Large-scale poverty is endemic on Caribbean islands, no matter their ruling status structure. Once, most islands were dominated by European colonial powers, by Spain, Great Britain, France, USA, The Netherlands and Denmark. The sole objective of colonial powers was to extract as much profit as possible for the benefit of a small ruling elite at the expense of locals. Locals were often limited to slave labor without any rights for the benefit of colonial powers.
Laws and regulations, anchored in extensive bureaucratic institutions, were put in place to protect and guarantee the extractive policies of colonizers. Locals were not included, or at best, as collaborators on minimum levels. Colonial governments exercised extractive policies, with minimal inclusive economies.
When in the ’50’s, ‘60’s and ‘70’s islands became independent or autonomous, a new local Caribbean elite took power, but without changing extractive colonial institutions, that impeded and even blocked economic growth. Rather, often institutions were specifically rearranged to benefit the new ruling elite, granting them extensive monopolies. Import barriers, work permits, immigration limitations and a wide array of business licenses and permits had to keep competition out, and block all economic growth beyond the reach of the ruling elite. These insurmountable barriers to entry caused widespread structural poverty and apathy amongst islands populations. Institutions did not even create incentives for parents to educate their children. Paradoxically, those who would benefit most from education became the strongest opponents, creating generations of dropouts without any skills or chances to become productive members of the society.
So, meager opportunities left to the poor were only available in the shadow economy, in ordinary crime and the brutalities-spiced narco industry.
The only answers by ruling politicians over continued discontent caused by poverty and crime was to enforce extractive institutional rule even firmer. Inevitable results were an even faster downward spiral of ever more poverty and crime, while desperate young generations emigrated abroad massively.
It seems self evident, that everyone should have an interest in creating a type of institution that will bring wealth and prosperity for all. Unfortunately such is not true. Ideology and greed of a few often caused policies that produced poverty for all. Ideology in China under Mao Zedong blocked prosperity for the masses and made the country one of the poorest in the world, only favoring a small party elite. Predatory dictatorship by Chavez and Maduro and their ruling junta in Venezuela turned one of the wealthiest South American countries into a famine struck backwater. Examples on the islands are numerous, but to mention a few. On many islands, Luddites blocked or delayed introduction of high speed internet and other modern communications essential for modern business development, just to protect their profitable monopolistic telecommunication enclaves. Monopolists, formal and informal cartels, in the airline industry blocked expansion of substantial airlift to and from the islands, crippling the tourist industry. Banking cartels limited business credits to “friends and family”, excluding new entries into the market. Gaming boards no longer issue casino permits just to protect a small elite of local entrepreneurs. Extremely limited mortgage facilities choked off free real estate markets and brought the construction industry to its knees.
Poverty and crime on Caribbean islands will continue as long as institutions remain extractive for the benefit of a few and refuse inclusive economies.
By Jacob Gelt Dekker, opinion columnist for Curaçao Chronicle.