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Regional Integration

Regional Integration. WHY INVEST IN TRINIDAD & TOBAGO?. http:// www.youtube.com/watch?v=0bzmJO6zXnk. The mighty sparrow - FEDERATION. www.youtube.com/watch?v=NZ7mU4DCtbc. Bob Marley – ONE LOVE. http:// www.youtube.com/watch?v=gWBrlnlKeqE. REGIONAL INTEGRATION – Glossary of Terms.

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Regional Integration

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  1. Regional Integration

  2. WHY INVEST IN TRINIDAD & TOBAGO? • http://www.youtube.com/watch?v=0bzmJO6zXnk The mighty sparrow - FEDERATION • www.youtube.com/watch?v=NZ7mU4DCtbc Bob Marley – ONE LOVE • http://www.youtube.com/watch?v=gWBrlnlKeqE

  3. REGIONAL INTEGRATION – Glossary of Terms • 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: • Free trade area • Customs union • Single market • Economic and monetary union (single currency) • Complete integration (political union)

  4. 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).

  5. 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).

  6. 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.

  7. 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).

  8. BENEFITS AND DISADVANTAGES OF GLOBALISATION & TRADE LIBERALISATION

  9. WORLD TRADE BLOCS

  10. REGIONAL TRADE BLOCS

  11. Major Challenges facing the Caribbean • Small size; small national markets • Lack of diversification • Unemployment and underemployment • Low levels of production and productivity • Differences in resource distribution • High levels of indebtedness (debt burden) • High level of cost imports • Shortage of skilled workers • Inadequate technology • Low value of exports • Difficulties in accessing markets of developed countries • Shortage of capital • Vulnerability to natural disasters

  12. STAGES OF REGIONAL INTEGRATION • 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)

  13. TIMELINE OF REGIONAL INTEGRATION

  14. MEMBERSHIP OF REGIONAL INTEGRATION

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

  16. FUNCTIONS • OECS • CARICOM SECRETARIAT • CONFERENCE OF HEADS OF GOVERNMENT (Please see handout for more information)

  17. OBJECTIVES • OECS & CARICOM: • The establishment of common services and cooperation in functional matters such as health, education, culture, industrial relations & communications. • Integration of the economies of member states • Harmonisation of foreign policy • CSME: • Free movement of goods and services • Right of establishment where any CARICOM-owned business can establish in any member state without restriction. • Free movement of capital • Free movement of skilled labour • Improved standards of living and work • Enhanced international competitiveness

  18. OBJECTIVES • The CARICOM Single EconomyHarmonisation of: • Fiscal (tax) policies • Monetary policies (including a single CARICOM currency) • External trade policy • Legislation (custom companies) • 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.

  19. FACTORS PROMOTING REGIONAL INTEGRATION • Why should we have regional integration? • Common cultural heritage • Common economic and social issues • Effects of globalisation, trade liberalisation and trading blocs • Vulnerability to economic shocks and natural disasters

  20. FACTORS THAT HINDER REGIONAL INTEGRATION • What factors deter or hinder regional integration? • Geography of region – islands isolated by water • Absence of a common model or strategy for development • Differences in stages of growth and development • Competition for location of industries • Conflict between territorial and regional demands and loyalties (insularity) • Absence of a common currency • Unequal distribution of resources • Lack of diversification in production • Influence of MNCs

  21. BENEFITS OF REGIONAL INTEGRATION • Reduction in unemployment and underemployment • Better response to economic implications of globalisation and trade liberalisation • Improvement in the quality of life • Reduction in the inequality of wealth distribution • Free movement of goods, labour and capital • Increased market size • Improved levels of international competitiveness • Expansion of trade • Increased co-operation among member states

  22. Role of Citizens, Businesses and Government in Regional Integration • Role of Citizens: • Entrepreneurship – starting your own business • Supporting regional producers (e.g. Sunshine) • Showing unity and mutual support towards regional fellow citizens • Investing in local and regional businesses • Being informed • Role of Business Organisations: • Improving competitiveness • Increasing range and quality of goods and services • Providing opportunities for investment and employment • Successful MNCs within the region (TCL, Sandals, Grace)

  23. Role of Citizens, Businesses and Government in Regional Integration • Role of Government: • Enacting or enabling legislation • Harmonising policies • Honouring protocols • Educating citizens about the objectives and benefits of integration

  24. The role of regional agencies in the integration process • Areas of regional co-operation: • AGRICULTURE: • The Caribbean Agricultural Research and Development Institute (CARDI) • SPORTS: • West Indies Cricket Board (WICB) • OECS sports desk • Confederation of North, Central American and Caribbean Association of Football (CONCACAF) – 40 associations • 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

  25. EMERGENCY RESPONSE: • Caribbean Disaster Emergency Response Agency (CEDERA) • MEDIA: • Caribbean Media Company (CMC) • One Caribbean Media Limited • Caribvision • EDUCATION: • University of the West Indies (UWI) • Caribbean Examinations Council (CXC) • JUSTICE: • Caribbean Court of Justice (CCJ) • SECURITY: • Regional Security Service (RSS) – military and police personnel from members of OECS

  26. REFERENCES & MORE READINGS • 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

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