Invest SVG: Business climate improvement and competitive enhancement

Invest SVG continues its thrust towards the improvement of the investment/business climate with a view to enhancing its competitiveness in the both the regional and the international arenas.{{more}}

To this end, Emmanuel Hess, international consultant with the Inter-American Development Bank (IDB) has been on island from April 8th, holding consultations with the Government and private sector stakeholders. The objective of the second mission of this international organization is to complete the drafting of the technical cooperation proposal for the project: “Strengthening the Institutional Framework and Building Capacity for Investment Attraction in St Vincent and the Grenadines (SVG).”

SVG’s status as a trading nation has weakened since 1990. The country’s trade performance, particularly in exports (as a percentage of GDP), has fallen significantly. Over the last 10 years, SVG’s total aggregate exports to CARICOM is estimated at EC$701 million (60 per cent) compared to imports of EC$1.8 billion (29 per cent), resulting in a trade deficit of EC$1.1 billion. The private sector is comprised of small and medium sized enterprises (SMEs) which are constrained by several factors which inhibit their export capabilities and their full integration into the global economy. The problem was further exacerbated by the impact of several exogenous shocks on the economy of SVG, including the global financial crisis of 2008.

This pilot project aims to address the aforementioned problem by proposing a strategic framework that is designed to enhance the global competitiveness of SVG, in keeping with the themes of the National Economic Social and Development Plan (NESDP, 2010 – 2025). It is anticipated that the outputs of this project will contribute towards economic growth, poverty reduction, increased export earnings, increased Gross Domestic Product (GDP) and reduce the country’s trade deficit. The targeted beneficiaries will be the population of SVG, through employment opportunities generated by foreign investors who decide to invest in the country. The Government of SVG will also reap the benefits through its increased capacity to generate the FDI that will benefit the economy as a whole; and the private sector, especially investors and SMEs currently supplying or with supply potential to foreign investors, will also benefit.

The project will seek to validate the newly proposed institutional framework presented by Invest SVG, and design a sufficient technical support mechanism to make the organization more efficient and effective in attracting FDI. This will be done by building internal capacity that will allow this central institutional pillar in the state’s administration to realize its mandate and its institutional goals and objectives. The project will also seek to obtain a better understanding of the economic focus sectors that represent SVG’s competitive advantages. To this end, the project will witness the development of comprehensive sector strategies, as well as the implementation of at least two or three identified as high growth/niche areas prioritized for investment promotions. It should be noted that these sector strategies would include specific trade and investment development profiles, which would clearly identify, quantify and assess the resources and advantages of each sector as targets for direct investment and outline the export criteria for the county’s trading partners.

In this, its second mission to the ‘Jewels of the Caribbean’, the International Donor Organization held meetings with key Government Ministers for all the economic focus sectors for which Invest SVG has responsibility, as well as the agency’s line ministry (Ministry of Finance) and the director of Central Planning. Consultations were also held with both private and public sector entities that fall within the purview of Invest SVG.

The Compete Caribbean program is jointly funded by the Inter American Development Bank (IDB), the UK Development for International Development (DFID) and Foreign Affairs, Trade and Development Canada (DFATD). It supports projects in 15 Caribbean countries. Projects in the OECS countries are implemented in partnership with the Caribbean Development Bank (CDB). It is indeed an accomplishment that Invest SVG has been historically earmarked for funding under this initiative.