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The Caricom Single Market & Economy Essay Sample

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The Caricom Single Market & Economy Essay Sample

The CARICOM Single Market and Economy (CSME) is indeed a mixed blessing as it carries various benefits as well as challenges for the Caribbean islands. Firstly I will attempt to describe the CSME in its entirety giving the benefits and the shortfalls of its implementation and how it will affect the islands positively or negatively and the factors that may result in the contrasting outcomes.

Overview of the CSME
The CSME is also known as the Caribbean Single Market and Economy was first envisioned at the 10th meeting of the Conference of Heads of Government of the Caribbean Community in July 1989 in Grenada. The CSME consists currently of thirteen member states which are Antigua & Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname and Trinidad & Tobago.

The CSME is designed as a single economic system to facilitate the pooling of the Caribbean region’s financial, human and natural resources in order to build the economic capacity required to effectively respond to globalization and to be competitive against large capital intensive manufacturing countries. Globalization has created a marketplace in which most countries are attempting to capitalize by joining forces in trade agreements e.g. the European Union (EU), the North American Free Trade Agreement (NAFTA).

The preferential treatment that used to be meted out to Caribbean countries by the larger countries is now almost non-existent and as a result of this, it is becoming increasingly difficult for Caribbean countries to compete effectively within the global marketplace. The CSME is being implemented in an attempt to achieve a competitive standard within the global arena and eventually gain financial independence from these larger countries.

Composition of the CSME
As the name suggests, the CSME comprises of two sections i.e. the market and the economy. The market is an arrangement which will allow CARICOM goods, services, people and capital to move throughout the Caribbean Community without tariffs and without restrictions to achieve a single, large economic space, and to provide for a common economic and trade policy. The economy on the other hand is an arrangement which further harmonises economic, monetary and fiscal policies and measures across all member states of the Caribbean Community to underpin the sustainable development of the region. This would mean the coordination of foreign exchange and interest rate policies, the harmonisation of tax regimes and of laws and the convergence of economic performance among other measures.

It is expected that the CSME will be implemented by the alteration and modification of some laws relating to CARICOM. This will be accomplished by firstly amending the Treaty which established the Caribbean Community (the Treaty of Chaguaramas), modification of the national laws, policies and programmes of Member States to accommodate these and other decisions made at the regional level and by active interest in and participation of the region’s people in the CSME.

The Caribbean Court of Justice
One of the expected outcomes of the CSME will be the Caribbean Court of Justice (CCJ). The Caribbean Court of Justice is designed to be more than a court of last resort for member states of the Caribbean Community. For, in addition to replacing the Judicial Committee of the Privy Council, the CCJ is vested with an original jurisdiction in respect of the interpretation and application of the Treaty Establishing the Caribbean Community. In effect, the CCJ is designed to exercise both an appellate and an original jurisdiction.

In the exercise of its appellate jurisdiction, the CCJ considers and determines appeals in both civil and criminal matters from common law courts within the jurisdictions of member states of the community and which parties to the agreement establishing the CCJ. In the discharge of its appellate jurisdiction, the CCJ is the highest municipal court in the region. In the exercise of its original jurisdiction, the CCJ will be discharging the functions of an international tribunal, applying rules of international law in respect of the interpretation and application of the Treaty. In this regard, the CCJ will be performing functions like the European Court of Justice, the European Court of First Instance, the Andean Court of Justice and the International Court of Justice. In short, the CCJ is a hybrid institution – a municipal court of last resort and an international court with compulsory and exclusive jurisdiction in respect of the interpretation and application of the Treaty.

Expected Benefits of the CSME
Some benefits expected from the implementation of the CSME are:
1. Increased production and trade in goods and services in a combined market.

2. Competitive products of better quality and prices.

3. Improved services provided by enterprises and individuals, including transportation and communication.

4. Greater opportunity for travel.

5. Opportunities for nationals to study and work in CARICOM countries of their choice.

6. Increased employment and improved standards of living.

7. Independence of Caribbean territories in judicial matters with the implementation of the CCJ.

Once the CSME is totally implemented, it is anticipated that there will be an increase in production and trade in goods and services as the Caribbean islands will have a bigger market to Supply because the concerted efforts of the different islands will make it possible to produce goods and services competitively with other countries outside the region. Therefore the level of production required by large industries which could not have been met by individual islands can now be attained which will make the region more competitive.

The CSME will enable greater efficiency in the production of goods and services and will in effect create jobs for people. Employment will lead to a lower level of dependence of Government subsidies and alleviate pressure on some social services. This will assist in the building of the economy and allow the Government to direct resources to other areas that need improvement as employment in effect reverses the role of Government in most cases from provider to recipient as they will receive from the people in the form of taxes.

The interaction between nationals of the different Caribbean islands can also be observed as a benefit of the CSME although it is not touted as such among the initiators of the concept. Despite the fact that relations between the islands are relatively peaceful and we enjoy quite formal and reasonably cordial interaction, it is known that there are underlying tensions and biases especially in the case of Jamaicans as our reputation of unlawful behaviour undermines our ability to accomplish great things which defies logic given our small population.

The fact that persons from the islands within the CSME will be afforded the option of working in any of the CSME member countries can create a situation in which the fostering of better relationships between the countries can be attained and in effect lead to the realization of the differences in cultures and help to mend social ills.

Under the Free Movement of Persons category, Jamaica has already enacted the Caribbean Community (Free Movement of Skilled Persons) Act, 1997 entitling five groups of CARICOM Nationals and their dependents to offer services in Jamaica without the need for work permits. Under the Revised Treaty, enables university graduates, media workers, sports persons, artistes and musicians and also self-employed persons engaged in activities of a commercial, industrial or agricultural nature, to establish a business in any other member state without restrictions. It entitles these five categories and their dependents to offer services in Jamaica without work permits.

The CSME will also aid entrepreneurs to transfer money to another country without having to obtain prior authorization, the right to buy shares in any company in any member state and access to a wider pool of skilled persons from which to recruit. The establishment of the CSME is intended to assist member CARICOM states to achieve national objectives such as sustained economic development and expansion of trade, full employment of all the factors of production, improved standards of living and work and effective economic relations with other countries.

The benefits of the CSME should far outweigh the challenges even in countries that are not as developed as Barbados and Trinidad. Improved ability to recruit skilled workers from across the region and for increased job opportunities for all CARICOM nationals, enhanced access to specialized training and technology transfer serving to expand the knowledge base and capacity building skills of various sectors are attributes of the CSME. The full establishment of the CSME will also encourage regional institutions to strengthen collaboration in policy development and information sharing with respect to human and social development at all levels.

The CSME will promote a greater sense of regional identity and cross-cultural interaction and individuals, communities and groups stand to benefit from greater exposure to cultural norms and practices from across the region. There will also be a wider range of goods and services to choose from with improved quality based on increased competition.

The CCJ is designed to give us judicial independence in dealing with matters of regional or domestic interest which reinforces the fact that we are now independence states and not affiliates or better yet not colonies of the European countries. These countries continue to exercise authority over our islands in judicial matters because we use the UK’s Privy Council as the last court of appeal. This despite the knowledge that the Privy Council disapproves of our stance on capital punishment and continues to commute the death sentences of convicted prisoners with scant regard for our judicial process. Ironically some of the closest allies of the United Kingdom continue to utilize the option of capital punishment without the intervention of the UK. The CCJ will function in its original jurisdiction as a trade court, following the ruling of the Privy Council. The court will be charged with the interpretation and application of the Revised Treaty and exercise exclusive jurisdiction with respect to dispute settlement, mediation, conciliation and arbitration.

Drawbacks of the CSME
The questions that should be asked which denote the readiness of the CSME states to undertake such a development are: 1. Do poorer states have the capacity and resources to support additional stresses that may be placed on their social institutions? 2. How will small businesses in smaller and poorer nations deal with additional competitors in their respective sectors? 3. Is the labour force of small nations equipped with the knowledge and skills to compete in the CSME? 4. Is the CSME in the best interest of all involved?

5. Is the formation of the CCJ in the best interest of the rights and privileges of our people? The answers to these questions are a resounding no, especially when they are evaluated on the basis of individual islands and their capacity to compete or produce competitively with their larger more developed counterparts such as Trinidad & Tobago, Barbados and Jamaica. The major issue for each state is whether its existing businesses and workforce can survive the increased competition when businesses that are more successful enter the local market. Many states are uncertain as to whether their local economy can survive the transition. From all indications, it appears that the CSME is about survival. Businesses that do not have the resources or capacity to compete will surely whither away. States that fail to develop their capacity must prepare to deal with economic calamity.

Of major concern to the Governments and people of the region is the potential for an increase in local unemployment as a result of more persons competing for the few available jobs. Another concern is the increased pressure that may be placed upon social and economic institutions, in the event of mass migration, and their ability to cope. Governments of the region are exploring various measures to assist the public and private sectors to adapt. However, many are of the view that, the question of whether these states have the resources to deal with negative externalities including increases in crime, poverty and unemployment levels is yet to be strategically addressed. The questions of size and productive capacity are perhaps most critical if the CSME is going to operate in an equitable way. When we consider the condition of poorer states it is easy to see them going under quite quickly in a CSME since they do not have the resources – especially human – to function meaningfully within the market.

This seems to be the major problem in regards to the effective functioning of the CSME. It is conceivable that these poorer countries will end up being mere importers of products from the larger states in the CSME. The possibility of “brain-drain” is another harsh reality of what the CSME can create especially in countries where unemployment is rife and offers of better salaries, living, working and economic conditions in other countries will no doubt be attractive to educated and qualified persons in islands with poor economic conditions. This tends to create a trend in which these individuals migrate to the islands for the promise of more affluent lifestyles and leave the less educated to sustain the domestic workforce. Small islands would continue to be net-importers, much thanks to the petrol subsidization policy of the Government of Trinidad, which would ensure that no other country produce more than they can and cheaper.

World Trading Organization (WTO) rules won’t be able to protect these islands from this and the CCJ would possibly favour ruling for the large family owned businesses that control governments in the islands rather than side with smaller islands as money is a convincing tool for manipulation. The CCJ may be open to manipulation from the various Governments and businesses as the independent opinion that used to be attained from Privy Council would now be lost and judgements from the CCJ may be prejudiced. Judges may be manipulated also because they may side with the Government in cases against the Government because their salaries will be paid by Government entities. Foreign investors may also opt out of investing in the Caribbean as the CCJ may be seen as a hindrance to their business practices and not as favourable to them in civil or criminal wrangling as the Privy Council would have been.

In summation, the CSME has the ability or potential to be a driving force for the development of the Caribbean territory and a emergency exit from this arena of global invalidity that the region is rapidly becoming susceptible to. However, the only way that we can make the transition smoothly is to learn from the mistakes that was made in Lewis’ “Industrialization by Invitation” model and ensure that the larger more developed countries provide sustenance for the smaller poorer countries and not as the enclaves failed to provide support for the traditional sector. Once our efforts are unified in developing the Caribbean as a whole and we can bypass the selfishness of our own territorial ideals, there is no reason why the CSME cannot be a success. The question that should have been answered foremost however is this; are we mature enough to our petty selfish obsession? Only God and time will answer this question. Mek wi si nuh.

Bibliography

• www.en.wikipedia.org/wiki/CARICOM_Single_Market_and_Economy • www.caricom.org/jsp/single_market
• www.jis.gov.jm
• www.tradeind.gov.tt

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