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Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)
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Final general public_caribbean_basin_initiative_-_last_frontier_of_the_americas (1)

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Investing with an Edge:Caribbean Basin Initiative: Last Frontier of the Americas

Investing with an Edge:Caribbean Basin Initiative: Last Frontier of the Americas

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  • 1. INVESTING WITH AN EDGE© International Developmentinthe Caribbeanand Latin Americas LAST FRONTIER OF THE AMERICAS - CARIBBEAN BASIN & CARICOMREGION 2012-2025 (FOR RELEASE TO THE GENERAL PUBLIC) ©CopyrightedDecember15, 2011
  • 2. LAST FRONTIER OF THE AMERICAS - CARIBBEANBASIN &CARICOM REGION INTRODUCTION: TRINIDAD AND TOBAGO LEADING IN INVESTMENT INCENTIVES What is the Caribbean Basin Territory? The Caribbean Basin isgenerallydefinedasthe arearunningfromFloridawestwardalongthe Gulf coast, thensouthalongthe Mexicancoast throughCentral Americaandtheneastwardacrossthe northerncoast of SouthAmerica.Thisregionincludesthe islandsof the archipelagoof the WestIndies. Bermudaisalso includedwithinthe regioneventhoughitisinthe west-central Atlantic,due toits commoncultural historycreatedbyEuropeancolonizationof the region,andinmostof the regionby the presence of a significant groupof Africandescent. The UnitedStatesTrade officesrecognize 17 beneficiary Countriesasessential tothe economicregion. ThisRegionjumpedfrom55millionin1940 to 166 millionby1980. The populationhasstartedtolevel off today,butthe UN projectsthat itwill jump80 percentbyyear 2025. CaribbeanBasin:1-Antiqua and Barbuda;2-Aruba;3-theBahamas;4-Barbados;5-Belize;6-British Virgin Islands;7-Dominica;7-Grenada;8-Guyana;9-*Haiti;10-Jamaica;11-Monserrat;12-Panama;13- St.Kitts&Nevis;14-St.Lucia;16-St.Vincentand theGrenadines; and 17-Trindid and Tobago. All are partof the Caribbean Basin Initiative (CBI) andare vital elementsinU.S.EconomicRelationswithour neighborsinCentral AmericaandSouthAmerica. The CBIwasdevelopedto facilitate the economic developmentandexportdiversificationof the CaribbeanBasineconomies. The CaribbeanBasinInitiativebecame effectivein1984 as a part of the CaribbeanBasin Initiative Act (CBERA) to encourage economicgrowthanddevelopmentinthe CaribbeanBasincountriesbyfirst promotingincreasedproductionandexportsof nontraditionalproductsandtoproclaimpreferential ratesof dutyon productsenteringthe UnitedStatesfromthe region. In2000 the (CBERA) was substantiallyexpanded throughthe U.S.-CaribbeanBasinTrade PartnershipAct (CBTPA), the CBI currentlyprovidesbeneficiarycountrieswithduty-freeaccesstothe U.S. marketfor mostgoods. Eightof these 17 countries are alsobeneficiariesunderCBTPA:Barbados;Belize;Guyana;Haiti; Jamaica; Panama;St.Lucia;and Trinidad and Tobago. The (CBERA) was amendedbythe Trade Act of 2002 and the Hope Act of 2006 to addressthe estimated effectsof CBERA beneficiariesthrough2006. The Trade Act of 2002 extended preferential treatmenttoimportsof socksfromC B T P A. The Hope Act authorizesduty-free treatmentforthree yearsforaspecifiedquantityof wovenapparel importsfromHaiti made from fabricproducedanywhere inthe world—upto50 million SMEsinyears one and two of the Act, andup to 33.5 millionSMEsinyear three.
  • 3. -2- What impact of preferential trade agreementson the CBERA countries? 2006-2008 – 31.8 billion CEBRA countriesconstitutedthe 17th – largestUS supplieraheadof Thailand but behindBrazil TrinidadandTobago’srise to the top source of U.S. importsfromCBERA countriesresultedmainlyfrom increasesinimportsof natural gas andnatural gas derivatives. The DominicanRepublicremained secondplace.CostaRica regaineditspositionfromHondurasasthe third largestimportsource as CAFTA-DR*enteredintoforce in2006 for the lattercountry,and Arubaand the NetherlandAntilles occupiesfourth andfifthplaces,respectively CAFTA-DR of 2006 ushersin International Law The DominicanRepublic–Central AmericaFree Trade Agreement,commonlycalledDR-CAFTA,isafree trade agreement(legallyatreatyunderinternational law,butnotunderUSlaw).Originally,the agreementencompassedthe UnitedStatesandthe Central Americancountriesof CostaRica,El Salvador,Guatemala,Honduras,andNicaragua,andwascalledCAFTA.In2004, the DominicanRepublic joinedthe negotiations,andthe agreementwasrenamedDR-CAFTA. DR-CAFTA togetherwiththe NorthAmericanFree Trade Agreement(NAFTA)andactive bilateralfree trade agreements,includingthe Canada-CostaRicaFree Trade Agreement, isseenasblocagreements insteadof a Free Trade Area of the Americas(FTAA) agreement. Panamacompleted negotiationswith the US fora bilateral free trade agreement(ratificationof whichispending),andBelize becamea memberof the CaribbeanCommunity(CARICOM). The (24) Caribbean Communityand Common Market (CARICOM) wasestablishedbythe Treatyof Chaguaramas,whichwassignedbyBarbados,Jamaica,Guyana andTrinidad& Tobago and came into effectonAugust1, 1973. Subsequentlythe othereightCaribbeanterritoriesjointCARICOM.The Bahamas became the 13th MemberState of the CommunityonJuly4, 1983, but not a memberof the CommonMarket.In July1991, the BritishVirginIslandsandthe TurksandCaicosbecame Associated Membersof CARICOM,followedbyAnguillainJuly1999. The CaymanIslandsbecame the fourth Associate Memberof the regional groupingon16 May 2002, and Bermudathe fifthAssociate Member on 2 July2003. Suriname became the 14th MemberState of the CaribbeanCommunityonJuly4,1995. For 2006, all countriesreceivedfull-yearCBIpreferences: •51% of U.S. importsoriginatedinonlythe top three CBIcountries;90% inthe topeight;• the numberone exporterbyvalue (25%) wasTrinidad and Tobago,whichisexplainedbyitsmineral fuelsexports;• the othertopexporterstothe United States(DominicanRepublic,CostaRica,Guatemala,Honduras,El Salvador) are all majorapparel manufacturers,withCostaRica’strade increasinglydominatedbysemiconductors,whichenterNTR dutyfree ;• the topsix CBI exportingcountries,notincludingenergy producersTrinidadandTobagoand Aruba,accountedfor 95.6% of Caribbeantextile andapparel exportstothe UnitedStates;
  • 4. -3- By 2008, the secondyearthat CAFTA-DRwasineffect:• 81% of U.S. importsoriginatedinonlythe top three CBIcountries;96% in the top eight,excludingthe CAFTA-DRcountries;•the numberone exporter by value (45%) wasTrinidadandTobago, whichisagainexplainedbyitsmineral fuelsexports;•Haiti has become the majorbeneficiaryof preferencesforapparel underthe CBTPA andHOPE. What was the impact of Preferential Trade AgreementonFuture Developmentofthe Caribbean Basin Territory? The CBERA program has hada positive effectoninvestment,which wasdiminishedinitiallybyNAFTA the productionsharingaspectof the CBTPA andprotectionistregimes. Todaythese regionsare flourishingthroughguidance of newpolitical leadership,stablegovernments andcommitmentsfrom the US governmenttosupporttheirefforts. US Trade office hasreenergizedtheireffortsin2011 withour free trade agreementpartnersinCentral America(CostaRica,El Salvador,Guatemala,Honduras,andNicaragua) andthe DominicanRepublic and to expandtoexpandtrade relations withBrazil as well. InFebruary2011, US heldthe firstFree Trade Commission (FTC) Ministers’meetingunderthe CAFTA-DRtoreviewitsadministrationand toexpand and broadenthe benefitsof trade underthe agreement. There Ministers endorsedapositive,forward- lookingagendawithafocuson trade facilitationandsmall andmedium sizeddevelopmententerprises. Preferential Trade inthese countrieshasbecome asource of betterjobsand greatereconomicstrength. The administrationhassaidthattheywill continue tosupporteffortstolinktrade andeconomic growth CARICOMCaribbeanCommunity. In2010, the U.S. Trade Representative’s“PlusOne forHaiti”Initiative securedpledgesfromU.S.brandsandretailerstoworktowardsourcingone percentof theirtotal apparel production fromHaiti. In2011, the US helpedHaiti totake maximumadvantage of opportunitiesinthe U.S.marketthrougheffortslike theseand the implementationof the Haitian HemisphericOpportunitythroughPartnershipEncouragement(HOPE II) Act,asamendedandextended by the Haiti EconomicLiftProgram (HELP) Act of 2010. Collectively,there are 24 countries thatmake-upthe ModernDayCaribbeanBasin today. Thisterritory has become acritical pillarof U.S. and global prosperity. The US has strengthened theirtransatlantic trade and investments. Thisnewfoundgrowthisnow sourcesof new jobs,growthandcompetitive advantages. Modern CaribbeanBasincountries:Bahamas;Barbados;Belize; Bermuda;Colombia;Costa Rica;Cuba; Dominica;El Salvador; Grenada;Guatemala;Haiti;Honduras;Jamaica;Mexico;Nicaragua;Panama; Puerto Rico (Commonwealthof Puerto Rico) Dominican Republic;SaintKitts and Nevis;Saint Vincentand the Grenadines,SaintLucia; Trinidad and Tobago;Venezuela ModernCARICOM (CaribbeanMembers): Antiqua and Barbuda;TheBahamas;Barbados;Belize; Dominica;Grenada; Guana;Haiti; Jamaica;Montserrat;SaintLucia; St.Kitts and Nevis;St. Vincentand the Grenadines; Suriname; Trinidad and Tobago. (Associate Members) Anguilla - 4 July 1999;
  • 5. -4- (Associate MembersofCARICOM Continues) Bermuda - 2 July2003; British VirginIslands - 2 July1991; CaymanIslands- 15 May2002; Turks and CaicosIslands - 2 July1991. Has Preferential Trade Agreementscreatedsustainable growth, jobcreation and poverty reductionto support New!Developments? In 2009, The WorldBank conducteda studyentitled, Accelerating Tradeand Integration in the Caribbean Policy OptionsforSustained Growth,Job Creation,and Poverty Reduction. Inthe study,the author discussedthe relationshipbetweentrade,growthandpovertyreduction. Inaddition,they discussed policy optionsforsustainedgrowth,jobcreationandpovertyreduction. The authorpoints out that the role of Regional Integrationwill playamajorrole infuture developmentof trade inthis region. The rightof establishmentandthe free movementof services,capital andlaborare also importantelementsof the region’sexternalcompetitiveness. http://siteresources.worldbank.org/EXTLACREGTOPECOPOL/Resources/CaribbeanTradeandIntegration. pdf Accordingly,the authorpointsoutthatincreasingthe region’scompetitivenesswill increase the capacity of the CaribbeanBasincountriesto build,andenhance the provisionof,regional publicgoods,Building infrastructure thatlastwouldbe critical forregional trade tofacilitate the mobilityof goods,labor,and capital across the region. In addition,itisstated bythe Author, that investingininfrastructure (police stations,jails,affordable housing, transports, energy,telecommunications, portsandsoforth) wouldalsoreduce the costof tradingwithexternal partners,therebyimprovingthe region’scompetitiveness. Forinstance energy utility ratesinCARICOMare amongthe highestinthe world.Weaknessesof infrastructure have limited the region’scapacitytopenetrate the global economy. A shiftto“trade quality”fromtrade quantity wouldrequire investmentininfrastructure. Specifically,investmentinenergytogetherwitharegional energypolicywill be atool to optimize the use of energyresourcesandreduce the relative costof energytoregional producers.A fewregional initiativesare ongoing,includingthe creationof a Task Force on Regional EnergyPolicy;the TrinidadandTobagoRegional EnergyPlan;the Caribbean RenewableEnergyDevelopmentProgramme (CREP) ProjectPipeline andNational EnergyPolicyFramework;GeoCaribe andPetroCaribe.
  • 6. -5- The challenge isnow toBuildand/orrehabilitate infrastructure,includingroads,irrigationschemes, waterand sanitationfacilities,electricitydistributionandICTnetworkswouldhelpfill the Caribbean region’sinfrastructure gapandwouldfacilitate increasedeconomicactivitiesand improvedaccessby the populationtosocial services.Manyof the Caribbeancountries(and notablythe poorestinthe region,suchas Haiti and Guyana) remainill equippedtotake full advantage of new trade opportunities because of significant supply-side constraints. Eliminatinginfrastructure constraints,suchaswater shortages,electricityoutagesanddifficultroadaccess,wouldreduce productioncostsandfavorthe region’ssupplyof exports. Intermsof reducingpovertyandimprovinghumandevelopment,public Infrastructure electricity,roads,andsanitation) islinkedtoimprovementsinhealthandeducation outcomes. Improvedaccess toimprovedaccesstoinfrastructure servicescangenerate significant benefitsforexportactivitiesintermsof amore productive/higherquality laborforce. The author pointsoutthat PolicyReformsinInvestmentIncentiveswould acceleratethe regions competivenesswiththe restof the World. The CARICOMcountries wouldalsoneedtocreate or strengthenincentivetopromote investment.TrinidadandTobago’sincentivepolicycouldserveasan example forthe otherCARICOMcountries. The author exploresthe traditional TourismSector,andconcludesthata long-termtrade strategywould require exploringopportunitiesinnewareassuchas high endrentals,affordablehousing, highvalue financial services,banking,telecommunications,andmaritimetransportwouldbe acritical stepto expandthe range of opportunitiesinservicessector. The asymmetricnature of the liberalization processbetweenCARICOMandthe EuropeanCommissionalsogivesthe Caribbeancountriesleewayto prepare forthe changingenvironment.Italsogivesthemthe opportunitytoredeploytheirservice developmentstrategy.However,the regionwouldneedtostrengtheninfrastructure forexports,and addressthe issuesof theirincentivesregime mostnotablyforsmall firmstobe able toexportservices abroad. More broadly,the authorsuggeststhatthe region’seffortsshouldfocusonthe followingstrategic directions: (i) expansionof value-addedactivitieswithabroaderparticipationof the private sector; (ii) modernizationof trade transactionsystemandconcertedexportstrategy;and (iii) facilitationof sectoral developmentandprovisionof favorable investmentclimate. The author suggeststhatpriorityshouldbe giventothe followingactions. First,the Caribbean governmentswill needtoinvestinthe productionandmarketinginfrastructuresof the sectorsandin the technical andoperational capacitiesof the private sectoroperators.Specificactionsinclude among others, targetingthe infrastructure forfacilitatingexportsof services.Second,the governments’ interventionsshouldfacilitateaccesstofinance by exportersandtradersthroughproperinstitutional arrangements.These couldinclude revampingthe CaribbeanExportDevelopmentAgency.Third,the
  • 7. -6- Governments shouldalsopromotethe disseminationof knowledge andinformationonmarketsand marketstandards. To thisend,the author suggestthatconcrete policyactionsshould include:(i) establishmentof a marketinformationsystemthatwillbe accessible toproducersandexporters;and(ii) establishmentof a rural radiosystemsthatwill provide rural producersandtraderswithinformationonmarkets,accessto resourcessuchas servicescredit,inputavailability,nichesforpotentialgrowth. Fourth,the effectivenessof aservicesbusinesspolicywill alsodependonthe governments‘capacity toattract and involve the private sectorandthe Diaspora,soas to jointlydesignedfinancial instrumentsthatcan supportgrowthlike DepositsAccounts,SecuritizationRemittances,TransnationalLoans,Diaspora Bonds,Mutual Fund, Revenue Bonds,DiasporaPrivate EquityFundandothersthatcanfacilitate a Venture Opportunity. Improvingthe InvestmentClimate andthe BusinessEnvironmenttoReinforce Complementarity betweenPrivateandPublicInvestment isthe meanstothe endas pointedthroughoutthe study.As stated,itis critical toensure that the Caribbeangovernmentsexploitfullythe potential of new areasof opportunities.Acceleratingthe structural reformagendawouldbe acritical step toreinforce private/publicsectors’complementarity.While the governmentshave made substantial progressinthe implementationof theirstructural reformagenda,effectively addressingthe shortcomingsinthisarea couldconsiderablymagnifythe returnsonpublicinvestmentefforts,spur growth,andsignificantly contribute tothe humandevelopment goals.Speedingupthe ongoingeffortsaimingatimprovingthe investmentclimate,includingacceleratingthe regulatoryreforms,anddeepeningthe financial sector reformsare crucial if the Caribbeancountriesare toenhance theirinvestmentclimate. TogetherwithInvestmentReforms, the Authorsuggestthat improvingthe judicialandregulatory frameworkgoverningthe private sectorwill requireacceleratingthe ongoingreformsincluding harmonizingthe investmentandbusinessregulations,insurance,social security,andemployment regulationsbetweenCARICOM memberstates. Thiswill be necessarytoattract the private sectorin sectorswithhighexportandgrowthpotential.Thiswill requirethatthe Caribbeangovernmentsfocus on addressingthe issuesrelatedto investment,infrastructure,institutions,innovation,andinputs. These implythatthe governmentmake the investmentnecessarytoimprove the basicinfrastructure; but alsotackle the institutional weaknesses,andfacilitatesthe provisionof inputsandmarket informationtothe benefitof the private agents. The author alsopointsoutsome short comings. The mostcritical weaknessesidentified withinthe Caribbeanregional and internationaltrade negotiationsconstructhasbeenthe endemicfailure of the regionsinstitutionstotake advantage of the marketaccessopportunitiespresentedthrougheitherone waypreferential arrangement.The authorwasveryquickto make the case that TrinidadandTobago are leadersinthe Region,andhasthe greatestpotential forgrowth. Itisalsoclear that CostaRica has benefitedfromitsassociationwithDR-CAFTA aswell.
  • 8. -7- Today,Trinidad andTobago has earneda reputationasan excellentinvestmentsite forinternational businessesandhasone of the highestgrowthratesandper capitaincomesinLatinAmerica.Economic growthbetween2000 and 2007 averagedslightlyover8%,significantly above the regional averageof about3.7% forthat same period;however,GDPhassloweddownsince thenandcontractedabout3.5% in2009, before risingmore than2% in2010. Growthhas beenfueledbyinvestmentsinliquefiednatural gas (LNG),petrochemicals,andsteel.Additionalpetrochemical,aluminum,andplasticsprojectsare in variousstagesof planning.TrinidadandTobagoisthe leadingCaribbeanproducerof oil andgas, andits economyisheavilydependentupontheseresourcesbutitalsosuppliesmanufacturedgoods,notably foodproductsand beverages,aswell ascementtothe Caribbeanregion.Oil andgasaccountfor about 40% of GDP and 80% of exports,butonly5% of employment. The countryisalsoaregional financial center,andtourismisa growingsector,althoughitisnotas importantdomesticallyasitisthe other Caribbeanislands. The economybenefitsfromagrowingtrade surplus. WHAT ARE THE INVESTMENTINCENTIVES TO INVEST IN TRINIDAD AND TOBAGO? There isan array of investmentincentives,alongwithotherrelevantinformationforanyprospective investorsconsideringdoingbusinessinTrinidadandTobago. There isa specificpublicationentitled InvestmentGuide toTrinidadandTobagoat the countries website. http://www.investtnt.com/index.aspx WHYINVEST IN TRINIDAD AND TOBAGO? - Located at the crossroadsof the Americas - Competitive coststructure - Educatedlaborforce - Bi-lateral investmentandtaxationtreaties - Noforeignexchange controls - 100% ownershipof locally-registeredprivate companies - Facilitationof landpurchases - Repatriationof funds - ExemptionfromVAT,customsdutyand variousothertaxes -Political Stability - Enablinglegislation: The CustomsAct,providingexemptionfromdutyonimportationof certainitems; The IncentivesAct;The Free ZonesAct;and The Venture Capital Actand Special advisoryservicesfor investors.
  • 9. -9- Accordingto TrinidadTrade Minister,“Inlessthan20 years,TrinidadandTobago transformeditself into one of the world’sleadingenergyproducers,becomingthe world’s5thlargestproducerof Liquefied Natural Gas, and the #1 providertoNorthAmerica. Our successinthe energysectorboostedour nation’seconomytobecome the largestandstrongestinthe Caribbean.Thatsuccessispoweringour growthintoothersectors,as we work inpartnershipwithbusinessesacrossthe globe tocreate a thrivingandhighlydiversifiedeconomy.Todothis,we are leveragingournation’snatural,geographic and humanresourcestoattract industriesthatpromise asmuchgrowthandpotential forsuccessas energy. These include: Information&CommunicationTechnology;Creative Industriesand Entertainment;LightManufacturing;Transport&Logistics,CleanTechnology. Ourvisionistobe internationallyrecognizedasthe Chief developerof the Caribbean.” WHYINVEST IN THE TRINIDAD VERSUS BRAZIL? Brazil isa countrylocatedinSouthAmerica.Itssize amountstoalmosthalf of the entire continent.Itis the fifthlargestcountryinthe worldand isslightlysmallerthanthe UnitedStates.Brazil’sfavorable economicconditionsare veryattractive toforeigninvestors.The growthpotential inBrazil isapparent to itsinvestors. The economyisdiversifiedandthe businessconditionsare changingquickly. The main investmentcategoriesof Brazil usedtobe agriculture andnatural resources.Thishaschanged and the countryhas nowshiftedtowardsindustrialdevelopment.Thisshift isfinanciallybackedby international investmentsandloans.The placeswhere thisshifthasalreadyoccurredmake upthe wealthiestplacesinBrazil.One of the majordisadvantagesof investinginBrazil isthe legal issuesthat investorsface.Although there ismuchinterestinBrazil,some investorssimplyavoiditall together because of the regulatoryproblemsinthe country. Keepinmind,thatin1999 the Real GDP wasrated 692 (0.8%);unemploymentwas13,3%,moneymarket value was26.3%,publicdebt was$100 billion,exportswasat$5.3 billion,imports$4.5 billion,reserves were $160 billionandinterestrate waslike upwardsof 30%,and the capital flightwas$28 billion. It tookan infusionof the IMF to provide a$41.5 billiondollarloanin1998 and 1999 to defenditscurrency didwe see the economystart torespond. TrinidadandTobago (T&T) has alwaysbeenone of the mostdynamiceconomies inthe Englishspeaking Caribbean. Today,T&T has emergedasone of the major playersinthe multilateral tradingsystemwith one of the highestForeignDirectInvestment(FDI) ratesinthe region.T&Tisone of the most prosperous,highlydiversifiedandindustrializedcountriesinthe Caribbean,andadominantplayerin CARICOM.While the economyisenergybased,withlarge exportsof oil,gasanddownstreamenergy products, T &T have a strong industrial base,andadeeplyentrenchedmanufacturingandservices sector,especiallyfinancial services.The Governmentispursuingapathof economicdiversificationto reduce itsdependence onthese resourcesandassuchhave put inplace ina varietyof incentivesand policiescreatinganextremelyinvestorfriendlyenvironmentwhichcanyieldsignificantbenefitsfor firmswishingtoinvest.
  • 10. -10- NINE BUSINESS REASONS TO INVEST IN TRINIDAD AND TOBAGO Strategic Location: TrinidadandTobago isten (10) kilometersfromVenezuela,whichplacesitatthe gatewayto the SouthAmericanmainland.The majorcitiesof NorthAmericaare onlyafew hoursaway by airplane. Thisisaparticularadvantage,especiallywhenviewedincombinationwiththe numberof trade agreementstowhichthiscountryisa signatory,andcreatestremendouspotential forthe transformationof TrinidadandTobagointoan international centerfortrade andtransport. Access to a wide Array of Markets: TrinidadandTobago ispart of the CaribbeanCommunity(CARICOM) whichhas an estimatedpopulationof 6.4 million.Inaddition,investorshave accesstoa numberof regional marketsthroughanumberof bilateral trade agreementsbetweenCARICOMandcountriessuch as the DominicanRepublic,Venezuela,Colombia,CubaandCostaRica. EnglishSpeaking:Englishremainsthe country’sofficiallanguage.However,Spanishhasbeendeemedas the firstforeignlanguage.The Governmenthasspearheadedthisinitiativeasthe countryforgescloser linkswithLatinAmericaandotherSpanishspeakingCaribbeanneighbors. Macro-Economic Stability:Accordingto the Review of the Economy2009, TrinidadandTobago’sGross DomesticProduct(GDP) continuestoshow substantial growthrates.Althoughthe energysector continuestobe the driverforeconomicgrowth,the non-energysectorhasmaintainedagrowthrate in excessof 3.7% overthe period2004 to 2008. It contractedonlyslightlyby0.9% in2009 due to the global economiccrisis.The manufacturingsectorhashad consistentgrowthratesover8% during2004 to 2007 and growingby5.2% and 2.8% in2008 and 2009 respectively. Competitive Tax Rates: Companiesenjoycompetitive tax ratesfromaslow as 25% for businessesinthe non-energyand35%in the energysector. Low Energy Cost: TrinidadandTobago has one of the lowestenergycostsinthe regionwhichcontinues to be a majorattractionfor manufacturingentities. ForeignExchange Stability:Althoughthe TrinidadandTobagodollarwasliberalizedin1993, the exchange rate tothe US Dollarhas averaged$US 1 to $TT 6.30 overthe pastten years. DevelopedManufacturingSector: There isa well-developedmanufacturingsectorbothinthe energy and non-energysector.Thisprovidesvastpotential forjoint-venture cooperation.More informationcan be accessedfromthe Trinidadand TobagoManufacturers’Association.
  • 11. -11- OTHER AREAS OF CONSIDERATION IN THE REGION: “CostaRica,” ProvenTrack Record;QualifiedWork Force;StrategicLocation;QualityInfrastructure andExcellentBusinessClimate; Nevis:Butthis tiny West Indiesisland nation,known to thenativesas "St. Kitts-Nevis," hasbecomevery big in certain exclusive internationalfinancialcircles. That's becauseNevishasno taxes,extremely user-friendly incorporation and trustlaws,and an officialattitudeof hearty welcometo foreign offshorecorporationsand asset protection trusts;“St.Lucia,” Changesin the EU importpreferenceregime and the increased competition fromLatin American bananashave madeeconomicdiversification increasingly importantin SaintLucia. The island nation hasbeen able to attract foreign businessand investment,especially in its offshore banking and tourismindustries.Tourismisthe main sourceof foreign exchange,with more than 700,000 arrivalsin 2005. The manufacturing sectoristhe mostdiverse in the Eastern Caribbean area,and the governmentistrying to revitalize the banana industry.Economicfundamentalsremain solid,even though unemploymentneedsto becut. “Grenada,” isone of the fastestgrowing tourism markets in the Caribbean and hasa shortageof high quality holiday properties. The World Travel and TourismCouncil havepredicted tourismgrowthof 5.5% per year between 2006 and 2015, far abovetheaverageforthe Caribbean asa whole.Grenada’stouristmarketissupported by direct flightsfromthe UK,USA and ContinentalEurope,aswell as by two downtown cruiseship terminalswhich received over245 cruise ship visits holding over 240,000 passengersbetween October2005 and April 2006. Aswell a new marina, newcommercial center, a duty-freeshopping malland a planned golf resortwill increase theisland’s desirability overthe coming years.And lastly,”AntiquaandBarbuda,” should notbeoverlooked. Antigua and Barbuda located in theCaribbean,hasnaturalbeauty,mild weather,a friendly,courteous,English- speaking population.Thecountry ispolitically and socially stableand considered an outstanding tourist destination,witha legacy of beneficial foreign direct investment.Altogether,theenvironmentiswell suited for industriessuch as tourism,financialservices,education,medicalhealth and wellness,business supportservicesand logistics. WHAT ARE THE BIGGESTBARRIER FOR THE CARIBBEAN BASIN AND TRINIDAD TOBAGO? The biggestbarriersare attracting foreigncapital anddesigning exitstrategiesthatencourage investors. Amongthe potential solutionstothisilliquidity: • Create anExit Finance Facility. The facilitywouldprovide peer-grouplendingleveragedbyan organizationsuchas a CaribbeanOverseasPrivate InvestmentCorp.tohelpinvestorssell their stake. • Create a PermanentCapital Vehicle.Twotypesof PCV structuresproposed.One wouldbe structured much like abusinessdevelopmentcompanyinthe UnitedStates,andthe secondwouldbe structuredas a mezzanine buyoutfund. • Use a RoyaltyModel or HolisticModel.Royalties,apercentage of acompany’srevenue orsales,gives the investorastream of capital overthe life of the investment,andallow the typicallycash-strapped investee tomake asmallerpaymentwhenthe investorexits.
  • 12. -12- Introducingtransparencyinthe equation canhelpaninvestoranticipateriskandfullyadjustitthrough othermeans,suchas creatingregional investmentsfundsandgrant-basedpoolsfortechnical assistance,therebymatching CountriestoCapital Groupsthroughan InternetPlatform. WHAT ROLE OF THE DIASPORA POPULATION IN THE CARIBBEAN BASIN AND TRINIDAD TOBAGO? A global alliance withDiasporasof the CaribbeanBasin,CARICOM,DR-CAFTA wouldnotonlyfortifythe region,itwouldcreate anInstitutional base andcontinuedgrowthtothe Region. The opportunities have somewhatbeenexploredbysome the poorestregions,butthe largestof the Diasporaliving in Americaare from this Trinidad... In 2004, the WorldBank estimatedthatthere was$150 billionremittance fromthe UnitedStatesto foreigncountries.$40Billionwassenttothe Caribbean. Trinidadwasbyfar the largestrecipient. Remittance flowstodevelopingcountrieshave increasedsteadilyandsharplyinrecentyearstoover $300 billion,andthe WorldBank believesthatforthe Caribbean, itshouldbe usedto create an InstitutionalBase. There are ten investmentopportunities outlined: 1. Increase DepositAccountsinBanks 2. Securitizationof Remittance Flow couldcreate long-termstructural reform 3. OfferTransnational Loans 4. DiasporaBonds(Issue byCountryand Corporation) 5. DiasporaMutual Funds 6. Revenue Bondsperprojectthatbenefitsthe country 7. DiasporaPrivate EquityFund – AccreditedInvestors/InstitutionalManagers 8. Create Subnational Debtissues –Bonds 9. Attract InstitutionalInvestors 10. Create a capital market– AssetClass CONCLUSION In 1989, Ida Muorie,JD leda delegationfromthe InternationalPetroleumExchange tothe Region asthe headof Cargill Investors InstitutionalEnergy Deskoutof Coral Gable,Floridatore-engineerthe petroleumindustry.In1990, IdahostedTrinidadDelegatesata NYMEX forum, and fromthese two forumsmanyoil allianceswere forgedandseveral deep seasdrillingprojectswere proposed. Today, Trinidadis the largestproducerof National Gas forthe UnitedStates,and isthe largesteconomyinLatin Americas. TogetherwithWarrenPierre Matthews(Long-termbusinessConsultantinthe Region), Ida Muorie, JD returns to the regiontospearheada “HolisticApproach”to globalize andintegratethe Regionunderone goal of international development. Firstobjective istoelevatethe Regionasa PreferredInvestment;second, toset-upa long-termfacilitiestofundfuture projects,andmore importantly, launchaPRcampaignthat will change the perceptionsof traditional tourismtoeconomic opportunitiesforInstitutionalInvestors. The endresultspromisestobe a win-winforthe Region.

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