Transcript Where are we working?

Globalization and Saint Lucia
Why would globalization be good?
• Economic growth means improved livelihoods
and reduces poverty
• Access to food and education
• Access to technology- Diamond: remote poor
•
access to information
Access to more things
• The more growth we have the better off we all
are
• It will trickle down
Why would globalization be bad?
• Economies of scale – not diversified
(subject to outside forces)
• National autonomy – tourism
• Ecological impact
• Distribution
“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
Caribbean Single Market Economy
(CSME) - 1996
• 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
St Lucia, St Kitts and Nevis, Suriname, Belize, Jamaica,
Antigua and Barbuda, Montserrat, Grenada, Dominica, St
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
“The total value of goods and services produced by a
nation”
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
World GDP and CO2
$100,000
$10,000
$1,000
$100
$10
1
0
0
0
$1
CLIMATE DAMAGE
Distribution-Grow out of
poverty?
Poverty rate vs. GDP per Capita (1996$)
$35,000
20%
18%
$30,000
16%
$25,000
14%
$20,000
12%
$15,000
10%
per capita GDP (1996$)
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0
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2
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95
1
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93
1
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91
poverty rate
1
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89
1
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87
1
1
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85
1
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83
1
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81
1
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79
1
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77
1
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75
1
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73
1
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71
1
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69
1
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67
1
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65
9
63
1
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1
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1
9
1
61
8%
59
$10,000
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.
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.
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 and
the environment.
What do you think about
globalization?
• Incorporate values of ecosystem services
• Better distribution
• Can we have more economic growth and
incorporate ecological sustainability and
social equality? - Walmart