the region and has contributed US$7 billion in public investments and loans since 2005 across six countries. Jamaica has received the most funds from China, followed by the Dominican Republic and Trinidad and Tobago.”

CSIS calls for more US engagement in the region. The report recommends that in addition to diversification, there be “a reimagined approach” to the Caribbean that addresses climate resilience, green energy transitions, equitable employment, public-private partnerships and the rule of law. “Although the Caribbean economy has largely shifted toward service sectors, this is not covered by the current CBI, so an updated strategy toward the region should reflect this,” highlights the report.

The specialists conclude: “Finally, building alliances with the Caribbean diaspora at home should form the basis for such US initiatives. The consequences of failing to engage the Caribbean are clear: China will emerge as the preferred partner in the region.”

CSIS is a bipartisan, nonprofit policy research organization dedicated to advancing practical ideas to address the world’s greatest challenges and ensure US national security. Based in Washington, D.C., CSIS is a think tank that conducts policy studies and strategic analyses of political, economic, and security issues throughout the world, focusing on international relations, trade, technology, finance, energy, and geostrategy. It was founded in 1962.

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11 April 2021