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Caribbean Export and Caribbean Development Bank join forces to provide grants to MSMEs

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The Caribbean Export Development Agency (Caribbean Export) and the Caribbean Development Bank (CDB) in collaboration with the European Union, have entered a partnership to support regional MSMEs with financial assistance to help businesses retool and preserve jobs. CDB will fund a US$600K grant facility via a Technical Assistance Programme (TAP) to mitigate the impact of COVID-19 and providing ongoing capacity building through e-learning.

“Caribbean Export is honoured to have been entrusted by CDB to implement such an important programme for our regional MSME’s. The funds are not only timely, but they are also necessary, if firms are to come back stronger, preserve jobs and create more,” said Damie Sinanan, manager of the Competitiveness and Export Promotion division responsible for the TAP at Caribbean Export. CDB Projects Department Director Daniel Best said the initiative responded to an “urgent need for technical assistance and capacity building programmes to help businesses survive, remain competitive and regain market share in export and domestic markets” in the wake of COVID-19.

He stated that it aligned with several other measures including loan support and capacity-building, which the Bank had supported in the past year to assist the business sector in its Borrowing Member Countries. The two organisations collaborated in 2020 with a regional survey to assess the impact of the COVID-19 pandemic on MSMEs operations; ascertain the level and areas of support that would be required to assist SMEs during the crisis; and better position firms to cope with the economic fallout.

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The survey highlighted that almost 50% of respondents were forced to close physical locations, whilst approximately 45% ceased production of goods and services and 80 per cent had no continuity plan. In view of these findings, the TAP presents an opportunity for these MSME’s to gain the technical assistance needed to develop their businesses to rebuild and retool in a manner to withstand future shocks. MSME’s will be able to apply for grant’s of up to US$15,000 to be used on various technical assistance projects including, but not limited to Resource Efficiency and Renewable Energy; Digitisation of Business; Marketing & Promotions; Building Resilience; Purchase & Upgrade of Capital Goods; Certification; Capacity Building and Protection of Intellectual Property Rights.

To bring a holistic approach to supporting regional MSMEs impacted by the COVID-19 the provision of a suite of capacity building tools to complement the technical assistance are also to be developed. These tools will be made available to MSMEs online via an e-learning portal hosted by Caribbean Export. E-learning and its inherent accessibility advantages are even more important during this time when travel restrictions are still in place.

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Supporting micro, small and medium enterprises, the backbone of Caribbean economies

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The United Nations commemorated Micro, Small and Medium-sized Enterprises (MSMEs) day on 27th June. This day dedicated to MSMEs is to recognise their contribution to the global economy.  There is indeed a clear reason for doing so. The United Nations Conference on Trade and Development reports that MSMEs account for more than 90% of all businesses and around 70% of jobs globally, writes Deodat Maharaj. 

Right here in the Caribbean, MSMEs form the backbone of many of our economies generating precious jobs and opportunities for our people. According to the Caribbean Development Bank, MSMEs represent between 70-85% of Caribbean businesses and contribute between 60-70% of Gross Domestic Product. Critically, they account for an estimated 50% of total employment. Importantly, 40% of Caribbean businesses are owned by women. The success of these enterprises reflects the ingenuity, industry, and innovative spirit of our entrepreneurs. Based on the data, to build a resilient Caribbean under normal circumstances where business must be a central partner, we would need to ramp up support to the entrepreneurs in micro, small and medium scale business enterprises.
 
However, given the fact that we are living in unprecedented times with small and vulnerable Caribbean countries reeling from the coronavirus pandemic, the emphasis must be on fast-tracking recovery and building resilience. To be successful, the private sector has a major part to play. Consequently, given the role of MSMEs in creating opportunity and jobs, it is logical that MSMEs must get priority attention. Policy measures excluding them or providing sub-optimal support will be counterproductive and only ensure a prolonged recovery phase or even worse, job loss and suboptimal growth. 

MSMEs require a range of support including finance on which I have previously written. However, it is not only about providing financial support and creating an enabling environment for business to flourish. There are other crucial areas where support is required to give our MSMEs the maximum chance of success. 

First and foremost, is the area of technology. COVID-19 has demonstrated quite clearly the imperative of embracing new ways of working and doing business. Support must be extended to our MSMEs to help them embrace this new era. We at the Caribbean Export Development Agency (Caribbean Export) have already scaled up our support in this area and have seen huge interest on the part of businesses across the Region. For example, at our last webinar on e-commerce “Build your e-Commerce Store from Scratch” in February 2021, we had over 400 participants from across the Caribbean. This shows the eagerness of our firms to take advantage of the opportunities presented by technology to help grow their businesses.

Technology also has a democratising effect helping firms regardless of size with an opportunity to grow their businesses and reach new customers at low cost. In this COVID-19 era, examples abound. Here in Barbados, small scale farmers have taken to the internet to sell their products. In Trinidad and Tobago, there is a Facebook group “Trini Farmers” with an estimated membership of 49,500 members which serves as a peer group where members support each other. These are two good examples where entrepreneurs have taken the initiative. At the same time, we need to be actively supporting those who need assistance.

In terms of leveraging technology to grow businesses, government has an important role to play in creating the right policy environment, providing incentives, and delivering concrete support to MSMEs. Simultaneously, it is not only about state assistance, but the larger corporate sector including financial institutions, have an important part to play as mentors and business partners for MSMEs. It is in everyone's interest for micro, small and medium scale enterprises to succeed.

Secondly, the cost of energy here in our Region is amongst the highest on the planet. This is not only a disincentive to foreign direct investors but also a constraint to our businesses right here in our Caribbean. High energy costs simply drive up the cost of production making it difficult for us to compete with imports at the national level and to export our products to regional and international markets. To address this matter, the push to renewables is important both at the national and regional levels. We at Caribbean Export are working closely with MSMEs across the Region to help them enhance energy efficiency and as a result make them more competitive. However, we need to do this on a scale that can have a transformational impact. The reality is that we are not there yet. Allocating the requisite resources to reduce energy costs with the twin advantage of taking climate action, must be a high priority at the national level.

Finally, our MSMEs need to focus on niche markets with premium products and commensurate prices to reflect their quality. We at the Caribbean Export have been helping regional businesses to penetrate the European market and take advantage of the Economic Partnership Agreement with the European Union. However, we also realise much more must be done. It is precisely for this reason that we have partnered with the International Trade Centre to establish a hub for trade in sustainable products. 

This Hub will help bolster the competitiveness of MSMEs by supporting the implementation of green business practices. There is already a well-established and growing market for products that meet sustainability criteria, and we are keen to help Caribbean businesses take advantage of this opportunity. Going forward, it is important to partner with business support organisations not only in Europe but also in other premium markets to get our products on the shelves to attract the expanding customer base for products that meet “sustainability “criteria. 

In summary, fast-tracking recovery and building resilience require a major programme of support and focus on our micro, small and medium sized businesses. They are key to creating much needed jobs and opportunity for our people. To achieve success, a broad-based partnership including with the larger regional business enterprises is required. The Caribbean Export Development Agency is committed to this agenda. We will continue to work with all to provide this much needed support and create options and opportunities for our people, as we seek to build a truly resilient Caribbean.

Deodat Maharaj is the executive director of the Caribbean Export Development Agency.

About Caribbean Export

Caribbean Export is the only regional trade and investment promotion agency in the African, Caribbean and Pacific (ACP) group. Established in 1996 by an Inter-Governmental Agreement as the regional trade and investment promotion agency, it serves the 15 states of the Caribbean Forum (CARIFORUM), namely: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Haiti, Grenada, Guyana, Jamaica, Saint Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

The agency carries out numerous programme based activities designed to enhance the competitiveness of regional small and medium sized enterprises, promote trade and development amongst CARIFORUM states, promote stronger trade and investment between the Caribbean Community (CARICOM) and the Dominican Republic, CARIFORUM states and the French Caribbean Outermost Regions (FCORs) and the EU Overseas Countries and Territories (OCTs) in the Caribbean.

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Citizenship by investment schemes – more than meets the eye?

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Re Mr Gurdip (Dev) Bath

We repeat our profuse apology to Mr Dev Bath and we have today settled libel proceedings with Mr Dev Bath and have paid an agreed sum in settlement of his claim and legal costs to his nominated Charity, St John Ambulance UK.

We completely accept that Mr Dev Bath was falsely and unjustly accused of being involved in the alleged kidnapping of Mehul Choksi, a fugitive from Indian justice, who alleged he was a victim of a state-sponsored kidnapping from Antigua and Barbuda by boat on or about 23 May 2021, on behalf of the Indian Government and handed over to the authorities of the Commonwealth of Dominica, where he is currently detained. The motive was said to be to circumvent ongoing extradition proceedings in Antigua where India is the requesting state.

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We completely accept the documented findings of a team of experienced investigators directed by the International lawyer Mr Gary Summers of Counsel, of 9 Bedford Row International Chambers and led by Mr Tarique Ghaffur CBE QPM a former Assistant Commissioner of London’s Metropolitan Police Service who have interviewed all the subjects accused of being involved in the kidnapping and have completely exonerated Mr Gurdip (Dev) Bath along with 3 other subjects falsely and unjustly accused: Ms Barbara Jarabik; Mr Gurmit Singh & Mr Gurjit Singh Bhandal.

We completely accept that Mr Dev Bath has always been a very honourable man of complete integrity who would never associate himself with sleeze or criminal activity of whatever kind.

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Clean and green – The new economy set to transform the Caribbean

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Seismic shifts are taking place in the global economic architecture as countries accelerate efforts to transition clean and green economies. In 2015, at the United Nations Climate Change Conference known as COP21, world leaders signed the landmark Paris Agreement. This pact signalled the collective ambition of 196 countries to contribute to the goal of limiting global warming and effectively addressing climate change. The implication for the global economy was immense given the need to transition away from fossil fuels, writes Deodat Maharaj.

To achieve this reduction, countries have developed targets to bring down emissions associated with fossil fuels known as the nationally determined contributions (NDCs). The United States, one of the major hold outs in this transition has taken a welcome about turn with the Biden Administration which has already established ambitious targets. The decision of the United States to fully embrace a cleaner and greener economy would only hasten the transition.

It should be noted that those who have embraced the shift to renewables also recognise the massive economic opportunities it presents in what will be a new economy. Given our own climate vulnerability and economic challenges as small island developing states, we have no option but to do the same. There is also a strong economic case for doing so given our own economic performance and the need for new options.

According to the World Bank, over the period 2009 – 2019, the economies of small states in the Caribbean grew by less than half of one percent or at an average rate of 0.38%, to be more precise. By comparison, the average growth rate of all small states globally over the period was 3.08%. The COVID-19 pandemic has only served to exacerbate our challenges, with double-digit economic contractions projected for most countries in our Region. In essence, we are underperforming compared to others even though we are all confronting common challenges.

On the positive side, we have recognised the need to make this change. In fact, since 2013 CARICOM countries have agreed on a regional energy policy which aims at achieving set targets for decarbonisation and energy efficiency while enhancing energy security. In addition, Caribbean countries, like many others, developed NDCs and became party to the Paris Agreement. Caribbean countries have also largely recognised that it is strategically advantageous to embrace the new economy offered by low carbon industries and sectors.

What impact will the new economy have?
First and foremost, the new economy offers tremendous potential in job creation. The transition will present opportunities for higher paying jobs and the reduction of poverty. In a joint report published in 2020 by the International Labour Organization and the Inter-American Development Bank, it was estimated that decarbonisation will lead to the net increase of jobs in the Caribbean by 3.1%, that is, the creation of approximately 400,000 jobs. Jobs are a precious commodity and, on that basis, alone we have a strong case.

There is also the accompanying advantage of growth. The International Renewable Energy Agency estimates that for every US dollar invested in energy transition, an additional US 93 cents of GDP growth will occur above the business-as-usual scenario. Within the renewable energy industry, firms are emerging who can execute engineering, procurement, construction, operation, and maintenance services.  Energy services companies are developing that can provide demand-side management services and jobs.

Outside of the core activities of the renewable energy industry, engineering, construction, legal, financial, logistics and transportation services will all be needed to support the development of renewable energy projects. In fact, no economic sector will be left untouched by energy transition. The electrification of the transport sector will call for the roll out of charging infrastructure powered by renewables. A movement to a green economy will spur much needed innovation. Most important, it will help lower production costs in a Region where energy costs are amongst the highest on the planet and a deterrent to new investments.  

Recognizing the enormous potential for this new economy Caribbean Export has been contributing to this transition through both technical and financial assistance. More specifically, we have implemented energy management capacity building interventions at the firm level. Since 2017, 26% of our grant funding with support from the European Union has gone to renewable energy and energy efficiency projects. We are also leveraging our connections with partners and firms, to help develop networks of financiers, technology producers and services providers. We view this as an important step in supporting the greening of businesses.

Investments in Renewable Energy
Caribbean Export as the lead regional institution with the remit for attracting foreign direct investment to our Region, we are acutely aware of the scale of investment which will be required to effectively support energy transition. Consequently, we have teamed up with the Caribbean Association of Investment Promotion Agencies to make the steering of investments in this sector as a high priority. This will include a focus on solar photovoltaics (PV) and wind, two of the most relevant technologies for our Region. In this regard we have been steadily building up a network of partners with a view to fostering investment in our region. It should be stated that the regulatory bottlenecks must be addressed as a priority to achieve success on the scale required.

In summary, transition to the new economy opens a world of opportunity for us especially in creating precious jobs and generating much needed growth. We recognize that success will be hinged on building a broad-based partnership to deliver results for Caribbean people. We at Caribbean Export are determined to play our part and remain committed to this agenda.

Deodat Maharaj (pictured) is the executive director of the Caribbean Export Development Agency and can be reached at: [email protected]

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