Caribbean Investment Forum Magazine

SMARTer, GREENer, CARIBBEAN.

TOP 10

REASONS TO INVEST IN THE CARIBBEAN

CLEAN AND GREEN: THE NEW ECONOMY SET TO TRANSFORM THE CARIBBEAN

INVESTMENT SECTORS

Agriculture Technology Renewable Energy ICT and Digital Business Transport and Logistics

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TABLE OF CONTENTS

Message from Caribbean Export

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Message from the Government of Trinidad and Tobago

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Message from the European Union

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CARIBBEAN INVESTMENT FORUM

Message from CARICOM

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Top 10 reasons to invest in The Caribbean

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Investing and Winning Together in the Digital Age

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Attracting Investment to Enhance Trade

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Why You Should Invest in the Caribbean in 2022

The Imperative of Foreign Direct Investment for Caribbean Countries

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Bene fi ts To Investing in The Caribbean’s Agricultural Sector

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Embracing AgTech - How the Caribbean can achieve 25 in 5 and reduce its food import bill

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Millions to be Invested in the Caribbean’s Agribusiness Sector

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Clean and Green: The New Economy Set to Transform the Caribbean

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An Innovative Private Sector: A prerequisite for Caribbean Green Economy Transition

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MESSAGE FROM CARIBBEAN EXPORT

2022

Stimulating greater in fl ows of regional and foreign direct investments to the Caribbean is essential to the success of the region’s development agenda. Equally important is getting investments in sectors that can drive Caribbean transformation creating jobs and opportunity for our people. It is this transformational agenda that the Caribbean Export Development Agency has committed to support. As the regional trade and investment promotion agency with the mission to help build a resilient Caribbean, we are supporting this landmark Caribbean Investment Forum in concert with our partners as a mechanism to help generate investments in the key sec to r s that can acce l e r at e the economi c transformation of our countries.

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Consequently, the focus is on vital sectors namely digital technology, renewable energy, agriculture technology (AgTech) and logistics and transportation. Additionally, the Caribbean Investment Forum has a forensic focus on providing a platform for business to engage with business to create business opportunities. Given our role as the Secretariat of twenty-three investment promotion agencies across the Caribbean, the Caribbean Investment Forum will provide access to the key players and partners in one location including projects that are regional in scope. We are delighted to support this initiative as the Caribbean signals to the world that it is ready and open for business. The forum promises to be the largest gathering of businesses in the region since the dawn of the COVID-19 pandemic with businesses, investors and policy makers joining from both within the Caribbean and extra-regionally.

Executive Director, Caribbean Export Development Agency Deodat Maharaj

MESSAGE FROM THE GOVERNMENT OF TRINIDAD AND TOBAGO

As host country of this year’s Caribbean Investment Forum (CIF) 2022, Trinidad and Tobago is pleased to collaborate with the Caribbean Export Development Agency, the CARICOM Secretariat, the Caribbean Association of Investment Promotion Agencies and the Caribbean Development Bank on this prestigious business event. We also recognize the valuable engagement of the European Union Delegation. This year’s Forum focuses on “Building a SMARTer, GREENer Caribbean” and reinforces the critical need to develop more sustainable approaches to technological innovation for stronger, more resilient economies.

CARIBBEAN INVESTMENT FORUM

This event will address investment opportunities in priority sectors namely Agriculture Technology, Renewable Energy, ICT and Digital Business, and Transport Logistics. As we transition from a post-pandemic period amid global economic disruptions and uncertainties, Trinidad and Tobago and the Caribbean’s commitment is to remain steadfast in fostering a stable investment environment. The CIF will further advance our country’s National Development Policy (Vision 2030), as well as international targets under the 2030 Agenda for Sustainable Development and the Paris Agreement. Trinidad and Tobago and the region welcome the opportunity to exchange ideas, forge mutually bene fi cial agreements, and create new prospects and investments towards a greener, more pro fi table future for all. Our region continues to attract successful investment initiatives due to our unique location, market access, natural resources, competitive incentives, educated population, and diversity. This Forum intends to provide additional opportunities for investors to capitalize on shovel ready initiatives with expected high-levels of return on establishing a presence in the Caribbean that is ready and open for business.

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Welcome to Trinidad and Tobago and the Caribbean.

Minister of Trade and Industry, Republic of Trinidad and Tobago SENATOR THE HONOURABLE PAULA GOPEE-SCOON

MESSAGE FROM THE EUROPEAN UNION

2022

The European Union has had a long and productive history of working together with the Caribbean Export Development Agency in facilitating the growth and development of the Caribbean’s private sector. Our focus has been on enhancing the Caribbean’s export and investment capacity with the ultimate aim of increasing employment creation, inclusiveness and the overall alleviation of poverty. The European Union (EU) has invested over € 27.5 million (approx. USD 27 million) into the Regional Private Sector Development Programme, which supports the implementation of the CARIFORUM – EU Economic Partnership Agreement (EPA).

The EU has invested in the Caribbean for over half a century. Jointly with the Caribbean, there is a very strong alignment of policies covering the ‘Green Deal’, digitalisation, economic growth and resilience and the defence of common democratic values. We again renew our commitment to continue working together with the nations of the Caribbean in these challenging times. The Caribbean Investment Forum provides an opportunity for others to explore the width and breadth of investment opportunities available, be it in logistics and transportation, renewable energy, AgTech (agriculture technology) and ICT (information, communication and technology). We congratulate the Caribbean Export Development Agency for conceptualising the Caribbean Investment Forum as a vehicle to accelerate the development of a SMARTer and GREENer Caribbean.

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HIS EXCELLENCY PETER CAVENDISH Ambassador Extraordinary & Plenipotentiary, Delegation of the European Union, Trinidad and Tobago

MESSAGE FROM CARICOM

Increased investment and foreign exchange in fl ows are central to economic growth and development, and to improving the quality of life of the people across our Community. It is clear that the global community is at an important juncture, which requires our Region to increase cooperation that supports the growth of our economies through transformative development in entrepreneurship, science and technology.

CARIBBEAN INVESTMENT FORUM

This Caribbean Investment Forum places a global spotlight on the possibilities for the future of the Caribbean.

Our mandate at the Caribbean Community (CARICOM) Secretariat is to promote and support a Caribbean Community that is inclusive, resilient, competitive and prosperous. Our focus, at this time, on priority economic sectors such as agriculture, ICT, energy, and transportation re fl ects the importance of these sectors for the sustainable development of our Region. We are particularly keen to accelerate ICT capabilities across all sectors of our societies, given its critical importance to participating in the current global economy.

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Our Community is committed to the mission of building a SMARTer and GREENer Caribbean, and we encourage you to explore all the opportunities available.

CARLA N. BARNETT PHD CBE Secretary-General

REASONS TO INVEST IN THE CARIBBEAN

TOP 10

2022

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ountries in the Caribbean provide strong foundations for businesses boasting outstanding track records of economic and political stability, openness to international trade and economic integration with one of the lowest perceived risks in the Latin American Caribbean region. The Caribbean’s privileged geographic location makes the region a perfect gateway to markets in North, Central and South America, o ff ering a 13 million strong quali fi ed work force with multilingual capabilities. Governments are committed to supporting the development of key sectors with attractive incentives for investment, tax holidays or preferential income taxes, exceptions from duties on imports, property tax exemptions, an extensive range of free economic zones, among others. Business process outsourcing, renewable energy, technology in agribusiness, among others, are all industries that present great investment opportunity.

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1 Located in the center of the Americas, the Caribbean provides the advantage of easy access to markets in the North, South and Central America and serves as a bridge to European markets. Ideal Location 2 Most Caribbean countries have international airports that provide daily direct fl ights to the USA, Canada, the UK, and several other countries in Europe, as well as South America. Accessibility by sea via the world-renowned regional ports is also an advantage allowing for easy access to raw materials and equipment. Accessibility

3 Many countries in the Caribbean have preferential access to some of the largest markets in the world. A few Regional Trade Agreements include: Openness to Trade

+ CARIFORUM-EU EPA: Granting preferential access to markets in Europe

+ CARIBCAN

+ CARIBBEAN BASIN INITIATIVE: Providing bene fi ciary Caribbean territories with duty free access to the US market for most goods + DR-CAFTA: Facilitating increased trade and investment among 5 Central American territories, the Dominican Republic and the USA + CARICOM: Allowing access to the 15 markets of the Caribbean (with more than 23 million inhabitants) at preferential rates

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+ Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) & Haiti Economic Li ft Programme (HELP):

Granting preferential access to the US market

4 Electricity and water supply are constant and a ff ordable. Telecommunications and broadband internet access are available, and a ready supply of natural gas can also be easily accessible from within the Region. Land and o ffi ce space are available at cost-e ff ective rates. Modern Infrastructure 5 The Caribbean is known for its stable democracies and economic development. This provides the assurance of a secure location to do business and raise families. Economic & Political Stability

6 The Caribbean is known for its highly skilled labour supply with an agreement that allows for the free movement of skilled labour within CARICOM. The peoples of the Region are also fl uent in key languages: English, Spanish, French and Dutch. Skilled Labour Supply 7 The Caribbean has garnered critical acclaim as a Mecca for tourism with its abundant natural resources. However, there are a number of other competitive sectors including: information communications technology/business process outsourcing, fi nancial services, agribusiness and the creative industries- 23 diverse territories from which to choose. Diverse Investment Opportunities 8 Many of the Region’s territories o ff er incentives, some of which can be customized, providing the best opportunity for investors. Incentive Programmes 9 Economies in the Caribbean carried out record reforms over the past year to make it easier for enterprises to do business. The World Bank Group’s Doing Business 2020 study notes that improvements in the Caribbean were concentrated in starting a business, getting electricity, paying taxes and enforcing contracts. Ease of Doing Business

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The Region’s Investment Promotions Agencies have been recognized for their competent inquiry handling services and excellent web sites. Responsive Investment Promotions Experts

INVESTING & WINNING TOGETHER IN THE DIGITAL AGE

2022

BY PHILLIP JACKSON Phillip Jackson is the Advisor for Innovation & Digital Business at the Caribbean Export Development Agency. He is an expert in the policy and private sector dimensions of digital development and trade in small states.

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e are living in a connected world in what is already shaping up to be the Connected Century despite inward-looking tendencies by some. The Covid-19 Pandemic is a stark reminder of this reality. However, the same connectedness that allowed for the cascading of this crisis has facilitated the massive scaling of resilient responses and out pouring of solidarity and support. Collectively, citizens, communities, businesses, and governments are trying to come to terms with the new normal, re-examining their raison d'être and relationships with each other and the planet to allow for sustainability and resilience. W

The inter-connected global economy, underpinned by digital technologies and infrastructure may be conceptualised as an ecosystem with a heterogeneous distribution of various resources, exploited by strategic actors mediated through conventions and agreements in a dynamic cl imate of competition and cooperation. The implication of such a perspective for economic actors in the Caribbean Region is to fi rst adopt an optimistic framework grounded in the idea of niche opportunities for the diversi fi cation of our economies consistent with our collective resources in strategic partnership with relevant global actors. This would require a winning mindset buttressed by a system of intelligence gathering for mapping the global techno economi c l ands cape and eme r g i ng consumer trends to inform new product and bus i ness mode l i nnovat i on , and the improvement or repositioning of existing goods and services Caribbean businesses o ff er to a global marketplace. Businesses wishing to internationalise and grow, must adopt appropriate digital technologies and business models to improve their products and production processes, establish attractive online presences to advertise these products, engage with customers, receive payments, del iver purchases, provide a ft er sales services, and connect with suppliers and logistics partners. The Covid 19 Pandemic has proven that companies in our Region can digitalise

certain aspects of their business to respond to changi ng market condi t i ons . The challenge is to incentivise more businesses to adopt and to support expansion and consolidation of adoption among companies who have already started the journey. T o f a c i l i t a t e t h i s p r o c e s s o f digitalisation, Caribbean companies will require investments of various types as they typically lack the requisite knowledge, skills, and capital to do so on their own. To guide and focus their digitalisation strategy, companies can immediately focus on crucial areas such as market presence, customer e n g a g eme n t , o p e r a t i o n s , a n d t h e organisational setup. More speci fi cally there are opportunities for investments in the following areas: Providing knowledge and skills training to management and sta ff in the understanding and management of digitalisation. Training and enabling in-country digital services specialists who will work one-on-one with companies to establish their level of digital maturity and elaborate a responsive digital adoption plan consistent with their business strategy. 1 2

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Providing capital to fund the various investments and activities de fi ned in the adoption plan.

As more Caribbean businesses sell online to foreign markets there will be a need for improved logistics services. The cost e ff ective provision of these services will encourage the adoption of E-Commerce by more businesses, creating a virtuous cycle of digitalisation in the wider economy. In traditional industries like agriculture and agro-processing there are investment opportunities for the use of appropriate technologies in production; creating digital marketplaces to integrate the value chain; as well use of sensors for traceability of products from farm to factory to consumer, enhancing trust and building reputation among va l ue-based consumer s and intermediaries. Consistent with recent near shoring e ff orts, the Region is a prime destination for new investments in call centres, information processing and business process outsourcing, given our strategic location, our languages, and the availability of the requisite skills to support these operations. From the perspective of new product development, there are opportunities to take advantage of our unique culture including music to create innovative products with mass appeal for non-traditional markets taking advantage of existing in-market consumer behaviour and infrastructure for consumer engagement. I want to end this section with what I believe is a winner. The Caribbean Region possesses the creative capacity to pursue big bold initiatives in partnership with world class technology companies in areas where we h a v e a d e c i d e d l y c omp e t i t i v e advantage. The concept of the Virtual Caribbean through Virtual Reality Tourism is a tremendous opportunity for investment through strategic partnerships given the

Regions’ unparalleled diversity of beautiful landscapes and seascapes that can be virtualized and gami fi ed for a growing market of “Digital Dwellers”. As the consumer hardware for accessing virtual real ity content becomes more a ff ordable, adoption of VR adoption would be driven by the availability of a new type of quality and i nterest i ng content for new mar ket segments. Virtual Reality Tourism (VRT) is a prime content area to drive new adoption. The Digital Economy presents tremendous opportunities for digital entrepreneurs to exploit. Conclusion The individual, businesses, investors, and governments must conceptualize and equip themselves as entrepreneurs in this multi dimensional digital economy. The task requires a winning mindset with a focused global-local approach to knowledge building of our indigenous resources and emerging trends, and visionary yet attentive leadership to initiate and sustain strategic partnerships with local stakeholders, key development actors, and global industry players.

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SOURCES

1 See https://www.pwc.com/cb/en/issues/assets/ digital-readiness-survey-2021.pdf

2 Pacheco and Pacheco (2020). Available at: Microso ft Word - SST-3-2-2020-Pacheco-Pacheco (um.edu.mt)

ATTRACTING INVESTMENT TO ENHANCE TRADE

2022

BY ALICIA NICHOLLS Alicia Nicholls is an international trade consultant and founder of the Caribbean Trade Law & Development Blog (caribbeantradelaw.com)She is also the Junior Research Fellow of the Shridath Ramphal Centre for International Trade, Law and Policy of the University of the West Indies and a part-time lecturer.

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FDI for Sustainable Transformation of Caribbean Economies

f a rmi ng t o h i gh-va l uec r op s w i t h i n sophisticated value chains (McMillan et al 2017). For this economic transformation to be sustainable, the process must be informed by a sustainable development framework. Indeed, the concept of “sustainable development” has been the dominant paradigm of development since the 1990s. In i ts groundbreak i ng 1987 Repor t , the Brundtland Commission de fi ned sustainable development as “development that meets t he need s o f t he p r e s en t w i t hou t compr omi s i ng the ab i l i ty of futu r e generations to meet their own needs” (Brundtland Commission 1987). Fol lowing on from the Mi l lennium Development Goals (MDGs), the United Nations’ Agenda 2030 encompasses 17 sustainable development goals (SDGs) and their 169 targets which all countries, including Caribbean States, have committed to achieve by 2030. As identi fi ed in the Addis Ababa Action Agenda (2015), FDI is one of the fi nancing channels from which countries could raise the fi nancing needed to meet their development objectives. Sustainable economic transformation has been a post-independence pol icy imperative of Car ibbean governments. Caribbean economies have largely moved from monocrop economies, focused on the export of agr icultural commodities, to services-based economies buoyed primarily by tourism and fi nancial services exports. The commodities-based economies of Trinidad & Tobago, Guyana, Suriname have also been underdoing diversi fi cation e ff orts. The region has seen generally high levels of human d e v e l o pme n t . H o w e v e r , e c o n om i c transformation of regional economies has been constrained by several structural factors,

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here is a popular saying which goes “never let a good crisis go to waste”. The world faces a panoply of crises: climate change, the COVID-19 pandemic and a likely global recession if recent predictions from the International Monetary Fund (IMF) and World Bank pan out. Faced with this trifecta of crises, Caribbean governments have evinced greater urgency to work closer with the private sector for diversifying and transforming their economies to sustainable growth and development paths. This article argues that, while not a panacea , at t r ac t i ng fo r e i gn d i r ec t investment (FDI) in high-value sectors is one of the ways Caribbean governments could ach i eve sus ta i nab l e pos t-COV I D- 1 9 transformation of their economies. The article further contends that the bene fi ts of FDI are not automatic and that Caribbean countries’ foreign investment promotion and facilitation e ff orts must be informed by data, their national development strategies and focused on also wooing regional and diaspora investors. In their study entitled “Supporting Economic Transformation”, McMillan et al. (2017) de fi ne economic transformation as “a process of moving labour and other resources from lower- to higher productivity activities.” This, they argue, entails not just shi ft ing resources between sectors to higher value activities, such as shi ft ing from agriculture to manufacturing, but also such change within sectors, such as shi ft ing from producing low productivity subsistence The Economic Transformation Imperative

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The empirical literature shows that FDI has many bene fi ts for countries, including employment generation, foreign exchange, and the transfer of skills, knowledge and technology. However, Executive Secretary of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) noted that while FDI was key for economic recovery, “there is no evidence to suggest that FDI has contributed to a change of direction in the development model in the [LAC] region because many in fl ows go the sectors where transnational enterprises have played a prominent role for decades.” While detailed data on FDI fl ows by sector is not widely available in the Caribbean, successive ECLAC reports show that most FDI to the region generally goes to tourism and the extractive sectors. To this end, UNCTAD (2014) has identi fi ed in its World Investment Report of 2014 10 SDG-related sectors as follows: power, climate change mitigation, food security, telecommunications, transport, ecosystems/biodiversity, health, water and sanitation, climate change adaptation and education (UNCTAD 2014). The sectors of focus at Caribbean Export Development Agency’s forthcoming Caribbean Investment Forum in November 2022, namely digital economy, agribusiness, the blue economy, s u s t a i n a b l e t o u r i sm , l o g i s t i c s a n d transportation innovation and renewable energy are all high growth sectors and sectors which, in many cases, are SDG related. It is increasingly recognized that countries should focus on attracting FDI in sectors which would help them achieve their development objectives.

In their IMF blog post dated October 2020 Pienknagura, Roldos & Werner (2020) noted that although the region had been relatively successful at managing the virus spread, Caribbean countries were the hardest hit economically because of their heavy dependence on tourism for economic activity and employment. The authors likened the sudden stop in tourist arrivals and local lockdowns to ‘a cardiac arrest to their economies’. The COVID-19 pandemic has further exposed and exacerbated pre existing social issues: rising crime, large informal economies, youth underemployment and unemployment, poverty and growing income inequality. including small population size, narrow economic and export bases, high import dependence, and their susceptibility to shocks. The good news is that, as the World Bank (2022) reports, many of our countries are expected to experience positive growth, with Guyana and Barbados projected to lead the Latin America and Caribbean region in growth in 2022 (World Bank 2022). However, many headwinds exist, such the Russia Ukraine crisis, global in fl ation, a weakening UK economy and news that the IMF expects some two-thirds of the global economy to contract in 2023. There is also the looming debt crisis as many developing countries, lacking enough fi scal space, were forced to take on new debt to ride out the pandemic.

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FDI and Economic Transformation

Caribbean countries generally have very liberal and open investment regimes. In large p a r t , o u r c o u n t r i e s f o l l o w e d t h e ‘Industrialisation by Invitation’ model proposed by Saint Lucian-born Nobel Prize Laureate in economics, the venerable Sir W. Arthur Lewis.

irst, Caribbean countries should continue to identify and prioritise those sectors in which FDI could be most transformative, in particular the SDG related sectors UNCTAD (2014) identi fi ed. Most Caribbean countries’ IPAs indeed indicate on their websites and marketing material sectors of particular interest to their country for attracting investment. However, there is limited available data on what levels of FDI goes to these sectors and there is therefore need for greater levels of FDI data disaggregation, including by sector. Second, given the region’s sizable diaspora and e ff orts to transform the CSME into a single investment space, the focus should not just be on attracting and facilitating foreign investors (those without ties to the region) but also diaspora investors and regional investors. Caribbean IPAs have already made diaspora FDI targeting part of their promotion e ff orts and these should be intensi fi ed. Particularly, it is important to conduct research on what are the potential investment interests of the diaspora and any bar r i er s to i nvestment the diaspora experiences. Third, investment reforms must form part of a wider investment strategy, which coheres with the country’s industrial and trade policies, all of which are moored to the country’s development strategy. To this extent, it is important for those countries which have them to evaluate the utility of their international investment agreements, in particular their bilateral investment treaties. Fourth, competition for investors among Caribbean countries cannot be merely on tax rate or incentives alone, but on their value proposition to investors, through How do we make FDI transformative? F

things such as market potential, ease of establishment, access to fi nance, and other factors which investors consider in their decisions. Moreover, despite on-going reforms and improvements, doing business wi th i n the Car i bbean and between Caribbean countries retains many frictions. Intra-CARICOM trade remains low compared to many other regions due to many factors, including logistical and historical factors but also because of the fi nancial frictions. Fi ft h, the aim is to attract investment which is development-friendly, sustainable and inclusive. Therefore, screening of p r o p o s e d i n v e s tme n t s t o p r e v e n t environmental degradation, as well as monitoring to ensure compl iance with environmental and labour laws will ensure such investments are sustainable. Sixth, evidence-based investment policy requires data which is lacking for many Ca r i bbean count r i es . L imi ted disaggregated data on investment type, source or sector makes it di ffi cult to empirically assess the e ff ectiveness of investment promotion and faci l itation strategies. Moreover, investors o ft en rely on such data in making their decisions on whether to invest or reinvest. As such, a concerted approach to improving the quality, timeliness and availability of data should be a key component of the region’s e ff orts. In summary, accelerating the promotion and facilitation of foreign direct investment is one important element for the post-COVID-19 sustainable transformation of Caribbean economies in an increasingly polycrisis world. It can do so by stimulating economic activity, foreign exchange in fl ows and job creation. However, these bene fi ts are not automatic and must be informed by a sound deve l opment s t rategy and monitored if they are to achieve the desired results.

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WHY YOU SHOULD INVEST IN THE CARIBBEAN IN 2022

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Beyond opening up to tourism (millions have been booking their Caribbean vacations), Caribbean nations are open to investment. There is a renewed sense of optimism that has been driven by necessity, innovation and technology. The convergence of these factors is making NOW the ideal time for investors to get into the Caribbean and realize both short and long-term gains. here are distinct advantages for investing in the Caribbean in 2022. Caribbean nations have largely opened up as the world has relaxed COVID-era travel T

5 REASONS TO INVEST IN THE CARIBBEAN IN 2022 1 CARICOM has a target of 48 percent renewable energy penetration by 2030. Individual nations have set their own targets, some even more aggressive. Overall, this will be a fourfold plus increase in the amount of renewable energy being generated throughout the Caribbean. To accomplish this goal, public-private partnerships are available. Companies who are involved in the infrastructure, manufacturing, storage, distribution and servicing of renewable energy projects are all invited to contact CAIPA to learn about investment opportunities. Caribbean nations have high renewable energy targets 2 The Caribbean is a true near-source location. Companies looking to expand but wanting to be near their call center or operations hubs, should invest in the Caribbean for the sheer convenience of being able to reach the islands in a couple of hours. Most are in Eastern Standard Time, making it easy for sta ff and for customers to communicate between locations It’s easy to reach The Caribbean from the U.S., Canada & Mexico 3 Companies throughout the world are struggling to fi nd educated and skilled employees to fi ll positions. The Caribbean has the talent you are looking for. Our workforce is some of the most educated in the world. Hard working, and wanting to live in the Caribbean, our workforce is excited for opportunities to build and grow a career close to home. So, if a lack of talent is hurting your operations, 2022 is the ideal time to invest in the Caribbean. The Caribbean has the talent you’re looking for 4 English is the primary language spoken across the Caribbean. Culturally, Caribbean people are aligned with European and American customs and traditions. This cultural a ffi nity means that the learning curve is shortened when outsourcing to the Caribbean. Sta ff who travel back and forth will fi nd the transition incredibly easy. There are cultural similarities 5 The Caribbean has historically been a global hub for trade. It still is. Several free trade agreements are in place and Caribbean nations have enacted policies that make trading between nations easy and convenient. For example, the Caribbean Basin Initiative provides Caribbean territories with duty-free access to US markets for most goods. Likewise, the CARIFORUM/European Union Economic Partnership Agreement grants preferential access to European markets. The Caribbean is open to trade

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THE IMPERATIVE OF FOREIGN DIRECT INVESTMENT FOR CARIBBEAN COUNTRIES

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itizens of the Caribbean are fully aware of the challenges we face. They know that governments across the Region are fi nancially stretched which has been further accentuated by the COVID-19 pandemic. C

Our citizens also know that we have l i m i t ed a c c e s s t o e i t h e r Ov e r s ea s Development Assistance or concessional fi nancing from global fi nancial institutions and that our options are limited in accessing fi nance for business development. Our people are clear on what they want - a brighter future for themselves and their children. More speci fi cally, those with whom I speak have an overwhelming interest in either getting jobs or preserving the ones they have so they can take care of themselves and their families. We , a t t h e Ca r i b b e a n E x p o r t Development Agency (Caribbean Export) also recognize these constraints and hear the voices of our Caribbean people. The question is how as a Region, can we emerge from this stranglehold. For us, the solution is obvious – attracting increased levels of local investment and foreign direct investment (FDI). Governments and other stakeholders across the Caribbean must have a singular focus on steering investment our way. To a c h i e v e r e s i l i e n c e a n d e c o n om i c transformation we need to signi fi cantly ramp-up and draw investment to our shores. But fi rst, we must understand the trends and challenges so we can position ourselves accordingly. Globally, there has been a decline in FDI fl ows, with the United Na t i on s Con f e r en c e on T r ade and Development reporting a 42% decline in global foreign direct investment in 2020 in its January 2021 Report. The same report went on to note that one of the most a ff ected Regions is Latin America and the Caribbean which saw a decline of 38% in investment in fl ows from external sources. On the other hand, Asia and Africa witnessed declines of only 18% and 4%, respectively. 3

The outlook for the tourism sector continues to be pessimistic. The World Tourism Organization reports that travel experts surveyed are expecting a return to pre-pandemic levels only by about 2023 (Jan. 2021 report). Therefore, sitting and waiting for tourists to return in the numbers of yesteryear or for global prospects to drive up our export earnings cannot and will not li ft us out of this economic quagmire. This is why, increasing local investment and getting foreign direct investment to our shores is most critical. For the Caribbean to be successful in attracting investment, new thinking in these unprecedented new times is required. Further weakness in FDI fl ows is expected for the rest of the year and for our countries, if we continue with business as usual, the future will be a dim one. Firstly, we cannot continue to compete with each other as individual investment destinations, given our limited resources and populations. This approach cannot achieve the scale required to attract serious money our way. In view of this, we at Caribbean Export are work ing closely wi th the Car ibbean Associat ion of Investment Promotion Agencies (CAIPA) to support our countries in preparing investment projects that can be packaged and promoted as ‘regional’ proposals with more than one country being promoted as an investment destination for a speci fi c venture. This gives much needed scale, and the pooling of resources helps a wider group of countries. 4

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Linked to the emphasis on the ‘new economy’, is the leveraging of technology in key sectors such as agr icul ture. The Caribbean is one of the most food insecure regions on the planet, and this has been more eloquently demonstrated by COVID-19. A new emphasis on agriculture is required. However, this time around, it has to be about us ing technology to take Car ibbean agriculture forward into the 21 st century where our young people also see it as a viable business opportunity. This is precisely why Caribbean Export, in partnership with the CAIPA has identi fi ed Agrotech or Agriculture Technology as a priority sector for us in the Region. It connects all the dots in helping us to become more food secure; treats agriculture as an entrepreneurial activity; and as one Region we can o ff er the scale required for larger investors. Secondly, we need to focus on investment that can help propel a new economy, driven by climate-friendly business and digitalization. The world is going green and embracing digitalization and so must we. Therefore, we need to make a concerted e ff ort to bring companies to our shores that are at the forefront of green technologies in areas such as solar and wind. This means an investment approach that is targeted and forensic in focus. We at Caribbean Export recognize that innovation is imperative for our survival and must be central to our regional investment promotion strategy. As a matter of fact, we have already engaged the services of an alternative fi nance adviser with experience in raising capital across emerging and frontier markets for entrepreneurs and SMEs with high growth potential.

We intend to fast-track support to the packaging and promotion of regional investment projects and focus on steering investment to sectors that are vital to what will be the new economy whether by focusing on Agrotech, digitalization or the climate-friendly investments. We are acutely conscious that the future of our Region and the prosperity of our people ride on the actions we take now for business to be a driver and central player in advancing a transformational agenda for our Region. At Caribbean Export, we intend to do just that, with the attraction of local and foreign investment being a central pillar of our work in the years ahead.

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SOURCES

3 https://unctad.org/system/ fi les/o ffi cial- document/diaeiainf2021d1_highlight_en.pdf

4 https://www.weforum.org/agenda/2021/02/tourism- industry-covid19-recovery-government-response/

BENEFITS TO INVESTING IN THE CARIBBEAN’S AGRICULTURE SECTOR

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EXCELLENT CLIMATE.

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HIGH DEMAND FOR SUPPLIES FROM THE LOCAL MARKET AND TOURISTS WITH SIGNIFICANT EXPORT OPPORTUNITIES.

INVESTORS BENEFIT FROM LOCAL AND GLOBAL PROGRAMS INVESTING IN THE CARIBBEAN’S FOOD SECURITY INITIATIVES.

PUBLIC AND PRIVATE LAND IS AVAILABLE FOR AGRICULTURAL USE IN THE CARIBBEAN.

THE CARIBBEAN’S AGRICULTURE TALENT IS READY TO ADD VALUE TO ANY OPERATION.

Embracing AgTech: How The Caribbean Can Achieve 25 in 5 And Reduce Its Food Import Bill

2022

he Caribbean, one of the most vulnerable regions of the world continues to contend with arguably the greatest tumultuous period post industrial era. This era, dubbed the three C’s - Climate, COVID-19 and Con fl ict - hinder the strides made towards its economic development and attainment of overall lo ft y ideals of the sustainable development agenda. T For the Caribbean, the impetus to recover from the stranglehold of the COVID-19 pandemic is made even more acute given the region’s high debt-to GDP ratios, food insecurity and attendant ast ronomi cal food impor t bi l l whi ch according to CARICOM fi gures stood at USD 5 billion in 2018. The region’s vulnerabilities are further exacerbated by the disruptions in the global supply chain making the refrain on airwaves, the rising prices of consumer goods, including food; from The Bahamas to Trinidad and Tobago, Belize and Saint Lucia, nowhere is absolved of this growing concern. 5 Consequently, it is laudable that Caribbean governments, led by CARICOM have set a target to reduce by 2025, regional food imports by 25%. Dubbed 25 in 5, this strategy fi nds its foundation in the Caribbean Community Agriculture Policy (CAP) that seeks to undertake policy measures and incentives that support food production in the Region. The obvious question, however, is how can this be ach i eved when , save for acreage abundant countries like Belize, Guyana and

Suriname, there simply is not enough arable land to scale production towards reversing this food insecure trend? The answer lies in turning conventional thinking on its head and embracing technology to build food security. Digital technologies are transforming agriculture and food production, speci fi cally, in the agriculture and food sector. The spread of mobile technologies, remote-sensing services and distributed computing are already improving smallholders’ access to information, inputs and markets, increasing production and productivity, streamlining supply chains and reducing operational costs. Israel is a model of ingenuity and smart technology; no other s i ng l e count r y s i nce the 1 950s has contributed more breakthroughs to tackle the problem of dwindling natural resources owing to an expanding global population. Indeed, Israel has found ways to green their desert, developing solutions for more e ffi c i ent farmi ng, hardi er crops and alternative sources of nutrition to name a few of those innovations. Aspiring to those models would be vacuous unless they were de fi ned by unambiguous and focused strategies. These policies must be grounded in a framework that involves the private sector and international donor partners, and but t r es sed by mu l t i l ate r a l suppo r t , pa r t i cu l a r l y i n t he a r eas o f po l i cy intervention, institutional strengthening, investment, and sector fi nancing. 6

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5 https://today.caricom.org/2020/07/27/25-in-5- plan-to-tackle-caricom-food-import-bill/ SOURCES 6 https://today.caricom.org/2020/07/27/25-in-5- plan-to-tackle-caricom-food-import-bill/

F o r u s a t C a r i b b e a n E x p o r t Development Agency, there is a path forward. We have worked with the Caribbean Association of Investment Agencies (CAIPA) to identify AgTech as a priority sector to attract foreign direct investment as well as to stimulate regional capital fl ows. Caribbean Export is fully committed to the goal of 25 in 5 and we have begun our work in concert with our partners to de fi ne a mechanism to position the region’s AgTech opportunities to regional and international investors. However, with few exceptions, the Caribbean has been slow to embrace the widescale use of new technology in our food production systems. This is not a challenge solely faced by the Caribbean, as the World Economic Forum has noted that for its member territories, only $14 billion in investments in 1,000 food sys tems-focused s tar t-ups was generated since 2010, whi le healthcare attracted $145 billion in investment in 18,000 start-ups during the same time period. 7 For us in the Caribbean, the introduction of new technologies presents a major opportunity to accelerate food production, create jobs and attract investment. Embracing and accelerating the use of technology in agriculture or AgTech makes sense since it allows us to produce more with less, making food production more e ffi cient. Innovations using technology such as h y d r o p o n i c s a n d a q u a p o n i c s h a v e circumvented the need for extensive tillable land, which is a major constraint in many of the region’s small territories, especially island nat i ons . The i nt roduct i on of ar t i fi c i a l intelligence, analytics, connected sensors, and other emerging technologies could further increase yields, improve the e ffi ciency of water and other inputs, and build sustainability and resilience across crop cultivation, animal husbandry and agro-processing.

During the highly anticipated Caribbean Investment Forum under the theme - Building a SMARTer, GREENer, Caribbean - held 8-11 November, 2022 in Trinidad and Tobago, AgTech featured prominently as one of the sectors on showcase for investment. Together with presenting partners the European Union, the Caribbean Development Bank, CARICOM and Trinidad and Tobago’s Ministry of Trade and Industry, Caribbean Export and its esteemed panelists explored how AgTech innovations can transform the region’s agr icul tural landscape and review the investment opportunities on o ff er across the region. More information on the event can be found at: caribbeaninvestmentforum.com There is enormous potential for the Caribbean to strengthen market linkages and help farmers, fi shers, and agri-food businesses to catch up with current best practices and technologies. As the COVID-19 pandemic demonstrated, the pivot to digitalization and the swi ft adoption of technology was a sine qua non, whether for consumption of food or entertainment. Similarly, if the region is to succeed in ful fi lling its potential of feeding itself, without further compromising its natural capital and related ecosystem services, agriculture and agro-processing practices will have to move from the traditional mode of production. Practitioners ought to embrace and adapt to the technological innovations available to spur on economic growth and contribute to poverty reduction, particularly for marginal communities and households in the informal sector. Moreover , through the promotion of inclusive and sustainable agricultural development, these sectors can contribute positively towards socio-economic and environmental goals of food and nutrition security, increasing youth employment, gender equal ity, the sustainable use of natural resources, and climate change.

CARIBBEAN INVESTMENT FORUM

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7 https://www3.weforum.org/docs/WEF_ Innovation_with_a_Purpose_VF-reduced.pdf SOURCE

Millions to be Invested in The Caribbean’s Agribusiness Sector

2022

he Caribbean is making concerted e ff orts to increase local agricultural p r o d u c t i o n a n d r e d u c e t h e dependency on imported products. This creates s igni fi cant oppor tuni t ies for investment in agribusiness and the AgTech industry and investors from throughout the world are noticing. T In the Caribbean, 26 agribusiness projects with an FDI volume of $919.1 million were implemented between 2003 and 2020 (fDi Markets). The Caribbean is a $369 billion market with 30 million local consumers and 30 million a ff luent visitors to the region each year - a number that is growing annually as t he t ou r i sm i ndu s t r y expand s . The combination of local consumers and tourist demand makes the Caribbean’s agribusiness sector highly attractive, as does the region’s unique growing climate. In addition to growing food for local consumpt ion, investors are seeing pro fi ts from growing high-value crops like mushrooms for export. An Agri-Investment Forum and Expo was held in Guyana in May of 2022 to highl ight these opportuni t ies, and to encourage the move towards more agricultural independence. The “Agri Investment Forum and Expo: Investing in Vision 25 by 2025”, was organized by the Government of Guyana and the CARICOM Secretariat. During the forum, stakeholders agr eed to a l l ocate e ff or t s towards addressing food insecur ity, improving regional transportation (something the Caribbean Development Bank has pledged support for), removing any trade barriers,

and supporting agricultural projects led by women and youth. Investors can play a key role in helping the Caribbean to transition from importing much of their food products to producing and manufacturing them at home.

CURACAO IS ONE OF THE CARIBBEAN ISLANDS MOVING TOWARDS SUSTAINABLE, LOCALLY-GROWN FOOD

I n 201 7 , Cu racao ' s gove r nment approved a pol icy memorandum that p r omo t e s s u s t a i n a b l e a g r i c u l t u r a l development and includes replacing 5% of imported foods with locally grown food each year, for fi ve years. To support the increase in locally-grown food products, the Institute of Professional Excellence and the University of the West Indies has o ff ered the farming training program to local farmers and entrepreneurs with a focus on hydroponic and syntropic farming processes. Since 2016, over 100 farmers have been trained, resulting in successful projects throughout the island, several of which are looking for investors. They include a vertical hydroponic farm growing cold-weather crops, a solar powered production facility, and expanded farming.

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THE WORLD BANK & INVESTORS ARE SUPPORTING GROWTH IN THE CARIBBEAN’S AGRICULTURAL INDUSTRY

In March, the World Bank approved $25 million in fi nancing for the Belize Climate Resilient and Sustainable Agriculture Project to increase food production capacity and to implement technologies that will support climate resiliency. Over 7,000 farmers in Belize will now have access to technical information to improve yields and assist with planning. In addition, 3,700 small farmers will receive grant funding. Lilia Buruniuc, World Bank Country Director for the Caribbean, said, “Both the World Bank and Belize know the sector can be an engine of growth to support the well-being of families and communities and improve the economic prospects of the country.” Likewise, the IADB has invested in projects in countries like Suriname, providing millions in grant funding for sustainable agriculture development. In Belize alone, they are investing $15 million in the agriculture sector in 2022. A variety of trade agreements increase the Caribbean’s agribusiness market size to $38,419 billion and 941 million customers. This has created opportunities for investors in specialty food products. For example, the Caribbean is growing the world’s fi nest cocoa - one of several high-value agricultural export opportunities available within the region. As another example, 1 million tonnes of sweet potatoes are produced in the Caribbean annually for export. View high tech agribusiness investment opportunities at www.investincaribbean.org AGRICULTURAL EXPORT OPPORTUNITIES