The Caricom Single Market and Economy (CSME) is supposed to be an evolving arrangement intended to promote the economic development of the region, based on the impeccable logic of free movement of goods, services and factors of production, namely capital and labour.
The fact is that the CSME has not happened, as is evident in the myriad national restrictions which prevent a genuine and significant intra-regional movement of labour. One result is the haemorrhage of human capital to countries outside the region.
Capital movements are very limited, discouraged by a raft of restrictions on ownership and complicated rules governing rights of establishment. Evidence of this is in the absence of a regional money and capital market. Notice the disparity in interest rates and foreign exchange rate.
The reason for this is the lack of a real spirit of Caribbean community among the region’s peoples. Imagine 5,000 people in Nevis, across from St Kitts, who want more autonomy.
Similarly, a person from Tobago will tell you they are not Trinidadian. The Caribbean people largely do not know each other and that is because transport among Caricom countries do not allow them to visit and mingle easily.
The CSME was to (1) create an enlarged regional market which would, as it removed trade barriers, stimulate an expansion of trade; (2) make exports more efficient by providing economies of scale and scope; (3) ensure that exporting within the regional market would boost training and preparation; and (4) make possible industry that could only be viable on the basis of the entire Caricom market.
None of this has happened, especially the joint production such as the aluminium smelter using bauxite from Guyana and Jamaica and natural gas from Trinidad.
The undoubted proof of the failure of intra-regional trade is that it represents a small share of total Caricom trade and has not increased substantially over the years. It is insignificant compared to the same ratio in the European Union, the North American Free Trade Area and in Asia where there is no formal integration process.
Intra-regional trade in Caricom has always been hampered by inadequate transportation. Canada was far-sighted when it gave the West Indies Federation two ships, the Federal Palm and the Federal Maple. Caricom did not have the good sense to replace them.
Intra-regional transport is in disarray. Goods from Jamaica to The Bahamas have to pass through the port of Miami. Air Jamaica collapsed leaving the skies to Caribbean Airlines, which only services a limited number of destinations. The perpetually bankrupt LIAT has again collapsed.
Tourism, the most important industry in Caricom, is at the mercy of foreign airlines and foreign-owned cruise ships. This cannot be the basis for increasing intra-regional trade and it will never facilitate the mingling of the Caribbean people, which is the basis for fostering the spirit of community and laying the foundation of a regional community.
The recent Caricom Heads of Government meeting rolled out the usual platitudes and recited the usual good intentions. Only major transformative plans will allow the dream of the region’s peoples to become a reality. One of these is intra-regional transportation. (Jamaica Observer)
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