eeb1 flow of investment capital from intra- regional sources flow of investment capital from intra-...
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EEBEEB 11
Flow of Investment Capital Flow of Investment Capital from Intra- Regional from Intra- Regional
Sources Sources
Enid E Bissember Enid E Bissember Economic Intelligence and Policy Unit Economic Intelligence and Policy Unit
CARICOM Secretariat CARICOM Secretariat [email protected]@caricom.org
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OutlineOutline IntroductionIntroduction
• Nature of Intra-Regional Nature of Intra-Regional InvestmentInvestment
• Sectoral Trends in Intra-Regional Sectoral Trends in Intra-Regional Investment Flows Investment Flows
Implications Implications Policy RecommendationsPolicy Recommendations
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Nature of Intra-Regional Investment Nature of Intra-Regional Investment
Erratic Erratic Discriminating Discriminating Scarce Scarce Mobile Mobile Highly sought after Highly sought after Multi-directionalMulti-directional Responds to market opportunity Responds to market opportunity
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Erratic FlowsErratic Flows
0
50,000
100,000
150,000
200,000
250,000
1997 1998 1999 2000 2001 2002 2003
total CARICOM Investment in OECS
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Intra-Regional Investment in the Intra-Regional Investment in the OECS OECS
020,00040,00060,00080,000
100,000120,000140,000160,000180,000
1997 1998 1999 2000 2001 2002 2003
CARICOM investment in OECS 1997-2003
Antigua andBarbudaDominica
Grenada
St Kitts
St Lucia
SVG
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Types of Intra-Regional Types of Intra-Regional InvestmentInvestment
Portfolio investment Portfolio investment Direct investmentDirect investment
–Joint venture Joint venture
–Greenfield Greenfield –Mergers and acquisitionsMergers and acquisitions
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ScarceScarce Largely from few Member StatesLargely from few Member States
–Trinidad and TobagoTrinidad and Tobago
–Barbados Barbados
–Jamaica Jamaica
–St Vincent and the Grenadines St Vincent and the Grenadines Behaviour similar to global TNCs Behaviour similar to global TNCs
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Intra-Regional Investment Arena Intra-Regional Investment Arena
Major recipients are Jamaica and Major recipients are Jamaica and Barbados Barbados
Guyana, Suriname , the LDCs and Guyana, Suriname , the LDCs and the Bahamas not as attractivethe Bahamas not as attractive
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0
20
40
60
80
100
120
140
160
180
Discriminating flows
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Trinidad and Tobago intra regional Trinidad and Tobago intra regional investment 99-03 US$mninvestment 99-03 US$mn
BarbadosBarbados 171.42171.42
GrenadaGrenada 0.450.45
GuyanaGuyana 5.05.0
Jamaica Jamaica 94.794.7
Saint Lucia Saint Lucia 8.48.4
Suriname Suriname 9.659.65
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Attracting Intra regional Attracting Intra regional InvestmentsInvestments
Large variations across countries Large variations across countries Variations across Sectors Variations across Sectors
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Sectoral Trends Sectoral Trends
Banking and financial services Banking and financial services sectorsector
Distribution and trading Distribution and trading Food services Food services Tourism Tourism
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Sectoral Distribution of Intra Sectoral Distribution of Intra Regional Investment Regional Investment
Sunset industries -Primary sector lost in Sunset industries -Primary sector lost in importance importance
New emerging areas of services dominant New emerging areas of services dominant Countries with low growth seems to be left Countries with low growth seems to be left
behindbehind
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Intra regional investors Intra regional investors
Intra regional investment undertaken by a Intra regional investment undertaken by a few firms few firms
Banking led by RBTT and Republic Bank Banking led by RBTT and Republic Bank Limited Limited
Conglomerates led by ANSA McAL, Neal & Conglomerates led by ANSA McAL, Neal & Massy, Goddards , C L Financial Massy, Goddards , C L Financial
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Sample Areas of Operation of one TCCSample Areas of Operation of one TCC
AutomotiveAutomotive Brewing Brewing Chemicals Chemicals Insurance and financial services (including Insurance and financial services (including
Merchant bankingMerchant banking Marketing and distribution Marketing and distribution Manufacturing Manufacturing Media Packaging Media Packaging Real Estate Development Real Estate Development Shipping Shipping TradingTrading
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Concentration Concentration
Tourism Tourism 4 firms 4 firms Banking and finance Banking and finance 4 firms 4 firms Food and beverages Food and beverages 44 Conglomerates Conglomerates 66 Manufacturing Manufacturing 11 Transportation Transportation 11
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Recipient countries of Intra regional Recipient countries of Intra regional investment in banking and financeinvestment in banking and finance
Antigua and BarbudaAntigua and Barbuda Barbados Barbados Belize Belize Grenada Grenada Guyana Guyana JamaicaJamaica St Kitts and NevisSt Kitts and Nevis Saint LuciaSaint Lucia St Vincent and the GrenadinesSt Vincent and the Grenadines SurinameSuriname The Bahamas The Bahamas Trinidad and Tobago Trinidad and Tobago
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Multi-Directional Flows Multi-Directional Flows
MDCMDC MDC -- JMMB into MDC -- JMMB into Trinidad and Tobago and Trinidad and Tobago and Barbados Barbados
MDCMDC LDC -- RBTT in Grenada LDC -- RBTT in Grenada
LDCLDC LDC --Antigua Barbuda Investment Bank into LDC --Antigua Barbuda Investment Bank into BelizeBelize
LDCLDC MDC -- OECS commercial banks into MDC -- OECS commercial banks into BarbadosBarbados
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The Reality The Reality
Not all countries have the same Not all countries have the same locational attractiveness locational attractiveness
Benefits unevenBenefits uneven Operations are not integrated Operations are not integrated
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The TCCs The TCCs
Moving into branding e.g. RBTTMoving into branding e.g. RBTT Ansa McAlAnsa McAl Republic Bank Limited Republic Bank Limited
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Sample Direct Investment Sample Direct Investment
T.C.L. investments in Arawak Cement T.C.L. investments in Arawak Cement Barbados and Carib Cement Jamaica Barbados and Carib Cement Jamaica
Sandals investments in hotel properties in Sandals investments in hotel properties in Saint Lucia Saint Lucia
ANSA McAL acquisition of Bryden’s in ANSA McAL acquisition of Bryden’s in Barbados Barbados
A.I.C. venture capital operation in BarbadosA.I.C. venture capital operation in Barbados
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Portfolio investment Portfolio investment
Trinidad and Tobago Unit Trust Corp. Trinidad and Tobago Unit Trust Corp. investment in equities of regional companies investment in equities of regional companies including National Commercial Bank of including National Commercial Bank of Jamaica and Grace Kennedy of Jamaica, Jamaica and Grace Kennedy of Jamaica, B.S.&T and Sagicor of Barbados B.S.&T and Sagicor of Barbados
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Joint ventureJoint venture
RBTT and Guardian Holdings of Trinidad RBTT and Guardian Holdings of Trinidad and Tobago together with Sagicor of and Tobago together with Sagicor of Barbados investment in RGM Barbados investment in RGM
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Policy Recommendations Policy Recommendations Integrate the production process cross Integrate the production process cross
border border Increase competitivenessIncrease competitiveness Use trading arrangements more fullyUse trading arrangements more fully Consolidate into larger units Consolidate into larger units Take advantage of the larger market Take advantage of the larger market
created by the CSMEcreated by the CSME
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Thank YouThank You