REGIONAL INTERGRATION AND DEVELOPMENT Presentation Overview Define the concept of Regional Integration Outline the current Regional Integration process Compare the current Integration process on three levels (market, economy and political) Limitations and Challenges of the Regional Integration Process Regional Integration and Development Conclusion Defining the concept of Regional Integration Regional integration has been defined as an association of states based upon location in a given geographical area, whose terms are fixed by a treaty or other arrangements. Regional integration initiatives, should fulfill the following functions: the strengthening of trade integration in the region the creation of an appropriate enabling environment for private sector development the development of infrastructure programmes in support of economic growth and regional integration contribution to peace and security in the region the strengthening of the region’s interaction with other regions of the world. Defining the concept of Regional Integration Economic Integration: the elimination of tariff and nontariff barriers to the flow of goods, services, and factors of production between a group of countries. Market Integration: is where the rules and procedure in the operation of the market is harmonized between a group of countries. Market Integration can take place on a sectorial level e.g. finance. Political Integration: the creation of supranational units among a group of countries duly empowered to strengthen the decision making process. The Current Regional Integration Process OECS Economic Union CSME • Bilateral Arrangements - WTO Comparison of the Integration Process OECS Economic Union CARICOM Single Market Bilateral Arrangement and Economy Unrestricted movement of the factors of production (goods, services, capital, people) Unrestricted movement of the factors of production (goods, services, capital, people) Restrictions /structured movement of the factors of production. Use of a single currency through the ECCU No single currency Restrictions on capital movements based on national legislations. Harmonization of policies and procedure for the financial sector e.g. banking No harmonization of policies and procedure for the financial sector. Commitment for the financial sector is based on national legislations. Greater degree of legislative harmonization. Legislative harmonization No legislative harmonization. relates to the implementation of the CSM. Comparison of the Integration Process OECS Economic Union CARICOM Single market and the Economy Bilateral Agreements Creation of an OECS No enforcement Assembly to enact legislation mechanism. and policies in the Economic Union. Enforcement is based on commitment made in the agreement. Authority to develop subregional policies in the areas of tourism, environment, agriculture. Policies are developed based on the Treaty Chaguaramas. Implementation of policies are based on commitment made in the agreement. Existence of the Eastern Caribbean Court system Creation of the CCJ – specialized court Establishment of dispute mechanism. Single procurement framework for No single procurement framework. Procurement framework based on commitment s Limitations and Challenges of Regional Integration The high degree of economic differentiation among member states, which enormously complicates the task of finding common ground on intra-regional and external policies. Lack of unequivocal political commitment to regionalism among political leaders and lack of leadership on, or champions of, the regional project. Policy incoherence within and among member countries on key economic, social and foreign policy issues (e.g. on the questions of relations with Taiwan vs The People’s Republic of China, Petrocaribe/ALBA, or effective responses to the global financial and economic crisis). Limitations and Challenges of Regional Integration Shifts in the regional, hemispheric and global contexts, including the proliferation of competing regional organisations such as ALBA. Limited regional and national capacity to follow-up and implement decisions and no legal capacity of enforcement. Emergence of new ‘existential threats’ to regional states in the form of climate change, the rising incidence and cost of natural disasters and the impact of proliferating transnational crime. States are more inward looking in relation to development of policies. Regional Integration and Development Financial stability Development of a quality assurance framework for the production, packaging of goods and services Increase levels of competitiveness Policy convergence and coordination Promotes good governance Modernization of the legislative framework Creates the enabling environment for businesses to expand and grow Regional Integration and Development Increases regional exports and trade Increases the regions international awareness and voting power Increases the regions ability to access international donor resources Expands national economies and opportunities Conclusion It is for you to determine whether Regional Integration impacts positively or negatively on development in the Caribbean.