This inevitably impacted the living conditions of the region’s 515 million people. Seven million more sank into poverty. Unemployment rose from 8.4 to 9.1 per cent of the work force. Average real wages fell by 1.5 per cent and inflation doubled to 12 per cent.

ECLAC draws attention to the fact that the slowdown began as long ago as 1997. The Executive Secretary, Jose Antonio Ocampo, speaks of the “lost half decade” of the Latin American and Caribbean region.

Twenty-five of the 34 countries covered by ECLAC are members of the Association of Caribbean States (ACS) in the Greater Caribbean region. The GDP figures for 24 of these are shown in the accompanying table, broken down into ACS sub-groups.

Thirteen of the 24 experienced a fall in real income per person in 2002. Of the other 11, only four managed an increase in excess of two per cent. Fifteen of the 24 also suffered a worsened growth performance by comparison with 2001.

The countries with falling per capita income include those of the Group of 3, containing 70 percent of the ACS population; three of five Central American countries; six of 14 CARICOM countries and one of three non-grouped countries. Thus it is likely that real income per person fell for the Greater Caribbean region as a whole in 2002.

There is some consolation to be found in the incipient recovery noted by ECLAC beginning in the second quarter of 2002. If the recovery continues through 2003 ECLAC foresees modest growth of 2.3 per cent for the year.

The root of the problem, as become clear from the ECLAC report, lies in the nature of Latin America’s insertion into the world economy coupled with the impact of several unfavourable international economic developments since the onset of the Asian financial crisis in 1997.

Chief among these are conditions in international financial markets, the 2001-2002 recession in the United States, and declining terms of trade for non-oil exporting economies.

There is a lesson to be drawn from this on the strategic value of increasing integration within and among regional groupings such as the ACS, CARICOM, Central America, the Andean Group and Mercosur. Regional integration can mitigate the impact of external changes, reducing vulnerability and heightening the resilience of the economies of the region.

GDP change 2001-2002

GDP
Per capita GDP

2001

2002

2001

2002

Latin America (20 countries)

0.3

-0.5

-1.2

-2.0

Caribbean (1)
1.8

1.9

1.1

1.2

ACS Members

Group of 3

Colombia
1.4

1.6

-0.4

-0.1

Mexico
-0.4

1.2

-1.9

-0.3

Venezuela
2.9

-7.0

1.0

-8.7

Central America

Costa Rica
1.0

2.8

-1.2

0.7

El Salvador
1.9

2.3

0.0

0.4

Guatemala
2.4

1.9

-0.3

-0.7

Honduras
2.7

2.0

0.1

-0.6

Nicaragua
3.0

0.5

0.3

-2.1

Non-grouped

Cuba
2.5

1.4

2.1

1.1

Dominican Republic
2.7

4.0

1.0

2.3

Panama
0.4

0.4

-1.1

-1.1

CARICOM

Antigua & Barbuda
4.3

0.0

4.0

-0.3

Barbados
-2.2

-0.4

-2.6

-0.7

Belize
4.7

3.7

2.6

1.7

Dominica
-5.2

-6.0

-5.2

-5.9

Grenada
-3.3

3.4

-3.6

2.7

Guyana
2.3

2.0

1.9

1.7

Haiti
-0.7

-1.5

-2.5

-3.3

Jamaica
1.8

2.0

0.9

1.1

St Kitts & Nevis
2.0

-2.5

2.7

-1.8

St Vincent & Grenadines
0.3

4.0

-0.3

3.4

St Lucia
-5.0

1.0

-6.1

-0.1

Suriname
n.a

n.a

n.a

n.a

Trinidad & Tobago
3.3

2.7

2.8

2.2

Note:(1) CARICOM excl. Haiti