What If The Caribbean Community Implemented a Single Market Earlier?

The Actual History

The Caribbean Community (CARICOM) was established on July 4, 1973, through the Treaty of Chaguaramas, signed by Barbados, Jamaica, Guyana, and Trinidad and Tobago. This regional integration initiative emerged from the earlier Caribbean Free Trade Association (CARIFTA), which had been created in 1965. CARICOM's founding represented an ambitious attempt at regional cooperation among former British colonies and other Caribbean states seeking to strengthen their position in the post-colonial era.

The original Treaty of Chaguaramas outlined four main pillars: economic integration, coordination of foreign policies, functional cooperation in areas like health and education, and security collaboration. However, the economic integration component remained limited to a common market arrangement that still preserved significant barriers to the free movement of goods, services, capital, and people across member states.

By the late 1980s, facing the challenges of globalization and recognizing the limitations of the existing framework, CARICOM leaders began discussions about deepening economic integration. These conversations culminated in the 1989 Grand Anse Declaration in Grenada, where member states committed to establishing the CARICOM Single Market and Economy (CSME). The CSME was conceived as a comprehensive economic integration framework that would create a unified economic space allowing for the free movement of goods, services, capital, and skilled labor, along with the right of establishment for businesses across the region.

Despite this commitment, progress toward implementing the CSME was slow and uneven. In 1991, the West Indian Commission was established to develop concrete proposals for advancing the integration process. Based on its recommendations, CARICOM members signed the Revised Treaty of Chaguaramas in 2001, which provided the legal foundation for the CSME.

The CARICOM Single Market component was officially launched in January 2006—nearly 17 years after the initial commitment—with six countries (Jamaica, Barbados, Belize, Guyana, Suriname, and Trinidad and Tobago) as the first participants. Other members joined the Single Market in subsequent years. However, the Single Economy component, which would have involved deeper harmonization of economic policies, monetary integration, and potentially a common currency, has remained largely theoretical.

As of 2025, the CSME remains a work in progress. While there has been significant advancement in removing tariffs on goods traded within CARICOM and establishing systems for the free movement of specific categories of skilled workers, numerous barriers continue to impede the free movement of people and services. The rights of establishment for businesses across borders still face regulatory hurdles, and capital movement restrictions persist.

The slow and incomplete implementation of the CSME has been attributed to various factors, including concerns about sovereignty, uneven levels of economic development among member states, limited institutional capacity, insufficient political will, and vulnerability to external economic shocks. These challenges have prevented CARICOM countries from fully realizing the potential benefits of deeper economic integration, such as increased market size, improved competitiveness, greater economies of scale, and enhanced bargaining power in international negotiations.

Without a fully implemented single market and economy, CARICOM countries have continued to face significant economic challenges, including high external debt, vulnerability to natural disasters, limited economic diversification, high energy costs, and difficulty competing in global markets. The region's economic growth has remained generally below global averages, with persistent issues of unemployment, inequality, and brain drain limiting human development outcomes despite the abundance of natural resources and strategic location.

The Point of Divergence

What if the CARICOM Single Market and Economy had been fully implemented in the early 1990s, shortly after the Grand Anse Declaration of 1989? In this alternate timeline, we explore a scenario where Caribbean leaders transformed their rhetorical commitment to economic integration into swift and comprehensive action, creating a fully functioning economic union decades earlier than in our timeline.

Several plausible paths might have led to this accelerated integration:

First, the West Indian Commission's work could have proceeded with greater urgency and political backing. Established in 1991, the Commission might have delivered its recommendations by late 1992 rather than 1993, with CARICOM heads of government immediately adopting a fast-track implementation schedule rather than engaging in nearly a decade of further negotiations.

Alternatively, external pressures could have catalyzed faster integration. The early 1990s witnessed significant global economic realignments: the collapse of the Soviet Union, the acceleration of European integration with the Maastricht Treaty, and the negotiation of NAFTA. These developments might have created a stronger sense of urgency among Caribbean leaders about the need for regional economic consolidation to maintain relevance and bargaining power in the new global order.

A third possibility involves key leadership differences. Had more integration-minded leaders held power simultaneously across major CARICOM states during the early 1990s—perhaps visionaries who recognized that the end of Cold War preferences and trade protections required bold new economic strategies—they might have overcome the sovereignty concerns and political hesitations that delayed integration in our timeline.

Finally, a more robust response to early economic crises could have played a role. Jamaica's financial sector crisis in the early 1990s and Trinidad and Tobago's economic challenges following the oil price collapse might have been viewed as regional rather than national problems, demonstrating the urgent need for coordinated economic policies and shared stability mechanisms.

In this alternate timeline, we posit that through some combination of these factors, the Revised Treaty of Chaguaramas was completed and signed by 1993, rather than 2001. Implementation of the Single Market began in 1994, with all components—including free movement of goods, services, capital, labor, and right of establishment—fully operational by 1997. The Single Economy elements, including harmonized economic policies, coordinated sectoral development, and monetary coordination, followed closely behind, substantially implemented by 2000.

This accelerated integration created a genuinely unified Caribbean economic space at a pivotal moment in the global economic order, enabling the region to navigate the opportunities and challenges of turn-of-the-millennium globalization from a position of greater strength and cohesion than in our timeline.

Immediate Aftermath

Regional Institutional Transformation

The immediate implementation of the CSME necessitated a rapid strengthening of regional institutions, dramatically altering the Caribbean's governance landscape:

Enhanced CARICOM Secretariat: By 1995, the CARICOM Secretariat in Georgetown, Guyana underwent significant expansion, transforming from a primarily administrative body into a robust executive agency with increased technical capacity and enforcement powers. Its staff tripled between 1994-1997 as new departments for competition policy, monetary coordination, and regional development were established.
Caribbean Court of Justice: Unlike our timeline where the CCJ was inaugurated in 2005, the Court was established by 1996 as both a final appellate court and the tribunal for interpreting the Revised Treaty. This earlier implementation created a consistent legal framework crucial for business confidence and dispute resolution across the single market.
Regional Central Bank Framework: The creation of a Regional Monetary Authority by 1998 coordinated national central banks, establishing mechanisms for exchange rate stability and laying groundwork for potential currency convergence. While stopping short of a single currency, this system created a more stable monetary environment than existed in our timeline.

These strengthened institutions provided the governance architecture necessary for a functioning single market, creating accountability mechanisms that addressed the implementation deficits that plagued our timeline's integration efforts.

Economic Restructuring and Adjustment

The first five years of the accelerated CSME triggered significant economic restructuring across member states:

Industry Consolidation and Specialization: Industries previously protected by national barriers underwent rapid rationalization. Trinidad and Tobago's manufacturing sector expanded regionally, while Jamaica's financial services industry became more dominant. Smaller states saw both painful contractions in uncompetitive sectors and growth opportunities in niche areas like specialized agriculture and tourism services.
Internal Migration Flows: The genuine free movement provisions created noticeable population shifts. Between 1995-2000, approximately 85,000 CARICOM nationals relocated within the region—significantly higher than in our timeline—with Trinidad and Tobago, Barbados, and Jamaica as primary destinations. This migration generated political tensions but also addressed labor market imbalances.
Small State Adjustment Mechanisms: Recognizing the differential impacts of integration, a Regional Development Fund was operationalized by 1996, providing approximately US$250 million annually for infrastructure and economic diversification projects in smaller states. This cushioned adjustment costs more effectively than in our timeline, where such mechanisms remained underfunded.
External Trade Strategy: By 1997, CARICOM successfully negotiated as a bloc with the European Union for the post-Lomé Convention framework, achieving more favorable terms than individual states could have secured. This early experience in unified external negotiations established practices that strengthened the region's international economic diplomacy.

Private Sector Response

The business community reacted dynamically to the new integrated environment:

Pan-Caribbean Enterprises: Several regional companies emerged as significant players between 1995-2000. Trinidad-based conglomerates expanded throughout the region, Jamaican financial institutions established comprehensive regional networks, and even companies from smaller states found expansion opportunities. By 2000, intra-regional investment had increased by approximately 300% compared to 1993 levels.
Business Formation Boom: The harmonized business registration systems and right of establishment provisions catalyzed entrepreneurship. Approximately 6,000 new cross-border businesses were established between 1995-2000, particularly in services, light manufacturing, and agro-processing—a sharp contrast to our timeline's more limited regional business integration.
Competitiveness Initiatives: Facing increased regional competition, national private sector organizations partnered with governments to launch productivity enhancement programs. The Jamaica Productivity Centre, established in 1996 rather than 2003 as in our timeline, became a model, with similar institutions appearing across the region by 1999.

International Recognition and Relationships

The early implementation of the CSME altered the region's international positioning:

Enhanced Diplomatic Weight: By 1998, international institutions like the IMF, World Bank, and WTO had adjusted their engagement models, increasingly dealing with CARICOM as a coordinated entity rather than individual states. This provided smaller members with amplified voices in international forums.
Investment Attractiveness: Foreign direct investment into the region increased approximately 45% between 1994-1999 compared to historical trends. Investors were attracted by the larger unified market, regulatory predictability, and improved infrastructure connectivity.
Regional Identity Strengthening: Public opinion surveys conducted in 1999 showed that approximately 67% of CARICOM citizens identified strongly with regional identity alongside national identity—a significant increase from the 42% recorded in 1992. This shift reflected growing social and cultural integration alongside economic ties.

While not without adjustment challenges and disputes, the immediate aftermath period demonstrated measurable progress toward the long-held vision of a unified Caribbean economic space. National leaders who had made political gambles on fast-track integration generally found their positions strengthened as tangible benefits began materializing more quickly than skeptics had predicted. By 2000, the foundations were established for a development trajectory distinctly different from our timeline.

Long-term Impact

Economic Performance Divergence

By 2025, the earlier implementation of the CSME had produced significant economic performance differences compared to our timeline:

Aggregate Economic Growth: Between 2000-2025, the CARICOM region averaged 3.8% annual GDP growth, compared to the approximately 2.1% in our timeline. This higher growth trajectory meant a regional economy approximately 40% larger than in our actual history, with a combined GDP of around US$170 billion rather than US$120 billion.
Reduced Economic Volatility: The integrated market provided better insulation against external shocks. During the 2008-2009 global financial crisis, CARICOM economies contracted by an average of 1.7%, significantly less than the 3.5% contraction experienced in our timeline. Recovery was also faster, with pre-crisis output levels restored by 2011 rather than 2013-2014.
Sectoral Transformation: The economic structure of the region evolved differently. By 2025, knowledge-based services (including financial services, creative industries, and digital services) represented 34% of regional GDP compared to 22% in our timeline. Agricultural value-added products saw a renaissance, with production value 85% higher than in our timeline due to greater regional market access and coordinated export strategies.
Debt Dynamics: The improved growth fundamentals and coordinated fiscal policies resulted in substantially lower debt-to-GDP ratios across member states. By 2025, the regional average stood at 61% of GDP versus approximately 80% in our timeline. This created greater fiscal space for development investment and reduced vulnerability to debt crises like those faced by Jamaica and Barbados in our timeline.

Demographic and Social Transformations

The single market's implementation reshaped Caribbean demographics and social structures:

Migration Patterns Reversal: The robust regional labor market gradually reduced extra-regional emigration. By 2025, net emigration rates to destinations outside CARICOM had decreased by approximately 35% compared to our timeline. More significantly, approximately 225,000 Caribbean nationals who had previously emigrated to North America and Europe returned to the region between 2000-2025, bringing valuable skills and capital.
Educational Transformation: The University of the West Indies evolved differently, establishing specialized campuses for different disciplines across the region rather than duplicating programs. By 2015, it had risen to rank among the top 300 universities globally (compared to its position outside the top 500 in our timeline), with enrollment 60% higher and significant increases in research output.
Income Distribution Effects: While regional inequality initially increased during the adjustment period (1995-2005), coordinated social policies and labor market integration subsequently narrowed disparities. By 2025, the regional Gini coefficient stood at 0.39 compared to 0.45 in our timeline, with poverty rates approximately 28% lower.
Regional Identity Consolidation: The CARICOM passport, introduced in 1999 rather than piecemeal after 2005, became a powerful symbol of shared identity. By 2025, polls indicated that 78% of citizens considered their Caribbean identity equally important to their national identity, with younger generations increasingly viewing the region as their primary social and economic space.

Geopolitical Repositioning

The integrated CARICOM significantly altered the region's international relationships and influence:

Trade Relationship Reconfiguration: With enhanced negotiating capacity, CARICOM secured more advantageous terms in major trade agreements. The 2008 Economic Partnership Agreement with the European Union contained substantially better provisions for services and development financing than in our timeline. Similarly, relationships with the United States evolved from the unilateral Caribbean Basin Initiative toward more balanced arrangements.
China-Caribbean Engagement: When China accelerated its global economic engagement in the 2000s, it encountered a more coordinated Caribbean position. Rather than the fragmented approach seen in our timeline, CARICOM negotiated region-wide infrastructure and investment frameworks after 2005, preventing debt-trap scenarios while maximizing development benefits.
Caribbean Basin Dynamics: The successful CARICOM model influenced wider regional relationships. By 2010, enhanced cooperation mechanisms with Central America, Cuba, and the Dominican Republic created a more integrated Greater Caribbean economic space. The Caribbean Basin Free Trade Area, established in 2018, created a market of over 100 million people—an arrangement that remains hypothetical in our timeline.
Climate Diplomacy Leadership: With strengthened institutional capacity and collective voice, CARICOM emerged as a powerful advocate in international climate negotiations. The Alliance of Small Island States, often led by CARICOM members, secured significantly stronger commitments in the 2015 Paris Agreement than in our timeline, including dedicated financing mechanisms for adaptation and loss and damage.

Sectoral Developments and Innovation

Specific economic sectors developed along significantly different trajectories:

Financial Services Evolution: Rather than the contraction seen in our timeline, Caribbean offshore financial centers evolved into a more sophisticated regional financial hub through harmonized regulations and coordinated responses to international standards. By 2025, financial services contributed approximately 18% to regional GDP, compared to 11% in our actual history.
Renewable Energy Transformation: Coordinated energy policy created economies of scale that made renewable energy investments viable earlier. By 2020, the region achieved 52% renewable electricity generation (compared to 28% in our timeline), with Trinidad and Tobago's energy expertise repurposed toward developing a regional green hydrogen industry after 2015.
Digital Economy Acceleration: The harmonized telecommunications regulatory framework established by 1996 fostered earlier market liberalization and infrastructure development. By 2010, broadband penetration reached 65% (versus 35% in our timeline), enabling the growth of a vibrant regional digital services sector. By 2025, over 2,000 technology startups operated across the region, with several achieving "unicorn" status.
Tourism Integration: Rather than competing primarily against each other, CARICOM destinations developed complementary tourism products marketed under unified branding from the late 1990s. Multi-destination tourism packages became standard, extending average visitor stays and spreading benefits across member states. By 2025, tourism value retention within the region stood at 68% versus 45% in our timeline.

Persistent Challenges

Despite the alternative trajectory's successes, significant challenges remained by 2025:

Vulnerability to External Shocks: While reduced compared to our timeline, the region remained vulnerable to climate impacts and global economic disruptions. The COVID-19 pandemic still caused severe economic contraction in 2020-2021, though recovery was more robust than in our actual history.
Governance Tensions: The balance between regional governance and national sovereignty required continuous negotiation. A major constitutional crisis in 2012-2013 over a Caribbean Court of Justice ruling against a member state's immigration restrictions highlighted ongoing tensions in the integration process.
Implementation Unevenness: Similar to the European Union experience, the depth of integration varied across economic sectors. Labor market integration reached approximately 85% completion by 2025, while monetary policy harmonization achieved only about 60% of its intended objectives.
Development Disparities: While narrowed compared to our timeline, significant development gaps persisted between the more and less developed member states. The regional convergence process proved slower than initially hoped, requiring ongoing transfer mechanisms and special provisions.

Nevertheless, by 2025 in this alternate timeline, CARICOM had evolved into a functioning economic union with significantly greater prosperity, stability, and international influence than in our actual history. The region demonstrated that small states could successfully pursue deep integration as a development strategy, offering a model that influenced other regional groupings of developing countries around the world.

Expert Opinions

Dr. Antoinette Blackwood, Professor of Caribbean Integration Economics at the University of the West Indies and former advisor to the CARICOM Secretariat, offers this perspective: "The delayed implementation of the CSME in our actual timeline represents one of the great missed opportunities in Caribbean development history. Had integration proceeded rapidly after the Grand Anse Declaration, the region would have positioned itself advantageously just as globalization accelerated in the 1990s. Instead of fifteen small, vulnerable economies trying to navigate the currents of global economic transformation individually, an integrated market would have provided the scale, resilience, and negotiating power to shape rather than merely react to external forces. The 'implementation deficit' that has characterized CARICOM has been as much about political psychology as about technical capacity—a persistent belief that national solutions can adequately address what are fundamentally regional challenges."

Professor James Richardson, Director of the Center for International Economic Policy at Georgetown University and specialist in comparative regional integration, provides this analysis: "What makes the Caribbean case particularly fascinating in alternate scenario modeling is that, unlike some regions, the fundamental economic logic for integration was sound. The complementarities between resource-rich and service-oriented economies, the cultural and linguistic commonalities, and the shared external challenges all created favorable conditions. However, timing proves crucial in such processes. The early 1990s offered a unique window when global economic restructuring, the end of certain preferential trade arrangements, and the demonstration effect of other regional blocs created both push and pull factors for accelerated integration. Once this window closed, the path-dependent nature of economic development made catching up increasingly difficult. The counterfactual of early CSME implementation suggests that regions facing similar circumstances today—like parts of Africa or Central Asia—should consider the potential costs of integration delay, not just the challenges of integration itself."

Dr. Elena Verdier, Economic Historian at the University of Paris and author of comparative studies on post-colonial economic development, suggests: "The alternate CARICOM trajectory reminds us that economic history is not deterministic for small post-colonial states. The conventional narrative that small island economies are inevitably marginalized in the global economy deserves scrutiny. What the accelerated CSME counterfactual demonstrates is the critical importance of institutional design and implementation timing. Had the Caribbean created robust regional institutions in the 1990s with genuine enforcement capabilities—similar to how the East Asian economies built state capacity earlier—the development outcomes could have diverged dramatically from what we observe today. The Caribbean's actual experience with partial integration neither captured the benefits of true economic union nor preserved the full flexibility of independent economic policy, leaving the region in an unfavorable institutional middle ground. This offers a cautionary tale about the risks of halfway integration measures that many other regional groupings would do well to consider."