Thursday, February 4, 2010

St. Lucia: Life After the Lomé Convention

Originally posted on: NACLA.org

Febraury 4 2010
Kevin Edmonds

My uncle, George James, a longtime St. Lucian banana farmer, sits on the front step of his dimly lit kitchen, sucking his teeth loudly to show his frustration. “I have land, but can’t sell it because nobody wants to work it,” he says. “Bananas are not making money. Nobody wants to be a farmer. Young people look at us as fools. The work is too hard, and the money is too small. That’s why all the young boys want to move drugs. It wasn’t always so bad.”

The frustration in his voice comes from almost 20 years of living in a constant state of uncertainty and continually declining prices due to a trade dispute between the European Union (EU) and the United States. In December an agreement was reached that will see the EU further reduce tariffs on imported Latin American bananas. St. Lucia is now facing a widespread economic and social breakdown—including a crisis in the government’s ability to provide basic social services—that threatens to reverse 40 years of genuine development achieved through protected trade.

The Lomé Convention was a preferential trading policy established in 1976 between European countries and their former colonies in Africa, the Caribbean, and the Pacific (ACP). It was the key article in the development of a European banana regime that guaranteed ACP banana growers a market for their produce in an otherwise Latin American–dominated industry.

Despite the fact that the Windward Islands as a whole (Dominica, Grenada, St. Lucia, and St. Vincent) contributed only 2% of the world’s total banana exports at the end of the 20th century, these tiny islands and their protected trade agreements were portrayed in the World Trade Organization as a threat to the entire global economic order of free trade. Since the creation of the EU’s banana regime in 1993, the prices paid for St. Lucian bananas have been steadily declining. Far too many farmers could not cover their cost of production and abandoned their plots. In 1993 the island produced 132,854 tons of bananas, and in 2008 it produced 38,359 tons, a drop of more than 70% in 15 years. The massive decline in production brought a staggering loss of revenue, from $72 million in 1993 to $16.2 million in 2008, creating an army of newly unemployed farmers.

The collapse of the rural economy has echoed through every corner of the island. The most recent comprehensive poverty report—The Population Reference Bureau’s 2009 World Population Data Sheet—stated that more than 40% of St. Lucian nationals now live on less than $2 a day. With the dramatic reduction of banana-related income, the government is increasingly unable to provide basic services to the population. Many families lack the ability to purchase nutritious food; a common meal is a soft drink and bread. As a result, St. Lucia led the world in 2007 with the highest per capita diabetes rate. Another statistic that captures the breakdown of social services and growing inequality is the infant mortality rate. Both the World Bank and the St. Lucian government report that infant mortality almost doubled between 2000 and 2008, reaching about 25 in 1,000.

The rural banana industry’s decline has led to a large amount of rural migration to the capital city of Castries, swelling the ranks of squatter communities, aggravating the breakdown of existing services, and contributing to a rising crime rate linked to drug trafficking and other gang-related activities. In the rural areas, in order to feed their families, many banana farmers have begun to use their land to cultivate the only crop that offers a considerable return, marijuana. St. Lucia has also become an increasingly attractive transhipment point for South American–produced narcotics on their way to the United States.

The collapse of the agricultural industry across the entire Caribbean has coincided with the area being declared by the United Nations Office on Drugs and Crime as the most violent region on earth. The poorest neighborhoods in Castries, like Marchand, Grass Street, and Wilton’s Yard, are now ground zero in the ever-intensifying warfare between rival drug gangs. Largely because of the drug trade, St. Lucia now has a murder rate higher than Haiti’s, and sits just below Brazil at 23 homicides per 100,000 citizens.

The island’s political situation is best described as in a state of paralysis. In an examination of national headlines, both the governing United Workers Party and the opposition St. Lucian Labour Party are excellent at unearthing scandals to discredit their rivals but have demonstrated a lack real leadership in a time of economic and social breakdown. Understandably, this economically vulnerable island of 160,000 residents cannot be expected to tackle the world’s superpowers, institutions of global governance, and multinational corporations alone. That is why December’s Treaty of Basseterre—the creation of an economic union within the Organization of Eastern Caribbean States (OECS)—might be a step in the right direction. The deepening cooperation among nations facing the same problems is vital to finding a solution that will ensure their survival. The inclusion of several members of the OECS in the Bolivarian Alliance (ALBA) might also introduce new ideas into the static political system.

In order to help the banana-dependant economies deal with the increased competition, EU trade commissioner Karel De Gucht stated that “the EU will do its best to help.” It has since been revealed that the EU has created a compensation fund of 200 million euros (about $287 million) to help economies like St. Lucia adjust to the new realities of the post-Lomé world. When compared to the previous income earned from bananas in St. Lucia alone, the EU’s charity seems to be too little, too late. At the peak of banana production, St. Lucia exported 133,777 tons, contributing $187 million to the economy, in 1990 alone.

The St. Lucian example makes it clear that free trade is indeed a zero sum game. All St. Lucia managed to get out of a free trade deal was increased unemployment and an ever declining standard of living while the large fruit corporations increased their market share in Europe. Looking at the long-term history of the region, one can hardly be surprised of the outcome.

Back on the steps of his kitchen, George James stands up and puts the padlock on the weathered wooden door. As he turns around he shrugs his shoulders. “It’s nothing new,” he says. “That’s what we farmers and poor people do. We work to feed other people, then go home hungry.”


Kevin Edmonds is a NACLA Research Associate.

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