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.