Flow of investment capital from intra regional sources
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Flow of Investment Capital from Intra- Regional Sources . Enid E Bissember Economic Intelligence and Policy Unit CARICOM Secretariat [email protected] Outline. Introduction Nature of Intra-Regional Investment Sectoral Trends in Intra-Regional Investment Flows Implications

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Flow of Investment Capital from Intra- Regional Sources

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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

[email protected]


Outline

Outline

  • Introduction

  • Nature of Intra-Regional Investment

  • Sectoral Trends in Intra-Regional Investment Flows

  • Implications

  • Policy Recommendations


Nature of intra regional investment

Nature of Intra-Regional Investment

  • Erratic

  • Discriminating

  • Scarce

  • Mobile

  • Highly sought after

  • Multi-directional

  • Responds to market opportunity


Erratic flows

Erratic Flows


Intra regional investment in the oecs

Intra-Regional Investment in the OECS


Types of intra regional investment

Types of Intra-Regional Investment

  • Portfolio investment

  • Direct investment

    • Joint venture

    • Greenfield

    • Mergers and acquisitions


Scarce

Scarce

  • Largely from few Member States

    • Trinidad and Tobago

    • Barbados

    • Jamaica

    • St Vincent and the Grenadines

  • Behaviour similar to global TNCs


Intra regional investment arena

Intra-Regional Investment Arena

  • Major recipients are Jamaica and Barbados

  • Guyana, Suriname , the LDCs and the Bahamas not as attractive


Flow of investment capital from intra regional sources 1317000

Discriminating flows


Trinidad and tobago intra regional investment 99 03 us mn

Trinidad and Tobago intra regional investment 99-03 US$mn


Attracting intra regional investments

Attracting Intra regional Investments

  • Large variations across countries

  • Variations across Sectors


Sectoral trends

Sectoral Trends

  • Banking and financial services sector

  • Distribution and trading

  • Food services

  • Tourism


Sectoral distribution of intra regional investment

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


Intra regional investors

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


Sample areas of operation of one tcc

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


Concentration

Concentration

  • Tourism 4 firms

  • Banking and finance 4 firms

  • Food and beverages 4

  • Conglomerates 6

  • Manufacturing 1

  • Transportation 1


Recipient countries of intra regional investment in banking and finance

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


Multi directional flows

Multi-Directional Flows

MDCMDC -- JMMB into Trinidad and Tobago and Barbados

MDCLDC -- RBTT in Grenada

LDCLDC --Antigua Barbuda Investment Bank into Belize

LDCMDC -- OECS commercial banks into Barbados


The reality

The Reality

  • Not all countries have the same locational attractiveness

  • Benefits uneven

  • Operations are not integrated


The tccs

The TCCs

  • Moving into branding e.g. RBTT

  • Ansa McAl

  • Republic Bank Limited


Sample direct investment

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


Portfolio investment

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


Joint venture

Joint venture

  • RBTT and Guardian Holdings of Trinidad and Tobago together with Sagicor of Barbados investment in RGM


Policy recommendations

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


Flow of investment capital from intra regional sources 1317000

Thank You


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