Terms and concepts for regional integration
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The document discusses regional integration in the Caribbean, outlining key concepts such as bilateral and multilateral agreements, and the economic advantages of forming a common market. It examines factors that promote integration, including shared cultural heritage and common challenges, as well as obstacles like competition for resources and lack of common policies. Ultimately, it highlights the benefits of integration, including increased market size, improved job opportunities, and enhanced international competitiveness for member states.
Terms and concepts for regional integration
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TERMS AND CONCEPTS FOR REGIONAL INTEGRATION<br />Bilateral Agreement - An agreement between two groups, countries or nations<br />Multilateral agreement - Agreement among many groups, countries o nations.<br /> Common Market - An economic unit, formed of nations , intended to eliminate or markedly reduce trade barriers among its members<br />Single market - A group of countries that have few or no restrictions on the movement of goods, money and people between the members of the group<br />Economic integration - the process by which the economies of a group of countries are drawn more closely together so that the group as well as the individual countries becomes stronger or more developed.<br />Independent State - self government of a county , nation or state by its residents and population <br />Underdeveloped country - a relatively poor country with little or no material wellbeing.<br />Developing country - a country that has not yet reached the stage of economic growth to stand on its own for further growth.<br />Developed country - a country that has high level of development and high gross domestic product (GDP) per capita. <br />Trade Liberalization - the movement towards the removal of trade barriers among the members of the World Trade Organization (WTO)<br />Globalization - the process by which countries all over the world are becoming connected or similar because large companies are doing business in many different countries.<br />Multinational Corporation - Sometimes called transnational corporation is a corporation or enterprise that manages production and delivers services in more than one country. <br />Trading Bloc - made up of a large number of countries, with the same political and economic aims, linked by special trading arrangements among them.<br />Free trade Area - an arrangement whereby a group of countries agrees to remove the tariff and non-tariff barriers to trade among them. <br />Intra-Regional Trade - countries in the region buying locally produced goods from or selling locally produced goods to, other countries in the region.<br />Fiscal Policy - the use of government spending and revenue collection to influence economy.<br />Monetary Policy - the process a government, central bank or monetary authority 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.<br />Exploration of the factors promoting regional integration<br />Common language - The language of the Caribbean people is English, and this facilitates easy communication.<br />Close Proximity - The Caribbean countries are relatively close to each other, hence, travel by air or sea from one country to another can be done in a relatively short space of time.<br />Caribbean countries share a common history - Most of the Caribbean people are descendants of people who had been subjected to slavery and indentureship. This makes it possible for the Caribbean people to embrace each other. <br />Common Cultural Heritage - The Caribbean people share a common culture in terms of language, dress, music, cuisine and general lifestyle. All these features make the integration process smoother. <br />Small population - The Caribbean countries are at a disadvantage when competing against international markets because of their small size. Thus, coming together makes it easier to influence international markets.<br />The Limited human and physical resources available in the Caribbean region necessitate the pooling and trading of these resources among Caribbean countries.<br />Common economic, political and social problem - The Caribbean countries encounter similar problems, inclusive of, but not limited to unemployment, difficulty in accessing international markets, lack of adequate capital, poor housing and inadequate health facilities. <br />The common challenges of Globalization and Trade Liberalization - Companies all over the world are doing business in many countries, filtrating into the Caribbean region creating unwelcomed competition. The Caribbean government can no longer restrict extra-regional imports to protect regional manufacturers/companies, hence, Caribbean businesses are required to amalgamate or face ruin.<br />The increase in the number of trading blocs - Across the world, economic groupings and trading blocs are being established where a large number of countries are linked by special trading arrangements among them. For example, the European Union (E.U.) The Caribbean is required to do the same to ensure productivity and continuity in its economic growth. <br />Caricom member states have made several attempts at integration, while some of these attempts have been successful, others have met upon obstacles that persist to present. The following factors have hindered the integration process of the Caribbean region:<br />Absence of common model or strategy for development - Caricom member states have pursued different strategies for political and economic development. There are some that depend on agriculture, another on tourism, one on petroleum. The fact that the varying countries are placing different emphasis on different strategies suggests that a common policy will not exist and countries will only be interested in policies that relates to the strategy they are pursuing. Jamaica would be more interested in debating a common policy on tourism or agriculture because they depend on those for economic development, but would generate little or no interest in a policy on petroleum because they do not pursue such for development. <br />Differences in stages of growth and development - The fact that the Caribbean countries pursue different strategies for development means that they will all be at different levels of growth and development. The less developed countries are hesitant to trade with the more developed countries because of fear that they might be at a disadvantage. Such fear has led to the delay in the implementation of certain factors that would ensure or facilitate the integration process.<br />Competition for location of industries - The government of each Member States wants what is best for their country; such aspiration usually leads to competition between the countries for the location of new industries. The competition often times evolves into envy and jealousy among member states.<br />Conflict between territorial and regional demands and loyalties (Insularity) - The 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. The member states work hard to attain international attention as an individual country than working together as a part of Caricom to attain the same. <br />Absence of Common Currency - The value of the money in each Caribbean country is different. There are some member states that do not accept the currency of others. In this regard, Caricom residents travelling through the region have to obtain the relevant currency. A common currency would provide for greater level of integration.<br />Unequal distribution of resources - Some member states are blessed with more natural resources than others. Those countries that are abundant in natural resources have utilized the income gained from this wealth for their country's benefit rather than for regional benefit. <br />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, bananas, cocoa, coffee and ground provisions. This puts constraint on intra- regional trade.<br />Influence of multinational corporations - Trans-national corporations have contributed to some of the Caricom Member states running a foul to the objectives of Caricom. Those corporations enter individual member states and bargain with individual governments to grant special benefits such as tax free holidays, repatriation of profits, duty free on raw materials among other things. Those benefits, most times, run contrary to the objectives of Caricom.<br />There are many benefits to be derived from being a member of Caricom: <br />Reduction in unemployment and underemployment - The removal of the barriers to intra-regional trade among member states of Caricom increases employment in the region as consumers buy more regionally produced goods. Buying regionally produce goods ensure that jobs are maintained or created because of the demand.<br />Increased market size - Caricom is committed to trade within the region. Therefore, integration provides a larger market for individual member state.<br />Free movement of goods, labour and capital - All goods which meet the Caricom standards are traded duty free throughout the region, therefore, all goods created within the region can be traded without restrictions. There is also an agreed upon policy called The Caribbean Community Free Movement of Persons Act enacted in all CSME member states. Under this Act, it allows for the free movement of certain categories of skilled workers, which will later evolve into the free movement of all persons across the CSME member states. There is also a move to eliminate the various restrictions such as foreign exchange controls which will allow for the free movement of capital across the CSME member states. This will allow for the convertibility of currencies or a single currency and capital market integration.<br />Better response to economic implications of globalization and trade liberalization - The act of the larger international companies doing business across the world and in the Caribbean has forced the Caribbean businesses to amalgamate in order to survive, thus creating a greater sense of unity. Caribbean governments can no longer protect the regional manufacturers by restricting extra-regional imports, as such; the Caribbean people have been encouraged to support regional manufacturers. Regional manufacturers have improved their products and services, and this has made it possible for them to compete with producers in developed countries. <br />Improved levels of international competitiveness - Caricom has a stronger, more persuasive voice on international matters than as individual countries. The size of a country dictates to its power, and the integrated approach of the Caribbean countries has lent to greater influence on the international scene. Individual member states are too small to withstand economic competition from more developed countries and trading blocs. A united voice among member states has resulted in better prices for extra-regional exports and cheaper prices for imports to the region from other international sources.<br />Increased co-operation among member states -The Integration process among member states of Caricom has allowed for greater co-operation and utilization of the services offered by the different institutions of the organization. <br />Improvement in the quality of life - The increased job opportunities accrued through the cooperative effort of the Caribbean states have led to job creation and economic development and a consequent increase in the quality of life for the Caribbean people<br /> <br />There are many other benefits to be derived from regional integration. Can you identify others? <br />