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FDI trends in the Caribbean


Reflecting the relatively small size of Caribbean economies, many of which are island states, the FDI stock to Commonwealth countries in 2010 was a modest US$51 billion, pretty well dispersed across the many member countries but with some concentration in the Bahamas, Jamaica and Trinidad and Tobago. The most dynamic sectors in term of FDI among nearly all

Caribbean Commonwealth countries has been tourism, in addition to the oil and gas industry in the case of Trinidad and Tobago, offshore finance in the case of Bahamas, and mining and garments in the case of Jamaica.

FDI inflows to Commonwealth countries in Latin America and the Caribbean dropped in 2009 as a consequence of the global economic crisis, and continued declining in 2010, in contrast to FDI in Latin America and some other developing regions. This is due to the strong dependence of these economies upon exports of goods and services – such as tourism, bauxite, garments and offshore finance – to the US and other developed economies in the throes of financial and economic crisis.   In addition, depressed liquefied natural gas (LNG) prices – which have not necessarily followed the same upward trajectory as oil prices over the past year – and the failure of downstream gas projects to materialise have dampened

FDI in oil and gas related activities in Trinidad and Tobago. Nevertheless, FDI in tourism is likely to be spurred by new investments in the tourism sector, such as the construction in the Bahamas of a US$3.4 billion mega-resort (Baha Mar) by Chinese investors.


Some countries are taking measures to reverse recent downward trends in FDI inflows. For example, Barbados has launched several initiatives in China in recent months aimed at attracting increased flows of both investment and tourists, while Trinidad and Tobago has approved a variety of investment incentives for companies interested in exploring deepwater oil and gas fields. Similarly, after efforts to increase the transparency of offshore banking, the Bahamas has been removed from the OECD’s taxation ‘black list’, and it was announced in May 2011 that the UK will upgrade Barbados’s status relating to

compliance with information disclosure and other laws governing offshore financial centres.


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