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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

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




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




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 and finance

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


The reality
The Reality and finance

  • Not all countries have the same locational attractiveness

  • Benefits uneven

  • Operations are not integrated


The tccs
The TCCs and finance

  • Moving into branding e.g. RBTT

  • Ansa McAl

  • Republic Bank Limited


Sample direct investment
Sample Direct Investment and finance

  • 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 and finance

  • 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 and finance

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


Policy recommendations
Policy Recommendations and finance

  • 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


Thank You and finance


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