REGIONAL INTEGRATION




caribbeanregional.png


What is Regional Integration?


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.

It 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 and gives the integrated nations a more powerful voice on the global stage.
e.g. CARICOM (Caribbean Community).




Aims of Regional Integration:


  1. To overcome some of the challenges facing the region. eg. crime, poverty, unemployment, etc.
  2. To address some of the consequences of the unequal distribution of resources - very few Caribbean countries have oil and natural gas.
  3. To assist in the development of human resources by providing improved education and health services across the region.
  4. To make the best use of natural resources so that productivity and efficiency ensures the best value for money.
  5. To promote economic development through the development of policies that help businesses.



Types of Cooperation in Regional Integration:

  1. Functional Cooperation - where each member state within CARICOM (for example) has certain functions to perform. This is seen as the best way to achieve the goals of seeing a better educated and healthier population as well as lower crime levels.

  2. Economic Integration - is the process by which different countries agree to remove trade barriers between them. Trade barriers can be tariffs (taxes imposed on imports to a country), quotas (a limit to the amount of a product that can be imported) and border restrictions. Economic integration of economies also involves policies that facilitate the trade and movement of capital between members states. e.g. CARIFTA (Caribbean Free Trade Area).

  3. The Single Market/Economy - The single market is the midpoint of the integration scale between political and economic integration. It is the point at which the economies of the co-operating states become so integrated that all barriers to the movements of labour, goods and capital are removed. At this stage the integrating states set a common external tariff on goods from other countries – this is called a customs union. A further step in the process of economic integration might be adoption of a common currency, with monetary policy regulated by a single central bank.

  4. Political Integration - As the economies of the co-operating countries become completely integrated into a single market, there appears a need for common policies in social policy (education, health care, unemployment benefits and pensions) and common political institutions. In political integration, when the co-operating countries can become so integrated that they share the same foreign policies and merge their armies. In effect, they form a new country. e.g. The EU (European Union).

History of Regional Integration movements in the Caribbean:


West Indian Federation (1958-1962)

The West Indian Federation was an attempt at achieving political union among 10 Caribbean countries. Its purpose was to come up with ideas to solve their social and economic problems that faced many of the Caribbean colonies after Emancipation such as low wages, high unemployment and poor social services.
In March of 1858 federal elections were held with the aim of constructing a federal parliament to overseer the agreement between territories based on the constitution that was drafted in 1956 to regulate the relationship between the member states. Jamaican Prime Minister Norman Manley in 1962 decided to settle concerns about the Federation in his country by allowing the public to decide by popular vote, if Jamaica was to remain a part of the union. 45.9% of Jamaica’s population voted pro-Federation while 54.1% kicked against it. This resulted in the secession of Jamaica from the Federation in of 1962. Under the Leadership of Dr. Eric Eustace Williams, Trinidad and Tobago quickly followed Jamaica and sought independence on their own. By May 23rd 1962, the Federation was dissolved.

Members of the West Indian Federation:
  1. Antigua & Barbuda
  2. Barbados
  3. Dominica
  4. Grenada
  5. Jamaica
  6. Montserrat
  7. St. Lucia
  8. St. Kitts & Nevis
  9. St. Vincent & the Grenadines
  10. Trinidad & Tobago


Caribbean Free Trade Association (CARIFTA) (1968-1973)

CARIFTA was formed with the intention to foster economic and social development by increasing free trade (the exchange of goods and services between countries) among Caribbean member states. Free trade, also called trade liberalization, involves the removal of customs duties, taxes, tariffs and quotas on trade among the islands. Unlike the West Indian Federation, CARIFTA did not fail. It did in fact promote further trade among Caribbean countries and its members decided to enlarge and deepen cooperation by forming CARICOM in 1973.


CARICOM

The establishment of the Caribbean Community and Common Market (CARICOM) was the result of a 15-year effort to fulfill the hope of regional integration which was born with the establishment of the British West Indies Federation in 1958. The West Indies Federation came to an end in 1962 but its end, may be regarded as the real beginning of what is now the Caribbean Community.

With the end of the Federation, political leaders in the Caribbean made more serious efforts to strengthen the ties between the islands and mainland by providing for the continuance and strengthening of the areas of cooperation that existed during the Federation. Further, Jamaica and Trinidad and Tobago both attained independence in August that year and with it the power to control their own domestic and external affairs.

In announcing its intention to withdraw from the Federation, the Government of Trinidad and Tobago proposed the creation of a Caribbean Community, consisting not only of the 10 members of the Federation, but also of the three Guianas and all the islands of the Caribbean Sea - both independent and non-independent.

Click HERE to view the objectives of CARICOM.

The CARICOM Single Market & Economy is not just about goods and capital, but also about persons. The agreements which CARICOM Governments have made concerning free movement of persons can be divided into two broad caregories:
  1. The Free Movement of Skills/ Labour - this is the right of a CARICOM national to seek work or engage in gainful employment in all CARICOM member states as either a wage-earner or non-wage earner, without the need to obtain a work permit in the member state in which he/she desires to work.

  2. The Facilitation of Travel/ Hassle-free Travel - this makes sure that CARICOM nationals are treated in a similar manner to nationals of the host member state, at a minimum in an equal manner or better than foreigners.


(Organization of Eastern Caribbean States) OECS

The Organisation of Eastern Caribbean States (OECS) came into being on June 18th 1981, when seven Eastern Caribbean countries signed a treaty agreeing to cooperate with each other and promote unity and solidarity among the Members. The Treaty became known as the Treaty of Basseterre, so named in honour of the capital city of St. Kitts and Nevis where it was signed.

Following the collapse of the West Indies Federation, and prior to the signing of the Treaty of Basseterre, two caretaker bodies were created: the West Indies Associated States Council of Ministers (WISA) in 1966 and the Eastern Caribbean Common Market (ECCM) in 1968. As the islands gained their independence from Britain it became evident that there was need for a more formal arrangement to assist with their development efforts. So it was that the OECS was established. The WISA Secretariat became the central secretariat of the OECS and the ECCM, the Economic Affairs Secretariat.

Click HERE to read about the objectives of the OECS.


Reasons the Caribbean SHOULD integrate:


Regional integration is promoted as a way ahead for the achievement of regional advancement, development and progress. A number of factors support the idea of regional integration:

  • Caribbean countries are located in the same geographic region.
  • Caribbean countries share a similar culture and history of slavery and indentured labourers.
  • Caribbean countries are small in size and can find it difficult to survive on their own.
  • Caribbean countries face similar challenges/social problems such as crime, poverty and natural disasters.
  • Caribbean countries have a common language.



Benefits of Regional Integration:

There are number of benefits that member countries can gain from engaging in regional cooperation with one another. They include:

  1. United Voice - as the saying goes "united we stand, divided we fall". The means that, together, Caribbean states stand a greater chance in increasing their negotiating power in the prices of their exports and in securing cheaper imports when trading with countries outside the region.

  2. Free Trade - the removal of duties, taxes, quotas and licensing arrangements results in cheaper goods. This leads to increased trade which results in increased economic activity, production and employment for nationals.

  3. Freedom of Movement - with the introduction of a CSME passport, Caribbean nationals can now travel freely/without restriction to seek employment in participating member countries. This encourages the maximization of the human resources found in the Caribbean.

  4. Preferential Treatment - special low rates and quantities can be arranged for CARICOM goods entering economic zones such as the EU and the USA. This was the case for agricultural products such as bananas, sugar and rum.

  5. Larger Markets - because regional integration usually allows several different countries to come together and form common markets, countries are now able to easily market and sell its products in other member countries, thus allowing it to expand its business.

  6. Increased Global Competitiveness - the effect of a larger market not only allows the internal economic output within the regional block to increase, it also puts the block at an advantage in relation to other countries around the world.

  7. Foreign Direct Investment (FDI) - because of a reduction in competition among member states to attract foreign investment, they can now focus on attracting foreign investors.


Factors that HINDER Regional Integration:


A number of factors work against regional integration, slowing down the process dramatically:

  • All Caribbean countries don't have a single currency.
  • Caribbean countries don't have similar economic policies.
  • Caribbean economies are at different stages of development.
  • There is an absence of a common model or strategy for development.
  • Caribbean countries do not have access to the same resources. (e.g. oil, natural gas, bauxite, etc.)
  • Caribbean countries are all producing the same goods and therefore compete against each other. (e.g. tourism, agriculture, etc.)
  • Caribbean countries are competing with one another in the global markets since they produce similar products.
  • Caribbean islands are scattered across the Caribbean archipelago.
  • There is conflict over the monetary contribution levels of each Caribbean country.