Caribbean Regional Integration

A Critical Development Approach

Patsy Lewis

• Publisher: Routledge
• Year: 2022
• Print ISBN: 9781032075365
• eBook ISBN: 9781000587494
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Global Development Studies
• Index: Politics & International Relations

This book provides an in-depth analysis of the role of regional integration in the contemporary Caribbean, challenging the value of the neoliberal ideology that permeates regionalism discourse.

The book asks what value neoliberal regionalism holds for the Caribbean, when its economic goals of efficiency and competitiveness serve to actively marginalize small states within the global community. Presenting an alternative framework for assessing success, the book investigates how the Caribbean Community (CARICOM) can confront new challenges and perform a more developmental function, centring economic transformation and a more democratic process. The book also explores long-standing challenges with implementing regional decisions at the national level and the absence of avenues for citizens to influence the direction of the integration movement. It explores these themes against the backdrop of the global pandemic and the climate crisis which underscore the fragility of Caribbean economies, their high levels of indebtedness, weak social security systems, and their marginality.

Bringing together decades of research from one of the world's foremost scholars on the subject, this book will be essential reading for researchers of the Caribbean specifically, and for those with an interest in regionalism more generally, across the fields of political economy, international relations, history, geography, economics, and global development.

1 Introduction The limits and possibilities of regional integration

DOI: 10.4324/9781003207597-1

Caribbean islands inhabit a peculiar space in the global imagination. Although located historically at the centre of fundamental global processes that have shaped the modern world, they are assumed by the architects of the contemporary global economic system to exist outside of this system into which they must be “integrated”. They are sites of exoticism, pleasure, leisure and retirement for the wealthy but exhibit high levels of poverty, unemployment and inequality. They are viewed as lacking in capacity, even as they supply excessively high numbers of their highly educated to the United States and North America, especially in their health systems. They are labelled as medium-income countries while being some of the most indebted countries in the world. And they remain one of two regions (with the Pacific) with the smallest independent states and largest numbers of non-independent territories. This volume focuses on their efforts, despite inhabiting these contradictions, to address some of their challenges collectively through their regional schemes, the Caribbean Community (CARICOM) and the sub-regional Organisation of Eastern Caribbean States (OECS). It draws on years of reflection on the role of their regional integration organizations’ efforts to respond to the seismic developments in the global political economy since their independence, the challenges that make effective regional responses difficult and suggests possible directions for the regional movement to take it beyond its current impasse.

Size and its associated challenges have been central concerns of the Caribbean in the post-independence era and a defining feature of Caribbean regionalism. Concerns around the viability of small territories, despite the nearly 60 years since the first territory became independent remain endemic, as evident in the persistence of small territories languishing in relations of dependency, which many find intolerable. Not only have their existence in this space of limbo continued with limited notice outside of the arcane workings of the UN Special Committee on Decolonization, but their generally higher per capita GDP, relative to their independent counterparts, has led some to conclude that the independence project had failed and that dependence on a former colonial power conferred more tangible benefit, if not a more preferable option.¹ Even so, many of these independent Caribbean states boast medium per capita income and high to very high human development, on the United Nations Human Development Index, leading to what the literature (Briguglio, 2004) has dubbed, the Singapore paradox, of high levels of income alongside high levels of vulnerability. In the Caribbean these indicators of development sit uncomfortably alongside some of the highest debt per capita GDP ratios and per capita skilled migrations in the world and, for many countries, high levels of poverty and unemployment, aggravated by a susceptibility to natural hazards, including earthquakes, volcanoes and hurricanes, the latter expected to be exacerbated by climate change, presenting existential threats.

One of the main mechanisms Caribbean states have adopted to address their small size was regional integration. In the aftermath of the failure of the West Indies Federation (WIF) the newly independent states along with some of the still dependent territories turned to economic cooperation and established the Caribbean Free Trade Area (1967), transformed in 1973 to the Caribbean Community and Common Market as a means of addressing the small size of their economies and a perceived need to pool resources across a number of non-economic sectors. CARICOM was thus one of the earlier schemes described in the literature, that predated the upsurge in regional organizations in the mid-1980s–1990s. The explosion of such arrangements ranging from partial scope trading agreements to arrangements going beyond trade to include broader concerns such as security, alongside the intensification of existing schemes such as the European Union and CARICOM, led to an increasing interest in the transformative possibilities of regionalism. This upsurge in regional organizations can be located in the shift in the 1980s by the International Financial Institutions (IFIs) and donor governments to liberalize markets through structural adjustment programmes; the collapse of the Soviet Union which consolidated the shift towards the global embrace of neoliberalism, already underway in the transformation of the GATT to the WTO; the further liberalization of goods and the inclusion of services; and the extension of WTO coverage both in terms of membership – especially after the collapse of the Soviet bloc and the entry of China – and scope, to include beyond the border issues such as Intellectual property.

The proliferation of what was described as a “spaghetti bowl” (Bhagwati, 1995) of regional schemes (not all geographically situated) were viewed by some as a means of locking in pro-capitalist reforms and “democratic” political norms.² This proliferation led to a renewed academic interest and approaches with their own concerns and questions. The early focus on the relationship of these new schemes to the multilateral liberalization process occurring under the WTO was whether they advanced or retarded multilateral liberalization (see Bhagwati, 1995 and Hudgins, 1995/1996 for different perspectives) and how they differed from earlier integration schemes, that is, the difference between “new” and “old” regionalism (Fuentes, 1994; Hettne et al., New Regionalism Series, especially 1999 and 2000). The diversity in schemes and experiences has prompted a shift in focus to view these not through the lenses of the European experience which had dominated attempts to theorize regionalism, but rather to understand them on their own terms, while trying to identify commonalities that would facilitate theoretical insights (Acharya, 2016). There are also efforts to locate regional movements within the global architecture of power in light of the WTO’s loss of influence as negotiations have stalled; and a perceived dispersion of power in the international system, with the lessening of political influence of Europe (compounded now with Britain’s exit from the European Union (EU)) and the United States’ apparent domestic retreat under the Trump Presidency, which appears to be continuing in some measure under the Biden administration. Both appeared to have lost ground to China, reanimating discussions around the role of regional schemes in the emerging world order, which Acharya characterizes as a “multiplex” world. In such a scenario, Acharya sees an avenue for regional organizations to fill this gap, advancing the liberal cause. With very few exceptions (Riggiorizi and Tussie, 2012), the basis on which regional schemes are assessed is their ability to extend the liberal trading regime.

CARICOM was not immune to these global shifts, reacting to reforms in one of its major markets – the EU – and concerns that its other major markets (United States and Canada) would follow suit, with its own efforts to “deepen” its scheme by introducing the Caribbean Single Market and Economy (CSME). The CSME sought to significantly reduce and eliminate impediments to trade in goods and services, and introduced for the first time a limited mobility regime to facilitate the movement of skilled workers in a bid to boost the viability of more competitive firms. It also introduced dispute resolution mechanisms, including the Caribbean Court of Justice (CCJ), which it hoped would function both as the main forum for interpreting the CSME and as its members final court of appeal, replacing the UK Judicial Committee of the Privy Council, a holdover from British colonialism.

This collection of essays explores the role of regional integration in the Caribbean. It raises critical questions around the limitations of the post-independent state, the extent to which regional integration schemes have been able to ameliorate some of these, and the potential for regional institutions to perform a more developmental function, centring economic transformation and a more democratic process. Central to the book is a critical reflection on neoliberalism as the accepted philosophical grounding and analytical tool for theorizing regionalism. It focuses on three broad thematic areas: size as both a site of solidarity and conflict, the challenges of implementing regional decisions and the possibilities of political integration, and the role of regional organizations in defining development and defending Caribbean sovereignty. The remainder of this chapter elaborates on these themes.

Size and regionalism: limits and possibilities

The treatment of size in integration schemes is an understudied area of regionalism. Earlier efforts to consider imbalances have centred on the challenges of economic polarization within integration schemes between more and lesser economically developed countries. Within CARICOM this was closely tied to the differences in size among its units, and, with it, different levels of exploitable resources and economic diversification, which led to the formal categorization of lesser and more developed countries (LDCs/MDCs) with special measures to address the perceived disadvantaged LDCs within the arrangement. This divide was given institutional form in the creation of the sub-regional OECS, whose membership incorporated all those states so classified, with the exception of Belize. Within the Caribbean, the work of Nobel Laureate and development economist Arthur Lewis (1950) and William Demas (1965), who went on to become the first secretary general of CARICOM, made concrete connections between small size and the value of integration schemes as a means of overcoming some of the limitations it posed. A more recent effort to use size as an analytical category appears in the attempts by Panke, Stapel and Starkmann (2020) to develop typologies of regional organizations. Their typologies were based, however, not on country or population size, but on the numbers of members they have and their policy scope. Nevertheless, this is one of the few attempts, utilizing the comparative framework for analysing regional organizations, that have made more than a cursory attempt to include CARICOM and the OECS.

Despite its relative absence in the literature, size is an important analytical tool for understanding the pitfalls of Caribbean integration. As the chapters in Part 1 of this collection show, the Caribbean experience invites a particular reflection on the role of size in integration schemes. Tensions around size in CARICOM are reflected in the formation and perpetuation of the OECS as a tighter, more coherent integration arrangement within CARICOM and Jamaica’s resistance to the continuation of the LDC/MDC divide in the revised treaty of CARICOM (RTC). Two chapters in this volume (Chapters 2 and 3) explore tensions within the group, especially Jamaica’s dissatisfaction with the continued privileging of the LDCs in special adjustment financing and other arrangements under the CSME, despite the extension of such provisions to a new category of “disadvantaged” countries, regions and sections introduced into the RTC (article 1). The RTC makes a clear distinction between the two categories. The LDC is a fixed category of named countries (RTC Article 4) with special provisions for derogation across the various disciplines of the treaty; the disadvantaged categories are designated by CARICOM and the measures to address their disadvantage are considered “transitional or temporary” (RTC article 1 (b)).

Central to Jamaica’s claims (as reflected in the Commission to Review Jamaica’s Relations within the CARICOM and CARIFORUM Frameworks (Golding Report) which was largely accepted by the government) was the argument that the so-called LDCs were performing much better, in terms of growth and per capita GDP, than Jamaica. Moreover, the Report argued that the basis for the categorization of these states was never made on clear conceptual grounds and, in any event, changing fortunes of member states had made these distinctions no longer relevant.

This raises questions about the location of size as a structuring feature of regional organizations and its conceptual validity as a framework for understanding the workings of such organizations. In other words, can we assume size to be a static category and, even if we did, is it a reliable predictor of economic performance? This might be easier to answer in arrangements where substantial size asymmetries exist. This is blurred in CARICOM where, at the start, Barbados, whose size, both in terms of geography and population, was not significantly different from that of other countries in the OECS, was classified as an MDC, reflecting its stronger economic performance, the location of key regional and international organizations in Bridgetown and its more highly educated population. Moreover, almost all CARICOM countries carry massive debt burdens reflecting their small productive base; uncompetitive sectors; their exclusion from concessional financing given their middle income status, and the high costs of international borrowing; and anaemic growth, especially after the 1980s. Despite this, the perpetuation of the LDC as a distinct category in CARICOM suggests that their conditions are viewed as structural. This is borne out by the failure to move Guyana from MDC to LDC status, despite its designation by CARICOM HOG in 2000 as a “disadvantaged Country” in keeping with its status then as a highly indebted poor country. Haiti’s designation as an LDC by HOG in 1999 with the provision to review this after 10 years³ suggests that in the case of larger countries these constraints were not viewed as structural. Notwithstanding their perceived better performance, limitations to achieving competitiveness within the CSME remain a particular challenge for the OECS with their small firms.

The continued existence of the OECS suggests that size might also operate differently, occupying both the conceptual plane and the realm of experiences. Earlier dissatisfaction with CARIFTA’s focus on trade, at a time when they were not yet independent, drove the move to the more expansive CARICOM. The OECS represents a more coherent regional scheme which Panke et al. classify as a “small encompassing” scheme, with a small membership (seven independent countries and three associated territories) and a large number of competencies. The group, with the exclusion of the associated French Departments, shares a common currency (the Eastern Caribbean dollar-EC$) and central bank (The Eastern Caribbean Central Bank-ECCB); supreme court; unrestricted movement to live and work; a regional drug procurement system; and tighter governance arrangements, among others.

The existence of a tighter, more inclusive scheme within CARICOM whose ambitions for a regional court,⁴ common currency and unrestricted move...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Dedication Page
• Table of Contents
• Acknowledgements
• List of abbreviations
• 1 Introduction: the limits and possibilities of regional integration
• Part 1 The long fraught road of Caribbean integration
• Part 2 Towards a more political integration
• Part 3 Development and regional integration: possible futures
• Index