REGIONAL INTEGRATION

WHY INVEST IN TRINIDAD & TOBAGO?

http://www.youtube.com/watch?v=0bzmJO6zXnk

www.youtube.com/watch?v=NZ7mU4DCtbc

THE MIGHTY SPARROW - FEDERATION

http://www.youtube.com/watch?v=gWBrlnlKeqE

BOB MARLEY – ONE LOVE

Regional Integration – involved the unifying of a number of nation states into a larger whole. The main theme running through the efforts at regional integration is that of co-operation.

Economic Integration – is an agreement and attempt among countries in a geographic region to reduce and ultimately remove, tariff (tax or duty) and non-tariff barriers to the free flow of goods or services, labour or capital among member states.

Stages of economic integration – The degree of economic integration can be categorized into five stages:1. Free trade area2. Customs union3. Single market4. Economic and monetary union (single currency)5. Complete integration (political union)

REGIONAL INTEGRATION –Glossary of Terms

Common Market (or ‘Free’ Market) – a group of countries, in a common geographical area, formed to promote few or no duties on trade and free movement of labour and capital among its members. For example, CARICOM (Caribbean Community and Common Market)

Single Market – is a space within which goods and services, people, capital and technology freely circulate. Thus, for example, moving goods or services, capital or people from Trinidad and Tobago to Barbados would be no different from moving them from Port of Spain to San Fernando.

Single Economy – This requires unified economic and monetary policies, including related legislation, executive instruments and institutions. One of the most important instruments of a single economy is a single currency, so ALL members states would use the same money.

An example of a Single Market and Single Economy is the CSME (The Caribbean Single Market and Economy).

REGIONAL INTEGRATION –Glossary of Terms

Bilateral Agreement – an agreement or contract made between two countries

Multilateral Agreement – an agreement or contract made between more than two countries.

Independent State – is a sovereign (free) state which exercises self-government over its affairs.

Underdeveloped Country – a non-industrialised (agricultural) poor country that is seeking to develop its resources by industrialization.

Developing Country – a semi-industrialised country that is seeking to become more advanced economically and socially.

Developed Country – a country with a lot of industrial activity and where people generally have high incomes.

Criteria used to measure development for countries are: Gross Domestic Product (GDP), industrialisation and Human Development Index (HDI).

REGIONAL INTEGRATION –Glossary of Terms

Harmonisation – to come to some agreement or harmony of something (e.g. a policy or contract).

Trading Bloc – is a type of agreement where regional barriers to trade (tariffs, customs and duties) are reduced or eliminated among participating countries.

Fiscal Policy – it is the policy of a government in controlling its own expenditures and taxation, which together make up the budget deficits & indirect taxes

Monetary Policy – is what central banks use to manage the amount of liquidity (cash & credit) in the economy and they focus specifically on exchange, interest rates and the commercial banks.

REGIONAL INTEGRATION –Glossary of Terms

Trade Liberalisation – The removal or reduction of restrictions or barriers on the free exchange of goods between nations. This includes the removal or reduction of both tariff (duties and surcharges) and non-tariff obstacles (like licensing rules, quotas and other requirements).

Globalisation – The worldwide movement toward economic, financial, trade, and communications integration through the use of advances in technology. It refers to the world as a “global village.”

Multinational Corporation (MNC) – a corporation or large business that has its 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 head office where they co-ordinate global management.

Acculturation – is when a culture changes because of other cultures (e.g. American influence on T&T).

REGIONAL INTEGRATION –Glossary of Terms

ADVANTAGES DISADVANTAGES

• Free movement of labour and money means more investment in poorer countries

• Freer markets means governments have less control over trade & MNCs

• Globalisation via the internet have opened up international markets for local businesses (Angostura Bitters)

• Richer countries have an advantage over poorer ones because they have more resources

• Sharing technology helps developing countries catch up with richer ones

• There is risk of harmful acculturation as cultures lose their uniqueness because of influences of American media

• Easy access to goods should raise standard of living of many in poorer countries

• Small developing states become a ‘dumping ground’ for unwanted products from wealthy countries.

• Regional integration may be enhanced and accelerated

• Employment may increase but with very low wages, in poor working conditions with little job satisfaction.

BENEFITS AND DISADVANTAGES OF GLOBALISATION & TRADE LIBERALISATION

WORLD TRADE BLOCS

REGIONAL TRADE BLOCS

i. Small size; small national marketsii. Lack of diversificationiii. Unemployment and underemploymentiv. Low levels of production and productivityv. Differences in resource distributionvi. High levels of indebtedness (debt burden)vii. High level of cost importsviii. Shortage of skilled workersix. Inadequate technologyx. Low value of exportsxi. Difficulties in accessing markets of developed

countriesxii. Shortage of capitalxiii. Vulnerability to natural disasters

Major Challenges facing the Caribbean

Stages: West Indian Federation Caribbean Free Trade Area (CARIFTA) Caribbean Community (CARICOM) Organisation of Eastern Caribbean States (OECS) Association of Caribbean States (ACS) The CARICOM Single Market and Economy (CSME)

STAGES OF REGIONAL INTEGRATION

TIMELINE OF REGIONAL INTEGRATION

MEMBERSHIP OF REGIONAL INTEGRATION

ORGANISATION # OF MEMBERS STATES

CARICOM 15

OECS 9

ACS 25

The diagram above shows the Caribbean countries who are members of OECS, CARICOM and ACS.

OECS CARICOM SECRETARIAT CONFERENCE OF HEADS OF GOVERNMENT

(Please see handout for more information)

FUNCTIONS

OECS & CARICOM:1. The establishment of common services and cooperation in

functional matters such as health, education, culture, industrial relations & communications.

2. Integration of the economies of member states3. Harmonisation of foreign policy

CSME:1. Free movement of goods and services2. Right of establishment where any CARICOM-owned

business can establish in any member state without restriction.

3. Free movement of capital4. Free movement of skilled labour5. Improved standards of living and work6. Enhanced international competitiveness

OBJECTIVES

The CARICOM Single Economy Harmonisation of:1. Fiscal (tax) policies2. Monetary policies (including a single CARICOM

currency)3. External trade policy4. Legislation (custom companies)5. Sectoral policies in agriculture, manufacturing,

fisheries The Regional Development Fund – is a fund or

account that goes towards development of the Caribbean region. It is used to assist member countries to reach a certain economic level so they can benefit from the integration process.

OBJECTIVES

Why should we have regional integration?1. Common cultural heritage2. Common economic and social issues3. Effects of globalisation, trade liberalisation and

trading blocs4. Vulnerability to economic shocks and natural

disasters

FACTORS PROMOTING REGIONAL INTEGRATION

What factors deter or hinder regional integration?

1. Geography of region – islands isolated by water2. Absence of a common model or strategy for

development3. Differences in stages of growth and development4. Competition for location of industries5. Conflict between territorial and regional demands and

loyalties (insularity)6. Absence of a common currency7. Unequal distribution of resources8. Lack of diversification in production9. Influence of MNCs

FACTORS THAT HINDER REGIONAL INTEGRATION

1. Reduction in unemployment and underemployment

2. Better response to economic implications of globalisation and trade liberalisation

3. Improvement in the quality of life4. Reduction in the inequality of wealth distribution5. Free movement of goods, labour and capital6. Increased market size7. Improved levels of international competitiveness8. Expansion of trade9. Increased co-operation among member states

BENEFITS OF REGIONAL INTEGRATION

Role of Citizens:a) Entrepreneurship – starting your own businessb) Supporting regional producers (e.g. Sunshine)c) Showing unity and mutual support towards regional

fellow citizensd) Investing in local and regional businessese) Being informed

Role of Business Organisations:1. Improving competitiveness2. Increasing range and quality of goods and services3. Providing opportunities for investment and

employment4. Successful MNCs within the region (TCL, Sandals,

Grace)

Role of Citizens, Businesses and Government in Regional Integration

Role of Government:a) Enacting or enabling legislationb) Harmonising policiesc) Honouring protocolsd) Educating citizens about the objectives and benefits of

integration

Role of Citizens, Businesses and Government in Regional Integration

Areas of regional co-operation:a) AGRICULTURE:

The Caribbean Agricultural Research and Development Institute (CARDI)

b) SPORTS: West Indies Cricket Board (WICB) OECS sports desk Confederation of North, Central American and Caribbean

Association of Football (CONCACAF) – 40 associations

c) HEALTH: Caribbean Public Health Agency (CARPHA), which is made up of:

Caribbean Environmental and Health Institute (CEHI) Caribbean Epidemiology Centre (CAREC) Caribbean Food and Nutrition Institute Caribbean Regional Drug Testing Laboratory Caribbean Health Research Council

The role of regional agencies in the integration process

d) EMERGENCY RESPONSE: Caribbean Disaster Emergency Response Agency

(CEDERA)

e) MEDIA: Caribbean Media Company (CMC) One Caribbean Media Limited Caribvision

f) EDUCATION: University of the West Indies (UWI) Caribbean Examinations Council (CXC)

g) JUSTICE: Caribbean Court of Justice (CCJ)

h) SECURITY: Regional Security Service (RSS) – military and police

personnel from members of OECS

http://www.businessdictionary.com/definition/common-market.html#ixzz33oESWJ77

CARICOM Website – http://www.caricom.org/jsp/speeches/csme_politicalunity_brewster.jsp

http://www.caricom.org/jsp/community_organs/caribbean_market.jsp?menu=cob

REFERENCES & MORE READINGS