Despite its formidable positioning both geographically and linguistically – many Caribbean countries have struggled to fully capitalize on their unique advantages in winning more business and investments in the global services industry. Some countries remain deeply dependent on tourism and others frankly don’t know where or how to get started down the road toward building and promoting an internationally focused knowledge-based economy.
There are certainly lots of bright spots in this fascinating archipelago, however. Jamaica and the Dominican Republic are home to a considerable number of BPO operators. Trinidad is seeking a loan from the Inter-American Development Bank (IDB) to stimulate its outsourcing sector. Barbados has recently unveiled plans to build up a strong offshoring services industry.
“We need to make it clear that the Caribbean is not just for sun and fun, these countries are also a good destination for investment,” says Ronald Theodore, President of the Caribbean Association of Investment Promotion Agencies (CAIPA), an umbrella organization aimed at enabling collaboration among the region’s investment promotion agencies. Theodore, who was elected as the president of CAIPA in November last year, is also the vice president of the Grenada Industrial development Corporation (GIDC). Nearshore Americas engaged with Theodore to learn more about the overall business climate and the efforts of his association to bring investment into the region’s service sector.
NSAM: What are the key advantages in the Caribbean, and what plans are there to further improve the business climate?
Ronald Theodore: Geographical placement, abundant labor pool and a stable political climate are our advantages. Our telecom and electricity infrastructure are not bad either. Year after year, our ranking on the World Bank’s ‘Ease of Doing Business’ report is rising. The Caribbean countries are increasingly realizing the need to protect the interest of foreign investors. We are signing trade agreements with many countries and positioning ourselves to lure more foreign investment in service sector. I think we need to build a new image for the Caribbean, we are not just for sun and fun.
NSAM: Many businesses are using generators for electricity in many countries including Jamaica. How are you advising governments to ease the power crisis?
Ronald Theodore: Not all countries are running short of electricity, many countries supply uninterrupted electricity to businesses. We are turning to alternative energy sources to ease the crisis. Things are improving rapidly. We are confident of overcoming the power crisis in the near term.
NSAM: How strong is the ICT infrastructure to attract foreign investment in the technology sector?
Ronald Theodore: Our ICT sector has gone through a series of changes in the past few years. In Grenada, for example, almost every household has a computer and a smartphone. You will see public Wi-fi hotspots in many rural areas across the country, an evidence of growing usage of Internet. Our telecom markets have finally been liberalized. Nowadays you cannot see an operator monopolizing the telecom market. ICT costs have gone down considerably. I am not an ICT expert, but you need to take into account the decreasing cost of telecom services.
NSAM: What are your plans for the outsourcing sector?
Ronald Theodore:We have a huge number of English-speaking population and also people who can speak fluently in Spanish and French. Good education and low-cost labor are our main advantages to grow this industry. From New York, many Caribbean countries are closer than California in terms of flying-hours and time-zones. Not only call center services, we also need to develop software companies in the developed world. The Dominican Republic and Jamaica have successfully grown their outsourcing sector. JAMPRO (Jamaica Trade & Invest) is also our member. I think every member states can mimic the success of others. The CAIPA will ask all member countries to set up agencies to monitor and lobby for the outsourcing sector, which I think has a huge potential to increase employment opportunities in the region.
NSAM: Why do you believe the region has not fully capitalized on some of these opportunities?
Ronald Theodore:We have not capitalized fully, because we are reactive not pro-active. We don’t go behind investors, we answer the investors’ call only when they call us. We have not really mastered the art of convincing investors, explaining them the advantages they can make use of if they invest in our country. Some countries are promoting themselves well and many countries are not. We need to have a clear investment promotion strategy in place.
NSAM: What are the factors preventing you from luring large investment in the outsourcing sector?
Ronald Theodore: There are many hurdles standing in our way. We don’t have office buildings suitable for housing call centers. Almost every country in the region has an industrial park, but this kind of industries (call centers) need facilities that are ready for use. When we approach the investors, we should have the resources in place. Building such infrastructure needs money. Lack of financial resources is preventing the region from ‘capacity building.’ I think there is a need to build business parks specifically to house call centers.