Monday, January 25, 2010

Economic Integration and Development in the Caribbean

CSME is necessary for meeting the economic and social objectives of the region’s economy.

Caribbean economic development has lagged behind as compared to other small economies, such as Singapore, Ireland and Cyprus, as they have depended on the exploitation of natural resources as well as preferential arrangements for products such as sugar and bananas.

In 1975 the Caribbean was at the same level, in terms of GDP per capita, with Ireland, Singapore and Cyprus. However, Ireland and Singapore’s GDP was almost twice the size of the Caribbean region by the turn of the century.

Compared to other developing economies, the Caribbean ranks high on the human development index. Both the region’s average literacy and life expectancy rates are high. On the other hand however, poverty rates are also high and income inequality is significant.

Three of the main economic challenges facing the region are the loss of preferential arrangements, importance of achieving higher productivity levels and the need to strengthen fiscal positions and reduce the public debt burden.

In terms of loss of preferential arrangements, the estimated cost of producing and exporting sugar by the lowest cost Caribbean producers is 50 to 60 percent higher than that of the higher cost free market exporters.

In terms of economic restructuring, the reality is that the Caribbean agricultural sector will find it difficult to globally compete as the high labour intensive manufacturing in the Caribbean can no longer compete internationally due to high wage structures and the rise in exportation of Chinese manufacturers.

Caribbean economies need to improve productivity since there was a decline in productivity in the 1990’s in both public and private investments. Migration is another reason for the decline in productivity as it has represented a brain drain which has weakened the skills base and capacity of regional economies.

PART ONE...-------> DUM DUM DUMMMM... NOT FINISHED... TO BE CONTINUED

CSME is fundamental to the erasure of economic development challenges in the Caribbean region.
The Caribbean has made a fall back in their econmic development because of their abuse of natural resources and high dependence on main agricultural products(sugar and bananas).
GDP per capita of the Caribbean in comparison to that of the mentioned countries, in 1975, were almost equivalent, however, with the passing of the century the countries were ahead of the region.
T&T did not experience poor growth performance in the 1990’s , due to resurgence of oil.
GDP growth improved in the Caribbean in 2000
This was due to the the indicators of development: Income Health Education and Birth Rate
The first main economic challenge: the loss of preferential arrangements,for example,in terms of traditional agricultural exports and the necessity to make changes in the economies to meet the current global trading environment. This led to competition in export markets.
part one:

Challenges in economic development in the region, propose that the CSME is necessary for economic and social objectives of the region. Development in the caribbean has lagged behind those of commparable countries because of our independence on the exploitation of natural resources and preference for agricultural produce (sugar and bananas). Economic performance suffered a decline which, while marginally better than that of Latin America, was still not as good as Asian countries. The notable exception to this poor growth performance was Trinidad and Tobago. While, the universally accepted indicators of development were considered to be income, health , education and life expectancy.

stay tuned for part two...

Caribbean blah blah blah...

Summary:

1. Throughout this presentation, we will be discussing the challenges facing the region, namely the region’s economic development, as well as the proposal that economic integration is essential for the region’s economic and social objectives.

2. The Caribbean economy is less developed than other small countrries such as Singapore, Ireland and Cyprus because the Caribbean depended on the exploitation of both the natural resources, and the preferetial rates of the main agricultural products, being sugar and bananas.

3. Though the Caribbean was in line with Ireland, Singapore and Cyprus in 1975 with respects to GPD, they fell behind greatly, with Singapore and Ireland doubling their GDP compared to the region’s highest per capita country.

4. The Caribbean experienced a steady decline in GDP with a decrease from 3.9 percent in the 1970s to 1.9 percent in the 1990s, lower than the average growth rate of the world’s small island countries. This continued in the 1990s, with the exception of Trinidad and Tobago, who experienced a revival of world oil prices and implemented economic policy reforms which resulted in the continuation in per capita growth.

5. High oil prices and population growth resulted in the doubling of per capita income from 2000-2006 in Trinidad and Tobago while tourism and infrastructural development aided in the growth of other Caribbean islands. Included in the factors indicating growth were life-expectancy, income, health-care and education.

6. The region ranks high on the Human Development Index with high literacy and life-expectancy rates while also experiencing high poverty rates.

7. The economic challenges facing the nation are: 1.Loss of preferential arrangements, 2. Higher productivity levels and, 3. The need to reinforce fiscal positions and reduce public debts.

Economic Integration and Development

Noting the economic challenges within the Caribbean region, the CSME is necessary for economic integration. The Caribbean exploits natural resources because economic development in the region is delayed in comparison to small and comparable countries and we have preferential rates for agricultural produce. The Caribbean was in line with Ireland, Singapore and Cyprus in 1975. However, there has been a steady decline in growth in the 1970’s to the 1990’s of 1% of the GDP per capita. In 2000, there has been some growth in the real GDP in the Caribbean, increasing per capita incomes. Although poverty rates in the region are high, the Caribbean ranks high on the Human Development Index based on income, literacy and life expectancy. The main economic challenges facing the Caribbean are the loss of preferential arrangements, the ability to achieve higher productivity levels and the necessity to strengthen fiscal positions and reduce public debt burden.
As governments face political mandates to improve social and economic conditions, European markets are eroded. Developing countries have not taken the advantage of the long period of preferential market access to increase productivity of agricultural produce. The agricultural sector in the Caribbean is finding it difficult to be globally competitive. The lower productivity of both public and private investments has declined in the 1990’s. The agriculture sector has declined as a result of migration. Currently, remittances are a major factor to foreign exchange receipts in the region. However, migration has caused the brain drain which weakens the region’s human resources. Excessive build up in public debt hurts growth as resources were redirected to debt servicing.

Why The Lag?

Caribbean economic development has lagged behind that of similar countries due to its dependence on the exploitation of our natural resources .

E.S Williams

*CSME is important for eceonomic and social development of the caribbean region.
§ *The exploittion of natural resources in the Caribbean, and dependence on prefential trade has caused economic develpmnent to lag behind
§ *Deveplopment of carbbean countries has lagged behind because of their expliotation of natural resources

§ *development in the caribbean has lagged behing those of comparible countries like singaporo, Ireland and Cyprus because we depend on exploitation of natural resoures and on preferential rates for agricultural produce( sugar and bananas ).
§ *All the countries started off the same position and now the Caribbean countries are lagging behind.

§ Per capita income is one of the main economic development indicators. HDI:
Ireland=4
Barbados=31




§ With the exploitation of resources and dependence on preferential agreements, the Caribbean experienced a decline in both income per capita and GDP.
§ GDP experience lower growth rates with Asia moving 3times its pace

§ However, high oil prices have incresed incomes per capita reulting in economic growth, improving infrastructure and tourism facitlities

§ Though there was underdevelopment before 2000, progress and development has been made thruough income, health, education and life expectancy

§ All countries are middle income except haiti and guyana
§ Although there are high literacy and life expectancy rates, poverty and income inequality is also high which can cause adverse effects


§ the main economic challenges facing there gionis the loss of preferential arrangements- move away from agriculture and access to European market is challenging..
§ higher productivity levels-
§ strengthen fiscal positions and reduce the public debt burden-

Summary of E.S. Williams' speech

The CSME is important for the Caribbean to reach economic development. In the Caribbean, economic development is slow compared to other small countries. The region tends to focus on exploiting natural resources or relying on “preferential agreements” for agricultural produce. The Caribbean had a low growth rate in comparison with other “small island states” and the new Asian countries grew at a faster rate than perceived in the Caribbean.
This is not to say that the Caribbean does not do well. In the 2000’s, economic growth has increased with the Cricket World Cup 2007 in the tourist countries and oil in Trinidad and Tobago. The HDI is high compared to other developing markets. There are three main challenges to economic integration: removing preferential agreements, increasing productivity and erasing public debt. The Caribbean would find it difficult to let go of preferential agreements especially since there have been a number of external “shocks’ in the region. The Caribbean would find it difficult to increase productivity in the region especially with competition from China. The “third challenge” is the debt still present in many governments’ budgets. This has largely resulted from over-spending on the government’s part.
For the CSME to be implemented, there will be need for a lot of funds. Some to be donated by the member and the rest by the development partners. There are also concerns that since some member states do not have the necessary funding to fully contribute, the other more-developed states will have to take up the slack. Therefore, there will be need for compensatory procedures and economic policy restructuring.

Sunday, January 24, 2010

First assignment - Summary of E S Williams speech

Hello everyone,

You have to summarize the main points of E Williams'speech on "Issues in Caribbean Economic Development" and post this up in your own words for your first blog entry.

CSME - some additional information

The CARICOM Single Market and Economy also known as the Caribbean Single Market and Economy or CSME is an integrated development strategy envisioned at the 10th Meeting of the Conference of Heads of Government of the Caribbean Community which took place in July 1989 in Grand Anse, Grenada. The Grand Anse Declaration[1] had three key Features:

1.Deepening economic integration by advancing beyond a common market towards a Single Market and Economy.
2.Widening the membership and thereby expanding the economic mass of the Caribbean Community (eg. Suriname and Haiti were admitted as full members in 1995 and 2002 respectively).
3.Progressive insertion of the region into the global trading and economic system by strengthening trading links with non-traditional partners.
A precursor to CARICOM and its CSME was the Caribbean Free Trade Agreement, formed in 1965 anSingle Market and Economy
The CSME will be implemented through a number of phases, the first being the CARICOM Single Market (CSM). The CSM was initially implemented on January 1, 2006 with the signing of the document for its implementation by six original member states. As of July 3, 2006, it now has 12 members. Although the Caribbean Single Market and Economy (CSME) has been established, it is only expected to be fully implemented in 2008. This will be achieved with the harmonization of economic policy, and possibly a single currency.[2]

At the eighteenth Inter-Sessional CARICOM Heads of Government Conference in St. Vincent and the Grenadines from 12-14 February 2007,[3] it was agreed that while the framework for the Single Economy would be on target for 2008, the recommendations of a report on the CSME for the phased implementation of the Single Economy would be accepted.[4] The Single Economy is now expected to be implemented in two phases.

Phase 1 is to take place between 2008 and 2009[4] with the consolidation of the Single Market and the initiation of the Single Economy. Its main elements would include:

The outline of the Development Vision and the Regional Development Strategy
The extension of categories of free movement of labour and the streamlining of existing procedures, including contingent rights
Full implementation of free movement of service providers, with streamlined procedures
Implementation of Legal status (i.e. legal entrenchment) for the CARICOM Charter for Civil Society
Establishment and commencement of operations of the Regional Development Fund
Approval of the CARICOM Investment Regime and CARICOM Financial Services Agreement, to come into effect by January 1, 2009
Establishment of the Regional Stock Exchange
Implementation of the provisions the Rose Hall Declaration on Governance and Mature Regionalism, including:
The automatic application of decisions of the Conference of Heads of Government at the national level in certain defined areas.
The creation of a CARICOM Commission with Executive Authority in the implementation of decisions in certain defined areas.
The automatic generation of resources to fund regional institutions.
The strengthening of the role of the Assembly of Caribbean Community Parliamentarians.
Further technical work, in collaboration with stakeholders, on regional policy frameworks for energy, agriculture, sustainable tourism, agro-tourism, transport, new export services and small and medium enterprises.
During Phase 1 it is also expected that by January 1, 2009, there would be:

Negotiation and political approval of the Protocol on Enhanced Monetary Cooperation
Agreement among Central Banks on common CARICOM currency numeraire
Detailed technical work on the harmonisation of taxation regimes and fiscal incentives (to commence on January 1, 2009).[5]
Phase 2 is to take place between 2010 and 2015[4] and consists of the consolidation and completion of the Single Economy. It is expected that decisions taken during Phase 1 would be implemented within this time period, although the details will depend on the technical work, consultations and decisions that would have been taken. Phase 2 will include:

Harmonisation of taxation systems, incentives and the financial and regulatory environment
Implementation of common policies in agriculture, energy-related industries, transport, small and medium enterprises, sustainable tourism and agro-tourism
Implementation of the Regional Competition Policy and Regional Intellectual Property Regime
Harmonisation of fiscal and monetary policies
Implementation of a CARICOM Monetary Union.[5]
[edit] Member States

CARICOM members part of CSM
CARICOM members not part of CSME
CARICOM associate membersCurrent 12 full members of both CARICOM and the CSME:

Antigua and Barbuda
Barbados
Belize
Dominica
Grenada
Guyana
Jamaica
Saint Kitts and Nevis
Saint Lucia
Saint Vincent and the Grenadines
Suriname
Trinidad and Tobago
Of the 12 members expected to join the CSME, Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago were the first six to implement the CARICOM Single Market (CSM) on January 1, 2006.[6] Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines were the next batch of members (six in all) that joined the CSM on July 3, 2006 at the recent CARICOM Heads of Government Conference.[7]

Current full members of CARICOM and signatory for the CSME:

Montserrat
Montserrat is currently awaiting entrustment (approval) of the United Kingdom with regards to the Revised Treaty of Chaguaramas in order to participate.[8]

Current full members of CARICOM but not the CSME:

Bahamas
Haiti
Haiti has not completed its accession to the Revised Treaty of Chaguaramas and is therefore not a participant in the Single Market and Economy.

Current 5 associate members of CARICOM but not the CSME:

British Virgin Islands (July 1991)
Turks and Caicos Islands (July 1991)
Anguilla (July 1999)
Cayman Islands (16 May 2002)
Bermuda (2 July 2003)
Current 7 observing members of CARICOM but not the CSME:

Aruba
Colombia
Dominican Republic
Mexico
Netherlands Antilles
Puerto Rico
Venezuelad dissolved in 1973.

Monday, January 18, 2010

Caribbean Studies

Welcome everyone,

I hope that this will be a new and an interesting experience for all of you. I know it may be difficult at first but try to challenge yourself so that we can all become a little bit more computer savvy, and ultimately I hope that this will help you to be able to cope when you enter University.

I will be using this space for you to work on some specific topics but I will alert you and give you the specifications for your contributions.

Thanks