Globalization and Saint Lucia Adapted from Kevin Stapleton (CDAE grad student)

Why would globalization be good? Economic growth means improved livelihoods and reduces poverty Economic growth means improved livelihoods and reduces poverty Access to food and education Access to food and education Access to technology- Diamond: remote poor access to information Access to technology- Diamond: remote poor access to information Access to more things Access to more things The more growth we have the better off we all are The more growth we have the better off we all are It will trickle down It will trickle down

Why would globalization be bad? Economies of scale – not diversified (subject to outside forces) Economies of scale – not diversified (subject to outside forces) National autonomy – tourism National autonomy – tourism Ecological impact Ecological impact Distribution Distribution

An agreement between 12 lesser- developed countries in the Caribbean, Latin America and South America An agreement between 12 lesser- developed countries in the Caribbean, Latin America and South America The aim is to create a single economic space within which all factors of production will move freely and common economic policy will apply The aim is to create a single economic space within which all factors of production will move freely and common economic policy will apply Caribbean Single Market Economy (CSME)

St Lucia, St Kitts and Nevis, Suriname, Belize, Jamaica, Antigua and Barbuda, Montserrat, Grenada, Dominica, St Vincent and Grenadines and Trinidad and Tobago

How do economies grow? How do economies grow? Capital (K) Capital (K) –Land –Natural resources –Built environment Technology (T) Technology (T) –Changes in productivity Labor (L) 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. Y = f (K,T,L)

Factor 1: Capital Gross Domestic Product (GDP) Components of GDP Limitations of GDP “The total value of goods and services produced by a nation”

Ecological: “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…” – Senator Robert Kennedy Distribution: Is GDP/GNP an indicator of how well everyone is doing? -

Saint Lucia’s Per Capita GDP is just below the median among CSME nations, but well below the average.

St Lucia’s growth in the past 15 years has been well below the CSME average of 2.0%.

Like most Caricom nations, St. Lucia is heavily dependent on the service sector.

“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…” -Senator Robert Kennedy

Factor 2: Technology “Technology” encompasses any change that increases production without adding capital or labor. Anything that increases productivity is considered 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. 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. St Lucia has 336 internet users for every 1,000 people. This is well above the CSME average of 223.

Factor 3: Labor Components Components Size Size Education Education

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.

Saint Lucia’s poverty rate is below average, while its unemployment is above average.

76% of school-age children are currently enrolled in Saint Lucia, which is the average among CSME nations

The importance of education: Correlating Education and GDP Average years of education Per capita GDP 12

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 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. 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 and the environment. While the long term benefit will be positive, it could have negative impacts on distribution and the environment.

What do you think about globalization? Incorporate values of ecosystem services Incorporate values of ecosystem services Better distribution Better distribution Can we have more economic growth and incorporate ecological sustainability and social equality? Can we have more economic growth and incorporate ecological sustainability and social equality?

Questions Limitations of using GDP/GNP as indicator of overall human well-being Limitations of using GDP/GNP as indicator of overall human well-being Briefly describe the 2 components of Caribbean Single Market Economy (CSME) Briefly describe the 2 components of Caribbean Single Market Economy (CSME) 3 Factors that predict economic growth 3 Factors that predict economic growth Predicted short-term and long-term impacts of CSME & St. Lucia’s economy Predicted short-term and long-term impacts of CSME & St. Lucia’s economy