Review of Caribbean economic and social performance in the 1980's and 1990's
NU. CEPAL. Sede Subregional para el Caribe
Includes bibliographyIntroduction The integration of the world economy gathered momentum in the mid-1980s and continued during the 1990s, through increased trade and financial flows around the world, and the establishment and strengthening of linkages related to the production and distribution of goods and services. Trade flows around the world received a boost from the successful conclusions of the negotiations of the Uruguay Round of trade talks, the establishment of the World Trade Organization (WTO) and the beginning, in 1995, of the implementation of the 1994 General Agreement on Tariffs and Trade (GATT). Other factors reinforcing the growth of trade around the world included the widespread trade liberalization programmes implemented in many countries and the numerous, more comprehensive, and generally more outward-oriented, trade agreements instituted in many parts of the world. Unilateral trade liberalization programmes implemented at the national level also reinforced the trend towards a more open global trading system. During the 1990s the volume of world trade increased substantially compared with the previous decade. World trade increased overall by 53.6 per cent, from an average of 4.4 per cent for the period 1980-89, to an average of 6.76 per cent for the period 1990-97. Although the exports of goods are still dominant in total exports, services have made substantial progress since 1980 and represented more than 20 per cent of world exports in the 1990s (1). Increased financial flows were the result of widespread liberalization of the current and capital accounts of many countries, successful macroeconomic reforms (including financial sector reforms), and the creation of an environment generally more welcoming to international capital flows. Exchange rate policy reforms, which led generally to more flexible exchange rate systems and the abolition, in many countries, of exchange controls also contributed to the worldwide increase in financial flows. Technology and technological innovation were key factors influencing the increasing integration of the world economy. They have brought about substantial reductions in the costs of transportation, communications and computing, thus facilitating the integration of national markets in goods, capital and services. In addition, technological innovations have increased the tradeability of services, a growing sector of international trade. The reinforcement of the trend towards a more integrated world economy presents opportunities and challenges to both developing and advanced countries. Better access to larger markets, increased access to finance and investment opportunities, positive externalities from technological spillovers and more competition, are likely to result in efficiency gains in the world economy, but will also continue to require adjustment to constantly changing economic realities. An inevitable result of an increasingly integrated world economy is the more rapid transmission of both favourable and unfavourable economic shocks. This increasing globalisation of the world economy has brought about fears in both developed and developing countries. For developing countries, the general concern is that their firms would not be able to compete with the far more efficient firms of developed countries. On the other hand, loss of market share to firms from the low-wage developing countries is a major preoccupation of businesses in the developed countries. These fears have strengthened over recent years, in the face of increasing income disparities within and among countries, and increasing levels of poverty and marginalisation in many parts of the world. In the Caribbean, major economic and social reforms were undertaken in the 1980s, which continued in the 1990s. These include macroeconomic reforms to consolidate the stability of the economies and correct the external and internal disequilibria, which had developed during the latter part of the 1970s and in the early 1980s. Trade reforms were embarked upon which sought to open regional economies further and capitalise upon the opportunities available in the increasingly liberalised world economy. The 1990s also saw the acceleration of activities to establish the Caribbean Community (CARICOM) Single Market and Economy (SME) (which now includes Suriname and Haiti), as well as CARICOm's widening of its trade and economic relations with the Dominican Republic and other countries in the Western Hemisphere. During the 1980s and 1990s, there was increased focus on issues related to social equity. Foremost among these were the efforts made to increase employment, improve access to health and education and alleviate poverty, especially in those Caribbean countries which had experienced slow growth or political instability in the decades under review. Efforts were made, as well, to improve gender equity in the subregion, through the implementation of policies and programmes to improve the social and economic status of women. Increased migration and population growth continued to modify the characteristics of the Caribbean population. In 1994, the adoption of the Small Island Developing States Programme of Action (SIDS-POA) focused the attention of governments in the subregion and the world community on the need to preserve the fragile environment of these mostly island States, within the context of sound, sustainable development policies. This paper seeks to review the social and economic performance of Caribbean countries in the 1980s and the 1990s and highlight a few of the changes which have taken place. 1 International Monetary Fund - World Economic Outlook and International Capital Markets, Interim Assessment - December 1998
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