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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

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
  • 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
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