A Propensity for Dependence

by Jerome L. McElroy, Professor of Economics, Saint Mary’s College, Notre Dame, Indiana

The recent transfer of Hong Kong from Britain to China has re-focused attention on the political status of myriad dependent mostly island territories scattered across the globe. Despite their periodic chafing and complaints of neglect, and despite the United Nations’ declaration of the 1990s as the Decade of Decolonization, there appears scant sentiment for independence among these small remaining colonial outposts.

As an example, take the situation of the smaller (less than half million inhabitants) island societies of the Caribbean. Despite the postwar march to independence of ten of their larger neighbors - from Bahamas and Jamaica to Barbados and Trinidad - some sixteen island democracies remain dependent territories (DTs).

They comprise the six islands that make up the Netherland Antilles, the six British Dependencies including Montserrat presently suffering destructive volcanic eruptions, the two French Overseas Departments of Guadeloupe and Martinique, and the two United States Territories of Puerto Rico and the U.S. Virgin Islands.

Their persistent propensity for dependence is evident from recent electoral results. In the last referendum in the French Antilles, less than 5% of the voters favored independence. In the Dutch Antilles in similar votes in 1993 and 1994, islanders overwhelmingly preferred the status quo in Curacao (73%), St. Eustatius (91%), Saba (86%), Bonaire (88%), and St. Maarten (59%). Aruba, once slated for autonomy in the mid-1990s, has since reversed course.

The outcomes have been similar in both British and American territories. In recent elections in the Turks and Caicos Islands, Cayman Islands, Montserrat, Anguilla and the British Virgin Islands, voters elected status quo parties. In the 1995 status referendum in Bermuda, residents of the UK’s oldest colony voted against independence three-to-one. Likewise, in separate status plebiscites in 1993 in Puerto Rico and the U.S. Virgins, islanders voted over ten-to-one against full autonomy.

These results are not surprising given the substantial socio-economic advantages associated with political affiliation. These benefits include free trade with and export preferences from the parent country, lucrative grants and social welfare assistance, ready access to off-island capital through special tax concessions, in many cases the availability of off-island labor markets through migration, aid-financed infrastructure and communications, relatively high quality health and educational systems, natural disaster relief, the provision of costly external defense, and even protection against potential internal disturbance.

The extent and impact of these territorial advantages are clear from recently published research with Professor Klaus de Albuquerque of the College of Charleston. A comparison of the average performance of a cross-section of thirteen DTs with that of a cross-section of twelve independent Caribbean neighboring island countries across several socio-economic indicators reveals the superior performance of the territories in all important respects.

For example, both average and per capita GDP and electricity production are three times higher for the dependencies than for their sovereign counterparts. Average annual GDP growth since the mid-1980s has been roughly twice as fast. The territories also record substantially higher levels of motor vehicles per capita (248 to 70 per 1,000 population) and telephone subscribers per capita (356 to 216) while they enjoy a significantly lower average unemployment rate (7 vs. 17%).

The same contrast emerges from the social quality of life measures. Average life expectancies are higher in the dependencies (75 vs. 70 years) while their average infant mortality rate is half the level of their independent counterparts (13 vs. 27 per 1,000 births). The DTs also have twice the number of doctors and 30% more hospital beds per capita. Territorial affiliation seems to provide educational benefits as well. In public primary schools, the student-teacher ratio is considerably lower in the dependencies (17) than in the sovereign islands (26), and measures of secondary educational performance on standardized tests in English and Mathematics are routinely 30 to 40 higher.

It is small wonder, then, that the process of decolonisation has stalled at the steps of the small-island Caribbean. The DTs relative affluence and superior socio-economic performance, however, rest on fragile footing. The dependencies are significantly smaller than their sovereign neighbors. They average less than one tenth the population and land area of the latter and are thus assumed to be more potentially vulnerable to hurricanes and other natural disasters.

The DTs also possess much fewer exploitable resources and much less diversified economies than the autonomous islands. With over three times more visitors and hotel rooms per capita, they are far more dependent on the capricious and cyclically sensitive tourism industry. The future viability of their delicate marine and terrestrial ecosystems, the natural capital base of their tourist economy, is also threatened by population densities nearly 50% above the sovereign island average. In addition, the DTs are also considerably more engaged in off-shore financial activities which are notoriously subject to volatile international currency realignments and tax code changes decided elsewhere.

Given these natural and commercial vulnerabilities, and their limited room to maneuver against the increasingly competitive forces of globalisation, islanders have come to appreciate and exploit the territorial privileges they enjoy. This awareness has bred political caution and a risk-averse desire to maintain the security of the status quo. Although they occasionally are irritated by the political limitations that result, territorial residents ultimately vote with their pocketbooks just like everyone else.

Since political dependence also seems characteristic of many small Pacific islands, overall this analysis suggests the postwar age of decolonization has been replaced by a new so-called “Era of Colonial Permanence.” Such a state of affairs hints that any future political status change may be due more to metropolitan fiscal woes than to insular territorial demands.