KINGSTON, Jamaica, Observer- With most Caribbean countries experiencing high debt, unemployment and anaemic growth, offers by China of low-cost loans and investment projects are understandably viewed favourably by regional governments. There are many obstacles along the way to unleashing these investment possibilities, however, and it is important that both the Chinese authorities and regional governments actively address these gaps. Otherwise, there is a risk of investment potential becoming the cause of tension, resentment and even conflict. The answer to mutually beneficial relations lies in understanding and accommodating context and business culture in current and future investment activities.
Caribbean in need of Change
Among the main impediments to growth in Caribbean countries are high public debt, low factor productivity and competitiveness, high energy cost, bureaucratic business processes, high crime and inadequate legal enforcement. Chinese investors must understand these realities, even while Caribbean hosts must accommodate these investments in a manner that will seek to overcome these challenges. Host governments must not seek to justify inefficiencies with the status quo, but rather use Chinese investments as a catalyst for change in the interests of economic growth and development.
Most Chinese investments in the region have taken the form of government to government agreements, primarily for infrastructure projects, financed by China EXIM and China Development Bank, and implemented by Chinese companies. To support this thrust further, China has engaged Caribbean countries for discussions on areas of trade, investment promotion, and double taxation agreements. The last Caribbean-China investment forum was held in Trinidad a few months ago where many Chinese and regional companies and government representatives explored possible investment opportunities.