Navigating the Caribbean market has been costly and cumbersome for businesses for decades now. Why is the Caribbean still a patchwork of small island countries, with multiple currencies and largely isolated business markets? And how may better economic integration be achieved within the region?
The idea of economic integration itself is not new to the Caribbean. There have been several attempts:
- Back in the early independence period, the islands of the English-speaking Caribbean were linked under the Sterling Agreement – which eventually fell apart due to nationalist aspirations.
- In the 70s, the same part of the region embarked on a system of bilateral currency swap agreements – the Intra-Regional Payment Scheme. This scheme became the CARICOM Multilateral Clearing Facility by 1976, which collapsed in 1983 due to unpaid balances.
- The OECS remains a regional integration success story, with its EC Dollar as the common national currency for seven countries, a single Automated Clearing House for regional payments, and the introduction of the world’s first Central Bank Digital Currency (CBDC). Unfortunately, its benefits are limited to a population of only 615,000.
Since 2006 CARICOM’s Single Market and Economy (CSME) has been the centre-point of the regional integration push. It is rooted in the principles of freedom of capital, goods and labour among member states. Despite its intentions, the CSME initiative has been plagued with a number of institutional bottlenecks.
What is the way out? What can a solution look like, tackling at least some of the challenges mentioned?
Introducing an Economic Union Complementary Currency (EUCC) throughout the Caribbean alongside National currencies, is a short-cut to address the problem of multiple currencies rather than creating a monetary union. Furthermore, integrating such a currency into a Caribbean business network would remove the isolation of the island’s business markets.
This describes the value proposition of Carib$: a means for B2B payments utilised by businesses all over the Caribbean. It facilitates simple and low-cost cross-border transactions and directly advances regional integration, while at the same time not setting the bar for integration too high. How this works? Please check our website.