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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.

Caribbean

Building a trade and investment partnership with Rising Africa

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Many Caribbean countries mark Emancipation in the month of August. Indeed, the CARICOM Community celebrates this historical milestone on 1st August annually. During this time, we reflect on the end of slavery which will forever remain a stain etched on the collective conscience of humanity. We use the remembrance of Emancipation to celebrate the deep and inextricable bonds we as Caribbean people have with Africa, writes Deodat Maharaj.

Thus far, these connections have largely remained in the historical, cultural and people spheres. This must change to also include translating our excellent ties into trade and investment relationships that will redound to the benefit of people here in our Region and in Africa. For those who follow developments in Africa, May 2019 marked the dawn of an exciting chapter in the continent’s continued ascent. It ushered in the start of the African Continental Free Trade Area with a cogent and compelling vision with Africa as one mega free trade area. Just in terms of countries participating, it is already the largest free trade area in the world given the number of states who are members.

Africa’s rise is also eloquently illustrated by the data. Whilst the entire world is reeling from the coronavirus pandemic and most countries and Regions like ours showing negative growth, the African Economic Outlook done by the African Development Bank noted that real GDP is expected to grow by 3.4 percent despite the COVID-19 pandemic. Countries such as Mozambique have been receiving record levels of foreign direct investment. Yet, whilst Asian countries led by China have been rushing to Africa, we have largely lagged behind in terms of pursuing an aggressive trade and investment relationship with Africa. The opportunities to partner with Africa and a market of an estimated 1.4 billion people are immense. As we seek to advance an agenda for a resilient Caribbean, it is not only important to shore up existing trade partnerships but to also look to new relationships on the trade and investment front.

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The world is changing and so must we. In terms of trade data, according to the International Trade Centre trade map, CARIFORUM countries (CARICOM and the Dominican Republic) exported US$249.2 million worth of goods to Africa in 2018 which grew to US$601.4 million in 2019. Though this is a step in the right direction it is still a fraction of what can be realised once we make a concerted push to Africa. The obvious question is then, how we go about ramping up our commercial relationship with Africa. Firstly, we need to shift from political diplomacy to one that includes a commercial focus giving Africa the priority it deserves. Some progress has been made with the establishment of missions in several African capitals by Caribbean countries.

We are also seeing results. Just last month, I participated in the signing ceremony here in Barbados where Caribbean companies Global Integrated Fintech Solutions (GIFTS) and IPayAnywhere (Global) signed an MOU with Nigerian giant TelNet relating to the provision of a range of payment services. What was different about this relationship is that it ushered in a partnership focused on the new economy and not the classic relationship in the trade of commodities. The Barbados High Commission in Ghana played an instrumental role in bringing this to reality hence the emphasis on strong commercial representation. Similarly, the joint mission of CARICOM countries established in Nairobi, Kenya must pursue the same objective with a focus on East and Southern Africa. Secondly, as we build a relationship with Africa and seek to also attract tourists from the continent, we must also deepen our relationship in the services sector other than tourism. We already have Caribbean expertise serving in Africa in places like Mozambique supporting the development of their energy sector.

However, this is individual and ad hoc. We need to be more systematic and look to areas such as tourism where we have demonstrated expertise and find ways of marketing our knowledge in such areas to countries where this assistance is required. Thirdly, as the youngest continent on the planet with approximately 60 percent of the population under the age of 25 and with a growing middle class, there is immense potential for our creative sector. For example, Caribbean music remains popular in Africa, but we need to be more proactive in identifying the market opportunities and support our artistes in accessing them through digital and other platforms building on initial efforts such as the successful collaboration between Caribbean Soca artistes like Machel Montano from Trinidad and Tobago and Nigeria’s Timaya. By focusing our creative sector on Africa’s vibrant young people, we will be building a relationship for years to come.

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Finally, it is important to underline that building this relationship with Africa and its private sector is not only the remit of the governments across the Region. Business has an important role to play in reaching out to Africa as has been done by institutions such as Republic Bank which has established operations in Ghana. Private sector organisations such as the chambers of commerce and manufacturers association need to also establish relationships with their counterparts on the continent.

We at the Caribbean Export Development Agency recognise the importance of helping to build this bridge. This is precisely the reason why the identification of new trading relationships is an important part of our Strategic Plan for the period 2021 – 2024. We have already started initial outreach to institutions such as the East Africa Chamber of Commerce. As a Caribbean person who has lived, worked and travelled across Africa, I have seen first-hand the seismic shifts taking place on the continent. It is time we also make this pivot to Africa investing the requisite time, effort and energy. In a rapidly changing world, bolstering our relationship with Africa is no longer an option but should be a key element of our strategy to help build Caribbean resilience.

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Caribbean

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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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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