Social studies

Regional Integration
Factors that promote regional integration

Regional integration
Regional integration is promoted as the way ahead for the achievement of regional
advancement, development, and progress. A number of regional factors support the idea of
regional integration.

A common cultural heritage

Although there are variations between the countries of the Caribbean there is also a sense that
all share in a common cultural heritage. The current inhabitants are descendants of people who
came into the region from other parts of the world, bringing with them many values, beliefs,
traditions and customs. To a degree all these peoples are involved in creating new societies
and, perhaps especially following independence, they are together creating a shared identity.
This historic variety in cultural heritage is being moulded into a common culture that, through
unity and cooperation, seeks to achieve the development that will benefit as many parts of
society as possible.
This sentiment is expressed in Jamaica's national motto 'Out of many, one people’.

Common economic and social issues

There is a common pattern to the economies of most Caribbean countries although the details
are different. They largely have an economic history based on an agricultural sector that was
mostly dedicated to producing crops for export. As the world's markets and trading
arrangements have altered, the region has struggled to adapt and modernize its agricultural
practices or diversity its production.
Caribbean countries also have to deal with a number of similar social issues, such as the need to
develop and extend health care and education and to eradicate unsatisfactory levels of poverty.
Experiencing the same issues leads to a level of mutual understanding between countries of
one another's situation and also encourages cooperation in dealing with them.

Globalisation, trade liberalisation

and trading blocs
Caribbean countries have had to make structural changes to their economies in the face of
global changes. As competition for our traditional agricultural exports has intensified there has
been a shift from agricultural production of primary products towards the service industries. If
agricultural production is still to have an important role, changes have to be made. As an
example, global trade liberalisation has seen the removal of concessions in relation to sugar and
bananas.
Countries working together can assist one another as these necessary but far-reaching
adjustments are made.

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Economic shocks and natural disasters
The small economies of Caribbean countries are vulnerable to 'economic shocks'. This term
describes how an event such as a rapid rise in the price of an imported commodity, such as oil,
or the rapid fall in the price of an export such as coffee or sugar, can have a dramatic 'shock'
effect on an economy.
Caribbean countries are vulnerable because they do not have great reserves to fall back on to
see them through difficult period. Many look to integration as a possible means of softening the
blow from such shocks.
Countries in the region also share the experiences of natural disasters and know the
devastation these can bring. Facing this common source of catastrophe leads countries towards
a willingness to work together in both disaster preparedness and dealing with the aftermath of
disastrous events.

Factors that hinder regional integration

A number of practical, economic, political and ideological factors work against regional
integration, slowing the process down dramatically.

Geography of the region

The simple fact that the countries of the Caribbean are physically separated hinders the process
of regional integration because it makes it harder to:
❖ create networks of physical linkages for such essentials as telecommunications, Internet
and energy distribution
❖ travel between countries

❖ Send freight, mail, packages

Unequal distribution of resources

The resources available to Caribbean countries that can be exploited for economic benefit are
not distributed evenly. Resources-rich countries are able to expand their economy and develop
more quickly. Regional integration prompts the question of how much responsibility a country
has in terms of maintaining the economic and social development of countries without similar
resources and which have, therefore, made less progress in the process of development.

Intraregional competition
The lack of diversification in Caribbean economies has two main effects:
❖ it limits the effects of intraregional trade in stimulating a large amount of economic
growth and development
❖ it means that Caribbean countries are competing with one another in the global
markets since the product they hope to export are similar.

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Devising acceptable strategies that would perhaps see one country decreasing or even
discontinuing production of a certain product is challenging.
Countries also compete with one another in trying to attract business investment from within
and outside the region. Sometimes the businesses looking to develop in the Caribbean are
multinational corporation (MNCs).

They are often attracted by the possibilities of favourable production costs, lower wages and
cheaper land rentals. Cheap labour is not the only factor that helps MNCs to determine where
they will locate. Companies will want to know that there is a reliable, suitably qualified
workforce of sufficient size. They will also look for good governance of the country and a safe
and stable society and will also consider aspects of business regulation and tax laws.

Absence of common currency

Proponents of integration suggest that a common currency would bring many benefits to the
region as a result of efficiencies and transparency in both financial and commercial
transactions. A common currency would:
❖ reduce transaction costs for intraregional trade, foreign investments and remittances

❖ make prices clear and 'transparent’ since there would be no need to convert from one
currency to another
❖ increase confidence in the currency’s exchange rates (which can encourage
investment)
❖ Improve efficiencies in financial markets
A common currency would also add to a sense of regional identity

Different stages of growth and strategies

for development
Economic and social development processes happen at a different pace in each country. This
can cause problems for integration because of concern over the distribution of benefits and
burdens for the different countries. Some fear that smaller LDCs will not be able to take part in
economic integration simply because they have a smaller economy and resources. There is the
possibility that MDCs will have more to offer in attracting outside investment and so will simply
continue to be ahead in the development process. Those from MDCs may believe that they
have to make contribution and bear greater responsibility which would be seen as unfair.

The 'income gap' among Caribbean countries is quite large. The economies of smaller countries
rely heavily on tourism and international financial services provision. Larger nations have other
resources to exploit and have the export of minerals, fuel and agricultural commodities as
important elements of their economies.

Absence of common model or strategy

for development

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The main strategy for development in the 1950s and 1960s was industrialization, a process that
relied on cheap labour. Other theories, ideas and practices have been implemented such as
import substitution. Import substitution seeks to replace imported products with those
produced domestically.
The countries that have made most progress in achieving structural adjustment are those that
have been able to specialise in service industries, notably tourism and financial services.

Territorial and regional demands and loyalties

Political integration probably proves most difficult for people to accept since this domestic laws
and society. There are two extreme situations which describe the approaches to this issue.
Firstly, there is supra-nationalism which is an approach that sees national members of an
organisation delegate power to independent institution (in this case CARICOM Secretariat).
Decisions taken by this independent institution often have direct effects on domestic laws
within the countries of the organisation.
Secondly, there is the intergovernmental approach where control and power remain with
member states and decision-making takes place through a unanimous vote. The Conference of
Heads of State is an example of the intergovernmental approach.
Integration requires individuals, government and institution to shift their allegiances from being
only towards nation states to encompass the region as a whole.

The benefits of regional integration

Increased cooperation
Supporters of regional integration say that it will lead to increased cooperation in many spheres
of life and that it is only through such cooperation that individual Caribbean countries will be
able to deal with the challenges they face, not simply from globalisation and trade liberalisation
but also from the possible effects of climate change.

Free movement of goods, labour

and capital
Within the proposed CSME, manufacturers and producers will be able to get their products to
over six million people within the Caribbean. This is a much larger market than the domestic
market available in a single country.
Goods traded will have to meet an agreed regional standard, which will act as an incentive for
producers to improve and maintain the quality of their products.
The free movement of labour allows for people to seek work in different countries within the
region when suitable opportunities do not present themselves in the home country. The idea
benefits employers since they are also able to recruit employees from across the region.
The free movement of capital is aimed at increasing the opportunities for investment and
encouraging that investment to take place. It allows businesses to access a wider range of

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sources for raising capital investment at competitive rates. This will assist in expansion
programmes and efforts towards competitiveness, regionally and internationally.

Increased employment opportunities

Regional integration is seen as an important means of generating efficiencies and economies of
scale for commercial enterprises which will bring down production costs and make their
products more competitive. Successful businesses expand and employ more people. Other
integration policies, such as the free movement of labour, should also increase employment
opportunities.

Improved quality of life

Increased levels of employment should see more individuals achieving a higher standard of
living and experiencing an improved quality of life.
Economies of scale and greater efficiencies are also promised for governments since integration
allows governments to work cooperatively and collaboratively, sharing financial and technical
resources and avoiding duplication of activity and of expenditure. Savings in government
expenditure on the administration and implementation of policies will free up more money to
be spent on those parts of life that directly affect people's quality for example, health services.

Greater equality of wealth distribution

Wealth distribution occurs within most countries through a number of such as taxation,
relevant monetary policies and provision of welfare services.
In most countries, progressive distribution, where money passes from the rich to the poor, is
seen as the appropriate or correct approach. Wealth redistribution happens through income
tax, more of which is paid by higher earners. Higher levels of redistribution are achieved if more
people enter into higher paid work and so pay more taxes. These can then be used to benefit
the poorest in society through mechanisms such as welfare schemes, food vouchers and
healthcare.
Regional integration becomes relevant because it is seen as a means of improving the economic
development of the region as a whole. This economic development would both require and
produce higher levels of employment and a larger range of employment opportunities. The
greater the number of people in employment the greater the tax revenues become. Working
people also have more disposable income as consumers, stimulating further economic growth.

Expansion of trade and increased

international competitiveness
One hope for regional integration was that it would see a rise in the expansion of trade both
within the region and outside it.
Given this situation the region has to look to global markets. Globalisation and trade
liberalisation have meant that Caribbean countries are no longer beneficiaries of a number of
preferential trade arrangements that have been part of their economic history. CARICOM
products have to be competitively priced as countries seek to engage in trade around the
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world. Regional integration is again put forward as contributing towards this competitiveness
through reducing production costs, perhaps by sharing expertise and providing greater
economies of scale.

***The end***

References

Myers, C. (2015). Social Studies: Sustainable Development and Use of Resources. Kingston,

Jamaica: Printsource International.

Sandy, M. (2012). Social Studies Essentiaal for CSEC. Kingston 13, Jamaica: Carlog Publishers.

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