Globalization has made the world a smaller place, and has made it more challenging for small countries to participate and compete effectively in the world of business. The Caribbean economy is made up of separate island economies, which traditionally have been competing with each other for the same markets and investments. Profound changes in the international economic environment have made it imperative that the region acts as a single body. This has led to the formation of CARICOM Single Market and Economy (CSME). CSME is a means of deepening regional economic integration, thereby providing the region with a unified voice. The purpose of this study is to identify whether the CSME can mitigate the region’s economic troubles. It identifies through economic theories, the benefits that can be attained from integration. It illustrates using empirical methods how to measure the gains from integration. The study identifies supply and demand factors that are crucial for successful regional integration. The study provides evidence that CSME does possess both the demand and supply factors necessary for successful integration. Finally, the study points out some areas of concern that needs to be addressed for CSME to be truly effective.

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