Is the Whole Greater than the Sum of its Parts? Strengthening Caribbean Regional Integration

80 Pages Posted: 28 Feb 2020

See all articles by Abdullah Al-Hassan

Abdullah Al-Hassan

International Monetary Fund (IMF)

Mary Burfisher

International Monetary Fund (IMF)

Julian T.S. Chow

International Monetary Fund (IMF)

Ding Ding

International Monetary Fund

Fabio Di Vittorio

International Monetary Fund (IMF)

Dmitriy Kovtun

International Monetary Fund (IMF)

Arnold McIntyre

International Monetary Fund (IMF)

Inci Otker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department; World Bank

Marika Santoro

International Monetary Fund (IMF)

Lulu Shui

International Monetary Fund (IMF)

Karim Youssef

International Monetary Fund (IMF)

Date Written: January 2020

Abstract

Deeper economic integration within the Caribbean has been a regional policy priority since the establishment of the Caribbean Community (CARICOM) and the decision to create the Caribbean Single Market and Economy (CSME). Implementation of integration initiatives has, however, been slow, despite the stated commitment of political leaders. The 'implementation deficit' has led to skepticism about completing the CSME and controversy regarding its benefits. This paper analyzes how Caribbean integration has evolved, discusses the obstacles to progress, and explores the potential benefits from greater integration. It argues that further economic integration through liberalization of trade and labor mobility can generate significant macroeconomic benefits, but slow progress in completing the institutional arrangements has hindered implementation of the essential components of the CSME and progress in economic integration. Advancing institutional integration through harmonization and rationalization of key institutions and processes can reduce the fixed costs of institutions, providing the needed scale and boost to regional integration. Greater cooperation in several functional policy areas where the region is facing common challenges can also provide low-hanging fruit, creating momentum toward full integration as the Community continues to address the obstacles to full economic integration.

Keywords: Real sector, Economic integration, Economic policy, Regional economics, Financial crises, Regional Integration, Caribbean, CARICOM, CSME, Cooperation, WP, ECCU, trade cost, CARICOM member

JEL Classification: F15, F22, F36, F40, F60, G20, H20, J61, O10, Q54,

Suggested Citation

Al-Hassan, Abdullah and Burfisher, Mary and Chow, Julian T.S. and Ding, Ding and Di Vittorio, Fabio and Kovtun, Dmitriy and McIntyre, Arnold and Ötker-Robe, İnci and Santoro, Marika and Shui, Lulu and Youssef, Karim, Is the Whole Greater than the Sum of its Parts? Strengthening Caribbean Regional Integration (January 2020). IMF Working Paper No. 20/8, Available at SSRN: https://ssrn.com/abstract=3545296

Abdullah Al-Hassan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mary Burfisher

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Julian T.S. Chow (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ding Ding

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Fabio Di Vittorio

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Dmitriy Kovtun

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Arnold McIntyre

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

İnci Ötker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department ( email )

United States
202 623-7000 (Phone)
202 623-4661 (Fax)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Marika Santoro

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Lulu Shui

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Karim Youssef

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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