Address by the Rt. Hon. Freundel Stuart, Q.C., M.P., Prime Minister of Barbados Commonwealth

Address by the Rt. Hon. Freundel Stuart, Q.C., M.P., Prime Minister of Barbados Commonwealth Business Forum; Focus on the Caribbean Malta, 26 November, 2015

Mr. Chairman, Your Excellencies, Ladies and gentlemen, Let me begin by thanking Lord Marland and the organisers of this Commonwealth Business Forum 2015 for inviting me to address this very important gathering focusing on investment in the Caribbean.

I am especially delighted to be joined by two fellow Caribbean Heads of Government: Prime Minister Timothy Harris of Saint Kitts and Nevis and Prime Minister Keith Rowley of Trinidad and Tobago.

In his 1992 Nobel Prize lecture, the Saint Lucian, Trinidadian, Caribbean poet, Derek Walcott described the Caribbean thus: Visual surprise is natural in the Caribbean; it comes with the landscape and, faced with its beauty, the sigh of History dissolves. Derek Walcott is one of our three Nobel Prize winners, one in Economics and two in Literature.

The Caribbean, as many of you know, is famous for its beauty, the vibrancy of its peoples and culture [need I remind you that today’s global superstar, Rihanna, hails from the 166 square mile island of Barbados which I have the honour to lead?].Of course others like the internationally renowned Bob Marley from Jamaica preceded her! Marrying the beauty of our surroundings and the appeal of our culture, the Caribbean has built itself into one of the world’s most formidable brands in tourism, one of the world’s most competitive markets.

As we have broadened the range of tourism products and services, at the same time we have also been diversifying our countries - and our economies more generally- as places in which to invest and as international centres for business and finance. This development is built around four main pillars. The first is what might be described as our intrinsic assets – good location, perfect weather, high levels of education and, critically, enduring political stability, built upon strong institutions. The Parliament of Barbados, for example, celebrated 375 years of existence in 2014. The second pillar is the productive sector.

Throughout the region, given the political stability which I have already mentioned, there are significant investment opportunities in multiple sectors. In Barbados, we are on track to record one billion US dollars in investment in our tourism sector over the period 2015-2019 [and, naturally, we are happy to welcome more!]. Investment opportunities are not limited to the hospitality sector. The Caribbean is a diverse region and this diversity is reflected in the investment opportunities, whether they are in the extractive sectors, manufacturing, infrastructure, or, renewable energy.

As many of us are, literally, on our way to COP 21, permit me, Chairman, Prime Ministers, ladies and gentlemen, to dwell for a moment on this last point. The Caribbean is, for obvious reasons, one of the regions of the world with the greatest potential for renewable energy, in particular solar energy.

My own country, Barbados, already has one of the world’s highest penetration levels for solar water heaters – in excess of thirty percent of houses are equipped with these energy-saving, carbon neutral devices. And now, we are preparing to take the next step. Barbados was recently chosen to host the Caribbean Centre for Renewable Energy and Energy Efficiency which was launched just last month. The Caribbean thus has the physical conditions, the market and the regulatory framework to make investment in the renewable energy sector an attractive prospect from every perspective. The third main point I would like to highlight is the fact that the Caribbean is at the heart of a network of regional, hemispheric and international trading arrangements.

The sovereign states of the Commonwealth Caribbean are all members of the Caribbean Community – CARICOM. CARICOM, which I have the honour to chair until the end of this year, is a community built around several regional integration and cooperation mechanisms. We have a number of regional agencies facilitating functional cooperation in areas ranging from agriculture to education to security. In addition, CARICOM is a fully-functional single market with its own judicial dispute settlement mechanism, the Caribbean Court of Justice.

Finally, CARICOM has concluded a number of trading arrangements with neighbouring countries such as Colombia, Venezuela, Cuba, the Dominican Republic and the countries of Central America. Further afield, CARICOM enjoys preferential access to the US, Canadian and European markets. Producing goods and services in the Caribbean, for the Caribbean and beyond is thus seamlessly facilitated.

Many countries of the region are international financial centres compliant with the highest international standards. Barbados, for example, has a global network of double taxation agreements, bilateral investment treaties and tax information exchange agreements. Our network of treaties stretches from the People’s Republic of China, to Canada, the United Kingdom, the United States, Mauritius, Botswana and, of course, Malta.

In addition, Barbados has signed on to the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters. You should also be aware that our key regional trade and economic arrangements are as follows: CARICOM Caribbean Basin Initiative (CBI) Agreements with the Dominican Republic and with Haiti DTA’s and Investment Treaties (mainly in Barbados) Economic Partnership Agreement (EPA) with the European Union.

Investment Opportunities in CARICOM States

It must be acknowledged that together CARICOM States offer a wide array of investment opportunities. There are the traditional sectors – tourism and related activities, agriculture (rice, sugar, tropical fruits), fishing and marine products, services (including the entertainment industry), mining and minerals (petroleum, bauxite, gold and other minerals). The growth potential for these sectors, though somewhat diminished in accord with their current life cycle, can be resuscitated through innovation and product diversification.

Then there are the new and emerging opportunities in respect of Agriculture and Agribusiness, Tourism (health and wellness), Renewable energy and Business /ICT related services, and cultural industries. Indeed, renewable energy investments will boost both productivity and competitiveness of CARICOM businesses and are a major priority for CARICOM States. We have agreed targets for the introduction of renewable energy sources. Member States have committed to 20 percent, 28 percent, and 47 percent by the years 2017, 2022, and 2027, and we are working assiduously with our development partners towards that achievement. In addition, the creation of a single ICT space is a major initiative for CARICOM States.

The main economic investment opportunities are thus in: Tourism Agriculture and agribusiness; Construction; Manufacturing; Mining; Oil and Gas; ICT; International Business and Financial Services; Wholesale and Retail business; Cultural industries; Renewable energy.

Investment is also actively encouraged in particular in Hotels; Manufacturing of inputs of furniture, furnishings, linens to the hotel industry and Desalination plants whose output is sold to the water grid. Economic Citizenship Programmes have been adopted by some member countries: St. Kitts and Nevis; Dominica; Antigua and Barbuda and Grenada, as a means of attracting foreign capital.

Public-Private Partnerships:

We also encourage public–private partnerships, that is, private sector equity, combined with loans for which the private sector proponents and projects take responsibility Government puts in place the legislative, regulatory and institutional arrangements to enable the projects to charge and collect user fees to repay capital with an acceptable rate of return. Government also provides the land and government facilities as these are thought necessary. Some of the areas in which public-private sector participation is encouraged are the following:

1. Water system renewal and upgrade

2. Sewerage system expansion, upgrade and aquifer recharge with treated water

3. Waste to Energy plants to manage waste disposal

4. Airport expansion

5. Cruise port upgrade and expansion

6. Cargo port upgrade and expansion for transshipment

7. Affordable housing for sale

8. Energy efficiency and renewable energy in government facilities

CARICOM States remain extremely optimistic about their capacity to attract growth inducing investments to drive the sustainable development process, but remain mindful that exogenous events can considerably derail economic expansion. Recent experience highlights this vulnerability and underscores the importance of building economic resilience to withstand external shocks.

Just prior to 2008 (and the onset of the global financial and economic crisis), there was a surge of interest in locating investments in certain CARICOM States. This interest was focused on hotels, condominiums, real estate development and golf courses as well as other service sector opportunities including areas ranging from private health care, the establishment of specialist financial services to port development and sea transport.

This kind of interest in CARICOM States represented a welcome shift from traditional approaches and the usual government to government relationships, to the ability of CARICOM governments to interact in a meaningful manner with global financiers and entrepreneurs.

CARICOM States are aiming to rekindle this interest and are ready to lift the image of the region’s business operating environment. As Chairman of CARICOM and Prime Minister of Barbados, I am here to tell you that we are open to business. We are ready to assist you through our Caribbean Export Development Agency (Caribbean Export), which is the Regional Export Development and Trade and Investment Organisation of the forum of Caribbean States (CARIFORUM), and it comprises 19 countries.

Mr Chairman, Ladies and gentlemen, the Caribbean’s charms are well-known globally, as the world comes to our shores and to the Caribbean Sea to enjoy the beauty before which, as Derek Walcott said, even history’s heavy sigh dissolves. I invite you, I invite interested investors to join us to develop the region further; to broaden and to diversify the economic opportunities for investment both for your benefit and for that of the peoples of the Caribbean.

We have a Caribbean Commission on the Economy, set up in 2013, chaired by Barbados, and which is actively seeking to establish strategies to revitalize growth in the CARICOM region, including the identification of regional best practices in business reforms.

Ladies and Gentlemen, in conclusion let me remind you that the Caribbean is open to business!

I thank you.