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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 Development in the Caribbean and Latin AmericasLAST FRONTIER OF THE AMERICAS - CARIBBEAN BASIN & CARICOM REGION 2012-2025(FOR RELEASE TO THE GENERAL PUBLIC)©Copyrighted December 15, 2011
  • 2. LAST FRONTIER OF THE AMERICAS - CARIBBEAN BASIN& CARICOM REGIONINTRODUCTION: TRINIDAD AND TOBAGO LEADING IN INVESTMENT INCENTIVESWhat is the Caribbean Basin Territory?The Caribbean Basin is generally defined as the area running from Florida westward along the Gulfcoast, then south along the Mexican coast through Central America and then eastward across thenorthern coast of South America. This region includes the islands of the archipelago of the West Indies.Bermuda is also included within the region even though it is in the west-central Atlantic, due to itscommon cultural history created by European colonization of the region, and in most of the region bythe presence of a significant group of African descent. The United States Trade offices recognize17beneficiary Countries as essential to the economic region. This Region jumped from 55 million in1940 to 166 million by 1980. The population has started to level off today, but the UN projects that itwill jump 80 percent by year 2025.Caribbean Basin:1-Antiqua and Barbuda;2-Aruba;3-the Bahamas;4-Barbados;5-Belize;6-British VirginIslands;7-Dominica;7-Grenada;8-Guyana;9-*Haiti; 10-Jamaica;11-Monserrat;12-Panama;13-St.Kitts&Nevis;14-St.Lucia;16-St. Vincent and the Grenadines; and 17-Trindid and Tobago. All are part ofthe Caribbean Basin Initiative (CBI) and are vital elements in U.S. Economic Relations with ourneighbors in Central America and South America. The CBI was developed to facilitate the economicdevelopment and export diversification of the Caribbean Basin economies.The Caribbean Basin Initiative became effective in 1984 as a part of the Caribbean Basin InitiativeAct(CBERA) to encourage economic growth and development in the Caribbean Basin countries by firstpromoting increased production and exports of nontraditional products and to proclaim preferentialrates of duty on products entering the United States from the region. In 2000 the (CBERA) wassubstantially expanded through the U.S.-Caribbean Basin Trade Partnership Act (CBTPA), the CBIcurrently provides beneficiary countries with duty-free access to the U.S. market for most goods.Eight of these 17 countries are also beneficiaries under CBTPA:Barbados; Belize; Guyana; Haiti; Jamaica;Panama; St. Lucia; and Trinidad and Tobago.The (CBERA) was amended by the Trade Act of 2002 and the Hope Act of 2006 to address the estimatedeffects of CBERA beneficiaries through 2006.The Trade Act of 2002 extended preferential treatment to imports of socks from C B T P A.The Hope Actauthorizes duty-freetreatment for three years for a specified quantity of woven apparelimports from Haiti madefrom fabric produced anywhere in the world—up to 50 million SMEs in yearsone and twoof the Act, and up to 33.5 million SMEs in year three.
  • 3. -2-What impact of preferential trade agreements on the CBERA countries?2006-2008 – 31.8 billion CEBRA countries constituted the 17th – largest US supplier ahead of Thailandbut behind BrazilTrinidad and Tobago’s rise to the top source of U.S. imports from CBERA countries resulted mainly fromincreases in imports of natural gas and natural gas derivatives. The Dominican Republic remainedsecond place. Costa Rica regained its position from Honduras as the third largest import source asCAFTA-DR* entered into force in 2006 for the latter country, and Aruba and the Netherland Antillesoccupies fourth and fifth places, respectivelyCAFTA-DR of 2006 ushers in International LawThe Dominican Republic – Central America Free Trade Agreement, commonly called DR-CAFTA, is a freetrade agreement (legally a treaty under international law, but not under US law). Originally, theagreement encompassed the United States and the Central American countries of Costa Rica, ElSalvador, Guatemala, Honduras, and Nicaragua, and was called CAFTA. In 2004, the Dominican Republicjoined the negotiations, and the agreement was renamed DR-CAFTA.DR-CAFTA together with the North American Free Trade Agreement (NAFTA) and active bilateral freetrade agreements, including the Canada-Costa Rica Free Trade Agreement, is seen as bloc agreementsinstead of a Free Trade Area of the Americas (FTAA) agreement. Panama completed negotiations withthe US for a bilateral free trade agreement (ratification of which is pending), and Belize became amember of the Caribbean Community (CARICOM).The (24) Caribbean Community and Common Market (CARICOM) was established by the Treaty ofChaguaramas, which was signed by Barbados, Jamaica, Guyana and Trinidad & Tobago and came intoeffect on August 1, 1973. Subsequently the other eight Caribbean territories joint CARICOM. TheBahamas became the 13th Member State of the Community on July 4, 1983, but not a member of theCommon Market. In July 1991, the British Virgin Islands and the Turks and Caicos became AssociatedMembers of CARICOM, followed by Anguilla in July 1999. The Cayman Islands became the fourthAssociate Member of the regional grouping on 16 May 2002, and Bermuda the fifth Associate Memberon 2 July 2003. Suriname became the 14th Member State of the Caribbean Community on July 4, 1995.For 2006, all countries received full-year CBI preferences: • 51% of U.S. imports originated in only thetop three CBI countries; 90% in the top eight; • the number one exporter by value (25%) was Trinidadand Tobago, which is explained by its mineral fuels exports ; • the other top exporters to the UnitedStates (Dominican Republic, Costa Rica, Guatemala, Honduras, El Salvador) are all major apparelmanufacturers, with Costa Rica’s trade increasingly dominated by semiconductors, which enter NTRduty free ;• the top six CBI exporting countries, not including energy producers Trinidad and Tobago andAruba, accounted for 95.6% of Caribbean textile and apparel exports to the United States;
  • 4. -3-By 2008, the second year that CAFTA-DR was in effect: • 81% of U.S. imports originated in only the topthree CBI countries; 96% in the top eight, excluding the CAFTA-DR countries; • the number one exporterby value (45%) was Trinidad and Tobago, which is again explained by its mineral fuels exports; • Haitihas become the major beneficiary of preferences for apparel under the CBTPA and HOPE.Whatwas the impact of Preferential TradeAgreement onFuture Development of the Caribbean BasinTerritory?The CBERA program hashad a positive effect on investment, which was diminished initially by NAFTAthe production sharing aspect of the CBTPA and protectionist regimes. Today these regions areflourishing through guidance of new political leadership, stable governments and commitments fromthe US government to support their efforts.US Trade office has reenergized their efforts in 2011 with our free trade agreement partners in CentralAmerica (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic andto expand to expand trade relations with Brazil as well. In February 2011, US held the first Free TradeCommission (FTC) Ministers’ meeting under the CAFTA-DR to review its administration andto expandand broaden the benefits of trade under the agreement. There Ministersendorsed a positive, forward-looking agenda with a focus on trade facilitation and small and mediumsized developmententerprises.Preferential Trade in these countries has become a source of better jobs and greatereconomic strength.The administration has said that they will continue to support efforts to link trade and economic growthCARICOM Caribbean Community. In 2010, the U.S. Trade Representative’s “Plus One for Haiti” Initiativesecured pledges from U.S. brands and retailers to work toward sourcing one percent of their totalapparel production from Haiti. In 2011, the US helped Haiti to take maximum advantage ofopportunities in the U.S. market through efforts like these andthe implementation of the HaitianHemispheric Opportunity through Partnership Encouragement (HOPEII) Act, as amended and extendedby the Haiti Economic Lift Program (HELP) Act of 2010.Collectively, there are 24 countries that make-up the Modern Day Caribbean Basin today. This territoryhas become a critical pillar of U.S. and global prosperity. The US has strengthened their transatlantictrade and investments. This new found growth is now sources of new jobs, growth and competitiveadvantages.Modern Caribbean Basin countries: Bahamas; Barbados; Belize; Bermuda; Colombia; Costa Rica; Cuba;Dominica; El Salvador;Grenada; Guatemala; Haiti; Honduras; Jamaica; Mexico; Nicaragua; Panama;Puerto Rico (Commonwealth of Puerto Rico) Dominican Republic; Saint Kitts and Nevis; Saint Vincent andthe Grenadines, Saint Lucia; Trinidad and Tobago; Venezuela
  • 5. Modern CARICOM (Caribbean Members):Antiqua and Barbuda; The Bahamas; Barbados; Belize;Dominica; Grenada; Guana; Haiti; Jamaica; Montserrat; Saint Lucia; St. Kitts and Nevis; St. Vincent andthe Grenadines; Suriname; Trinidad and Tobago. (Associate Members) Anguilla - 4 July 1999;-4- (Associate Members of CARICOM Continues)Bermuda - 2 July 2003; British Virgin Islands - 2 July 1991; Cayman Islands - 15 May 2002; Turks andCaicos Islands - 2 July 1991.Has Preferential Trade Agreements created sustainable growth, job creation and poverty reduction tosupport New! Developments?In 2009, The World Bank conducted a study entitled, Accelerating Trade and Integration in theCaribbean Policy Options for Sustained Growth, Job Creation, and Poverty Reduction. In the study, theauthor discussed the relationship between trade, growth and poverty reduction. In addition, theydiscussed policy options for sustained growth, job creation and poverty reduction. The author points outthat the role of Regional Integration will play a major role in future development of trade in this region.The right of establishment and the free movement of services, capital and labor are also importantelements of the region’s external competitiveness., the author points out that increasing the region’s competitiveness will increase the capacityof the Caribbean Basin countries to build, and enhance the provision of, regional public goods, Buildinginfrastructure that last would be critical for regional trade to facilitate the mobility of goods, labor, andcapital across the region.In addition, it is stated by the Author, that investing in infrastructure (police stations, jails, affordablehousing, transports,energy, telecommunications, ports and so forth) would also reduce the cost oftrading with external partners, thereby improving the region’s competitiveness. For instance energyutilityrates in CARICOM are among the highest in the world. Weaknesses of infrastructurehave limitedthe region’s capacity to penetrate the global economy. A shiftto “trade quality” from trade quantitywould require investment in infrastructure.Specifically, investment in energy together with a regionalenergy policy will be a tool to optimize the use of energy resources and reduce the relative cost ofenergy to regional producers. A few regional initiatives are ongoing, including the creation of a TaskForce onRegional Energy Policy; the Trinidad and Tobago Regional Energy Plan; the CaribbeanRenewable Energy Development Programme (CREP) Project Pipeline and NationalEnergy Policy Framework; GeoCaribe and PetroCaribe.
  • 6. -5-The challenge is now toBuild and/or rehabilitate infrastructure, including roads, irrigation schemes,water andsanitation facilities, electricity distribution and ICT networks would help fill theCaribbeanregion’s infrastructure gap and would facilitate increased economic activities andimprovedaccess by the population to social services. Many of the Caribbean countries (andnotably the poorest inthe region, such as Haiti and Guyana) remain ill equipped to takefull advantage of new tradeopportunities because of significant supply-side constraints. Eliminating infrastructure constraints, suchas water shortages, electricity outages and difficult road access, would reduce production costs andfavor the region’s supply of exports.In terms of reducing poverty and improving human development,publicInfrastructure electricity, roads, and sanitation) is linked to improvements in health and educationoutcomes. Improved access to improved access to infrastructure services can generate significantbenefits for export activities in terms of a more productive/higher quality labor force.The author points out that Policy Reforms in Investment Incentives would accelerate the regionscompetiveness with the rest of the World. The CARICOM countries would also need to create orstrengthen incentive to promote investment. Trinidad and Tobago’s incentive policy could serve as anexample for the other CARICOM countries.The author explores the traditional Tourism Sector, and concludes that a long-term trade strategy wouldrequire exploring opportunities in new areas such as high end rentals, affordable housing, high valuefinancial services, banking, telecommunications, and maritime transport would be a critical step toexpand the range of opportunities in services sector. The asymmetric nature of the liberalizationprocess between CARICOM and the European Commission also gives the Caribbean countries leeway toprepare for the changing environment. It also gives them the opportunity to redeploy their servicedevelopment strategy. However, the region would need to strengthen infrastructure for exports, andaddress the issues of their incentives regime most notably for small firms to be able to export servicesabroad.More broadly, the author suggests that the region’s efforts should focus on the following strategicdirections:(i) expansion of value-added activities with a broader participation of the private sector;(ii) modernization of trade transaction system and concerted export strategy; and(iii) facilitation of sectoral development and provision of favorable investment climate.
  • 7. The author suggests that priority should be given to the following actions. First, the Caribbeangovernments will need to invest in the production and marketing infrastructures of the sectors and inthe technicaland operational capacities of the private sector operators. Specific actions include amongothers, targeting the infrastructure for facilitating exports of services. Second, the governments’interventions should facilitate access to finance by exporters and traders through proper institutionalarrangements. These could include revamping the Caribbean Export Development Agency. Third, the-6-Governments should also promote the dissemination of knowledge and information on markets andmarket standards.To this end, the author suggest that concrete policy actions should include: (i) establishment of amarket information system that will be accessible to producers and exporters; and (ii) establishment of arural radio systems that will provide rural producers and traders with information on markets, access toresources such as services credit, input availability, niches for potential growth. Fourth, theeffectiveness of a services business policy will also depend on the governments ‘capacity to attract andinvolve the private sector and the Diaspora, so as to jointly designed financial instruments that cansupport growth like Deposits Accounts, Securitization Remittances, Transnational Loans, DiasporaBonds, Mutual Fund, Revenue Bonds, Diaspora Private Equity Fund and others that can facilitate aVenture Opportunity.Improving the Investment Climate and the Business Environment to ReinforceComplementaritybetween Private and Public Investment is the means to the end as pointed throughout the study. Asstated, it is critical to ensure that the Caribbean governments exploit fully the potential of new areas ofopportunities. Accelerating the structural reform agenda would be a critical stepto reinforceprivate/public sectors’ complementarity. While the governments have madesubstantial progress in theimplementation of their structural reform agenda, effectivelyaddressing the shortcomings in this areacould considerably magnify the returns on public investment efforts, spur growth, and significantlycontribute to the human developmentgoals. Speeding up the ongoing efforts aiming at improving theinvestment climate, including accelerating the regulatory reforms, and deepening the financial sectorreforms are crucial if the Caribbean countries are to enhance their investment climate.Together with Investment Reforms, the Author suggest that improving thejudicial and regulatoryframework governing the private sector will require accelerating theongoing reforms includingharmonizing the investment and business regulations, insurance, social security, and employmentregulations between CARICOM member states. This will be necessary to attract the private sector insectors with high export and growth potential. This willrequire that the Caribbean governments focus onaddressing the issues related to investment, infrastructure, institutions, innovation, and inputs. Theseimply that the government make the investment necessary to improve the basic infrastructure; but alsotackle the institutional weaknesses, and facilitates the provision of inputs and market information to thebenefit of the private agents.
  • 8. The author also points out some short comings. The most critical weaknesses identified within theCaribbean regional andinternational trade negotiations construct has been the endemic failure of theregions institutions to take advantage of the market access opportunities presented through eitheroneway preferential arrangement. The author was very quick to make the case that Trinidad and Tobagoare leaders in the Region, and has the greatest potential for growth. It is also clear that Costa Rica hasbenefited from its association with DR-CAFTA as well.-7-Today, Trinidad and Tobago has earned a reputation as an excellent investment site for internationalbusinesses and has one of the highest growth rates and per capita incomes in Latin America. Economicgrowth between 2000 and 2007 averaged slightly over 8%, significantly above the regional average ofabout 3.7% for that same period; however, GDP has slowed down since then and contracted about 3.5%in 2009, before rising more than 2% in 2010. Growth has been fueled by investments in liquefied naturalgas (LNG), petrochemicals, and steel. Additional petrochemical, aluminum, and plastics projects are invarious stages of planning. Trinidad and Tobago is the leading Caribbean producer of oil and gas, and itseconomy is heavily dependent upon these resources but it also supplies manufactured goods, notablyfood products and beverages, as well as cement to the Caribbean region. Oil and gas account for about40% of GDP and 80% of exports, but only 5% of employment. The country is also a regional financialcenter, and tourism is a growing sector, although it is not as important domestically as it is the otherCaribbean islands. The economy benefits from a growing trade surplus.WHAT ARE THE INVESTMENT INCENTIVES TO INVEST IN TRINIDAD AND TOBAGO?There is an array of investment incentives, along with other relevant information for any prospectiveinvestors considering doing business in Trinidad and Tobago. There is a specific publication entitledInvestment Guide to Trinidad and Tobago at the countrieswebsite. INVEST IN TRINIDAD AND TOBAGO?- Located at the crossroads of the Americas- Competitive cost structure- Educated labor force- Bi-lateral investment and taxation treaties- No foreign exchange controls- 100% ownership of locally-registered private companies- Facilitation of land purchases
  • 9. - Repatriation of funds- Exemption from VAT, customs duty and various other taxes-Political Stability- Enabling legislation: The Customs Act, providing exemption from duty on importation of certain items;The Incentives Act; The Free Zones Act; and The Venture Capital Act and Special advisory services forinvestors.-9-According to Trinidad Trade Minister, “In less than 20 years, Trinidad and Tobago transformed itself intoone of the world’s leading energy producers, becoming the world’s 5th largest producer of LiquefiedNatural Gas, and the #1 provider to North America. Our success in the energy sector boosted ournation’s economy to become the largest and strongest in the Caribbean. That success is powering ourgrowth into other sectors, as we work in partnership with businesses across the globe to create athriving and highly diversified economy. To do this, we are leveraging our nation’s natural, geographicand human resources to attract industries that promise as much growth and potential for success asenergy.These include: Information & Communication Technology; Creative Industries andEntertainment; Light Manufacturing; Transport & Logistics, Clean Technology. Our vision is to beinternationally recognized as the Chief developer of the Caribbean.”WHY INVEST IN THE TRINIDAD VERSUS BRAZIL?Brazil is a country located in South America. Its size amounts to almost half of the entire continent. It isthe fifth largest country in the world and is slightly smaller than the United States. Brazil’s favorableeconomic conditions are very attractive to foreign investors. The growth potential in Brazil is apparentto its investors. The economy is diversified and the business conditions are changing quickly.The main investment categories of Brazil used to be agriculture and natural resources. This has changedand the country has now shifted towards industrial development. This shift is financially backed byinternational investments and loans. The places where this shift has already occurred make up thewealthiest places in Brazil. One of the major disadvantages of investing in Brazil is the legal issues thatinvestors face. Although there is much interest in Brazil, some investors simply avoid it all togetherbecause of the regulatory problems in the country.Keep in mind, that in 1999 the Real GDP was rated 692 (0.8%);unemployment was 13,3%, money marketvalue was 26.3%,public debt was $100 billion, exports was at $5.3 billion, imports $4.5 billion, reserveswere $160 billion and interest rate was like upwards of 30%, and the capital flight was $28 billion. Ittook an infusion of the IMF to provide a $41.5 billion dollar loan in 1998 and 1999 to defend its currencydid we see the economy start to respond.Trinidad and Tobago (T&T) has always been one of the most dynamic economies in the English speakingCaribbean. Today, T&T has emerged as one of the major players in the multilateral trading system with
  • 10. one of the highest Foreign Direct Investment (FDI) rates in the region. T&T is one of the mostprosperous, highly diversified and industrialized countries in the Caribbean, and a dominant player inCARICOM. While the economy is energy based, with large exports of oil, gas and downstream energyproducts, T &T have a strong industrial base, and a deeply entrenched manufacturing and servicessector, especially financial services. The Government is pursuing a path of economic diversification toreduce its dependence on these resources and as such have put in place in a variety of incentives andpolicies creating an extremely investor friendly environment which can yield significant benefits forfirms wishing to invest.-10-NINE BUSINESS REASONS TO INVEST IN TRINIDAD AND TOBAGOStrategic Location: Trinidad and Tobago is ten (10) kilometers from Venezuela, which places it at thegateway to the South American mainland. The major cities of North America are only a few hours awayby airplane. This is a particular advantage, especially when viewed in combination with the number oftrade agreements to which this country is a signatory, and creates tremendous potential for thetransformation of Trinidad and Tobago into an international center for trade and transport.Access to a wide Array of Markets: Trinidad and Tobago is part of the Caribbean Community (CARICOM)which has an estimated population of 6.4 million. In addition, investors have access to a number ofregional markets through a number of bilateral trade agreements between CARICOM and countries suchas the Dominican Republic, Venezuela, Colombia, Cuba and Costa Rica.English Speaking: English remains the country’s official language. However, Spanish has been deemed asthe first foreign language. The Government has spearheaded this initiative as the country forges closerlinks with Latin America and other Spanish speaking Caribbean neighbors.Macro-Economic Stability: According to the Review of the Economy 2009, Trinidad and Tobago’s GrossDomestic Product (GDP) continues to show substantial growth rates. Although the energy sectorcontinues to be the driver for economic growth, the non-energy sector has maintained a growth rate inexcess of 3.7% over the period 2004 to 2008. It contracted only slightly by 0.9% in 2009 due to theglobal economic crisis. The manufacturing sector has had consistent growth rates over 8% during 2004to 2007 and growing by 5.2% and 2.8% in 2008 and 2009 respectively.Competitive Tax Rates: Companies enjoy competitive tax rates from as low as 25% for businesses in thenon-energy and 35% in the energy sector.Low Energy Cost: Trinidad and Tobago has one of the lowest energy costs in the region which continuesto be a major attraction for manufacturing entities.Foreign Exchange Stability: Although the Trinidad and Tobago dollar was liberalized in 1993, theexchange rate to the US Dollar has averaged $US 1 to $TT 6.30 over the past ten years.
  • 11. Developed Manufacturing Sector: There is a well-developed manufacturing sector both in the energyand non-energy sector. This provides vast potential for joint-venture cooperation. More information canbe accessed from the Trinidad and Tobago Manufacturers’ Association.-11-OTHER AREAS OF CONSIDERATION IN THE REGION:“Costa Rica,” Proven Track Record; Qualified WorkForce; Strategic Location; Quality Infrastructure and Excellent Business Climate; Nevis:But this tiny WestIndies island nation, known to the natives as "St. Kitts-Nevis," has become very big in certain exclusiveinternational financial circles. Thats because Nevis has no taxes, extremely user-friendly incorporationand trust laws, and an official attitude of hearty welcome to foreign offshore corporations and assetprotection trusts;“St. Lucia,”Changes in the EU import preference regime and the increased competitionfrom Latin American bananas havemade economic diversification increasingly important in Saint Lucia.The island nation has been able to attractforeign business and investment,especially in its offshorebanking and tourism industries. Tourism is the mainsource of foreign exchange, with morethan 700,000arrivals in 2005. The manufacturing sector is the most diversein the Eastern Caribbean area, andthegovernment is trying to revitalize thebanana industry. Economicfundamentals remain solid, eventhough unemployment needs to be cut. “Grenada,”is one of the fastest growing tourism markets in theCaribbean and has a shortage of high quality holiday properties. The World Travel and Tourism Councilhave predicted tourism growth of 5.5% per year between 2006 and 2015, far above the average for theCaribbean as a whole. Grenada’s tourist market is supported by direct flights from the UK, USA andContinental Europe, as well as by two downtown cruise ship terminals which received over 245 cruiseship visits holding over 240,000 passengers between October 2005 and April 2006. As well a new marina,new commercial center, a duty-free shopping mall and a planned golf resort will increase the island’sdesirability over the coming years. And lastly,”Antiqua and Barbuda,”should not be overlooked.Antiguaand Barbuda located in the Caribbean, has natural beauty, mild weather, a friendly, courteous, English-speaking population. The country is politically and socially stable and considered an outstanding touristdestination, with a legacy of beneficial foreign direct investment. Altogether, the environment is wellsuited for industries such as tourism, financial services, education, medical health and wellness, businesssupport services and logistics.WHAT ARE THE BIGGEST BARRIER FOR THE CARIBBEAN BASIN AND TRINIDAD TOBAGO?The biggest barriers are attracting foreign capital and designing exit strategies that encourage investors.Among the potential solutions to this illiquidity:
  • 12. • Create an Exit Finance Facility. The facility would provide peer-group lending leveraged by anorganization such as a Caribbean Overseas Private Investment Corp. to help investors sell their stake.• Create a Permanent Capital Vehicle. Two types of PCV structures proposed. One would be structuredmuch like a business development company in the United States, and the second would be structured asa mezzanine buyout fund.• Use a Royalty Model or Holistic Model. Royalties, a percentage of a company’s revenue or sales, givesthe investor a stream of capital over the life of the investment, and allow the typically cash-strappedinvestee to make a smaller payment when the investor exits.-12-Introducing transparency in the equation can help an investor anticipate risk and fully adjust it throughother means, such as creating regional investments funds and grant-based pools for technicalassistance, thereby matching Countries to Capital Groups through an Internet Platform.WHAT ROLE OF THE DIASPORA POPULATION IN THE CARIBBEAN BASIN AND TRINIDAD TOBAGO?A global alliance with Diasporas of the Caribbean Basin, CARICOM, DR-CAFTA would not only fortify theregion, it would create an Institutional base and continued growth to the Region. The opportunitieshave somewhat been explored by some the poorest regions, but the largest of the Diaspora living inAmerica are from this Trinidad...In 2004, the World Bank estimated that there was $150 billion remittance from the United States toforeign countries. $40 Billion was sent to the Caribbean. Trinidad was by far the largest recipient.Remittance flows to developing countries have increased steadily and sharply in recent years to over$300 billion, and the World Bank believes that for the Caribbean, it should be used to create anInstitutional Base. There are ten investment opportunitiesoutlined: 1. Increase Deposit Accounts in Banks 2. Securitization of Remittance Flow could create long-term structural reform 3. Offer Transnational Loans 4. Diaspora Bonds (Issue by Country and Corporation) 5. Diaspora Mutual Funds 6. Revenue Bonds per project that benefits the country 7. Diaspora Private Equity Fund – Accredited Investors/Institutional Managers 8. Create Subnational Debt issues –Bonds 9. Attract Institutional Investors 10. Create a capital market – Asset ClassCONCLUSION
  • 13. In 1989, Ida Muorie, JDled a delegation from the International Petroleum Exchange to the Region as thehead of Cargill InvestorsInstitutional Energy Desk out of Coral Gable, Florida to re-engineer thepetroleum industry. In 1990, Ida hosted Trinidad Delegates at a NYMEX forum, and from these twoforums many oil alliances were forged and several deep seas drilling projects were proposed.Today,Trinidad is the largest producer of National Gas for the United States, and is the largest economy in LatinAmericas. Together with Warren Pierre Matthews (Long-term business Consultant in the Region), IdaMuorie, JD returns to the region to spearhead a “Holistic Approach” to globalize and integrate theRegion under one goal ofinternationaldevelopment. First objective is to elevate the Region as aPreferred Investment; second, to set-up a long-term facilities to fund future projects, and moreimportantly, launch a PR campaign that will change the perceptions of traditional tourism to economicopportunities for Institutional Investors. The end results promises to be a win-win for the Region.