Major economic institutions and systems
Yvonne Harvey, Contributor

Hi friends! Did you know that this week's lesson starts the last section of the syllabus - section 10? This section is entitled regional and global business environment. Enjoy.

THE CARIBBEAN COMMUNITY (CARICOM)

This body was formed in an attempt to solve some of the regions development problems. It officially came into being on July 4, 1973, although its early beginnings can be traced back to 1968 when the Caribbean Free Trade Association was formed. The body comprises all the countries of the English-speaking Caribbean.

CARICOM was established with specific aims and objectives in mind. Some of these are:

(a) The establishment of a regionally known market which is called the common market.

(b) Economic, cultural and social integration and development which includes encouraging the use of raw materials among member states and encouraging regional trade in agricultural products.

A major focus of CARICOM is the Caribbean Common Market (CCM). You may wish to do some research on this group arrangement. It may be useful also to research the functions of the different parts of the structure of CARICOM. At the top, is the heads of government conference. The common market comes next, and finally the CARICOM secretariat.

In keeping with the overall objectives of CARICOM, in 1994, at the Caribbean Heads of Government meeting, Caribbean governments agreed to establish a single market and a single economy known as the CSME - Caribbean Single Market and Economy. The main aim of the CSME is to allow free movement of people, capital and services across the region.

THE CARIBBEAN DEVELOPMENT BANK (CDB)

This is a regional financial institution established in January 1970. Its headquarters is located in St Michael, Barbados. The bank was established by Caribbean nations to provide financing for development purposes in member states. All members of CARICOM are beneficiaries of the CDB and some non-CARICOM countries have also been granted member status, for example Turks and Caicos Islands and the Cayman Islands.

The bank makes loans to member states for social and economic development in tourism, agriculture, health and education at low rates of interest. The CDB also assists local development banks which may be too small to deal with major projects. Jamaica has been one of the beneficiaries of the CDB. Assistance has been given to Jamaica for agriculture and special assistance was given after hurricane Gilbert in 1993.

THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (IBRD)

This institution is also known as the World Bank. The bank began operating in June l946. Its purpose is to give loans for productive reconstruction and development projects. Funding for projects comes from money contributed from member countries, as well as through financial agencies and institutions. Developed countries like the USA and the UK contribute large sums.

The bank's first loans were made in 1947 for reconstruction in four European countries. After 1948, the bank turned its main efforts to development lending. Funding obtained by a country through the IBRD can be used to meet infrastructure, health, education and other needs.

The World Bank is also a major source of funding for the CDB.

INTER-AMERICAN DEVELOPMENT BANK (IADB)

This bank was founded in 1959 and is composed of member countries in North and Central America and the English and Dutch-speaking Caribbean. The aim is to promote individual and collective development of member countries through financing economic and social development projects. They also give technical assistance and help to implement the objectives of the Inter-American System.

The bank's activities include:

• Giving loans to governments, the public and private bodies for special development projects. Loans are given at attractive rates of interest for 10-25 years and must be repaid in the currency that the loan was given in.
• Special funds are also given for economic and social projects which require special treatment such as lower interest rates and longer repayment than regular loans.
• Special assistance to Latin America.

ORGANIZATION OF EASTERN CARIBBEAN STATES (OECS)

This institution is made up of the less developed countries of the CARICOM group who signed the treaty in 1981. One of the main reasons for the OECS was that member countries felt that they were getting a raw deal from the larger and more developed countries within CARICOM. The countries involved felt that the OECS would better serve their needs than CARICOM. It was also felt that if they could speak with one voice, the voice would be heard. The headquarters of the OECS is in St Lucia and the institution was formed with the following in mind:

• Economic and political integration
• The creation of a single currency (the EC dollar) which would be managed and controlled through the Eastern Caribbean Central Bank (ECCB)
• Trading arrangements among themselves which would be reasonable and workable
• Common policies in particular areas such as agriculture, hospitality and tourism. Such policies must encourage the free movement of capital and labour from one state to the next
• Common practices and procedures in industrial policies
• The establishment of a single central bank.

Okay, I think I have given you all quite a lot to read and digest so, until next week, walk good.

Yvonne Harvey teaches at Glenmuir High School. Send questions and comments to kerry-ann.hepburn@gleanerjm.com