REGIONAL INTEGRATION -ESSAY

Development is a multi-faceted issue and can be viewed from the perspective of human and economic development. In order for a holistic Caribbean development to take place, integration within the region is essential and there have been toward this regional movement since the pre-independence era. Throughout the years, Caribbean leaders have tried various schemes at integration namely the West Indian Federation, CARIFTA and late CARICOM and CSME. However, each attempt has seen various setbacks along the way, some of which are still experienced today. While each of these integration movements and the respective challenges will be explained, this essay also attempts to discuss the view that a major challenge to regional integration, whatever name it may take, is the wide disparity in levels of development among member countries of CARICOM.


Regional integration within the Caribbean has taken on many perspectives, namely political, economical and social. The first movement toward integration, the West Indian Federation began in 1958, but subsequently failed in 1960. Although this attempt was arguably premature, it is an apt example of the way in which these said political, economical and social perspectives hinder progress toward regional integration. Emanating from economic strife within the federation, were issues of political power and the allocation of natural resources. This is due to the fact that large contributors expected equally as large levels of power, which caused internal tension and in turn put a strain on the success of the Federation. The economic disparity led to internal political struggle, as the two largest contributors and most developed in the region, Jamaica and Trinidad and Tobago both vied for more recognition of power. As such, the Federation was immeasurably dependent on their membership and whatever decisions they made for survival. Of the ten members which comprised the federation, 85% of the financial burden was carried in equal shares by Trinidad and Tobago and Jamaica. With relevance to their economic worth and the vast disparity in levels of development, the other member states gained the nickname of the “little eight”. Rivalry between the two financial leaders was increased by the decision for the capital of the federation to be located in Trinidad. In 1961, discussions about the grant of Independence to the Federation had begun, which created political choice for Jamaica to either maintain its membership within the Federation or to withdraw and gain individual independence. Choosing to withdraw in favour of their own independence, the Federation failed. In light of this failure to integrate politically due to desires for control and recognition of power, the Caribbean shifted its focus to economic integration.


The direction of the integration movement somewhat changed its course and took on a more economic objective. This was done through the introduction of the Caribbean Free Trade Area (CARIFTA) which was established with the aim of achieving a viable economic community of Caribbean territories. However, this quickly evolved into the Caribbean Community (CARICOM). At the core of its objectives were economic integration, co-ordination of foreign policy, and functional co-operation in areas such as health, education and culture and other areas related to human and social development. Various institutions such as the Caribbean Development Bank (CDB) and the Caribbean Environmental Health Institute (CEHI) were set up to prioritise certain social and economic issues as well as the CARICOM Single Market and Economy (CSME) to deepen the integration movement to better respond to the challenges and opportunities presented by globalisation. These latter movements however, have been more successful and have brought about a more ‘integrated’ Caribbean region in some aspects.


It cannot be denied that one of the main aims of integration is development in various aspects of the lives of Caribbean people. These movements have allowed “free” movement of natural and human resources across borders of member countries. That is, no legal documentation was needed for members of one country to enter the borders of another. This resulted in mass migration into the two major provinces, Trinidad and Tobago and Jamaica as scores of people from the less developed nations emigrated with the hope of improving their standard of living. This migration, places a strain on the resources of the countries to which these persons migrate.


However, all of these difficulties cannot deny the various social advancements that have been effected as a result of Caribbean integration. Institutions such as the University of the West Indies (UWI), Caribbean Examinations Council (CXC) as well as the West Indies Cricket board (WICB) foster development in terms of education and sport. The former two have been successfully maintained, improved and expanded over time as UWI now boasts three campuses. This shows regional co-operation and the common view that education is essential to development. The success of West Indies Cricket Board shows the importance of sport in development. For example through cricket, track and field and football the Caribbean has gained international stature. These institutions however, are not without fault. Although we gain regional pride through sports like cricket, national pride has seemed to override regional and insularity in the Caribbean opposes integration.


Therefore, to conclude, it cannot be denied that journey toward regional integration within the Caribbean has been long. Although considerable progress has been made, there are still challenges today which prevent integration within the Caribbean from being optimally effective. However, from this evidence, it may be just to say the major challenge toward the integration movement is not just the wide disparity in levels of development among member states but instead a mixture of the desire for political power and a tendency toward insular pride and economic recognition. Until it is realised that integration requires not insularity on political, economic and social front but a sense of one Caribbean identity, regional development may never fully be achieved.

Caribbean Essay

Economic Integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state. However, there are several factors that affect economic integration among member countries of CARICOM. One major factor affecting economic integration is development since it affects the extent to which economic integration is achieved. There are various aspects that must be taken into consideration when expressing the view that the levels of disparity of development affect economic integration. Such aspects include the economical, social and political development among member countries of CARICOM and will now be discussed.

In terms of the economical development among member countries of CARICOM economic development has lagged behind as compared to other smaller Caribbean countries especially that of Trinidad and Tobago since they have depended on the exploitation of natural resources as well as preferential arrangements for products such as sugar and bananas. Also many member countries of CARICOM tend to have low levels of productivity, one reason for this has been migration as it has represented a brain drain which has weakened the skills base and capacity of regional economies. Economic development has also suffered since many member countries of CARICOM need to strengthen fiscal positions and reduce the public debt burden. High public debt hurts growth as resources that should be devoted to productive expenditure and social programmes are redirected to debt servicing. Having mentioned these faults of economical development among CARICOM member countries, solutions need to be implemented in order for economic integration to successfully move ahead in these member states. For example, Trinidad and Tobago has moved away from the production of sugar and has started to import it. However to deal with the issue of chronic fiscal imbalances these member states may need to consider debt restructuring or the generation of high primary surpluses. Jamaica is an example of a CARICOM member state that has tried this approach however public debt continues to rise because of high interest costs and low growth. In order to achieve this, member states must first increase levels of productivity if not they may not be able to survive in terms of competing globally. Therefore, it can be seen that member countries of CARICOM still have a lot of work to do to improve their economic development if they are to reap the full benefits of economic integration.

Moreover, in terms of social development, there have been a number of institutions that have been established to help economic integration move ahead. For example in terms of education The University of the West Indies has tremendously assisted with social development among member countries of CARICOM. Social development has occurred because of this since it has produced committed people to the CARICOM regions also it has helped to develop science and technology and it has produced research which has fueled the private sectors. Another example of social development has come through The West Indies Cricket board as it has organized coaching programmes in collaboration with territorial Boards from the individual countries to develop the sport in the various territories. This has helped economic integration to move forward as it helps to achieve the objective which sets out to accomplish close links with member countries. However, these institutions may face challenges in the future as the world is rapidly changing and there are always more options available but these challenges are ones CARICOM member states can work on to overcome. All in all these examples have clearly illustrated the point that social development is striving for member countries of CARICOM therefore it can be said that there are hardly any disparity levels of development for the social aspect of economic integration among member states. Also if these institutions keep up the good work then, in terms of social development, member countries can gain a lot of benefits from economic integration.

Additionally, in terms of political development, CARICOM member countries have implemented trade barriers such as tariffs and quotas. This has reduced the impact of trade liberalization among member states of CARICOM. For example, the impact of trade liberalization has been reduced by the large number of exemptions from the common tariff reduction scheme. This therefore shows that such trade restrictions have hindered regional integration among CARICOM member countries since it does not comply with the objectives of free trade among CARICOM countries.

In conclusion, the economical, social and political development among CARICOM member countries has posed a problem to economic integration due to the wide disparity levels of development. This is so since many of the objectives of economic integration are not being achieved among CARICOM member countries. Hence, the member countries of CARICOM will not reap the benefits of economic integration if they do not address the faults stated in the above factors.

Assignment

Assignment: Discuss the view that a major challenge to the integration movement in the Caribbean is the wide disparity in levels of development among member states of CARICOM.

The integration movement in the Caribbean possess great opportunities for the Caribbean region to be heard more, and have a greater say with respect to global affairs. The integration movement however, is faced with some challenges, one of the major challenges being the wide disparity in levels of development amongst member countries of CARICOM. These challenges were also faced years ago by the West Indian Federation. The disproportion in levels of development amongst member countries indicate that, as some countries are economically weaker than others, they would not significantly benefit from integration, however, others that have by far stronger economies still would not benefit, but instead would face loses. The major challenges in development are the unequal distribution of resources, the lack of development of certain industries and natural disasters, all of which result in the disparity in levels of development, and hinder the integration movement.

The unequal distribution of resources is very common in the Caribbean, as the Caribbean has a history of inequality. The population density of persons of lower class, middle class, and upper class, varies from country to country in the Caribbean, and in some cases this distribution is extremely unbalanced, for example Jamaica, which has an extremely large lower class, a very small middle class, and a large upper class. The unequal distribution of resources stems from persons of the lower class not having opportunities available, preventing the development of individuals in this sector and thus social mobility, and by extension, inhibits the improvement and productive potential of the society. The unavailability of resources and opportunities for individuals would cause said individuals to seek opportunities elsewhere (usually in other, more developed countries), resulting in the country to which they belong, to lose potentially valuable skilled or manual labour, while the well developed countries gain more labour, contributing to the disparity in levels of development, and hampering the integration movement.

Certain industries lack development in the Caribbean, two of these industries are tourism and agriculture, both of which have great potential in the development of individual countries, and by extension the region. Of the different types of tourism, leisure and eco tourism are the most well developed, while only some Caribbean countries capitalize on business (mostly the well developed countries) and festival tourism. The lack of growth in tourism for most Caribbean countries poses a problem since the opportunities available for locals (jobs etc.), and the revenue brought in from tourists and the foreign exchange cannot be accessed. Agriculture is also underdeveloped in most Caribbean states as many products are often imported, even though there is great potential for the cultivation/ production of said products in the Caribbean. This disadvantages local farmers, and by extension the general public as it often results in high food prices, which also leads to low levels of development and as such, obstructing the integration movement since job opportunities are not available and social mobility is again hampered.

Natural disasters affect the Caribbean on a whole, however, some countries are more often, and severely affected than others. Some natural disasters experienced by countries in the Caribbean are tropical storms/hurricanes, flooding, earthquakes, and volcanic eruptions. Certain Caribbean countries are fortunate to escape consequences of, or recover from these natural disasters either through good infrastructure, or through not being exposed to them frequently, while some are not as fortunate. For example, Trinidad and Tobago have escaped the impact of hurricanes over the years, but still suffered when major flooding occurred, they however were able to recover quickly, while Grenada has not been so fortunate, as it was struck by hurricane Ivan in 2004 which wreaked havoc on the small island which is still in the process of recovering today. Haiti was also not as fortunate since their poor infrastructure, resulted in the collapse of many buildings, and a high mortality rate after the January 11^th earthquake of this year, another example is the 1997 Soufrière Hills eruption in Montserrat, which completely destroyed the islands airport and the islands capital. The impact of these natural disasters on countries of the Caribbean greatly slows down development, as these countries often have to pick up the pieces, start all over after these disasters strike and destroy most of their infrastructure, and even injure or kill a great deal of the population. This slowing down of development adds to the disparity in the levels of development of member states of CARICOM, and again by extension causes a problem in the integration movement.

In conclusion, development in the Caribbean is greatly uneven, as some countries are developing quickly, while others are not, and the slow rate of development in these countries are based upon many factors/ challenges, the largest of which are the unequal distribution of resources, the lack of development of certain industries and natural disasters. The disproportion/ disparity of the levels of development amongst member states of CARICOM poses a challenge, as the integration movement in the Caribbean cannot easily be achieved. As a result, in order to achieve the full implementation of the integration movement in the Caribbean, there is a great need to even off the levels of development in member states of CARICOM, so that the Caribbean on a whole can eventually have a more stable economy, and have a more prominent say in global affairs.

Topic: Discuss the view that a major challenge to the integration movement in the Caribbean is the wide disparity in the levels of development among m

The integration movement in the Caribbean has been envisioned in days as far back as the West Indian Federation (the original CARICOM) where diverse Caribbean states joined with the intention of creating a political unit that would become independent from Britain as a single state, much like the successful Canadian Federation. This short-lived attempt at regional integration unfortunately collapsed before any real development could be made. The reincarnation of this motion, however, occurred in 1973, 15 years after the West Indian Federation, in the form of The Caribbean Community, CARICOM, with much of the initial motives intact. However, many challenges hinder the progress of CARICOM, in particular, the different levels of development of its member states, thus thwarting regional integration. Economic factors such as productivity levels, social factors such as education which relate to the employment rates and literacy of citizens, as well as the political, and geopolitical factors with respects to natural resources such as oil and natural gas, are a few of the issues which suppress the success of integration as envisioned by CARICOM.

The ideology of CARICOM is that as an integrated region, the Caribbean would be capable of much greater economic development and global competitiveness than as single entities. This means that all members of CARICOM would be required to contribute and as such would each be entitled to benefits which would aid in both the individual development of the states and the development of the Caribbean as a whole. However, at present the economies of many of the islands are not as successful as others, for example, the contrast between the economies of Haiti and the Bahamas. One reason for the difference in levels of development in several islands is the availability of natural resources in some while others depend solely on tourism. Therefore, this disparity in the level of development between the member states results in the delay of regional integration as citizens of smaller and less developed islands may find it profitable to migrate to larger, more economically developed islands to increase their standards of living. This would, as a consequence, further impede the development of the smaller island state as labour would be exiting the country. The effects of such an action are presently seen in countries such as Africa, whose economic development was greatly impacted because of the slave trade. The productivity level will also be affected by migration as the link between production levels and labour is evident.

Apart from affecting the productivity levels of the various states, the disparity in the level of development amongst the states can also have negative implications on each state’s education level. With free labour mobility within the region, less developed countries face the problem of suffering a brain drain. Free movement of labour so far has been limited to a small group of employment categories, such as mobility of doctors and surgeons within the Caribbean. Though further progress in this area is on the cards, it is a great risk for the smaller counties. Employment rates will plunge greatly in these countries as more job opportunities will become available in the larger or more developed states, leaving them in a worse position than before the integration movement began, since without a sufficient labour force, little development can be made. An obvious sub consequence of this brain drain which would also jeopardise the economic progress of the smaller states is the literacy of the remaining citizens. If the more proficient citizens left these states, then the general rate of literacy throughout the state will decrease, limiting the states’ abilities for development.

It is natural for each individual state to have on their personal agenda, ideas and plans concerning the fulfilment of policies, reforms and other mandates for national sustainable development. However, though both national and regional developments are important, many states are less focused on achieving regional goals. Political and geopolitical issues concerning trade laws and oil diplomacy are problems affecting regional integration. The political issue at hand however is the question of whether trade agreements under the CSME facilitates the advancement of individual and regional trade interests, an issue which is believed to have also contributed to the dissolution of the West Indian Federation. The Bahamas, for example, is a full member of CARICOM but oppose the CSME as they are against the Free Trade Agreement. This is because they fear that with the free trade zone proposed by CARICOM, their economy will be inundated by foreign labourers, causing its employment to swell. The Bahamas has therefore been accused of defrauding their Caribbean neighbours in order to protect its own interests. It is because of this gap in the joint economic initiative by the Bahamas, along with other issues facing individual states, that integration has not yet been successfully achieved.

After assessing all of the different factors that face the regional integration movement proposed by CARICOM, it can be concluded that these challenges, as large as they may be, when overcome, store many benefits for its member countries that would contribute to both the individual development of the states, as well as the development of the Caribbean as a single entity. This integration would in turn create a more globally competitive region, possibly allotting greater power to the Caribbean and a louder, greater say in world issues.

Essay

Discuss the view that a major challenge to the integration movement in the Caribbean is the wide disparity in levels of development among member countries of CARICOM.

Achieving integration in the Caribbean is a major challenge today whereby there is a great difference in the development levels among the various CARICOM members. Due to this, it is difficult for the countries to move forward together because not everyone is on the same level. Three factors which account for this disparity are the levels of skilled labour, the crime rate in the countries and the level of production within the CARICOM members.

The skilled labour in each CARICOM member differs. Some countries invest heavily in the education sector hence allowing citizens of the country to emerge with professional qualifications therefore equipping these individuals to contribute towards increasing the economic stability of their economy. An example is Trinidad and Tobago which invests in free education to its citizens hence there are a lot of certified individuals in their economy promoting development. However, a CARICOM member like Haiti has a low level of literacy rate in its society thus resulting in a less educated population and not being able to uplift its economy through skilled professionals, leaving it poverty stricken. Also, the very few educated ones remaining migrate so as to seek better opportunities abroad causing a brain drain. Therefore, this difference in level of skill which may result in migration and poverty for some states causes countries not to be able to work together to establish a common ground because of their disproportion in development hence hindering integration within the Caribbean.

Secondly, there is the crime rate in countries which affect progress in an economy. High levels of crime in a society tend to cause the entrepreneurs in the society to migrate because their safety can be compromised. This affects the development in such a way that businesses terminate and results in unemployment of individuals and also again a brain drain. Due to high crime rates, the tourism industry is also affected whereby fewer tourists choose to vacation in that country. Countries that depend heavily on tourism and sustain high levels of crime would be severely affected with a decline in the development of their economy. This can be seen happening to Jamaica which reportedly had the highest murder rate in 2008 and has reported a decline in the cruise ship passengers to the country.

Thirdly there are the levels of production of CARICOM countries that can account for the disparity in the development in the region. Countries that are able to produce a surplus so as to provide for exportation which can raise the GDP and hence contribute to the development will have stronger economies that those CARICOM members which engage in more importation of goods. Also countries that have high production cost will find it difficult to sell in the international market therefore not being able to reach that level of productivity as other CARICOM countries. Thus it prevents integration because some countries are not on the same level of efficiency and stability as others. An example is Belize and Guyana not being able to produce sugar at a competitive price. Statistics also state that Guyana has had balance of payment deficits.

The disparity in the levels of development in the CARICOM member states does affect the integration process of the Caribbean as shown in the factors outlined before. This prevents the Caribbean from becoming one and being able to help stabilize each other’s economy.

Wide Disparity in Development Levels

Topic: Discuss the view that a major challenge to the integration movement in the Caribbean is the wide disparity in levels of development among member countries of CARICOM.

Development can be defined as the process of improving the quality of life. It implies sustainability, self-sufficiency and independence. One can consider that levels of development affects how far integration has been achieved in the Caribbean Region, that is, amongst CARICOM members. There have been many attempts at integration in the Caribbean since the pre-independence era with the West Indian Federation of 1958 which fell apart in 1962. Nevertheless, in the post-independence era, the Caribbean has experienced success in integration at a regional level since the initiation of the Caribbean Free Trade Area (CARIFTA) back in 1968. Regional integration can be described as a process which countries enter into an agreement in order to enhance cooperation in the region. It has been argued that the countries of the Caribbean are at different levels of development even with the evident integration movement among these islands. This can be seen in the gaps displayed through the politics, economics and social policies in terms of regional institutions.

In the initial stages, the focus was on political union amongst member countries. Subsequent to the British leaving, the Caribbean region tried to find a way to remain sustainable. Their first attempt was the West Indian Federation. Politics of the embryonic Federation were racked by struggles between them and the provincial government as well as between the two largest and smaller provinces. Trinidad had already discovered its natural resources - oil and gas. As a result, they had more money and it was felt that larger countries should give the most. In totality, Trinidad and Jamaica had been contributing up to 85% of federal revenues in approximately equal shares. Conversely, in Jamaica, there was and still is little social mobility – urban and rural conflicts. Jamaica thus, began looking at their internal circumstances and decided that it was best that they left. In light of their perspectives, various member countries began reviewing their own internal circumstances. It was recognized that if complete movement of the Federation was allowed, smaller countries feared mass migration to other countries like Trinidad and Jamaica. Issues such as who would be the leader and how the shares were to be distributed rose. That created a political fuse between the influential leaders and eventually the two (2) most important provinces did not see the Federation as viable. In due time, the Federation collapsed due to internal political conflict and with the eventual evolvement of CARIFTA, currently called CARICOM, the focus was shifted to the promotion of economic integration.

Integration in the region is needed to boost economic growth of the member states however, as a result of the disparity in development levels in the region, equality in growth and development is hindered. The formation of the Caribbean Common Market (CARICOM) in 1973 led to the free movement of certain factors of production across the region’s borders. This allowed labour, capital and entrepreneurship to move freely within the region. Nevertheless, the more developed countries (MDCs) fear mass migration from inhabitants of the less developed countries who are seeking better education and employment opportunities in order to increase their standard of living. There is also the fear of regional brain drain. In the case of Bahamas, whose economy is sustained by tourism, has a high level of development represented by a 0.856 HDI (human development index) and as a result has not signed on to the CSME which is hindering the development of the Caribbean as an economic bloc. In relation to Haiti, on the other hand, the recent devastation in January 2010 can lead to mass migration of the population via illegal immigration into the MDCs in the region. Nonetheless, for the Cricket World Cup in 2007 in the Caribbean, political leaders made the decision to allow hassle-free movement amongst CARICOM states which in turn, led to the promotion of the development of sports tourism in the region as well as the injection of foreign revenue in the Caribbean economy. Furthermore, regional institutions have also sought to deepen economic ties.

Several regional institutions have been established in the Caribbean over the years. For instance, in education, the University of the West Indies which has been in existence since 1948 has contributed to the educational development of the region’s population so as to increase the skills, innovation and entrepreneurship of the region. However, in order to fulfil the needs of the changing technological age, the University of Trinidad and Tobago (UTT) in Trinidad and in Jamaica, the University of Technology (UTEC) has been founded. In this way, the separate governments are able to have direct political control and satisfy the needs of the individual countries in order to achieve growth but hinder regional growth in the Caribbean. In the sports arena, the West Indies Cricket Board (WICB) has unified several islands such as Barbados, Guyana, Jamaica, and the Leeward Islands and Trinidad and Tobago under the umbrella of cricket. Despite the gaps in development, the Caribbean has produced a number of brilliant players such as Sir Gary Sobers (Barbados), Sir Vivian Richards (Antigua) and Brian Lara (Trinidad and Tobago). The WICB has focused on advancing the sport in various territories so as to bridge the gap among the islands in the sport of cricket. Also, investment in the tourism sector within the Caribbean is also a major revenue-earner for the region, hence, the creation of the Caribbean Tourism Organisation (CTO) in 1989 which focuses on the development of sustainable tourism for the economic and social benefit of the West Indies. Although the territories of the Bahamas, Barbados, Antigua and Barbuda and Jamaica has a well-developed tourism sector, the CTO must further assist the rest of the Caribbean to properly and engagingly establish their tourism sector which will lead to increasing tourist arrivals and as a result, increasing foreign revenue. In this way, foreign revenue earned by the tourism sector can be ploughed back into the economy to lead to further growth and development in the Caribbean.

In agreement with Readings In Caribbean Studies, ‘At a time when the rest of the world is realising the importance of economic integration for purposes of development, it may be necessary for Caribbean populations to become more aware of the challenges of the world’s financial markets to their own development.’ Hence, it is crucial that it is recognized that regional integration is critically central to our evolution and future development. Thus, based on evidence provided on political, economic and social factors, it can be deduced that the disparity in levels of development among member countries in CARICOM have contributed to major challenges in the integration movement especially with the further hindrance created by the delayed signing of the CSME. Perhaps the real question is how feasible were the reasons for withdrawal or disagreement based on developmental status of individual member countries.

By Khadine and Sue-Ann

Essay

Discuss the view that a major challenge to the integration movement in the Caribbean is a wide disparity of development among member countries of CARICOM.

Regional integration is one of the main objectives of CARICOM. There are many challenges that CARICOM faces in meeting sustainable and harmonized integration in the Caribbean. CARICOM member states are at different levels of development and so this disparity can prove to hinder integration. Economic, social and political factors affecting development and the extent to which they hinder integration in CARICOM Caribbean will be discussed.

Economic factors are some main indicators of economic development. Some of the poorer member states such as Haiti, Montserrat, and Grenada, are less developed than other member states such as Trinidad and Tobago, Bahamas, and Barbados. The poorer countries are less productive and there is higher exploitation of resources. These economies lack diversity, focusing on one sector e.g. agriculture. Therefore, these economies suffer unsustainable growth and development. Consequently, the poorer countries depend on the more developed ones for aid and would benefit more from “free trade” since they are not able to sustain growth and development in their economies as the developed countries. Challenges emerge here, because the more developed countries would not benefit as much because there would be free movement of their skilled labour, capital and would like to receive higher portions of the profits based on their investments.

Social factors that pose problems for integration, as well, can be seen in education and employment. In the richer countries, the literacy and life expectancy rates are higher and the poverty rates are lower. The educational opportunities are better and offer more chances to further education. For example, in Trinidad and Tobago, Barbados and Jamaica there is access to the University of the West Indies. This attracts min these more migrants to the richer countries for these opportunities. Similarly, workers would also leave for better jobs and wages, in these more diversified countries. Once there is free movement of people, as the CARICOM movement would like to implement, the richer countries fear that it would be easy for skilled human resource to move out of their country while the poorer ones fear that labour would move for better opportunities. This can cause brain drain in some countries and could deter some CARICOM members and hinder integration.

Also, politically, the policies of the government of the developed countries protect their goods and services to trade with countries where they can increase profitability. They might have higher tariffs and quotas because they are able to trade independently within the region and even internationally to gain more for their country for example, Bahamas and Barbados. The poorer countries would be more dependent and the richer ones would expect higher share of profits which will threaten integration.

In conclusion, the political, social and economic development of developed CARICOM countries compared to the less developed countries has evidently caused problems with implementation of “free trade” of labour, capital, and goods and services. Hence, the disparity in levels of development of CARICOM countries can be said to be a major challenge in the integration of the member states of CARI COM.

Caribbean Studies essay

Topic:Discuss the view that a major challenge to the integration movement in the Caribbean is the wide disparity in levels of development among member countries of CARICOM.

The countries in the Caribbean differ in many ways, political, economical and social because of their history. No country has exactly the same history which accounts for the differences in development today. CARICOM’s ideals include political, economical and social integration among its members. However, it is difficult to integrate because the less developed countries have to give up their preferential trade agreements which are a large part of their revenue and the more developed countries have to shoulder much of the budget for CARICOM. Also, one of the policies included in CARICOM is free movement of labour and the more developed countries fear mass migration into their countries.

One of the key tenets of CARICOM is the CSME (Caribbean Single Market and Economy). The CSME is to ensure economic integration among the members of CARICOM. However, if there is to be economic integration, there must be economic independence. Countries cannot depend on preferential trade agreements if they want economic integration. Be that as it may, the less developed countries like Grenada and Dominica may not want to lose their preferential trade agreements with the UK and the US because they bring in a lot of revenue.

While, preferential trade agreements for agricultural products bring in revenue, it does not bring in as much revenue as natural resources such as oil, natural gas and bauxite. Trinidad and Tobago and Jamaica have natural resources which can be exported to the world. Natural resources are goods that are much in demand and bring in more revenue than agricultural products. Therefore, countries with natural resources will be more developed as there is more money for structural building in the country. In CARICOM, these countries will fund the larger part of its budget and will therefore expect a greater share in decision making. This will cause tension between them and the less developed islands who may feel that they are imposing their will on them thereby inhibiting regional integration.

If free movement of labour is allowed, people will move to the more successful areas. In the past, people moved from rural areas to urban areas. In CARICOM, movement of people from less developed countries to more developed countries can be expected. The more developed countries will have a problem with this because it will mean an influx of people using up the resources meant for the citizens of the country. More developed countries would then place restrictions on immigrants coming into the country which defeats the purpose of having free movement of labour.

The integration movement in the Caribbean is fraught with challenges. These challenges can be attributed to the differences in development among the countries in the region.

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.

Caribbean blah blah blah...

8. When governments are carrying out policies for improvement of socio-economic circumstances, and external distresses have become a norm, decreasing aid flows and the shift from conventional agriculture create a severe economic difficulty.
9. It can’t be denied that first world countries fight for liberty of markets while hesitant to remove their own agricultural grants or their cruel limits on freedom of labour. At the same time however, it is hard to deny that Caribbean countries haven’t utilized the long duration of favoured market access to increase productivity in the agricultural sector.
10. We are mainly responsible for production and export of sugar in Guyana and Belize being significantly greater than that of the higher cost free market exporters. With bananas as well, Caribbean countries are the highest cost producers internationally.
11. In the near future, some Caribbean exporters will be able to export profitably.
12. The Caribbean’s trial is rapid development of high productivity sectors to push the regional development thrust. The Caribbean’s agricultural sector will have difficulty in being globally competitive in the same way as sugar and bananas were affected.
13. An effort must be made to better productivity. Overlooking the difficulty of measuring productivity, several Caribbean economic estimations show increases in productivity during the 1980s, accompanied by a sharp decrease in the 1990s; a reason for the decrease being the lower productivity of both public and private investments.
14. A second reason for of productivity may be migration. While migration may act as a safety valve for sudden high unemployment rates and add greatly to the economy, in opposition of these benefits, Caribbean migration is also reflected as a brain drain, which resulted in a poor skills base and capacity of regional economics. The excessive emigration of the skilled labour force weakens the labour force, lessens productivity, and the educational resources and training invested in the individual are not utilised by the region.
15. The third reason for decrease in productivity is the need to deal with chronic fiscal imbalances. For Caribbean countries, imbalances in self- sustaining growth and development have created hindrances such as an accumulation of public debt to unsustainable levels.
16. Generally, while public debts to GDP ratios of 50 to 60% of GDP are considered high, six Caribbean countries have ratios between 95 and 160%, including Guyana, which is one of the highest indebted countries internationally.

17. High public debt affects growth since resources allocated to other sectors have to be redirected to debt servicing. Highly indebted countries can either restructure or generate high primary surpluses.


18. CSME is viewed as an important factor in any strategies involving the development of Caribbean economies. The present integration model is described as one of open regionalism, which the private sector is expected to lead. CSME covers inter alia, freedom of trade in goods and services, free movement of labour and capital, a regional strategic sectoral plan, the adoption of a harmonized investment code and the development of a regional capital market.
19. The integration model aims to deal with restraints that resulted in economic under-achievement during the past thirty years. It cannot be argued that, more integration within the CARICOM area could assist in competitiveness. For example:

•freedom of regional trade should lead to reduction in cost of input and hence assist rationalization of production
• labour mobility within the region has the potential to improve skill
and wage arbitrage;
• co-ordinated investment promotion could make the region more
attractive for foreign investment and reduce the fiscal cost attached
to expensive and sometimes wasteful tax concessions; and
• regional planning could facilitate the exploitation of production
integration opportunities, through clusters of economic activities.
• The CSME model also presents opportunities for joint marketing in
extra-regional markets, joint research and development, and joint
purchasing arrangements.
Also the implementation of several critical provisions of the CSME has lagged.

PART TWO

Second: need to achieve higher productivity levels. Third: need to strengthen fiscal positions and reduce public debt burden. It is proven that developed countries fight for more open markets while they do not want to give up their agricultural subsidiaries or restrictions on freedom of labour. Gov’t subsidiaries to cover damage could increase to weak levels if exports were to continue. The Caribbean is now challenged to quickly develop new high productivity sectors that would push the region’s development. One prominent reason for this decline is the lower productivity of both public and private investments. As a result of Caribbean migration, there has been a brain drain leaving countries with little or weakened skills and capacity of regional economies. Development is needed in regions to grow fiscally. High public debt affects this growth. For countries with high debt, it is suggested that they reform their debt or create high primary surpluses. The region thinks implementation of CSME is detrimental for regional growth. Recent integration model is said to be one of open regionalism and is trying to find the main reasons for economic under achievement in regions. The CSME has fallen behind with the realization of many significant provisions.

economic integration

It is believed that in order to overcome the challenges of economic development, especially the CSME the process of economic integration is important in meeting the region’s social and economic goals with the assistance of financial aid.

Since the last three decades, the Caribbean’s economic development has been seen declining whereby other small countries have progressed. This is reflected in the economic development indicators such as in incomes, life expectancy, GDP, health and education within the Caribbean region.

Three main economic challenges affecting the region are the loss of preferential arrangements, the achievement of higher productivity levels and fiscal positions and public debt burden on the economy.

There is a loss of preferential arrangements due to lack of the ability of Caribbean countries to grasp the opportunities to increase their productivity via access to the foreign markets thus hampering export profitability of producers.

Hence economic restructuring is needed since Caribbean countries can no longer have high labour intensive manufacturing because of the high wage structure as well as migration which also contributes to the brain drain in the economy resulting in excess financial resources spent on education and training which exceeds the benefit of this investment in the economy. Due to these factors mentioned, high productivity is difficult to achieve in the region.

Thirdly, is the challenge of fiscal imbalance and public debt caused by excessive government expenditure which restricts the growth of the region’s economy because the money that is now allocated to covering for the debt should have been used on the productive expenditure and social programmes needed to uplift the state of the economy.

It is therefore believed that regional integration through the CSME can help reduce these problems within the region whereby a strategy or integration model of open-regionalism is targeted. By also coordinating the CSME with CARICOM the regions will be able to achieve greater integration and improved competiveness by providing for labour mobility, free trade liberalization, as well as addressing the challenges mentioned above.

However, to achieve this objective, a great amount of financial resources is needed to finance the national and regional public infrastructure as well as the private sector activities. Hence with the these implementations, the Caribbean region could moving closer towards new development.

Economic Integration and Development....Part II: the continuation

CY Thomas describes integration as open regionalism. The freedom of trade of goods, services, labour and capital, the regional strategic sectoral plan, the adoption of a harmonized investment code and the development of a regional capital market is integrated within the CSME. The impact of free trade as a result of the common external tariff scheme has led to the lag of the CSME. Financing for infrastructural development and social programmes in the region has come from the CDB. Hence, most of the region’s increasing integration has come via the ownership of financial institutions. Further integration and development of the region’s stock exchange allows firms access to a wider market so that capital can be easily raised. In conclusion, if the Caribbean region increases its savings level and improves financial intermediation for long-term developmental objectives, the Single Economy would be on the verge of a development thrust.

By Khadine and Sue-Ann

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. In 1975, the Caribbean was on par with countries like Ireland, Singapore and Cyprus in terms of GDP per capita. By the 21^st century, Ireland and Singapore had bypassed the Caribbean not only in terms of GDP but in other development factors. 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. The first is the removal of preferential trade agreements. 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 second is increasing productivity levels to a level on par with the rest of the developed world. 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 members 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.

PART 2

Another major problem the Caribbean region that has to be addressed if they want to reach the level of self sustaining growth and development is the correction of fiscal imbalances. This usually results from excessive government spending which in turn leads to a buildup in public debt. Public debt is very bad for the economy as debt affects growth as resources are redirected to debt servicing instead of productive expenditure and social programmes. However this can be solved by debt restructuring and generation of high primary surpluses.

If regional economies seek a strategy to further their development then they should implement the CSME. The benefit of the CSME allows for liberalization of trade in goods and services, the free movement of labour and capital, a regional strategic sectoral plan, the adoption of a harmonized investment code and the development of a regional capital market. Therefore growth can be achieve through what is described as open regionalism as it is based on an outward looking market oriented framework in which the private sector is to take the lead. This integration seeks to address the constraints that have led to regional economic under achievement.

If regional economies have greater integration with CARICOM this could be a critical input in improving competitiveness. Examples include regional trade liberalization which would lead to a reduction in the cost of inputs and contribute to the rationalization of production, labour mobility which has the potential to enhance skill and wage arbitrage in the region, coordinated investment promotion which would make the region more attractive for foreign investment reducing the fiscal cost attached to expensive and wasteful tax concessions and the CSME model presents opportunities for joint marketing, joint research and joint purchasing arrangements in extra regional markets. The implementation of many of the critical provisions of the CSME has lagged in terms of the impact of trade liberalization has been reduced by the large number of exemptions from the common tariff reduction scheme. Free movement of labour so far has been limited to a small group of employment categories and liberalization of trade in services has been slow in coming and there have been problems in implementing the rights of establishment which is pivotal to unlocking the potential of the regional private sector.

Funds are needed to finance new regional institutions in order to find compensator ways to finance national and regional public infrastructure as well as to finance the regional private sector’s activities which will be the ultimate engine of growth and development.
There is still concern that many organizations face an intense inadequacy of fiscal resources and will be difficult to make a commitment although many of the regional institutions are funded from contributions by existing member states.
Over the years, The Caribbean Development Bank has played a crucial role in financing infrastructural development and social programmes in the region.
If the development drive envisaged by the single economy programme is to be arrived at, an emphatic increase in the bank’s resources will be needed.
Compensatory and/or corrective mechanisms should form a necessary and influential feature of the CSME since the benefits of regional integration are often asymmetrically distributed.

Finally, in the context of the CSME, regional development will require new and expended private sector financing systems. However, despite ample liquidity, the regional financing system has only made a limited a limited contribution to regional development through a fall in the cost or a rise in the availability of business investment financing.

Regional private financial institutions need to adopt more innovative and supportive financing strategies if the private sector is to play an influential role. There is a crucial requirement for appropriate methods to finance small and medium sized firms that are likely candidates for niche manufacturing.

The next step in the financing puzzle is the establishment of an integrated regional stock exchange where all member states are electronically linked for bonds and equities trading. This would allow firms to have access to a wider market for raising risk capital and would allow the productive sectors to become more productive internationally.

Conclusively, the implementation of the single economy could put the Caribbean region on the verge of a new development drive. The region will need to reconsider its production structures and raise its level of productivity in order to remain competitive in the global economy. It would also need to increase its level of savings and improve financial intermediation if it is to fund its long term development objective. THIS IS OF GREATEST IMPORTANCE AS TIME IS NOT ON OUR SIDE.

Caribbean blah blah blah

Declining aid flows and the transition from traditional agriculture constitute a
major economic challenge. at a time
when exogenous shocks have
become more common place and at a time when Governments are facing strong
political mandates to improve social and economic conditions.

8. When governments are carrying out policies for improvement of socio-economic circumstances, and external distresses have become a norm, decreasing aid flows and the shift from conventional agriculture create a severe economic difficulty.

There is no denying that developed countries argue strongly for freedom of markets while
they are reluctant to eliminate their own large agricultural subsidies or their harsh restrictions on freedom of labour. it is difficult to deny
that some Caribbean countries have not exactly taken advantage of the long
period of preferential market access to increase productivity in the sugar and
bananas sector.
9. It can’t be denied that first world countries fight for liberty of markets while hesitant to remove their own agricultural grants or their cruel limits on freedom of labour. At the same time however, it is hard to deny that Caribbean countries haven’t utilized the long duration of favoured market access to increase productivity in the agricultural sector.

It is largely our fault that after all these years the estimated cost of production and export of sugar in Guyana and Belize – the lowest cost Caribbean producers, is 50 to 60 percent higher than that of the higher cost free market exporters. Similarly in bananas, the Caribbean countries are the highest cost
producers in the world,

10. We are mainly responsible for production and export of sugar in Guyana and Belize being significantly greater than that of the higher cost free market exporters. With bananas as well, Caribbean countries are the highest cost producers internationally.
Given the impending further erosion of preferential arrangements for
sugar and bananas, in the next five years, few (if any) of the current regional
exporters will be able to export profitably.
11. In the near future, some Caribbean exporters will be able to export profitably.
This brings us to the imperatives of economic restructuring
With the current open trade regime, the challenge for the Caribbean is to quickly develop new high productivity sectors that could drive the region’s developmental thrust. The reality in the Caribbean is that the regional agricultural sector will find it difficult to be globally competitive for the same reasons that affected sugar and bananas.
12. The Caribbean’s trial is rapid development of high productivity sectors to push the regional development thrust. The Caribbean’s agricultural sector will have difficulty in being globally competitive in the same way as sugar and bananas were affected.

E,S, Williams

The exploitation of natural resources in the Caribbean, and dependence on preferential trade has caused economic development to lag behind. Also, the exploitation of natural resources has increased this problem. These factors have caused development in Caribbean countries to fall behind that of other countries like Singapore and Cyprus who started off on the same level with the Caribbean. Though the Caribbean has a declining GDP and high rates of poverty, it does not take away from the progress that Caribbean made over the years measured by the HDI, in terms of income, health, education and life expectancy.

The move away from traditional markets and deteriorating access to preferential markets that the Caribbean is heavily dependent on has posed a serious challenge. Adding to this problem is that the European countries want to maintain control of labour and operate on a market without restrictions.

Alarmingly, another problem faced is that production is low while production costs on the agricultural land are high, they are still labour intensive and pay high transport costs. This causes losses and Government subsidies would not be able sustain this demand for help. It is a case of loss with high interest costs and low growth. Hence, its main goal should be toward self sustaining growth and development, as there would be fiscal imbalances or deficits.

Their main aim is to restructure economy to trade on current global trading environment, get higher productivity levels and reduce public debt. Hence, the CSME is important since it provides a solution with o en regionalism for free trade of goods and services, free access to labour and capital, and an outline for investment and a regional source of capital.

The CSME model also presents opportunities for joint marketing in extra-regional markets, joint research and development, and joint purchasing arrangements. Though this is the framework, implementation of the CSME has lagged in terms of reduction in tariffs, the ability for labour to move freely and also the rights of the public sector. Financial resources which is needed to initiate the growth and development process is a major issue. Moreover, members maybe unwilling or unable to go beyond their current funding level.

A pivotal role has been played by the Central Bank in financing development and social programs. But, In order to fulfill the trust envisaged by this program a significant increase in Bank’s resources is required. Also, compensatory mechanisms form a necessary feature of the CSME because benefits of regional integration are often asymmetrically distributed among countries. Thus, to finance the gap, there is a proposal to be funded the member states and region’s development partners and The CSME would require new and expanded private sector.

Though much integration has come through the cross border of ownership of financial institution, it is limited to reduction in cost or increase in availability of finance for business investment. Therefore Innovative and supportive financing strategies are to be implemented if the private sector is to play the important role allocated to it. They must also be appropriate to the characteristics of the firm in terms of size etc.to minimize the risk of cross border contagion, also a full regional stock exchange allows the firm to compete on the international markets.

Caribbean Economic Development REAL & UNCUT

Caribbean economic development has lagged behind that of similar countries like Cyprus, Ireland and Singapore. This is primarily due to the disproportionate dependence on the exploitation of the natural resources and main products of export. In order to provide some logic and reasoning for the current state of the Caribbean's economic development it is to be noted that the region has maintained a pattern of declining rates in per capita GDP. Viz in the periods of the 1970's, 80's and some continued into the 1990's. However, Trinidad & Tobago broke free from this trend via implementation of policy reforms and drastic increases in world oil prices.

Contrastingly, the 20th century marked improvements in per capita GDP for the Caribbean. This was the result of economic expansion for Trinidad & Tobago whereas in the rest of the region the improvement can be attributed to infrastructural and tourism development. Setting aside the tendencies for decline in GDP the Caribbean has seen improvements in other universally accepted indicators of development such as, income, health, education and life expectancy.

Although improvements have been observed, Caribbean economic development is faced with relentless economic challenges. The most threatening of which would be the loss of preferential arrangements, seeking to achieve higher productivity levels and the need to strengthen fiscal positions and reduce the public debt burden. The Caribbean Single Market Economy is seen as the most appropriate entity to combat these challenges.The CSME may seek to employ strategies such as identifying and eradicating regional constraints and introducing inputs such as trade liberalisation, labour mobility and investment promotion to increase competitiveness within the region.

The TRUTH about Caribbean Development

Over the last few decades, the Caribbean has experienced various setbacks which have hindered the process of economic development in the Caribbean region. However this was not always the case. In 1975, for example, the level of development within the region coincided with levels in similar comparably small countries such as Ireland and Cyprus. Several reasons may be said to account for this staggering process. Primarily, the Caribbean lost its preferential trade agreements to lower-cost producers with the advent of free trade. The loss of these arrangements, which meant that the Caribbean nations were assured of export markets, and low levels of productivity placed Caribbean nations in a quandary as Caribbean island states were used to dependence on and exploitation of resources in one particular sector. As a result, this was marked by significant declines in the GDP per capita of these countries during the period of the 1970s, 80s and for some even into the 1990s, with the exception of Trinidad and Tobago who saw improvements as a result of subsequent increases in world oil prices and policy reform.

However, the dawn of the twenty-first century has brought some improvements. Since 2000, the Caribbean has experienced some significant indicators of development such as improvements in infrastructure, education and life expectancy rates. Notwithstanding, the Caribbean still grapples with high poverty rates and income inequality.

The CSME, therefore can be seen as a vehicle for advancement within the region on a global level. Although for it to be successful it requires high external financing, the implementation of a single market and economy may benefit the Caribbean by increasing its market shares and competitiveness in the global market.