part 1 continued..... (full post)

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 comparable 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, the Caribbean region has on average, high literacy rates and life expectancy, but, while not severe, significant poverty rates and income inequality. There are three main economic challenges in the Caribbean, those being, the loss of preferential arrangements, the importance of achieving higher productivity levels and the need to strengthen fiscal positions and reduce the public debt burden.
The change from traditional agriculture, as access to European markets is decreased, and contributes to a major economic challenge, in a time where governments are facing strong political mandates in order to improve social and economic conditions. While some Caribbean countries have not benefitted from the preferential market access, potential further erosion of preferential arrangements will be profitable for regional exporters. The Caribbean is challenged to quickly develop new, high productivity sectors that may help the region’s development. However, it is difficult to be globally competitive because of the loss of preferential arrangements, and international competition, especially from China. Another factor for the decline in the economy in the 1990’s is the lower productivity of both the public and private investments, which have been concentrated in the falling agriculture sector and tourism, in smaller economies. Also, brain drain, due to migration, has weakened the skill base and capacity of regional economies, and the high rates of emigration of skilled labour affects productivity, and resources invested in education and training do not benefit the region. Lastly, self-sustaining growth and development is needed
to deal with chronic fiscal imbalances, which are a result of excessive government spending, and lead to high public debt, which hurts growth and development, as resources are thus made unavailable.
The region sees that the implementation of the CSME is a necessary part of the strategy of further developing regional economies, and while the integration model is sound, integration within the CARICOM region could prove to be a critical part in improving competitiveness. However, the implementation of many of the necessary parts of the CSME has lagged, and the implementation of the programme will require considerable financial resources. Many regional institutions are funded by contributions by existing member states, and the Caribbean Development Bank has also played an important role, however, the assistance of the region’s development partners and private sectors is also needed.
In conclusion, the implementation of the Single Economy could push the Caribbean region to new development and help keep the region competitive in the global economy, with the reconfiguration if its plans and raise productivity levels.