CARIBBEAN COUNTRY OF THE FUTURE:
Puerto Rico takes the title Caribbean Country of the Future in fDi’s first biannual competition for this part of the world.
In 1898, after 400 years of Spanish rule, Puerto Rico became part of the US and its commonwealth status has made the island a popular destination for multinational investment. It topped four out of the seven main categories as having the best human resources, the best transport system, the best quality of life and the best promotion of FDI. It was also runner up for its economic potential, registering 5.4% GDP growth last year.
Puerto Rico also came in the top three in 13 out of the 26 sub categories: GDP (first); GDP growth (third); FDI deals (second); cost of calls to the US (first); percentage of the population with a degree (third); quality of universities (first); healthcare (first); schools (first); cultural and natural heritage (second); incentives (first); promotion (first); FDI attractions (first); and projects (first).
Recent deals, including investment from high-tech companies such as Guidant ($60m), Abbott Biotechnology ($2m) and Hamilton Sundstrand ($12m), impressed the expert panel. Location and labour costs are not the cheapest in the Caribbean but telecoms costs are low because the island has the same rates as the mainland US. Also in its favour is its comparatively high level of education: 18% of the population has a university degree.
Runner up:Dominican Republic
The Dominican Republic ranked among the top three countries in 11 subcategories (level of FDI; FDI deals; out-of-town office rent; industrial rent; secretarial costs; middle management costs; manual labour costs; telecoms costs; universities; transport; and heritage). In 2004, the country closed 55 deals involving FDI, and in the first nine months, FDI reached $365m.
The country came top for its cultural and natural heritage, yet location costs remain reasonable. Out-of-town office space costs around $102 per square metre per year and industrial space around $43 – only Martinique offers cheaper rental costs. Meanwhile, the Dominican Republic’s universities ranked second after Puerto Rico’s.
Though it did not place in the competition, Montserrat’s development projects, following major volcanic activity, were also noted by the judges as the island begins to seek inward investment.
BEST ECONOMIC POTENTIAL:
Winner: Trinidad & Tobago
Trinidad & Tobago is the second largest economy in the competition after Puerto Rico with annual GDP of $13.5bn. Economic growth of 6.3% makes it the second fastest growing economy in the competition after Anguilla. With just a fraction less than $1bn invested in the country in 2004 (up from $738m in 2003), it ranks top for foreign investment inflows.
Runners up: Puerto Rico/ Anguilla (tie)
Puerto Rico picked up points for being the largest and third fastest growing economy in the competition. Last year GDP reached $78.8bn, up 5.4% on the previous year. The judges also ranked it second for recent FDI deals (see above).
MOST COST EFFECTIVE:
Winner: Dominican Republic/ Martinique (tie)
Martinique tied with the Dominican Republic on points. Martinique came top for central and out-of-town office costs, secretarial costs, and middle management costs. It is also the only country in the competition with office space available for less than $100 per square metre per year.
Dominican Republic ranked top for industrial rental costs and manual labour costs (manual labourers make just $0.53 an hour). It ranked second after Puerto Rico for low telecoms costs.
Runner up: Trinidad & Tobago
Reasonable location and labour costs put Trinidad & Tobago in third place. Secretaries earn an average of $4600 a year; industrial space costs an average of just $53.8 per square metre per year, while central office space is available for an average of $150.
Meanwhile, Aruba offers low management and telecoms costs, the Cayman Islands low-cost industrial and out-of-town office space, and Antigua low-cost office space.
BEST HUMAN RESOURCES:
Winner: Puerto Rico
Puerto Rico’s universities were voted top by all but one of the judges and more than 18% of the country’s population holds a degree.
The country has 61 university-level institutions, including Pontificia Universidad Católica de Puerto Rico, Universidad de Puerto Rico, Universidad Interamericana de Puerto Rico, Universidad Metropolitana Sistema Universitario, Instituto de Banca y Comercio, Instituto Tecnológico de San Juan, Caribbean University, Antilles School of Technical Careers and Universidad Central del Caribe.
Runner up: Cayman Islands
With one in four of the population holding a degree, Cayman Islanders come out as the best-educated workforce in the Caribbean.
BEST TRANSPORT SYSTEM:
Winner: Puerto Rico
Puerto Rico’s Port of San Juan is the seventh busiest in the western hemisphere; and the island boasts other seaports such as the Port of Ponce and the Port of Mayagüez. Its airports handle 1500 cargo flights a week, and its main international airport is Luis Muñoz Marín International Airport. The island boasts several expressways, toll roads and a good road network. The $69m Tren Urbano commuter rail system is due to open this summer. No facility is more than two hours from an international airport or seaport.
Runners up: Dominican Republic/Cayman Islands (tie)
Dominican Republic has excellent maritime and flying connections, with eight international airports and 11 ports, seven with access to the Atlantic Ocean and the Caribbean Sea. The country has more than 20 daily flights to the US and Europe.
The Cayman Islands have 140 miles of modern roadway, two international airports, and a major port undergoing expansion. The national airline flies direct routes to seven US cities. British Airways flies from London four times a week.
BEST IT TELECOMMUNICATIONS:
Winner: Cayman Islands
With 765 telephone lines per 1000 people, Cayman Islanders are the best connected in this year’s competition. Mobile phone ownership is estimated at more than 72% and internet connectivity had reached 23% in 2003.
Runners up: St Lucia/Martinique/Antigua and Barbuda/ Barbados (tie)
St Lucia has the highest level of mobile phone ownership at 82.5%. Martinique has reached 76% mobile phone ownership and 27% of the population has internet access.
Antigua and Barbuda has 77.5% mobile phone ownership and 600 land lines per 1000 people, while Barbados has the highest level of internet users at 30.2% of the population.
BEST QUALITY OF LIFE:
Winner: Puerto Rico
Puerto Rico came top for healthcare and schools and second for natural and cultural heritage. It has six public hospitals and 32 specialist private hospitals. There are also more than 10 healthcare companies.
Puerto Rican schools teach in both English and Spanish. In many schools, such as Colegio Maria Auxiliadora, the American Military Academy, the Commonwealth High School and Parkville School, more than 80% of the teaching is in English.
The country also scored highly for its cultural and natural heritage. San Juan’s Centro de Bellas Artes Luis Ferre is the largest and best equipped performing arts complex in the Caribbean. Puerto Rico has 16 championship golf courses, plus world-class restaurants, nightlife and tropical rainforests.
Runners up: Barbados/British Virgin Islands (tie)
The British Virgin Islands won the award for best housing in this year’s competition. Average monthly rents in the hills surrounding the capital, Road Town, range between $3000 and $4000 for a typical three-bedroom, two-bathroom property with swimming pool. Similar properties cost around $450,000 to $500,000 to buy.
Barbados’ expatriate housing generally sells for between $300,000 to $8.5m. Apartments can be rented for between $1000 and $4000 a month. Gated developments have become increasingly popular, offering residents access to clubhouses, fitness centres and tennis courts.
BEST FDI PROMOTION:
Winner: Puerto Rico
Puerto Rico swept the board for its promotion strategy, ranking first in all four categories used to judge FDI promotion: promotion strategy, investment incentives, FDI attractions and development projects. Attractions include the fact that Puerto Rico is part of the US while being outside the US federal tax jurisdiction. It has a maximum 7% income tax rate for eligible industries and a surplus of highly educated individuals available for hire, many of them graduates of the country’s engineering schools.
Investment that creates jobs and brings new technology to Puerto Rico is also liable for tax reductions.
Major projects include a new $450m international convention centre, due to open in 2005, and major expansion of the main port to allow large cargo ships to dock and unload before feeder carriers transport goods to other Caribbean and Latin American ports.
Runners up: Cayman Islands/St Vincent & the Grenadines (tie)
The Cayman Islands were runner up in three out of the four categories: investment incentives, FDI attractions and major development projects. The Cayman Islands have no direct taxation and investors can receive import duty waivers on equipment, building materials, machinery, manufacturing materials and other tools.
Further concessions and fee reductions are also available to investors in designated areas. Attractions for investors include: a reputation for stability and a sound regulatory framework, a modern infrastructure, and a professional infrastructure that supports the Cayman Islands as a recognised international financial centre.
The Cayman Islands’ $17m port expansion, completed in May 2005, has increased their capacity for cruise tourism. The country is also undergoing a $50m road highway programme, with the first section of a four-lane highway scheduled to open next year.
St Vincent & the Grenadines’ investment promotion agency has worked closely alongside its counterpart in Mustique to raise levels of FDI, building links between domestic and international companies. The government has also led successful public-private sector developments, including the airport and cruise ship terminal, which have encouraged private inward investment in the islands. St Vincent’s National Investment Promotion Inc has been a strong policy advocate of legislation to enable higher levels of investment, particularly in the context of the Caribbean Community’s (Caricom) Single Market and Economy.