The Caribbean Single Market Economy

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The Caribbean Single Market Economy
Understanding the impact of the free movement
of labor on the people of St. Lucia Kevin
Stapleton, Graduate Student Community Development
and Applied Economics The University of Vermont
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Short term goal To understand the
strengths, weaknesses, similarities and
differences between the economies of CSME nations
Long-term Project Goals 1. To assess the
impact of the free movement of labor on the
people of St Lucia.2. To help develop
strategies for St Lucia to maximize its benefit
from free movement of labor
Project Goals
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Project Partners

• Lisa Louis Philip, PMP
• Commerce and Industry Officer
• Ministry of Commerce, Investment and Consumer
  Affairs
• Titus Preville
• Deputy Permanent Secretary
• Ministry of Commerce, Investment and Consumer
  Affairs

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How do economies grow?
Y f (K,T,L)

• Capital (K)
• Land
• Natural resources
• Built environment
• Technology (T)
• Changes in productivity
• Labor (L)
• Size of the labor force
• Skills of the labor force
• All changes in the real size of an economy are a
  result
• of one or more of these factors.

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Factor 1 Capital

• Gross Domestic Product (GDP)
• Components of GDP
• Limitations of GDP

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Saint Lucias Per Capita GDP is just below the
median among CSME nations, but well below the
average.
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St Lucias growth in the past 15 years has been
well below the CSME average of 2.0.
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Like most Caricom nations, St. Lucia is heavily
dependent on the service sector.
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GNP counts special locks for our doors and jails
for the people who break them. GNP includes the
destruction of the redwoods and the death of Lake
Superior. It grows with the production of napalm,
and missiles and nuclear warheads -Senato
r Robert Kennedy
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Factor 2 Technology

• Technology encompasses any change that
  increases production without adding capital or
  labor. Anything that increases productivity is
  considered technology.
• Perhaps the most important technological
  improvement in the past 25 years is internet
  access.
• St Lucia has 336 internet users for every 1,000
  people. This is well above the CSME average of
  223.

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Factor 3 Labor

• Components
• Size
• Education

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Saint Lucia can benefit from its more diverse
labor force. A study to find the percent of each
labor force that is skilled according to CSME
would be very beneficial.
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The CSME as a whole will benefit from the
increasing size of the labor force.
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Saint Lucias poverty rate is below average,
while its unemployment is above average.
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Saint Lucia is among the highest achievers in
this category, which should serve it well in the
future. Percent of the population that graduated
secondary school and percent of the population
with tertiary education would be very helpful
information.
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76 of school-age children are currently enrolled
in Saint Lucia, which is the average among CSME
nations
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The importance of education Correlating
Education and GDP
Per capita GDP
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Average years of education
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Hypotheses for long-term goals

• The short-term impact of the CSME on the St.
  Lucian economy will be negative as skilled labor
  moves to higher wage areas.
• The long-term impact of CSME on the St Lucian
  economy will be positive, primarily because of
  increased trade, economies of scale and access to
  skilled labor.
• While the long term benefit will be positive, it
  could have negative impacts on distribution.

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Resources and References

• Mcintyre, A. (2000). Caricom and the WTO.
  Social and Economic Studies. 49,1, 83-112
• A Time to Choose Caribbean Development in the
  21st Century (2005) Caribbean Country Management
  Unit, The World Bank.
• Freckleton, M. Karagiannis, F. (2004).
  Development Policy Options for Caricom in an Era
  of Free Trade. The Caribbean Economies in an Era
  of Free Trade.
• Coppin, A. (1994). The Demand for Labor in the
  Caribbean Community. The Review of Black
  Political Economy, 23(2),39.
• Griffith, W.H. (2002). A Tale of Four Caricom
  Countries. Journal of Economic Issues. 36
  (1) 79
• Bernal, R.L. (2003). The Caribbeans Future is
  not What it Was. Social and Economic Studies.
  52(1)

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Questions or comments?

• Contact information
• Kevin Stapleton
• Department of Community Development and Applied
  Economics
• The University of Vermont
• 104 Morrill Hall, Burlington VT 05401
• Kevin.stapleton_at_uvm.edu