The Caribbean Single
Market Economy
Understanding the impact of the free movement of
labor on the people of St. Lucia
Kevin Stapleton, Graduate Student
Community Development and Applied Economics
The University of Vermont
Project Goals
Short term goal:
To understand the strengths, weaknesses, similarities
and differences between the economies of CSME
nations
Long-term Project Goals:
1. To assess the impact of the free movement of labor
on the people of St Lucia.
2. To help develop strategies for St Lucia to maximize
its benefit from free movement of labor
Project Partners

Lisa Louis Philip, PMP
Commerce and Industry Officer
Ministry of Commerce, Investment and
Consumer Affairs

Titus Preville
Deputy Permanent Secretary
Ministry of Commerce, Investment and
Consumer Affairs
How do economies grow?
Y = f (K,T,L)



Capital (K)
– Land
– Natural resources
– Built environment
Technology (T)
– Changes in productivity
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.
Factor 1: Capital
•Gross Domestic Product (GDP)
•Components of GDP
•Limitations of GDP
Gross Domestic Product per capita (PPP)
14000
12000
GDP (PPP, US$)
10000
8000
CSME Average: $7,726
CSME Median: $6600
6000
4000
2000
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Saint Lucia’s Per Capita GDP is just below the median among CSME nations, but well below
the average.
GDP per capita annual growth rate (%), 1990-2004
Jamaica
Guyana
Grenada
Dominica
Belize
Saint Kitts
Saint Vincent
Trinidad & Tobago
Antigua
St Lucia
0
0.5
1
1.5
2
2.5
3
3.5
4
St Lucia’s growth in the past 15 years has been well below the CSME average of 2.0%.
4.5
Dollar value contributions to per capita GDP
Service
Agriculture
Industry
Barbados
Antigua
Trinidad & Tobago
Grenada
Belize
Suriname
Saint Vincent
St Lucia
Dominica
Guyana
Jamaica
0
2000
4000
6000
8000
10000
12000
Like most Caricom nations, St. Lucia is heavily dependent on the service sector.
14000
“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.

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.
Factor 3: Labor

Components

Size

Education
Components of the Labor Force
Services
Agriculture
Commercial/Industrial
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
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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.
Size of the labor force
2004
2015
100.0
90.0
% of total population
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Trinidad &
Tobago
Guyana
Saint
Vincent
St Lucia
Suriname
Jamaica
Barbados
The CSME as a whole will benefit from the increasing size of the labor force.
Belize
Poverty and Unemployment
Unemployment rate (% of labor force, 2002 or 2003)
Poverty rate
70
60
Percent
50
40
30
20
10
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Saint Lucia’s poverty rate is below average, while its unemployment is above average.
Percent of Children reaching grade 5
Guyana
Median:
88
64
Grenada
78
Dominica
84
Saint Kitt
87
Saint Vincent
88
Jamaica
90
St Lucia
90
Belize
91
Trinidad & Tobago
100
0
10
20
30
40
50
60
70
80
90
100
Saint Lucia is among the highest achievers in this category, which should serve it well in the future.
Percent of the population that graduated secondary school and percent of the population with
tertiary education would be very helpful information.
Combined gross enrollment
100
90
80
CSME average: 76
% enrolled
70
60
50
40
30
20
10
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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
Per capita
GDP
12
Average years of education
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 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.
Resources and References

Mcintyre, A. (2000). Caricom and the WTO. Social and Economic Studies.
49,1, 83-112

A Time to Choose: Caribbean Development in the 21st Century (2005)
Caribbean Country Management Unit, The World Bank.

Freckleton, M. & Karagiannis, F. (2004). Development Policy Options for
Caricom in an Era of Free Trade. The Caribbean Economies in an Era of Free
Trade.

Coppin, A. (1994). The Demand for Labor in the Caribbean Community. The
Review of Black Political Economy, 23(2),39.

Griffith, W.H. (2002). A Tale of Four Caricom Countries. Journal of Economic
Issues.
36 (1) 79

Bernal, R.L. (2003). The Caribbean’s Future is not What it Was. Social and
Economic Studies. 52(1)
Questions or comments?

Contact information:
Kevin Stapleton
Department of Community Development and Applied Economics
The University of Vermont
104 Morrill Hall, Burlington VT 05401
Kevin.stapleton@uvm.edu