ECONOMY & TRADE FOCUS YOUTH FOCUS
Overview of
Regional Integration Integration in the Caribbean. In 1965 he penned, “These Islands did not start on the federal road in a fit of idleness. They started because it was clear that a Federation is the only possible solution of their problems.” Where resources are limited, regional integration provides an economic and political support to small states on development issues. Incidentally, there has been a demonstrated attempt to address development, as a whole, through the establishment of the Treaty of Chaguaramas. This year marks the 40th Anniversary of the Treaty of Chaguaramas, a treaty with the aim of establishing a regional framework where goods, services, and people are allowed to move freely between member states to foster deeper integration. However, the aspiration of achieving a Caribbean Single Market and Economy has been a slow work-in-progress because the aim of regional integration involves some compromise by member states that should result in an improvement of standard of living for its citizens.
The inevitability of globalization, where there is a presence of increased interconnectivity and interdependence of sovereign states, has moved from a mere concept to an impactful reality in the global economic system. Globalization promotes International Cooperation, where states are dependent on each other for mutually benefitting outcomes. The aim to ‘level the playing field’, means that every state has equal competitive opportunities in their capacity. However, not every state has equal opportunities to reap desired benefits in the global village. Each state differs in size and natural resources which often determine their productive capacities. For example, a single Caribbean state does not have an equal impact in the global economy in comparison to the United States. For this reason, it is important for the region to collaborate, pool their resources together to increase its bargaining power and its general impact in global economy. With this in mind, pioneer in Caribbean Development, Sir Arthur Lewis, has constructed the usefulness of Regional 90 |
BusinessFocus • November/December2013
As a student at the University of the West Indies, I have a greater understanding for the need of deeper regional integration in the Caribbean, but I often observe the inertia to achieve this goal because there is great concern of erosion of state sovereignty. Although true, the erosion of state sovereignty should not distort the significant meanings of Regional Integration. Regional integration is defined as the reduction of any elements that would limit the free flow of goods, services, and people across the region. This process is an effective means of facilitating trade between the islands which will ultimately foster co-operation and dependency. For instance, a single Caribbean state cannot provide all the resources it needs for sustainable development and as such, each member state specializes in its most efficient sector. In this case, at quid pro quo, there is a mutual exchange of goods and services between states. For the private sector, full integration gives rise to an enlarged market which produces goods and services beyond the confines of a single state to a market of at least 14 million people. On one hand, this will encourage firms to enhance production capacity for export and on the other, consumers will benefit from an improved quality of goods and services.