POB 2 Regional Integration
POB 2 Regional Integration
POB 2 Regional Integration
Trading Bloc - made up of a large number of countries, with the same political and economic aims,
linked by special trading arrangements among them.
Free trade Area - an arrangement whereby a group of countries agrees to remove the tariff and non-tariff
barriers to trade among them.
Free Trade Area of the Americas (FTAA) -The FTAA is an expansion of NAFTA. It is an organization of
34 countries of the Americas including North and South America, Canada and the Caribbean except for
Cuba.
North American Free Trade Agreement (NAFTA) - This agreement allows duty free entry of goods
among Canada, United States and Mexico.
Intra-Regional Trade - countries in the region buying locally produced goods from or selling locally
produced goods to, other countries in the region.
Fiscal Policy - the use of government spending and revenue collection to influence economy.
Monetary Policy - the process a government, central bank or monetary authority of a country uses to
control the supply of money, availability of money and cost of money or rate of interest to attain a set of
objectives oriented towards the growth of the economy.
Caribbean Basin Initiative (CBI) - CBI allows certain Caribbean and Central American products duty
free entry into the United States. Products exported include chemicals, manufactured goods, fresh fruits
and vegetables.
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World Trade Organization (WTO) - The WTO is an international organization that monitors and
regulates trade among the nations of the world based on trade agreements by member states. The WTO
replaces the General Agreement on Tariffs and Trade (GATT).
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2: The Major Challenges Facing the Caribbean Region
Caribbean countries face similar economic problems, for example, the difficulty of getting imports priced to a level
they can afford as well as the difficulty competing with their exports. Also most Caribbean countries lack the
proper local infrastructures to create suitable employment for their populations.
Major Challenges:
(a) Small size, small national markets
(b) Lack of diversification
(c) Unemployment and underemployment
Unemployment - (or joblessness) occurs when people are without work and actively seeking work.
The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by
dividing the number of unemployed individuals by all individuals currently in the labor force.
Globalization has contributed significantly to unemployment in the Caribbean. With the removal of trade barriers,
some industries have not been able to compete globally. The lack of adequate skills that are required for the new
industrial paradigm for example, information technology skills have also contributed to the problem of
unemployment.
A high level of unemployment among the young people of the Caribbean may results in various social problems,
as survival may depend on illegal activities.
Reasons for unemployment
Businesses e.g. multinationals closing down
lack of investment to create new businesses
lack of skills training
Underemployment - refers to an employment situation that is insufficient in some important way for the worker,
relative to a standard. Examples include holding a part-time job despite desiring full-time work, and over
qualification, where the employee has education, experience, or skills beyond the requirements of the job.
(d) Low levels of production and productivity
(e) Differences in resource distributions
(f) High levels of indebtedness (debt burden)
Many Caribbean countries have high debt- to-GDP ratios. This ratio is the amount of national debt of a country
as a percentage of its Gross Domestic Product. High debt-to-GDP can stifle an economy as a large portion of its
GDP is consumed in debt payment and very little is left for investment in the economy. A very low debt- to- GDP
ratio is desirable for economic growth and development.
(g) High level and cost of imports
(h) Shortage of skilled workers
(i) Inadequate technology
(j) Low value of exports
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(k) Difficulties in accessing markets of developed countries
(l) Shortage of capital
(m) Vulnerability to natural disasters
Population Density - Population density Refers to the average number of people living on every square kilo meter
in a country. Very high population densities can indicate overpopulation. This occurs when the facilities in a
location, are not able to serve the number of persons in that location. This will cause heavy competition for jobs,
schools, health facilities etc.
Migration - Caribbean people migrate to first world countries in search of opportunities such as employment and
education. When skilled and professional workers migrate, Caribbean countries may experience shortages in
critical areas such as health care. Loss of skilled workers from industry will also retard growth and development.
Social problems may arise when children are left in the care of grandparents and other relatives who have
challenges to discipline them.
Sourcing Capital and Raw Materials - While the Caribbean might be rich in certain natural resources such as
bauxite, oil and gold the region lacks other very important resources such as capital and entrepreneurial skills.
Capital is important as it increases production through the use of machinery, equipment and money invested. The
spirit of entrepreneurship is necessary for the creation of new business ideas and entrepreneurship skills are
important for the successful running of the businesses.
Economic Dualism in the Region - Economic dualism occurs in countries where there exist two opposite economic
sectors. One sector is characterized by development, capital intensive industries, large scale farming and
technological advancement, and the other sector is characterized by subsistence farming, labour intensive
industries, handicraft industries and simple trading means of survival.
Other Economic Problems Facing Caribbean Economies Are:
• . Dependence on single-crop agricultural production and exports - (b) lack of diversification
• Government plays a dominant role in employment, consumption and production
• . Flight of the educated to the developed countries
• High unemployment and under-employment caused by lack of industrial development
• Under-development of domestic markets to spur domestic production
• Over-consumption of imported, particularly US produced goods
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Dr. Eric Williams of Trinidad and Tobago stated after Jamaica's withdrawal that "ten minus one equals nothing",
which meant that Jamaica's withdrawal would make it impossible to bring about a strong and unified federation, so
he declared Trinidad and Tobago would also withdraw.
In 1961, the federation was dissolved. Both Trinidad and Jamaica gained their independence in 1962.
Despite the failure of creating a federation of Caribbean states, the idea of regional integration was never fully
lost. A number of regional organizations were formed with the aim of fostering Caribbean unity and development.
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CARICOM Members
The CARICOM member states are: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica,
Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, St. Kitts and Nevis, St. Vincent and the
Grenadines, Suriname, and Trinidad and Tobago.
The meetings of the Heads of Government and of the ministerial Councils, also known as institutions, represent
the main means of achieving consensus on regional issues and policies. The Conference of Heads of
Government is the highest decision-making forum and the final authority of the Community. It is made up of the
Heads of Government of the Member States. Because of the increasing number of issues to be decided and
implemented, a subset of the Conference, called the Bureau, was instituted in 1992. The Bureau meets as
necessary and reports to the Conference.
The Community Council of Ministers is the second highest organ of CARICOM, and consists of Ministers
responsible for Community Affairs and any other Minister designated by Member States in their absolute
discretion. The Community Council has primary responsibility for the development of Community strategic
planning and co-ordination in the areas of economic integration, functional co-operation and external relations.
The Community Council also has the responsibility for establishing a system of regional/ national consultations in
order to ensure the effectiveness of the decision-making and implementation processes in the Community.
The following Ministerial Councils were also established to streamline the functioning of the Community and
increase the smooth functioning of the different sectors:
The Council for Trade and Economic Development (COTED), which has been charged with the responsibility for
the promotion of trade and economic development of the Community;
The Council for Foreign and Community Relations (COFCOR), which has been charged with responsibility for
determining relations between the Community, and international organizations and Third States;
The Council for Finance and Planning (COFAP), which has been charged with primary responsibility for economic
policy coordination and financial and monetary integration of Member States
The Council for Human and Social Development (COHSOD), which is responsible for human and social
development in the Community especially in the areas of health, education, labour and industrial relations, youth,
women, and sports
The following Subsidiary Bodies have also been established:
(a) The Legal Affairs Committee composed of Ministers responsible for Legal Affairs and/or Attorneys-
General of Member States;
(b) The Committee of Central Bank Governors consisting of the Governors and Heads of Central Banks of
Member States or their nominees;
(c) The Budget Committee consisting of senior officials of Member States.
The CARICOM Secretariat, located in Guyana, is the principal administrative organ of the community.
Institutions of CARICOM
Caribbean Disaster Emergency Response Agency (CDERA) – headquarters is in Barbados
Caribbean Meteorological Institute (CMI) – headquarters s in Barbados
Caribbean Food Corporation – headquarters in Trinidad and Tobago
Caribbean Environmental Health Institute (CEHI) – headquarters is in St. Lucia
Caribbean Agricultural Research and Development Institute – headquarters is in Trinidad on the UWI St
Augustine Campus
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Caribbean Regional Centre for the Education and Training of Animal and Veterinary Public Health
Assistants (REPAHA) – headquarters is in Guyana
Association of Caribbean Community Parliamentarians (ACCP)
Caribbean Centre for Development Administration (CARICAD) – headquarters is in Barbados
Caribbean Food and Nutrition Institute (CFNI) – has two locations, namely at the Mona Campus of UWI
(Jamaica) and the St. Augustine Campus of UWI (Trinidad).
Caribbean Court of Justice (CCJ)
Associate Institutions of CARICOM
Caribbean Development Bank (CDB) – located in Barbados
Caribbean Examination Council (CXC) – located in Barbados
Caribbean Law Institute/Caribbean Law Institute Centre (CLI/CLIC) – located at the Faculty of Law, Cave
Hill Campus of the UWI, Barbados
University of Guyana – located in Guyana
University of the west Indies – three campuses located in Jamaica, Trinidad and Barbados.
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The preservation and conservation of the Caribbean Sea. The preservation and conservation of this
natural resource is a mandate of primordial importance for the ACS; a manifestation of the duty of all
Caribbean citizens to protect this very tangible shared birthright.
Sustainable Tourism. The importance of the tourism industry to the economic development of all the
Members of the ACS transcends questions of physical size or language.
Trade and Economic External Relations. The ACS provides a framework for the dialogue and activity
necessary to further advance economic integration and intra-regional trade and investment, thereby
improving the economic competitiveness of the Greater Caribbean region.
Natural Disasters. The continued vulnerability of all countries and territories of the Greater Caribbean to
the physical ravages and economically crippling consequences of natural disasters is a theme of the utmost
importance on the regional agenda
Transport. The proper functioning of efficient and viable intraregional air and maritime routes not only
facilitates closer intraregional relations, but represents a fundamental base in the achievement of
cooperation in the aforementioned areas
Membership
Member States Associate Member States
Antigua and Barbuda El Salvador Panama Aruba
Bahamas Grenada St. Kitts and Nevis Curaçao
Barbados Guatemala St. Lucia France
Belize Guyana St. Vincent and the Grenadines Sint Maarten
Colombia Haiti Suriname Turks and Caicos Islands
Costa Rica Honduras Trinidad and Tobago
Cuba Jamaica Venezuela
Dominica Mexico
Dominican Republic Nicaragua
Observer States
Argentina Finland Peru
Brazil India Russia
Canada Italy Spain
Chile Netherlands Turkey
Ecuador South Korea Ukraine
Egypt Morocco United Kingdom
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the Region. This would mean the coordination of foreign exchange and interest rate policies, the harmonization of
tax regimes and of laws and the convergence of economic performance among other measures
The CARICOM Single Market and Economy is not a political union The CARICOM Single Market and Economy is
not a replacement for national identity and sovereignty
Reasons for Single Market
There is more economic and political strength from a grouping of 15 countries as against the strength of a single
country.
The small states of the Caribbean face better prospects within the CARICOM grouping than they do if they face
mega-blocs and superpowers across the negotiating tables individually.
The Single Market and economy creates more opportunities for employment, investment, production and trade for
the inhabitants of the Caribbean Community.
• Trade liberalization is the movement towards the removal of trade barriers among the members
of World Trade Organization (WTO).
• Globalization is the process by which countries all over the world are becoming connected or
similar especially because large companies are doing business in many different countries.
Implementation of CARICOM Single Market and Economy
(a) By amending the Treaty which established the Caribbean Community (the Treaty of Chaguaramas)
(b) By modification of the national laws, policies and programmes of Member States to accommodate
these and other decisions made at the regional level
(c) By active interest in and participation of the Region’s people in the CARICOM Single Market and
Economy.
The Treaty is being amended by way of Protocols. There are nine Protocols:
• Protocol I addresses Organs, Institutions, Procedures of the Community
• Protocol II addresses Right of Establishment. The Right to provide Services and the Right to
move Capital by any CARICOM national in the Community, which has been defined to
include the Single Market and Economy
• Protocol III address the Community Industrial Policy
• Protocol IV addresses Trade Liberalization
• Protocol V addresses the Community Agricultural Policy
• Protocol VI addresses the Community Transport Policy
• Protocol VII addresses Disadvantaged Countries, Regions and Sectors
• Protocol VIII addresses Disputes Settlement
• Protocol IX addresses Rules of Competition
These Protocols are now Chapters within the Revised Treaty.
Membership
• Suriname and Trinidad and Tobago were the first six to implement the CARICOM Single Market on
January 1, 2006.
• Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the
Grenadines were the next batch of members (six in all) that joined the CSM on July 3, 2006
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• Montserrat -Current full members of CARICOM and signatory for the CSME
The work of the Secretariat is constantly informed by considerations of cost effectiveness in the context of the
need to respond to the increasing challenges placed on it, taking into account the limited fiscal capacities of its
members. The Secretariat consists of four main Divisions namely: Division of the Office of the Director General,
Social and Sustainable Development Division, Corporate Services Division and Economic Affairs Division. These
four Divisions oversee the strategic direction of the Organization, as well as the work of a number of specialized
institutions, work units or projects located in six countries - Commonwealth of Dominica, Saint Lucia, Belgium,
Switzerland, Canada, and the United States of America.
In carrying out its mission, the OECS works along with a number of sub-regional and regional agencies and
institutions. These include the Eastern Caribbean Central Bank (ECCB), the Caribbean Community (CARICOM)
Secretariat, and the Caribbean Development Bank (CDB).
Functions - The objectives of the ACS are enshrined in the Convention and are based on the following: the
strengthening of the regional co-operation and integration process, with a view to creating an enhanced economic
space in the region; preserving the environmental integrity of the Caribbean Sea which is regarded as the
common patrimony of the peoples of the region; and promoting the sustainable development of the Greater
Caribbean. Its current focal areas are trade, transport, sustainable tourism and natural disasters.
OECS Commission
The OECS Commission is the principal Organ responsible for the general administration of the Organization. The
OECS Commission comprises of the Director-General, who is responsible for the day to day administration of the
Organization, and will convene and preside at meetings of the OECS Commission. The Commission will also
include one Commissioner of Ambassadorial rank named by each Member State. This Commissioner will
represent the OECS Commission in the Member State.
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The OECS Commission’s functions include the provision of Secretariat services to the Organs of the
Organization, including coordinating of meetings of the Organs of the Organization; and acting on decisions,
recommendations or directives approved at such meetings. The OECS Commission will make recommendations
to the OECS Authority and the Council of Ministers regarding the formation of Acts and Regulations of the
Organization; and undertake other work and studies, and perform other services relating to the functions of
Organization as required under this Treaty or by the OECS Authority or by any other Organ.
(b) update the consensus of the Member States on issues falling to be determined by the Conference;
(c) facilitate implementation of Community decisions, both at the regional and local levels, in an
expeditious and informed manner;
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(d) provide guidance to the Secretariat on policy issues
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The CARICOM Single Market CSME
The CARICOM Single Market and Economy (CSME) is intended to benefit the people of the region by providing
more and better opportunities to produce and sell our goods and services and to attract investment. It will create
one large market among the participating member states.
Deepening economic integration.
Free trade of services.
Free movement of capital, labour and the freedom to establish business enterprises anywhere within
CARICOM states.
Widening of membership.
A common currency/single currency.
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- Economic Policy measure: coordinating and converging macro-economic policies and
performance; harmonizing foreign investment policy and adopting measures to acquire,
develop and transfer appropriate technology;
-Monetary Policy measures: coordinating exchange rate and interest rate policies as well
as the commercial banking market;
- Fiscal Policy measures: including coordinating indirect taxes and national budget deficits.
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The Caribbean Single Market And Economy: Is It Realistic Without Commitment To Political Unity?
Havelock R. Brewster
A. From Common Market to Single Market and Economy
A 'single market' is a space within which goods and services, people, capital and technology freely circulate.
When created among States, it involves, so far as market transactions are concerned, the complete removal of
physical, technical and fiscal frontiers. Thus, for example, moving goods or services, capital or people from
Trinidad and Tobago to Barbados would be no different from moving them across parish borders in Barbados
itself.
A single market is thus somewhat different from a 'common market' which is an arrangement among States to
remove market barriers, while the frontiers themselves remain. In the Revised Treaty of Chaguaramas, unlike the
Single European Act (1986), there is no concept of an area without frontiers. In fact, to the contrary, the Treaty
implicitly rests on the maintenance of frontiers, within which it is the aim to liberalize conditions of access to
markets. Thus, although the Treaty refers to a 'single market' this is in effect no different from the pre-existing
common market.
The Revised Treaty of Chaguaramas goes further to establish a 'single economy.' This requires unified economic
and monetary policies, including related legislation, executive instruments and institutions. One of the most
important instruments of a single economy is a single currency – just as there is a single Barbados currency for all
parishes of the country.
The Revised Treaty actually provides, in principle, for most aspects of a single economy, incorporating the original
protocols on establishment, services and capital; industrial policy; trade policy; agricultural policy; transport policy;
disadvantaged countries, regions and sectors; competition policy and consumer protection; dumping and
subsidies; dispute settlement. In addition, macroeconomic policy convergence, fiscal policy harmonization,
monetary convergence, fiscal policy harmonization, monetary union/single currency, as well as the Caribbean
Court of Justice, complete the mandate for implementing the Caribbean Single Market and Economy (CSME).
The free trade regime and the common external tariff (CET) were core features of the earlier Common Market,
and of course are essential components of a CSME. There are a few notable single economy omissions, such as
the absence of provisions in the Treaty for Community Transnational Enterprise Law, Labor Law and Property
Law.
Single Market
Free Movement of Goods - According to the Caribbean Community Secretariat (CCS) some 95 percent of intra-
regional trade is free of barriers. Nevertheless, after 30 years of the Community's existence, intra-regional exports
amount (in 2000) to only 18 percent of total regional exports, having increased from 11.5 percent in 1990.
Moreover, in domestic value-added terms the absolute value of intra-regional trade would be substantially less
than its nominal value (perhaps one-half). While the increase that took place over the last decade is almost wholly
attributable to Trinidad and Tobago, some 75 percent of this country's intra-regional exports consists of mineral
fuels, lubricants, chemicals and related materials that would have taken place without the free trade regime.
There has been a small increase in the intra-regional exports of Barbados but this has been offset by the
complete stagnation in those of the Eastern Caribbean States and a substantial decline in Jamaica's.
Intra-regional trade probably could be increased to some extent since there still remains in several Member States
unauthorized barriers and licenses, as well as discriminatory internal taxes and other fiscal charges. However,
even with the removal of these remaining restraints, intra-regional trade is unlikely to rise to a significantly higher
level without the kind of transformation of the productive structure that would make this possible.
Free Movement of Services -No Member State has yet enacted legislation to put into effect the Treaty provisions
on the removal of restrictions to trade in services (including self-employed service providers, entrepreneurs,
technical, managerial and supervisory staff, spouses and immediate dependent family members).
Free Movement of Persons - All States will two exceptions (and The Bahamas that does not participate in the
Common Market) have implemented legislation enabling the movement without work permits of certified tertiary
graduates (skills). Movement is nevertheless subject to constraints, the severity of which varies from State to
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State, such as national certification requirements, immigration procedures, administrative delays, the rights and
status of family members, and other contingent rights. Most States have not yet put into effect legislative and
administrative arrangements for the movement of media workers, artistes, musicians, and sportspersons.
Although the skills legislation has been adopted in most Member States for more than five years, relatively few
skilled persons have actually moved to other Community States (statistics are not available). Ironically, there
seems to have been more movement among unskilled persons though they are not included in the "free
movement" legislation.
Free Movement of Capital - To date, no Member State has enacted legislation or implementation programs to put
into effect the Treaty provisions on the removal of restrictions to the free movement of capital. Complicating issues
that need to be determined concern the different modes under which capital moves in and out of Member States
that are governed by specific national laws (e.g. direct foreign investment, portfolio investment, banking,
insurance, securities, real estate, industrial establishment, profit and capital repatriation, etc) and also vary from
State to State.
Common External Protection
While most States have adopted de jure the fourth phase of the CET, a common external protective regime is still
far from having been achieved. This is due to the incomplete or defective application of the CET, and the
increasing use of derogations from it; the presence of non-tariff barriers, including standards, health and
environmental protective measures, subsidies, and inter-country differences in value-added and in the application
of rules of origin.
Single Economy
Sectoral Policies - The Treaty provides for sectoral policies in respect of agriculture, industry, services and
transport. These policies are mostly expressions of intentions to promote, cooperate, collaborate, and coordinate
actions in respect of a variety of common problems. They fall very far short of what would be expected of sectoral
policy in a single economic space. Even at the level of intergovernmental cooperative actions (with the exception
of limited aspects of the tourism sector) little or nothing has actually been achieved.
Macroeconomic Coordination - The Treaty provisions are also expressions of intentions to promote, collaborate,
coordinate policies conducive to sound national macroeconomic policies, and again are not what would be
expected of a commitment to create a single economic space. In fact, even at the level of intergovernmental
collaboration on macroeconomic policies very little has been done or even attempted.
The Council for Finance and Planning (COFAP) itself nevertheless recognized (in 2001) that 'lack of
macroeconomic coordination could result in severe disintegrative effects… and that countries must be prepared to
cede some degree of sovereignty in economic policy formulation to the regional level.'
Fiscal Policy Harmonization - Technical work on the issue has scarcely begun. COFAP agreed that a tax
harmonization framework and tax harmonization guidelines should be developed for its consideration, and a
Working Group on Fiscal Policy has been established. Likewise, a Community Investment Policy, including a
harmonized system of investment incentives, is a long way off as technical preparations are still in progress.
A Protocol on a Harmonized Corporation Tax Structure has been prepared and is currently going through the
process of intergovernmental examination. The CARICOM Double Taxation Agreement has been signed and
ratified by most Member States and is effective among eight of them that have put the enabling legal framework in
place.
Monetary Union/Single Currency - The approach to this issue has been to monitor set macroeconomic parameters
against pre-determined targets, so as to gauge the extent of macroeconomic convergence, the accepted pre-
condition for moving to a single currency. Not only has attainment of the targets generally been below expectation
in respect of all parameters, but also no mechanisms are provided to correct underperformance.
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In considering the issue of monetary union, COFAP recently accepted the recommendation of the Committee of
Central Bank Governors that a monetary union involving all CARICOM Member States is not achievable at this
point in time, but should remain a long-term goal. For all practical purposes a single currency for the single market
has been abandoned.
Institutional strengthening cannot be a substitute for political conviction, for the Revised Treaty of Chaguaramas
merely recognizes a number of narrowly defined technical objectives, such as 'improved standards of living and
work,' 'enhanced levels of international competitiveness,' 'enhanced functional cooperation.' There is nothing in
the Treaty objectives that commits States to the essential values of Caribbean Community. Yet the creation of a
unified economic space is now the declared purpose of the Community. For example, a single economy with a
multiplicity of currencies is a contradiction in terms. Thus, while declaring their commitment to high levels of
regional economic unity, governments continue to operate in a mode of full national sovereignty.
The CSME has been defined in the same way as the concepts applied to the earlier Common Market, that is, the
gradual, State-by-State removal of barriers. By contrast, the European Union when inaugurating its single market
in the mid-1980s introduced the concept of the internal market that created an area without internal frontiers in
which the free movement of goods, persons, services and capital is ensured. Physical (checks on persons and
goods at internal customs ports), technical (national rules in a variety of fields), and tax-related (different indirect
taxes) frontiers were thereby abolished.
The change to a single market was accomplished by changes in the Community legislative system (the
introduction of European Directives, approved by qualified majority voting for most subjects, that are obliged to be
transposed into national law in the Member States) designed to encourage adoption of the measures needed for
completion of the single market. The Caribbean Community is yet to make the political transition that is
necessitated by the commitments undertaken to create a single market and economy. The adjustments needed
are best illustrated in respect of the CSME implications for national sovereignty and the financing of the
Community institutions.
National Sovereignty
The Caribbean Community intends to create a Single Market and Economy with each Member State retaining
maximum national sovereignty. It intends to do so apparently through a mode of discretionary intergovernmental
cooperation. These objectives clearly are contradictory. The effects of this approach are manifest in the failure to
achieve any significant progress in respect of the program of legislative harmonization, the removal of barriers to
the movement of people, services and capital, and the merely titular commitments made to macroeconomic
coordination, fiscal harmonization and monetary integration.
This was also the experience of the European Community. By the mid-1980s, there had been no substantial
reduction in non-tariff measures; except for certain professions, the free movement of services had been instituted
only as non-discrimination on the grounds of nationality; free trade in goods was still restricted by anti-competitive
practices imposed by public authorities.
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According to the European Parliament 'stagnation in the achievement of the common market was largely
attributed to the choice of detailed legislative harmonization as the method of removing the obstacles of national
technical regulations, when harmonization was in fact very difficult to achieve…' The Single European Act that
created the European single market was the answer to this impasse. It incorporated the concept of the internal
market referred to above and radically altered the legislative decision-making machinery. CARICOM however,
unlike the EU, in moving to a single market kept the old common market concepts (of frontiers and State-by-State
liberalization of market access), and legislative procedures (of intergovernmental harmonization and national
ratification) in place. This dichotomy lies at the root of the impasse in CARICOM.
Beyond the legislative and market access areas, it is becoming increasingly apparent in CARICOM that such
issues as sectoral policy, macroeconomic coordination, fiscal harmonization and monetary integration simply
cannot proceed in an environment of unabridged national sovereignty. The CCJ is itself an illustration of
sovereignty being breached by default. In its original jurisdiction the Court becomes necessary since in its
absence the municipal courts of the Member States would be competent to interpret and apply the Revised
Treaty, with the possible consequence that their decisions may not be consistent.
However, ensuring consistency of legal decisions in this way results in an important aspect of supranationality
being inserted into an otherwise intergovernmental mode of cooperation. Indeed, even outside the CSME
framework, signs of encroachment on the principle of national sovereignty are observable, for example, in respect
of such sectoral policy areas as offshore financial services and regional security (illicit drugs, arms trafficking,
money laundering).
Financing the Caribbean Community and Single Market and Economy
The CSME calls for the establishment of a number of new Community institutions. They include the Caribbean
Court of Justice, a standards organization, a competition commission, a conciliation commission, a regional
securities body, a regional intellectual property rights office, and a regional development fund. Most of these new
Community institutions are premised on the existence of national counterparts that actually do not currently exist
in most Member States. Already the Community supports over a dozen regional organizations, including the
Community Secretariat, the Regional Negotiating Machinery, and the University of the West Indies.
In the absence of an independent source of income for the Community institutions, all these new institutions will
require national appropriations (apart from the CCJ for which, as indicated above, trust fund arrangements are
being made through the Caribbean Development Bank). How this will be achieved, including the resources
needed for the national counterparts, remains to be seen. Experience does not inspire confidence that
governments will be prepared to fund all these new institutions adequately and reliably—especially in an
environment that is already politically strained and financially distressed over commitments to the existing regional
institutions.
The financing issue was also one that confronted the European Community and was resolved by a decision in
1970 on 'own resources' for the Community. In fact, this was originally provided for under the Treaty of Rome,
which stipulated that the EEC was to be financed by national contributions for a transitional period before
changing to a system of own resources. Own resources have been found in a mixture of 'natural' own resources,
which are revenues collected by virtue of Community policies such as customs duties, agricultural levies, VAT
own resources, and GNP based balancing resources. Currently the own resource system is based on a ceiling of
1.27 percent of the Union's GNP. The European Court is financed out of the Union's own resources.
By way of comparison, 1.0 percent of the GNP of the CARICOM States (excluding Haiti) would amount to about
US$300 million a year. Currently governments contribute US$10 million to the CCS annual budget (donors
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contribute an additional US$4 million). The financing issue, and particularly the institution of an own resources
system, thus becomes a real test of political conviction on the future of regional integration. D. Conclusion
Caribbean governments since 1989 have undertaken deep and far-reaching commitments to establish a Single
Market and Economy, representing a major advance over the Common Market. However, very little has actually
been achieved in terms of implementing these commitments. The root cause of the situation can be found in the
fact the most of the CSME commitments are premised on the existence of higher degrees of political integration
than currently exist. While a mode of intergovernmental cooperation, by way of discretional State-by-State
progressive market liberalization, legislative harmonization and ratification, may have been more or less workable
for Common Market arrangements, they are unlikely to be effective for the purposes of creating a single market
and economy. The experience of the only grouping of States that has attempted such a transition indicates that it
is necessary to move beyond intergovernmental cooperation to selective forms of supranational action. Two initial
priority areas for the application of this conclusion in the Caribbean Community would be the program of
legislative harmonization and arrangements for financing the Community institutions.
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6: Factors Promoting Integration in the Caribbean
The Caribbean was shaped by a logic of both unity and diversity. On the one hand, the region has been
historically divided as a result of colonialism by various European powers; on the other hand, the slave trade and
the entry of the Caribbean into the global market by way of agricultural production, created a common cultural
base which has persisted to this day. The following article sketches elements of today's Caribbean reality that
foster or hinder development work in the region.
In different eras many efforts have been made towards Caribbean unity, for instance, the proposed West Indian
confederation in the 19th century. But Caribbean unity as a real and urgent challenge has arisen only today. In
Caribbean countries a new consciousness has emerged, reflecting the growth of a new regional order that goes
beyond the nation-state. That is to say, Caribbean nations face challenges that began outside national borders
and which must therefore be resolved at a regional level.
If some elements display the region's heterogeneity (such as different political traditions and linguistic diversity),
the common factors that define the region outweigh the differences. In reality there are few development problems
that are not related in some way to similar problems in other societies, or to the region as a whole. For example,
Caribbean countries were economically shaped by agricultural systems geared to requirements abroad; and their
industrialization has been based on the facility of cheap labour to attract foreign capital. As a result there are
common economic and labour issues.
On the other hand, Caribbean societies face similar social processes as a result of urban transformation, itself the
result of a huge migration of people from different countries and with different languages, as well as tourism, drug
trafficking, and environmental deterioration. Moreover, all Caribbean countries have in common the existence of a
Diaspora scattered around the world, which interacts intensely with societies within the Caribbean region.
These new challenges require joint action by Caribbean actors. There are important state initiatives such as the
West Indian Commission, the Association of Caribbean States, and other regional political initiatives. In addition,
civil society has mobilized in a significant way precisely because of the difficulties facing state and private
enterprise to tackle the enormous number of national and regional problems.
• Common goals
• Common resources though limited
• Common political ideology
• Common history: colonialism, descendants of migrants, slavery
• Common economic status, developing countries
• Common problems, local and international
• Common climate, soil, landforms
• Common culture, language
• Strategic locations: all Caribbean countries are surrounded by the Caribbean Sea.
• The challenges of globalization and trade liberalization.
Factors Promoting Regional Cooperation (Internal)
Domestic Factors
Common language – The CARICOM Member States, except for Haiti and Surinam, use English as
the official language;
The common history and cultural heritage which the people share make it possible for them to
embrace common values and goals
Small population – this is necessary for them to co-operate to form a large market; their small size
also makes it difficult for them to influence international organizations or countries individually.
Limited resources (human and physical)
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Common local and international problems e.g. Difficulty in accessing international markets, pressure
from international organizations such as the World Trade Organization, the International Monetary
Fund, the World Bank and the exploitation by international businesses require a united approach.
Factors Promoting Regional Cooperation (External)
The challenges of Globalization
The Challenges of trade liberalization – Caribbean governments can no longer restrict extra-regional
imports to protect regional manufacturers; they MUST compete in the world market on the same
terms as the rich, industrialized nations.
The increase in the number of trading bloc – the trend throughout the world is moving towards the
establishment of trading blocs and economic groupings e.g. The European Union (EU) and the Free
Trade Area of the Americas (FTAA).
NB: Trading blocs are made up of a large number of countries with the same political and economic aims, linked
by special trading arrangements among them.
Common Language - The language of the Caribbean people is English, and this facilitates easy
communication.
Close Proximity - The Caribbean countries are relatively close to each other, hence, travel by air or sea
from one country to another can be done in a relatively short space of time.
Caribbean Countries Share A Common History - Most of the Caribbean people are descendants of
people who had been subjected to slavery and indentureship. This makes it possible for the Caribbean
people to embrace each other.
Common Cultural Heritage - The Caribbean people share a common culture in terms of language, dress,
music, cuisine and general lifestyle. All these features make the integration process smoother.
Small Population - The Caribbean countries are at a disadvantage when competing against international
markets because of their small size. Thus, coming together makes it easier to influence international
markets.
Limited Human and Physical Resources – the limited resources available in the Caribbean region
necessitate the pooling and trading of these resources among Caribbean countries.
Common Economic, Political and Social Problem - The Caribbean countries encounter similar problems,
inclusive of, but not limited to unemployment, difficulty in accessing international markets, lack of
adequate capital, poor housing and inadequate health facilities.
The Common Challenges of Globalization and Trade Liberalization - Companies all over the world are
doing business in many countries, filtrating into the Caribbean region creating unwelcomed competition.
The Caribbean government can no longer restrict extra-regional imports to protect regional
manufacturers/companies, hence, Caribbean businesses are required to amalgamate or face ruin.
The increase in the number of trading blocs - Across the world, economic groupings and trading blocs are
being established where a large number of countries are linked by special trading arrangements among
them. For example, the European Union (E.U.) The Caribbean is required to do the same to ensure
productivity and continuity in its economic growth.
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7: Factors Hindering Regional Integration
• Conflict between territorial and regional demands and loyalties – some governments and citizens may be
torn between the loyalty to their own country’s needs and demands and the regional integration
objectives.
Differences in resource distribution – the unequal distribution of natural resources in the region makes
those countries with limited resources feel that they would be at a disadvantage when trading with
countries that have greater resources.
Countries produce similar products and this may hinder trading relationships because it has reduced the
opportunities for trade.
Competition between countries – there is competition between countries for the location of new industries.
There is also competition in the tourism industry.
Differences in stages of growth and development – the LDC fear that the differences in the stages of
growth and development between them and the MDC put them at a disadvantage in trading with the MDC
in the region. This has led them to reject or delay implementing some of the integration decisions.
Influence of multi-national and metropolitan agencies – some of the countries in the region are not
independent, e.g. Montserrat and Anguilla are still subject to the control of England. An independent state
is a country which is not governed or controlled by another country or organization.
Caricom member states have made several attempts at integration, while some of these attempts have been
successful, others have met upon obstacles that persist to present. The following factors have hindered the
integration process of the Caribbean region:
Absence of common model or strategy for development - Caricom member states have pursued
different strategies for political and economic development. There are some that depend on agriculture,
another on tourism, one on petroleum. The fact that the varying countries are placing different emphasis
on different strategies suggests that a common policy will not exist and countries will only be interested in
policies that relates to the strategy they are pursuing. Jamaica would be more interested in debating a
common policy on tourism or agriculture because they depend on those for economic development, but
would generate little or no interest in a policy on petroleum because they do not pursue such for
development.
Differences in stages of growth and development - The fact that the Caribbean countries pursue
different strategies for development means that they will all be at different levels of growth and
development. The less developed countries are hesitant to trade with the more developed countries
because of fear that they might be at a disadvantage. Such fear has led to the delay in the
implementation of certain factors that would ensure or facilitate the integration process.
Among the diverse levels of development in the region some countries are deeply underdeveloped (such as
Haiti and Guyana) and need special attention. Here co-operation and regional action are limited by two types
of problem: The absence of a good communications infrastructure; and an ideology of survival that forces
inhabitants to prioritize daily problems over long-term matters.
Competition for location of industries - The government of each Member States wants what is best for
their country; such aspiration usually leads to competition between the countries for the location of new
industries. The competition often times evolves into envy and jealousy among member states.
Conflict between territorial and regional demands and loyalties (Insularity) - The Caribbean
countries tend to be more interested in satisfying the immediate needs of the residence within their
countries than attending to the demands of the region. The member states work hard to attain
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international attention as an individual country than working together as a part of Caricom to attain the
same.
Absence of Common Currency - The value of the money in each Caribbean country is different. There
are some member states that do not accept the currency of others. In this regard, Caricom residents
travelling through the region have to obtain the relevant currency. A common currency would provide for
greater level of integration.
Unequal distribution of resources - Some member states are blessed with more natural resources than
others. Those countries that are abundant in natural resources have utilized the income gained from this
wealth for their country's benefit rather than for regional benefit.
Lack of diversification in production - It is interesting to note that most of the Caricom member states
produce similar products. Most of the member states are dependent on agriculture; therefore, they
process and manufacture products from sugar cane, bananas, cocoa, coffee and ground provisions. This
puts constraint on intra- regional trade.
Influence of multinational corporations - Trans-national corporations have contributed to some of the
Caricom Member states running a foul to the objectives of Caricom. Those corporations enter individual
member states and bargain with individual governments to grant special benefits such as tax free
holidays, repatriation of profits, duty free on raw materials among other things. Those benefits, most
times, run contrary to the objectives of Caricom.
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Increased market size - Caricom is committed to trade within the region. Therefore, integration provides
a larger market for individual member state.
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Free movement of goods, labour and capital - All goods which meet the Caricom standards are traded
duty free throughout the region, therefore, all goods created within the region can be traded without
restrictions. There is also an agreed upon policy called The Caribbean Community Free Movement of
Persons Act enacted in all CSME member states. Under this Act, it allows for the free movement of
certain categories of skilled workers, which will later evolve into the free movement of all persons across
the CSME member states. There is also a move to eliminate the various restrictions such as foreign
exchange controls which will allow for the free movement of capital across the CSME member states.
This will allow for the convertibility of currencies or a single currency and capital market integration.
Better response to economic implications of globalization and trade liberalization - The act of the
larger international companies doing business across the world and in the Caribbean has forced the
Caribbean businesses to amalgamate in order to survive, thus creating a greater sense of unity.
Caribbean governments can no longer protect the regional manufacturers by restricting extra-regional
imports, as such; the Caribbean people have been encouraged to support regional manufacturers.
Regional manufacturers have improved their products and services, and this has made it possible for
them to compete with producers in developed countries.
Improved levels of international competitiveness - Caricom has a stronger, more persuasive voice on
international matters than as individual countries. The size of a country dictates to its power, and the
integrated approach of the Caribbean countries has lent to greater influence on the international scene.
Individual member states are too small to withstand economic competition from more developed
countries and trading blocs. A united voice among member states has resulted in better prices for extra-
regional exports and cheaper prices for imports to the region from other international sources.
Increased co-operation among member states -The Integration process among member states of
Caricom has allowed for greater co-operation and utilization of the services offered by the different
institutions of the organization.
Improvement in the quality of life - The increased job opportunities accrued through the cooperative
effort of the Caribbean states have led to job creation and economic development and a consequent
increase in the quality of life for the Caribbean people
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The Conference of Heads of Government
This consists of the heads of government of the member states or any other person designated to represent him
or her at any meeting of the conference.
Functions and powers of the Conference of Heads of Government
The conference is the supreme organ of the community and it determines and provides policy direction for the
community
It acts as the final authority for the conclusion of treaties on behalf of the community and for entering into
relationships between the community and international organisations and states
It makes financial arrangements as it becomes necessary to defray the expenses of the community and it is the
final authority on questions arising in relation to the financial affairs of the community It may establish such organs
or bodies as it considers necessary for the achievement of the objectives of the community
The conference may issue policy directives of a general or special character to other organs and bodies of the
community concerning the policies to be pursued for the achievement of the objectives of the community and
effect shall be given to such directives
The conference may consider and resolve disputes between member states.
The conference shall regulate its own procedure and may decide to admit at its deliberations as observers of non-
member states of the community and other entities.
WEST INDIES FEDERATION
The federation was established by the British Caribbean Federation Act of 1956 with the aim of establishing a
political union among its members.
CARICOM
The three main objectives of the community at its inception were economic integration, coordination of foreign
policy, and functional cooperation in areas such as health, education and culture, as well as other areas related to
human and social development
These objectives have been simplified to include:
Improved standards of living and work in the region
Full employment of labour and other factors of production
Accelerated, coordinated and sustained economic development and convergence
Expansion of trade and economic relations and enhanced levels of international competitiveness
Organisation for increased production and productivity
Enhanced functional cooperation, including efficient operation of common services and activities for the benefit
of its peoples
Accelerated promotion of greater understanding among its peoples and the advancement of their social, cultural
and technological development
Intensified activities in areas such as health, education, transportation, telecommunications
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CSME
The CARICOM Single Market and Economy (CSME) is intended to benefit the people of the region by providing
more and better opportunities to produce and sell our goods and services and to attract investment. It will create
one large market among the participating member states.
The main objectives of the CSME are:
Full use of labour and full exploitation of the other factors of production.
Competitive production leading to greater variety and quantity of products and services to trade with other
countries.
It is expected that these objectives will, in turn, provide improved standards of living and promote sustained
economic development
Free movement of goods and services
Through measures such as eliminating all barriers to intra-regional movement and harmonising standards to
ensure acceptability of goods and services traded
Right of establishment
To permit the establishment of CARICOM-owned businesses in any member state without restrictions
A common external tariff
A rate of duty applied by all members of the market to a product imported from a country which is not a member of
the market
Free circulation
Free movement of goods imported from extra-regional sources which would require collection of taxes at first
point of entry into the region and the provision for sharing of collected customs revenue
Free movement of capital
Through measures such as eliminating foreign exchange controls, convertibility of currencies (or a common
currency) and integrated capital market, such as a regional stock exchange
A common trade policy
Agreement among the members on matters related to internal and international trade, and a coordinated external
trade policy negotiated on a joint basis
Free movement of labour
Through measures such as removing all obstacles to intra-regional movement of skills, labour and travel,
harmonising social services (education, health, etc.), providing for the transfer of social security benefits and
establishing common standards and measures for accreditation and equivalency.
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The Objectives of the OECS
It serves to promote cooperation among its members and defend their sovereignty and territorial integrity. It also
promotes economic integration, assists them in meeting their international obligations and responsibilities, and
establishes, wherever possible, arrangements for joint overseas representation and common services.
The objectives of the ACS
This includes the strengthening of the regional cooperation and integration process with a view to creating an
enhanced economic space in the region, as well as preserving the environmental integrity of the Caribbean Sea
which is regarded as the common patrimony of the peoples of the region. Finally, promoting its sustainable
development.
Sources
Ruel Reid (1998) Challenges to Caribbean Development - 2000 and Beyond.
Activities
1. Identify five organisations established in the Caribbean between 1958 and 2010.
i) Give the dates each was established
ii) Identify the treaty and signatories
iii) State the objectives of each organisation
iv) Outline the functions of each organisation
2. Suggest three reasons why these organisations were established
Integration
The need for integration and helping each other in the region; the various ways in which we integrate and factors
that facilitate this integration are all looked at.
As individuals, we are always given options and so we have three options to choose one - we will look at
communications, consumer affairs or tourism. Your teacher may decide which is best for you to do.
Question:
Is it necessary to study the society and what individuals make of it?
Why do you think individuals are necessary for any society to survive?
No assembly as after the Morant Bay Rebellion in 1865 they dissolved and invited England to rule the colony
directly. It held great promise of reform for the colonies social welfare and political system. The CC (Crown
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Colony) system was an attempt to introduce greater control by the British authorities. It also ensured that the
majority of the population, blacks still did not qualify to vote. The black majority was still unrepresented by their
own people with their particular interests in government.
In Jamaica by the 1930s many people began to feel that only by achieving self-government could Jamaica
progress. Unstable conditions added to widespread political and social distress and sparked off several
disturbances/riots.
Arising from these riots, several recommendations for improving the social and economical life of the people were
made by the Moyne Commission such as:
* Universal Adult Suffrage (the right of all citizens over the age of 21 to vote) 1944. This age has since then been
lowered to 18 years.
* Political activities: vigorous citizenship education aimed at making the Jamaican people aware of what they
could do and believe.
ROAD TO INDEPENDENCE
* 1906: Dr. Love's election to the Legislative Council - first black man to sit there.
* 1938: Riots due to social, political and economic distress.
* 1944: New constitution recommended by Moyne Commission. Universal Adult Suffrage introduced.
* 1953: Ministerial system introduced.
* 1957: Free internal self-government.
* 1958: Attempt at Federation.
* 1962: Independence or Dominion Status. This new constitution provided for full control over internal and foreign
affairs. Alexander Bustamante's party won the first general election of that year and so Bustamante became the
first Prime Minister of independent Jamaica.
Jamaica still remains in an association with Britain by staying within the Commonwealth of Nations. The British
Monarch, through her representative the Governor General, remains as the Head Of State. These countries are
called the Constitutional Monarchies. Constitutional Monarchy is based on the Westminster Model (British
System)
CHARACTERISTICS OF WESTMINSTER MODEL
*Separation of powers
*Two-party system
*General elections every five years
*Cabinet system of Government
*Difference between Head of State and Head of Government
CONSTITUTIONAL MONARCHY
Jamaica
Barbados
St. Vincent
Grenada
REPUBLICS
Trinidad and Tobago
Guyana
Dominican Republic
ASSOCIATED STATEHOOD
Montserrat
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TRINIDAD AND TOBAGO AND THE DOMINICAN REPUBLIC
The President is Titular Head of State, having mainly ceremonial power.
GUYANA
The President is Head of State and also Head of Government. He/she is referred to as an Executive President.
two benefits that Caribbean people can obtain from being members of the CSME. Correct responses
included skilled Caribbean workers can obtain jobs in the
different Caribbean member countries and Caribbean people can obtain goods at cheaper prices
because of reduced trade barriers among the countries
factors that hinder economic integration among Caribbean countries. Correct responses that were well-
developed and clearly explained to warrant full
marks included
The countries are at different levels of development and those which are at a higher level such as
Jamaica, Trinidad and Barbados may consider that they will carry most of the responsibilities in the
integration movement, which would retard their development.
The countries produce similar goods and thus there is competition among the territories to produce
goods for inter-regional trade and trade on the international market.
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necessary.
Candidates were asked to suggest to citizens three measures they may take to assist community
members in the event of a natural disaster. An example of a measure that was well-developed and
clearly explained was for citizens to organize themselves in various groups to do voluntary work in
cleaning different sections of the community. Activities included removing fallen trees and properly - 8 -
disposing of the dead animals. A well explained justification for the measure was that if citizens
helped in cleaning the community immediately after the disaster, this would prevent health problems
such as the outbreak of diseases
the benefits of cooperation and to suggest ways to promote industrial development
how to use water from waterfalls and rivers to turn turbines to generate energy.
r reasons Caribbean countries develop their physical resources. -Many reasons focused on earning foreign
exchange, job creation and to improve the quality of life of citizens. There were some clear responses with
reasonable development that were linked to a better standard of living. A few candidates mentioned that the
development of physical resources would help in the establishment of industries.
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