Glossary -- Islands of the Commonwealth Caribbean

alumina: The derivative of the metal ore bauxite (q.v.), used to make aluminum.
associated state(hood): A system of British colonial administration under which a colony has full internal self-government while Britain retains control over defense and foreign affairs. Associated states are governed by a British-appointed governor and a locally elected assembly. An associated state has more control over internal affairs than does a crown colony (q.v.); thus, associated statehood is one step closer to self-government. In late 1987, Anguilla was the only remaining associated state in the Commonwealth Caribbean.
bauxite: An earthy metal ore mined for its derivative, alumina (q.v.), used in the manufacturing of aluminum.
Black Power movement: A political and cultural black consciousness movement that began in the United States in the late 1960s and later spread throughout the Caribbean, causing widespread strikes and protests in the early 1970s.
cay: A low island or reef of sand or coral. In the Bahamas it may refer to a low sandy outlet or to an island. The customary spelling in the United States, key, is not used in the Caribbean.
crown colony (government): A system of British colonial administration under which Britain retains control over defense, foreign affairs, internal security, and various administrative and budget matters. Crown colonies are governed internally by a British-appointed governor and a locally elected assembly. In late 1987, the British crown colonies in the Caribbean consisted of the British Virgin islands, the Cayman Islands, Montserrat, and the Turks and Caicos Islands. Prior to the Morant Bay Rebellion in Jamaica in 1865, crown colony government was limited to Trinidad and St. Lucia. Over the next thirty-five years, however, Britain abolished the old representative assemblies that had flourished on many of the islands, and the colonies were governed directly by the Colonial Office in Britain and by a British-appointed governor on each island who was assisted by a local council, most of whose members were appointed by the governor. As the nineteenth century progressed, however, an increasing number of officials were locally elected rather than appointed. This so-called system of modified crown colony rule began in Jamaica and was emulated in other West Indian colonies in the 1920s and 1930s. Following the report of the Moyne Commission in 1940, the crown colony system was further modified to make local councils even more representative and to give local officials more administrative responsibility. Nevertheless, defense, foreign affairs, and internal security remained the prerogatives of the crown.
Eastern Caribbean: A term used to describe the islands east of Puerto Rico and north of Trinidad and Tobago. The Eastern Caribbean includes both independent nations and British, French, Dutch, and United States dependencies.
economies of scale: Decreases in the unit cost of production associated with increasing output.
807 program: Refers to items 806.3 and 807 of the Tariff Schedules of the United States that allow the duty-free entry of goods whose final product contains a certain portion of raw material or labor value added in the United States and the Caribbean Basin.
enclave industry: Foreign-owned firms that manufacture products exclusively for export. These businesses usually are labor-intensive, light assembly operations. Host nations provide investors with a range of benefits that typically include subsidized factory spaces in industrial parks near ports or airports; exemptions from import duties for raw materials, equipment, and machinery used in manufacturing; and suspensions of capital gains, income, and real property tax requirements for several years.
Eurocurrency: A country's currency on deposit outside the country. Most Eurocurrency claims are Eurodollars, which are dollar claims on banks located outside the United States. The Eurocurrency market is a wholesale market.
export-led growth: An economic development strategy that emphasizes export promotion as the engine of economic growth. Proponents of this strategy emphasize the correlation between growth in exports and growth in the aggregate economy.
financial intermediation: The process of taking in money (borrowing) so that it can be made available to individuals or institutions in the form of loans or investment.
fiscal year (FY): The fiscal year varies throughout the Commonwealth Caribbean. For example, in Anguilla, the Bahamas, Grenada, Trinidad and Tobago, and the Turks and Caicos Islands the fiscal year corresponds to the calendar year, whereas in Antigua and Barbuda, Barbados, the British Virgin Islands, the Cayman Islands, Jamaica, and Montserrat the fiscal year covers the period April 1-March 31, and in Dominica the fiscal year runs from July 1 to June 30. In this volume, however, fiscal year, when used, refers to the United States fiscal year, which runs from October 1 to September 30.
gross domestic product (GDP): A measure of the total value of goods and services produced by the domestic economy during a given period, usually one year. Obtained by adding the value contributed by each sector of the economy in the form of profits, compensation to employees, and depreciation (consumption of capital). Only domestic production is included, not income arising from investments and possessions owned abroad, hence the use of the word domestic to distinguished GDP from gross national product (q.v.).
gross national product (GNP): The total market value of all final goods and services produced by an economy during a year. Obtained by adding the gross domestic product (q.v.) and the income received from abroad by residents less payments remitted abroad to nonresidents.
import substitution industrialization: An economic development strategy that emphasizes the growth of domestic industries, often by import protection using tariff and nontariff measures. Proponents favor the export of industrial goods over primary products.
International Monetary Fund (IMF): Established along with the World Bank (q.v.) in 1945, the IMF is a specialized agency affiliated with the United Nations that takes responsibility for stabilizing international exchange rates and payments. The main business of the IMF is the provision of loans to its members when they experience balance of payments difficulties. These loans often carry conditions that require substantial internal economic adjustments by the recipients.
Lomé Convention: A series of agreements between the European Economic Community (EEC) and a group of African, Caribbean, and Pacific (ACP) states, mainly former European colonies, providing duty-free or preferential access to the EEC market for almost all ACP exports. The Stabilization of Export Earnings (Stabex) scheme, a mechanism set up by the Lomé Convention, provides compensation for ACP export earnings lost through fluctuations in the world prices of agricultural commodities. The Lomé Convention also provides for limited EEC development aid and investment funds to be disbursed to ACP recipients through the European Development Fund and the European Investment Bank. The Lomé Convention is updated every five years. Lomé I took effect on April 1, 1976; Lomé II, on January 1, 1981; and Lomé III, on March 1, 1985.
Offshore banking: Term applied to banking transactions conducted between participants located outside the country. Such transactions increased rapidly worldwide after the mid-1960s because of the growth and liquidity of Eurocurrency (q.v.) markets.
Organisation of Eastern Caribbean States (OECS): A regional body founded in 1981 by the seven former members of the West Indies States Association (WISA), which had been created in 1966. Original members were Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Christopher and Nevis, St. Lucia, and St. Vincent and the Grenadines. The British Virgin Islands later became an associate member. Headquartered in Castries, St. Lucia, the OECS is designed to coordinate economic, foreign policy, and defense matters among its members and to facilitate their relations with various international organizations. The OECS is an associate institution of the Caribbean Community and Common Market (Caricom-- see Appendix C) and oversees cooperation of its members in several Eastern Caribbean institutions: the Eastern Caribbean Currency Authority, the Eastern Caribbean Common Market, the Eastern Caribbean Central Bank, and the Eastern Caribbean States Supreme Court. The primary administrative organs of the OECS are the Authority of Heads of Government (the supreme policy-making body), the Foreign Affairs Committee, the Defence and Security Committee, and the Economic Affairs Committee. After the 1983 coup in Grenada, the OECS members jointly requested United States military intervention on that island. Four OECS members (Antigua and Barbuda, Dominica, St. Lucia, and St. Vincent and the Grenadines) joined with Barbados in October 1982 in signing the Memorandum of Understanding Relating to Security and Military Cooperation, which formed the basis for the creation of the Regional Security System (RSS).
Paris Club: A Paris-based organization that represents commercial banks in the rescheduling of national debts.
Rastafarian(ism): An Afro-Christian revivalist cult formed in Jamaica in the early 1920s. The so-called Rastafarian Brethren emphasized rejection of both Jamaican and European culture in favor of eventual repatriation to Africa. Identifying Africa with Ethiopia, Rastafarians viewed the former emperor Haile Selassie of Ethiopia as God incarnate. As hope of returning to Africa dwindled, Rastafarianism became more of a religious than a political movement. Rastafarians developed a system of beliefs compatible with their poverty and aloofness from society and similar to mystical experiences found in other protest religions. Rastas (as they are known in common parlance) have come to symbolize the movement away from white domination and toward a heightened black identify and pride. Rasta thought, reggae music, dance, and literature have been popularized throughout West Indian culture.
structural adjustment program: A sectoral economic program designed to restructure an economy to be more responsive to market mechanisms. Often required of countries receiving assistance from the International Monetary Fund (q.v.).
value-added tax: An incremental tax applied to the value added at each stage of the processing of a raw material or the production and distribution of a commodity. It is calculated as the difference between the product value at a given state and the cost of all materials and services purchased as inputs. The value-added tax is a form of indirect taxation, and its impact on the ultimate consumer is the same as that of a sales tax.
World Bank: The informal name used to designate a group of three affiliated international institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), and the International Finance Corporation (IFC). The IBRD, established in 1945, has the primary purpose of providing loans to developing countries for productive projects. The IDA, a legally separate loan fund administered by the staff of the IBRD, was set up in 1960 to furnish credits to the poorest developing countries on much easier terms than those of conventional IBRD loans. The IFC, founded in 1956, supplements the activities of the IBRD through loans and assistance designed specifically to encourage the growth of productive private enterprises in less developed countries. The president and certain senior officers of the IBRD hold the same positions in the IFC. The three institutions are owned by the governments of the countries that subscribe their capital. To participate in the World Bank group, member states must first belong to the International Monetary Fund (q.v.).