Austerity offers impetus to band Caribbean islands together


This piece by Robin Wigglesworth appeared in The Financial Times. Here is an excerpt. For the complete report follow the link to the original report below.

The West Indies Federation, an ambitious political union of British colonies and protectorates in the Caribbean, collapsed more than half a century ago amid intense bickering. Yet an economic crisis of unprecedented proportions may force the former members to band together once more.

The scale of the problems varies. Trinidad and Tobago, for example, is prosperous thanks to natural gas exports. But many of the anglophone Caribbean countries have foundered in recent years, dragged down by a tourism decline, withering banana and sugar industries and debt incurred by government overspending.

Many economists, international officials and even local politicians concede that part of the solution lies in closer union and that this will inevitably involve some loss of sovereignty, a touchy subject in states that were not so long ago under the colonial yoke.

“This is going to be the dominant conversation that the international community is going to place on the region in the next five to 10 years, largely because of what appear to be fiscally unsustainable scenarios,” says Mia Mottley, leader of the opposition Labour party in Barbados. “The Caribbean will have to make some choices.”

There have been some moves towards closer integration over the years since the West Indies Federation debacle. A handful of the former federation members – Barbados, Jamaica, Trinidad and coastal Guyana – formed the Caribbean Community, or Caricom, in 1973 to deepen the Caribbean Free Trade Association that grew from the ashes of the federation.

Caricom has since grown to include most of the anglophone islands.

. . .

But progress has on the whole been disappointing to non-existent. While there have been some successes, such as a pan-Caricom schools examinations board and a Caribbean Court of Justice, which has recently begun to gain traction, wider efforts have foundered due to a lack of political will. “There’s instinctive protectionism in the Caribbean,” says one western diplomat based in the region.

. . .

However, the benefits could be significant. For the micro states of the eastern Caribbean the cost of the trappings necessary for nationhood are particularly onerous: even a modest network of overseas embassies is a burden.

The entire Eastern Caribbean currency union – which comprises Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines – has a population of 600,000. It would make sense to merge and rationalise some functions.

A true common market for goods, capital and labour could help foster bigger companies and reduce the severe economic efficiencies that bedevil the region, especially in areas such as transport and logistics. “It costs more for me to send a crate to Trinidad than to Liverpool [in the UK],” one Jamaican businessman points out.

. . .

Nonetheless, in time the chastening experience of international bailouts and austerity could perhaps play the same role in gluing the Caribbean states more closely together as the memory of two devastating wars did in Europe.

For the original report go to


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