Outside the Caribbean region, if a holidaymaker tells someone that they are going to Saint Vincent and the Grenadines, the odds are they will offer a blank expression and ask where, or what, it is. But show them photos of the place afterwards and they will sigh with envy. A lush string of islands scattered across the south-eastern Caribbean, the small archipelago country has a rugged, unspoilt beauty that has escaped the notice of the hordes of international tourists that flock to neighbouring countries.
Among the 32 islands and cays that make up the country, only the Grenadine island of Mustique enjoys international renown, although not that many people are fortunate enough to access it. Five kilometres by 1.5 kilometres in circumference, Mustique is a privately owned island that serves as a secluded retreat for the rich and famous – as economic minister and son of the prime minister Camillo Gonsalves jokingly describes it: “Where the billionaires go to get away from the millionaires.” Now celebrating 50 years in existence, management firm the Mustique Company has no plans to open up the island further – it has 100 luxury villas on it, with room only for a handful more.
Nearby Canouan and Palm Island have taken a similar approach and are keeping themselves exclusive. Luxury hotel group Mandarin has taken over a five-star resort on Canouan.
But other Grenadine islands – such as the small, impossibly pretty Bequia, about which a headline in UK newspaper the Daily Telegraph asked a few years ago: “Is this the perfect Caribbean island?” – have the space, appetite and opportunities for development. National Properties, the government agency charged with overseeing state lands, is offering sites for development to the private sector in stunning settings on Bequia, Union Island and Saint Vincent. Incentives are available to entice resort developers.
“We offer, through our Hotels Aid Act, duty-free food and beverage concessions once the hotel is operational. We offer tax holidays, and basically even if it’s not covered within our legislation, it doesn’t mean that it’s completely exempt. You still have the opportunity to request the concession from our cabinet and it will be given consideration,” says Nadine Agard-Juillerat, deputy executive director of investment agency Invest SVG.
Though the largest and most populated of the country’s constituent islands – and site of capital city Kingstown – Saint Vincent has mostly been bypassed by the wealthy visitors who fly on small charter flights or private planes direct to their island hideaways in the Grenadines. A lack of direct commercial flights from key source markets for sun-seekers such as Canada and the US kept the less wealthy tourists away.
But the February 2017 opening of a new international airport just outside Kingstown looks set to place Saint Vincent on the tourist track – and, it is hoped, create new export and FDI opportunities as well.
“We are open for investment. We have already announced that we are going to have a record cruise season [for 2017], our yacht arrivals have been strong over the past few years and should be even better this year, and now the international airport is here. So all of the dots are [being joined] and the product that we have as a tourism destination is improving and therefore we’ll see the interest,” says Cecil McKie, minister of tourism, sports and culture in Saint Vincent and the Grenadines.
Ready for take-off
Securing deals with international airlines is a top priority, starting with North America, an obvious tourist source market for the Caribbean. Air Canada plans to launch the first ever scheduled flights from North America to Saint Vincent in December 2017, and will be serving the new Argyle International Airport weekly.
There has been impatience at the slow take-up of international carriers but Hadley Bourne, CEO of the airport, says talks are ongoing with other airlines, including some in Europe. “The European market is still basically served via our connecting partners, whether through Barbados or Trinidad and connecting onward. But we’re in the process of developing that direct link to increase the volume. Currently our growth from a passenger point of view is really through the North American market, where New York and Toronto are our main source markets,” he says.
Not everyone was on board with the idea of the new airport – it was a long-fought, highly contentious, costly endeavour – but now that it is operational the general feeling is that the country needs to make the most of it.
“With the opening of the new international airport, Saint Vincent and the Grenadines is open for business and ready for investment in tourism, property development, agriculture, fisheries, banking and infrastructure projects, adding jobs and business opportunities for local people and outstanding returns for investors. Much remains to be done to improve commerce and industry in Saint Vincent and the Grenadines through FDI, and once the anticipated comprehensive policy for investors is in place, the country can really take off,” says Mark-Anthony Johnson, CEO of JIC Holdings, an asset and investment holding company with interests in emerging and frontier markets that has been looking at Saint Vincent and the Grenadines for some years with a view to investing in the development of the islands.
“The airport is the start of a process, I hope. We need to be able to promote the island and start getting the tourists here. Once we get that, it will be a good economic boost and it should trickle down to other sectors,” says Stephen Joachim, chief financial officer of the Mustique Company.
A blank canvas
Saint Vincent and the Grenadines’s lack of previous widespread development presents an opportunity for both tourists and investors to explore uncharted terrain.
“We’re still virgin territory. Saint Vincent and the Grenadines is not as developed or mature as some of the other economies in the Caribbean, such as Barbados, Trinidad and Tobago, Jamaica and Guyana – they’re an older [tourism] product, they’ve been at it for a longer time, and have more infrastructure, facilities and population scale. But because Saint Vincent and the Grenadines is virtually untapped, it presents a good proposition for investors who would like to come in and carve a niche,” says Anthony Regisford, executive director of the country’s Chamber of Industry and Commerce.
Annette Mark, executive director of Invest SVG, says the agency has seen an uptick in investor enquiries since the airport opened. “We are wonderfully poised. We are in the Caribbean, we have great weather, nothing extreme – we are lucky in that we are further south than a lot of other islands and hurricanes tend to spin to the north. We have a stable government, strong court system, and we have great connectivity now from our islands,” she says.
Keen to capitalise on its new transport links but wary of being overrun with tourists, many on the islands caution against over-development. “You have to be careful about mass tourism on these small islands and what it can do to you and the impact it can have on your local environment,” says Mr Joachim.
“I see great opportunity here, if we develop those tourism sites and we promote what is best about us and not try to copy other people. We don’t need to be another Caribbean destination with a million tourists coming just to burn up their skin on the nice beautiful beaches.”
Areas of opportunity
In addition to tourism, the other pillar of Saint Vincent and the Grenadines’ economy, agriculture, stands to gain from improved connectivity to regional and global markets. Known in the region for its root crops and fish, Saint Vincent and the Grenadines has to date had limited means to get its goods to markets beyond its immediate neighbourhood. Having gone through a process of privatisation, foreign partners are being sought to help maximise the sector’s potential at a time when demand is growing for the country’s foodstuffs.
“Saint Vincent and the Grenadines right now is the bread basket of the southern Caribbean, satisfying major markets in Barbados and Trinidad and Tobago. Since the hurricanes Irma and Maria we have been called upon by the northern islands to triple production to satisfy this new demand,” says agriculture minister Saboto Caesar. “We really need FDI to bring our production platforms to the next level.”
Fisheries is an area of real potential, as Saint Vincent and the Grenadines has larger territorial waters than many of its neighbours. While once fish products had to be exported via Trinidad, they now can go straight to Miami in the US.
Other sectors identified for future potential are ICT, creative industries, light manufacturing, renewable energy and financial services.
“ICT in Saint Vincent is a growing sector. We’ve been a little late in catching up as to what are state-of-the-art ICT services here but there are a lot of projects that are on the horizon that will move Saint Vincent out of the more antiquated ICT features into more internet-based driven series, so you move from analogue systems to digital services. That creates a major area for growth,” says Carlon Browne, business solutions manager at telecoms company Digicel.
Digicel has been in the market since 2003, offering services ranging from mobile phones to full ICT solutions, and employs about 100 people in a head office and call centre. “The ICT side of things is relatively new; we’ve began distributing solutions around ICT for the past five or six years, and we’ve seen it growing increasingly year after year,” says Mr Brown.
The financial services sector in Saint Vincent and the Grenadines is small but stable, and expects a positive residual effect from the country’s enhanced connectivity and any growth that comes to the economy’s main sectors.
“There will be a lot of avenues and room for expansion – and we expect those spin-offs to come to the banking sector, to the extent that you have growth in tourism and those other sectors,” says Bernard Hamilton, manager of the Bank of Saint Vincent and the Grenadines. “I expect over the next four to five years, as we see our major traditional trade partners and the numbers coming back in tourism, we should see some positive spin-off from the international airport, but slowly. Some foreign investments will be projected in the near to medium term, which will generate employment. I can see that all going well for the banking services.”
Linda Bullock, CEO of offshore bank Loyal Bank, is also cautiously optimistic. “The economy has been growing, I would say moderately over the past two years, and I expect it to continue to grow with some accelerated growth towards the end of 2017 going forward. This would be primarily because of two important factors: the opening of the international airport and the existing pro-business climate of the jurisdiction.”
Work to do
While there is a clear feeling that the country has the wind at its back at this moment, further reforms and improvements are needed to make sure Saint Vincent and the Grenadines can make the most of the new chances it has been given. Public sector reform and the improvement of the delivery of government services are both frequently called for.
“Because of our small size and vulnerability to external shocks, we have to improve on things that we have control over and one of those things is the level and quality of the service that we deliver; and we have to remove restrictions and obstacles for investors,” says Mr Hamilton. “Once we have the necessary infrastructure, once we have the requisite trade agreements, once we make the necessary reforms in terms of our laws and policies, and once we apply the advancement in technology to the different sectors, then we can become as competitive as any other [Caribbean country] – because we have a unique product to offer. But it has to be predicated on those tangible things.”
Editor's note: An original version of this article mistakenly stated that Canouan and Palm Island are privately owned and managed, and that a Pink Sands resort is Canadian; in fact it is locally owned. We are happy to clarify these two points.