Abstract Six 2003

GLOBAL

DEVELOPMENT STUDIES

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Volume Three Winter 2002-Spring 2003 Numbers 1-2.

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Theme: THE TENTH ANNIVERSARY OF THE WEST INDIAN COMISSION REPORT: ASSESSING THE

PROGRESS OF CARICOM NATIONS IN IMPLEMENTING THE COMMISSION'S RECOMMENDATIONS

GROWTH, STRUCTURAL CHANGE AND VULNERABILITY IN CARICOM COUNTRIES

Ramesh Ramsaran and Roger Hosein

University of the West Indies

St. Augustine Campus, Trinidad

Published online: February 10, 2017

ABSTRACT

The post-war experience has offered us useful insights into the causes of economic growth and development without producing a coherent set of principles which can be universally applied as a formula in all cultures and situations. Differing levels of poverty and the capacity to adjust to policy changes reflect differences in levels of economic progress and in the social and institutional factors that have emerged from varying historical and cultural experiences. We know that there are numerous and complex factors which drive the growth process, and that growth and development are not identical. We know, too, that the growth dynamic can come from within or from outside countries, or from both, and in the absence of certain kinds of structural changes, growth achieved in one period may not be sustainable in another. We know that changes in economic variables do not necessarily translate into improved social well-being. We know that while natural resources may provide one source of growth, critical stimuli can come from a variety of sources including human capital, governance, management, and economic and social policies. There have been considerable discussions on the relationship between size and development; and while some feel that size is not an impediment to development, others argue that size and location are associated with certain types of vulnerabilities which need to be considered in assessing economic viability. Development questions are not unique and, therefore, there can be no unique answers.

Based on per capita income, CARICOM countries are generally ranked as middle-income countries with average incomes exceeding those of many other developing countries. However, growth has been erratic, depending on the movement in the volume and prices of a narrow range of exports, tourism, and foreign investment. Changes in standards of living tend to depend heavily on foreign exchange availability. National policies have failed to deal effectively with the issues of employment, sustained development, and poverty eradication. Integration as a strategy to fuse the politically distinct units into a viable economic entity has largely been a failure, as national programs continue to take precedence over collective actions and collaboration.

Against the background of the liberalizing global policy framework and the strengthening of regional blocs, this article discusses the growth experience in CARICOM countries, the nature of structural change, weaknesses in the integration strategy, and the prospects facing the region in the emerging global environment. The first section discusses some of the theoretical assumptions influencing Caribbean development strategies. In the second section, we examine the recent growth experience and structural changes which have occurred in Caribbean economies, indicating continuing areas of weakness. The third section discusses the integration experience and its failure to have a significant impact on Caribbean development. This is followed by some observations on the region’s vulnerability and the prospects facing the Caribbean in the emerging global economy. The final section offers some concluding remarks.