Ladies and Gentlemen, I, therefore, invite you to ask yourselves at this conference today why coordination and cooperation in practice have lagged the aspirations for greater integration.
The associated revenue losses are large and the benefits in terms of new and profitable investments are questionable. Pluralism and democracy have flourished, and racial and gender equality have long underpinned the political process.
Of course, with the large emigration of skilled labor from the region to industrial countries, the task of ensuring that the retooling of skills meet the evolving demands of the region is even more formidable. In practical terms, we at the Fund are now in the process of extending the regional work, which had hitherto been limited to the ECCU, to encompass the entire Caribbean.
Tax incentives and tax holidays have been used extensively in the Caribbean to promote investment. I will then address the question of what globalization means for the Caribbean and why integration is key to taking advantage of the opportunities afforded by this trend.
Extending financial integration beyond the region would also help reap the full benefits by diversifying risks and enlarging financing flexibility. Such integration serves to increase market flexibility and efficiency, and thereby increases the capacity of the region as a whole to recover from these shocks.
Moreover, the convergence of macroeconomic policies to a significant degree is essential before full monetary union, such as in the Euro area, can be considered.
The stability of the financial sector would need to be safeguarded by enhanced supervision. Coincidentally, or not so coincidentally, they are also very much on our radar screens at the International Monetary Fund. A regional risk pooling scheme, whose viability is currently being studied by the World Bank, is also an avenue to pursue seriously as the feasibility of obtaining insurance by individual countries at reasonable rates remains limited.
In the decade tofinancial depth indicators for the Caribbean showed great improvements. There is a strong consensus in the region that it is important to safeguard these achievements in the competitive global environment and we could not agree more with this view—human capital is the single most critical ingredient in making the most of the growth opportunities over the longer run.
Another attribute of the region is the demonstrated ability to seize on emerging comparative advantages—such as your thriving tourism sector. Clearly the imperatives for, and challenges of, regional integration belong naturally with this initiative.
You have collectively built the expertise in trade negotiations with the rest of the world. As we have observed in other emerging market countries, and there are some examples in the this region also, when financial conditions tighten, markets are quick and ruthless in punishing vulnerable economies.
A key policy area where coordination can make every country better off is that of tax concessions.
Regional Integration in a Globalizing World: Typically, reconstruction costs far outweigh those of precautionary measures.
I will begin by giving you my perspective of the Caribbean region and take stock of where it currently stands on the issue of integration.
Surely, this state of affairs is not beneficial for the region as a whole. A third area, where the benefits of regional cooperation are clear is in providing collective government services.
Indeed, studies that we have carried out at the Fund suggest that regional competition for investments, including the prevalent tax holidays, create a phenomenon of a "race to the bottom", where marginal effective tax rates in most countries come down to near zero or become negative.
Greater labor mobility should serve to ameliorate shortages within the region as some regional economies inevitably grow faster than others.
During the coming year, our work will focus on many of the same issues raised above, organized around three themes: As you know even more than I, it is not that the sentiment for integration has been absent—indeed, regional integration has been a top agenda item for Caribbean leaders for nearly half a century, but the action has not fully matched the rhetoric.
The Fund stands ready to assist you, in every way that it can, in helping globalization and regional integration improve the living standards of the people of the Caribbean—the ultimate objectives of the policy makers in this region as well as ours. At the risk of repeating myself, Ladies and Gentlemen, this point emphasizes the fact that regional integration needs to complement, not substitute for, integration with the world economy.
This impetus toward regional financial integration has also been contributed to by the extremely rapid growth of non-banking financial firms and attendant securitization, particularly in Jamaica and Trinidad and Tobago. Integration Despite a shared history and many of the shared experiences since independence that I have noted, it is surprising that there has not been more significant progress at regional integration.
Such coordination is both a necessary ingredient for, and a necessary outcome of, greater regional integration. Instead, they have been used to finance public debt to levels that are now among the highest in the world.
The Caribbean in perspective A significant strength of the Caribbean, as it faces the forces of globalization, is the existence in most countries of vibrant democracies. Globalization provides great benefits but competition in the international arena is also fierce.
It is in these respects that greater regional integration gains prominence.
Indeed, with greater integration comes the need to ensure that changes in monetary and exchange rate policy in one Caribbean country do not unduly impact on another.
For example, the ratio of broad money to GDP increased, on average in the region, from about 50 percent to about 80 percent during the period.
Not only does macroeconomic performance vary widely across countries, but the nature of the shocks also differs: The answer to these questions, Ladies and Gentlemen, lies in the fast pace of globalization which has fundamentally changed the external environment facing the region.1 Globalisation and Cultural Identity in Caribbean Society: The Jamaican Case Abstract The Caribbean is a region whose very name reverberates from the early effects of.
Impact of Globalization on Caribbean Economies. Uploaded by Jason Richards. Related Interests. Globalization; takeovers and regional expansion 7. Restructuring and reorganization of government activities; greater focus on macro economic stability and greater focus on creating an investment friendly environment.
The Impact of 4/4(6). GLOBALISATION AND THE CARIBBEAN Patrick Kendall Economist Caribbean Development Bank to provide some understanding of globalisation and of its impact on the Caribbean. The paper begins with a discussion of the definition of globalisation and of the dating of the.
Latin America and the Caribbean Transition countries of Europe and Central Asia Western Europe and North America regional and global levels. Participants included over Another common concern was the impact of globalization on culture and identity.
Some saw it as. Press Release TAD/ IMPACT OF GLOBALIZATION ON VARIOUS AREAS OF WORLD DISCUSSED BY HEADS OF UN REGIONAL COMMISSIONS Fourteen Statements Also Made in UNCTAD X General Debate.
The IMF Press Center is a password-protected site for working journalists. with greater integration comes the need to ensure that changes in monetary and exchange rate policy in one Caribbean country do not unduly impact on another.
in helping globalization and regional integration improve the living standards of the people of the.Download