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Small Island Developing States

Can closer economic integration bring more decent work opportunities in the Caribbean?

A high-level panel discussion at the UN Small Island Developing States (SIDS) Conference in Samoa on 1 September will bring together the ILO with policy makers, employer and worker representatives to discuss the feasibility and implications of greater economic integration in the Caribbean. The Director of the ILO Office for the Caribbean looks at some of the proposed measures and their implications for decent job creation.

Comment | 01 September 2014
Small Island Developing States (SIDS) in the Caribbean face a number of development challenges. Although they are ranked at medium and high levels in the UN Human Development index, inequalities are growing and many residents face low standards of living.

Recent economic growth in Caribbean SIDS has been weak. The global economic recession, along with recurrent extreme weather events have taken their toll on GDP levels across the region.

Stagnation and contraction in the overall economy and depressed conditions in the tourism sector have led to decreased business and taxation revenues, resulting in increased debt levels.

As a result there has been less room for public investment that could have improved infrastructure, generated jobs and provided greater support to those in poverty.

Job creation is a significant challenge and for four of the five countries that have produced unemployment statistics in 2012 and 13, unemployment rates range between 11 and 27 per cent. Youth unemployment rates are significantly higher.

MDG targets impacted

Efforts to reach Millennium Development Goal (MDG) poverty reduction targets have therefore been severely impacted.

Against this background some regional institutions and policy makers have called for a renewed and intensified commitment to closer economic integration that goes well beyond intra-regional trade liberalization and other agreements reached in the past.

Some argue that linking the full process of production and distribution of goods and services across the Caribbean would lead to the establishment of regional enterprises that would be more internationally competitive and focus on higher quality products and services.

Depending on how the benefits of faster growth are distributed both within and between countries of the region, this process could foster economic convergence and greater income equality.

But such outcomes are not guaranteed. Questions arise about which industries or sectors of the economy would be suitable for a regional integrated approach? What would this imply for competition between existing enterprises within a sector? What would be the implications for economic policy including monetary, fiscal and economic development policies within the region?

Carving a path of cooperation

Achieving a regionally integrated production and distribution system would require high levels of cooperation. This applies not just to relations between governments of the region but also within countries, between the government and their social partners.

This could be advanced through regional industrial development policies, which would require significant new investment in transport and communications infrastructure. And the region would require the development of public private partnerships to provide the services and infrastructure that small and medium enterprises need to expand.

Trade unions, for their part, ask how wages and labour market conditions would be determined for regional enterprises. Employers and trade unions in the Caribbean are also keen to ensure that closer economic integration results in convergence across countries with regard to the implementation of labour standards.

It is encouraging that Caribbean employers' and workers' organizations are committed to social dialogue at the regional level. This was confirmed by the Caribbean Employers’ Confederation (CEC) and the Caribbean Congress of Labour (CCL) at the CARICOM Council for Human and Social Development (COSHOD) meeting in Guyana in May.

Priority was also given to education reform, through a new Technical Vocational Education and Training (TVET) strategy, designed to help ensure young people in the region have the skills required by the labour market.

In that regard, the support expressed for full employment and decent work as a priority for the Post-2015 Development Agenda was also welcome.