Vidal Gabay 3955905

Book Review

Accounting Services and Growth in Small Economies
The Caribbean Basin are independent countries with small economies; in the era of the global
economy those small countries had their space to develop their economies in a big economy
system. In the actuality the vast majority of developed countries focus their economies in the
service sector, the best examples that the book uses are the transportation and communication
services those made the world economy possible another examples are banking, insurance
financial and entertainment services. Those services are in an oligopolistic market where small
firms can develop, work and offer those services, even though that international chain are in
barely all the business, but the small firms made the corporations to work better and more
efficient. Those small firms works more dedicated to an activity, something that big
corporations can due to its large size. For that reason big corporation like to let the small firms
focus on some services, they are giving a good attention to the costumers thru the small firms,
and small firms have a market to work with. Its a good situation for both parts, the big
corporations and the small firms. Somehow all the countries of the Caribbean Basin are part of
the world economy and are necessaries for the world.

The agricultural goods in the Caribbean countries are good quality because the weather and
the fertile land, but the vast majorities of those countries are price takers from the
bigger economies. Caribbean countries failed to develop a good system of export and
good diversification for their goods. Another factor is the competitive markets; all North
American countries with the focus on Mexico are hard competence for the small export
market of the Caribbean Basin countries. Another factor that affects the agricultural
market of the Caribbean Countries are in hurricane zone, where is easy that in one day a
hurricane can destroy the crops and as Abu Amara said reducing annual agricultural
export earning to next to zero. Economics shocks are a very common problem for the
economies of the world, shocks like natural disasters, the devaluation of their currency
high levels of unemployment, a rise of the price for an important commodity, like oil.
Those shocks in general are bad for any economy but for the small economies of the
countries of the Caribbean, are really bad, sometimes a Caribbean Country will take
more than five years to recover from a shock.
International Accounting firms offer more than accounting services they offer consulting,
manufacturing advice, in other words they give an approach to a company in relation to the
market, where a company is? Where a company can be and how a company can reach that
point like the book said they make the global economy possible. All the countries are related
with the accounting firms even the Caribbean Basin countries have firms that need all the
services offered by the accounting firms. Countries like Bahamas, Barbados, Bermuda, The
British Virgin Island, etc are partners of the largest international accounting services in the word
like Deloitte Touche Tohmatsu International, Price Waterhouse, KPMG Peat Marwick, etc.
Those accounting firms have costumers from the Caribbean Basin countries, the services that
they offer and give to their customers are Auditing, Accounting, Tax, Management Consulting,
etc
The Caribbean Basin is conformed by small countries, but we have to know that each country
have their own laws and institutions. We have to know that the laws from one country to
another can be different and for that reason some aspects of the economy of that country will
be more or less developed, For example, The Bahamas have a lot forms of business and firms,
those firms can do domestic and offshore transactions, but the difference from most countries
is: in Bahamas income, capital gains, wealth, inheritance are not taxable money. A factory can
have their headquarters in Bahamas but have many plants in Mexico, China and India and the
will not pay taxes from the income they are making by selling the goods inside or outside
Bahamas. Most countries in the Caribbean are Tax free with some restrictions a company
doesnt have to pay or pay a small amount of money for their income, unlike USA, that a
company has to pay high a percentage of their income in taxes.
As we know by that point is that the majority of the economies today are service oriented., but
in order to have a complete economy we have to have the other two that are agriculture,
because we have to produce food to eat, and the manufacturing process. The economy can be
oriented to the service sector, but without agriculture and Manufacturing, the economy will not
be complete. The Caribbean Basin countries sadly most of them do not have the three sectors.
Most of them have the agricultural sector and others the manufacturing sector, but not all the
three together. The Caribbean countries as the said have to develop or find a way to have each
country all the three together, so their economies will be complete and strong.
From my point of view a lot of companies use the Caribbean countries to have like I said before
the headquarters of a firm but they do all the operations offshore, that mean those companies
use the labor, of another country, pay low taxes of the profit that they make around the world
and give almost nothing to the country where the company is established. Caribbean Countries
should work in a law or an agreement to have more benefits for having the foreign companies
in their countries. In general its good for the Caribbean Basin countries to be part of the world
economy by having those companies in their countries and by using and having partners of the
most important International Accounting firms. The economies of the Caribbean Basing are
becoming bigger, with some regulations and help from the bigger and well developed countries
they could be a bigger and more important part of the international economy.