Tag: Caribbean

  • Could citizenship by investment be a homegrown solution to address loss and damage?

    Could citizenship by investment be a homegrown solution to address loss and damage?

    Javier Spencer, Guest contributor

    Javier Spencer

    “We have lost everything” is the harrowing cry you would hear from someone in the aftermath of a climate disaster. And ‘everything’ in this context is not a hyperbole but a stark reality. For instance, the paradise islands of Barbuda (part of Antigua & Barbuda) and Dominica were hit by catastrophic hurricanes in September 2017. The hard blow experienced by both islands resulted in permanent infrastructural damages, economic losses, and losses of lives and livelihoods. The onset of these disasters has been coming at an increased frequency with incomparable strength. Citizens of Caribbean Small Island Developing States (SIDS) have no choice but to toil forward in fear – not knowing when or how strong the next hit will be.

    After the catastrophe has departed, it leaves a dismal recovery for these Caribbean SIDS. These countries are characterized by small size, high debt burdens, and limited physical resources that make it particularly challenging to address the adverse impact of climate change disasters. This is what we call “loss and damage”. The consequences of climate change fast outpace the ability to adapt, coupled with the lack of resources to exploit in the face of a climate disaster. Out of curiosity, could Citizenship By Investment Programmes (CBI) in the Caribbean be one way to raise urgent finance to address loss and damage? This article considers whether these programmes could be one way to raise quick cash to address loss and damage.

    The binary view of loss and damage shows one side as economic losses and the other as non-economic, but both categories are often woven tightly together. On the one hand, economic loss and damage emanates from productive sectors being negatively affected by climate change. In contrast, non-economic loss and damage, on the other hand, is simply the unreckonable human casualties – that is, the loss of life, the human displacement, and even the proliferation of physical and mental illnesses.

    The writing on the wall is that Caribbean SIDS lack the requisite resources to build resilience and to merely implement adaptation and mitigation strategies equivalent to the extent of the resulting damage. Owing to this, developing countries, particularly SIDS, have for thirty years vociferously implored developed countries to agree to establish a multilateral fund that would assist them in tackling loss and damage.

    The key tenets of the multilateral fund, however, are ‘new’ and ‘additional’. This means that the funding arrangement should be separate and distinct from existing global financial structures marred by eligibility criteria checkboxes that would exclude most SIDS – the most climate vulnerable – from accessing these funds. Furthermore, a specific, fit-for-purpose multilateral funding arrangement that is governed under the oversight of the United Nations Framework Convention on Climate Change (UNFCCC) would guarantee access for vulnerable countries, establish legitimacy and enhance transparency.

    The logic is solid and cohesive. Yet, the road to a consensus to establish the fund was daunting and met with resistance from developed countries. Nevertheless, history was made by the sound of the gavel at COP27 in Sharm el-Sheikh, Egypt. Parties finally agreed to establish a long-awaited loss and damage fund for assisting developing countries that are particularly vulnerable to the adverse effects of climate change. This would compensate the most climate-vulnerable countries, which have contributed inconsequentially to the climate crisis.

    Now that there is an agreement, what’s next? The next hurdle is negotiating the operationalisation of the fund – what are the sources of finance? What will the fund look like? How will it be administered? And more importantly, how soon will beneficiaries be able to access the fund? With these looming questions and details to iron out, operationalising the fund could be lengthy. But time is a luxury that SIDS cannot afford.

    As cynical as this question may be, what if the fund takes another 30 years to operationalise? Some reports have indicated that the cost of weather-related events in 2021 is estimated at US $329 billion globally. In the context of Caribbean SIDS, out-of-the-box fundraising might have to be employed to fill the void and supplement a fund.

    Citizenship by Investment (CBI) Programmes have met favour with some Governments in the Caribbean in generating quick revenue outside of traditional revenue streams to repay debts, invest in development projects, and fund other initiatives. CBI Programmes grant investors citizenship for significant investment contributions to the economy. These programmes currently exist in Saint Kitts and Nevis, Dominica, Grenada, Saint Lucia, and Antigua and Barbuda.

    So far, these programmes are proving to be one way to generate foreign investment quickly. For instance, between 2016 to 2021, reports have shown that  the CBI programme generated an annual average for  Saint Lucia, XCD $ 30 million; Grenada, XCD $ 3 million; and Antigua Barbuda, XCD $ 33 million.

    Looking at the dollars and cents at the surface shows that CBI programmes could be a veritable income generator. Zooming in, with specific reference to the one in Antigua and Barbuda, the investment options for investors are the National Development Fund (NDF), Real Estate, Business Investment, and the University of the West Indies (UWI) Fund.

    In spite of the dollars and cents, these programmes have received negative global press – bringing into question governance, accountability and transparency. Ironically, the same carbon-emitting developed countries are the ones scrutinising CBI programmes in Caribbean SIDS. The increased scrutiny has certainly impacted these countries through blacklisting, tax haven labelling, and visa restriction for passport holders from these countries.

    Very soon, we could see a rapid decline or even a sudden halt in CBI programmes. But while they are still alive, now is the time to consider adding a new investment stream: Climate Resilience Fund. This new revenue stream would be exclusively used to address loss and damage. Establishing this would require the integration of relevant local and authorised environmental agencies and a robust transparency and accountability framework that governs these programmes. This article should not be misconstrued to replace the multilateral loss and damage fund but rather a speedy self-fundraising mechanism to supplement the fund. Is this feasible?

    Javier Spencer is an International Trade & Development professional with keen interests and specialization in Global Business, Communications and Diplomacy.  You are free to reach out to Javier via email at javier@javierspencer.com or on LinkedIn.


  • BCCI/KNCCI Virtual Dialogue Series 1: Demystifying the Barbadian and Kenyan Markets

    BCCI/KNCCI Virtual Dialogue Series 1: Demystifying the Barbadian and Kenyan Markets

    I am pleased to be facilitating this upcoming panel at the first session of the Barbados Chamber of Commerce and Industry (BCCI) and Kenya National Chamber of Commerce and Industry (KNCCI) Virtual Dialogue Series carded for Tuesday, March 21st at 8:30-10:00 am (Atlantic Standard Time).

    This first session will be on Demystifying the Barbados and Kenya markets and features an all-star panel. If you’re an exporter, investor, businessperson, or are just generally interested in Africa-Caribbean trade, please register here:
    https://lnkd.in/eefaiPQx

    See the flyer for further details!

  • Exciting times for Africa-Caribbean trade relations

    Exciting times for Africa-Caribbean trade relations

    Alicia Nicholls

    Africa-Caribbean relations are seeing some exciting times. Doubt me? Think about the fact that Nigerian Afrobeats superstar Burna Boy was the headline act at Tipsy, a major fete on the calendar of Crop Over, Barbados’ biggest festival which had been suspended for two years due to the COVID-19 pandemic. The Grammy Award winner’s performance in Barbados on July 17 was the first leg of his 2022 Love, Damini Summer Tour. From all reports the much-anticipated event attracted patrons not just from Barbados but across the Caribbean and beyond. But this is just the ‘tip’ of the iceberg in what has been a deepening of Africa-Caribbean engagement and not just at the political level.

    As I explained in several previous articles on this subject, total volumes of Africa-Caribbean trade and foreign direct investment are quite small for now. While a few African and Caribbean countries have tax and investment treaties with each other and bilateral cooperation agreements in various areas, there are no free trade agreements (FTAs) between Caribbean countries and African countries. However, the low trade volumes could likely change. Though efforts to expand Africa-Caribbean economic relations predate the COVID-19 pandemic, the economic fall-out has accelerated our countries’ need to diversify our trading partners and tourism source markets as part of their post-COVID economic recovery. Amplifying trade and investment ties with African countries is at the forefront of many Caribbean countries’ diversification efforts.

    Collaboration in the creative industries

    Burna Boy’s headlining of Tipsy introduced the Barbadian audience to Afrobeats, a genre with which many Barbadians might not have been previously familiar. Of course, his headlining of Tipsy’s 2022 All White Party is not the first African-Caribbean ‘collaboration’ in the creative industries. For example, a couple years ago two of my favourite artistes, Trinidadian soca star Machel and Nigerian star Timaya collaborated on several soca songs and remixes, like “Shake ya bum bum” and “Better than them”.

    Many musical genres in the Caribbean and the African continent share similar DNA. Given the current explosion of interest in each other’s cultures, one can only ponder the many future collaborations between Caribbean and African creatives. I am sure many of us would enjoy attending an Africa-Caribbean Music Festival of some sorts featuring popular and emerging acts from both regions. Indeed, as many Barbadians are Nollywood movie aficionados, an Africa-Caribbean Film Festival would also be an exciting prospect, featuring films from our countries and even the opportunity for African and Caribbean film makers to meet and discuss possible co-productions.  

    Other areas of collaboration

    African Fintech companies are also taking an increased interest in the Caribbean. A Nigerian company has also expressed interest in purchasing the struggling Caribbean regional airline, LIAT. This proposal has elicited a mixed reaction but it is indicative of what anecdotally appears to be a burgeoning interest of African investors in the Caribbean market. The business interest has not been one-way either. For instance, Barbadian fintech company Bitt Inc was contracted by the Central Bank of Nigeria to develop the digital version of the Nigerian Naira, called the eNaira, which is Africa’s first Central Bank Digital Currency (CBDC).

    There are also promising prospects for Africa-Caribbean trade in educational services, such as through increased student and faculty exchanges and joint course offerings. Scope also exists for continued and greater joint research between African and Caribbean academics and academic institutions on areas of mutual interests. Indeed, last year I had the pleasure and honour of co-convening with Dr. Ohio Omiunu, a well-respected legal scholar, a symposium on the AfronomicsLaw Blog on the topic “Prospects for Deepening Africa-Caribbean Economic Relations”. Recognising that Africa-Caribbean economic relations was an understudied area in the academic literature, the Blog Symposium featured essays authored by established African and Caribbean scholars and practitioners on deepening the African-Caribbean relationship from a variety of perspectives.

    There is growing interest among Caribbean people of African ancestry in tracing their genealogy which means genealogy tourism could be a significant, though not the only driver, of Africa-Caribbean tourism in the future. I like many Barbadians was intrigued to learn that Barbados possesses  the largest archive of slave records outside of the United Kingdom. The Government of Barbados announced it will be establishing a geneaology research centre at the historic Newton Slave Burial Ground where those records will be held. This could make Barbados a hub for researchers from the Caribbean, Africa and further afield.

    Creating the enabling environment

    Naturally, there are trade, cultural, linguistic and other barriers which need to be addressed. With some exceptions, most Caribbean countries lack direct air and sea links to the African continent despite the two continents being a hive of connectivity during the 300 years of the Trans-Atlantic Slave Trade. If those links could have existed during that barbaric period, surely we must make all efforts to build sea and air bridges for a more noble purpose, that of expanding understanding, connectivity and trade between our peoples. Thankfully, serious efforts are being made by Caribbean governments to establish scheduled direct air links with the continent, particularly with airlines from Ghana and Kenya and which would facilitate Africa-Caribbean travel for recreation and business.

    Barbados has also been expanding its network of tax and investment treaties with African countries which would make the island an attractive hub for African investors to expand into other markets by leveraging Barbados’ treaty network. It was recently announced that an investment agreement was signed between Barbados and Rwanda and it is hoped that the text of this agreement will soon be made available.

    Moreover, exporting is an expensive venture and access to finance is one of the major barriers firms face when seeking to export. Therefore, the agreement in principle by the African Export Import Bank to establish an Africa-Caribbean Trade and Investment Financing Facility with an initial injection of US $250 million is a commendable step in helping to create the enabling environment for enhanced Africa-Caribbean trade and investment by providing access to trade finance.

    Future looks bright

    To be sure, the prospects for deepening Africa-Caribbean trade are promising. I eagerly look forward to the upcoming inaugural AfriCaribbean Trade and Investment Forum which will be held in September in Barbados. For African and Caribbean firms and professionals, this forum should be the perfect opportunity for deepening and expanding relations and knowledge about the opportunities in each other’s markets. Without doubt, these are indeed exciting times for Africa-Caribbean trade relations. One cannot be anything but enthused for what the future holds!

    Alicia Nicholls, B.Sc., M.Sc, LL.B. is an international trade specialist and founder of the Caribbean Trade Law and Development blog http://www.caribbeantradelaw.com.

  • Assessing the Ninth Summit of the Americas: A Caribbean Perspective

    Assessing the Ninth Summit of the Americas: A Caribbean Perspective

    Alicia Nicholls

    Twenty-three heads of government and the representatives of eight other countries of the Americas gathered in Los Angeles, California, United States (US) on June 6-10, 2022 for the Ninth Summit of the Americas (CRS 2022). It was the first time the US has hosted since the inaugural 1994 Summit in Miami, Florida. The Summit of the Americas is a hemispheric summit at which leaders of the Americas gather every three years to discuss cooperation on issues of hemispheric importance. The Summit has also been the setting against which US Presidents have tended to launch major Caribbean-specific partnership initiatives, such as the Third Border Initiative (TBI) revealed by President George W. Bush at the Third Summit of the Americas in 2001 and the Caribbean Basin Security Initiative (CBSI) announced by President Barack Obama at the Fifth Summit of the Americas in 2009.

    The 2022 Summit outcomes have elicited differentiated reactions from commentators depending on their success metrics. Those focusing on a geopolitical perspective have generally panned it as a diplomatic failure for the Biden Administration (Norton 2022), a squandered opportunity (Newman 2022) and a sign of America’s declining hemispheric influence (Barry 2022).

    This article assesses the summit from a Caribbean perspective. Specifically, it looks at to what extent do the Summit’s outcomes provide meaningful initiatives for deepening US-Caribbean partnership on issues of importance to the Caribbean and in a mutually beneficial way. It is argued that while not particularly groundbreaking, there are some noteworthy outcomes from the Summit. However, the success of the initiatives announced will be dependent on several factors discussed in this article.

    The Controversy

    The Ninth Summit was postponed by one year due to the on-going novel coronavirus disease 2019 (COVID-19) pandemic. The Summit’s theme “Building a Sustainable, Resilient, and Equitable Future” recognizes the numerous challenges facing countries in the hemisphere, chief of which include climate change, COVID-19 and the economic fall-out from the Russia-Ukraine conflict and the consequent escalated Western sanctions on Russia.  

    The lead up to the Summit stimulated an inordinate amount of controversy not so much for its agenda, but US President Joseph Biden’s refusal to invite the leaders of three countries – Cuba, Nicaragua and Venezuela – which the US regards as authoritarian. This exclusionary policy sparked a backlash as several countries threatened to boycott the Summit. Some leaders, including most notably Mexico’s President Lopez Obrador, decided not to attend and instead sent lower-level delegations.

    Caribbean country leaders also expressed misgivings about this exclusionary policy both privately and in their speeches. In fact, CARICOM Heads in the communique emanating from their recently held 43rd Regular Meeting emphasised “the importance of an inclusive Summit with the full participation of all countries of the Americas”.

    The Outcomes

    Ultimately, St Vincent & the Grenadines was the only CARICOM Member which boycotted the conference. A total CARICOM boycott would not have been in the region’s best interest as the Summit provided an opportune forum in which Caribbean leaders could meet face to face with US leadership to ventilate and obtain high-level commitments on issues of specific interest to Caribbean States. Generally speaking, topics of specific interest to the Caribbean rarely make it on the agenda of these Summits and in this case, the Ninth Summit was an exception. In his op-ed after the Summit, Antigua & Barbuda’s Ambassador to the US, Sir Ronald Sanders, noted that Caribbean leaders (including the Dominican Republic) were successful in their insistence on meeting not just with the Vice President Kamala Harris, as was originally planned, but with President Biden himself. This meeting, according to Sir Ronald, was very productive and CARICOM Heads in their communique also welcomed the exchange with the US President to address some of their concerns. The read-out from the meeting referenced the proposed launch of a Caribbean Zero Hunger Plan to promote nutrition security in the Caribbean, while President Biden has also pledged US$28 million in new food security assistance to the region.

    It was, therefore, interesting that CARICOM Heads of Government also expressed concern that the outcome of the Summit “did not adequately reflect issues of significance to the Community”. These issues, they noted, include post-pandemic recovery, climate financing, debt and debt financing, energy and food security, access to financing and firearms entering the CARICOM Region. It could be that this statement in their communique was meant to reiterate that while Caribbean leaders are happy with the opportunity to raise these issues, they want to ensure there is meaningful follow-up action.

    Indeed, one particular area in dire need of action and which was raised in the bilateral meeting between Caribbean leaders and the US President and Vice President is the illegal flow of firearms into the Caribbean from the US. While Caribbean countries do not manufacture guns and have strict laws on gun ownership, the flow of illegal firearms into the region, particularly from the US, remains a driver for the escalating gun violence and crime plaguing Caribbean states. The readout from the joint meeting reveals a disappointingly limited and vague approach which simply proposes the development of national action plans to counter firearms trafficking and which would “help the US more effectively tailor support to CARICOM Member Countries”.

    The outcomes of the Summit consist of several declarations and statements touching principally on areas of health, climate change, economic recovery, governance and migration. For example, leaders agreed to reach consensus on an Action Plan for Health and Resilience in the Americas to be implemented by 2030.

    Los Angeles Declaration on Migration and Protection

    The most detailed outcome, and likely because illegal immigration is a ‘hot button’ topic in the US, is the negotiated side agreement called the Los Angeles Declaration on Migration. Over 100 million people have been forcibly displaced globally with one in every 78 people on earth being a displaced person, according to the UNHCR.  In this hemisphere alone, for example, over 6 million Venezuelan refugees and migrants have fled the political and economic turmoil in their homeland and some 80% of them have settled in countries in the LAC region, according to the International Organisation for Migration (IOM). Trinidad & Tobago, which is at its nearest is just 11km from the Venezuelan mainland, has up to January 2022 been host to some 28,500 Venezuelan migrants. Data from the Government of Panama estimates that 130,000 migrants passed through the highly dangerous Darien Gap in 2021 on their way to the US and many were asylum seekers from Haiti and Cuba. Therefore, the decision to exclude Cuba, which is one of the largest sources of irregular emigration to the US, was a short-sighted one on the Biden administration’s part as solving the migration crisis would also require cooperation with the Cuban government.

    The Los Angeles Declaration on Migration and Protection recognises that irregular migration is a hemisphere-wide problem and tackling it should be the shared responsibility of source, transit and destination countries and solving the crisis also involves addressing the root causes or push factors which lead people to emigrate. Under the agreement, both the US and several other countries adopted specific commitments to ensuring legal pathways for immigration and fostering greater protections for migrants. However, only twenty countries have signed the Declaration so far and of those from CARICOM are Barbados, Belize, Guyana, Jamaica and Haiti. US Secretary of State Anthony Blinken, when asked about only twenty countries signing on so far, was confident that more countries would sign on.

    Americas Partnership for Economic Prosperity (APEP)

    The Summit’s main economic initiative, the Americas Partnership for Economic Prosperity, is the sister plan to the Indo-Pacific Economic Framework (IPEF) President Biden launched at a meeting of a dozen initial partners in the Indo-Pacific region in Tokyo Japan in May 2022. The five-pronged APEP framework would be based on reinvigorating regional economic institutions and mobilizing investment, making more resilient supply chains, updating the basic bargain, creating clean energy jobs and advancing decarbonization and biodiversity, and ensuring sustainable and inclusive trade. Many of these pillars are in consonance with the goals outlined under the prosperity pillar of the US Strategy for Engagement in the Caribbean formulated pursuant to the US-Caribbean Strategic Engagement Act of 2016, a legacy of the Obama Administration of which President Biden was then Vice President. However, the APEP consists primarily of aspirational goals rather than binding commitments, and is disappointingly vague with little specifics on timelines and how these goals would be achieved.

    U.S.-Caribbean Partnership to Address the Climate Crisis 2030 (PACC 2030)

    Perhaps the most substantive outcome for the Caribbean was the Partnership to Address the Climate Crisis 2030 (PACC 2030) launched by Vice President Kamala Harris. PACC 2030 recognises that Caribbean small States are at the frontlines of the adverse impacts of climate change and the need for the region to build resilience as the adverse effects of global warming accelerate. While this might seem obvious, US government recognition of this immutable fact cannot be taken for granted. The previous US administration, headed by a climate change denier president, heralded a 180-degree reversal in the US’ foreign policy position on climate change. Similar to the Biden administration’s rejoining the Paris Agreement after the Trump administration left it, the PACC initiative therefore is a welcomed signal and acknowledgement that this current US administration has returned to the longstanding US position of recognising climate change as a global and hemispheric crisis and priority.

    The PACC framework has two strategic objectives: strengthening energy security and promoting adaptation resilience. It also names four pillars for achieving these objectives: improving access to development financing, facilitating clean energy project development and investment to attract private investment in clean energy infrastructure and adaptation.

    The framework contains some noteworthy commitments. The US has committed to partnering with Caribbean countries and regional institutions to promote stable access to clean energy resources and resilient energy infrastructure. It also speaks to climate finance, such as a promise to develop bankable infrastructure projects, enhancing local capacity building and deepening collaboration with Caribbean partners. The US International Development Finance Corporation will be charged with exploring ways to increase access to DFC financing for climate and clean energy projects in underserved countries. Critically on the issue of inadequate criteria for accessing concessional finance, the US government has committed to advocate for improving access to international financing mechanisms to unlock additional financing for infrastructure projects.

    Next steps

    Laudable as many of the commitments might be, they are non-binding and best endeavour in general and little will come from them without the required follow-through by both the US and Caribbean governments, as well as the meaningful involvement of the private sector, the diaspora and civil society. It is, therefore, notable that following the summit, CARICOM and Dominican Republic leaders accepted a US proposal to establish three US-Caribbean joint committees to address US-Caribbean cooperation on three fronts: finance, energy and food security. In their communique, the Heads of Government revealed that the CARICOM chairs for the committees would be as follows: Prime Minister of Barbados, Honourable Mia Amor Mottley, for the Finance Committee; President of Guyana, His Excellency Mohamed Irfaan Ali, for the Food Security Committee; and Prime Minister of Trinidad and Tobago, Dr. the Honourable Keith Rowley, for the Energy Security Committee. It is still unknown who will be the US co-chairs of these committees.

    The Heads of Government also noted the CARICOM Secretariat’s submission to the US of an initial list of CARICOM’s “near-term energy security, food security, and development/debt finance priorities” as advanced by the Co-Chairs of the respective Committees. It is not known publicly what is on this initial list and it is unclear why this should be treated as a confidential issue since matters of regional concern affect us all.

    There are some principal challenges for regional leaders to implement the commitments made at the summit. One is that the statements are non-binding and best endeavour non- time-bound commitments and are largely aspirational goals which need to be translated into concrete policy actions. A second is that there is the need for funding mechanisms for these proposals. Of some concern is that there was neither representation from the US Department of the Treasury nor the United States Trade Representative (USTR)’s office at the Summit, two agencies which would be central to the success of these initiatives.  

    Congressional action will also be needed to pass legislation to translate the initiatives into law and approve the funds necessary for financing the programmes emanating from these initiatives. Encouragingly, a congressional delegation from both houses, including Speaker Pelosi, attended the Summit and held a press briefing thereafter. Moreover, US Virgin Islands Representative in the US House of Representatives, Stacey Plaskett, introduced a non-binding resolution (H.Res 1168) “reaffirming the economic partnership between the United States and the Caribbean nations and recognizing the need to strengthen trade and investment between the United States and the Caribbean nations, our “Third Border”. Among other things, the draft resolution calls on the President to “prioritize and implement trade programs with the Caribbean region that promote sustainable and resilient economic development”.

    A third and not insignificant issue is the increasing polarisation and volatility in the US political landscape and whether the panoply of domestic issues facing the current Biden administration will truly allow for deeper hemispheric engagement. US foreign policy under the last administration had adopted a more insular “America first’ disposition, with limited hemispheric engagement, a rejection of multilateralism and a denial of climate change. While the Biden administration has reverted to the status quo on many of these issues, it has evinced very little appetite for the once longstanding US embrace of free trade. No doubt this more protectionist US posture is influenced by the groundswell of anti-trade sentiment among a politically important segment of the US electorate. The success and longevity of the 2022 Summit initiatives will, therefore, likely depend on the outcome of the presidential election of 2024.

    Conclusion

    The Summit of the Americas, while hailed as a failure by some and a success by others, cannot be seen in such absolutist terms. While the outcomes were not particularly earth shattering, there are some good initiatives that once fleshed out, well-funded and executed can lead to mutually beneficial outcomes for both the US and Caribbean countries.

    Alicia D. Nicholls, B.Sc.,, M.Sc., LL.B is an international trade specialist who specializes in foreign investment law and policy, global financial regulation and international business. She is the founder of the Caribbean Trade Law & Development Blog (www.caribbeantradelaw.com) and was one of the panelists at a recently held Global Americans and Caribbean Policy Consortium Webinar on the Summit whose recording may be accessed here.