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University of the West Indies Open Campus Annual Independence Lecture

Independence: a 21 st Century Toolkit for the Caribbean

Herbert A (Haz) Samuel

Kingstown, St Vincent & The Grenadines

22 nd October, 2015

Independence: a 21 st century toolkit for the Caribbean

Thank you Mr Chairman and Mrs Dalrymple, for your kind remarks. I am honoured to be invited by the UWI Open Campus to give this year’s Annual Independence Lecture. Thank you, ladies and gentlemen, for coming out this evening and thanks to those listening to the audio and watching our live stream, for your time and attention.

I have chosen to speak on the subject of independence in the 21 st century, which means that I should first say a few words about independence in the 20 th .

Caribbean independence movements had their roots in the dire economic circumstances of the early 1930s, pre-existing, but greatly amplified by the Great Depression of 1929, the deepest and longest-lasting economic downturn in the history of the Western industrialized world. The working classes of the region, already exploited and on the margins of society, were particularly hard hit and their socio-economic conditions, previously bad, became intolerable.

It was fortunate that the emerging leaders of the time, men such as Norman Washington Manley and Alexander Bustamante in Jamaica and Grenadian-born Uriah Butler in Trinidad (to name a few), recognised the need to advocate, agitate and organize on behalf of the oppressed workers. Trade unions were active and new ones were formed, workers withdrew their labour and by 1935 strikes and rioting had begun to boil over on the plantations and into the streets of Jamaica, Guyana, Trinidad, St Kitts, St Lucia and St Vincent. Some of the union leaders formed political parties, the colonial masters were forced to the negotiating tables and the culmination of the decades-long struggle was eventual independence for the colonies, starting with Jamaica in 1962. Our own independence was attained 36 years ago, in 1979.

The yearning for independence was collective: George Lamming called it “a matter that concerned the whole region” and it was driven by two main catalysts, the first of which was economic. The second one, which came much later, was a desire for self-determination on the part of the middle and upper classes of our society – who, higher up on Maslow’s pyramid, had the luxury of being able to focus on matters such as political self-determination and autonomy, which they also believed to be essential prerequisites to the development of their territories. In short, these nations in the throes of birth had to be able to harness the desires, talents and skills of their peoples if they were to fully develop.

So now, here we are. The region has enjoyed self-government – political freedom – for decades. Here in our own SVG, in another 14 years, we will celebrate 50 years of such freedom.

But have we in SVG and the region achieved that which drove the struggle in the first place?

I wish in these remarks to suggest a few things:

The struggle for independence continues in the Caribbean, but the struggle is latent – we are in it perhaps without fully recognizing it; our 21 st C independence struggle is to attain economic independence – and to do so, we must do three broad things, concurrently:

1)

2) We must be aware that the primary catalyst in the arena of economic independence in this 21 st century, is what I want to call ‘intelligent technology’ (IT) but we have no practical control over how this IT develops, so our main tool must be INNOVATION around this IT – ie: the creation and adoption of new business models and approaches that allow us not simply to consume this IT, but to shape and utilize this IT for our collective benefit;

We must improve practical aspects of our political independence;

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3)

And not least of all, we must design and build sustainable energy sectors across our region.

These are our key challenges, if we are to be truly independent in this 21 st century. I see them as being linked together in fundamental and interesting ways, which I’d like to expand on over the next several minutes.

First, let’s look at the business of fixing practical aspects of our political independence. This is actually the critical and fundamental item on our list, because it refers to governance, which is: how our governments operate to secure the best outcomes for society as a whole. You see, we may indeed be self-governing democracies, but a clear and growing intellectual consensus tells us that self-governing democracies will not thrive, if they are poorly governed.

In their highly-praised 2012 book Why Nations Fail, economists Daron Acemoglu and James Robinson asked the simple question: why are some countries poor and others rich? Their answer, detailed in the book, is based on the findings of fifteen years of extraordinary, original research looking at centuries of historical and contemporary evidence from civilizations including the Roman Empire, the city-states of the Mayan civilization, medieval Venice, through to the Soviet Union, the Americas, England, Europe, the United States, and Africa. Their findings are fascinating – and can be summarized quite simply. They found that the success or failure of nations did not depend on their endowments of natural resources, or on their socio-cultural heritage, or their geographic characteristics – no, their economic success or failure depended on whether or not they had inclusive political institutions that were designed, organized and operated for the benefit of their societies as a whole.

Take the extreme example of Korea (just one of their several fascinating examples). The Korean peninsula is in many ways a remarkably homogeneous place. The territory was divided into North and South at the end of World War 2, and its development was overseen by the Soviet Union in the North and the USA in the South. Today, the people of North Korea are among the poorest on earth, while those in the South are among the richest.

Why? Because: the leaders of South Korea “forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to its citizens” 1 On the other hand, at the opposite end of the spectrum, the unfortunate people of the north have endured decades of famine, political repression, and very different economic prospects, because their very small ruling elite had constructed a system in which political power was “narrowly concentrated” and “organized for its own benefit, at the expense of the vast majority of people.”

In short, what South Korea did was to govern well.

Larry Diamond, a leading contemporary scholar of democracy explains that to govern well, governments would “listen to their citizens’ voices, engage their participation, tolerate their protests, protect their freedoms and respond to their needs”. Failure to do these things could result in what he calls “predatory societies”, where people achieve a better quality of life not from producing wealth in a manner that benefits society as a whole, but increasingly by “taking advantage of power and privilege, stealing from the state and diminishing the power of the law”.

According to these analyses, the costs of getting governance wrong are huge. On the plus side, the benefits of getting it right are also huge, according to Dr Daniel Kaufmann, a Chilean economist and president of the New York-based Natural Resource Governance Institute. Dr Kaufmann is regarded as a leading expert on

1 From the book description

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governance and development, and has co-produced the Worldwide Governance Indicators used by the World Bank.

He considers governance to be "an absolutely crucial and fundamental input to development" and he refers to what he calls "the 300% development dividend of good governance", which is based on the findings of his research over the past 15 years.

He tells us that “A country that has a leadership and a resolve to enact governance reforms – rule of law, control of corruption, government effectiveness – and does it over a period of time, in the long term can expect a tripling of its per capita income… it’s a major payoff, a major dividend of good governance.”

So the arguments are clear and are backed by solid empirical evidence.

Eight specific characteristics have been defined for ensuring good governance at national levels, including rule of law, transparency, responsiveness, consensus, accountability and participation – and I wish to focus on one of these – transparency, which overlaps into some of the others, and to highlight in this context how things are going in the wrong direction in SVG.

Good governance in an effective democracy requires, among other things, an informed public: citizens must have access to sufficient information so as to properly weigh pros and cons and to make informed choices. But it is surely an interesting paradox of our existence in this so-called information age, that we as citizens don’t have basic data on the operations, affairs and outcomes of the state and its enterprises.

For example, the government’s digest of statistics was a 100-page document, produced annually, that compiled time series data on the vital statistics of the country; its health, production, imports, exports, finances, trade, crime, education and environment, etc. I say “was” because the department of statistics has not published a digest of statistics since 2004.

And St Vincent Electricity Services Ltd, the largest corporation in the country (and which happens to be owned by the state), has not published an annual report since 2010.

Speaking of VINLEC, surely you know that a significant proportion of the money you have paid in electricity bills to VINLEC over the past 10 years or so, has ended up in the government’s coffers, in something called the PetroCaribe Fund? (Which may or may not be the official name of the fund.)

The fund is an integral part of the Petrocaribe oil credit agreement, which this country signed with Venezuela in 2005. The agreement essentially allows, among other things, for the participating governments (of which there are 12 CARICOM members) to borrow money against petroleum products imported from Venezuela.

One ostensible purpose of the Petrocaribe fund, where the borrowed monies accumulate, is to finance social development programmes for the country. But do you know how that money – your money – is being spent by your government?

If we were having this discussion in Kingston, Jamaica, instead of Kingstown, St Vincent and the Grenadines, the answer would be yes – because Jamaica’s PetroCaribe Development Fund (that is the official name) publishes audited, annual financial statements, the most recent being for 2013.

But here, we have no details on what this fund, amounting to hundreds of millions of dollars of our money (there is some argument about the exact amount), is being spent on.

Speaking of Petrocaribe, let’s take a related and even larger example.

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The government of SVG, a small, relatively poor country has proposed to build a massive infrastructure project, one unprecedented in the country’s history. The project is an airport. St Vincent and the Grenadines already has several functional airports, the two most important being The ET Joshua Airport at Arnos Vale, and the airport at Canouan. This new airport is a so-called “international airport” which only means that it will accommodate large commercial aircraft that cannot fly into Arnos Vale or Canouan.

The government proceeds with the project, on the basis that it is “an absolute economic necessity”.

Let’s pause to consider that statement for a minute. Such a proposition, to be accepted by a rational observer, must fulfil one of two conditions. It must either be a statement of the patently obvious, such as if I were to say: “breathing is an absolute physiological necessity”, or it should be verifiable by some accepted means – in this case, by an economic feasibility study carried out by capable and impartial experts. Such a study would consider the estimated costs of financing, building, operating and maintaining the project over its lifetime, and the dollar values of the various benefits estimated to flow over time, from operating the project. In the simplest analysis, in the case of an economically viable project, the total present dollar value of estimated benefits would be greater than the total present dollar value of the estimated costs.

But it is not a statement of the obvious, and no such study was done – at least not in the beginning. We were told about a year ago by the International Airport Development Corporation – a state-owned company – that in 2010 (two years after the project had commenced) in response to the government’s request for funding, the CARICOM Development Fund commissioned an economic feasibility study on the project. We are told that the study was performed, and that the CDF approved some funding for the project (though not the full amount requested). But, we are also told that the IADC is not at liberty to release the results of the study – so we don’t know what the study concluded.

In other words, neither of the conditions has been satisfied for the statement to be accepted – and we, the citizens who will pay, in one way or another, for this unprecedented public infrastructure undertaking, can only speculate about its long-term value and its impacts on our national development prospects.

No wonder then that one of the IADC taglines for the project refers to the “Vincentian dream”. Dreams are fine, but I would suggest that actual governance in the public interest, requires a vigilant and informed public keeping its government awake, if our dreams are not to be subverted into nightmares as we blissfully sleep.

We should note two things at this point. One is that similar governance issues are affecting other nations in the Caribbean – as we have seen from recent news reports from our neighbours in St Kitts Nevis, Trinidad and Tobago and Barbados to name some prominent examples.

The second and critical point about all of this however, is that it will at some point fall to the citizens of the region – for us – to fix this problem. You see, the conditions of bad governance may well be the creation of a select group of elites, but the solution is for us – the citizens – to administer.

So, how do we intercede? What are the tools at our disposal to fix this problem?

These are not easy issues and they will not be resolved by one or two speeches, no matter how inspired or insightful. They will require a commitment to improve; hard and consistent work in that direction and monitoring and oversight – what us engineers would call a ‘feedback loop’, created by an informed and engaged public – and note that when I refer to public, I include the press, which too often appears to be strangely disconnected in critical areas.

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Luckily for us – the public, that is – engagement with the issues is easier now than it was just a few years ago. Assisted by the rise of social media platforms such as Facebook and Twitter and the reach of mobile technology, ordinary citizens and movements have agency, have a voice and have a place for that voice to be heard. Like it or not, social media represents the 21 st century public square, with far-reaching ramifications for the development of our societies.

Of course, there is always the occasional recourse of voting at regular, free and fair elections, when citizens can replace governments that are failing to perform on behalf of the public good – the raison d’etre of governance.

Part 2

Innovation and Sustainability

That was item # 1.

energy sustainability, and are related in fundamental ways.

The relationship began in the 18 th century, at the start of the industrial revolution, the period in the Western world when the production of goods became mechanized, a process driven by innovation and invention on a previously unprecedented scale. The beginnings of the industrial revolution are closely linked to the innovations of an Englishman named Arkwright, who in 1769 invented the thread-spinning machine.

The direct purpose of the machine was fairly simple. It was to mechanize the production of cotton threads for cloth-making, at the time when the creation of textiles was the dominant business in England. In those days, thread was produced by artisans working hand-driven spinning wheels set up in their cottages; these threads were then woven into fabric on looms manually operated by other artisans working from their cottages, and so on. As a result of all of this disconnected manual labour (which provides the origin of the term ‘cottage industry’) production of cloth was slow and inefficient, the final goods were relatively expensive – and the average citizen of the mid-18 th century owned only very few items of clothing.

Arkwright’s machine changed all that. It allowed the process of spinning to be scaled up, so instead of being produced by a person at home, thread could now be produced by several machines housed in a building specially made for the purpose – which gave rise to the other critical innovation of the industrial age – the invention of the factory production system. The machines in these factories moreover, could be driven by an external supply of energy. The early machines were driven by literal horse-power: a horse attached to a turning wheel (which is the origin of the term now applied to car engines). But Arkwright transformed the production process by innovating around an existing energy source – he constructed a building where his machines were powered by a water-wheel he installed on the property, driven by water diverted from a nearby source. This of course you will recognize as an early use of renewable energy, and a precursor of the modern hydro turbines that we use right here in SVG, to produce electricity.

Thus did Arkwright’s thread-spinning factory, which housed 200 workers on five floors, working two 12-hour shifts, six days a week, lay the foundation for a manufacturing revolution in 1771, which fed on itself and changed the very way in which communities and societies were organized thereafter.

The invention of spinning machines was of course accompanied by the invention of mechanized looms to weave the now plentiful threads into fabrics at a much faster rate, making cloth and clothing cheaper and therefore increasing the demand for the goods, for the raw materials and for factory space. The new

The second and third items in the toolkit have to do with technological innovation and

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factories needed energy – and the source was coal, which was facilitated by another critical innovation of the time.

James Watt’s steam engine, created within a few years of Arkwright’s spinning machine, provided a huge boost to the development of the new industrial age, as it provided a more efficient means of converting the energy in coal to usable work. In fact, it made the per-unit cost of energy cheaper, so more energy could be – and indeed was – used by a society in its rush to industrialize.

The era of cheaply available energy had dawned. England’s output was now unconstrained by the availability and cost of energy and as a result, energy consumption soared, along with national production and growth.

How does this relate to sustainability?

Well, if you took the data on greenhouse gas concentrations in the atmosphere over the past 2000 years and plotted it on a graph, you would see that just around 1770 marks the very place where the graph starts going upwards – after being flat for the previous 1700 years. And between 1770 and today, the increase has followed an exponential curve. In other words, it turns out that the birth of this period of extreme technological innovation – the industrial revolution – coincides exactly with the start of the human- influenced global warming that is now the main driver of global climate change – because of the direct link between fossil fuel use and greenhouse gas emissions.

So in a very real sense, mankind’s technological innovations created the existential climate problem that many nations now face. About 250 years ago, an equation was created:

Technological innovation + energy innovation = GHG emissions + climate change

Our challenge now is to invert that equation (turn it upside down):

We need to create a new equation where Technological innovation + energy innovation will reduce GHG emissions and the impacts of climate change.

This will not be easy. We are fighting against a rising tide. According to Bloomberg New Energy Finance:

Despite investment over the next 25 years of US$8 Trillion in renewables, “there will be enough legacy fossil- fuel plants and enough investment in new coal-fired capacity in developing countries to ensure global CO 2 emissions rise all the way to 2029, and will still be 13% above [current] (2014) levels in 2040.”

It is clear that we urgently need interventions that will invert the equation. My own contribution to this effort, Welectricity, is a behaviour-based intervention, which seeks to nudge users to understand and reduce their energy consumption at home – and will soon be modified to do the same for water consumption as well. I am grateful to have received some recognition for my work, but it is but one tiny step in the required direction. We must go further – as far as we can in the shortest possible time, in the face of the many challenges, constraints and barriers that will retard our progress.

Here’s a practical example of a challenge:

Over the past several years, a buzz has developed around solar energy. Public awareness of the prospects for use of solar electricity as an environmentally friendly and cheap energy source has soared – and installations have increased – exponentially in some countries such as Barbados, over the past 10 years.

But certain important technical complexities may have been lost in the debate. For example, some people ask – why can’t SVG just go solar and wind? We have all this sunshine, and so on. Why should we still be using dirty, expensive diesel fuel?

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The fact is there is a real, practical limit on how much solar photovoltaics (PV) and wind energy we can install, which has to do with the intermittent nature of the resource – there’s no solar energy at night and the wind doesn’t always blow, so we still need diesel or something else to provide power on a still night. The solution to this specific problem of course, is electricity storage, but the technology for this is still expensive and not yet ready for large-scale, prime time. Until the storage problem is solved, there is no such thing as 100% solar or 100% wind energy.

But that particular problem will be solved, because some very smart entrepreneurs are working on it as we speak. And when that happens, we will need business models that work in the region, to take advantage of the new possibilities opened up by the new technology. Which raises the question of how will 21 st century Caribbean energy sectors be organized, to create and maintain a viable ecosystem among the component players – the utility on the one hand and the consumers on the other – while increasing the proportion of our energy that is generated by renewables?

Will the consumers own the PV plants and the utility own the batteries and rent their capacity out to the consumers? Or suppose when the battery storage technology is ready, a group of us entrepreneurs were to set up a utility – a storage utility – that would store solar-generated electricity and sell it back to the utility at night – or sell it directly to customers in a wide-area network?

Also bear in mind that if and when geothermal energy becomes a reality, electric vehicles will become a viable proposition, which may be another avenue for addressing the battery and storage conundrum.

These are not the answers – these are the questions, addressing the business model issues that countries like ours can innovate around. Because of the site-specific nature of renewable energy, there is no one-size-fits- all, off-the-shelf solution and the various solutions will require us to come together to produce new ideas, not just to consume existing ones.

All of the above – the requirements for good governance, for innovating business models around existing and new technology and for developing sustainable approaches to our energy production and use, will require profound commitments – and clear and focused leadership at all levels.

How do we actually do this? Is again the question

In his overview report on the work of his West Indian Commission published in 1992, Sir Sridath Ramphal, our eminent Caribbean intellect, noted that there was “much complaint” to the commission on the “decline in standards of governance and erosion of the quality of civil society” across the region. The seriousness of the problem resulted in a recommendation, which was that a CARICOM Charter of Civil Society be developed, having legal standing, which would deal specifically with such matters as ensuring rights to “a free press, a fair and open democratic process, the effective functioning of the parliamentary system, the absence of corruption from public life, respect for the rights of women and children, the right of association and freedom from political victimization… greater accountability and transparency in governance and greater public access to information.

Five years later, the charter was eventually drafted and adopted (no doubt with great fanfare) at a 1997 CARICOM heads of government meeting in Antigua. But as (the late) Dr Norman Girvan pointed out in 2011, it was never given legal effect, and fourteen years later, “most of the actions it calls for have not been executed.”

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Dr Girvan had a few possible explanations for CARICOM’s relaxed and noncommittal approach to the matter. He notes that, critically, the “national constitutional arrangements that we have in most, if not all, CARICOM states assign no role to civil society in governance” and that “citizen participation in governance is restricted… to voting” in elections every five years.

Moreover, he opined that access to these rights specified in the charter which the heads of government adopted, is seen by the very governments themselves not as a right of citizens, but as a favour which they grant us at their fancy. And he correctly surmised that the predominant political cultures, dominated by the ‘winner take all’ system and the cult of the Maximum Leader, are not conducive to the practice of good governance.

I agree with Dr Girvan’s analysis. It is clear – to me anyway – that our recent CARICOM leadership has been quite uninterested in changing their fortunate status quo. Some of our leaders are even willing to endure the occasional critical lecture by their peers about governance, but neither they nor the speechmakers are serious about fundamental change; they all know that the speeches are mostly made with an eye on legacy, not with the intent of transformation. They applaud politely, discuss the matter over cocktails, and move on to the next talking point.

How do we fix this? I must confess, I don’t know. I know that it must be fixed if we as a country and a region, are to make economic progress in the 21 st century.

So let’s talk about innovation and sustainability, something I know a little bit more about.

On the matter of innovation;

The first big-picture, strategic task we must put our minds to is to create a new generation of problem solvers – this will call for a re-examination of our education system’s priorities, methods and approaches. Handing out laptops to schoolchildren is fine, but now is the time to also consider primary-level interventions such as teaching coding in schools – the goal being not to produce legions of computer programmers, but rather to allow young students to learn critical skills related to logical thinking and problem-solving, which are the hallmark properties of programming – and in fact essential life-skills. Interventions such as these have already been rolled out in several advanced societies including Finland, Estonia and the UK.

On the other end of the to-do scale, we need to do smaller, tactical things on the ground right now. One example is that we need to reduce the costs and friction involved in doing business. For example, what is preventing us from embracing mobile money for payment for local goods and services? After all, mobile money was not born in cosmopolitan New York or London – it was born in the grassroots – in villages in Uganda, Botswana, Ghana, Nigeria and Kenya. Moving money around virtually instead of physically will have sustainability benefits, and once properly regulated, it will help to reduce the costs of doing local business. I think that legitimate businesses should be able to securely move some of their transactions to more efficient platforms, because as it is now, our traditional banks have an overly large leeway and ability to actually impede business by adding arbitrary rules and fees to their services.

Specifically in relation to building energy sustainability;

We need first need to recognise the huge task at hand, a task which is complicated in some quarters by the

lack of an honest and open discussion between stakeholders.

discussion is driven by the proximity of the next general election, instead of being based on sound technical

In our particular case in SVG, too often the

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and economic facts. In other jurisdictions, the discussion is shaded by commercial interests that may not align with national ones, and so on. This is also a governance issue and needs to be addressed as such within that framework.

National energy policies must include the appropriate mix of legislation, incentives and disincentives to motivate the utilities and their customers to invest in and adopt efficient and sustainable energy systems and behaviours.

Finally, sustainability is inextricably linked to consumption – and consumption starts and ends at home. Which means that we as individuals, have our vital part to play in building a sustainable 21 st century future. Some of us can buy energy efficient appliances. Some of us can reduce our electricity consumption. Some of us can consume less water. All of us, together, can make a difference.

I thank you.

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Sources:

Acemoglu, Daron and Robinson, James. Why nations fail: The Origins of Power, Prosperity, and Poverty.

Diamond, Larry Jay. The Spirit of Democracy: The struggle to build free societies throughout the world.

Ramphal, Sridath. Overview of the Report of the West Indian Commission

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