SVG records best FDI performance in OECS in 2012

St Vincent and the Grenadines had the best Foreign Direct Investment (FDI) performance in the OECS in 2012, with over $126 million coming from FDI inflows and credited to the input of Invest SVG.{{more}}

According to Minister of Foreign Affairs, Foreign Trade and Consumer Affairs Senator Camillo Gonsalves, the numbers speak eloquently to the importance of FDI and Invest SVG in our national and regional context.

Delivering the feature address at the opening of Invest SVG’s 10th anniversary exhibition, which was held last Friday, September 27, at the National Trust building on Granby Street, Gonsalves said that 10 years prior to Invest SVG (1993 to 2002), FDI inflows averaged US$40 million a year.

Now, according to the Economic Commission for Latin America and the Caribbean (ECLAC), in the 10 years since Invest SVG has been around, SVG’s annual FDI inflows average US$100 million.

Senator Gonsalves said that in 2001, when the Unity Labour Party (ULP) took office, FDI was US$21 million, which placed us fifth among six OECS independent countries.

He said that in 2012, we had FDI inflows of US$126 million, which is not only an improvement, but the best performance in the OECS last year.

“That $126 million in 2012 is important because it represents the best year since the economic crisis”, said Gonsalves who stressed that FDI climbed steady up to 2008 and peaked at US$159 million, at which time the world financial crisis struck, causing a decline which saw FDI decline to $80 million in 2011, a 45 per cent decrease.

“Last year, US$126 million is not far off from the pre-crisis high point. It is our second best FDI in the last few decades and hopefully it constitutes another positive sign that we and our investors are beginning to emerge from financial crisis”, said Gonsalves.

He added that in the last few years, SVG has seen FDI from Buccama and Amajaro, among others, while an Icelandic geothermal company is looking at moving into SVG.

“Within the region, FDI is still a mixed bag. While SVG’s FDI increased to a post crisis high, St Lucia, St Kitts and Grenada are in decline. Antigua and Dominica have stopped the decline, but they are not growing”, revealed Gonsalves, who also stressed that in the wider Caribbean, economists will say that FDI is increasing, but that growth has localized in countries that have minerals like Trinidad and Tobago, Guyana and Suriname.

“So, although these snapshots do not give a clear picture, it points to growth in the sector and the next decade will be even more challenging in spite of recovery”, said Gonsalves.

He said that locally, SVG places people-centered development at the heart of its policy agenda, so our government, like other governments in the region therefore, have to find ways to integrate FDI into this evolving developmental thrust.

The senator said that Invest SVG will have to be increasingly selective about the types of investment they pursue and accommodate in keeping with the developmental priorities of the government.

Locally, the Government tries to attract FDI with five pillars which can be broadly categorized. These are state agency outreach, investment incentives and concessions, international arrangements and agreements that we may be part of that will facilitate investments in one way or the other, good governance and a good regulatory environment and domestic infrastructure and local skills.

“A lot of the work of Invest SVG has been in the solicitation of overseas investment and the discussion of the optimal mix of incentives necessary to draw investors. Continue refining who and how you pursue investors, while engaging in the formulation of investment policy, particularly as it relates to the good governance and development of skills and infrastructure,” the senator told Invest SVG.

He said that the local development of skills and infrastructure is inextricably tied to our attractiveness as a destination for foreign investment, while few can doubt that high end 21st century transformative FDI can only occur within a country where the local population is properly educated.

“We are looking for investments that take advantage of the skills and values that we talented Vincentians can add to the product. In that context, our education revolution is not simply a social or developmental policy, but an investment policy. Invest SVG has to become part of the loop that not only tells us which skills are most in demand, but also in the attraction of employers who are the best positioned to hire our newly minted graduates”, said Gonsalves.

He added that Invest SVG must become knowledgeable about the student profile of our population, so that they can effectively seek investors who are more likely to hire, employ and advance our youths.

“We much prefer an investor who comes in and builds from scratch, we build and also staff. We need investors who can tap into the talent, similarly infrastructural development policy is also investment policy”.

Gonsalves said that in his opinion, the Argyle international airport will be a boon to investment and investors who would have had concerns about transport to SVG will no longer have a problem.

“It is easier to sell a tourism investor on an island with good air access…”, said Gonsalves, who stressed that the success of the airport as a developmental game changer hinges on Invest SVG’s ability to attract investment that can increase the quality and quantity of existing hotel room stock”.

The launch also heard from executive director of Invest SVG Bernadette Ambrose-Black, Parliamentary Secretary in the Ministry of Tourism, Sport and Culture Senator Luke Browne and lawyer and former Minister of Tourism and Culture, Urban Development and Electoral Matters René Baptiste.

The exhibition attracted some 25 small business operators and also saw a fashion show and performance from Delroy “Fireman” Hooper.