The Caribbean Community: Facing the Challenges of Regional and Global Integration
On 4 July 1998, the Caribbean Community (CARICOM) celebrated its twenty-fifth anniversary. CARICOM is one of the oldest integration schemes in the Western Hemisphere, the largest in terms of membership, yet by far the smallest in economic and geographic terms. In the wake of its historic anniversary, many have reflected on the Community's past achievements and future prospects. Has CARICOM served the development goals of its member states? Will it assist them in pursuing those goals into the next century? How can regional integration facilitate CARICOM's successful insertion into the global economy? The aim of this study is to answer those questions and, in doing so, to contribute to the ongoing debate on the future of CARICOM. With some exceptions, CARICOM economies have either stagnated or grown very slowly, and high unemployment has become chronic. Despite important policy changes, export diversification has been limited and insufficient for generating satisfactory growth rates. Size constraints have always hampered the potential for growth based on domestic markets and intra-CARICOM trade; decreased protectionism makes the size limitations even more evident. The region's overall export performance has been unsatisfactory despite privileged market access conditions. Today those conditions are becoming less favorable. Foreign aid, a key contributor to development in past decades, is also diminishing. CARICOM is clearly at a crossroads. Chapter I provides a general overview of the Caribbean Community, key features of its economies and the challenges facing the region on the eve of the new millenium. Chapter II offers an overview of the regional integration process, including progress on intra-regional trade liberalization, the deepening and the widening of CARICOM. Chapter III examines the external challenges facing the region today, particularly as regards its trade relations with Europe, the United States, Canada and Latin America. Chapter IV examines key areas of the services sector, both in terms of enhancing the region's export potential and supporting the establishment of a functioning single market. Chapter V briefly examines the Community's institutional structure, outlining existing bottlenecks to the effective design, implementation and enforcement of common policies. Chapter VI provides an analytical justification for promoting integration and cooperation initiatives in the region, and suggests a number of actions that could be taken to enhance the development prospects of CARICOM. The study argues that despite the limited contribution of regional integration efforts to economic development in the region so-far, integration can play a beneficial role if pursued under the right framework and with the right instruments.