It is early morning in Kingstown, capital of Saint Vincent and the Grenadines, and the office of Invest SVG, the island’s promotional agency, is buzzing with anxiety. What appears to be the result of a caffeine overdose is in fact a reaction to the news of the delayed arrival of a prospective investor. Such behaviour might be less surprising if it was in response to a potential multimillion dollar deal, which could create thousands of jobs. But the investor in question represents an ethnic food store in Philadelphia and is searching for new fish suppliers.
“As long as someone is interested in us, we do our best to show the opportunities that exist here,” says Allan HM Alexander, the deputy executive director at Invest SVG.
No matter the size of the venture, economic development agencies in the Caribbean are keen to show the lengths that they will go to to attract and facilitate crossborder investments. “We have a Mandarin speaker among our employees and another person who is studying the language. We also learn about different cultural nuances to show respect to our prospective investors,” says Sancia Bennett Templer, president of Jampro, the trade and investment agency operating under the direction of the Jamaican Ministry of Industry, Investment and Commerce.
Emeline Taitt, director of investment promotion and facilitation at InvestBarbados, says during a networking session for potential and existing investors set up by the investment agency: “This is one, out of our many ideas, to convince businessmen to our island.” The story remains the same throughout the Caribbean: investment promotion agencies (IPAs) seeking innovative and creative ways in which to show their dedication to attracting and retaining investors.
Such a proactive approach is bringing results. According to greenfield foreign investment monitor fDi Markets, the number of crossborder projects in the Caribbean was up by 34% in 2011, compared to 2010. And while nearby Central America attracted just $2.2bn in foreign ventures in 2011, the figure for the Caribbean was more than twice as large. When it comes to the diversification of these ventures, however, the outlook for the region is much less positive.
With the exception of hotels and tourism, the sectors that are attracting investment in the Caribbean are all related to the domestic market. Countries in the region are struggling to convince entrepreneurs to launch ventures in sectors such as value-added manufacturing, creative industries and shared services.
According to Kelvin Mahabir, president of Trinidad and Tobago’s economic development agency, InvesTT, his country and the region as a whole has a trainable workforce and cultural affinity with the West, which should help attract more FDI. But one of the main obstacles to investment is the fact that the Caribbean has pleasant, but not necessarily business-oriented, associations.
“People, of course, know our region. But when we are at various trade shows, people come to our booth and tell us about the honeymoon or vacations they have spent here,” says Mr Mahabir.
The Caribbean is also trying to shrug off the perception that it is a tax haven. “We make sure that our records are transparent. We try to attract investors with our favourable tax system and other incentives, not covert financial registries,” says Dr McChesney Emanuel, chairman of the board at the Antigua and Barbuda Investment Authority (ABIA). Still, as representatives of the IPAs in the region admit, quite often they are approached by dubious businesspeople, who perceive the little Caribbean islands as the perfect place for their murky dealings. “We tell them that they are in the wrong place. We are open for business, but as long as it is within our legal framework,” says Mr Emanuel.
In a bid to shed these associations and labels, the region is undergoing a major marketing overhaul. “We have so much to offer, but it is not easy to fight against preconceptions and much bigger countries,” says Ronald Theodore, investment promotion manager at Grenada Industrial Development Corporation.
In 2004, in an attempt to unify promotional efforts and bring focus to the region-at-large, the Caribbean Association of Investment Promotion Agencies (Caipa) was formed. The organisation arranges joint outward investment promotion missions and study tours for economic development experts. “Caipa wants to make sure that all IPAs across the region are on the same footing and tries to pull all the members together,” says Chris McNair, director of competitiveness and innovation at the Caribbean Export Development Agency.
Caipa's integrational efforts can have limited impact, however, as the Caribbean economies are not as interlinked as it might seem. Although most of the Caribbean countries are joined in the regional single market treaty (CSME), this does not necessarily create closer ties between them. “It is not so much about law and treaties, as it is about a mentality of people over here,” says Cheronne Allen, planning and policy manager at Jampro. Ms Allen says that under CSME, citizens of the Caribbean community have the right to live and work across the region, but this is not always as easy as it seems. “Upon arrival, you may still be questioned by an immigration officer,” she says.
By the same token, travelling around the islands is not as easy as it may seem. The name of the Caribbean main regional operator – Leeward Island Air Transport, or LIAT – is often referred to by locals as 'leaving in any time' or 'left in air transit', as the service is not known for its reliability. On top of that, a lack of direct routes means that travelling to the region may involve a lengthy stopover in the US.
“People have started travelling around the islands more recently, but we still need an investor who will recognise that there is a big need for frequent and cheap regional flights,” says Lestroy Samuel, Caipa’s president. Foreign visitors can also expect that travelling around the Caribbean will entail filling out a lot of immigration forms and the constant exchanging of currency.
“Integration is a work in progress. We are trying to make certain that we get the economic integration right. At the same time, we must move at a pace that it is in keeping with psychological and political readiness of the people in the Caribbean,” says Harold E Lovell, Antigua and Barbuda’s finance minister.
Wayne Kirton, CEO of Invest Barbados, says: “Each island is different and historically Caribbean [integration] efforts have not been very successful.” He jokes that the biggest success story in the unification of the islands is the multi-national cricket team, the West Indies. But even here, the team that was virtually unbeatable in the 1970s and 1980s has fallen upon hard times.
While Caribbean cricket fans can do nothing but hope for a return to glory, businesspeople and IPAs are waiting for closer economic integration. In the meantime, however, investors can feel welcomed – for a large part thanks to the dedication and creativity of the regional IPA professionals – whether they are planning to set up a multimillion-dollar operation or just looking to expand the list of products offered in their ethnic food store.