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
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
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.
What impact of preferential trade agreementson the CBERA countries?
2006-2008 – 31.8 billion CEBRA countriesconstitutedthe 17th
– largestUS supplieraheadof Thailand
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
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
dutyfree ;• the topsix CBI exportingcountries,notincludingenergy producersTrinidadandTobagoand
Aruba,accountedfor 95.6% of Caribbeantextile andapparel exportstothe UnitedStates;
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
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
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
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.
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
Regional EnergyPolicy;the TrinidadandTobagoRegional EnergyPlan;the Caribbean
RenewableEnergyDevelopmentProgramme (CREP) ProjectPipeline andNational
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
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
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
More broadly,the authorsuggeststhatthe region’seffortsshouldfocusonthe followingstrategic
(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
Governments shouldalsopromotethe disseminationof knowledge andinformationonmarketsand
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
Bonds,Mutual Fund, Revenue Bonds,DiasporaPrivate EquityFundandothersthatcanfacilitate a
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
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
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.
WHYINVEST IN TRINIDAD AND TOBAGO?
- Located at the crossroadsof the Americas
- Competitive coststructure
- Bi-lateral investmentandtaxationtreaties
- Noforeignexchange controls
- 100% ownershipof locally-registeredprivate companies
- Facilitationof landpurchases
- Repatriationof funds
- ExemptionfromVAT,customsdutyand variousothertaxes
- Enablinglegislation: The CustomsAct,providingexemptionfromdutyonimportationof certainitems;
The IncentivesAct;The Free ZonesAct;and The Venture Capital Actand Special advisoryservicesfor
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
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
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
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.
the firstforeignlanguage.The Governmenthasspearheadedthisinitiativeasthe countryforgescloser
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.
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
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.
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
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.