Caribbean Investment Forum Magazine

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.

CARIBBEAN INVESTMENT FORUM

19