News Americas, New York, NY, November 14, 2024: The Eastern Caribbean Central Bank (ECCB) Monetary Council has introduced a series of new measures aimed at boosting individual and small-business participation on the Eastern Caribbean Securities Exchange (ECSE). The council has notably lowered the minimum financial threshold for investment, reducing the barrier from EC$5,000 to EC$500 to facilitate wider engagement with the regional stock exchange.

ECCB Governor Timothy Antoine

These changes are part of the ECCB’s strategic initiative to democratize access to investment opportunities within the eight member territories, which include Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. The ECSE, launched in 2001 as a fully electronic exchange, was established to provide a platform for regional investment, but individual investors have historically been underrepresented. Currently, approximately 98% of investors are institutional entities, leaving individual participation at a marginal 2%.

To address this gap, the ECCB’s Monetary Council, which includes finance ministers from each member territory, not only lowered the entry threshold but also recommended that a portion of future bonds and treasury bills be earmarked exclusively for small investors. This safeguard is intended to prevent institutional investors from monopolizing these financial instruments, providing individual investors with fairer access.

ECCB Governor Timothy Antoine emphasized the importance of public participation in the securities market, likening the opportunity to wealth-building practices common in larger markets, such as the U.S., where Caribbean diasporic families routinely invest. Antoine explained that the ECCB itself maintains substantial holdings in U.S. markets, as the U.S. dollar is essential to member economies given its status as the currency for the majority of their external debt and import transactions.

In tandem with the ECCB’s efforts, Finance Minister Dennis Cornwall highlighted the need to foster a culture of financial literacy and access to capital within the region. He outlined three key focus areas for regional credit unions: promoting financial education from a young age, expanding access to capital—particularly in underserved communities—and encouraging collaboration across sectors. These initiatives aim to equip citizens with the skills and resources to build sustainable wealth and support regional economic growth.

The announcement came at a recent conference, held under the theme “Financial Empowerment through Wealth Creation: Investment Opportunities in the Eastern Caribbean Currency Union (ECCU).”

News Americas, New York, NY, Tues. Nov. 12, 2024: Caribbean businesses encounter significant operational and financial challenges, with informal payments, power outages, and limited access to capital markets among the top hurdles, according to a new report by the Inter-American Development Bank, (IDB) and Compete Caribbean titled “Are We There Yet? The Path toward Sustainable Private Sector Development in the Caribbean.”

The report, which covers 13 Caribbean nations, finds that regulatory bottlenecks often lead firms to rely on informal payments to expedite approvals, such as import licenses or construction permits. Meanwhile, two-thirds of firms face frequent power or Internet disruptions, emphasizing the need for stronger public service infrastructure to support business continuity.

A critical challenge highlighted is the lack of access to finance, which severely limits firm productivity. The study notes that Caribbean capital markets are underdeveloped and often illiquid, forcing companies to rely on limited and high-cost credit markets. Further complicating this issue is the lack of robust credit history data, which stifles lending options.

The report also identifies limitations in the region’s support for innovation and entrepreneurship. Although many Caribbean countries see significant potential in fostering entrepreneurship, systematic support for startups is scarce, and existing programs are often small in scale or temporary. This inhibits the development of scalable enterprises and limits the growth of a robust private sector.

Workforce Mismatch and Brain Drain

The Caribbean also faces a notable mismatch in labor market needs, with an oversupply of unskilled workers and a shortage of skilled professionals, particularly in technology sectors. Emigration of highly skilled workers to opportunities abroad exacerbates this imbalance, leaving critical skill gaps in key industries, the study said.

Need for Policy Reforms and Modernized Services

To address these issues, the report suggests reforms to improve business processes and public services. Key recommendations include streamlining licensing procedures, automating services through digital platforms, and implementing transparency campaigns to reduce corruption.

For workforce development, the study advises creating closer collaboration between employers and educational institutions to align training programs with in-demand skills, especially in information and communication technology (ICT). It also recommends government-supported job placement services and vocational training programs to enhance employment opportunities.

Support for Innovation and Financial Inclusion

On the financial front, the IDB study calls for policies that foster competition in credit markets and expand financial inclusion. These include establishing credit registries and bureaus for sharing credit histories, strengthening property rights and insolvency processes, and advancing financial technologies with adequate safeguards to improve credit risk assessment.

The report further encourages governments to design innovation support programs that span the business lifecycle, including public and private incubators and accelerators. Greater collaboration between industry and academic institutions is also recommended to support technology transfer and development.

A Roadmap for Growth

“The launch of this publication comes at a pivotal moment for our region. It underscores the crucial role of the private sector in driving national growth and development. By identifying key challenges and offering regional solutions and policy recommendations, it aligns with IDB Strategy+ and the pillars of our One Caribbean regional program,” said Anton Edmunds, IDB General Manager for the Caribbean Country Department. “This is not just a book; it’s a roadmap filled with regional messages and country-specific insights to promote more sustainable economic development within the Caribbean.”

The report uses data from the Innovation, Firm Performance, and Gender Issues in the Caribbean (IFPG) Firm-Level Survey, sponsored by Compete Caribbean in 2020, offering a comprehensive look into the hurdles Caribbean firms face and potential policy-driven solutions.

As the region seeks to reinvigorate economic growth post-COVID-19, the IDB report underscores the need for a stronger private sector and improved business environment. Between 1960 and 2019, the Caribbean region experienced an annual growth rate of just 1.47%, lagging behind the 1.94% rate in Latin America and well below the global average for middle-income countries.

The report’s recommendations offer a roadmap for fostering a more dynamic and resilient private sector, which is vital for accelerating the Caribbean’s long-term economic growth and development.