EEB1 Flow of Investment Capital from Intra- Regional Sources Flow of Investment Capital from Intra- Regional Sources Enid E Bissember Economic Intelligence and Policy Unit CARICOM Secretariat

EEB2 Outline  Introduction Nature of Intra-Regional InvestmentNature of Intra-Regional Investment Sectoral Trends in Intra-Regional Investment FlowsSectoral Trends in Intra-Regional Investment Flows  Implications  Policy Recommendations

EEB3 Nature of Intra-Regional Investment  Erratic  Discriminating  Scarce  Mobile  Highly sought after  Multi-directional  Responds to market opportunity

EEB4 Erratic Flows

EEB5 Intra-Regional Investment in the OECS

EEB6 Types of Intra-Regional Investment  Portfolio investment  Direct investment –Joint venture –Greenfield –Mergers and acquisitions

EEB7 Scarce  Largely from few Member States –Trinidad and Tobago –Barbados –Jamaica –St Vincent and the Grenadines  Behaviour similar to global TNCs

EEB8 Intra-Regional Investment Arena  Major recipients are Jamaica and Barbados  Guyana, Suriname, the LDCs and the Bahamas not as attractive

EEB9 Discriminating flows

EEB10 Trinidad and Tobago intra regional investment US$mn Barbados Grenada0.45 Guyana5.0 Jamaica94.7 Saint Lucia 8.4 Suriname9.65

EEB11 Attracting Intra regional Investments  Large variations across countries  Variations across Sectors

EEB12 Sectoral Trends  Banking and financial services sector  Distribution and trading  Food services  Tourism

EEB13 Sectoral Distribution of Intra Regional Investment  Sunset industries -Primary sector lost in importance  New emerging areas of services dominant  Countries with low growth seems to be left behind

EEB14 Intra regional investors  Intra regional investment undertaken by a few firms  Banking led by RBTT and Republic Bank Limited  Conglomerates led by ANSA McAL, Neal & Massy, Goddards, C L Financial

EEB15 Sample Areas of Operation of one TCC  Automotive  Brewing  Chemicals  Insurance and financial services (including Merchant banking  Marketing and distribution  Manufacturing  Media Packaging  Real Estate Development  Shipping  Trading

EEB16 Concentration  Tourism 4 firms  Banking and finance 4 firms  Food and beverages 4  Conglomerates 6  Manufacturing 1  Transportation 1

EEB17 Recipient countries of Intra regional investment in banking and finance  Antigua and Barbuda  Barbados  Belize  Grenada  Guyana  Jamaica  St Kitts and Nevis  Saint Lucia  St Vincent and the Grenadines  Suriname  The Bahamas  Trinidad and Tobago

EEB18 Multi-Directional Flows MDC MDC -- JMMB into Trinidad and Tobago and Barbados MDC LDC -- RBTT in Grenada LDC LDC --Antigua Barbuda Investment Bank into Belize LDC MDC -- OECS commercial banks into Barbados

EEB19 The Reality  Not all countries have the same locational attractiveness  Benefits uneven  Operations are not integrated

EEB20 The TCCs  Moving into branding e.g. RBTT  Ansa McAl  Republic Bank Limited

EEB21 Sample Direct Investment  T.C.L. investments in Arawak Cement Barbados and Carib Cement Jamaica  Sandals investments in hotel properties in Saint Lucia  ANSA McAL acquisition of Bryden’s in Barbados  A.I.C. venture capital operation in Barbados

EEB22 Portfolio investment  Trinidad and Tobago Unit Trust Corp. investment in equities of regional companies including National Commercial Bank of Jamaica and Grace Kennedy of Jamaica, B.S.&T and Sagicor of Barbados

EEB23 Joint venture  RBTT and Guardian Holdings of Trinidad and Tobago together with Sagicor of Barbados investment in RGM

EEB24 Policy Recommendations  Integrate the production process cross border  Increase competitiveness  Use trading arrangements more fully  Consolidate into larger units  Take advantage of the larger market created by the CSME

EEB25 Thank You