Economic Diplomacy in the Caribbean Since the Second World War

Economic affairs are an essential part of world history and, even more so, in contemporary times after World War II, when globalization processes with higher levels of interdependency and proximity among individuals and countries are increasingly observed—see Steger (2017) for a brief introduction to these globalization trends in four fronts: the political, the economic, the cultural, and the environmental. Economic systems are ways in which societies organize to provide opportunities for individuals, communities, and countries to earn the basics for livelihood and sustainability. Ensuring the socioeconomic sustainability of nations in that contemporary globalized environment has spurred significant activity in the field of international relations, pushing nations to practice diplomacy in various spaces and even subnational governments like cities, provinces, and associated territories to pursue paradiplomacy—this latter term referring to the international activity of non-central governments of a sovereign country as a localized complement to the central government diplomacy, as described in works by Aldecoa and Keating ([1999] 2013), Kuznetsov (2015, chapters 1-2), Lecours (2008), Tavares (2016, chapter 1) and Laureano-Ortiz (2016, chapters 1-2; 2022). A case study of this economic diplomacy and paradiplomacy, a critical activity for survival during particularly challenging times in world history, is the Caribbean region since the second half of the 20th century. In the case of the Caribbean area, the subnational governments of interest are those under national governments outside the region, that is, US, Netherlands, France, and UK. 

Defining the Caribbean 

The extent of the Caribbean area can be defined in various ways—see Gaztambide-Géigel (2006, 29-58) on the multiple Caribbean identities. The focus of this essay is the core Caribbean zone composed of the island territories within the Caribbean Sea in addition to Belize and the three Guianas (Guyana, Suriname, and French Guiana). However, consideration is also given to the larger notion of a Greater Caribbean or a Caribbean Basin, which adds the continental areas around the Caribbean Sea: i.e., southern Mexico, Central America, and the Northern coastal countries of South America. The peoples and lands of the Caribbean region share common historical experiences that include the interrelated indigenous populations, colonization by Europeans, the plantation economy and slavery, the significant African cultural heritage, and commerce networks (originally illicit when crossing imperial boundaries and/or rules).  

In an appreciation widely supported by historiography and other Caribbean literature, Gaztambide-Géigel (1998) specifically suggests that the Caribbean area shares a past dominated by the battles among the imperial powers (see also Williams [1970] 1984; Bosch [1970] 2005; Morales Carrión [1952] 1974; Rodríguez Beruff 1988; García Muñiz and Vega Rodríguez 2002), by colonialism and the plantation economy (see also Moya Pons 2007; Ayala 1999; Moreno Fraginals [1983] 1999), and by a culture of resistance with manifestations in political and cultural nationalism (see also Knight 1990; Lewis [1968] 2004), the existence and defense of their own languages (see also Alleyne [1985] 1989), the diversity of miscegenation processes, specially cultural ones (see also Knight 1999), religious syncretism (see also Dos Santos and Dos Santos [1977] 2006; Stewart 2004), music (see also Quintero Rivera 1998; Giovannetti 2001), and migratory patterns. Morales Carrión ([1952] 1974) provides an overview of the dynamics of illicit commerce networks during the first centuries of the European presence in the Caribbean zone. Other contemporary elements to the shared reality of this space include the intra-regional migrations, extra-regional movements to Anglophone North America and their former colonial powers in Europe, transnational populations (Richardson 2004; Duany 2011; Goulbourne 2002), the ups and down of the integration/collaboration efforts (Lewis, Gilbert-Roberts, and Byron 2018; Laureano-Ortiz 2018a, 2018b, 2018c), and cultural and sport exchanges—e.g., the Central American & Caribbean Games (Uriarte González 2009).  

For panoramic, and yet in-depth, views of the Caribbean region beyond what is covered in this essay, see the multi-author collections edited by Naranjo Orovio, González-Ripoll Navarro, and Ruiz del Árbol Moro (2019), Palmié and Scarano (2011), Naranjo Orovio (2009-2014), and Sued Badillo, Emmer, Knight, Laurence, Brereton, and Higman (1997-2011). 

The Caribbean: Confluence or Converging Point 

Across time, as evidenced by several examples, the Caribbean has indeed been a zone of confluence or convergence and the center for globally impactful processes, many of them being ambitious hegemonic projects by extra-regional parties. First, the roots of the indigenous population of the area are being traced to the confluence of tribes from North, Central, and South America. Second, the region was the entry point to the Pan-American continent for the Europeans at the end of the 15th century, causing a radical change in their geographical notions and worldview. This paradigm change gave the Caribbean, as seen by many scholars, a key role as originator of the Modern Age—a characterization underlined by a research project sponsored by the European Union under the name “Connected Worlds: The Caribbean, the Origin of the Modern World” (“ConnecCaribbean” in this shorter form), an effort headquartered in Madrid (https://www.conneccaribbean.com), which includes more than one hundred scholars from Europe, Latin America, and the Caribbean itself. This third phase of history as understood by Western civilization, the Modern Age, was an era of revolutions not only in geography, but also in art, science, philosophy, commerce, and religion.  

A third example of the Caribbean as a zone of confluence or convergence lies in its strategic location, making the zone center stage of the struggles for hegemony by European and US empires from the 15th century through the 20th. Global European empires led by the Spanish, the English, the French, and the Dutch originated in the Caribbean. Others like the Danish-Norwegians, the Swedish, and even Courlanders—from a small duchy in today’s Latvia (Ramerini [1998] 2020)—had a smaller or shorter presence in the area. Meanwhile, the US strengthened its hegemony in the region during the 20th century through interventions. 

As a fourth example, driven by the labor needs of economic activities developed in the region by the Europeans, the Caribbean became a convergence area for culturally diverse groups of Africans that were brought as slaves from many different regions of the continent; for Indians, Chinese, and Javanese that came from Asia through indentured labor contracts; and for others like Arabs and more Europeans, the latter from both the colonial powers and other countries, that arrived looking for opportunities. In a more recent period of history, as the region has gained more autonomy since the Second World War, the Caribbean has continued to be the axis of global competing hegemonies, this time in the economic front, as powerful countries outside the region and multinational enterprises (both legal and illicit) establish their worldwide strategies. 

The Economic Challenges of the Contemporary Period since the Second World War 

The decolonization processes pursued around the world after the Second World War, many of them facilitated by the United Nations, gave rise to today’s 34 countries in the core Caribbean region. Sixteen of them took the independence route: Spanish-speaking Cuba and Dominican Republic, Dutch-speaking Suriname, French-speaking Haiti, and twelve Anglophone countries (Guyana, Belize, Jamaica, St. Vincent & the Grenadines, Dominica, St. Lucia, Grenada, Antigua & Barbuda, St. Kitts & Nevis, Trinidad & Tobago, Barbados, and Bahamas). Eighteen have been exploring different kinds of relationships (still much debated in terms of their effectiveness) with their former colonial powers (US, France, UK, Netherlands) to further integrate in more democratic ways to those nations outside the region. These eighteen territories associated with nations outside the region include Puerto Rico and US Virgin Islands under United States; Aruba, Curaçao, Bonaire, Sint Maarten, Saba, and St. Eustatius under Netherlands; Cayman Islands, British Virgin Islands, Turks & Caicos, Anguilla, and Montserrat under United Kingdom; and French Guiana, Martinique, Guadeloupe, St. Martin, and St. Barthelemy under France. 

Bulmer-Thomas (2011, 2012, 2021) offers a panoramic economic history of the Caribbean since the nineteenth century, highlighting commonalities and divergences. According to his sources (Bulmer-Thomas 2021, xx-xxi), circa 2016, the five countries (out of the 34) with the highest Gross Domestic Product (GDP) per capita (in adjusted 2010 US dollars) were Cayman Islands ($59,796), St. Barthelemy ($46,952), US Virgin Islands ($29,389), British Virgin Islands ($29,091), and Martinique ($27,817). On the other hand, those with the lowest GDP per capita were Haiti ($729), Guyana ($3,784), Belize ($4,367), Jamaica ($4,790), and Cuba ($6,381). This wide range in economic states across the Caribbean during the 21st century is the result of imperial legacies and, as the region gained more autonomy during the second half of the twentieth century, to individual-country public policies and development strategies that responded to evolving global pressures. 

These latter pressures have come from the strategic maneuvering of multiple global parties that have had the intention to attain economic hegemony before the governments in the Caribbean: e.g., the narcotics informal sector which uses the region as an important pathway from producers to consumers (Rodríguez Beruff and Cordero 2005); tourism-related enterprises (including cruise lines and hotel chains) and international banking institutions with important stakes in the region for their particular products; manufacturing operations and exportable services centers (including call centers, consulting firms, and IT development shops) that originated their international division of labor and division of operational processes in the Caribbean; and governments from developed countries using various strategies to advance free trade, transparency, and anticorruption. The establishment of operations by multinational corporations in tourism, banking, manufacturing, and exportable services has typically required negotiation of tax and other business incentives provided by the government. This has been a challenging area in which the Caribbean governments are experienced, even being attributed to the pioneering creation of incentive schemes such as the Export Processing Zones (EPZs) and Special Economic Zones (SEZs). In his history of EPZs and SEZs as important elements in the development of global capitalism, Neveling (2015a, 2015b, 2017) points to Puerto Rico as being the first place where these incentives were implemented as multinational corporations formulated their strategies for the international division of labor. 

In terms of the advancement of free trade, transparency, and anticorruption, developed countries (especially former colonial powers) have led the way in proposing and requiring measures that have not always been advantageous for the region. The Caribbean has thus faced this type of measures, for example, via established trade-liberalization requirements to be accepted into trading blocs or simply through exclusion from the blocs. The region has also dealt with them via the trade liberalization requirements (oftentimes with no reciprocal commitments from other countries) to be granted international loans from institutions such as World Bank or Interamerican Development Bank. It has seen them through trade liberalization guidelines from the World Trade Organization and the financial-services transparency pressures from the Organization for Economic Co-operation and Development (OECD 2000). Likewise, the Caribbean zone has felt them via the push of the potentially burdensome responsibilities of international antidrug initiatives from countries with significantly large consumer markets. 

The Strategies of Economic Diplomacy and Paradiplomacy 

To search for options in socioeconomic development while navigating the above scenarios and seeking to overcome the imperial legacies, add consistency to country-level policies and strategies, and jointly face global pressures, the Caribbean leaders have historically pursued collaboration/cooperation by means of diplomacy and paradiplomacy among themselves in the region and in key spaces in the international extra-regional arena. Even when most of the territories of the core Caribbean were still colonies/dependencies of extra-regional powers (US, France, UK, and Netherlands) between the 1940s and the 1960s, their local leaders had an opportunity to meet, interact, and provide input to discussions/projects for regional development and security within international organizations—the Anglo-American Commission, the Caribbean Commission, and the Caribbean Organization—set up by the metropoles (Laureano-Ortiz 2018a, 2018b, 2018c; Vélez Rodríguez 2014). As territories gained independence, collaboration evolved, eventually giving rise in the 1970s to CARICOM (CARICOM 2005; Lewis, Gilbert-Roberts, and Byron 2018; Byron 2016). Although CARICOM was originally exclusive to the Anglophone Caribbean, it presently includes French-speaking Haiti and Dutch-speaking Suriname, and it is in the process to consider associate membership of Caribbean territories with subnational governments under France and Netherlands. It has also expanded its reach to the Greater Caribbean by organizing the Association of Caribbean States (ACS). In addition, it has supported the efforts of a subset of countries that have decided to make more significant commitments to integrate economically under the Organization of Eastern Caribbean States (OECS).  

From this CARICOM-based expanded platform, the Caribbean has historically addressed debates and challenges related to trade sectors such as tourism, manufacturing, financial services, agroindustry (including the banana controversies), the oil production, and drug trafficking. From this space, the countries of the region have formulated policies and strategies to collectively negotiate and strengthen its trade and economic alliances with the already mentioned ACS and OECS, but also others like the Caribbean Basin Initiative (CBI) agreements with the US, the failed Free Trade Agreement of the Americas (FTAA), and the Organization of African, Caribbean and Pacific States (ACP) and its related Lomé/Cotonou Agreements with the European Union. From CARICOM, the Caribbean countries have also established common fronts in negotiations within larger diplomatic circles like the United Nations (UN) and the Organization of American States (OAS). The most recent efforts of the region in economic diplomacy and paradiplomacy have been seeking to create an awareness of the impact of climate change and related extreme events and rising sea levels, mostly responsibility of developed countries, in the Caribbean region and to devise ways to obtain support to manage this impact (Lacascade and Laureano-Ortiz 2019).  

Historicizing economic diplomacy should acknowledge the growth of civil society as a significant player in the Caribbean—both at home and in the diaspora. Recent protests and grassroots movements (especially since 2017) in places like Cuba, Haiti, Puerto Rico, and the French Caribbean highlight this greater degree of involvement in day-to-day matters and decision-making. In the case of Puerto Rico, this involvement is evidenced by the work being done under the initiative Reimagine Puerto Rico (CNE 2022), the energy revolution and environmental awareness promoted by Casa Pueblo (Casa Pueblo 2022), and the centers of mutual aid and other community-led efforts across the archipelago (Vélez-Vélez 2020; Bonilla and LeBrón 2019, parts 4-5). CARICOM and other regional governmental entities already have spaces for the involvement of civil society organizations within its structure for policy making processes (Hinds 2019). Individuals and organizations around the region have been reaching out beyond the boundaries of their respective territories as they explore alternative models of community economic development and organize alternative means to plan and respond to emergencies and disasters. Examples of this type of internationally expanding organizations in Puerto Rico include Vamos Puerto Rico (2022), Iniciativa Comunitaria (2022) with its International Health Brigades, and AMAR (2022), Spanish acronym for Alliance of Physicians to the Rescue; all of them with activities in the Greater Caribbean and beyond.  

Approaches to Historicizing the Caribbean’s Economic Diplomacy 

To historicize these processes of economic diplomacy for the Caribbean region, there are several approaches to primary sources. Raw numerical data and quantitative analysis reports may be pursued to track historical behavior through socioeconomic and demographic indicators; this data might be the basis to understand socioeconomic challenges and potential solutions. This information might be useful to understand historical trends in specific products grown, produced, or manufactured (from bananas and sugar to hospitality and financial services); the evolution of specific economic activities; and indicators such as population, literacy rates, income per capita, or gross domestic product (GDP) as a measure of a country’s productivity. Online sources of this kind for the region are provided by institutions such as the World Bank (2022) and ECLAC (2022a, 2022b). To capture the diplomatic side of this history from the point of view of governments, official documents describing economic policies, joint strategies, and related decision-making processes from governments in the Caribbean region could be pursued. The online collections from organizations such as CARICOM (2022a, 2022b, 2022c), OECS (2022), and ACS (2022) would be a starting point for researching this aspect. To incorporate the work by civil society beyond these organizations, since these historical processes are contemporary, oral history and participatory action research methodologies would enrich the project. 

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