Call to fix impediments to investment

Barbados and other Caribbean Community (CARICOM) member states are being challenged to urgently address shortfalls that officials say are hindering more foreign direct investment from being pumped into regional economies.

At the same time, the CARICOM Secretariat has been asked to consider a regional approach to investment in projects that will allow the Caribbean to achieve the United Nations Sustainable Development Goals (SDGs).

The recommendations came during a panel discussion on Thursday on the topic Facilitating Private Sector Investment for SDG Achievement in Caribbean Small Island Developing States (SIDS).

Dr Jason Haynes, Deputy Dean of Graduate Studies and Research in the Faculty of Law at the University of the West Indies (UWI), Cave Hill Campus, said he believed “a whole host of things” could be improved in the region to allow for greater investment that would help countries achieve the SDGs.

He said chief among them was a clear investment framework for countries that would inform investors what to expect from the outset.

“Many of our jurisdictions do not have national investment laws that speak to processes with respect to attracting and retaining foreign direct investment,” said Haynes. “In my experience, I have found that to be a significant impediment insofar as attracting private sector investment in our region.”

He also highlighted the difficulty in accessing information in one place, an absence of bilateral treaties, a constant backlog in the court system and a general lack of ease in doing business as serious barriers that needed to be tackled urgently.

Haynes added that while there were investment promotion agencies and policies in several jurisdictions, in practice, the
operationalization of these has been very “constrained”.

The university lecturer also argued that while the COVID-19 pandemic has resulted in some countries embarking on a digitalization process, there were still too many that were carrying out some processes manually and this was also an impediment.

“In addition to that, we have the challenge of protection of minority shareholders in the context of insolvency laws, which are generally weak,” he added.

“The region is moving in the direction of alternative dispute resolution and in particular mediation or arbitration . . . but they are not ubiquitous across the region, and so in terms of settling disputes, it still is a fundamental challenge outside of the courtroom context.”

Haynes said perhaps one of the biggest challenges facing regional economies now is the lack of access to information.

“There is a culture of silence. So, you request particular information regarding the prospect of investment in the jurisdiction and you do not hear back until two weeks later, a month later, or even several months later. If we are serious about generating foreign direct investment we cannot operate in the manner in which we have in the past,” warned Haynes.

“I would say while we have made considerable progress over the last several years in improving our investment climate, we still have a very long way to go to ensure that the private sector feels comfortable investing in our jurisdictions,” he said.

Meanwhile, Matthew Wilson, Chief of the Special Projects Office of the Executive Director at the International Trade Centre, said he believed the private sector could help countries achieve the SDGs by being an agitator, partner, financier and investor, and buyer.

Stating that businesses should “more forcefully” incorporate the SDGs into their business brands, targets and investment decisions,

Wilson urged companies to report their success while acknowledging their shortfalls.

“We know the SDGs will not be achieved without the private sector and without investment based on partnership and a dual recognition of economic gains and social gains,” he said.

“These companies that are doing this kind of work already – prioritizing SDGs – they need to inspire others, share their models about what works and also to truly and respectfully partner with developing countries and UN agencies to ensure a win-win outcome,” he suggested.

At the same time, Wilson is of the view that a more regional approach is needed in achieving the SDGs and attracting investment to the Caribbean.

“They [the CARICOM Secretariat] can bring together stakeholders from across the region, not just policymakers and not just chambers of commerce, but true stakeholder engagement to discuss these things,” he added.

While saying there needs to be greater political will among leaders to implement policies and greater engagement of the private sector, he also suggested the harmonization of investment policies across regional states.

“We are far too small to have demarcation of policies. Foreign policy and investment policy have got to drive and support our domestic priorities. I think there is still so much more that we need to do, kind of behind the border, in terms of linkages and really making sure that all of these countries sing from the same hymn sheet and that they are mutually supportive,” said Wilson. (MM)