The Journey So Far: The Effect of Structural Adjustment Programme (SAP), Sustainable Growth, and Development in the Caribbean Region
Author(s)
Elu, Juliet
Abstract
The economic performance and growth pattern of most Caribbean countries leave much to be desired. In an attempt to resuscitate their economies, some of these countries have implemented structural adjustment programs (SAP’s). The intent of SAP’s is to encourage export-led growth through trade liberalization, which is also the basic objective of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). The GATT agreement calls for an elimination of all trade barriers, while the WTO enforces and administers multilateral trade agreements negotiated by member countries. According to some economic literature, trade liberalization continues to be the dominant prescription recommended for most less developed countries (LDC’s) as the engine of growth and development. The traditional neoclassical growth models imply that long-term economic growth is exogenously determined; however, the new growth models imply that correct policies can speed up the growth process. Similarly, the wrong policies could lead to economic stagnation. While the Caribbean region and LDC’s in areas such as sub-Saharan Africa have implemented trade liberalization policies as part of GATT/WTO/SAP rule, they have not yet been able to attract much foreign direct investment from industrialized countries. The major criticism of International Monetary Fund (IMF) policies is its lack of transparency. This article reviews the growth and development of the Caribbean Community (CARICOM) countries, given their participation in GATT/WTO, since their adoption of SAP’s.
