GLOBAL DEVELOPMENT STUDIES
Copyright © 2003 International Development Options
All Rights Reserved
Volume Three Winter 2002-Spring 2003 Numbers 1-2.
Theme: THE TENTH ANNIVERSARY OF THE WEST INDIAN COMISSION REPORT: ASSESSING THE
PROGRESS OF CARICOM NATIONS IN IMPLEMENTING THE COMMISSION'S RECOMMENDATIONS
MONETARY ASPECTS OF CARICOM INTEGRATION: A REVIEW AND APPRAISAL
Department of Economics
The University of the West Indies
St. Augustine Campus
Published online: February 10, 2017
The Report of the West Indian Commission (1992) called for the establishment of a monetary union within CARICOM. That is, the commissioners wanted to see the region move towards a very advanced stage of economic integration by having a single currency. Ten years later, the region seems to be no closer to achieving this objective than when the call was first made. This is so despite the widespread support for a monetary union by academics and politicians throughout the region. Although the global environment has changed since the early 1990s, the need for the region to move toward a monetary union remains an important point of contention. In fact, it can be argued that the changes in the global environment make the creation of such a union even more imperative. That is, despite the failed attempts of the past, global developments, and relatively weak economic linkages among the islands, the goal of a monetary union remains one that should be pursued within the CARICOM region.
This article explores some of the major issues affecting the establishment of a Caribbean Monetary Union (CMU). The idea of a common Caribbean currency is not new since there have been several efforts at cooperation in the past. These efforts are briefly reviewed in section two of the article. Section three examines some of the key global economic developments over the past ten years that have affected the region. The main issues affecting the CMU are examined in section four. A complete adoption of the U.S. dollar as an alternative to the CMU has also been raised as an option for the region, and this issue is explored in section five. Some of the socio-political considerations for monetary integration are discussed briefly in section six. Finally, section seven summarizes the analysis and presents some policy recommendations.