Caribbean opportunities

Linda Hutchinson-Jafar reports on the advent of a wider Caribbean Single Market and Economy

The Caribbean Community (CARICOM) Single Market (CSM) established last year is seen as potentially opening up more business and employment opportunities for a cadre of professional workers, including accountants.

The CSM went into partial effect at the beginning of 2006 with an initial six countries and, by July, the remaining six members were integrated in the CSM.

The CSM has a combined population of around six million with a gross domestic product (GDP) of US$300m.

The member countries are aiming to have a single economy implemented by 2008 and are working towards the harmonisation of economic policy.

Professionals in the Caribbean have been working in member countries under CARICOM’s Free Movement of Skilled Persons Act 1997, which allows for certain categories of non-nationals to work in CARICOM countries without work permits. With the advent of CSME, this will be extended under the Trade in Services policy.

‘As it is, there is an adequate, albeit not ideal, framework for accountants to move freely in their trade within CARICOM, and CSME does not necessarily convey any additional benefit or preferred advantage for accountants to practise in CSM countries, since I believe this is a function of labour market conditions – for example, pricing, availability, perks, position, etc,’ says Roshan Baboolal, an accountant in Trinidad. ‘However, with the Trade in Services, particularly as it relates to any CSM countries’ ability to set up CARICOM-owned companies as legitimate local enterprises to operate and trade as local companies, there will be a greater re-allocation and movement of accountants in multi-state enterprises, not to mention the larger auditing and accounting firms.’

Baboolal also sees the introduction of the CSM as having a positive impact on conducting business intra and extra-regionally as a major bargaining body, particularly with visible goods and services moving within the CSM countries.

‘In addition, external trade agreements with American, Asian and European countries will have to be revisited in light of this consolidation to equate a more preferred position in taking up its share of the global trade pie.

‘There is nothing new about this CSME strategy that hasn’t been tried elsewhere in the world, but its success hinges on the fair implementation and acceptance of a framework that preserves sovereignty, fair trade practices, harmonisation of legislation and movement away from a national vision towards a regional or global vision,’ he adds.

Greater choice

However, Steve Ramlakhan, another accountant in Trinidad and Tobago, sees greater opportunities under the CSM for accountants to move within member countries, and bring benefits to the countries.

‘At present in Trinidad, we are suffering from the unavailability of good and competent accountants to fill vacancies in both the private and public sectors. Persons who are available seem to be on the less experienced side and, therefore, with free movement, this can open up companies to a greater choice... it also allows individuals to move into different environments which will allow them to gain better experience and opportunities,’ he adds.

Ramlakhan believes the CSM will, in the long run, have a positive impact on companies as they compete with new entities in their markets.

‘It will force companies to become more efficient if they are to be competitive and survive. It will allow for greater opportunities for individuals and it will strengthen the Caribbean community if we can be seen as one unified group.’

In Guyana, where the economy continues to remain depressed, some accountants see the CSM as offering an easier way to move into other Caribbean countries and beyond for improved salaries.

‘Most of our qualified accountants leave Guyana for better pay overseas. They tend to use the Caribbean as a stepping stone to North America. A newly qualified accountant gets about US$2,000 per month in Guyana whereas they could attract twice as much in the Caribbean. Movement is easier with CSM as they would not need to get a work permit,’ says Noel Narine, managing partner at PKF, Barcellos, Narine & Co.

Narine also sees the CSM as having a positive impact because it would standardise pay, reduce inefficiencies and make politicians more honest.

‘If Guyana wishes to return its qualified professionals, then the salaries would have to increase. Investments from other territories into Guyana would put pressure on corrupt practices as the investors would wish to maintain certain standards that apply in their home territories,’ he says.

Deodath Ramdass, a chartered certified accountant (FCCA) in Trinidad, says professionals have recognised that the harmonisation of taxation is an important step in the achievement of the CSME, and failure to do so is likely to result in barriers to the free movement of goods and capital.

Accountants in the region have the opportunity as a unified body to advise the governments within CARICOM on how to accomplish some measure of tax uniformity in the way in which taxable income is calculated, as well as harmonisation of tax rates within various member states, according to Ramdass. An Intra-Regional Double Taxation Agreement, already in force in some member states, is an important asset in this direction.

‘Advising CARICOM nationals on taxation issues is another important opportunity for accountants as they must be cognisant of the fact that they are subject to all applicable tax laws of their host country.

‘It is therefore important to have knowledge about the types of taxes to be paid, before moving to work in another member state,’ he adds.

Critical

Ramdass also sees audit and financial services playing critical roles as the CSM now permits the free movement of goods and services imported from extra-regional sources which would require the collection of taxes at the first point of entry into the region, and the provision of sharing of collected customs revenue.

Describing the CSM as a basis for a stronger and more effective negotiating and lobbying force, rather than individual territories acting on their own, he says it will help the region to win recognition of important principles, such as the need for special attention to the situation of smaller economies.

Jamaican business executive, James Moss-Solomon, points to some bureaucratic problems hampering a smooth flow of applications for the required skills certificate which has replaced the work permit, and says these need to be ironed out for the free movement of professionals to take full effect.

‘In terms of people moving across the Caribbean, I’m not happy with the rules and the follow up,’ says Moss-Solomon, the President of the Caribbean Association of Industry and Commerce (CAIC) which represents the regional private sector.

‘I, myself, am applying in several categories [in] which I’m qualified for a CARICOM certificate and I’m encountering a lot of problems, and some of [these] can be easily solved...’

Statistics at the Barbados-based CSME Unit of the CARICOM Secretariat show that there is no rush of skilled persons moving and swamping local jobs and opportunities under the CSM regime in its inaugural year.

‘What we find in most cases is that many persons mix up the fact that individuals can still seek employment through a work permit. So many figures are quoted in the thousands when numbers actually receiving a CARICOM skills certificate are significantly less,’ said Salas Hamilton, specialist communications officer at the CSME unit.

‘So there are opportunities for the qualified categories... and one of our PR thrusts is to get CARICOM nationals to think regional, create regional businesses, make regional links and use regional resources in order to compete globally.’

Hamilton says a small accounting company can link with established accounting companies from other member states to achieve economies of scale for enhanced external competitiveness, and even for their own survival.

Linda Hutchinson-Jafar is a business writer based in the Caribbean.