It’s understood that regional economic integration means that there will be an unequal distribution of benefits, with a disproportionate share accruing to the more developed countries.
It’s likewise considered a given that the system would then arrange for a transfer of funds to the less developed countries to compensate for the discrepancy.
The European Union is the prototype of this model, and its glowing results speak volumes to the system’s potential. The transfer of resources to the less developed members not only played significant roles in the economic growth and development of Europe’s lesser developed nations such as Ireland and Portugal, but also helped create a sense of community that has well served all of Europe.
Members of the Caribbean Community (Caricom) were hoping for a similar endgame when they modeled their regional integration arrangements after the process in Europe.
Only the affirmative action of giving back to the more needy countries is yet to happen with Caricom, where, instead, one of the region’s least developed countries in Jamaica is asked to subsidize its larger, more prosperous neighbors.
The member states of Caricom are divided into two classes, namely, the “more developed countries” (MDCs) and the “less developed countries” (LDCs). The classifications represented a division on the basis of size, where the MDCs were the larger countries such Guyana, Jamaica, Trinidad and Tobago, and Barbados and the LDCs were the smaller countries such as the Organization of Eastern Caribbean States (OECS) and Belize, which is included although it is among the largest countries in Caricom.
At the inception of the integration arrangements, size and level of development roughly paralleled each other calculated on the basis of size of population and annual per capita income. Today, Guyana is no longer expected to perform the duties of an MDC because it is a “least developed country” by United Nations classification and a Highly Indebted Poor Country.
Caricom’s affirmative actions are of two kinds; first, the LDCs are allowed permanent special and differential treatment in the form of derogations from obligations which the MDCs have to meet. In addition, the expenses of operating Caricom are calculated on the basis of size of GDP, so Jamaica is responsible for the largest share. Second, all member states are required to contribute to the Caribbean Development Fund (CDF), but the beneficiaries are confined to the LDCs in its first dispensation.
This situation discriminates against Jamaica, having the country pay into the CDF funds which will be used by countries with much higher per capita incomes, but who happen to have a smaller population. This is unfair because Jamaica is transferring resources to countries which are economically much better off. The per capita income of Jamaica is $4,750 USD; for Antigua it is $10,610 and for St Kitts it is $9,980.
Size cannot be the basis for perpetuating the outdated and unjust classification of member states. The redundant division of member states in the two groups and the attendant nomenclature must be abolished because the larger, but poorer countries, cannot permanently subsidize the smaller wealthier ones. All countries must be beneficiaries of the CDF.
There cannot be a Caribbean Community or CSME with differential treatment which is not based on development; otherwise it is not differential treatment, but discrimination based on size of population.
It was unfair, discriminatory treatment like this that prompted Jamaica to leave the West Indies Federation.