The global financial crisis and its aftermath: economic and political recalibration in the non-sovereign Caribbean

Abstract

The small non-sovereign island jurisdictions (SNIJs) of the Caribbean have a privileged position in the global political economy, with significant political and economic autonomy on the one hand, and useful protections and support structures provided by their metropolitan powers on the other. However, the global financial and economic crisis of 2007-2008 highlighted starkly some of the fragilities of this privileged status-in particular their economic vulnerability and the unequal and often fractious relationship with their metropolitan powers. This article considers the British, Dutch, French and United States jurisdictions and the short and longer-term impacts of the crisis. The article's key concern is to assess the extent to which the instability in the global economy over the last decade has affected both the economic and political dynamic of these jurisdictions, and to what extent their unique position in the global political economy has been compromised.

The impact of the 2008 global crisis on small economies in the Caribbean

“…The lack of harmonized data for many non-sovereign entities in the region however, has acted to conceal the severity of the domestic impact of the crisis. The crisis and its consequences have thus led some to reassess their longer-term relationship with their metropole in spite of their special status (see Clegg et al, 2017). Tables 7 and 8 show that sectoral specialization has been an important factor in post-crisis economic performance.…”

“…The global crisis however, has highlighted fundamental flaws in this strategy such that new growth-promoting policies are needed, possibly including greater state involvement (Bàrcena, 2010). Greater trade and integration with more dynamic emerging markets, such as Brazil, China and India, would reduce their heavy dependence on economic cycles in the US (Kouame and Reyes, 2011) as well as the metropoles of the many non-sovereign entities in the region (Clegg et al, 2017). OECD governments have been taking steps to clamp down on offshore tax avoidance and evasion, such that an over-reliance on financial services may not be a sustainable long-term growth strategy.…”