Dr. Kwame Nantambu

An Overview of U.S. Policy Toward the Caribbean in the 1970s

Part 2

Pages: 1 | 2 | 3 | 4

by Dr. Kwame Nantambu
November 20, 2005


When the Carter administration came into power, one of its first pronouncements was that a main foreign policy goal would be priority attention for the Caribbean. This was supposed to mark "a new era of friendship and cooperation between Washington and a one-time American lake sprinkled with emerging new mini-states determined not only to be independent but to act independently." In August 1977, Rosalyn Carter, then Secretary of State Cyrus Vance, and former U.N. Ambassador Andrew Young, all visited the Caribbean on good will missions "of atonement for United States transgressions in the region" as part of the Carter administration's objective to "spin a new policy web around a region long neglected by Washington power brokers obsessed with East-West relations."

Ambassador Young indicated that the purpose of the Caribbean tour was to convince Caribbean leaders that the Carter administration meant to pay more attention to what they said and what they wanted for their countries and to meddle less in how they and their people choose to run their affairs, especially Guyana and Jamaica. He stressed that the Democratic administration did not look with hostility at their choice of Socialism and did not see a threat in their friendly ties with President Fidel Castro of Cuba. He also pressed the idea that "an integrated Caribbean partnership as being in the interest of the United States and its neighbors." Then Ambassador Terence Todman put the Carter policy toward the Caribbean this way:
Until recently U.S. official involvement with the English-speaking Caribbean was extremely limited while our substantial involvement in the affairs of the Spanish-speaking Caribbean was often aimed in the wrong direction. In the past, security interests have been the overriding concern of the U.S. government in its dealing with the Caribbean. What we seek in the Caribbean today is not domination, disproportionate influence, or the right to intervene in other nations' internal affairs. We seek instead a mature, healthy relationship with all states in the region, founded on respect for sovereignty, recognition of common interests and consultation on matters of mutual concern.
President Carter also reaffirmed the "vital interest" of the Caribbean to the United States and America's firm commitment to human rights, democratization, significant support for economic development, acceptance and respect for ideological pluralism, unequivocal respect for national sovereignty, strong encouragement of regional cooperation, an active Caribbean role in world affairs and non-intervention in the Caribbean. This was so because America saw herself as part of the Caribbean community-a position which was quite unpopular and suspect among many Caribbean peoples.

Perplexed by rapid turnovers of governments in the Eastern Caribbean (after Grenada came the downfall of Patrick John's administration in Dominica, followed by the electoral defeat of John Compton in St. Lucia and the rising tide of discontent in Guyana and Antigua) Secretary Vance dispatched State Department specialist Philip Habib "to test the Caribbean pulse, perhaps to help the Carter administration to make some adjustments in the ' bright-spot', trouble-spot' evaluation." It is noteworthy that Habib selectively excluded Grenada from his itinerary. He visited St. Lucia and Antigua, where anti-Cuban sentiments were very strong but ignored St. Vincent. During his assignment, Habib bluntly refused to speak to the Caribbean press." A subsequent Habib report urged an increase in the regional aid program which totaled about $155 million in fiscal 1979, through multilateral organizations like the Caribbean Group for Cooperation in Economic Development; cooperation with the British in supporting a modest regional coastal force to help such smaller nations like Barbados, Dominica, St. Vincent, and St. Lucia protect their shores against foreign aggression; diplomatic campaign to convince the smaller Caribbean states that national sovereignty and independence need not follow the Cuban model; stepped up United States attention to its interests throughout the Eastern Caribbean; and the establishment of an interagency coordinating group on Caribbean policy.

This Caribbean Economic Group was formed in December 1977 at the initiative of the United States and the World Bank in addition to the International Monetary Fund (IMF), the Inter-American Development Bank and the Caribbean Development Bank (CDB) with the Trinidad government being the leading Caribbean instigator. The 30-member group also included Britain, Canada, France, West Germany, and Venezuela with the World Bank at the head of the pyramid. The main aim of the Group was "to provide an economic framework for promoting increased economic assistance to the region and more effective utilization of assistance." The Carter administration's objectives in initiating the Group's formation was to signal that Caribbean economic integration fueled by increased foreign aid, offered the only sensible course for the Caribbean to pursue and to demonstrate United States growing economic commitment to the region as a counterweight to expanding Cuban communist influence and aggression.

It must be interjected here, however, that Caribbean leaders were much less alarmed at the spread of Cuban influence than was the Carter administration. They have argued that acceptance of Cuban help did not signify embrace of communist doctrine, but rather admiration for those parts of the Cuban system - education, health, and social organization that worked in the very conditions that stymied progress in other Caribbean islands. Yet the Carter administration was obsessed with the spectre of Soviet domination of the Caribbean as supposedly evidenced by the Soviet Union trying to secure its base in Cuba by surrounding it with friendly nations, by "totalitarian Marxists" control of Grenada and Cuban advisers training guerrillas in Grenada for subversive action in Trinidad, and Fidel Castro's grand design to forge a Marxist axis running across the Caribbean from Grenada to Jamaica to Havana. But as Abraham Lowenthal surmises:
...the preoccupation of the State Department and the White House with Fidel Castro (did not sit well with most Caribbean leaders who perceive(d) Castro as only one of many Caribbean actors rather than as a Cold War instrument...
At the first formal meeting of the Economic Group in June 1978, the Caribbean Development Facility (CDF) was established "as a temporary mechanism for the purpose of promoting and coordinating external assistance to Caribbean governments." Donor pledges for the first year's operations of the CDF totaled $204 million. The U.S. Agency for International Development (U.S.A.I.D.) pledged a $20 million loan to be administered by the CDB and a $17.5 million proposed increment in PL 480 title 1/11 assistance for the region. Of the $20 million donated by AID, Jamaica received $11.1 million, Guyana $5.4 million, Barbados $1.5 million and $2.0 million went to the less developed Caribbean countries. At the second meeting of the Group, pledges increased to $326 million during the 1979-80 period. The United States contributed $78 million to this total.

The Caribbean Economic Group essentially became an American-controlled initiative just as the 1958-62 West Indian Federation was a collusion between Britain and the United States. The federation did not work. This economic group has not. It has only resulted in the economic underdevelopment and balkanization of the Caribbean economies. In the first place, economic under-development of the Caribbean economies occurred to the extent that since the United States contributed a substantial portion of the group's budgets, it was inconceivable that such "aid" was given without expecting something in return. However, reading of the records reveals that foreign aid does not benefit the recipient developing countries in any real economic sense but instead, aid represents an indirect public subsidy program for private United States transnational enterprises and other institutions and agencies. In reality, then, it is the United States economy that benefits from the foreign aid program since one of the unwritten but accepted strings attached is that foreign aid be used to perpetuate and protect transnational capitalist profits and values in the developing countries such as the Caribbean. Foreign aid indeed is not soft-headed humanitarianism but good capitalist business sense. Investigations indicated that three out of every four dollars of foreign aid is spent in the United States. In an article in The Washington Post, Dan Morgan indicated that "American foreign aid often conjures up an image of national treasure wasted abroad, of vast sums of taxpayers' money disappearing into obscure foreign hands," but to the contrary, "one thing is certain," which is that the bulk of foreign aid money "has not gone mainly into foreign hands. The United States itself is by far the largest recipient of its own foreign aid funds."

Investigations by the FBI into money mismanagement and congressional influence-peddling involving the Agency for International Development (AID) - have suggested that U.S. companies and consultants, rather than poor people abroad, receive most of AID's economic development funds. So that since the United States contributed $78m to the group's 1979-80 aid program, a quick calculation would show that the United States economy received at least $60m in return plus the huge profits United States businessmen derived from very favorable concessions given their investments. The availability of these apparently assured profits for United States and other foreign investors coincided with a report to the Caribbean Group by the Task Force on Private Sector Activities which recommended, inter alia, that "favorable conditions for increased private activities should thus be a vital part of development strategy in the Caribbean.

It must be pointed out here that this is the same prescription/ recommendation for so-called Caribbean development that Arthur Lewis recommended in his 1950 "Industrialization by Invitation" policy. Dr. Lewis recommended that Caribbean governments invite private foreign investment to 'industrialize' their economies, thereby providing them with their "engine of growth." Dr. Lewis argued that since Caribbean entrepreneurs lacked both the capital and market connections necessary to industrialize Caribbean economies, therefore, the burden of the effort in industrial development should fall on the shoulders of foreign investors.

He further argued that the best way to develop a manufacturing sector in a small country is to attract metropolitan business which brings not only capital, but also technology, organization, and market connections. In addition, it was hoped that such industry would use some local raw materials. And in exchange for creating employment, generating local income, and earning foreign exchange, the foreign industrialists were to be offered a period free from income tax, duty rebates on importation of equipment, machinery and raw materials, accelerated depreciation allowance, subsidized industrial sites provisioned with water and electricity, and repatriation of profits, inter alia. Dr. Lewis also implied that Caribbean governments should engage in "energetic activity" to induce "the influx of capitalists.

One result of Lewis' policy recommendations has been the economic under-development of Caribbean economies as economist Norman Girvan concludes in a case study of the Lewis prescription on the Jamaican economy as follows:
...foreign capital has been the principal single factor responsible for the structural change and the high rate of growth of the economy since the war; (but) the economy, nevertheless, failed to experience those structural changes necessary to make the growth self-sustaining and beneficial to the masses of the population; and that this failure has itself been due partly to the form of the capital inflows and the behavior of foreign-owned institutions...
In another case study of the Lewis prescription on the Trinidad and Tobago economy, Edwin Carrington comes up with similar conclusions. In his study entitled "Industrialization by Invitation in Trinidad and Tobago Since 1950", Carrington points out that Lewis' argument that local businesses would constitute an increasing share (of the industrialization process) as time goes on. The data suggest the contrary. Indeed, instead of local businessmen 'learning the tricks of the trade' and entering the field, it appears that they have been retreating into less productive activity, such as real estate and gambling..., (Furthermore), with over 60 per cent of raw materials being imported, it is not at all difficult to understand why the manufacturing sector failed to induce any considerable growth in the economy. It (had) few organic ties with it....

What these case-studies have shown is that private foreign investment took place in capital-intensive, high profit-generating industries that benefited the foreign investor, and not in labor-intensive, low profit generating industries that would have benefited the masses. Caribbean governments accepted and formulated Lewis' recommendations into policy then. They have repeated history by accepting and formulating the Task Force recommendations, with analogous results. Another result is the question of the economic Balkanization of the Caribbean economies. According to the late Kwame Nkrumah, "balkanization (the dividing-up of small states hostile to one another) is the major instrument of neo-colonialism and will be found wherever neo-colonialism is practiced." In terms of the Caribbean, there is no question that neo-colonialism is practiced in Trinidad and Tobago and Guyana. Hence, it need occasion no great surprise that Trinidad was the Caribbean protagonist for the Group's formation. What has occurred therefore is that Caribbean countries had to compete with one another for aid money and extending the most favorable conditions to private foreign investors in order to "industrialize" their economies. This of course generated a climate of hostility and/or antagonism among Caribbean countries to the detriment of the "less developed" countries. The foreign investor, however, still reaped huge profits. This is a classic example of economic Balkanization.

When the Carter administration took office, in addition to setting a new policy toward the Caribbean, an examination was also made of the United States long outstanding policy toward Cuba. The administration, while convinced that the United States best interests were served by maintaining communications with all countries, whether it approved of their governments or not, however, insisted that steps toward normal relations with Cuba must be measured and reciprocal. It was also convinced that only through dialogue can the United States begin to resolve the difficult problems between the two governments.

The Carter administration laid down the following conditions for the normalization of relations with Cuba, viz: Cuba should cease exporting revolution; abandon its military alliance with the Soviet Union to the extent that United States security and the Western Hemisphere were threatened by such alliance; compensation to U.S. citizens and businesses whose property was expropriated by the Cuban government to the tune of $1.8 billion; release of prisoners; withdrawal of Cuban troops from Africa; and improvement in human rights in Cuba.

For his part, Castro repeatedly stated that the "U.S. has no right to demand the withdrawal of Cuban troops from Angola as a pre-condition for restoring diplomatic relations" and further that it is his "revolutionary duty to help like-minded people in Africa" and that this "has nothing to do with his relations with the United States." He insisted that,
...Our solidarity with Angola and other African nations cannot be negotiated. Cuba will never renounce a principle of solidarity. I ask you, why must the United States demand we withdraw the technicians or instructors or even the military units we may have in any country? It was within a context of international law that those nations asked us for military support. It's funny--they ask us to withdraw our troops from Africa as a pre-condition, while on our own territory, on Guantanamo Base here are thousands of American troops...
Nevertheless, cognizant of fundamental differences with the Castro regime, but also convinced that the two countries had important interests that might be advanced by direct negotiations, the Carter administration reversed previous United States policy of antagonism to one of cordiality and initiated on an open dialogue or detente with Cuba. According to former Ambassador Sally A. Shelton: "We (began) to face the reality of Cuba - that it exists, that it is part of the Caribbean, that it is here to stay and that its existence (did) not directly threaten us." In short, it seems plausible to suggest that the Carter administration, in its early days, did not view the Cuban question as part of the United States paranoid obsession with the world-wide communist challenge...a view that was to change drastically with the "discovery" of the presence of 3,000 Soviet combat troops in Cuba in 1979. However, as a result of Carter's initiative, there were these concrete results in Cuban-United States relations:

(i) Formal agreement was reached on fishing grounds and boundaries of respective coasts;

(ii) Coast Guard talks were held on cooperation in search and rescue operations and drug traffic interdiction;

(iii) Diplomats were exchanged on September 1, 1977. The United States opened an Interest Section in the Swiss embassy in Havana on that day while Cuba opened its Section in Washington in the Czechoslovakian embassy. The main purpose of these interest sections was to facilitate communications between the two governments and to provide a broader range of consular services. Ten diplomats were assigned to each capital;

(iv) Most Americans and more than 3,600 Cuban prisoners were released;

(v) Residents of the United States, including Cuban Americans, were allowed to visit Cuba because in January 1977, the Carter Administration granted visas to selected Cuban citizens to visit the United States; lifted the ban on U.S. travel to Cuba; and permitted the resumption of charter flights between the two countries;

(vi) The Dakota basketball team visited Cuba and there were other sports and cultural exchanges; and

(vii) An anti-hijacking agreement was reached.

Although the Carter administration regarded these as significant achievements, yet it was firm in its conviction that Cuba's continuing and active military involvement (in League with the Soviet Union) in the internal affairs of other countries made normal relations impossible. The administration opposed Cuba's activities in this hemisphere as elsewhere and continued to do so. Administration officials argued that U.S. opposition to Cuba's activities was not opposed to change, because the administration was convinced that "our national interest align us naturally and inescapably with the forces of change, of democracy, of human rights, and of equitable development.

But what the administration insisted on was that the model that Cuba offered was, in its judgment, unattractive. However, there seemed to be a catch here to the extent that the administration was advocating change but in the same breath it was wryly suggesting what the nature of that change should be. This is not unusual for superpowers to do. Major powers have always claimed that their "model of development" or system is the best. For example, before the British granted political independence to her colonies, it was stipulated that they must meet the basic "criterion of eligibility for independence, viz, a full-fledged two-party system in operation, that is, the Westminster model of government. The British insisted that independence was not automatically a right of those who were nationally distinct. It was rather a right of only those who were capable and willing to maintain and perpetuate British liberal democratic institutions.

Carter's flirtation with Cuba, however, came to an abrupt end over the "discovery" of 3,000 Soviet combat troops in Cuba. Both the President and Secretary of State Cyrus Vance indicated that the presence of a Soviet combat brigade in Cuba was a very serious matter affecting United States relations with the Soviet Union, that it contributed to tension in the Caribbean and the Central American region, that it ran counter to long-held American policies and that such a presence was "unacceptable" to the maintenance of the status quo.


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