Salutations:

Invoking my prerogatives as Chairman of the Organization of Eastern Caribbean States, I take the liberty of welcoming you all to St. Lucia.

For those of you visiting St. Lucia perhaps for the first time, I can assure you that the Helen of the West is one of the most beautiful of all the Caribbean islands, and among OECS members, St. Lucia's beauty is surpassed by only one other member state.

I trust that our deliberations here can point our small countries on the right development path. I hope that our ideas will address the special circumstances of our Caribbean existence while at the same time placing us squarely in the modern globalized world.

History has recorded the many economic and social successes achieved by the Organisation of Eastern Caribbean States since its formation in 1981 through the Treaty of Basseterre.

I am tempted to add my voice to this ongoing chorus of commendation, mindful that we are still celebrating the 25th anniversary of the formation of the OECS. However, my task this morning is not to dwell on these achievements, significant though they are, but to seek to address questions relating to the future of the sub-region from my perspective as current Chairman of the OECS Authority.

Ladies and Gentlemen:

Some of the key questions that we face as a sub-region at this defining juncture in our economic and political history are:

How can the OECS, as an economic and political construct, consolidate its position as an indispensable component of the engine of economic and social progress of the people of the sub-region?

How can the OECS present and project itself, both to ourselves and the world, so as to ensure that the Organization continues to add value to the individual and collective endeavours of our people?

And what must the OECS do to ensure that this added value translates into a binding commitment on the part of member states, to mandate and fund the OECS to allow us to continue to be innovative, proactive and productive enough to deliver on the legitimate expectations of our OECS population?.

These are some of the key questions that the OECS Authority and the OECS Secretariat have been grappling with, particularly over the last few months, as we seek to embark on a new dimension of deeper integration amongst ourselves - the formation of an OECS Economic Union.

A consensus is emerging among the political directorate of the sub-region, and the administrative and technical secretariat that serves it, that regional and international imperatives demand of us a more efficient, productive and resilient economic and social system, a more competitive economic space, and a more collectively sovereign grouping of nations.

That political consensus is pointing in only one direction - OECS Economic Union.

Ladies and Gentlemen:

OECS Economic Union is not an experiment; it is the logical next step in the continuum of proactive solutions that the smallest member states of the English-speaking Caribbean grouping have been forced to engineer, in our collective bid to survive the harsh realities of a hostile globalising world economy.

We live in a world economy in which the debate on the inequalities of globalization is centred around its impact on the “offshoring” of specific jobs from North America to China, rather than the continuing marginalisation of entire states in the developing world.

We live in a world economy where the legitimate case for special attention to small resource-poor developing countries such as ours in the OECS, languishes in the shadows.

We live in a world economy of overarching global crises, such as the scourge of HIV/AIDS, crippling poverty in sub-Saharan Africa and world climate change. We are at the end of a very long line for international attention.

We will always find ourselves towards the back of the line of whatever new development assistance that may flow from the developed world in response to these issues.

Instead, we must choose to embark as a single economic unit on a strategic self-determined course of sustainable development and institution-building; on a path that is predicated on the rational and responsible exploitation of our natural endowments and the unique potentials of our people - hence, Economic Union.

Brothers and Sisters:

The timing of OECS Economic Union, coming as it does some months after OECS states have given a firm undertaking to be full and active partners in the CARICOM Single Market, should give comfort to our other CARICOM partners that we are unambiguous in our commitment to Caribbean integration.

But the strategic pursuit of OECS Economic Union at this time also serves as a fitting reminder of the fierceness of the pride, and the unapologetic boldness and single-mindedness, with which we continue to pursue the deeper integration of our own immediate economic space. Indeed deeper OECS integration is our own inescapable model of development, born and nurtured out of a necessity to consolidate the economic, social, cultural and functional cooperation gains of the last 25 years, and for the ultimate benefit of our people.

History could not forgive us; neither would the people of the OECS, should we fail to seize this time.

We as political leaders are seized of this historical necessity to integrate more deeply. We are also very clear in our minds that the real future of the OECS lies in integration at the grass roots level…people-to-people.

That is why the political leaders of the OECS, through the OECS Authority have recently committed ourselves to being personally involved in the process of educating the OECS public on OECS Economic Union.

With the assistance of our development partners, many of whom are gathered here with us this morning, we will launch a comprehensive community education drive over the next six months, as the first vital and defining public phase of the OECS Economic Union initiative.

Ladies and Gentlemen:

The theme of this development conference is the exploration of a new development paradigm for the OECS, and I therefore feel compelled to use this occasion to open up the public dialogue on the rationale for OECS Economic Union, as I see it.

The standard justification for countries to pursue some form of deeper economic integration among themselves is to pool both their resources in the exercise of their sovereignty, so as to reduce economic vulnerability and enlarge economic opportunity.

These goals are normally based on the existence of significant trade flows among the participating countries in the Union. However, the economic reality in the OECS is that the volume of trade between our countries is relatively insignificant in comparison with our trade with the rest of the world.

Indeed, we are some of the most open economies in the developing world.

For us, the rationale for Economic Union goes beyond the classical benefits of free trade. Given our peculiar historical circumstances, deeper integration has a broader strategic significance.

We want to create a new platform on which we can transform our OECS economies. But we cannot do this alone; which is why we have invited so many of our faithful development partners to be with us today.

Let me hasten to add that the OECS share of CARICOM trade has also been diminishing over time.

This reality presents our sub-region with two inescapable prospects: one is the potential to expand trade flows amongst ourselves and with CARICOM as a whole.

The second, and perhaps more important, is the opportunity to further integrate the OECS economies into the global economy.

Both of these endeavours can be significantly enabled if the OECS approaches them as a single economic grouping.

Interestingly, what this economic logic also reveals is that the pursuit of OECS Economic Union makes the economic objectives of the CARICOM Single Market more easily achievable and that much more meaningful both for the OECS and for CARICOM.

I hope that this will help to put to rest any lingering notion that OECS Economic Union and the CSME are in conflict with each other.

Quite the contrary, they are fully compatible and mutually interdependent.

The economic dimension of the Economic Union programme of work must of course extend beyond pure trade policy, trade facilitation and creation of new trading opportunities.

We have to intensify and expand our sphere of economic cooperation and coordinated economic management, to complement the unified monetary policy and our stable single currency that are already well established.

We must move with urgency to coordinate and harmonise our approaches to investment policy, fiscal policy, air and sea transport policy and infrastructure, as well as the regulation of business, with a view to better managing the impact of regulation on the ease and cost of doing business, for both our domestic and foreign investors.

We must dovetail our approaches to research and development across all economic sectors, as well as human resource development and institutional capacity building.

And we must ensure that our labour markets function efficiently, with minimal rigidities.

In fact one of the areas in which OECS Economic Union challenges us to go further or at least faster than the CSME, is in accelerating the free movement of all categories of labour across OECS member states.

Only by doing this can we liberate the opportunities for our service providers to expand their horizons beyond our narrow domestic markets, and for our entrepreneurs to fully integrate production across our individual narrow economic spaces.

Only if we do this can we possibly generate the levels of employment that we all desire for our skilled, semi-skilled and unskilled workers.

Only if we do this can we address the imbalance that exists between some of our member states that have surplus labour and some others that suffer temporary, and in some cases structural, labour shortages.

But, in reality, how freely can we move given the high costs to leisure and business inter-island travel, especially by air. How can we develop the potential for intra-OECS tourism, intra-Caribbean tourism and multi-destination tourism, inclusive of neighbouring French and Dutch territories, if a Caribbean vacation or business trip could cost an amount close to what it would cost to fly to Miami?

This is a matter that must be addressed frontally and on a collective basis. It is our hope that the recent alliance between LIAT and Caribbean Star will be one critical step towards more reliable, efficient, cost-effective and affordable air transportation services for the OECS and the wider Caribbean.

Ladies and Gentlemen:

In closing, let me signal the need for us to undertake a critical review of the performance and prospects of our major economic sectors.

For a region of such small population and economic size, but with such a comparatively high concentration of talent, it seems only rational for us to pursue a path of development that emphasizes specialization in the production of high value added niche products and services.

For us to achieve this we must distinguish ourselves as a region noted for the production of goods and services of a distinctive “OECS” character and of world class quality.

The challenge is to pursue this “up-market” development strategy if you like, while at the same time creating gainful, sustainable employment opportunities for what is still largely an unskilled and semi-skilled work force.

We can only accomplish this through serious investment in our people's education.

The recent trend in tourism investment right across the OECS sub-region is the emergence of more boutique accommodations, mixed use developments and significant product upgrades to existing properties.

This is a living example of the real possibility of pursuing a high economic value/high employment creation model of production.

In short, our tourism strategy, at least in some of its manifestations, seems to be moving in the right direction.

We must marshal our economic forces, and leverage the interest of our development partners to move our agriculture in the right direction as well, linking it with both cruise and land-based tourism and enabling our agricultural entrepreneurs to move into higher value-added agricultural products and enterprises.

This is not going to be easy in an environment of eroding trade preferences and shrinking market access, but we must be creative, we must persevere, and we must hold our international development and trading partners to their commitments and positive undertakings to assist us in our efforts at economic transformation and adjustment.

Last but by no means least we must intensify our efforts, supported by ongoing and proposed development assistance, to assist OECS manufacturers, through the programmes of the OECS Export Development Unit and Caribbean Export to achieve world class manufacturing standards and to penetrate new markets.

Ladies and Gentlemen:

The OECS is constrained in its development options on many fronts, historical, geographic, economic, social and political, both at home in the sub-region and further afield.

In exploring new development paradigms for the OECS over the next two days, we must keep those constraints in mind, and apply our creative energies to the task of transposing those challenges into viable and sustainable possibilities.

In that regard, we must draw inspiration and example from the successes of other small states such as Ireland, Iceland and Singapore, some of whose case studies will be considered during this conference.

But in the final analysis, we are faced with our own peculiar scenario, our own unique situation, in which we are charged with a mandate to chart a development path for a grouping of micro states.

We are in effect breaking new ground, by attempting to build a development model for small and micro states that can serve as a shining example to the entire global community.

This is indeed a noble undertaking for which I wish you every success.

May God bless us all and our nations.

Thank you.