Regional integration

OBJECTIVES

1. Explain and use correctly concepts and terms associated with regional integration.

2. Describe the major factors promoting Caribbean Integration.

Regional integration is the process by which two or more nations/countries (neighbouring countries) agree to cooperate and work closely together to achieve peace, stability, and economic growth.

• Bilateral agreement – an agreement that is made between two groups, countries, or nations.

• Multilateral agreement – an agreement that is made among many groups/countries

• Common market – An economic unit that is formed by countries with the intention of eliminating or reducing trade barriers among its members

• Single market – A group of countries that have few or no restrictions on the movement of goods, money, and people between the borders of the members of this group

• Economic integration – The unification of economic policies between different countries through the partial or full abolition of tariff and non-tariff restrictions on trade taking place among them prior to their integration

• Independent state – The self-government of a county, nation, or state by its residents and population. This country now has the right to exercise freely the full range of power a country possesses under international law.

• Underdeveloped country – A nation which, comparative to others, lacks industrialisation, infrastructure, developed agriculture, and developed natural resources, and suffers from a low per capita income as a result.

• Developing country – Referred to as a less-developed country, a country with a low standard of living, an underdeveloped industrial base, and a low human development index (HDI) relative to other countries.

• Developed country – This is an industrialised country, with a highly developed economy and advanced technological infrastructure. It is a country that has a high level of development and high gross domestic product (GDP) per capita.

• Trade liberalisation – The removal or reduction of restrictions or barriers on the free exchange of goods between nations

• Globalisation –This is the worldwide movement towards economic, financial, trade, and communications integration. The process by which countries all over the world are becoming connected or similar because large companies are doing business in many different countries.

• Multinational corporation – Transnational corporation, a corporation or enterprise that manages production and delivers services in more than one country

• Trading bloc – Made up of a large number of countries, with the same political and economic aims, linked by special trading arrangements

• Free trade area – An arrangement wherein a group of countries agrees to remove tariff and non-tariff barriers to trade

• Intra-regional trade –Ccountries in the region buying locally produced goods from or selling locally produced goods to, other countries in the region

• Fiscal policy – The means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. It is the use of government spending and revenue collection to influence economy

• Monetary policy – The process a government, central bank of a country uses to control the supply of money, availability of money, and cost of money or rate of interest to attain a set of objectives oriented towards the growth of the economy.

FACTORS PROMOTING REGIONAL INTEGRATION

• Common language – The language spoken by most of the Caribbean people is English, and this will facilitate easy communication.

• Proximity – The Caribbean countries are relatively strategically located. They are close to each other. This makes travel by air or sea from one country to another relatively short.

• Caribbean countries share a common history – Caribbean people are descendants of people who were subjected to slavery and also to indentureship.

• Common cultural heritage – The Caribbean people share a common culture in terms of language, dress, music, cuisine, and their general lifestyle.

• Small size/strength in unity – The Caribbean countries are at a disadvantage when competing against international markets because of their small size. Thus, coming together makes it easier to have an influence on the international markets.

• Common economic, political and social problem – the Caribbean countries encounter similar problems, such as unemployment, difficulty in accessing international markets, lack of adequate capital, poor housing, and challenging health facilities.

• The common challenges of globalisation and trade liberalisation – Companies all over the world are doing business in many countries. Caribbean businesses are required to amalgamate or face ruin.

• Competition for location of industries – The government of each member states wants what is best for its country. Such aspiration usually leads to competition among the countries for the location of new industries. The competition often evolves into envy and jealousy among member states.

• Conflict between territorial and regional demands and loyalties (insularity) – Caribbean countries tend to be more interested in satisfying the immediate needs of the residence within their countries than attending to the demands of the region.

• Absence of common currency – The value of the money in each Caribbean country is different. A common currency would provide for a greater level of integration.

• There is an unequal distribution of resources – Some member states are blessed with more natural resources than others.

• Lack of diversification in production – It is interesting to note that most of the CARICOM member states produce similar products. Most of the member states are dependent on agriculture; therefore, they process and manufacture products from sugar cane, banana, cocoa, coffee, and ground provisions. This puts constrainst on intra-regional trade.

ACTIVITIES

1. State THREE areas in which Caribbean countries compete.

2. Why is insularity considered to be a major problem to integration?

3. Suggest THREE reasons why multinational companies are present in the Caribbean region and why it is problematic to the growth of the CARICOM region.

REFERENCES

Terms and concepts for Regional Cooperation http://www.slideshare.net/egfred/ terms-and-concepts-for-regional-integration Dictionaries: http://www.businessdictionary.com/ definition/globalization.html https://www.google.com. jm/#q=globalization+definition https://www.google.com. jm/#q=fiscal+policy+definition

Brathwaite S. and Reynolds, P. (2004) Caribbean Examination Council, CSEC Social Studies (For Self-Study and Distance Learning.)

Ramsawak, R., and Umraw, R. (2009) Modules in Social Studies, Caribbean Educational Publishers

CARICOM members and the year they became members.

http://www.criti.info/sharing_the_vision/General%20 CARICOM%20Info/CARICOM%20Mission%20 and%20Function/member_states_associate_members.htm

ACTIVITIES

1. State three countries that may be found in all the organisations noted above.

2. Identify two objectives that seem to pervade all the organisations mentioned above.

3. Suggest from the objectives given three reasons for the establishment of organisations in the Caribbean. Explain each reason.