OECD Investment Policy Reviews
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OECD Investment Policy Reviews Caribbean Rim NETHERLANDS ANTILLES ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members. This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. Also available in French under the title: Examens de l’OCDE des politiques de l’investissement ANTILLES NÉERLANDAISES © OECD (2005) No reproduction, copy, transmission or translation of this publication may be made without written permission. Applications should be sent to OECD Publishing: [email protected] or by fax (+33-1) 45 24 13 91. Permission to photocopy a portion of this work should be addressed to the Centre Français d’exploitation du droit de Copie, 20 rue des Grands-Augustins, 75006 Paris, France ([email protected]). 3 Foreword The Caribbean Rim Investment Initiative (CRII) is an effort promoted by the OECD to develop a co-operative approach between countries of Central America and the Caribbean and other international organisations with a view to enhancing investment opportunities in the region. The CRII is a concrete and tangible exercise to support Caribbean Rim countries in their efforts to improve their investment climate, attract increasing flows of investment --both foreign and domestic-- and maximize the benefits that such flows may have in their economies. The origins of the CRII can be traced back to two workshops held in the Dominican Republic in April 2000 and in Curaçao in April 2001, where government officials from Caribbean Basin countries, private sector participants, and representatives of the OECD and other international organisations exchanged views on how these economies could improve their investment climate. Several reasons justify the focus on the countries of the Caribbean Basin. In addition to constituting a distinct geographic area, this region comprises more than half of the countries of the Americas and practically all of the smallest economies existing in the Hemisphere. Despite some common elements, the region does present a high degree of heterogeneity. It includes countries with just a few thousand inhabitants and others with cities of several million, societies with relatively high human development achievements while others endure the worst living conditions on the continent, some are strong democracies, others still have weak political institutions. The fact that the Caribbean Basin represents such a mosaic of economic, political and social diversity explains in part why this region has been less studied than other regions in Latin America. However, this reality also points to the need to promote initiatives specifically tailored to address the complex realities of these countries. To date, studies providing an overall factual assessment of investment conditions existing in each CRII country have been completed for Costa Rica, the Dominican Republic, and Jamaica, and were published in 2004. OECD INVESTMENT POLICY REVIEWS: CARIBBEAN RIM, NETHERLANDS ANTILLES © OECD 2005 FOREWORD – 4 The current report on the Netherlands Antilles benefited from a peer review which took place at the CRII meeting held in St. Maarten on 29-30 March 2004. This report has served as a basis for developing an investment policy reform agenda which could qualify for support by bilateral and international organisations. In publishing this report on the Netherlands Antilles, we would like to express our gratitude to our donors (The Kingdom of the Netherlands, and the United Kingdom) and to Mr. Errol Cova, Deputy Prime Minister of Economics of the Netherlands Antilles for his leadership in the CRII. Special thanks are also due to Mr. Don Martina, CRII national coordinator for the Netherlands Antilles, Mr. Gilbert Justiana, and to several organisations of the Netherlands Antilles, in particular, the Central Bureau of Statistics, the Central Bank, and the Chamber of Commerce. We are also grateful to the two main contributors to this report, Maiko Miyake and Maryse Robert, and to other international organisations that provided technical advice such as the U.N. Economic Commission for Latin America and the Caribbean (ECLAC), the CARICOM Secretariat, the Organisation of American States (OAS), and the Multilateral Investment Guarantee Agency (MIGA). We also appreciate the effective organization and coordination of CRII meetings provided by Luz Beaty from the Directorate for Financial and Fiscal Affairs. The report is published under the responsibility of the Secretary-General of the OECD. Rainer Geiger Deputy Director Directorate for Financial and Enterprise Affairs OECD INVESTMENT POLICY REVIEWS: CARIBBEAN RIM, NETHERLANDS ANTILLES © OECD 2005 5 Table of Contents Preface .................................................................................................................7 Executive Summary............................................................................................9 Part I Investment Trends.................................................................................17 1.1. FDI Trends.....................................................................................17 1.2. Other Forms of Foreign Interests in the Netherlands Antilles .......21 Part II Investment Environment.....................................................................23 2.1. Country Profile ..............................................................................23 2.2. Economic Environment .................................................................25 2.3. Economy........................................................................................27 2.4. Trade..............................................................................................29 2.5. Infrastructure..................................................................................33 2.6. Human Capital ...............................................................................35 2.7. Business Integrity ..........................................................................38 2.8. Investment Regime ........................................................................39 2.9. Fiscal Framework ..........................................................................40 2.10. Achievements So Far and Further Action......................................42 Part III Investors’ Perceptions .......................................................................45 3.1. Economy........................................................................................45 3.2. Infrastructure..................................................................................46 3.3. Human Capital ...............................................................................47 3.4. Business Integrity ..........................................................................48 3.5. Administrative Barriers..................................................................49 3.6. Summary.......................................................................................52 Part IV Conclusion: Future Agenda ...............................................................53 4.1. Assessing the Role of FDI .............................................................53 4.2. Recommendations..........................................................................54 Annex I Business Survey Methodology...........................................................57 OECD INVESTMENT POLICY REVIEWS: CARIBBEAN RIM, NETHERLANDS ANTILLES © OECD 2005 7 Preface As Minister of Economic and Labor Affairs of the Netherlands Antilles it gives me great pleasure to accept the request of the OECD Directorate of Financial and Enterprise Affairs to write this foreword for the Business Environment Report (BER) of the Netherlands Antilles. The completion of this report could not have been possible without the excellent cooperation between the OECD staff and the National Coordinating Group on the Caribbean Investment Initiative for the Netherlands Antilles under the chairmanship of former prime-minister Mr. D. Martina. Our first contact with the OECD related to a study to attract foreign direct investments dates back to 2000