The remarkable surge in Chinese economic productivity, especially since the turn of the century, has been of material benefit to every economy in the world trading system, and the Caribbean has shared in those benefits. The most substantial benefit to the Caribbean from the relationship with China has been via the purchase of more affordable products made in China or made with Chinese inputs. The Caribbean has secured additional imports that may be of the order of five to ten per cent, compared with what the same money would have bought from alternative sources.
This paper was presented at the Symposium “The Caribbean on the Edge: Rising Above the Orthodoxy of Development Thinking”, organized by the Insititute of International Relations, University of the West Indies, St Augustine, Trinidad on September 11, 2019.
The currencies of Caribbean countries have now outlived their usefulness, and have become a liability. They were devised at a time when most payments were made using notes and coin, issued in distant metropolitan centres. Scarcity of the means of payment was a severe hindrance to commerce. In response Currency Boards were set up, to issue local currency as needed in the colonies. The system worked well because the local currency issue was backed by an equivalent value of Sterling, in a global system of fixed exchange rates. In contrast, nowadays payments are made mostly by electronic communication, credit and debit cards, cheques and drafts, with settlement over digitized bank accounts. In today’s world an own currency has become a liability for small economies, limiting access to international goods and services, exposing residents to risks of currency devaluation and inflation, eroding the value of domestic savings, increasing economic inequalities, providing a tool for unproductive government spending, and diverting attention from the need to increase productivity and enhance international competitiveness. You can also access this publication on The Social Sciences Research Network.