Regional integration describes the coming together of a number of nation states to form a single unit in which

member states cooperate functionally, economically and politically.

Regional integration aims to produce benefits for each country within the region such as more efficient use of
resources and less duplication of effort and expenditure.

Regional integration is the process by which two or more nation-states agree to co-operate and work closely together
to achieve peace, stability and wealth. Through regional integration the integrated powerful nations will also have a
more powerful voice and trading stance on the global stage.

A bilateral agreement (or what is sometimes referred to as a "side deal") is a broad term used simply to cover
agreements between two parties. It is also called a clearing trade or side deal, refers to an agreement between two
parties or states that aims to keep trade deficits to a minimum. It varies depending on the type of agreement, scope,
and the countries that are involved in the agreement.

Trade deficits refer the amount by which the cost of a country's imports exceeds the value of its exports.

Common Market- a group of countries imposing few or no duties on trade with one another and a common tariff
on trade with other countries. A common market is a formal agreement where a group is formed among several
countries in which each member country adopts a common external tariff. In a common market, countries also allow
free trade and free movement of labour and capital among the members in the group. The trade arrangement is used
to promote free trade and free movement of production factors.

Single Market -The European Single Market is an entity created by a trade agreement between participating states.
These states include the members of the European Union(EU), as well as four non-EU countries that are members of
the European Free Trade Association (EFTA).
The Single Market created a unified trading territory that functions without border regulations, such as tariffs, which
typically apply to trade between countries. The Single Market allows the unrestricted movement of goods and
services, as well as capital and people throughout the territory or bloc.

A single market is a group of nations that do not charge any tax on goods and services that they trade with each
other, thus forming one market.

Independent State - Independence is a condition of a person, nation, country, or state in which its residents and
population, or some portion thereof, exercise self-government, and usually sovereignty, over the territory.

Underdeveloped Country- An underdeveloped country is defined as a nation that is not as developed economically
as other nations. These countries are very poor, have very low per capita real income, poverty is widespread, and
many residents live in very dire conditions. In these nations, very little money is spent on health care or education,
and there is very little industrial activity when compared to more developed nations. The main occupation in most
underdeveloped nations is agriculture.

In these nations, unemployment and underemployment are major problems. There is also a high rate of population
growth within these countries. In underdeveloped countries, most residents live in rural areas

Developing Country –a country with little industrial and economic activity and where people
generally have low incomes. A country having a standard of living or level of industrial production well below that
possible with financial or technical aid; a country that is not yet highly industrialized.
Developed Country- A developed country—also called an industrialized country—has a mature and sophisticated
economy, usually measured by gross domestic product (GDP) and/or average income per resident.
Developed countries have advanced technological infrastructure and have diverse industrial and service sectors.
Their citizens typically enjoy access to quality health care and higher education.

Globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and
populations, brought about by cross-border trade in goods and services, technology, and flows of investment,
people, and information. Globalization, or the increased interconnectedness and interdependence of peoples and
countries, is generally understood to include two inter-related elements: the opening of international borders to
increasingly fast flows of goods, services, finance, people and ideas; and the changes in institutions and policies at
national and international levels that facilitate or promote such flows.

A multinational corporation (MNC) has facilities and other assets in at least one country other than its home
country. Such companies have offices and/or factories in different countries and usually have a centralized head
office where they coordinate global management.

Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between
nations. These barriers include tariffs, such as duties and surcharges, and nontariff, such as licensing rules
and quotas. Economists often view the easing or eradication of these restrictions as efforts to promote free trade.

Protectionism refers to government actions and policies that restrict or restrain international trade, often with the
intent of protecting local businesses and jobs from foreign competition.

Economies of scale is the competitive advantage that large entities have over smaller ones. The larger the business,
non-profit, or government, the lower its per-unit costs. It can spread fixed costs, like administration, over more units
of production. Economies of Scale refer to the cost advantage experienced by a firm when it increases its level of
output

A trade deficit is an economic measure of international trade in which a country's imports exceed its exports.

Dumping-The practice of selling a product in a foreign market at an unfairly low price (a price that is lower than the
cost in the home market, or which is lower than the cost of production) in order to gain a competitive advantage over
other suppliers

An exchange rate is the value of one nation's currency versus the currency of another nation or economic zone.
An exchange rate is how much one currency is worth compared to another currency.

Free good- item of consumption (such as air) that is useful to people, is naturally in abundant supply, and needs no
conscious effort to obtain it. In contrast, an economic good is scarce in relation to its demand and human effort is
required to obtain it

Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and
services in an economy increases over a period of time. Inflation increases your cost of living

Monopoly is the market condition where a single supplier dominates the market for a given product. In other words,
you can only buy a product from one company. No other company competes with them in that space.

Predatory pricing is the illegal act of setting prices low in an attempt to eliminate the competition.
 Good-A commodity, or a physical, tangible item that satisfies some human want or need, or something that people
find useful or desirable and make an effort to acquire it.

Service- intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise,
medical treatment, or transportation.
Sometimes services are difficult to identify because they are closely associated with a good

Sustainable development – this refers to the benefits which a nation derives from the wise use and management of
its resources to ensure its present and future growth. Sustainable development is referred to as economic
development without the depletion of the natural resources.

Regionalism – consciousness of and loyalty to a distinct region with a homogeneous population.

Trading Bloc – A set of countries which engage in international trade together, and are usually related through a
free trade agreement or other association.

GDP vs. GNP: What's the Difference?

Gross domestic product (GDP) is the value of a nation's finished domestic goods and services during a specific
time period.

Gross National Product (GNP) is used to calculate the total value of the goods and services produced by
the residents of a country, no matter their location.

GDP measures the value of goods and services produced within a country's borders, while GNP measures the value
of goods and services produced by a country's citizens domestically and abroad.

Both GDP and GNP are two of the most commonly used measures of a country's economy, both of which represent
the total market value of all goods and services produced over a defined period.

Major stages in the integration movement/The road to regional integration/efforts to unite the region

Regional Cooperation

A multi-lateral agreement involving two or more countries or states. The following are examples of multi-lateral
agreements in the Caribbean.

1. West Indian Federation ( 1958-1962)

2. Carifta( 1965-1973)
3. Caricom( 1973)
4. OECS( Organisation of Eastern Caribbean States) ( 1981)
5. ACS ( Association of Caribbean States ) ( 1995)
 THE WEST INDIAN FEDERATION( 1958-1962)
The year 1958 , saw one of the first attempts by Caribbean countries to unite and work cooperatively to achieve
common goals. The was the West Indian Federation . The countries involved were :
1. Antigua
2. Barbados
3. Dominica
4. Grenada
5. Jamaica
6. Montserrat
7. St Kitts/Nevis/Anguilla
8. St. Vincent
9. St Lucia
10. Trinidad and Tobago

AIMS AND OBJECTIVES

Through Federation, the member countries hoped to achieve the following:

 To come up with ideas to solve their social and economic problems as Britain did not show much interest in the
welfare of the colonies after Emancipation, since sugar no longer brought large profits to Britain.
 To loosen the grip of foreign control over the economies of the countries.
 To secure cheaper prices for imports and better prices for exports.
 To resist the United States ‘intervention in the affairs of the Caribbean .
 To achieve independence and self-governing status from the mother country.

ACHIEVEMENTS

 Federation facilitated the movement from colonialism to independence through a united voice .
 The coming together of small states strengthened their effectiveness in dealing with international bodies such as the
United Nations
COLLAPSE
The West Indian Federation came to an end in 1962 .The following factors contributed to its failure :
 Trinidad and Tobago and Jamaica were called upon to provide eight –two percent (82%) of the funding for the
operating expenses of the Federation .
 There were conflicts over issues such as the selection of the capital site.The Federal Capital chosen was
Chaguaramas, Trinidad. Other member countries thought that this was not a suitable site since the United States had
a military base there.
 The islands were at varying stages of political development .The Federation was regarded as stifling their political
progress.
 Distrust by the smaller states of the larger members, since Trinidad and Tobago and Jamaica proposed to change the
Constitution of the Federation in their own interest.
 The most competent people who could hold the position of Federal Prime Minister refused to do so. For example,
Dr.Eric Williams of Trinidad and Tobago and Mr.Norman Manley of Jamaica ,preferred to remain as the Head of
Government of their respective countries rather than head the Federation.
 Jamaica withdrew from the Federation because of a referendum (is a direct vote in which an entire electorate is
invited to vote on a particular proposal) in September ,1961,in which the majority of the electorate voted against the
Federation. Trinidad and Tobago then also withdrew from the Federation
 The Federation was officially disbanded in May,1962.

CARIFTA(1965- 1973)

The Caribbean Free Trade Association was formed in 1965 with the signing of the Dickenson Bay Agreement .
Original members were Antigua and Barbuda ,Barbados ,Guyana and Trinidad and Tobago. In 1968 these territories
were joined by Dominica,Grenada, St.Kitts and Nevis,St. Lucia ,St Vincent and the Grenadines .Montserrat and
Jamaica joined in August of that year and Belize in 1971.

AIMS AND OBJECTIVES

 To foster economic and social development by encouraging free trade among member states. This involved the
removal of customs duties,taxes and licensing arrangements which previously stifled greater volumes of trade
among the islands.
 CAFIFTA was established to unite the economies of these countries and to give them a more powerful ,joint
international presence. CARIFTA was an attempt to join the economies of these recently independent nations and to
give them a stronger presence in international affairs.
 CARIFTA also sought to increase balanced regional development by increasing trade between members and
encouraging diversification of products and services and liberalization of trade.
 As well as providing free trade ,the Agreement also sought to address the imbalance experienced by some LDCs.

This would be achieved by :

1. Promoting industrial development in these countries

2. Promoting the development of the coconut industry which was particularly significant in the LDCs
3. Facilitating the marketing of agricultural products of particular significance in LDCs (St. Vincent and
the Grenadines, St. Lucia, Grenada,

Member States
1. Guyana
2. Trinidad and Tobago
3. Barbados
4. St.Vincent
5. St.Lucia
6. Dominica
7. Montserrat
8. Antigua and Barbusa
9. St.Kitts/Nevis and Anguilla
10. Jamaica
11. Belize

Benefits of cooperation began to pay dividends

Unlike Federation ,CARIFTA did not fail. The benefits to member states of cooperating in free trade were
numerous. The members of CARIFTA therefore decided to enlarge and deepen cooperation by forming CARICOM
in 1973.
 CARICOM- CARIBBEAN COMMUNITY AND COMMON MARKET

CARIFTA aimed to encourage more trade among member states by introducing free trade. This led to the cheaper
cost of goods imported by one member state from another. Benefits gained by member states were significant
.Efforts were therefore made to widen regional cooperation by forming CARICOM in 1973.

The agreement which gave birth to the Caribbean Community and Common Market (CARICOM) was signed on
July 4th ,1973 at Chaguaramas in Trinidad and Tobago . At this stage four countries ( Trinidad and Tobago
,Barbados,Jamaica and Guyana) were signatories to the Treaty of Chaguaramas.Effective operation of CARICOM
began on August 1st,1973. With the passage of time ,other countries joined CARICOM.

Member States

Since 1973 ,there has been a growing interest in Caribbean states. To date members include:

1. Antigua
2. Bahamas
3. Barbados
4. Belize
5. Dominica
6. Grenada
7. Guyana
8. Haiti
9. Jamaica
10. Montserrat
11. St.Kitts /Nevis
12. St. Lucia
13. St.Vincent and the Grenadines
14. Suriname
15. Trinidad and Tobago

MAIN OBJECTIVES OF CARICOM

1. To improve the economic development of member states through introduction of free trade .This is referred to as
economic cooperation, whereby barriers to trade such as customs duties, quotas and licensing impositions were
removed. With the resulting trade liberalization ,a greater volume of trade is possible.
2. Enhanced functional cooperation in the following areas
 Shipping
 Air transport
 Education and training
 Culture
 Broadcasting
 Meteorological services
 Health
 Intra-regional technical assistance

Functional cooperation - This is intended to produce results that affect the quality of life of citizens across the
regions through having an impact on such things as crime levels, education and provision of health care.
 Each member state within CARICOM has certain functions to perform such as the provision of health care.
Functional cooperation occurs when member states pool resources and capabilities to achieve goals such as a better
educated and healthier population.

Economic integration
Integrating economies involves policies that facilitate trade and movement of capital between member states and
brings together such elements as tax policies, customs tariffs. This is to help the private sector to generate higher
levels of productivity.

Harmonisation of foreign policy – This will strengthen the region in dealing with the wider world. Presenting a
‘united front” in foreign affairs will also tend to enhance regional identity.

3. Common policies in dealing with non-member states and transnational corporations. Caricom member states will
therefore effect the following :
 A common external tariff ( tax)
 A common policy when importing goods and services from outside the region
 A common policy when attracting foreign investors to the region.
 A common policy on tourism

4. Improved standards of living

5. Full employment of labour and other factors of production ( land ,labour ,capital )
6. Accelerated ,coordinated and sustained economic development
7. Expansion of trade and economic relations
8. Enhanced levels of international competitiveness

Caricom member states depend heavily on foreign investments for the purposes of job creation, maximization of the
use of physical resources, taxation.

HOW CARICOM IS ORGANIZED ?

In order to achieve the various objectives outlined above ( regional cooperation, economic integration and
harmonization of a foreign policy ) Caricom has decentralized authority in various bodies . Each body has specific
functions.
 Associate Institutions

U.W.I- University of the West

Indies

C.X.C- Caribbean Examination

Council

C.D.B – Caribbean
Development Bank

C.I.C- Caribbean Investment

Corporation

CARICOM SECRETARIAT

The Caricom Secretariat is the headquarters of Caricom and is located in Georgetown, Guyana.The CARICOM
Secretariat is the principal administrative body within the Community . It is headed by the Secretary General who is
the Chief Executive Officer of the Community .

The main functions of the Secretariat are to :

1. Provide services to member states on Community related matters

2. Collect,store and disseminate relevant information to member states
3. Prepare estimates of expenditure for any project relation to Caricom objectives
4. Implementing decisions taken by an Caricom body
5. Make arrangements to facilitate meetings of an Caricom body
6. Undertake research on issues relating to economic integration
 HEADS OF GOVERNMENT

The body consists of the Heads of Government or Prime Ministers of each member state. The Conference of the
Heads of Government is the supreme organ if the Community determining and providing policy direction and also
the final authority in finalizing treaties and establishing the basis for regional and international relationships.

The Heads of Governments are expects to meet at least once a year to decide on :

1. Policies and general direction of CARICOM

2. Which treaties between Caricom and other international bodies should be accepted
3. The resolution of disputes among member states
4. Consult with entities within the Caribbean region or with other organizations
5. Take decision in order to establish the financial arrangements necessary to cover the expenses of the Community.

COMMON MARKET COUNCIL

Responsibilities of the Common Market Council include:

1. Overseeing the effective operation of free trade among member states

2. Ensuring that trade barriers such as taxes,duties ,quotas and licensing arrangements are not applied in trading with
member states
3. Securing the application of a Common External Tariff ( C.ET) among member states
4. Operation of free movement of citizens from one member state to establish business in another member state
5. Application of a common policy in dealing with non-members states and transnational corporations

INSTITUTION OF MINISTERS

The body is subdivided into specialized units ,for example the Minister of Education from each member state will
form the Institution of the Ministers of Education.

They are responsible for :

1. Formulation and adoption of common policies for their respective Ministries

2. Resolving of problems arising within their respective Ministries

For example the Institution of Ministers of Health will be responsible for adopting a common policy to deal with
AIDS in the Caribbean.

FAILURES OF CARICOM

There are a number of pressing issues which have remained unresolved:

1. There is competition among member states in air transport ( Air Jamaica,Guyana Airways,Caribbean
Airlines ) There is a failure to agree on a common air carrier for the region
2. The West Indies Shipping Corporation ( WISCO ) which was formed to facilitate trade among the
Caricom member state has been plagued with problems since its inception. They ceased operations
which adversely affected intra-regional trade.
 3. Conflict has arisen on several occasions because member states fail to cooperate in exploring common
resources.
4. Over the years there have been accusations that Caricom member states breached the free trade
agreement and enacted trade barriers for goods produced within the region.

ORGANISATION OF EASTERN CARIBBEAN STATES ( OECS)

The OECS is a grouping of LDCs ( lesser developed countries ) of the Commonwealth Caribbean. It was established
in June 18th ,1981 by the signing of the Treaty of Basseterre . Original members of this organisation are:

1. Antigua and Barbuda

2. Dominica
3. Grenada
4. Montserrat
5. St.Kitts and Nevis
6. St.Lucia
7. St. Vincent and the Grenadines
The British Virgin Islands joined as an associate member in 1984 as did Anguilla in 1995.

OBJECTIVES OF THE OECS

 To promote development by the formation of a common market (A common market is a free trade area with
relatively free movement of capital and services) among member states.
 To deal more effectively with international bodies by forming a common foreign policy
 To assist each other in defending and maintaining political independence
 Promote economic integration among the member states
 Promote solidarity among member states and to defend their sovereignty and independence

The OECS member states have a common Eastern Caribbean currency ,they all belong to the Lesser Antilles ,they
are small independent states and they all share common strategies for development ,a common Central bank ,a
Common High Court and a Joint Stock Exchange.

ORGANISATION OF EASTERN CARIBBEAN STATES SECRETARIAT ( OECS)

The OECS is administered by the central secretariat located in St.Lucia. The Secretariat is headed by the director
general who is responsible to the authority. The OECS works with a number of institutions to assist member states
in dealing with the challenges to economic and social stability posed by rapidly changing conditions in the
international economy.

ASSOCIATION OF CARIBBEAN STATES ( ACS)

The convention establishing ACS was signed on 24th July,1994 in Cartagena de Indias ,Columbia and brought
together a number of Caribbean and Latin American states. The ACS is an organisation which at present consists of
25 member states
 OBJECTIVES OF THE ACS

The ACS was inaugurated on July 2nd ,1995 with its administrative office in Port of Spain ,Trinidad .

The main objectives of the ACS concern strengthening the processes of regional cooperation and integration and
promoting sustainable development across the Greater Caribbean.

Sustainable development- developing a country’s economy ,industries ,infrastructure and services in a manner that
means they will last over a long period without rapidly depleting the necessary resources.

1. Incorporating the collective human and physical resources of the Caribbean for economic ,social, cultural
and technological advancement

2. Maximizing the potential of the Caribbean by working with member states and other organizations

3. Encouraging increased trade and investment opportunities through cooperation

Associate Members states :

1. Aruba
2. France on behalf of French Guiana,Guadeloupe,Martinique
3. Netherland Antilles

There are 25 member states . These states have the right to :

1. Participate in discussions relating to the objectives of the ACS
2. Vote to elect members of various committees
3. Vote on elections to be taken by an committee

The ACS has 14 members with observer status . They are

1. Argentina
2. Brazil
3. Canada
4. Chile
5. Ecuador
6. Egypt
7. India
8. Italy
9. Netherlands( Holland)
10. Korea
11. Morocco
12. Peru
13. Russia
14. Spain

BODIES OF THE ACS

The ACS has two bodies

The association has a Ministerial Council which is the principal organ for decision making and of overseeing the
direction of the association and a Secretariat which deals with administration .

1. The Secretariat – This is the administrative office of the ACS . It comprises of a Secretary General and
other support staff. The main function of the Secretariat is to assist the organisation in the implementation
of policies and programmes

2. Ministerial Council- this is the major policy making body of the ACS. It has the responsibility of
establishing special committees to meet the objectives of the organization. These committees include

1. Committee of Trade, Development and External Economic Relation

2. Committee for the Protection and Conservation of the Environment
3. Committee on Natural Resources
4. Committee on Science ,Technology, Health ,Education and Culture
5. Committee on Budget and Administration

CARICOM SINGLE MARKET AND ECONOMY ( CSME )

The CSME was revised in 2002 with the intention of creating or establishing a single market and economy .The
resulting CSME is an arrangement that establishes a single large market among the participating member states.
CSME seeks to deepen the integration process among member states

Full members of CSME :

1. Antigua and Barbuda
2. Barbados
3. Belize
4. Dominica
5. Grenada
6. Guyana
7. Jamaica
8. St Kitts and Nevis
9. St.Lucia
10. St. Vincent and the Grenadines
11. Suriname
12. Trinidad and Tobago

THE SINGLE MARKET

The key elements within the idea of a single market are:

1. Free movement of goods and services achieved through measures such as eliminating all barriers to
intraregional movement and harmonizing standards to ensure acceptability of goods and services
traded.

2. Rights of establishment, permitting the establishment of CARICOM –owned businesses in any

member state without restrictions.
 3. Free movement of capital through measures such as eliminating foreign exchange controls
,convertibility of currencies ( or the adoption of a common currency) and the creation of an integrated
stock exchange.

4. Free movement of skilled labour, achieved through measures such as removing all obstacles to the free
movement of skills, labour and travel( harmonizing social services such as health and education).

5. A common trade policy which would see agreement among the members regarding matters related to
internal and international trade and a coordinated external trade policy .

6. A common external tariff which would see a rate of duty applied by all members of the market to a
product imported from a country that is not a member of the market

7. Free circulation which would allow free movement of goods imported from extra regional ( non –
member states ) sources which would require collection of taxes at first point of entry into the region
and provide for sharing of collected customs revenues.

THE SINGLE ECONOMY

A single economy would see harmonization of :

1. Legislation including company laws

2. Fiscal policy measures including coordinating indirect taxes (An indirect tax is collected by one entity in
the supply chain (usually a producer or retailer) and paid to the government, but it is passed on to the
consumer as part of the purchase price of a good or service. The consumer is ultimately paying the tax by
paying more for the product) and national budget deficits/shortfalls.
3. Monetary policy measures including coordinating exchange rate and interest rate policies

Major Challenges Facing the Caribbean Region

Major Challenges facing the region

1. Major challenges are felt to varying degrees by different countries. More developed countries have
relatively large and modern manufacturing, including up-to-date technologies in some sectors. Their
economies may be more diversified and service industries may be more developed.

Even in these countries progress still needs to be made in equitable provision of health and social services
,modernization of infrastructure and efficiencies in government.

1. Small island developing states (SIDS)

Caribbean island nations are categorized as small island developing states(SIDS). These countries share
certain circumstances and challenges including small populations ,limited resources,natural disasters
,vulnerability to external economic ‘shocks” ,such as a rapid rise in an import cost or fall in the value of an
export,and ecological fragility. Small nations struggle to produce goods and services at competitive prices
and to find adequate human and financial resources in the quantities needed. In addition, such countries are
not always in position to easily take full advantage of new technologies.
It is usually harder for a small population to generate sufficient revenue from its economic activities. The
situation is made easier if the country is fortunate enough to have some valuable natural resources .
Small countries also face difficulties because the small population means that there is a limited domestic
market for products and services.
2. Human Resources Development
Caribbean nations need to commit to continuing the process of developing human resources. Such countries
still have high rates of illiteracy and a lack of basic literacy skills among the populations. Illiteracy denies
people access to as much of life and a lack of skills limits their choices of employment.
There are health issues within the population that affect overall productivity levels and a mismatch between
the skills available in the workforce and the employment opportunities available.
3. Low Productivity
Productivity is a measure of efficiency and is about the relationship between outputs (goods and services)
and inputs (what is needed to produce outputs).Low productivity indicates inefficiency and high levels of
inputs in relation to outputs. The Caribbean region generally has low productivity levels ,partly as a result
of other challenges including limited resources, underdeveloped human resources, and lack of investment.
Low productivity makes production costs higher and products less competitive.
4. Inadequate technology and infrastructure
Technology innovation brings about more efficient methods of production such as mechanization in
agriculture or automation in factory processes. The greatest technological innovations of the last 50 years
have involved computers and more recently and significantly information and communications technology
( ICT) which has brought us the internet, the world wide web and mobile phone technology. A World
Bank Report in 2009 recognized that the provision of and access to broadband internet and a reliable
mobile system are key elements of a country’s ability to pursue economic development and encourage job
creation.
5. Economic Challenges – Debt Burden
All countries have a gross domestic product which is the total market value of all goods and services
produced . All countries must borrow money to maintain their economies and to finance various projects
and services . The money is borrowed from various institutions such as commercial financial institutions
,such as the Caribbean Development Bank and international financial institutions such as the International
Monetary Fund or the World Bank.
A country’s debt is known as its debt burden ,which is often expressed as a percentage of GDP.
Even if a country has high levels of indebtedness its debts are classified as being sustainable so long as it
can:
 Meets all its present and future debt obligations in full
 Avoid having to see any debt relief
 Maintain an acceptable level of economic development

Caribbean countries have high levels of indebtedness and meeting debt repayments diverts money
from programmes of economic and human resources development.

6. Imports and Exports

The historical basis for Caribbean economists have been agricultural products that tend to have a
comparatively low values as exports. Most countries in the Caribbean have to rely heavily on imports that
are expensive. With the exception of Trinidad and Tobago Caribbean countries spend large amounts
importing fuel for energy generation.
7. Natural disasters
A further challenge is the region’s vulnerability to natural disasters such as hurricanes and floods. These
disasters bring havoc by devastating communities, damaging housing,health ,education and social facilities
and destroying or disrupting supplies of power or fresh water. Preparation for such disasters and recovery
 following such an event costs huge amounts of money and there are always psychological and social
implications too.

From the Modules Text:

Following is a summary of the major challenges facing Caribbean countries

 The disadvantages of being small in size

 High levels of unemployment
 A lack of modern technology leading to low levels of production
 High levels of foreign debt
 The influence of transnational corporations
 Unfavourable balance of trade where imports exceed exports
 “ Brain drain” leading to a shortage of skilled workers
 Susceptibility of natural disasters

FACTORS PROMOTING REGIONAL INTEGRATION/ COMMON CHARACTERISTICS SHARED BY

CARIBBEAN COUNTRIES

The various efforts at regional integration in the Caribbean have been facilitated due to several common
characteristics among member states.

1. Caribbean countries are in close proximity to each other. Travel by air or sea from one country to the next can
be done in a relatively short space of time.

2. Caribbean countries share a common history. Most of the inhabitants of these states are descendants of people
who had been subjected to slavery and indentureship. This common thread connecting the people of the
Caribbean is a powerful unifying force.

3. Particularly because of a common history, the people share a common culture in terms of language, dress,
cuisine, music and general lifestyle. These common features enhance integration.

4. Caribbean countries are all small island states which consequently face certain common challenges. As small
island states with a high birth rate ,there is competition for limited land to be devoted to agriculture ,housing
,infrastructural development and for the establishment of industries. Most countries depend on food imports in
order to maintain food security. Caribbean countries face a high food import bills and an unfavourable balance
of trade ( imports exceeds exports) in this area.

5. Due to the lack of capital for investment small countries are heavily indebted to international lending agencies
such as the World Bank and International Monetary Fund. They also depend on transnational corporations to
inject foreign capital into their economies in order to create employment.
 6. Caribbean countries are also subject to the ravages of natural disasters . The vulnerability to natural disasters
places an additional economic burden on the countries.

7. Finally Caribbean territories share similar economic, political and social problems .Unemployment, lack of a
wide variety or physical resources, poor housing and inadequate health facilities are some common problems
being faced by countries of the region.

Common problems call for common solution .Thus the integration of the countries is inevitable.

8. Globalization is a recent phenomenon which is characterized by:

 Trade links being established around the globe.
A country will therefore purchase its goods and services from the cheapest source. The cost of
producing goods and services in the Caribbean is relatively high.
 Countries trying to create jobs by the inflow of direct foreign investment.
The Caribbean offers few prospects in competing for foreign investors because of its lack of a variety
of physical resources.
 Technological development in the production of goods and services which demands a skilled
labour force.
The Caribbean countries are behind developed countries in educating and training their nationals for
these highly skilled positions.
 Migration of skilled labour to whatever part of the world they wanted.
This leads to “brain drain” from Caribbean countries to the developed countries of the world.

As a consequence of globalization, small developing countries must unite in order to survive.

FACTORS THAT HINDER REGIONAL INTEGRATION

A number of economic ,political factors work against regional integration ,slowing the process down dramatically.

1. Geography of the region – Countries of the are physically separated hinders the process of regional integration
because it makes it harder to :

 Create networks of physical linkages for such essentials such as telecommunications,internet

 Travel between countries
 Send freight ,mail and packages

2. Unequal distribution of resources – the countries with fewer resources feel that they would be at a
disadvantage when trading with countries that have greater resources .

3. Intraregional competition – Countries within the region are in competition with one another when an
industry is looking for a new location ,the same goods such as bananas or services such as tourism ,are
being offered.
The lack of diversification in Caribbean economies has two main effects
1. It limits the effects of intraregional trade in stimulating a large amount of economic growth and development
2. Caribbean countries are competing with each other in the global markets since the products they hope to export are
similar.

Countries also compete with each other to attract foreign business investments from within or outside the region .
Sometimes the businesses looking to develop in the Caribbean are multinational corporations (MNCs). They are
attracted by the possibilities of favourable production costs ,lower wages, and cheaper land rentals.

4. Absence of a common currency

By establishing a common currency would result in efficiencies and transparency in both financial and commercial
transactions as well as a greater sense of regional identity.

A common currency would :

1. Reduce transaction costs for intraregional trade,foreign investments and remittances

2. Make price clear and transparent since there will be no need to convert from one currency to another
3. Improve efficiencies in the financial markets
4. More investment
5. Greater trade
6. Better prices for goods and services
7. Easier movement of people for commerce and tourism

5. Different stages of growth and development

There is concern that the more developed countries in the Caribbean will attract more business and become
more developed leaving the less developed further behind.
Another barrier is that the more developed countries feel that they have to bear the larger part of the
responsibilities associated with integration.
6. Absence of a common model or strategy for development – Caribbean countries have tried different
strategies such as import substitution ( replace imports with goods produced domestically ) .These
strategies does not work in favour of the integration process.
7. Conflict with territorial and regional demands – National governments have a duty to implement
policies that best serve the people of the nation . Sometimes they seek to protect jobs, manufacturers and
suppliers in their own country with can be in conflict with the goals and objectives of regional integration .
8. Lack of diversification in production – production of the similar products across the region has limited
trade between Caribbean countries .
BENEFITS OF REGIONAL COOPERATION
Benefits of Free Trade

1. Free Trade
2. Cheaper cost of imports
3. Greater demand for CARICOM goods
4. More goods produced
5. More jobs created
6. Savings in foreign exchange

The removal of duties,taxes ,quotas and licensing arrangements results in cheaper goods . A greater volume of trade
is therefore generated. This leads to higher level of demand for goods and services. With increased production ,more
employment is created for nationals.
THE BENEFITS OF REGIONAL INTEGRATION

1. Increased cooperation
Supporters of regional integration say that it will lead to increased cooperation in many spheres of life and
that it is only through cooperation that individual Caribbean countries will be able to deal with the
challenges they face, not simply from globalization and trade liberalization by also from the possible
effects of climate change.

2. Free movement of goods, labour and capital

Within the proposed CSME (Caribbean Single Market and Economy) manufacturers and producers will be
able to get their products to over six million people within the Caribbean.
The free movement of labour allows for people to seek work in different countries within the region when
suitable opportunities do not present themselves in the home country.
The free movement of capital is aimed at increasing the opportunities for investment and encouraging that
investment to take place.

3. An increased employment opportunities

Regional integration is seen as an important means of generating efficiencies and economies of scale
(Economies of scale is the competitive advantage that large entities have over smaller ones. The larger the
business, non-profit, or government, the lower its per-unit costs) for commercial enterprises which will
bring down production costs and make their products more competitive. Successful businesses expand and
employ more people.

4. Improved quality of life

Increased levels of employment should see more individuals achieving a higher standard of living and
experiencing an improved quality of life.

5. Greater equality of wealth distribution

Wealth distribution occurs within most countries through a number of mechanisms such as taxation,
relevant monetary policies and provision of welfare services.

6. Expansion of trade and increased international competitiveness

One hope for regional integration was that it would see a rise in the expansion of trade both within region
and outside it.

Facilitating the Integration Process

Examining the role of individual citizens, business organisations and governments in the integration process

ROLE OF CITIZENS

1. Entrepreneurship
An entrepreneur is a person who has an idea for a new business venture or enterprise and who accepts
responsibility for launching, running and developing it . Entrepreneurs hope to provide an income for
themselves and also to build up their business to create employment opportunities for other people.
Individuals in the Caribbean who have the skills, attitudes and personality to be entrepreneurs need to be
encouraged to do so in order to stimulate local and regional economies.
2. Supporting regional producers
As citizens of the region can contribute by choosing to support local producers. For example this would mean
choosing to buy a commodity from a local producer rather than an overseas producer.

3. Showing solidarity and mutual support towards regional fellow citizens

One aspect of showing solidarity/harmony is through welcoming and accepting working from other
CARICOM islands and treating them with dignity and respect.

4. Investing in local and regional businesses

Businesses often rely on other individuals or organisation for investment. To assist with integration and
development of the region, those with money to invest are encouraged to place this with local or regional
businesses rather than in overseas companies. This will help these businesses to grow and, therefore, to
provide job opportunities and to make a significant contribution to the economy.

5. Being informed
Citizens have a responsibility to be aware of the issues associated with integration in relation to their country
and in the region. An example of this awareness would be when citizens understand the importance of buying
products from local or regional suppliers.

ROLE OF BUSINESS ORGANISATIONS

1. Improving competitiveness
In order to be competitive ,a business must be able to match others in terms of price, quality and reliability
.These aspects will be related to efficiency ,lowering production costs and maintaining high productivity
levels .Improving these aspects of business in the region will contribute to success when competing in
global markets

2. Increasing range and quality of goods and services

Businesses have an important part to play in creating a diversity of products and services that the region
can provide.

3. Providing opportunities for investment and employment

The establishment, expansion or modernization of a business requires investment. Investors usually hope to
get a good return but this will be dependent on the success of the business. A successful business will be
generating income for employees and investors and also for the government through taxation. Expanding
businesses also provide more employment opportunities.

Successful multinational companies within the region

A number of companies have operations in different countries within the region in all sectors of the
economy, for example:
 TCL Group- cement, ready – mixed cement products ,packaging
 Sandals – all – inclusive resorts and vacations
 Grace- food processing and financial services
 Sagicor- financial and investment services
 ROLE OF GOVERNMENT

1. Enacting enabling legislation

Enabling legislation is legislation that gives another entity, which usually relies on the legislating body for
authority or legitimacy, the power to take certain actions. The legislation may also indicate functions, roles
and responsibility of the entity. Enabling legislation might also be used to give legislative functions and
powers to a super-national body,for example the heads of government of CARICOM.

2. Harmonizing policies
Harmonizing policies within the region is to do with agreeing on the rules and regulations that will apply to
a particular area. The ultimate aim is to ensure that each member of the region is treated in a similar way ,is
given no particular advantage nor suffers any unique disadvantage . This seeks to improve efficiencies in
the function of government through reducing bureaucracy and duplication. It also seeks to stimulate
business and to promote economic growth through making trade more straightforward.

3. Honoring protocols
Governments sign agreements and conventions which often include protocols. For example, the Convention
for the Protection and Development of the Marine Environment of the Wider Caribbean Region contains a
protocol regarding Specially Protected Areas and Wildlife(SPAW). The convention is about protecting,
managing and developing coastal and marine resources for the benefit of the region. Individual governments
are legally bound to follow the rules in the convention .

4. Educating citizens about the objectives and benefits of integration

Citizens need to be made aware of the issues regarding integration so that they will understand the role they
have and be able to take a full and active part in the process.

Role of Regional Agencies in the Integration Process

There are several institutions which have associated themselves with CARICOM in order to help CARICOM
achieve its objectives.

1. C.D.B (Caribbean Development Bank) was in existence before the formation of CARICOM. It started operations in
1968 with its headquarters in Barbados. Membership in the bank includes states from within and outside the region.
Members of the bank contribute to a common fund. The bank uses this to promote development among its
membership. It offers:
 “ soft loans” for industrial ,agricultural and tourism projects for interested persons
 Carry out feasibility studies to determine the profitability of a project
 Provides technical assistance for members when starting a new project
 Assist in sourcing funds from other lending agencies for development projects

2. C.I.C (Caribbean Investment Corporation )

The CIC was formed for the specific purpose of promoting development of the poorer member states of
CARICOM.CIC only provides service to member states of CARICOM whereas CDB membership spreads beyond
CARICOM.
 Education
1. U.W.I (University of the West Indies)
The UWI was established in 1948 with three campuses: St Augustine Trinidad, Mona Campus in Jamaica and Cave
Hill in Barbados. The UWI is a regional institution dedicated to regional development through the training of its
human resources by the provision of tertiary education and research facilities.

2. C.X.C ( Caribbean Examinations Council)

The CXC was established in the late 1970’s as a recognized examining body. The CXC conducts examinations and
awards certificates, provides services of curriculum and syllabus developments, training and professional
development.
It is for Caribbean people run by Caribbean people.

Agriculture
1. CARDI ( Caribbean Agricultural Research and Development Institute)
CARDI provides for the agricultural research and development needs of the region by producing technical
information for crop and livestock farmers, assisting with business planning for individuals and encouraging
development on an industry-wide basis.

Sports
1. W.I.C.B (West Indies Cricket Board)
The WICB is the governing body for professional and amateur cricket in the West Indies and organizes domestic
cricket, test tours and one day internationals against countries overseas. The board aids the regional development of
cricket as part of the International Cricket Council’s development programme.

2. CONCACAF ( Confederation of North ,Central America and Caribbean Association of Football

The confederation is part of Federation internationale de Football Association ( FIFA ). It is the administrative body
of 40 national football associations in the region .

Media
1. CMC ( Caribbean Media Corporation )
CMC is a multimedia organisation working in radio,television,print satellite and new media

Security
RSS( Regional Security Systems)
The RSS is a security force of military and police personnel from participating members who are all part of the
Organisation of Eastern Caribbean States ( OECS) . The main function of the RSS is to bring stability to the region
of the Easter Caribbean in order to achieve economic and social development and to maintain principles of
democracy ,liberty or the individual and the rule of law.

Justice
CCJ( Caribbean Court of Justice)The CCJ is the regional judicial tribunal that acts as the final court of appeal of the
Caricom countries that are signatories. The Caribbean Court of Justice (CCJ) settles disputes between Caribbean
Community (CARICOM) Member States, and also serves as the highest court of appeals on civil and criminal
matters for the national courts of Barbados, Belize and Guyana. The CCJ’s seat is in Port of Spain, Trinidad and
Tobago. The Caribbean Court of Justice does not have competence to hear individual complaints of alleged
human rights violations, except in its capacity as a court of final appeal in civil and criminal matters, which often
involve fundamental rights.