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### The Transformative Potential of Digital Technologies and Artificial Intelligence Overcoming Development Traps in Latin America and the Caribbean in the Digital Age ## Thank you for your interest in this ECLAC publication Please register if you would like to receive information on our editorial products and activities. When you register, you may specify your particular areas of interest and you will gain access to our products in other formats. Click on the link below for our social networks and other channels for accessing our publications: ##### Register https://bit.ly/m/CEPAL ### The Transformative Potential of Digital Technologies and Artificial Intelligence Overcoming Development Traps in Latin America and the Caribbean in the Digital Age United Nations publication LC/CMSI.9/3/Rev.1 Distribution: L Copyright © United Nations, 2025 All rights reserved Printed at United Nations, Santiago S.2500036[E] This publication should be cited as: Economic Commission for Latin America and the Caribbean (ECLAC), Overcoming Development Traps in Latin America and the Caribbean in the Digital Age: The Transformative Potential of Digital Technologies and Artificial Intelligence (LC/CMSI.9/3/Rev.1), Santiago, 2025. Applications for authorization to reproduce this work in whole or in part should be sent to the Economic Commission for Latin America and the Caribbean (ECLAC), Documents and Publications Division, publicaciones.cepal@un.org. Member States of the United Nations and their governmental institutions may reproduce this work without prior authorization, but are requested to mention the source and to inform ECLAC of such reproduction. This document was coordinated by Marco Llinás, Chief of the Division of Production, Productivity and Management of the Economic Commission for Latin America and the Caribbean (ECLAC), in collaboration with Sebastián Rovira, Officer in Charge of the Digital Transformation Unit, and Alejandro Patiño, Economic Affairs Officer, both of the same Division. Demetris Herakleous, Laura Poveda and Fernando Rojas, all of the same Division, also helped to draft the document. In addition, input was provided by Pamela Arellano, Fernando Callorda, Bernardo Díaz de Astarloa, Juan David Gutiérrez, Juan Jung, Raúl Katz, Sarah Muñoz-Cadena and Ramiro Valencia. This publication was supported by the European Union-Latin America and the Caribbean Digital Alliance. The United Nations and the countries it represents assume no responsibility for the content of links to external sites in this publication. Neither the European Union nor any person acting on behalf of the European Union is responsible for the use that might be made of the information contained in this publication. The opinions expressed are those of the authors only and should not be considered as representative of the opinion or position of the European Union. The boundaries and names shown on the maps included in this publication do not imply official acceptance or endorsement by the United Nations. José Manuel Salazar-Xirinachs Executive Secretary Javier Medina Vásquez Deputy Executive Secretary a.i. Marco Llinás Chief, Division of Production, Productivity and Management Sally Shaw Chief, Documents and Publications Division CONTENTS Foreword ... 7 Introduction ... 11 Chapter I The productivity challenge in Latin America and the Caribbean: how digital technologies and artificial intelligence can be a crucial component of change ... 17 A. The structural barriers that condition low economic growth ... 19 B. The role of digital technologies and artificial intelligence in meeting the productivity challenge ... 20 C. Levels of artificial intelligence adoption in Latin America and the Caribbean ... 22 D. The economic impact of artificial intelligence ... 25 E. The adoption of artificial intelligence in business and its sectoral characteristics ... 28 F. The artificial intelligence entrepreneurship ecosystem ... 32 Bibliography ... 35 Chapter II Skills, connectivity and infrastructure: key factors for harnessing the digital transformation and artificial intelligence to overcome inequality and low social mobility and cohesion ... 37 A. Low economic growth, poverty and inequality in Latin America and the Caribbean ... 39 B. Digitalization, skills development and employment ... 40 C. Access to broadband and “meaningful connectivity” ... 42 D. Computing capacity and access to the cloud in the region ... 47 E. The digital skills development gap ... 50 F. Artificial intelligence and its transformative impact on the labour market ... 52 Bibliography ... 56 Chapter III Digitalization as a vehicle for strengthening institutional and governance capacities ... 59 A. The trap of low institutional capacity and ineffective governance ... 61 B. Digital transformation in the region’s governments ... 64 C. Digital governance: structures and mechanisms for the digital transformation of governments ... 65 D. The adoption of AI by the public sector in Latin America and the Caribbean ... 67 E. The challenges of implementing AI systems in the public sector ... 73 Bibliography ... 74 Chapter IV Towards a productive, inclusive and sustainable digital future: agendas, strategies and policies ... 77 A. The evolution of digital agendas in Latin America and the Caribbean ... 79 B. Overview of the adoption of artificial intelligence strategies and agendas ... 81 C. Legislative and regulatory efforts related to artificial intelligence in Latin America and the Caribbean ... 85 D. Key aspects of complementarity between digital agendas and artificial intelligence strategies ... 87 Bibliography ... 89 3 Contents Economic Commission for Latin America and the Caribbean (ECLAC) Tables Table I.1 Latin America and the Caribbean (18 countries): enterprises engaged in artificial intelligence activities, by size, September 2024 ... 32 Table I.2 Latin America and the Caribbean (18 countries): investors, investments and funding in artificial intelligence enterprises, September 2024 ... 33 Table III.1 Latin America (4 countries): examples of artificial intelligence systems as an input for government processes ... 72 Table III.2 Bahamas, Brazil and Mexico: examples of artificial intelligence systems by interaction type ... 73 Table IV.1 Selected countries: artificial intelligence plans and strategies ... 82 Table IV.2 Latin America and the Caribbean (10 countries): artificial intelligence-related bills currently in the legislative process ... 85 Table IV.3 Areas of complementarity between digital agendas and artificial intelligence (AI) strategies and priority areas of AI to be strengthened ... 88 Figures Figure I.1 Selected regions and countries: value of output per hour worked and productivity gap between the United States and Latin America and the Caribbean, 1950–2023 ... 19 Figure I.2 Latin America (17 countries) and world regions: spending on artificial intelligence, 2023 ... 23 Figure I.3 Latin America (18 countries) and Europe (4 countries): per capita spending on artificial intelligence, 2023 ... 23 Figure I.4 Latin America (7 countries) and Europe (7 countries): estimated penetration of artificial intelligence by shares of total population who are users, 2023 ... 24 Figure I.5 Latin America (18 countries), Germany and France: penetration of artificial intelligence as measured by countries’ per capita spending and users as a share of the population, 2023 ... 25 Figure I.6 Latin America (17 countries): economic impact of artificial intelligence, by source of effects, 2023 ... 27 Figure I.7 Latin America (17 countries): projected impact of artificial intelligence, 2025–2030 ... 27 Figure I.8 McKinsey & Company annual global survey: share of organizations adopting artificial intelligence, 2017–2024 ... 28 Figure I.9 Brazil: shares of surveyed companies using artificial intelligence technologies, 2021–2023 ... 29 Figure I.10 Brazil: surveyed companies using artificial intelligence technologies by business area, as a share of all companies using these technologies, 2021–2023 ... 30 Figure I.11 Colombia: shares of surveyed companies developing an artificial intelligence tool or application, 2020 ... 31 Figure I.12 Colombia: surveyed companies reporting an impact from artificial intelligence, as a share of those developing any artificial intelligence tool or application, 2020 ... 31 Figure I.13 Latin America and the Caribbean: enterprises founded in the artificial intelligence sector, 1990–2024 ... 33 Figure I.14 Latin America and the Caribbean: shares of firms in the artificial intelligence sector engaged in different activities, 2024 ... 34 Figure II.1 Latin America and the Caribbean: poverty, extreme poverty and the Gini coefficient, 2002–2022 ... 39 Figure II.2 Latin America (13 countries): cumulative average distribution of Internet access and use, education level, professional or technical occupations, sanitation services and income, by household per capita income decile, 2022 ... 41 Figure II.3 Latin America and the Caribbean and European Union (27 countries): fixed broadband penetration, 2007–2023 ... 43 Figure II.4 Latin America and the Caribbean and European Union (27 countries): mobile broadband penetration, 2014–2023 ... 43 Overcoming Development Traps in Latin America and the Caribbean in the Digital Age... Contents Figure II.5 Latin America and the Caribbean: shares of households with Internet access, by income quintile, 2018–2022 ... 44 Figure II.6 Latin America and the Caribbean: shares of households with Internet access, by area of residence, 2018–2022 ... 44 Figure II.7 Latin America, the Caribbean (7 countries), European Union (27 countries) and world: fixed broadband download speeds, June 2024 ... 45 Figure II.8 Latin America, the Caribbean (7 countries), European Union (27 countries) and world: mobile broadband download speeds, June 2024 ... 46 Figure II.9 Brazil, Chile and the Dominican Republic: households with Internet access, people in households with Internet access and people with meaningful connectivity, 2023 ... 47 Figure II.10 Latin America and the Caribbean (12 countries) and world regions: global cloud ecosystem index, 2022 ... 48 Figure II.11 Latin America and the Caribbean: computing subindicator of the Latin American artificial intelligence index (ILIA), 2024 ... 49 Figure II.12 Latin America and the Caribbean (9 countries) and Republic of Korea: penetration of digital skills, 2023 ... 51 Figure II.13 Latin America (7 countries): workforce affected by machine learning, by educational level, 2023 ... 53 Figure II.14 Latin America (7 countries): workforce affected by generative artificial intelligence, by educational level, 2023 ... 54 Figure II.15 Latin America (7 countries): workforce affected by machine learning, by age group, 2023 ... 54 Figure II.16 Latin America (7 countries): workforce affected by generative AI, by age group, 2023 ... 55 Figure II.17 Latin America (7 countries): workforce affected by machine learning and generative AI, 2023 ... 56 Figure III.1 Latin America and the Caribbean (18 countries): people expressing distrust in political and State institutions, 1996–2020 ... 61 Figure III.2 Latin America and the Caribbean (17 countries): trust in government, 2023 ... 62 Figure III.3 Latin America and the Caribbean (17 countries): perceived progress in reducing corruption in State institutions over the last two years, 2023 ... 63 Figure III.4 Latin America and the Caribbean (33 countries) and Europe (43 countries): e-Government Development Index (e-GDI) scores, 2024 ... 64 Figure III.5 Latin America and the Caribbean: e-Government Development Index (e-GDI) scores, 2003–2024 ... 65 Figure III.6 Latin America and the Caribbean (31 countries and territories) and Europe (43 countries): scores on the governance and ethics dimension of the Government AI Readiness Index, 2023 ... 68 Figure III.7 Latin America and the Caribbean (20 countries): use of artificial intelligence systems by type of public agency, according to the Classification of the Functions of Government (COFOG) ... 69 Figure III.8 Latin America and the Caribbean (20 countries): classification of artificial intelligence systems by the functions they perform or the types of technologies they represent ... 70 Figure III.9 Latin America and the Caribbean (20 countries): contribution of artificial intelligence systems to government processes ... 71 Figure III.10 Latin America and the Caribbean (20 countries): types of interaction for which artificial intelligence systems are used ... 72 Figure III.11 Latin America and the Caribbean (20 countries): artificial intelligence systems implemented by public agencies that use personal data ... 74 Figure IV.1 Latin America and the Caribbean (18 countries): thematic intensity of digital agendas, 2023 ... 80 Figure IV.2 Latin America and the Caribbean (9 countries) and Organisation for Economic Co-operation and Development (OECD) (7 countries): relative focus on thematic areas in digital policies and strategies, 2023 ... 84 Contents Economic Commission for Latin America and the Caribbean (ECLAC) Box Box III.1 Chatbots and public administration ... 70 Diagrams Diagram 1 Development traps ... 14 Diagram I.1 Factors influencing the digitalization of production ... 21 Diagram I.2 Possible effects of artificial intelligence ... 22 Diagram I.3 The economic impact of artificial intelligence ... 26 Diagram II.1 Digital skills and their impact on labour market participation ... 42 Diagram III.1 Digital governance ... 66 Maps Map III.1 Latin America and the Caribbean: artificial intelligence systems by country ... 69 Map IV.1 Latin America and the Caribbean (18 countries): level of development of national digitalization policies in digital agendas and strategies, 2023 ... 80 #### Foreword In the twenty-first century, digital transformation has ceased to be optional and has become a necessity for the development of societies. Globally, digital technologies are reshaping the way we live, work and interact, and the Latin America and Caribbean region is not exempt from these tectonic shifts that are reshaping the path of humanity. The region has a historic opportunity to use these tools to deal with the three traps that are holding back its development: a trap of low capacity for growth, a trap of high inequality, low social mobility and weak social cohesion, and a trap of low institutional capacity and ineffective governance. Digitalization is a matter not only of technological infrastructure but of profound changes in production models, education systems, public services and social structures, i.e. in the way we understand our daily lives. Internet access, the adoption of artificial intelligence and the integration of new technologies can become the bridge whereby the region breaks from these development traps, closes historical inequality gaps and fosters more productive, inclusive and sustainable growth. However, this process requires a strategic and systemic approach to ensure that digital transformation fosters well-being and does not further widen existing gaps. Latin America and the Caribbean has a unique opportunity to harness technology as a catalyst for development. The lessons of the past, which was marked by periods of economic stagnation and structural inequality, underline the importance of decisive action. Today, digital transformation offers a path to strengthened competitiveness, more rapid learning, innovation and improved quality of life for millions of people. But this change will not happen automatically; it will require a joint effort involving governments, the private sector and civil society to ensure that the benefits of the digital age are shared by all. While much of the progress in this area will depend on the efforts made by countries and their territories, international cooperation will be essential to address the challenges posed by digital transformation, such as cybersecurity, protection of data and digital trade and the regulation of new technologies, among others. This collaboration serves to establish common principles that can ensure equitable access to digital technologies so that all the opportunities these present can be harnessed and their negative effects reduced. By joining forces and sharing resources, countries can adopt best practices, develop more robust infrastructure, mitigate risks and maximize the benefits of digitalization. Regional cooperation is particularly important in Latin America and the Caribbean, owing to the structural inequalities that characterize the region and the fact that regional institutional mechanisms are imperfect and have little capacity for action. For this reason, initiatives such as the Digital Agenda for Latin America and the Caribbean (eLAC) are vital for closer collaboration and action on shared challenges. To achieve this goal, it will be important to step up the efforts that are being made. On the eve of the twentieth anniversary of the Digital Agenda for Latin America and the Caribbean, the moment is opportune to recognize its valuable contribution and track record and to reflect on its great potential. The region has made major progress with digital transformation. Just as clearly, though, it is lagging behind regions that are at the forefront in this area, and there is an urgent need to address the growing challenges and opportunities posed by the new technological disruptions. Against this background, the present document explores in detail the opportunities offered by progress towards real and effective use of digital technologies, in particular artificial intelligence, to address the region’s core development problems. We hope it will serve as an input for the new stage in the Digital Agenda for Latin America and the Caribbean that is now beginning, in which concrete regional projects and actions should prevail, allowing us to take advantage of the possibilities offered by digital transformation. Digitalization is more than a tool: it is a unique opportunity to reshape the future of Latin America and the Caribbean, break from development traps and move towards a more productive, inclusive and sustainable model of development. José Manuel Salazar-Xirinachs Executive Secretary Economic Commission for Latin America and the Caribbean (ECLAC) #### Introduction Latin America and the Caribbean is affected by three development traps: one of low capacity for growth, one of high inequality, low social mobility and weak social cohesion, and one of low institutional capacity and ineffective governance. These traps not only operate independently as barriers to development, but are deeply interrelated and mutually reinforcing, making it ever more important to design and implement strategies and policies that can break this vicious circle of low growth, exclusion and institutional weakness. The low growth capacity trap is perpetuated by a number of interrelated factors. First, the region has an unsophisticated and undiversified economic structure and is overreliant on the export of raw materials or goods whose production is based on abundant cheap labour and generates less value added and quality employment than other more technologically advanced sectors. The inability to induce a productive transformation in its economies has resulted in poor productivity performance. In fact, productivity in Latin America and the Caribbean has stagnated, with the result that the region’s position has worsened relative to that of the most advanced and emerging economies. For example, whereas in 1950 it took 2.5 hours in the region to produce the same amount of output as was produced in the United States in 1 hour, by 2023 it took almost 4 hours (ECLAC, 2024a). In addit

## El potencial transformador de las tecnologías digitales y la inteligencia artificial Superar las trampas del desarrollo de América Latina y el Caribe en la era digital ## Gracias por su interés en esta publicación de la CEPAL Si desea recibir información oportuna sobre nuestros productos editoriales y actividades, le invitamos a registrarse. Podrá definir sus áreas de interés y acceder a nuestros productos en otros formatos. Conozca nuestras redes sociales y otras fuentes de difusión en el siguiente link: ##### Deseo registrarme https://bit.ly/m/CEPAL Superar las trampas del desarrollo de América Latina y el Caribe en la era digital El potencial transformador de las tecnologías digitales y la inteligencia artificial Este documento fue coordinado por Marco Llinás, Director de la División de Desarrollo Productivo y Empresarial de la Comisión Económica para América Latina y el Caribe (CEPAL), y contó con la colaboración de Sebastián Rovira, Oficial a Cargo de la Unidad de Transformación Digital, y Alejandro Patiño, Oficial de Asuntos Económicos, ambos de la misma División. En su redacción también participaron Demetris Herakleous, Laura Poveda y Fernando Rojas, funcionarios de la misma División. Para la elaboración del presente documento también se contó con el apoyo de Pamela Arellano, Fernando Callorda, Bernardo Díaz de Astarloa, Juan David Gutiérrez, Juan Jung, Raúl Katz, Sarah Muñoz-Cadena y Ramiro Valencia. Esta publicación contó con el apoyo de la Alianza Digital Unión Europea-América Latina y el Caribe. Las Naciones Unidas y los países que representan no son responsables por el contenido de vínculos a sitios web externos incluidos en esta publicación. Ni la Unión Europea ni ninguna persona que actúe en su nombre es responsable del uso que pueda hacerse de la información contenida en esta publicación. Los puntos de vista expresados en este estudio son de los autores y no reflejan necesariamente los puntos de vista de la Unión Europea. Los límites y los nombres que figuran en los mapas incluidos en este documento no implican su apoyo o aceptación oficial por las Naciones Unidas. José Manuel Salazar-Xirinachs Secretario Ejecutivo Javier Medina Vásquez Secretario Ejecutivo Adjunto a. i. Marco Llinás Director de la División de Desarrollo Productivo y Empresarial Sally Shaw Directora de la División de Documentos y Publicaciones Publicación de las Naciones Unidas LC/CMSI.9/3/Rev.1 Distribución: L Copyright © Naciones Unidas, 2025 Todos los derechos reservados Impreso en Naciones Unidas, Santiago S.2500036[S] Esta publicación debe citarse como: Comisión Económica para América Latina y el Caribe (CEPAL), Superar las trampas del desarrollo de América Latina y el Caribe en la era digital: el potencial transformador de las tecnologías digitales y la inteligencia artificial (LC/CMSI.9/3/Rev.1), Santiago, 2025. La autorización para reproducir total o parcialmente esta obra debe solicitarse a la Comisión Económica para América Latina y el Caribe (CEPAL), División de Documentos y Publicaciones, publicaciones.cepal@un.org. Los Estados Miembros de las Naciones Unidas y sus instituciones gubernamentales pueden reproducir esta obra sin autorización previa. Solo se les solicita que mencionen la fuente e informen a la CEPAL de tal reproducción. ÍNDICE Prólogo ... 7 Introducción ... 11 Capítulo I El reto de la productividad en América Latina y el Caribe: cómo las tecnologías digitales y la inteligencia artificial pueden ser un aspecto clave del cambio ... 17 A. Las barreras estructurales que condicionan el bajo crecimiento económico ... 19 B. El rol de las tecnologías digitales y la inteligencia artificial para superar el reto de la productividad ... 21 C. Niveles de adopción de la inteligencia artificial en América Latina y el Caribe ... 23 D. El impacto económico de la inteligencia artificial ... 25 E. La adopción de inteligencia artificial en el ámbito empresarial y sus características sectoriales ... 28 F. Ecosistema de emprendimiento en el ámbito de la inteligencia artificial ... 32 Bibliografía ... 35 Capítulo II Habilidades, conectividad e infraestructura: factores clave para aprovechar la transformación digital y la inteligencia artificial para superar la desigualdad y la baja movilidad y cohesión sociales ... 39 A. El bajo crecimiento económico, la pobreza y la desigualdad en América Latina y el Caribe ... 41 B. Digitalización, desarrollo de habilidades y empleo ... 42 C. Acceso a banda ancha y “conectividad significativa” ... 44 D. Capacidad de cómputo y acceso a la nube en la región ... 50 E. La brecha en el desarrollo de habilidades digitales ... 52 F. La inteligencia artificial y su impacto en la transformación del mercado laboral ... 55 Bibliografía ... 59 Capítulo III La digitalización como vehículo para el fortalecimiento de las capacidades institucionales y de gobernanza ... 63 A. La trampa de baja capacidad institucional y de gobernanza poco efectiva ... 65 B. La transformación digital en los gobiernos de la región ... 68 C. La gobernanza digital: estructuras y mecanismos para la transformación digital de los gobiernos ... 69 D. La adopción de la IA en el sector público de América Latina y el Caribe ... 71 E. Desafíos en la implementación de sistemas de IA en el sector público ... 77 Bibliografía ... 78 Capítulo IV Hacia un futuro digital productivo, inclusivo y sostenible: agendas, estrategias y políticas ... 81 A. Evolución de las agendas digitales en América Latina y el Caribe ... 83 B. Panorama de la adopción de estrategias y agendas en materia de inteligencia artificial ... 85 C. Esfuerzos legislativos y regulatorios en materia de inteligencia artificial en América Latina y el Caribe ... 89 D. Aspectos clave de la complementariedad entre las agendas digitales y las estrategias de inteligencia artificial ... 91 Bibliografía ... 93 Comisión Económica para América Latina y el Caribe (CEPAL) Índice Cuadros Cuadro I.1 América Latina y el Caribe (18 países): empresas que llevan a cabo actividades de inteligencia artificial, por tamaño, septiembre de 2024 ... 33 Cuadro I.2 América Latina y el Caribe (18 países): inversores, inversiones y financiamiento de las empresas de inteligencia artificial, septiembre de 2024 ... 34 Cuadro III.1 América Latina (4 países): ejemplos de los sistemas de inteligencia artificial como aporte a los procesos de gobierno ... 76 Cuadro III.2 Bahamas, Brasil y México: ejemplos de los sistemas de inteligencia artificial a partir del tipo de interacción ... 77 Cuadro IV.1 Países seleccionados: planes y estrategias de inteligencia artificial ... 86 Cuadro IV.2 América Latina y el Caribe (10 países): proyectos de ley sobre inteligencia artificial en trámite ... 89 Cuadro IV.3 Espacios de complementariedad entre agendas digitales y estrategias de inteligencia artificial (IA) y espacios de enfoque prioritario en IA que han de fortalecerse ... 92 Gráficos Gráfico I.1 Regiones y países seleccionados: valor de la producción por hora trabajada y brecha de productividad frente a los Estados Unidos, 1950-2023 ... 19 Gráfico I.2 América Latina (17 países) y regiones del mundo: gasto en inteligencia artificial, 2023 ... 23 Gráfico I.3 América Latina (18 países) y Europa (4 países): gasto en inteligencia artificial per cápita, 2023 ... 24 Gráfico I.4 América Latina (7 países) y Europa (7 países): penetración de la inteligencia artificial estimada según la proporción de usuarios en el total de la población, 2023 ... 24 Gráfico I.5 América Latina (18 países), Alemania y Francia: penetración de la inteligencia artificial medida como gasto per cápita de los países y proporción de usuarios en la población, 2023 ... 25 Gráfico I.6 América Latina (17 países): impacto económico de la inteligencia artificial, por fuente de efectos, 2023 ... 27 Gráfico I.7 América Latina (17 países): proyección del impacto de la inteligencia artificial, 2025-2030 ... 27 Gráfico I.8 Encuesta mundial anual de McKinsey & Company: proporción de organizaciones que adoptaron la inteligencia artificial, 2017-2024 ... 29 Gráfico I.9 Brasil: proporción de empresas encuestadas que utilizaron tecnologías de inteligencia artificial, 2021-2023 ... 30 Gráfico I.10 Brasil: empresas encuestadas que utilizaron tecnologías de inteligencia artificial por área de negocio, como proporción del total de empresas que utilizaron esas tecnologías, 2021-2023 ... 30 Gráfico I.11 Colombia: proporción de empresas encuestadas que desarrollaron alguna herramienta o aplicación de inteligencia artificial, 2020 ... 31 Gráfico I.12 Colombia: empresas encuestadas que declararon que la inteligencia artificial tuvo impacto, como proporción de las que habían desarrollado alguna herramienta o aplicación de inteligencia artificial, 2020 ... 31 Gráfico I.13 América Latina y el Caribe: cantidad de empresas fundadas en el sector de la inteligencia artificial, 1990-2024 ... 33 Gráfico I.14 América Latina y el Caribe: proporción de empresas del sector de la inteligencia artificial que realizan diferentes actividades, 2024 ... 35 Gráfico II.1 América Latina y el Caribe: evolución de la tasa de pobreza, la tasa de pobreza extrema y el coeficiente de Gini, 2002-2022 ... 41 Gráfico II.2 América Latina (13 países): distribución promedio acumulada del acceso a Internet y de su uso, del nivel de educación, de las ocupaciones profesionales o técnicas, de los servicios de saneamiento y del ingreso, por decil de ingreso per cápita del hogar, 2022 ... 43 Gráfico II.3 América Latina y el Caribe y Unión Europea (27 países): penetración de la banda ancha fija, 2007-2023 ... 45 Gráfico II.4 América Latina y el Caribe y Unión Europea (27 países): penetración de la banda ancha móvil, 2014-2023 ... 46 Superar las trampas del desarrollo de América Latina y el Caribe en la era digital... Índice Gráfico II.5 América Latina y el Caribe: proporción de hogares con acceso a Internet, por quintil de ingreso, 2018-2022 ... 46 Gráfico II.6 América Latina y el Caribe: proporción de hogares con acceso a Internet, por zona de residencia, 2018-2022 ... 47 Gráfico II.7 América Latina, el Caribe (7 países), Unión Europea (27 países) y mundo: velocidad de descarga de la banda ancha fija, junio de 2024 ... 48 Gráfico II.8 América Latina, el Caribe (7 países), Unión Europea (27 países) y mundo: velocidad de descarga de la banda ancha móvil, junio de 2024 ... 48 Gráfico II.9 Brasil, Chile y República Dominicana: hogares con acceso a Internet, personas en hogares con acceso a Internet y personas con conectividad significativa, 2023 ... 49 Gráfico II.10 América Latina y el Caribe (12 países) y regiones del mundo: índice global de ecosistemas de nube, 2022 ... 51 Gráfico II.11 América Latina y el Caribe: subindicador de cómputo del índice latinoamericano de inteligencia artificial (ILIA), 2024 ... 52 Gráfico II.12 América Latina y el Caribe (9 países) y República de Corea: penetración de habilidades digitales, 2023 ... 54 Gráfico II.13 América Latina (7 países): fuerza de trabajo afectada por el aprendizaje automático, por nivel educativo, 2023 ... 56 Gráfico II.14 América Latina (7 países): fuerza de trabajo afectada por la inteligencia artificial generativa, por nivel educativo, 2023 ... 57 Gráfico II.15 América Latina (7 países): fuerza de trabajo afectada por el aprendizaje automático, por grupo etario, 2023 ... 58 Gráfico II.16 América Latina (7 países): fuerza de trabajo afectada por la IA generativa, por grupo etario, 2023 ... 58 Gráfico II.17 América Latina (7 países): fuerza de trabajo afectada por el aprendizaje automático y la IA generativa, 2023 ... 59 Gráfico III.1 América Latina y el Caribe (18 países): población que manifiesta su desconfianza en las instituciones políticas y del Estado, 1996-2020 ... 65 Gráfico III.2 América Latina y el Caribe (17 países): población que manifiesta su confianza en el gobierno, 2023 ... 66 Gráfico III.3 América Latina y el Caribe (17 países): población que percibe un progreso en la reducción de la corrupción en las instituciones del Estado en los últimos dos años, 2023 ... 67 Gráfico III.4 América Latina y el Caribe (33 países) y Europa (43 países): puntaje en el índice de desarrollo del gobierno electrónico, 2024 ... 68 Gráfico III.5 América Latina y el Caribe: evolución del puntaje en el índice de desarrollo del gobierno electrónico, 2003-2024 ... 69 Gráfico III.6 América Latina y el Caribe (31 países y territorios) y Europa (43 países): puntaje en la dimensión de gobernanza y ética del índice de preparación para la IA del gobierno, 2023 ... 72 Gráfico III.7 América Latina y el Caribe (20 países): uso de sistemas de inteligencia artificial por tipos de entidades públicas, según la Clasificación de las Funciones del Gobierno (CFG) ... 73 Gráfico III.8 América Latina y el Caribe (20 países): clasificación de los sistemas de inteligencia artificial en virtud de las funciones que realizan o los tipos de tecnologías que representan ... 74 Gráfico III.9 América Latina y el Caribe (20 países): aporte de los sistemas de inteligencia artificial a los procesos de gobierno ... 75 Gráfico III.10 América Latina y el Caribe (20 países): tipo de interacción de los sistemas de inteligencia artificial ... 76 Gráfico III.11 América Latina y el Caribe (20 países): sistemas de inteligencia artificial implementados por entidades públicas que utilizan datos personales ... 78 Gráfico IV.1 América Latina y el Caribe (18 países): nivel de intensidad temática de las agendas digitales, 2023 ... 85 Gráfico IV.2 América Latina y el Caribe (9 países) y Organización de Cooperación y Desarrollo Económicos (OCDE) (7 países): grado de intensidad temática relativa en las políticas y estrategias digitales, 2023 ... 89 Comisión Económica para América Latina y el Caribe (CEPAL) Índice Recuadro Recuadro III.1 Los chatbots y la administración pública ... 74 Diagramas Diagrama 1 Las trampas del desarrollo ... 14 Diagrama I.1 Factores que influyen en la digitalización de la producción ... 21 Diagrama I.2 Posibles efectos de la inteligencia artificial ... 22 Diagrama I.3 Impacto económico de la inteligencia artificial ... 26 Diagrama II.1 Habilidades digitales e impacto en la inserción laboral ... 44 Diagrama III.1 Gobernanza digital ... 70 Mapas Mapa III.1 América Latina y el Caribe: sistemas de inteligencia artificial identificados por país ... 73 Mapa IV.1 América Latina y el Caribe (18 países): nivel de desarrollo de las políticas nacionales de digitalización en las agendas y estrategias digitales, 2023 ... 84 ### Prólogo En el siglo XXI, la transformación digital ha dejado de ser una opción para convertirse en una necesidad para el desarrollo de las sociedades. A nivel mundial, las tecnologías digitales están redefiniendo la manera en que vivimos, trabajamos y nos relacionamos, y la región de América Latina y el Caribe no es ajena a estos cambios tectónicos que marcan el camino de la humanidad. La región tiene ante sí la oportunidad histórica de utilizar estas herramientas para abordar las tres trampas que inhiben su desarrollo: una primera trampa de baja capacidad para crecer, una segunda de alta desigualdad, baja movilidad y débil cohesión sociales y una tercera de baja capacidad institucional y gobernanza poco efectiva. La digitalización no es solamente de una cuestión de infraestructura tecnológica, sino también de cambios profundos en los modelos de producción, los sistemas de educación, los servicios públicos y las estructuras sociales, es decir de cómo entendemos nuestro diario vivir. El acceso a Internet, la adopción de inteligencia artificial y la integración de nuevas tecnologías pueden convertirse en el puente que permita salir de las trampas del desarrollo, cerrar las brechas históricas de desigualdad y promover un crecimiento más productivo, inclusivo y sostenible. Sin embargo, este proceso exige un enfoque estratégico y sistémico que garantice que la transformación digital esté al servicio del bienestar y no potencie el ensanchamiento de las brechas ya existentes. América Latina y el Caribe tiene una oportunidad única para aprovechar la tecnología como catalizador del desarrollo. Las lecciones del pasado, marcado por períodos de estancamiento económico y desigualdad estructural, destacan la importancia de actuar con decisión. Hoy, la transformación digital ofrece un camino para fortalecer la competitividad, acelerar el aprendizaje, impulsar la innovación y mejorar la calidad de vida de millones de personas. Pero este cambio no se dará de manera automática; será necesario un esfuerzo conjunto en el que participen tanto los gobiernos como el sector privado y la sociedad civil para asegurar que los beneficios de la era digital sean compartidos por todos. Si bien buena parte del avance en esta materia dependerá de los esfuerzos que hagan los países y sus territorios, la cooperación internacional será esencial para enfrentar los desafíos que plantea la transformación digital, como la ciberseguridad, la protección de datos y el comercio digital y la regulación de las nuevas tecnologías, entre otros. Esta colaboración permite establecer principios comunes que garanticen un acceso equitativo a las tecnologías digitales para aprovechar todas las oportunidades que presentan y reducir sus efectos negativos. Al unir esfuerzos y compartir recursos, los países pueden adoptar mejores prácticas, desarrollar infraestructura más robusta, mitigar riesgos y maximizar los beneficios de la digitalización. En América Latina y el Caribe la cooperación regional cobra una importancia aún mayor debido a las desigualdades estructurales que nos caracterizan y a la existencia de mecanismos institucionales regionales imperfectos y con poca capacidad de acción. Por este motivo, iniciativas como la Agenda Digital para América Latina y el Caribe (eLAC), son clave para promover una colaboración más estrecha y enfrentar desafíos compartidos. Para lograr este objetivo, será importante intensificar los esfuerzos que se han venido haciendo. La Agenda Digital para América Latina y el Caribe está próxima a alcanzar su segunda década de existencia, lo que nos invita a reconocer su valioso aporte y trayectoria y a reflexionar sobre su gran potencial. Son importantes los avances que ha hecho la región en materia de transformación digital. Sin embargo, son también evidentes los rezagos frente a regiones que se encuentran a la vanguardia en el tema, además de imperiosos los crecientes desafíos y oportunidades que nos plantean las nuevas disrupciones tecnológicas. En este contexto, el presente documento explora en detalle las oportunidades que surgen de avanzar hacia una utilización real y efectiva de las tecnologías digitales, en particular, de la inteligencia artificial, para resolver los problemas centrales del desarrollo de la región. Esperamos que sirva de insumo para la nueva etapa de la Agenda Digital para América Latina y el Caribe que comienza, en la que deberán prevalecer los proyectos y las acciones regionales concretas, que nos permitan aprovechar las posibilidades que ofrece la transformación digital. La digitalización es más que una herramienta: constituye una oportunidad única para redefinir el futuro de América Latina y el Caribe, escapar de las trampas del desarrollo y avanzar hacia un modelo de desarrollo más productivo, inclusivo y sostenible. José Manuel Salazar-Xirinachs Secretario Ejecutivo Comisión Económica para América Latina y el Caribe (CEPAL) ### Introducción América Latina y el Caribe enfrenta tres trampas del desarrollo: una trampa de baja capacidad para crecer; una de alta desigualdad, baja movilidad social y débil cohesión social, y una de baja capacidad institucional y gobernanza poco efectiva. Estas trampas no solo actúan de forma independiente como barreras al desarrollo, sino que están pr

Inflation, consumer prices for Antigua and Barbuda | ALFRED | St. Louis Fed Skip to main content Home > Releases > World Development Indicators > Inflation, consumer prices for Antigua and Barbuda Inflation, consumer prices for Antigua and Barbuda (FPCPITOTLZGATG) Observations 2025: 1.36874 | Percent, Not Seasonally Adjusted | Annual Updated: Oct 13, 2026 6:41 PM CDT Observations 2025: 1.36874 Updated: Oct 13, 2026 6:41 PM CDT 2025: 1.36874 2024: 6.19887 2023: 5.06714 2022: 7.53108 2021: 2.06300 Units: Percent , Not Seasonally Adjusted Frequency: Annual Fullscreen Data in this graph are copyrighted. Please review the copyright information in the series notes before sharing. Share Graph Custom Graph Link Embed in Website Graph Image Link &nbsp Notes Title Release Dates Inflation, consumer prices for Antigua and Barbuda 2013-11-27 2026-10-13 Source World Bank 2013-11-27 2026-10-13 Release World Development Indicators 2013-11-27 2026-10-13 Units Percent 2013-11-27 2026-10-13 Frequency Annual 2013-11-27 2026-10-13 Seasonal Adjustment Not Seasonally Adjusted 2013-11-27 2026-10-13 Notes Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used. International Monetary Fund, International Financial Statistics and data files. 2013-11-27 2026-10-13 Release Tables Related Data and Content Data Suggestions Based On Your Search Consumer Price Index for Antigua and Barbuda Ease of doing business index for Antigua and Barbuda Gross Domestic Product for Antigua and Barbuda Population, Total for Antigua and Barbuda Internet users for Antigua and Barbuda Secure Internet Servers for Antigua and Barbuda Population Ages 0 to 14 for Antigua and Barbuda Population Ages 15 to 64 for Antigua and Barbuda See More... Content Suggestions General Government Revenue for Antigua and Barbuda FRED Series Inflation, consumer prices for Antigua and Barbuda Related Categories Antigua and Barbuda Countries International Data Releases More Series from World Development Indicators Tags Antigua and Barbuda Consumer World Development Indicators Consumer Price Index World Bank Inflation Price Index Indexes Price Annual Nation Public Domain: Citation Requested Not Seasonally Adjusted Permalink/Embed modal open, choose link customization options Select automatic updates to the data or a static time frame. All data are subject to revision. Make it responsive See FRED Help for usage instructions Copy Share Link

Inflation down on Bonaire, up on St Eustatius and Saba | CBS # Inflation down on Bonaire, up on St Eustatius and Saba 22/01/2025 15:30 © CBS In the fourth quarter of 2024, consumer goods and services on Bonaire were 1.8 percent more expensive than one year previously. Inflation stood at 2.5 percent in Q3. This is reported by Statistics Netherlands (CBS) on the basis of the consumer price index for the Caribbean Netherlands. On St Eustatius, prices were 3.4 percent higher in Q4 2024 year on year, compared with a 3.2 percent higher inflation rate in Q3 2024. Inflation on Saba was 2.7 percent in Q4 2024, compared with 1.9 percent in the previous quarter. Inflation Caribbean Netherlands | Jaar | Kwartaal | Bonaire (year-on-year % change, CPI) | St Eustatius (year-on-year % change, CPI) | Saba (year-on-year % change, CPI) | | --- | --- | --- | --- | --- | | 2015 | Q1 | -0.6 | -1.1 | 1.5 | | 2015 | Q2 | -0.9 | -1.7 | 0.9 | | 2015 | Q3 | -0.9 | -0.5 | -0.4 | | 2015 | Q4 | -1.2 | -0.7 | -0.1 | | 2016 | Q1 | 0.5 | 0.4 | 0.3 | | 2016 | Q2 | 0.4 | -0.1 | 0.0 | | 2016 | Q3 | 0.6 | -0.9 | 0.2 | | 2016 | Q4 | 0.5 | 0.2 | -0.3 | | 2017 | Q1 | 0.1 | 1.1 | -1.0 | | 2017 | Q2 | 0.4 | 2.6 | -1.0 | | 2017 | Q3 | 0.6 | 2.1 | -1.3 | | 2017 | Q4 | 1.2 | 1.8 | 2.5 | | 2018 | Q1 | 3.9 | 2.0 | 2.9 | | 2018 | Q2 | 3.0 | 1.2 | 3.2 | | 2018 | Q3 | 3.5 | 1.1 | 4.4 | | 2018 | Q4 | 3.4 | 1.1 | 0.0 | | 2019 | Q1 | 0.7 | 0.7 | 0.6 | | 2019 | Q2 | 1.1 | 0.4 | 0.5 | | 2019 | Q3 | 1.2 | 0.7 | 0.3 | | 2019 | Q4 | 2.2 | 1.0 | 0.8 | | 2020 | Q1 | 1.0 | 1.2 | 0.4 | | 2020 | Q2 | -1.0 | -0.8 | -0.8 | | 2020 | Q3 | -4.8 | -3.3 | -1.6 | | 2020 | Q4 | -5.2 | -3.2 | -0.8 | | 2021 | Q1 | -3.2 | -4.1 | -1.3 | | 2021 | Q2 | 0.3 | -1.2 | 1.0 | | 2021 | Q3 | 4.3 | 2.4 | 3.2 | | 2021 | Q4 | 5.7 | 2.7 | 4.0 | | 2022 | Q1 | 9.2 | 4.9 | 6.7 | | 2022 | Q2 | 9.4 | 7.7 | 8.2 | | 2022 | Q3 | 12.2 | 9.0 | 9.7 | | 2022 | Q | 8.1 | 9.1 | 9.7 | | 2023 | Q1 | 4.5 | 8.0 | 7.0 | | 2023 | Q2 | 4.6 | 3.3 | 5.2 | | 2023 | Q3 | 1.9 | 0.0 | 2.8 | | 2023 | Q4 | 4.1 | -1.0 | 1.2 | | 2024 | Q1 | 3.4 | -0.4 | 1.9 | | 2024 | Q | 2.5 | 2.5 | 2.0 | | 2024 | Q3 | 2.5 | 3.2 | 1.9 | | 2024 | Q4 | 1.8 | 3.4 | 2.7 | Inflation Caribbean Netherlands | Jaar | Kwartaal | Bonaire (year-on-year % change, CPI) | St Eustatius (year-on-year % change, CPI) | Saba (year-on-year % change, CPI) | | --- | --- | --- | --- | --- | | 2015 | Q1 | -0.6 | -1.1 | 1.5 | | 2015 | Q2 | -0.9 | -1.7 | 0.9 | | 2015 | Q3 | -0.9 | -0.5 | -0.4 | | 2015 | Q4 | -1.2 | -0.7 | -0.1 | | 2016 | Q1 | 0.5 | 0.4 | 0.3 | | 2016 | Q2 | 0.4 | -0.1 | 0.0 | | 2016 | Q3 | 0.6 | -0.9 | 0.2 | | 2016 | Q4 | 0.5 | 0.2 | -0.3 | | 2017 | Q1 | 0.1 | 1.1 | -1.0 | | 2017 | Q2 | 0.4 | 2.6 | -1.0 | | 2017 | Q3 | 0.6 | 2.1 | -1.3 | | 2017 | Q4 | 1.2 | 1.8 | 2.5 | | 2018 | Q1 | 3.9 | 2.0 | 2.9 | | 2018 | Q2 | 3.0 | 1.2 | 3.2 | | 2018 | Q3 | 3.5 | 1.1 | 4.4 | | 2018 | Q4 | 3.4 | 1.1 | 0.0 | | 2019 | Q1 | 0.7 | 0.7 | 0.6 | | 2019 | Q2 | 1.1 | 0.4 | 0.5 | | 2019 | Q3 | 1.2 | 0.7 | 0.3 | | 2019 | Q4 | 2.2 | 1.0 | 0.8 | | 2020 | Q1 | 1.0 | 1.2 | 0.4 | | 2020 | Q2 | -1.0 | -0.8 | -0.8 | | 2020 | Q3 | -4.8 | -3.3 | -1.6 | | 2020 | Q4 | -5.2 | -3.2 | -0.8 | | 2021 | Q1 | -3.2 | -4.1 | -1.3 | | 2021 | Q2 | 0.3 | -1.2 | 1.0 | | 2021 | Q3 | 4.3 | 2.4 | 3.2 | | 2021 | Q4 | 5.7 | 2.7 | 4.0 | | 2022 | Q1 | 9.2 | 4.9 | 6.7 | | 2022 | Q2 | 9.4 | 7.7 | 8.2 | | 2022 | Q3 | 12.2 | 9.0 | 9.7 | | 2022 | Q | 8.1 | 9.1 | 9.7 | | 2023 | Q1 | 4.5 | 8.0 | 7.0 | | 2023 | Q2 | 4.6 | 3.3 | 5.2 | | 2023 | Q3 | 1.9 | 0.0 | 2.8 | | 2023 | Q4 | 4.1 | -1.0 | 1.2 | | 2024 | Q1 | 3.4 | -0.4 | 1.9 | | 2024 | Q | 2.5 | 2.5 | 2.0 | | 2024 | Q3 | 2.5 | 3.2 | 1.9 | | 2024 | Q4 | 1.8 | 3.4 | 2.7 | ## Prices on Bonaire 0.5 percent lower than in Q3 Prices on Bonaire fell by 0.5 percent in Q4 relative to Q3. This decline was driven in part by transport costs; airline tickets were 8.5 percent cheaper and prices for petrol fell by 6.1 percent compared with the third quarter. Clothing and footwear also fell in price by 1.9 percent. However, prices for health products rose by 1.8 percent compared with Q3. ## Prices on St Eustatius up by 1.0 percent on Q3 On St Eustatius, consumer prices rose by 0.1 percent compared with Q3. Food products were 1.7 percent more expensive; prices for fresh fruit and vegetables also increased. Prices for petrol and diesel remained stable in Q4 compared with the previous quarter. Price increases were held back by several product groups: prices for airline tickets fell by 3.7 percent from Q3, and clothing and footwear were 1.1 percent cheaper in Q4. ## Prices on Saba up by 0.2 percent on previous quarter On Saba, prices rose by 0.2 percent in Q4 relative to Q3 2024. Prices for food products and beverages rose by 3.0 percent relative to the previous quarter. Fresh fruit and vegetables also rose in price, but prices for petrol, health products and toiletries fell in Q4 204. For example, the price of petrol fell by 5.2 percent from Q3. Consumer price index (CPI) Caribbean Netherlands | Jaar | Kwartaal | Bonaire (2017 = 100) | St Eustatius (2017 = 100) | Saba (2017 = 100) | | --- | --- | --- | --- | --- | | 2015 | Q1 | 98.8 | 97.6 | 100.1 | | 2015 | Q2 | 98.9 | 97.7 | 100.6 | | 2015 | Q3 | 99.1 | 99.2 | 100 | | 2015 | Q4 | 98.8 | 98.4 | 100.1 | | 2016 | Q1 | 99.4 | 98 | 100.4 | | 2016 | Q2 | 99.3 | 97.6 | 100.6 | | 2016 | Q3 | 99.7 | 98.3 | 100.2 | | 2016 | Q4 | 99.3 | 98.7 | 99.8 | | 2017 | Q1 | 99.5 | 99 | 99.4 | | 2017 | Q2 | 99.8 | 100.1 | 99.6 | | 2017 | Q3 | 100.4 | 100.4 | 98.9 | | 2017 | Q4 | 100.4 | 100.5 | 102.1 | | 2018 | Q1 | 103.3 | 101 | 102.3 | | 2018 | Q2 | 102.8 | 101.4 | 102.8 | | 2018 | Q3 | 103.9 | 101.5 | 103.3 | | 2018 | Q4 | 103.8 | 101.6 | 102.2 | | 2019 | Q1 | 104.0 | 101.8 | 102.9 | | 2019 | Q2 | 103.9 | 101.8 | 103.2 | | 2019 | Q3 | 105.1 | 102.2 | 103.6 | | 2019 | Q4 | 106.1 | 102.6 | 103 | | 2020 | Q1 | 105.0 | 103.0 | 103.3 | | 2020 | Q2 | 102.9 | 100.9 | 102.4 | | 2020 | Q3 | 100.1 | 98.8 | 101.9 | | 2020 | Q4 | 100.6 | 99.3 | 102.2 | | 2021 | Q1 | 101.6 | 98.7 | 102.0 | | 2021 | Q2 | 103.3 | 99.6 | 103.5 | | 2021 | Q3 | 104.4 | 101.2 | 105.2 | | 2021 | Q4 | 106.3 | 102.0 | 106.2 | | 2022 | Q1 | 111.0 | 103.6 | 108.8 | | 2022 | Q2 | 112.9 | 107.3 | 111.9 | | 2022 | Q3 | 117.2 | 110.3 | 115.5 | | 2022 | Q4 | 115.0 | 111.3 | 116.5 | | 2023 | Q1 | 116.0 | 111.8 | 116.5 | | 2023 | Q2 | 118.2 | 110.9 | 117.7 | | 2023 | Q3 | 119.4 | 110.3 | 118.7 | | 2023 | Q4 | 119.7 | 110.2 | 117.9 | | 2024 | Q1 | 119.9 | 111.4 | 118.7 | | 2024 | Q2 | 121.2 | 113.6 | 120.1 | | 2024 | Q3 | 122.5 | 113.8 | 120.9 | | 2024 | Q4 | 121.8 | 114.0 | 121.2 | | 2024 | | | | | Consumer price index (CPI) Caribbean Netherlands | Jaar | Kwartaal | Bonaire (2017 = 100) | St Eustatius (2017 = 100) | Saba (2017 = 100) | | --- | --- | --- | --- | --- | | 2015 | Q1 | 98.8 | 97.6 | 100.1 | | 2015 | Q2 | 98.9 | 97.7 | 100.6 | | 2015 | Q3 | 99.1 | 99.2 | 100 | | 2015 | Q4 | 98.8 | 98.4 | 100.1 | | 2016 | Q1 | 99.4 | 98 | 100.4 | | 2016 | Q2 | 99.3 | 97.6 | 100.6 | | 2016 | Q3 | 99.7 | 98.3 | 100.2 | | 2016 | Q4 | 99.3 | 98.7 | 99.8 | | 2017 | Q1 | 99.5 | 99 | 99.4 | | 2017 | Q2 | 99.8 | 100.1 | 99.6 | | 2017 | Q3 | 100.4 | 100.4 | 98.9 | | 2017 | Q4 | 100.4 | 100.5 | 102.1 | | 2018 | Q1 | 103.3 | 101 | 102.3 | | 2018 | Q2 | 102.8 | 101.4 | 102.8 | | 2018 | Q3 | 103.9 | 101.5 | 103.3 | | 2018 | Q4 | 103.8 | 101.6 | 102.2 | | 2019 | Q1 | 104.0 | 101.8 | 102.9 | | 2019 | Q2 | 103.9 | 101.8 | 103.2 | | 2019 | Q3 | 105.1 | 102.2 | 103.6 | | 2019 | Q4 | 106.1 | 102.6 | 103 | | 2020 | Q1 | 105.0 | 103.0 | 103.3 | | 2020 | Q2 | 102.9 | 100.9 | 102.4 | | 2020 | Q3 | 100.1 | 98.8 | 101.9 | | 2020 | Q4 | 100.6 | 99.3 | 102.2 | | 2021 | Q1 | 101.6 | 98.7 | 102.0 | | 2021 | Q2 | 103.3 | 99.6 | 103.5 | | 2021 | Q3 | 104.4 | 101.2 | 105.2 | | 2021 | Q4 | 106.3 | 102.0 | 106.2 | | 2022 | Q1 | 111.0 | 103.6 | 108.8 | | 2022 | Q2 | 112.9 | 107.3 | 111.9 | | 2022 | Q3 | 117.2 | 110.3 | 115.5 | | 2022 | Q4 | 115.0 | 111.3 | 116.5 | | 2023 | Q1 | 116.0 | 111.8 | 116.5 | | 2023 | Q2 | 118.2 | 110.9 | 117.7 | | 2023 | Q3 | 119.4 | 110.3 | 118.7 | | 2023 | Q4 | 119.7 | 110.2 | 117.9 | | 2024 | Q1 | 119.9 | 111.4 | 118.7 | | 2024 | Q2 | 121.2 | 113.6 | 120.1 | | 2024 | Q3 | 122.5 | 113.8 | 120.9 | | 2024 | Q4 | 121.8 | 114.0 | 121.2 | | 2024 | | | | | ## Average price change in 2024 In 2024, Bonaire saw annual average price levels increase by 2.6 percent on the previous year. The year-on-year increase was 2.2 percent on St Eustatius and 2.1 percent on Saba. On all three islands, this was related to higher prices for food products, transport and accommodation and food services. On Bonaire, health-related products and services became more expensive. St Eustatius saw a price increase in housing, water and energy, while Saba saw an increase in prices for education. ## Provisional figures The provisional figures over Q3 2024 for St Eustatius have been adjusted on the basis of new data. Figures over Q4 2024 and therefore also the annual figures over 2024 are provisional. They will become definitive upon publication of the figures over Q1 2025. ## Papiamentu A Papiamentu translation of this news release can be obtained from Statistics Netherlands’ office on Bonaire by sending a request by email to: caribischnederland@cbs.nl ## Sources - StatLine - Caribbean Netherlands; CPI

Consumer Price Index (CPI) Monthly Bulletins — Statistical Office, Government of Saint Vincent and the Grenadines ## 2026 - Consumer Price Index for April, 2026 (PDF – 1 MB) - Consumer Price Index for March, 2026 (PDF – 1 MB) - Consumer Price Index for February, 2026 (PDF – 1 MB) - Consumer Price Index for January, 2026 (PDF – 1 MB) ## 2025 - Consumer Price Index for December, 2025 (PDF – 1667 KB) - Consumer Price Index for November, 2025 (PDF – 997 KB) - Consumer Price Index for October, 2025 (PDF – 988 KB) - Consumer Price Index for September, 2025 (PDF – 1,018 KB) - Consumer Price Index for August, 2025 (PDF – 978 KB) - Consumer Price Index for July, 2025 (PDF – 1,031 KB) - Consumer Price Index for June, 2025 (PDF – 972 KB) - Consumer Price Index for May, 2025 (PDF – 958 KB) - Consumer Price Index for April, 2025 (PDF – 981 KB) - Consumer Price Index for March, 2025 (PDF – 877 KB) - Consumer Price Index for February, 2025 (PDF – 879 KB) - Consumer Price Index for January, 2025 (PDF – 919 KB) ## 2024 - Consumer Price Index for December, 2024 (PDF – 970 KB) - Consumer Price Index for November, 2024 (PDF – 597 KB) - Consumer Price Index for October, 2024 (PDF – 601 KB) - Consumer Price Index for September, 2024 (PDF – 629 KB) - Consumer Price Index for August, 2024 (PDF – 568 KB) - Consumer Price Index for July, 2024 (PDF – 613 KB) - Consumer Price Index for June, 2024 (PDF – 1 MB) - Consumer Price Index for May, 2024 (PDF – 523 KB) - Consumer Price Index for April, 2024 (PDF – 537 KB) - Consumer Price Index for March, 2024 (PDF – 515 KB) - Consumer Price Index for February, 2024 (PDF – 529 KB) - Consumer Price Index for January, 2024 (PDF – 521 KB) ## 2023 - Consumer Price Index for December, 2023 (PDF – 763 KB) - Consumer Price Index for November, 2023 (PDF – 521 KB) - Consumer Price Index for October, 2023 (PDF – 521 KB) - Consumer Price Index for September, 2023 (PDF – 545 KB) - Consumer Price Index for August, 2023 (PDF – 746 KB) - Consumer Price Index for July, 2023 (PDF – 734 KB) - Consumer Price Index for June, 2023 (PDF – 749 KB) - Consumer Price Index for May, 2023 (PDF – 743 KB) - Consumer Price Index for April, 2023 (PDF – 764 KB) - Consumer Price Index for March, 2023 (PDF – 764 KB) - Consumer Price Index for February, 2023 (PDF – 685 KB) - Consumer Price Index for January, 2023 (PDF – 728 KB) ## 2022 - Consumer Price Index for December, 2022 (PDF – 1 MB) - Consumer Price Index for November, 2022 (PDF – 709 KB) - Consumer Price Index for October, 2022 (PDF – 715 KB) - Consumer Price Index for September, 2022 (PDF – 706 KB) - Consumer Price Index for August, 2022 (PDF – 711 KB) - Consumer Price Index for July, 2022 (PDF – 1 MB) - Consumer Price Index for June, 2022 (PDF – 704 KB) - Consumer Price Index for May, 2022 (PDF – 704 KB) - Consumer Price Index for April, 2022 (PDF – 706 KB) - Consumer Price Index for March, 2022 (PDF – 706 KB) - Consumer Price Index for February, 2022 (PDF – 678 KB) - Consumer Price Index for January, 2022 (PDF – 713 KB) ## 2021 - Consumer Price Index for December, 2021 (PDF – 1 MB) - Consumer Price Index for November, 2021 (PDF – 613 KB) - Consumer Price Index for October, 2021 (PDF – 667 KB) - Consumer Price Index for September, 2021 (PDF – 649 KB) - Consumer Price Index for August, 2021 (PDF – 625 KB) - Consumer Price Index for July, 2021 (PDF – 595 KB) - Consumer Price Index for June, 2021 (PDF – 701 KB) - Consumer Price Index for May, 2021 (PDF – 612 KB) - Consumer Price Index for April, 2021 (PDF – 660 KB) - Consumer Price Index for March, 2021 (PDF – 1 MB) - Consumer Price Index for February, 2021 (PDF – 687 KB) - Consumer Price Index for January, 2021 (PDF – 664 KB) ## 2020 - Consumer Price Index for December, 2020 (PDF – 1010 KB) - Consumer Price Index for November, 2020 (PDF – 668 KB) - Consumer Price Index for October, 2020 (PDF – 2 MB) - Consumer Price Index for September, 2020 (PDF – 703 KB) - Consumer Price Index for August, 2020 (PDF – 761 KB) - Consumer Price Index for July, 2020 (PDF – 2 MB) - Consumer Price Index for June, 2020 (PDF – 2 MB) - Consumer Price Index for May, 2020 (PDF – 746 KB) - Consumer Price Index for April, 2020 (PDF – 791 KB) - Consumer Price Index for March, 2020 (PDF – 1 MB) - Consumer Price Index for February, 2020 (PDF – 558 KB) - Consumer Price Index for January, 2020 (PDF – 1 MB) ## Older - Consumer Price Index for December, 2019 (PDF – 1 MB) - Consumer Price Index for December, 2018 (PDF – 1982 KB) - Consumer Price Index for December, 2017 (PDF – 886 KB) - Consumer Price Index for December, 2016 (PDF – 690 KB) - Consumer Price Index for December, 2015 (PDF – 774 KB) - Consumer Price Index for December, 2014 (PDF – 851 KB) - Consumer Price Index for December, 2013 (PDF – 957 KB) - Consumer Price Index for December, 2012 (PDF – 1445 KB)

Gov't launches financial literacy programme for primary schools - Anguilla Focus | News Skip to content 18/11/2024 11/01/2025 Rebecca Bird Several Eastern Caribbean dollar notes. (Anguilla Focus/2024) The Department of Education has launched a financial literacy programme for primary school students to give them the skills to make informed decisions about their money. It is being delivered through the virtual family banking app, My First Nest Egg, which offers quick daily lessons to help children build a strong financial foundation. The programme was launched on Thursday, 14 November, at the Teachers’ Resource Centre in The Valley with speeches, a demonstration of the app, and a question and answer session. Chief education officer Bren Romney told attendees the initiative marks a significant step in equipping students with the knowledge and skills they need to succeed in the 21st century. "Financial literacy is not just about numbers and budgets, it is about empowering individuals to make informed decisions about their money," he said. "By introducing these concepts at an early age, we are laying the foundation for a future generation of financially responsible citizens." He said the programme will provide pupils with an understanding of basic financial concepts such as saving, spending and investing, as well as positive money habits like budgeting and avoiding debt. Romney said the programme will be piloted over the coming weeks then rolled out across all government primary schools in term two. "We believe that by fostering financial literacy in our young learners, we are investing in their future success," he said. Invest and thrive Dee-Ann Kentish-Rogers, Minister of Education and Social Development, told attendees the Ministry of Education has been trying for a "very, very long time" to incorporate financial literacy education in schools. She said the partnership with My First Nest Egg has now provided the government with platform to roll out a programme. It will begin in primary schools, the minister said, but will eventually be moved to secondary schools across Anguilla as well. She explained that young people develop their financial habits at home and often do not have the opportunity to develop positive habits through education. "This programme is intended as an early intervention to equip young students with the ability to understand what is saving, what is managing your expenditure, and also what is investing," she said. "So that we're equipping the next generation of young persons with the skills not only to survive, to balance budgets, but also to invest and to thrive." Annie Shoen, co-founder of My First Nest Egg, said she is very excited to be rolling out the app with teachers and students in Anguilla. She said she and her business partner founded the company because they have "a passion for giving every single child a secure financial future". Shoen encouraged teachers to speak to the founders if they see something that they would like expanded, or working materials they would like included, on the online platform. "Our goal is to support you all. You are on the front lines. You are doing the work. We are here to support you, and however we can support you, is what we want to do," she said. Financial partner Liberty Co-operative Cooperative Credit Union offered itself as the government's long-term financial partner in providing the platform, training and the roll-out. Managing director Vanessa Connor explained that the organisation had initially planned to use the app to educate its customers, but realised there was potential for a wider reach. "We've been embarking on a plan to ensure that every member is aware of the importance of financial empowerment, financial literacy," she said. "We wanted to see how we could get this to the very young, and when I reached out to My First Nest Egg, it was basically for us to launch this as a programme within Liberty. "But after having gone through a couple of the discussions with them and understanding their mission… we felt as though it needed to be a much further impact than just within Liberty's membership." She said she contacted the education minister who embraced the idea and said that it was also a passion of hers, so it became part of a larger plan for the government's schools. Liberty Co-operative Cooperative Credit Union was established in Anguilla in 2017 and now has about 4,000 members. The event included prayer, the national anthem and a rendition of the national song performed by members of Orealia Kelly Primary School. To watch the launch in full click here . Related Posts A new board of governors has been appointed to the Albena Lake-Hodge Comprehensive School for a three-year term. The board… Orealia Kelly, a remarkable woman revered as a "pioneer in primary education", who died recently aged 93, will be celebrated… The Department of Education hosted a three-day workshop this week to review and update the behaviour management plan for primary… Latest News View All Politics Top Stories 'There's room for us': Premier pledges to revive Anguilla's financial services sector Rebecca Bird 15/10/2026 Headline News Politics Anguilla opens .ai domain registration to non-Latin script writing systems Rebecca Bird 15/10/2026 15/10/2026 Health Top Stories Anguilla develops national school nutrition policy to combat childhood obesity Rebecca Bird 15/10/2026 Development Top Stories Contractors sought to remove remains of former Blowing Point dolphinarium Rebecca Bird 14/10/2026 14/10/2026 Health Top Stories ‘A top priority’: Government to invest more than US$500,000 in a mobile dental unit Rebecca Bird 14/10/2026 14/10/2026 Headline News Tourism Anguilla named Caribbean’s leading culinary and luxury island destination News Team 14/10/2026

### Contents I. Overview ... 3 II. Current Literacy Programs ... 4 A. Barbados ... 4 B. Dominica ... 5 C. St. Kitts and Nevis ... 5 D. St. Vincent and Grenadines ... 5 E. Regional ... 6 F. International ... 8 References and Further Reading ... 10 III. Access to Finance Resources ... 11 A. Financing for Women-Owned Firms ... 11 1. International Initiatives ... 11 2. Regional Initiatives ... 12 B. Financing for MSMEs ... 13 1. International Organizations ... 13 2. Regional Initiatives ... 14 3. Government Initiatives ... 15 4. Regional and National Development Banks ... 21 5. Credit Unions and Commercial Banks ... 24 ## I. Overview In recent years, the importance of financial literacy and access to finance has been increasingly recognized as a crucial factor in the success and sustainability of Micro, Small, and Medium Enterprises (MSMEs). This is particularly true for women-led and owned businesses in the Eastern Caribbean, where unique challenges and barriers often hinder their growth and financial independence. This compilation document serves as a comprehensive guide designed specifically for women entrepreneurs in the Eastern Caribbean, providing valuable insights into financial literacy programs and access to finance resources. The programs included in this guide have been validated by MSME authorities across six Eastern Caribbean countries, ensuring that the information is representative of the available programs and opportunities. Financial literacy training in the Eastern Caribbean is a fairly new phenomenon, with only a few programs in existence and some in the developmental stage. Therefore, some of the references below are drawn from the wider Caribbean and online programs developed in the United States. By leveraging the knowledge and resources provided in this vital resource, women-led MSMEs can enhance their financial capabilities, access critical funding, and contribute to the economic development of their communities. ## II. Current Literacy Programs ### A. Barbados a) Emotional Support for Entrepreneurs: Barbados Aims to Stamp out Financial Illiteracy”. St Kitts and Nevis Observer. November 4, 2020. The Government of Barbados (Ministry of Energy, Small Business and Entrepreneurship), with the support of the Small Business Association, the Barbados Chamber of Commerce and the financial sector has launched a Financial Literacy Bureau to address the issue of financial literacy among MSMEs and the public. The Financial Literacy Bureau program, Making Sense of Your Dollars, was launched in 2020 to support the development of micro and small businesses and increase growth in the economy by continuing to improve the financial education skills of entrepreneurs across Barbados. b) Money Smart is the Central Bank of Barbados’ digital financial literacy program. The material is presented in multiple formats, such as, videos, infographics, and blog articles. There is an advice column, “Ask the Expert,” where readers can submit their questions on the website and have them answered. Additionally, radio, newspapers, and other traditional media are used to disseminate financial literacy information. Overall, the program focuses on saving and budgeting, borrowing, investing, planning for retirement, and protecting individuals from falling victim to scams and financial fraud. c) Barbados Public Workers’ Co-operative Credit Union Ltd. The Financial Education Unit. The Financial Education Unit provides direct face-to-face service to credit union members and assists them in setting and attaining financial goals to achieve economic stability. The Unit also provides confidential, individual assistance to members in financial difficulty and will develop a financial plan tailor-made to each individual’s needs.” Financial Education sessions are free and by appointment only. ### B. Dominica a) Ministry of Commerce, Enterprise and Small Business Development (MCESBD) Dominica. The Small Business Assistance Program under the Ministry provides training for clients in micro and small business development via organized training workshops. This training includes record-keeping, marketing, customer service, basic accounting, business management, time management, financial management and personal development. b) National Development Foundation (NDFD) in Dominica offers: a) Training in small business management; and b) Technical training including accounting, record-keeping, customer service, management, etc. Other technical assistance includes help with tax and social security forms, business plan preparation, and advice. ### C. St. Kitts and Nevis Ministry of Small Business Enterprise, Entrepreneurship and Cooperatives. The Ministry offers a comprehensive range of business management skills training designed to empower MSMEs and promote sustainable growth. These training sessions cover essential areas such as record-keeping, bookkeeping, guidance on assessing grants, and the importance of tax compliance. A key component of the training also includes the use of financial digital tools. Entrepreneurs are introduced to various digital platforms and software to streamline record-keeping, bookkeeping, and financial management. ### D. St. Vincent and Grenadines Center for Enterprise Development Inc. (CED) supports the Micro, Small and Medium Enterprises (MSME) sector by undertaking business development and institutional strengthening initiatives, advocacy, training and education. Training is offered in the form of physical and virtual classroom sessions and business clinics on topics such as Financial Literacy, Financial Management (i.e. Recordkeeping, Costing and Pricing, Business Plan Writing, Financial Statement Analysis, Budgeting). Financial Literacy education is also offered through CED’s newletter, ‘Enterprise Focus’ and Business Guides, which are also available on the company’s website: https://ced.gov.vc/. ### E. Regional a) Academy for Women Entrepreneurs (AWE). U.S. Department of State WHA/ U.S., Embassy to Barbados, the Eastern Caribbean and the OECS. Implemented in 2019 by the U.S. Department of States’ Bureau of Educational and Cultural Affairs (ECA), AWE supports women’s social and economic empowerment by providing women with the knowledge, networks, and the access they need to launch or scale successful businesses. In this model, cohorts of approximately 30 women meet online and in-person to learn core business skills such as strategic planning, marketing, and finance. They then discuss the material with local facilitators, business leaders, and U.S. exchange alumni or mentors. In 2024, the Embassy put out a call for proposals for eligible institutions to implement an AWE in Antigua Barbuda, St. Kitts Nevis and Grenada. b) Eastern Caribbean Central Bank – ECB Connects. The Bank produces videos on various projects which the Bank has undertaken including financial literacy on topics such as “applying for a small business loan,” “Family Financial Planning,” “Achieving your goals through Financial Planning,” Tips for Balancing Savings and spending,” “Improving the Ease of Opening a Bank Account” and “Good financial behavior.” The St. Kitts and Nevis government, through it’s Financial Education and Savings Taskforce collaborates with ECB-Connect to educate its entrepreneurs. c) CARICHAM's Center of Excellence, Financial Management Resource Hub. The financial management resource is a subset of a wider business resilience resource hub to support Caribbean SMEs. The Center’s resources includes templates, checklists and short videos on the various aspects of business including financial management. d) Financial Literacy and Training. (Course: COCR 1013). University of the West Indies, Trinidad & Tobago. As stated in the course description, the “Financial Literacy and Training Course is a comprehensive financial education curriculum designed to enhance students’ financial skills as well as train them to be financial educators to low- and moderate- income individuals and families outside the financial mainstream. This course is geared towards educating and training UWI students, equipping them with the knowledge and tools to manage their own finances as well teach others how to do the same.” In this course students participate in several workshops covering a range of topics, including budgeting, saving, investing, retirement and much more. Additionally, students are taught the necessary skills to effectively communicate and present the course material to others. e) Entrepreneurs Business Builder Program (EBB) by Business People Development Associates Ltd. The Program is designed to provide women entrepreneurs with the confidence, knowledge and skills needed to run a sustainable technology enabled 21 st century profitable business. The program includes knowledge sharing as well as practical application of the financial education tools and knowledge gained in the participants’ businesses. Some of the focus areas include developing personal and business budgets, strategic planning, goal setting, marketing & sales, operations, team development and developing a CEO mindset. ### F. International a) OECD. Recommendation of the Council on Financial Literacy. This is the OECD’s Legal document outlining the recommendations of the Council on Principles and Good Practices for Financial Education and Awareness. The OECD recognizes the importance of, and the need for the development of robust financial education programs that combine financial awareness, knowledge, skills, attitudes and behaviors necessary to make sound financial decisions and ultimately achieve individual financial well-being. The Council recommendations include: (i) The development of national strategies for financial literacy (ii) Financial literacy for the various sectors of the economic landscape including women and SMES (iii) Best practices for effective delivery of financial literacy programs. b) INTUIT. “Building Financial Confidence with free Educational Resources” is a flexible financial literacy program that uses real world tools to learn about finances and build financial confidence. INTUIT provides free access to the tool, however the user must set up a personal account. The Entrepreneurial Finance Unit has a curriculum designed to teach the skills on how to run or start a business. It covers financial planning, fund-raising, and how to value a business when the time comes for an exit strategy. c) Fernando, Jason, 2024. “Financial Literacy: What It Is and Why It Is so Important to Teach Teens.” - Investopedia. This is a useful resource that explains the key concepts of financial literacy and the importance of being educated about money management. d) Financial Literacy Resource Center. Investopedia. This free resource hub from Investopedia breaks down the jargon making it easier to teach financial literacy to the next generation. Included are downloadable lesson plans for elementary school children as well as teen-focused content. e) Capital One & Khan Academy’s Financial Literacy Program. The Khan Academy Financial Literacy course is self-paced and completely free. The course is made up of multiple units, each with its own lessons, covering topics like budgeting, saving, credit, investments, insurance, taxes, scams, fraud and more. f) Small Business Administration (SBA). Provides financial educational resources and support to small business entrepreneurs that lay the groundwork to launch a new business idea. Two open-source programs available are: (i) Money Smart for Small Business - A toolkit that provides an introduction to small business management topics (ii) Business Smart Toolkit. The Toolkit developed in 3 modules focuses on: • Basics of starting a business • Essentials of becoming credit-ready • How and where to find additional small business support and educational resources ### References and Further Reading Eastern Caribbean Central Bank. The ECCU’s Financial Literacy and Financial Inclusion: Report on Survey Results, 2022/2023.” Vol. 1. This ECCU report consists of a general overview of financial literacy in the Eastern Caribbean. A more detailed description of financial literacy and inclusion in the ECCU with country-specific examples are also presented. Beuermann, D.W., Frisancho V., Alvarez L. G. 2020. “Financial Literacy in the Caribbean: The Case of Barbados.” IDB Research Department blog. October 7, 2020. Report on the status and impact of financial literacy in Barbados during the COVID-19 epidemic. “5 Key Principles of Financial Literacy for Mindful Entrepreneurs.” Big Idea Center, University of Pittsburgh. April 2024. Provides a brief overview of the 5 principles of financial literacy – i.e. earn, spend, save and invest, borrow and protect. ## III. Access to Finance Resources An ongoing challenge cited by small and medium size businesses in the Caribbean, and by women-owned businesses in particular, is access to finance. Lack of financing constrains business growth and hampers the ability to scale. Part of the issue is not knowing what financing options are available and the programs being offered. This section will identify some of these funding options. ### A. Financing for Women-Owned Firms 1. International Initiatives a) Women Entrepreneurs Finance Initiative (We-Fi) is an international alliance that aims to unlock financing and access to markets for companies owned or led by women. Finance from We-Fi, and IDB Invest provided performance based incentives and advisory services to help Banco Promerica in the Dominican Republic grow its portfolio of women-led SMEs. Initiatives like this can provide a model for future programs seeking to expand access to credit for women. b) Cherie Blair Foundation for Women offers programs that address the specific barriers that women entrepreneurs face. “The programs support women to build knowledge, skills, confidence, and access to resources through tried and-tested training, mentoring and networking opportunities.” (i) The Program Road to Finance sponsored by the Foundation provides women entrepreneurs with the skills and knowledge to unlock the finances they need. The training gives women entrepreneurs: • The ability to identify and assess their current business situation • An understanding of what business financing options exist, and how to assess what is needed for their business • Knowledge of how to develop a financial plan and related documents to get the best financing • Key skills and strategies needed to develop and deliver a successful investment pitch • The ability to negotiate with a potential lender or investor • Increased business confidence • Boosted professional networks • Direct linkages to financial services (ii) Mentoring Women in Business launched by the Foundation, offers a one-on-one online mentoring program that facilitates mentor and mentee to: • Conduct video calls and share direct messages • Track goals and manage tasks efficiently • Upload and review files and documents • Monitor and analyse their progress • Easily track their individual learning • Stay in touch with the Cherie Blair foundation support team. c) The Bankability Fund is a financing mechanism developed by ActionINVEST Caribbean Inc. (ACI) in collaboration with the Cherie Blair Foundation for Women (CBFW) and the Inter-American Development Bank – IDB Lab. It aims to support women entrepreneurs in Guyana by providing equity finance to help them grow their businesses. d) Women’s Economic Empowerment and Gender Equality. Small Enterprise Assistance Fund’s (SEAF) gender strategy is to invest in companies in certain sectors where gender bias is particularly present, such that they provide good opportunities to invest and benefit women. SEAF recognizes that there are attractive investment possibilities in women led and owned businesses. ### 2. Regional Initiatives a) Caribbean Development Bank: She Trades Caribbean. The SheTrades initiative supports women-owned businesses that are exporting across all sectors. The SheTrades Hub is an online resource centre for women entrepreneurs in the region providing access for: (i) Technical training and capacity-building (ii) Networking, mentoring and coaching (iii) Market access and investment opportunities ### B. Financing for MSMEs 1. International Organizations a) UNCDF Eastern Caribbean - “Leveraging Digital Finance for Financial Resilience” The United Nations Capital Development Fund (UNCDF) Digital Finance for Resilience Program for the Eastern Caribbean is funded by the European Union (EU) and implemented by UNCDF. The Program provides support to policymakers and private sector players across Trinidad and Tobago and the OECS states. The program aims to support and accelerate the deployment of digital finance solutions that reduce poverty and deepen financial inclusion, accelerate economic recovery from COVID-19 and increase resilience. It operates by offering: (i) Technical assistance and policy advisory for financial inclusion. (ii) Blended finance to scale innovations in digital finance for inclusion. (iii) Digital finance and financial inclusion events and knowledge exchange. b) Taiwan ICDF Project For Assisting The Economic Empowerment of Women In Latin America and The Caribbean in the Post Pandemic Era. Women Empowerment Entrpreneurship Financial Inclusion Project (WEEFIP). The Project provides financial assistance support for micro-enterprises and women entrepreneurs, combining credit guarantee mechanism and capacity building. The project also provides: Institutional function enhancement; Vocational skills training for women; Counseling for women’s entrepreneurship and development counselling for MSMEs ### 2. Regional Initiatives a) Caribbean Export: Fashion Accelerator. This program focuses on improving access to market by regional designers. The accelerator program prepares regional designers for the international market and facilitates the implementation of a go-to market strategy for selected designers. b) Eastern Caribbean Partial Credit Guarantee Program (ECPCGC). The ECPCGC facilitates additional financial intermediation for Micro, Small and Medium Enterprises (MSMEs). The ECPCGC works through the financial institutions, which are commercial banks, credit unions and development banks located in the member states: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. A Credit Guarantee Product requires a tripartite arrangement involving a borrower, a lender (Financial Institution) and a guarantor. Because SMEs (the borrower) usually lack the collateral required to obtain financing from the lender, ECPCGC, as the guarantor provides a commitment to the lender and pledges to provide the missing collateral up to a certain maximum. In the event of default on the loan, the guarantor pays the lender the unpaid portion of the loan, subject to the terms and conditions. b) Small Enterprise Assistance Funds (SEAF) - Caribbean SME Growth Fund (SEAF) is a private equity investment management group that provides growth capital and business assistance to small and medium enterprises (SMEs) in emerging markets underserved by traditional sources of capital. SEAF seeks to build successful businesses that realize both attractive returns for our investors and a measurable development impact in local communities. ### 3. Government Initiatives Antigua and Barbuda The Prime Minister’s Entrepreneurial Development Programme (EDP) provides low cost financing to new and existing business; offers general support to existing business; and provides training to managers and team members. Priority areas include: Agriculture and Agro-processing, Manufacturing, Information Technology, Innovative Internet-based Businesses and Tourism and Related Services. Dominica a) Ministry of Commerce, Enterprise an

## Marion Williams: Launch of the National Financial Education Programme in Barbados Welcome remarks by Dr Marion Williams, Governor of the Central Bank of Barbados, at the Launch of the National Financial Education Programme, Bridgetown, 31 August 2009. * * * The Honourable David Thompson, Prime Minister, Minister of Finance and Investment, Labour, Civil Service and Energy; Permanent Secretaries, members of the Board of Directors of the Central Bank of Barbados, Management and staff of the Bank, representatives of financial institutions and the education sector, members of the National Financial Education Programme Planning Committee; specially invited guests, ladies and gentlemen, good morning and welcome to the launch of the National Financial Education Programme (NFEP). A few years ago at a meeting of the Central Bank Governors of the Commonwealth, it was recommended that central banks should take steps to enhance financial literacy in their jurisdictions. At the time, of the central banks in the Caribbean only the Central Bank of Trinidad and Tobago had an active literacy programme. The Central Bank of Barbados took steps to make this a reality in Barbados. This National Financial Education Programme initiative is intended to educate individuals and households about how to better manage their personal finances and how to make sound financial decisions that will enhance the quality of their lives which can lead to improvements at the national level. It is therefore a very important occasion for us at the Bank and I hope that every Barbadian will find the programme useful and timely. Throughout our 37-year history, the Bank has considered financial and economic education as a critical aspect of our corporate social responsibility and as a Public Affairs goal. Indeed, education in the areas of economics and finance is part of our raison d’être because we have always believed that the more informed our publics are, the more successful our policies are likely to be. So that over the years, we have hosted seminars and conferences on an array of economic and financial topics, targeting various interest groups. We have also had a vibrant schools education programme geared to educating school children about how the economy works. The National Financial Education Programme, as we have designed it, is consistent with these educational programmes and objectives. Today we are launching the programme under the slogan “All about managing your money”. We hope to impact every citizen with this initiative, but especially the man-in-the street by making this Programme practical. I will give insights first about the programme for the adults. We have designed a programme for employees, Non-Governmental Organisations, community groups and service organizations, using a series of media. We have identified at least six topics that we will be addressing on a phased basis through face-to-face interaction with these groups. We will commence with presentations on Budgeting and Saving. Over the next three (3) to six (6) months, the programme will promote Budgeting and Saving as key elements of proper financial management. We will then review the programme, with a view to tweaking and improving it where necessary before we roll out the other topics. Other topics we hope to address in this phase are: Borrowing and Purchasing a Home, Credit/Debit Cards, Insurance, Retirement Planning and Estate Planning, and Investing and the Stock Market. We believe that this direct intervention will be key to influencing changes in personal financial management and we therefore hope to utilise this medium extensively. We have identified several groups that can possibly benefit from these presentations. However, if you have a group or know of one that might be interested, please contact the Bank. We will seek to accommodate you where ever possible. BIS Review 104/2009 1 In addition to dialoging with you in open fora we intend to use the mass media and the Internet to spread our messages and to inform and educate you. We are also hoping to work with the Ministry of Education to create a programme specially for school children as we believe that financial literacy is better started with the young. We recognize that education about managing personal finances should begin at an early age. Hence, we hope to place considerable emphasis on the programme for children of school age. Let me reiterate that the National Financial Education Programme is not intended to create financial experts, but to help you improve your financial circumstances and assist you in realizing your financial goals: be they purchasing a home, planning for your kids’ education, planning for retirement or insuring your home. It is designed to assist you in improving the financial decisions that affect your everyday lives. Before crafting our programme, we conducted a survey so as to measure whether Barbadians would embrace it. We canvassed about 25 workplaces and we received responses from 250 persons, including the Bank’s staff. The results of the survey show that Barbadians are receptive to the National Financial Education Programme. The respondents felt that education on such areas as Budgeting and Investing, Coping with the Cost of Living, Retirement Planning; Purchasing a Home, Financing a Child’s Education and Credit and Debit Card Management was key. Their responses were consistent with the subject areas on which the Bank will be focusing in the coming months. On behalf of the organizing Committee, I thank persons who so kindly participated in the survey. Let me add, however, that while there is no one particular topic dealing with the cost-of-living, we hope that the overall programme will equip you to better manage this area. The Bank hopes to partner with persons in the financial services and the education sectors to help with the delivery of the National Financial Education Programme. We are therefore inviting commercial banks, the Barbados Stock Exchange, credit unions and other financial entities to come on board to provide technical and other assistance. We have organized a comprehensive sponsorship package. If you are interested in partnering with us and you wish to obtain more details about the partnerships, please contact Ms. Sadie Dixon at the Bank. Additionally, the Committee with responsibility for developing these partnerships may be contacting you. I must add, that while we welcome the participation and involvement of partners we will not be promoting any company’s products and services. The National Financial Education Programme is not about marketing products and services. Educating the populace on matters related to finance and economics is a critical aspect of our mandate, it’s a mandate that we have fulfilled for years, and this programme is yet another initiative in our education campaign. However, as the nomenclature suggests, this programme will be on the national scale and we hope to make all Barbadians financially literate. Those of you who read the newspapers yesterday about the number of bounced cheques will agree that there is need for skills in budgeting. The result of such financial management and decisions can lead to a considerable improvement in financial decision-making. The length of the Programme will depend on its success. The more successful it is, the shorter its duration can be. We trust that the general public will benefit from the Programme. I thank you for listening. 2 BIS Review 104/2009

## Institutional Capacities for Small Business Policy Development in Latin America and the Caribbean #### Pablo Angelelli Rebecca Moudry Juan José Llisterri Inter-American Development Bank Washington, D.C. Sustainable Development Department Technical Papers Series Pablo Angelelli is an enterprise development specialist in the Micro, Small and Medium Enterprise Division of the Sustainable Development Department (SDS/MSM) at the Inter-American Development Bank. Rebecca Moudry is a senior associate in the Advisory Services and Research Department of the International Economic Development Council. Juan José Llisterri is principal enterprise development specialist in SDS/MSM. The authors wish to thank Matías Kulfas, Miguel Cabal, Irma Gutierrez, and Emilio Zeballos for their comments, and Raquel Trigo who provided production assistance. The views and opinions expressed in this report are those of the authors and do not necessarily represent the official position of the Inter-American Development Bank. Permission is granted to reproduce this report, in full or in part, for noncommercial purposes only and with proper attribution to the authors, the Sustainable Development Depart ment, and the Inter-American Development Bank. Publication of the Inter-American Development Bank, December 2006 Manager a.i., Sustainable Development Department: Antonio Vives Chief, Micro, Small and Medium Enterprise Division: Álvaro R. Ramírez This publication (Reference No. MSM-136) can be obtained through: Micro, Small and Medium Enterprise Division Mail Stop B-0600 Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 E-mail: mipyme@iadb.org Fax: 202-623-2307 Website: http://www.iadb.org/sds/mic Cataloging-in-Publication provided by the Inter-American Development Bank Felipe Herrera Library Angelelli, Pablo. Institutional capacities for small business policy development in Latin America and the Caribbean / Pablo Angelelli, Rebecca Moudry, Juan José Llisterri. p.cm. (Sustainable Development Department Technical paper series ; MSM-136) Includes bibliographical references. 1. Small business—Latin America—Government policy. 2. Small business—Caribbean Area—Government pol icy. I. Moudry, Rebecca. II. Llisterri, Juan José. III. Inter-American Development Bank. Sustainable Develop ment Dept. Micro, Small and Medium Enterprise Division. IV. Title. V. Series. 338.642098 A62—dc22 HD2346 .L38A62 2006 ## Foreword Government and private sector interest in micro, small and medium-sized enterprises (MSMEs) has in creased significantly in Latin America and the Caribbean in recent years. MSMEs play a key role in job creation, adding value, and enhancing productivity in the region’s economies. However, they face com petitive challenges resulting from globalization, regional integration, and the revolution in information and communications technologies, as well as from national reform and modernization. The IDB Group has long recognized the importance of MSMEs in the region, as well as the challenges they face. For this reason, the IDB Group has worked together with member states and the private sector to provide the financial and technical resources needed for MSME development. As part of its strategies to promote private sector development and competitiveness, the IDB Group provides support MSMEs through diverse activities, projects, and financial instruments, which can be grouped into four categories: (i) improvement of the business environment, (ii) financial services, (iii) business development services, and (iv) development and dissemination of strategies. This study provides a quantitative description of MSMEs in Latin America and the Caribbean. It high lights the quality of the information available in the region and, in doing so, also identifies gaps in the data. The study also presents a comparative analysis of the capacity of national MSME institutions to support small business development. Based on this assessment, the authors also draw attention to the dis parate levels of institutional capacity in the region. The study recommends the development of an MSME Institutional Learning System to organize and promote the sharing of information among MSME support institutions of all types in the region, and between them and their international counterparts and interna tional development organizations. We hope this report contributes to the dialogue on MSME support policies in Latin America and the Car ibbean, and stimulates an exchange of ideas, information, and best practices. Álvaro R. Ramírez, Chief Micro, Small and Medium Enterprise Division Sustainable Development Department ## Contents Executive Summary i Introduction 1 A Snapshot of the MSME Sector in LAC Economies 3 National Public Policies for Small Business Development 15 Conclusions and Recommendations 31 Bibliography 34 Appendix 1: Statistical Index 36 Appendix 2: MSME Support Institution Survey - Guidelines for the Preparation of the National Report 42 Appendix 3: Support for MSMEs: The Institutional Capacity Index 46 Appendix 4: Overview of MSME Support Programs 48 ## Executive Summary Micro, small, and medium enterprises (MSMEs) in Latin America and the Caribbean (LAC) are the most significant sources of employment across the region. In most countries the private economy is almost entirely comprised of MSMEs. Despite their import, research regard ing trends in the MSME sector and surveys of principal MSME development institutions re veals a lack of quality information about MSMEs and disparate capacity levels of national institutions to coordinate the sector. As a result, public policies to support the sector are not driven by accurate data and input from key co ordinating institutions. Based on a review of available information and analysis of institu tional capacities, this study sets forth recom mendations to enhance the capacity of institu tions whose mandate is to support the MSME sector. This study relies on published research on the MSME sector and surveys of the principal MSME development institutions in up to 17 Latin American countries and one Caribbean country to analyze information regarding MSMEs in the region and the policies that sup port them. The primary objective of the study is to identify weaknesses in the process of develop ing optimum support policies for MSMEs, and to propose opportunities for improvement. Insti tutions that support the MSME sector are con sidered to be at the center of this process in their role overseeing and taking part, either directly or indirectly, in increasing MSME competitiveness through the flow of information into policy. Understanding the MSME sector is a critical first step in designing and implementing opti mum support policies. However, through the course of this study it becomes clear that avail able information in LAC countries is scarce, out of date, and often inconsistent. Many countries do not regularly measure and track MSMEs. En terprise sizes are not uniformly defined across regions, making evaluations and comparisons difficult. And countries rely on distinct data sources (such as economic censuses or surveys) to measure the sector, a minority of which is recognized as extremely comprehensive, reli able, and consistent. As a result, there is little current, accurate, or longitudinal data to inform countries about the condition and needs of the MSME sector. Despite data limitations, this study draws on the most current and comparative information avail able to measure the size and impact of the MSME sector. MSME firms constitute nearly all private sector firms in the region, and employ the majority of private sector workers –well over 70 percent of total private sector employment in most countries in the region. However, the small contribution of MSMEs to gross domestic prod uct does not match the representation of these enterprises in terms of numbers and employ ment, signaling a considerable gap in productiv ity and competitiveness between MSMEs and large firms. Low productivity is not solely due to the small scale of MSME operations. Other more critical causes include difficulty in access ing financing, concentration in the lower-wage retail sector, the high costs of innovation, diffi culty exporting, and their position in a relatively corrupt and inefficient business environment. These challenges cause many of the numerous smaller enterprises that enter the market to fail, and also force them into the informal economy where they may compete with small firms in the formal economy. Finally, a small percentage of micro enterprises are able to expand into larger, more productive firms, justifying the need to monitor and support their progress. Public institutions in Latin America maintain disparate levels of capacity to address the chal lenges MSMEs confront. A review of 17 institu tions reveals general institutional characteristics. These include the fact that the annual budget of many institutions is quite small, there is great variance among the size of the institutions in terms of budget and the number of personnel and programs, the majority were founded re i directors) greatly diminish the stability of B, C, and D-rated institutions. Many lower-rated insti tutions do not have a strategic plan, meaning they do not implement a process to align their structure and resources with mid-term priorities, missions, and objectives. Many institutions also do not have annual working plans to identify specific responsibilities and timelines for the year. MSME institutions employ a wide range of pro grams. However, many institutions do not offer programs throughout the country, so that many small firms primarily in rural areas are not served. Some institutions only provide services in the central office. Institutions differ in their levels of sophistication in use of technology for offering services via the Internet. While a few offer comprehensive, interactive services and tools, other institutions have virtually no sub stantive information available on MSMEs online. Inter-institutional coordination seeks to under stand the level of interaction among MSME in cently (after 1990), most fall within the structure of the central government (as ministries or de partments), most institutions operate in a country with MSME law, and only one institution ac tively engages in MSME policy creation in the country. An institutional capacity index with 11 variables and four factors was created and implemented to measure the capacity of institutions to support the MSME sector in their country (see Box 1). Each variable was assigned a number of points, and institutions were rated and classified into four categories: A, B, C, and D. Institutions in the A rating include those with the highest level of institutional capacity; D institutions are those with the weakest institutional capacity. The re sults by rating category, institution, and corre sponding country are listed in Box 2. Many of the institutions maintain increasing re sources in terms of budget and number of em ployees, but frequent changes in key personnel (including maximum authority and immediate Box 1. Factors and Variables | Factor 1. Institutional stability Evolution of the annual budget - Evolution of - Stability of key personnel - Implementation of a strategic plan - Execution of an annual work plan - | number of personnel | Factor 2. Attention to problems confronted by MSMEs Themes covered through support programs - Territory covered - Services through the Internet - | | --- | --- | --- | | Factor 3. Inter-Institutional Coordination | | Factor 4. Institutional Learning | | | Box 2. Rating Category by Institution and Country | | | Rating Category | Institution and Country | | | A | SEBRAE (Brazil), Sercotec (Chile), Conamype (El Salvador) | | | B | ViceMinisterio de la MiPyme (Guatemala), Sepyme (Mexico), Prompyme (Peru), Anpyme (Paraguay) | (Argentina), Spyme | | C | DiPyme (Colombia), Conamipyme (Honduras), Ssepyme (Ecuador), Di gepyme (Costa Rica), Dinapyme (Uruguay), Inapymi (Venezuela) | | | D | Promipyme (Dominican Republic), Inpyme (Nicaragua), ProPyme (Paraguay) | | ii stitutions and other public and private organiza tions that also support the sector. Coordination is especially significant in LAC countries, where a myriad of entities exist that offer distinct ser vices to MSMEs. Few institutions surveyed maintain a high level of inter-institutional coor dination. High turnover in key personnel in the institutions may certainly reflect on the level of continuous and effective coordination and the overall stability of institutions in the region. Despite the many programs offered by institu tions, there is little activity to track and evaluate impacts. Only two institutions surveyed employ independent evaluations that are shared and dis cussed with those responsible for MSME poli cies with the goal to continue to learn from their activities. The findings from the institutional capacity in dex and institutional characteristics reveal six factors that determine the most capable institu tions. First, not the size of the budget, but the efficient use of resources is critical. Second, the age, and therefore experience, of an institution likely contributes to its ability to design and im plement effective programs. However, young institutions that put into practice comprehensive evaluation systems and gather expertise from more established initiatives can quickly gain a level of institutional knowledge. Third, the sta bility of key personnel is a component to a com petent institution. Fourth, involvement in re source provision and oversight (working beyond direct services) allows institutions to coordinate more with other organizations, facilitate pro gram development and implementation, and be more responsive to the sector overall. Fifth, in tegrating private interests into strategic decision processes steers institutions to best meet the needs of MSMEs. Analysis also indicates that a level of autonomy from the central government is a characteristic of many highly capable insti tutions. Sixth, the presence of MSME law may contribute to institutional stability, as such law may establish the framework and provision of resources to guide institutions. The findings generated from this study and input from participants at the “Public Policies for the Development of Small Enterprises: Challenges and Opportunities” workshop 1 (where this study was presented) make it clear that more resources are required to improve MSME public policy. A recommendation is set forth for the creation of an MSME Institutional Learning System. Spe cific recommendations for developing such a system include the following. Analyze current data collection techniques and develop a structure for enterprise-by-size data collection This study reviewed the difficulties of collecting and gathering comparable data across the LAC region. Indeed, many countries do not have sys tems in place to regularly collect even the most basic economic data. To understand the MSME sector and create policies accordingly, countries must implement regular data collection sched ules. Initiatives through the MSME Institutional Development System include an inventory of data currently collected in countries, creation of standardized or comparable MSME definitions, data collection and analysis support, and more. Identify best practices To understand the current capacity of national institutions supporting the sector, a more micro scopic analysis is required. An MSME Institu tional Learning System could work with coun tries to apply studies at the program level, and thus develop a set of best practices to overcome identified institutional and programmatic chal lenges. Best practices will be created for a wide range of techniques, processes, activities, pro grams, or initiatives that most effectively sup port the MSME sector. Disseminate evaluation and monitoring techniques and methodologies The lack of evaluation and monitoring is one of the principal weaknesses of MSME institutions. 1 The workshop was sponsored by the Inter-American De velopment Bank and Fundes and took place in Quito, Ec uador on September 12 and 13, 2006. This study was pre sented as a discussion paper under the title “Analysis of National Capacities to Support Small Enterprises in Latin America.” Additional information is available at www.iadb.org/sds/mic/politicaspublicas/homepage.htm. iii The majority of institutions do not possess the knowledge, experience, and resources to monitor and evaluate their programs and initiatives, un derstand impacts, and incorporate learning into the institution. An MSME Institutional Learning System would help to (i) overcome hesitations in developing evaluation and monitoring systems through promoting such systems as valuable tools for learning and improvement, as well as to demonstrate successes; and (ii) identify best practices in evaluation and advise institutions on implementing models. This includes providing technical assistance to institutions for adapting and modifying models to meet their needs and objectives, as well as for fitting within their re source constraints. Carry out dissemination and training The models and best practices to support institu tions should be disseminated through publica tions, forums, and education training courses. A publication would consistently gather best prac tices and distribute the information to those who can use it. Forums bring together colleagues from across the globe, including leaders and those working on-the-ground. Education training courses teach institution managers and personnel about tactics to confront MSME challenges, in cluding optimum programs, policies, implemen tation plans, and tracking. Forums and courses serve as an opportunity for networking, stimulat ing partnerships, and sharing information and ideas. Creation of a system that trains business development professionals will professionalize the career and lead to a larger and more accepted body of knowledge. Through providing MSME institutions with the resources they need to evaluate and understand the sector, identify critical needs, create appro priate responses, share and gain information, and increase education, the MSME Institutional Learning System will truly contribute to the long-term development of economies in Latin America. iv ## Introduction There is an established yet growing recognition of the importance of micro, small, and medium enterprises (MSMEs) in sustained national eco nomic growth. In Latin America, MSMEs are considered one of the most significant sources of employment and income across the region, and in most countries the private sector is almost entirely comprised of micro, small, and medium enterprises. Given their importance, however, there exists little systematic research in the area of MSMEs and the programs and policies to support them. As a result, scale-based enterprise promotion is often driven by social and political considerations rather than by economic analysis. This study relies on published research on the MSME sector and surveys of the principal MSME development institutions in 18 Latin American and Caribbean countries (LAC) to analyze information regarding MSMEs in the region and the policies that support them. The primary objective of the study is to identify weaknesses in the process of developing opti mum support policies for MSMEs, and to pro pose opportunities for improvement. Figure 1 illustrates the basic process for the development of MSME policy, and how the principal ele ments interact. The process begins with a need or rationale to develop a policy to increase MSME competi tiveness. Diverse market failures, such as imper fect information and competition, are often ra tionales. The next step includes the collection of information to arrive at a diagnosis of the par ticula

Entrepreneurial Innovation in the Caribbean: From Fragmentation to Expansion | IDB Lab Skip to main content Entrepreneurial Innovation in the Caribbean: From Fragmentation to Expansion Entrepreneurial Innovation in the Caribbean: From Fragmentation to Expansion By Jean Emmanuel Desmornes Date May 26 2026 Across the Caribbean, entrepreneurship has become a powerful driver of solutions that can benefit the region’s development. In recent years, the founders have launched startups addressing challenges in financial inclusion, environmental transformation, agribusiness, health, and talent development. However, despite this creativity, the region’s entrepreneurial innovation ecosystem continues to face structural constraints related to financing and knowledge transfer that limit its ability to scale and generate impact quickly. To help overcome these challenges, the regional initiative CARIBEquity , financed by IDB Lab and the European Union, addresses through an inclusive approach, the structural market gaps that limit early-stage entrepreneurship within the entrepreneurial ecosystem of 15 beneficiary countries. Financing and Fragmentation: Challenges for a Region with Potential Access to early-stage, risk-tolerant capital is one of the most pressing challenges. According to a recent study conducted with our partner Startup Genome, most of the venture capital ecosystem in the Caribbean, continues to be characterized by a scarcity of investors, limited angel and seed capital funds, and weak links between startups and investors. As a result, promising companies often face the “valley of death” that lies between ideation and growth, exacerbated by limited local capacity to structure, evaluate, and manage early-stage operations. Additionally, the ecosystem remains fragmented. Key organizations that play a critical role in training founders, known as entrepreneurship support organizations (ESOs) — such as incubators, accelerators, innovation hubs, and academic institutions — operate in isolation, with uneven quality service and limited access to shared regional data, tools, and networks. Geographical dispersion and the small market size further limit collaboration and scale. Despite these challenges, momentum is real. Caribbean governments are increasingly prioritizing entrepreneurship within their development strategies, and private investors, diaspora networks, and development partners are showing renewed interest in the region. What has been missing is a coordinated ecosystem-level approach: one that simultaneously addresses funding gaps, data constraints, and regional connectivity. Isolated interventions, however well-designed, are rarely enough to transform systems with scale. CARIBEquity: A Blended Finance Initiative That is the reason why IDB Lab and the European Union teamed up to create CARIBEquity , a regional blended finance mechanism to consolidate a Caribbean investment ecosystem that drives inclusive innovation in the private sector. The initiative operates in 15 Caribbean countries, directly addressing the structural market deficiencies that limit early-stage entrepreneurship, as well as the institutional foundations necessary for long-term sustainability. Rather than focusing solely on startups, the platform operates at the ecosystem level, building on three mutually reinforcing pillars: 1) Risk-tolerant capital to drive innovation: Providing support to early-stage, growth-oriented small and medium-sized enterprises through grants and hybrid financial instruments, channeled via competitive calls for proposals. These resources bridge funding gaps at critical stages, attract private co-investment, and enable experimentation with new business models. 2) Strengthening ecosystem actors: Through initiatives such as Conecta Caribbean , implemented alongside Bridge for Billions, the mechanism strengthens entrepreneurship support organizations across the region, helping them professionalize services and collaborate across borders. Its Caribbean Playbook offers shared frameworks, and the first toolkit for early-stage investors in the Caribbean , developed with Seedstars and Entrepreneurs of Growth (EOG), reinforces practices in due diligence, valuation, and the integration of ESG criteria. 3) Data, knowledge, and connections at scale: To help governments, investors, and entrepreneurs understand who is who in the Caribbean ecosystem, the initiative conducted the most comprehensive assessment of the ecosystem in Caribbean15 countries. The effort resulted in two analytical reports and an interactive digital mapping tool that identifies startups, investors, and ESOs, helping governments, investors, and entrepreneurs connect and collaborate. "The Caribbean’s entrepreneurial potential is undeniable. What initiatives like CARIBEquity demonstrate is that, through regional collaboration, inclusive financing, and stronger ecosystem connections, innovation can scale beyond borders and create lasting impact across the region.” — Lidia Martinez Frances, programme manager and private sector specialist from the European Union IDB Lab: Driving Systemic Change The initiative tackles three of the biggest barriers holding back the region’s innovative ecosystem: limited access to financing, gaps in knowledge, and weak connections between key players. Instead of addressing challenges in isolation, IDB Lab takes a holistic approach—combining financing, capacity building, and evidence to support solutions that can truly transform the system. By doing so, it connects capital with talent and innovation, filling a critical gap and creating the right conditions for solutions to take off and grow sustainability across the region. CARIBEquity shows how IDB Lab is stepping in where markets haven’t yet delivered, unlocking solutions that can grow, scale and make a difference across the Caribbean. Looking to the Future CARIBEquity continues to expand, and the results are already visible: 10 projects approved and underway, more than 30 ESOs in capacity-building programs, and almost 1,800 stakeholders connected through over 30 networking and knowledge sharing events. As the Caribbean faces overlapping challenges — from vulnerability to extreme weather events to youth unemployment — the need for scalable, locally driven innovation has never been greater. The next phase will require sustaining coordination, deepening partnerships, and translating early evidence into policies, financial products, and practices that endure beyond the mechanism to continue advancing toward a stronger entrepreneurial innovation ecosystem that harnesses the significant potential of Caribbean countries. For more information, to access ecosystem data, or to learn about ongoing initiatives, visit the CARIBEquity website . Jean Emmanuel Desmornes Senior Specialist / IDB Lab Jump back to top

# A COMPARISON OF THE MOBILIZATION AND USE OF SAVINGS ACROSS TYPES OF FINANCIAL INTERMEDIARIES IN THE JAMAICAN ECONOMY Published: 2016-01-01. 0 citations. ## Abstract banks and government-owned entities, are now benefiting from the operation of sophisticated institutions such as investment companies, venture capital firms and securities dealers. Financial transactions are now conducted electronically in both primary and secondary markets, and transactions involving various types of deriva tives are commonplace in the developing world. These developments have led to significant efficiency gains in the financial sectors of developing countries, as stud ies suggest that competition and financial sector deepening are important determi nants of the efficiency and profitability of financial institutions.1 Whilst these factors are important, one should, however, not lose sight of the fact that, ultimately, financial institutions and markets exist to mitigate the effects of infor mation and transaction costs, and as such, facilitate the allocation of resources, across space and time, in an uncertain environment' (Levine 1997). At the most fun damental level, financial institutions best serve the economy and facilitate productivi ty through the efficient mobilization and use of society's savings. In fulfilling this role, different types of financial institutions, with diverse areas of specialization and opera ## Authors - David F. Tennant: h-index 11; 338 citations; corresponding author ## Topics - Banking stability, regulation, efficiency - Microfinance and Financial Inclusion - Corporate Finance and Governance ## References - Dominique M. Gross. Financial intermediation : a contributing factor to economic growth and employment. RePEc: Research Papers in Economics. 2002. - Aubhik Khan. The finance and growth nexus. RePEc: Research Papers in Economics. 2000;3-14. - Robert Stennett, Pauline Batchelor. STABILISATION AND THE JAMAICAN COMMERCIAL BANKING SECTOR (1991-1997). Social and economic studies. 1999;48:345-377. - Peter S. Rose. Commercial bank management. 2002. - Asli Demirgüç‐Kunt, Harry Huizinga. Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence. World Bank policy research working paper. 1999. doi:10.1596/1813-9450-1900. - Colin H. Kirkpatrick, David F. Tennant. Responding to Financial Crisis: The Case of Jamaica. World Development. 2002;30(11):1933-1950. doi:10.1016/s0305-750x(02)00116-x. - Valerie R. Bencivenga, Bruce D. Smith. Financial Intermediation and Endogenous Growth. The Review of Economic Studies. 1991;58(2):195. doi:10.2307/2297964. - Maxwell J. Fry, Raymond W. Goldsmith. Financial Structure and Development. Economica. 1970;37(148):435. doi:10.2307/2551955. - Douglas W. Diamond. Financial Intermediation and Delegated Monitoring. The Review of Economic Studies. 1984;51(3):393. doi:10.2307/2297430. - Santiago Carbó Valverde, Rafael López del Paso, Francisco Rodríguez Fernández. BANKS, FINANCIAL INNOVATIONS AND REGIONAL GROWTH. 2004. - Panicos O. Demetriades, Svetlana V. Andrianova. Finance and Growth: What we Know and What we Need to Know. Palgrave Macmillan UK eBooks. 2004;38-65. doi:10.1057/9780230374270_2. - Jeremy Greenwood, Boyan Jovanovic. Financial Development, Growth, and the Distribution of Income. National Bureau of Economic Research. 1989. doi:10.3386/w3189. - Ross Eric Levine. Financial Development and Economic Growth: Views and Agenda. RePEc: Research Papers in Economics. - Thorsten Beck, Ross Eric Levine, Norman Loayza. Finance and the sources of growth. Journal of Financial Economics. 2000;58(1-2):261-300. doi:10.1016/s0304-405x(00)00072-6.

Scand. J. of Economics 94(2), 253-273, 1992 ## Household Saving in LDCs: Credit Markets, Insurance and Welfare* Angus Deaton Princeton University, Princeton, NJ, USA ### Abstract Some ways in which farmers in LDCs can protect their living standards against fluctuations in income are discussed. After considering the theory of consumption under uncertainty when there is no or limited borrowing, the case where some borrowing is allowed is also examined. Empirical evidence from some LDCs is used to look at (i) household borrowing and lending, their importance and timing, and their role in smoothing consumption, and (ii) the life-cycle behavior of consumption and income. The results suggest that "hump" life cycle saving is not likely to be a very important generator of wealth in LDCs and provide further evidence on the limited role of credit markets. I. Introduction Agricultural income is inherently uncertain. Weather, pests, disease and fires make yields uncertain, and the notorious variability of agricultural prices can generate fluctuations in farmers' incomes even when output is stable. In poor countries, most of the population earns its living from agriculture, either directly or indirectly. For many of these people, a poor harvest or a low harvest price can threaten disaster, even if, on average, agricultural incomes are sufficient to provide a sustainable standard of living. In such circumstances, the protection of living standards requires that resources be transferred across time, from good years to bad years. For this to work, someone, farmers, communities, or governments, have to be able to look ahead, and make adequate provision for the future. Until *The original, longer version of this paper, Deaton (1991b) can be obtained from the Research Program in Development Studies at Princeton University. I should like to thank Kristin Butcher for splendid research assistance, and the Lynde and Harry Bradley Foundation for financial support. Some of the results reported here come from a research project on saving behavior supported by the World Bank; the views expressed here are those of the author and should not be attributed to the World Bank or its affiliated organizations. Scand. J. of Econonics 1992 254 A. Deaton recent years, much of the development literature, and in particular the literature on project evaluation in developing countries, UNIDO (1972), Little and Mirrlees (1974) and Squire and van der Tak (1975), supposed that individuals were unlikely to be able to make adequate intertemporal plans, so that the government should do so on their behalf. In practice, there are many government policies that play such a role, at least in part. Many governments, particularly in Africa, set agricultural procurement prices that do not vary with world prices, and argue that such schemes help stabilize farm incomes. Governments in many developing countries are involved in the provision of credit, which can also play a role in insuring consumption in the face of income variability. There are also a wide range of relief policies, from ad hoc famine relief to more regular food for work schemes, which can provide some minimum living standards in bad times. This paper is concerned with non-governmental consumption insurance schemes. I discuss some of the ways in which farmers can protect their living standards against fluctuations in income. Where there are credit markets, individuals can borrow and lend, and there is no need for consumption to be tied to income in the short run. But even without credit markets, or with limited credit facilities, money or goods can be put by in good years to provide a buffer against the bad times that will sooner or later follow. Knowledge of the extent to which poor households use these mechanisms is necessary if we are to assess the appropriate role, if any, for programs provided by the state. Section II of the paper considers the theory of consumption under uncertainty when there is no borrowing, or limited borrowing at penal rates. The starting point is the model of liquidity constraints in Deaton (1990a, 1991a). I consider the effectiveness of simple rules-of-thumb of the type that agents could easily implement, and evaluate the welfare consequences of these against fully optimal strategies. I also look at the case where some borrowing is allowed, albeit in limited amounts, and at high rates of interest. In this model with "money-lenders", agents can pay to avoid the worst outcomes in a pure buffering model, when a succession of low incomes, which has exhausted precautionary assets, is followed by a further bad year. Section III considers some empirical evidence from C6te d'Ivoire, Thailand and Ghana. I look at two separate issues: (i) household borrow ing and lending in C6te d'Ivoire and Ghana, their importance and their timing in an attempt to assess the part they play in smoothing consumption, and (ii) the life-cycle behavior of consumption and income, here using data from Thailand and C6te d'Ivoire. As argued by Carroll and Summers (1991), if credit markets are good enough to support long-term (low frequency) consumption smoothing, and if the life-cycle hypothesis is true, then the ratio of young people's life-time resources to those of old people Household saving in LDCs: Credit markets, insurance and welfare 255 is larger in fast growing countries (Thailand) than in slow-growing countries (C6te d'Ivoire), so that consumption profiles should be more tipped towards the young in the former than in the latter. In fact, the opposite is true, and I show that, in contrast, consumption tracks current income very closely. There results suggest that "hump" life-cycle saving is not likely to be a very important generator of wealth in these countries, and provides further evidence on the limited role of credit markets, at least for long-term consumption smoothing. Section IV provides some brief conclusions. II. Theory: Saving with Borrowing Constraints Individuals in poor countries borrow and lend money, and perhaps do so to prevent shortfalls in consumption. However, it remains implausible that agents can always borrow as much as they like for consumption purposes, so that it is important to examine behavior when borrowing is not permitted. The essential point to note is that the inability to borrow does not imply that the consumer cannot save. Indeed, the fact that borrowing may be unavailable when most needed is itself a reason to set aside some thing when times are good; liquidity constraints reinforce the precau tionary demand for assets. Many consumers may never wish to borrow; people who are patient, or for whom the return on assets is sufficient to overcome their impatience, will tend to postpone consumption, building up assets as they go, so that temporary short-falls of income are unlikely to pose a problem, except perhaps early in life. But for those who are impatient, or who are poor enough to feel that future consumption is an inadequate reward for postponing current consumption, lack of borrowing facilities will be a real disadvantage. For such consumers, it is essential to hold some assets that can be used to buffer consumption when incomes are low. A simple model of optimal buffering is constructed in Deaton (199 la), and is summarized here as a starting point. Preferences take the standard form, E,<v(c,) (1) ere is th rte o tim p a v ( is th intat where 6 > 0 is the rate of time preference, and v(c,) is the instantaneous (sub) utility function, assumed to be increasing, strictly concave, and differentiable. The evolution of assets is given by A,+1 =(1 +r)(A, +y,-c,) (2) where y, is labor income, A, is real assets and r is the real interest rate. I Sctnd. J. of Ec'otonoics 1992 256 A. Deaton assume that r < 6, so that the agent's impatience outweighs the incentive to accumulate. The real interest rate is treated as fixed and known, and all the uncertainty is focussed on labor income y,. Labor is inelastically supplied, and Yt is a stationary random variable with support [yo, y,], with y( > 0 and Yo<y, < oo, so that income cannot fall below the positive floor y,. I start from the most obvious form of the borrowing restriction, viz. A, 0. (3) The simplest way to solve the consumer's problem is to start from the modification of the usual Euler equations that is brought about by the presence of the borrowing constraint (3). Define the state variable x, "cash on hand", by x=A + y,. (4) x, is the maximum that can be spent on consumption in period t. Consumption in periods t and t + 1 must satisfy A(c,)= max [I(x,), fE,A(c,+ i)] (5) where A;(c) is the marginal utility of c, i.e. A)(c) v'(c), B=(1 + r)/l + 6), and / < 1 since r< 6. If the consumer is constrained, consumption can be no higher than x,, and the marginal utility no lower than A(x,). The constraint will bind if marginal utility at x, is higher than the discounted expected marginal utility next period, otherwise the two marginal utilities are equated in the usual way. Note that the expectation itself takes account of the possibility of future constraints. The solution to (5) depends on the stochastic structure of the income process y,. Here, since my interest is in extending the model in other directions, I deal with only the simplest case where income is inde pendently and identically distributed over time. Deaton (199 la) discusses cases where income is a first order autoregressive or moving average process. In the i.i.d. case, the optimal rule is to make consumption a function of cash on hand, i.e. c,=f(x,) (6) where, by virtue of (4) and (2), x, evolves according to x,+ = (1 + r)x,-f(x,)} + y, (7) and y,, labor income, is an i.i.d. stochastic process. In general, it is not possible to write down an analytical form for the function f(x). However, the theory can be used to infer its general properties, and in practice, given specifications for the utility function and the distribution function of incomes, as well as the interest rate and time preference parameters, the function can be calculated numerically. Given Household saving in LDCs: Credit markets, insurance and welfare 257 his cash on hand, the consumer should spend everything if the total is below some critical value x*, say. Above x*, something is put by for the future, and the marginal propensity to retain cash, although always less than unity, is an increasing function of cash on hand. If the consumer follows the optimal rule, consumption can be very much smoother than income; if the income process is normally distributed with mean 100 and standard deviation 10, if utility is isoelastic with a coefficient of relative risk aversion of 3, and if the interest and time-preference rates are 5 per cent and 10 per cent respectively, the standard deviation of consumption is 5, which is half that of income. This can be achieved with very low average levels of "buffer" assets, averaging only 7 and rarely more than 10. However, consumption fluctuations are necessarily asymmetric. It is always possible to prevent consumption being too high, since resources can be kept for the future. But if assets are exhausted, as must happen from time to time, there is always the possibility of low income immediately thereafter, and the unprotected consumer has no choice but to cut consumption to match. Of course, these outcomes are no worse than would be the case if consumption were equal to income, and the optimal buffering strategy much reduces their likelihood. When they occur, the shadow price of the borrowing constraint, the shadow price of loans, will rise to high levels; for the same parameter values, rates of 30 per cent occur every twenty years or so, and rates of well over 100 per cent are possible. There is a demand for loans at even very high rates of interest. The calculation of the optimal policy (11) from the conditions (5) and (7) is not a trivial task. The function has to be approximated by points along a grid, or by some suitable polynomial, and then values or para meters chosen to satisfy the functional equations as closely as possible. The question then arises as to whether consumers could reasonably be expected to solve this problem for themselves, and if not, whether there might not exist simpler, more intuitive rules of thumb that might do nearly as well. In Figure 1, the broken line shows the optimal policy for a consumer with the preferences and income process described above, while the piecewise linear function shows the simple rule of thumb: "spend all cash on hand up to mean income, and 30 per cent of any excess". (The third function on the graph will be discussed below.) My choice of rule of thumb is not arbitrary, but was guided to some extent by knowledge of the optimal function. However, the critical point at which saving begins was taken to be mean income rather than any approximation to the optimal critical point. Note also that the rule-of-thumb function is never below the optimal function, so that the consumption is always too high, and I have made no attempt to achieve a better approximation. My concern is more that the rule should be simple, simple enough to have plausibly evolved from trial and error. 95 Broken line is policy with E n^ no borrowing 3E c 90 Piecewise linear function is o / rule of thumb 85 Solid line is policy with money lenders 80 75 x= = 100 70 60 80 100 120 140 160 Cash on hand Fig. 1. Three consumption policies. There are various ways of assessing the performance of such a rule. Figure 2 is one; it illustrates a 200-year realization of income, consump tion, and assets under the rule of thumb. Income values are random inde pendent draws from N(100, 10), the agent begins with no assets, and the process is allowed to run, governed by (6) and (7) with f(x,) in (6) taken to be the piecewise linear function, i.e. f(x,) = x,- 0.7 (x, -u )I(x, > u) (8) where I(.) is the indicator function. The outcomes in the figure are very close to those generated by the optimal policy, indeed there seems to be no practical difference between the two. Not only does the rule-of-thumb reproduce all the characteristics of the stochastic equilibrium under the optimal policy, but there is no perceptible welfare difference. Figure 3 shows value functions for various policies, and that for the rule of thumb in Figures 1 and 2 is not visibly different from that for the optimal policy. (These value functions are calculated from the following procedure. Start from a grid on x, {xxl, xx2, ... ,xxN} and corresponding grid on c, {cI, c2,..., cN}, with ci=f(xxi). Then the transition rule (7) is used to calculate a Scand. J. of Econonics 1992 Household saving in LDCs: Credit markets, insurance and welfare 259 100 er~~~~~ ~Time 60 20 0 0 20 40 60 80 100 120 140 160 180 200 Time, Fig. 2. Buffering without borrowing and rule of thumb behavior. transition matrix T with element ti, the probability that, given x is xx; in t, it is xxj in t+1. We also have a grid of subutility values vi= v(c,)= v{f(xx,)}, so that the expected utility associated with xx is the infinite sum of terms of the form (1 + 6)-~Tv or {1-(1+ 6)-1 T}-v). Figure 3 also shows the value functions associated with a number of other possible consumption strategies. The next best after the optimal strategy and the rule-of-thumb is a second rule of thumb where, instead of saving 70 per cent of the excess above ,u, only 50 per cent is saved, so that there is even more excess consumption than by the first rule. Quite some way below comes the value function that comes from the simplest policy of all, that associated with setting consumption equal to income and accumulat ing no assets. Finally, the worst policy shown is the ultra-conservative one of spending no more than mean income, and spending less if cash on hand is less. These rankings show that, at least for these parameters, the rules of thumb do well capturing most of the benefits of the more complicated optimal policy, and that any sensible rule of this form does a great deal better than the "obvious" policy of never saving anything. These results are not surprising given earlier results in the commodity storage literature, -0.00052 E -0.00056 . j L0 -C 5/ 4--J.c . 0 / Solid line is optimal policy J > - 0.00060 . /t/ Mixed dots and dashes is consumption = income f// Bottom line is consume min (cash, mean income) / Solid line is consume mean income plus 30% of excess Close dashes is consume mean income plus 50% of excess * -0.00064 . ' . I I 60 80 100 120 140 160 Initial cash on hand Fig. 3. Value functions for alternative policies. where piecewise linear storage functions are known to perform well relative to fully optimal policies; see Newbery and Stiglitz (1981, Chapter 30). One feature of these results that is perhaps surprising is the small values that are attached by consumers to any form of consumption smoothing. Figure 3 can be used to read off the amount that a "consumption equals income" consumer would pay to be instructed in the optimal buffering policy, and the answer is close to 10, which is one tenth of mean income, or one standard deviation of income. This amount is the discounted present value of the improvement, not a continuing per period gain, and seems a very small amount to pay for the consumption stream in Figure 2 rather than the income stream immediately above it. Of course, the agent who buffers consumption loses utility by holding assets, as well as gaining from the greater stability of his consumption and the net gain appears to be rather small. The low value attached to consumption smoothing is a standard result from other research, for example in the theory of commodity price stabilization; the continuing income equivalent of a reduction in variance is approximately the reduction in the coefficient of I - - - - _ Household saving in LDCs: Credit markets, insurance and welfare 261 variation multiplied by half the coefficient of relative risk aversion, an approximation that accords well with the results in Figure 3. But as has often been noted, these standard evaluations generate answers that reflect neither intuition nor the urgency with which policy-makers and agents in LDC's approach the stabilization issue. It is also possible to calculate how much these consumers would pay to be rid of the uncertainty altogether, and how much to be rid of the liquidity constraints, In this context, it is the liquidity constraints that hurt, much more than the uncertainty. If there is no uncertainty, the optimal policy is derived from equation (5), but without the expectation. If we insert the isoelastic form )A(c)= c-p, invert and take logarithms, we have In c, = min[ln x,, In c,+, - p '(r - 6)]. (9) Since impatience dominates, 6 > r, so that, if initially, the consumer has assets, they will be run down along a declining consumption path until consumption equals income, at which value it will remain thereafter. The value of this policy is the middle line in Figure 4, higher than the value of the optimal policy with borrowing restrictions and uncertainty, but much lower than the function for the case where there are neither borrowing constraints nor uncertainty. If there are no borrowing constraints, then these impatient consumers will plan a falling consumption trajectory, with initial consumption set to satisfy the long-run budget constraint. In the case illustrated, which has the same parameters as before, initial consumption is 84 per cent higher than mean income, so that very substantial use is made of the borrowing facility, consumption is brought forward, and there are large utility gains. (I have been unable to calculate the fourth value function, for the case where there is uncertainty, but no restrictions on borrowing, but I conjecture that it li

EconPapers: How important are remittances to savings? Evidence from the Latin America and the Caribbean Countries EconPapers Home About EconPapers Working Papers Journal Articles Books and Chapters Software Components Authors JEL codes New Economics Papers Advanced Search EconPapers FAQ Archive maintainers FAQ Cookies at EconPapers Format for printing The RePEc blog The RePEc plagiarism page How important are remittances to savings? Evidence from the Latin America and the Caribbean Countries John Bosco Nnyanzi (), Kilimani Nicholas and John Oryema Additional contact information Kilimani Nicholas: Public and Environmental Economics Research Centre (PEERC), University of Johannesburg, Johannesburg, South Africa IZA Journal of Development and Migration , 2022, vol. 13, issue 1, 37 Abstract: This paper investigates the direct and the indirect roles of migrant transfers in the saving behaviors of the Latin America and Caribbean (LAC) countries during the period 1997–2018. Using the autoregressive distributed lag (ARDL) panel estimation technique, the results based on the Pooled Mean Group approach provide strong evidence of the importance of inward remittances to savings. On average, an increase in inward remittances by 1% leads to about 0.10% increase in savings ceteris paribus, but the effect is quantitatively larger in the short-run than in the long-run, albeit more significant in the latter case. Quite outstanding here is the observation of the detrimental role of remittances on savings in the long-run once governance quality in aggregate and disaggregated forms are controlled for, suggesting possible adverse effects of remittances for economic development in the long-run. Nevertheless, macroeconomic stability as well as institutional quality, foreign direct investment (FDI), and foreign aid were found to be important moderators of the remittances–savings linkage. For the latter two variables, emphasis is on complementarity rather than substitutability between remittances, aid, and FDI. While in the short-run remittances appear to perform better in enhancing savings in countries where an improvement in corruption control is visible, political rights and civil liberties compliment migrant transfers in propelling savings in the long- and short-runs, respectively. Moreover, remittances are found to play a major role in ameliorating the adverse effects of the financial crisis on savings, just as they are observed to function as a lifeline to savings in countries with increasing macroeconomic instability in form of inflation, in the long-run. The findings are robust to the use of alternative estimation techniques. Policy recommendations are suggested. Keywords: remittances ; savings ; finance ; institutions ; LAC (search for similar items in EconPapers) JEL-codes: E21 F21 F22 O11 O16 (search for similar items in EconPapers) Date: 2022 References: View references in EconPapers View complete reference list from CitEc Citations: View citations in EconPapers (1) Downloads: (external link) https://doi.org/10.2478/izajodm-2022-0007 (text/html) Related works: This item may be available elsewhere in EconPapers: Search for items with the same title. Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vrs:izajdm:v:13:y:2022:i:1:p:37:n:6 DOI: 10.2478/izajodm-2022-0007 Access Statistics for this article IZA Journal of Development and Migration is currently edited by David A. Lam , Hartmut F. Lehmann and Francesco Pastore More articles in IZA Journal of Development and Migration from Paradigm & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA) Bibliographic data for series maintained by Peter Golla (). Share This site is part of RePEc and all the data displayed here is part of the RePEc data set. Is your work missing from RePEc? Here is how to contribute . Questions or problems? Check the EconPapers FAQ or send mail to . EconPapers is hosted by the School of Business at Örebro University . Page updated 2026-07-29 Handle: RePEc:vrs:izajdm:v:13:y:2022:i:1:p:37:n:6

#### Building Up Business Microenterprise demand for Credit in the Caribbean This report, commissioned and funded by the Multilateral Investment Fund (MIF) through the Caribbean Microfinance Capacity-Building Program II (CARIBCAP II), was done by Barbara Magnoni, Derek Poulton, and Danielle Sobol of EA Consultants Inc. The following people at the MIF participated in the review process: Winsome Leslie, Ryan Tang, Elizabeth Terry, and Xuan-Trang Ho. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. May 2014 © Multilateral Investment Fund Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 www.fomin.org mifcontact@iadb.org All rights reserved ## Contents Executive summary 5 Introduction 9 1. Methodology 11 2. Regional findings 15 Defining the target market 15 Potential market size 16 Market challenges for credit providers 16 3. Illustrative business profiles 25 Business profiles: Savings orientation 25 Business profiles: Weak consumer demand 28 Business profiles: Information asymmetries 30 Business profiles: Pioneering borrowers 31 Provider perspective: Selected interviews from the supply side 32 4. Belize: Weak economy, conservative providers suppress credit demand 34 Supply side: Providers of microfinance services in Belize 34 Microenterprises and microentrepreneurs in Belize 36 Basic profile of microenterprise survey respondents 36 Savings behavior and preferences 37 Credit behavior 38 Financing preferences 40 Key findings: Savings drive financial inclusion but there is room to expand credit 41 5. Guyana: A slow path toward formal business borrowing 43 Supply side: Providers of microfinance services in Guyana 43 Microenterprises and microentrepreneurs in Guyana 44 Basic profile of microenterprise survey respondents 44 Savings behavior and preferences 46 Credit behavior 48 Financing preferences 49 Key findings: Cautious microentrepreneurs want credit on their terms 50 5 6. Jamaica: Untapped savers and overstretched borrowers 53 Supply side: Providers of microfinance services in Jamaica 53 Microenterprises and microentrepreneurs in Jamaica 58 Basic profile of microenterprise survey respondents 58 Savings behavior and preferences 60 Credit behavior 62 Financing preferences 64 Key findings: Savers and smaller firms left out 66 7. Suriname: Savers lack knowledge to tap credit for growth 69 Supply side: Providers of microfinance services in Suriname 69 Microenterprises and microentrepreneurs in Suriname 71 Basic profile of microenterprise survey respondents 71 Savings behavior and preferences 72 Credit behavior 74 Financing preferences 76 Key findings: Awarenesss and outreach are key to tapping credit demand 77 8. Conclusions 80 ##### Bibliography 86 Appendix 1 Microentrepreneur profiles 90 Appendix 2 Desk study 93 ## Executive summary Microfinance, as practiced worldwide, is relatively new to the English-speaking Caribbean. The CARIB-CAP I and II projects 1 have made significant efforts to promote microcredit outreach and raise the capacity of microfinance service providers (MFSPs), which include credit-only non-profit organizations, credit unions, cooperatives, and commercial banks. Despite these efforts, uptake of microcredit has lagged behind expectations in many cases. Meanwhile, anecdotal evidence shows that many microentrepreneurs continue to use informal financing alternatives, such as rotating savings and credit associations (ROSCAs), moneylenders, and supplier credit. Why do some microentrepreneurs still turn to informal mechanisms instead of formal microcredit to finance their business? What characteristics of financing are most important to Caribbean microentrepreneurs? In this study, we explore the nature of demand for microfinance in four Caribbean countries—Belize, Guyana, Jamaica, and Suriname—using a quantitative market survey complemented by qualitative interviews with microentrepreneurs as well as formal and informal providers of financial services to low income segments. These case studies reveal that preferences are clearly delineated between savings and credit, where microentrepreneurs typically finance their businesses through both formal and informal savings. Additionally, we find that the relationships between formal and informal finance are often complementary rather than competitive. Our investigation uncovered five major themes about the region’s market for microfinance: ` Savings orientation. Nearly all microentrepreneurs surveyed saved, and business needs were the most common reason for saving. A majority saved in formal accounts, while ROSCAs were used to varying degrees in each country. Saving and borrowing are not mutually exclusive and most borrowers also saved. This strong savings culture may create less incentive for seeking loans for business investment. This contrasts strongly with many Latin American countries, where low-income people typically save at low rates (and mostly informally) and often borrow instead to finance their needs. 1 The Caribbean Microfinance Capacity-Building Projects I and II—CARIB-CAP I and II— are two phases in a USD 5.7 million regional program funded by the Multilateral Investment Fund (MIF), member of the Inter-American Development Bank (IDB) Group, the Caribbean Development Bank (CDB), the European Commission (EC) and Citi Foundation. These projects seek to improve the financial performance of microfinance institutions in the Caribbean and to increase their client outreach, thereby fostering a more developed microfinance industry in the region. ` Preference for low-cost, flexible financing. In every country, low costs and flexibility were respondents’ top priorities for financing. They want low interest and fees, repayment schedules that match their cash flows, and some lenience for late payments. Respondents’ borrowing and saving methods reflected these preferences. Perceptions about which providers matched these preferences varied, though informal financing methods usually ranked higher than formal institutions on important dimensions. ` Risk aversion. Many microentrepreneurs were cautious or pessimistic about business prospects and have experienced slow sales since the global economic crisis of 2008, particularly in Jamaica. Even where economic growth has been more buoyant, microentrepreneurs were cautious, perhaps due to their own lack of enterprise skills. This attitude bolstered reliance on savings (for those who can) and discouraged borrowing for fear of difficulty with repayment, even among respondents whom we estimate would benefit from a microloan. ` Information asymmetries. Many microentrepreneurs were unfamiliar with microcredit products or providers, or did not even know what microcredit was. Others held mistaken beliefs and generalizations about products and providers that prevented them from seeking accurate information. ` Supply-side constraints. While microentrepreneurs’ preferences and perceptions are important factors in uptake, major supply-side constraints also hinder outreach. The cost per loan is high, populations are dispersed, and some institutions are unwilling to risk capital on expansion and outreach. Savings-oriented microentrepreneurs, low rates of borrowing, and preferences for low-cost, flexible financing were common to all four countries. Each market, however, manifests these trends in different ways and microentrepreneurs in each place had different perceptions and preferences concerning financing sources: • Belize is a country of savers who strongly prefer formal institutions, especially credit unions. Belize had the highest percentage of credit eligible firms that would benefit from microcredit, and the lowest rates of borrowing, showing significant opportunities for expansion. • Guyana had the highest rates of informal financing, mainly through ROSCAs and suppliers. Guyanese were interested in formal credit, but pessimism about the economy kept many from borrowing, especially in more rural areas. • Jamaica’s weak economy has undercut demand for enterprise microcredit in favor of consumer loans, which both “legitimate” MFSPs and less scrupulous formal money lenders offer. These moneylenders have damaged the reputation of microfinance in the country. Debt was concentrated in the hands of risk-takers, though not always the most likely to pay. Meanwhile prudent microentrepreneurs opted out of borrowing, saving in ROSCAs and formal accounts instead. The smallest microenterprises were especially underserved. • Suriname’s microcredit market is underdeveloped due to inconsistent government support and risk aversion among MFSPs. However, Suriname’s microentrepreneurs showed a preference for borrowing from formal institutions. They are largely unaware of the limited microcredit products or providers available and also do not trust ROSCAs or informal sources. Overall, we estimate that roughly 120,000 potential clients would be eligible for and benefit from microcredit, and MFSPs could reach them with greater capacity and focus on demand driven products. More importantly, we find that many microenterprises in the region may benefit from having access to credit. We apply a rough analysis of the expected return on a business loan and find that 71% of businesses would see positive net gains from borrowing at typical market rates in their home country. 2 Low levels of leverage and a strong savings discipline, often with substantial savings balances contribute to the “math” and highlight the complementarily between credit and savings. Demand and potential for microcredit is not homogenous. We find untapped potential among the tiniest microenterprises as well as larger microenterprises, or “very small enterprises” (VSEs). To date, formal financial service providers have not always been able to match the needs and preferences of microentrepreneurs, who are not comfortable with excessive paperwork, collateral requirements and the high cost of borrowing, among other issues. Furthermore, we find that tiny microenterprises often need loans smaller than the minimum offered by MFSPs, while VSEs struggle to acquire usefully large loans due to apex lender restrictions or a lack of sufficient cash, asset or land collateral. Informal mechanisms have played a role to date, filling the gap that the formal sector has left behind, particularly for tiny microenterprises. To reach this underserved market, microfinance service providers must innovate products and processes to reduce costs and more closely match preferences. Adapted group and savings-led methodologies along with branchless banking, such as mobile banking or rural kiosks, could be part of the solution, particularly for the lower and middle range of microenterprises. VSEs could be better served by strengthening financial analysis and broadening product offers to allow for investment loans with longer tenors. The need for differentiated strategies for serving upper and lower niches may require MFSPs to specialize or train separate teams by target market. Financial inclusion efforts must be respectful and value the hard work and discipline that microentrepreneurs in the region have contributed to their economies to date and offer complementary products with sufficient information and client protection. Regulators should also consider specific frameworks for microfinance that provide sufficient certainty and legitimacy for providers and customers, without creating excessive compliance burdens in an already costly business line. With a little ingenuity, the region’s relatively sophisticated MFSPs, regulators, and savings-oriented microentrepreneurs can foster financial inclusion while avoiding the debt dependency characteristic of other microfinance markets, creating a healthier and more rational mix of financial services that catalyze micro and small business growth. 2 The percentage is of the majority sub-sample of respondents who provided sufficient hard data to apply the analysis. ## Introduction The present study investigates the role that formal and informal savings and credit mechanisms play in the financial lives of microentrepreneurs in the Caribbean, partly as an attempt to explain the relatively low outreach of microcredit in the region to date. Informal financing mechanisms studied include friends and family loans, moneylenders (unregulated “loan sharks”), store credit, and rotating savings and credit associations (ROSCAs). These informal financing sources are often characterized by relatively low requirements, quick disbursements, and no regulatory oversight. Formal financing institutions include third sector microfinance institutions (MFIs), cooperatives and credit unions, and retail commercial banks, as well as formal payday and quick cash lenders. Throughout this paper, we use the term MFI to refer strictly to non-profits and regulated financial service providers specialized in microfinance, while we use the term microfinance service provider (MFSP) to refer to any formal institution that offers small loans to the low-income market, 3 including microcredit products. The desk review (see Appendix 2) conducted to frame this study revealed that although many microentrepreneurs in the Caribbean are formally banked, informal mechanisms play a larger role in financing their businesses. Relevant academic and practitioner literature posits that microentrepreneurs prefer informal credit mechanisms for a variety of reasons. First, providers believed that microentrepreneurs either cannot or do not wish to comply with complicated loan requirements. Registering asset collateral and producing paperwork are often regarded as an unnecessary hassle, and some potential borrowers also fear losing their prized collateral. Related to requirements; providers also claimed that borrowers prefer fast disbursements. Low ambition and risk aversion were two more major themes in the literature. Many microenterprises serve to diversify household risks and/or generate supplementary income, and the owners of these businesses may prefer to keep their business small and thus have little use for microenterprise credit (Verrest 2013). Others may wish to grow their business but are unwilling to risk falling into debt if they perceive a challenging economic environment. Finally, familiarity and trustworthiness influence financing choices. Low-income people may be more comfortable dealing with known community members than with cold, faceless institutions. They may also avoid formal financing due to perceived ethnic or class based discrimination, or rumors of political ties within the institution (Hossein 2012). Thus, in many cases, informal financing sources such as ROSCAs or moneylenders align better to these preferences than formal loan products. Our preliminary interviews with MFSPs supported these hypotheses—that microentrepreneurs generally distrust formal providers and prefer financing methods that are convenient, low risk, low hassle, and have few requirements in terms of collateral and documentation. 3 Including MFIs, cooperatives and credit unions, and retail commercial banks, as well as formal payday and quick cash lenders that provide microcredit. In addition to these demand preferences and perceptions, the literature cites several supply side issues that prevent MFSPs from reaching microenterprises effectively. First, financial sectors in the region are highly formalized. Financial institutions are very rooted in traditional banking practices, such as asset-backed lending, and also have a preference for very well documented loans (Wenner and Chalmers 2001). Many low-income people, however, either cannot or do not wish to comply with such heavy security and documentation requirements. Furthermore, many Caribbean countries currently have or previously had interest rate caps, and even where caps were lifted, the market has an expectation for low rates (Vargas 2013; Wenner and Chalmers 2001; Lashley 2004). These interest rate trends limit financial institutions’ ability to take on risk or issue loans that may have high operating costs, including for microloans. The literature also points to a lack of government support through effective regulation or funding. In fact, none of the four countries studied has specific microfinance regulation, and while Jamaica and Suriname have subsidized apex funds, these were not always active or effective in the past (Vogel and Schulz 2011; Wenner and Chalmers 2001). The perception of political sources of this funding may have also contributed to high delinquency rates (Lashley 2004). Furthermore, some observers postulate that high dependence on remittances, especially in Jamaica, may have reduced demand for microcredit. Finally, the urban concentration of financial institutions has made credit scarce outside the capital of most Caribbean nations. Our research focuses on four Caribbean countries—Belize, Guyana, Jamaica, and Suriname— to test these hypotheses uncovered in the desk review. In general, we seek to understand microentrepreneurs’ current usage of formal and informal financial services as well as their preferences for financing sources, and the connection of those preferences to common barriers that MFSPs face in serving low-income clients. This paper presents the results of an 18week study in these four countries in several sections, organized as follows: Section 1 briefly describes the methodology of the study. Section 2 broadly describes microentrepreneurs and microenterprises and points to some specific trends across the region. Section 3 profiles specific microentrepreneurs interviewed that illustrate the key trends and shed light on the nuances of their context, preferences, and needs. Sections 4, 5, 6, and 7 offer specific details about our findings in Belize, Guyana, Jamaica and Suriname. Section 8 offers some concluding remarks and general recommendations. ## 1. Methodology The study began with a brief desk study to frame and focus the design of study instruments. We employed mixed quantitative and qualitative methods to profile and analyze both demand and supply sides of the market for microenterprise finance in each of the four markets. ` The desk study scanned macroeconomic data and existing academic and practitioner literature about microfinance and microentrepreneurs in the English-speaking Caribbean. While sources were scarce and often outdated, the desk review revealed the main theories about demand for microcredit (or a lack thereof ) and helped frame and focus our subsequent inquiry (See detailed literature review in Appendix 2). To compensate for unclear or unavailable information, we complemented with phone interviews with CARIB CAP participants and other experts. Table 1: Sample composition for quantitative survey TOTAL Belize Guyana Jamaica Suriname Total sample size 656 117 178 202 159 | Urban | 50% | 49% | 38% | 52% | 62% | | --- | --- | --- | --- | --- | --- | | Semi-urban | 39% | 42% | 62% | 48% | 0% | | Rural | 11% | 9% | 0% | 0% | 38% | | Women | 49% | 50% | 57% | 51% | 37% | Men 51% 50% 43% 49% 63% ` Quantitative microentrepreneur surveys were the main source of information for the study. A total of 656 respondents were surveyed, with 117 in Belize, 178 in Guyana, 202 in Jamaica and 159 in Suriname (see Table 1 for geographic and gender breakdowns). The survey questionnaire asked about the basic economic profile of the microenterprise (aimed to simulate a rough cash flow assessment by a microfinance loan officer), took inventory of savings and borrowing behaviors, and asked about preferences for and perceptions about different business loans and lenders. The same base survey was ada

Five Lessons From Getting My First Caribbean Deal Wrong Skip to content Home &middot; Insights &middot; Five Lessons From Getting My First Caribbean Deal Wrong Five Lessons From Getting My First Caribbean Deal Wrong By Dan Merriam I had been investing in Canadian real estate for about a decade before I bought anything in the Caribbean. I closed my first deal in the region in 2021 — my own money, my own file, not a client’s. I thought the Canadian experience would transfer, and most of it did not. Not because the fundamentals are different — a good building in a good location is a good building in a good location. But because almost everything around the transaction is different: the data, the timelines, the incentives of the people you are dealing with, and what a listed price even means. This is what that 2021 transaction taught me, including the parts I got wrong. I am deliberately not naming the jurisdiction or the numbers: my own file would read as a recommendation, and it is the lessons that travel, not the specifics. If I had to compress it into one sentence: what failed to transfer was not the analysis. It was knowing what a price means . In a market with an MLS, a listed price is a claim that data can test — you can check it against twenty comparable sales before lunch. Here there is no MLS and no reliable comparable data, so a price is an opinion, held by someone with an interest in it. Almost every mistake below is a version of not having absorbed that yet. Where I was coming from I built my portfolio in Hamilton, Ontario, just before it became one of Canada’s hottest markets. It went well — well enough that by my mid-thirties I was facing six-figure tax bills and asking harder questions about what I was building toward. I have written the fuller version of that decision in why I left Canada to live and invest in the Caribbean and, on the tax side, how Canada’s departure tax works . The short version: I wanted geographic optionality, a lower tax base, and a life I chose rather than one that had accumulated. Why the Caribbean, and how I chose where to look I looked seriously at a lot of the region before committing, and the criteria that ended up mattering were unglamorous. Clean foreign ownership. Ownership rules vary enormously — freehold in some jurisdictions, alien landholding licences in others , long leasehold elsewhere. Can I get home? Flight access is infrastructure, not a lifestyle detail. I ended up writing which Caribbean islands are a direct flight home because so many buyers underweight this and regret it. A stable jurisdiction, and money that moves. Political stability and the absence of capital controls matter more than the brochure ever mentions. Antigua is where I based myself, and where I later took citizenship through the program. Why I donated rather than bought real estate to do it is its own story, and a slightly embarrassing one for a real estate guy. Where you base yourself and where you buy are separate decisions, and they do not have to land in the same place. Hunting the first deal Here is where my Canadian instincts started failing. In Ontario I would pull comparable sales, check days-on-market, model a range, and arrive at a number with genuine confidence. I sat down to do the same in the Caribbean market I was buying into and discovered there was nothing to pull. There was no MLS in the sense I understood it, and no reliable public record of what things sold for. Listings that had been sitting at the same price for three years sat beside listings that were genuinely mispriced, and no dataset would tell me which was which. I built a financial model anyway, because that is what I knew how to do. The model was fine; the inputs were guesses. What the first deal taught me Five things, in rough order of how much they cost me to learn. 1. Price is an opinion, not a market signal In a thin market with no comparable data, an asking price reflects what the seller hopes , filtered through what an agent was willing to list. It is not evidence of value. I learned to stop treating the listed price as an anchor. Instead I built my own number from replacement cost, rental reality and what similar properties had genuinely transacted at. That usually meant asking people directly rather than looking anything up. This is also why the answer to "what does property cost in the Caribbean" is a range with caveats. I did eventually write what $300,000–$400,000 buys you , because the question deserves a real answer. 2. Everything takes three times longer I budgeted a Canadian timeline: thirty to sixty days, maybe ninety if something went sideways. The reality is three to six months, and that is when nothing goes wrong. Title searches take time, government offices take time, and approvals take time. In several jurisdictions a foreign buyer needs a licence before completing, which is its own multi-month process. The mistake is not the delay itself — it is planning around the wrong timeline and then making bad decisions under artificial time pressure you created. 3. Your lawyer matters more than your agent In Canada, the agent is the centre of the transaction and the lawyer processes the paperwork at the end; in the Caribbean it is closer to the reverse. A good local attorney is the person who finds the title problem, catches the encumbrance, knows whether the development has its approvals, and understands how the licensing process really works in that jurisdiction. That is where the risk sits, and where the money is well spent. Cheap legal advice is the single worst economy available to a foreign buyer here. 4. Learning to read the incentives I will put this diplomatically: in small markets with limited data and few repeat buyers, the incentives do not always point toward the buyer. Some agents represent the seller while sounding like they represent you, and some "off-market opportunities" are properties that have failed to sell publicly for years. Some developers have a pattern of announcing projects that never break ground. Almost none of that is illegal, and very little of it is discoverable from a website. The defence is not cynicism, it is references. Ask who else they have closed for, and ask to speak to those people. In a market this small, reputation is the only real due-diligence database — and it works, if you actually use it. 5. The best inventory is not listed This one genuinely surprised me, and it is the single most useful thing I know about this region. A meaningful share of the good property in the Caribbean never appears on a listing site. It moves between agents, developers and known buyers, often before anyone considers advertising it. Sellers here are frequently discreet by preference, and in a market with few buyers, a quiet sale to a known party is easier than a public campaign. Which means the search you can do from your laptop shows you a biased sample: what did not sell easily. That is not a conspiracy, it is just how thin markets clear. What I would do differently Spend the money on the lawyer first, before falling in love with a property. Establishing who is competent in that jurisdiction is worth doing before you have an emotional position. Visit in low season. Anywhere is lovely in February; the question is whether you like it in September, when it is hot, quiet and half the restaurants are shut. Assume the rental projections are optimistic. They almost always are, and I later wrote why Caribbean rental cashflow is harder than it looks precisely because I had believed a set of numbers I should have interrogated harder. Decide whether you are buying an asset or a life. These get conflated constantly, and they lead to different properties. If you want returns, be ruthless about the numbers. If you want a place to be, buy the place you want to be and treat any return as a bonus. The unhappy buyers I meet are the ones who told themselves it was the first while actually wanting the second. Whether it was worth it It was worth it, but not primarily as an investment. The property performed acceptably. What it bought me was a working understanding of a market I now advise in, a network of lawyers, agents and developers across several islands, and the specific, unglamorous knowledge of how these transactions really behave. That is why I am comfortable telling clients when the answer is no. I have been the inexperienced foreign buyer in this market, with good intentions and bad data, and I would rather someone benefited from that than repeated it. If you are somewhere near your own first Caribbean transaction, Book a call — including the part where I tell you what I would not buy. Or start with the Caribbean real estate overview and current listings . Five lessons, plainly stated There is no MLS and no reliable comparable data — an asking price is an opinion, not a market signal . Budget three to six months to close, not thirty days, and more where a foreign-buyer licence is required. Your lawyer matters more than your agent. That is where the risk and the value sit. Incentives are not always aligned with the buyer; references are the only real due-diligence database . The best inventory is frequently unlisted — what you can find online is a biased sample. Visit in low season before committing, and interrogate every rental projection. Settle whether this is an asset or a life before you look at anything. The two lead to different properties. Frequently asked questions Is Caribbean real estate a good investment? It can be, but it behaves differently from North American property. Markets are thin, data is scarce, transactions are slow and exits can take a long time. It suits buyers with a long horizon who will use the property. It suits poorly anyone needing liquidity or relying on rental income to carry the asset. Is there an MLS in the Caribbean? Not in the way North American buyers understand. Some islands have partial listing systems, but there is no comprehensive record of sold prices, and a meaningful share of good inventory is never publicly advertised. Pricing is therefore opinion-based rather than evidence-based. How long does it take to buy property in the Caribbean? Typically three to six months. Title searches, government processing and, in several jurisdictions, a foreign-buyer licence all add time. A ninety-day completion would be fast in most of the region. Do I need a lawyer to buy Caribbean property? Yes, a local one, and it is the most important hire you make. They handle title search, contracts, encumbrances, development approvals and the licensing process. Economising here is the most expensive mistake a foreign buyer can make. Can foreigners buy property anywhere in the Caribbean? Generally yes, but the mechanism varies significantly. Some jurisdictions offer straightforward freehold, some require an alien landholding licence with a fee based on value, and some offer only long leasehold. Confirm the specific rules for your target island before budgeting. What is the biggest mistake first-time Caribbean buyers make? Trusting the listed price and the rental projection, and rushing. In a market with no comparable data, both numbers are assertions rather than facts — and the artificial urgency that causes bad decisions is usually self-imposed. Filed under Due Diligence Dan Merriam Caribbean Real Estate & Investment Migration Advisor Offices across the Eastern Caribbean Dan Merriam is a Caribbean real estate and investment migration advisor who represents properties and developments across the region, working with global families and investors across luxury residential, branded residences and CBI-approved developments. He is based in the Eastern Caribbean and is regularly quoted on Caribbean property and citizenship in Forbes, Travel + Leisure, and other publications. Book a call Skip Question about real estate? Send your question and you'll receive a direct, personal reply. Send a private enquiry Sources: St Kitts and Nevis CIU, investment options &middot; Ministry of Legal Affairs, the Laws of Antigua and Barbuda &middot; Sources checked 31 August 2026 This article is general information and reflects the position at the date of writing — rules in this area change, and outcomes depend on your own circumstances. 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Caribbean Development Dynamics 2026 # Caribbean Development Dynamics 2026 Cecchi, Luis, Daniel Hernaiz, Valerie Mercer-Blackman, Juan Vázquez Zamora, Laura Gutierrez Cadena, Mariana Navarro, Diether Beuermann, et al. 2026. Caribbean Development Dynamics 2026. https://doi.org/10.18235/0014015 Author Cecchi, Luis ; Hernaiz, Daniel ; Mercer-Blackman, Valerie ; Vázquez Zamora, Juan ; Gutierrez Cadena, Laura ; Navarro, Mariana ; Beuermann, Diether ; Gauto, Victor ; Graham, Monique ; Mooney, Henry ; Mitchell, Travis Klaus ; Okey, Onoh-Obasi ; Ortiz de Mendívil, Cloe ; Saboin, José Luis ; Mills, Ian Wilfrid ; Nieto Parra, Sebastián ; Castilleja Vargas, Liliana Date issued April 2026 English View Online Download Cecchi, Luis; Hernaiz, Daniel; Mercer-Blackman, Valerie; Vázquez Zamora, Juan Sustainable Investment; Gross Domestic Product; Finance; Infrastructure Development; Development Economics; Climate Resilience; Infrastructure Investment; Foreign Direct Investment; Debt Restructuring; Public Private Partnership; Renewable Energy; Digital Transformation E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; F15 - Economic Integration; O11 - Macroeconomic Analyses of Economic Development; O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance; O40 - Economic Growth and Aggregate Productivity: General; Q54 - Climate • Natural Disasters and Their Management • Global Warming Country Bahamas; Barbados; Belize; Dominican Republic; Guyana; Haiti; Jamaica; Suriname; Trinidad and Tobago Caribbean Development Dynamics 2026: Investing in Sustainable and Resilient Development is a joint flagship report by the OECD Development Centre and the Inter-American Development Bank. It examines how to promote more sustainable and resilient development across Caribbean countries by increasing the quantity and quality of investment in the face of heightened climate risks, fiscal constraints and structural vulnerabilities. Drawing on new, comparable country data, the report identifies policy priorities to build resilience, mobilize longterm finance and close infrastructure gaps. It highlights the importance of building resilient infrastructure and early warning systems; strengthening institutional and statistical capacities; and deepening regional integration and international cooperation. The report also underscores the role of innovative financing instruments, development banks and public-private partnerships in financing investment and unlocking the potential of sectors such as sustainable tourism and transport, the blue economy, sustainable agriculture and renewable energy.

### Caribbean Development Dynamics 2025 ## Caribbean Development Dynamics 2025 This work is published under the responsibility of the Secretary-General of the OECD and the Inter-American Development Bank (IDB). The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD or its Development Centre or the IDB, its Board of Directors, or the countries they represent. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The names and representation of countries and territories used in this joint publication follow the practice of the OECD. Please cite this publication as: OECD/IDB (2024), Caribbean Development Dynamics 2025, OECD Publishing, Paris, https://doi.org/10.1787/a8e79405-en. ISBN 978-92-64-53038-6 (print) ISBN 978-92-64-88237-9 (PDF) ISBN 978-92-64-80935-2 (HTML) ISBN 978-92-64-36835-4 (epub) Photo credits: Cover design by Aida Buendía using an image from © Guven Ozdemir/gettyimages.fr. Corrigenda to OECD publications may be found at: https://www.oecd.org/en/publications/support/corrigenda.html. © OECD/IDB 2024 This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence (https://creativecommons.org/licenses/by/4.0/). Attribution – you must cite the work. Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid. Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD and the IDB. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries or the IDB, its Board of Directors, or the countries they represent. Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement. You must not use the OECD’s or the IDB’s respective logo, visual identity or cover image without express permission or suggest the OECD or the IDB endorse your use of the work. Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one. Attribution 4.0 International (CC BY 4.0)  3 #### Foreword Caribbean Development Dynamics is a new annual flagship report by the OECD Development Centre and the Inter-American Development Bank analysing key development trends in the Caribbean with a comparative and multi-dimensional approach. This publication is the result of fruitful dialogue between the two institutions, which concluded by acknowledging the need for a dedicated report to inform policy dialogue on the development of the Caribbean region. The report calls for a shift in perspective – from emphasising challenges to casting light on opportunities. It seeks to shape the debate on development opportunities in the Caribbean by providing comparable data, policy recommendations, and a regional perspective highlighting policy options and areas of common interest, while acknowledging diversity as a unique asset. This 2025 edition, alongside future ones, reflects the growing engagement of the OECD Development Centre and the Inter-American Development Bank with the Caribbean. The OECD Development Centre is expanding its work and membership with the region, while the IDB is carrying out this work under the framework of IDB’s Regional Program One Caribbean. This initiative is part of an overall institutional commitment to address regional public goods and advance the development agenda of multiple subregions of Latin America and the Caribbean. The programme leverages resources, co-operation, and economies of scale to tackle shared challenges across the Caribbean region. 4  #### Acknowledgements This report is co-produced by the Inter-American Development Bank (IDB) and the Development Centre of the Organisation for Economic Co-operation and Development (OECD). The contribution of the OECD Development Centre to the report was led and managed by Sebastián Nieto Parra and Juan Vázquez Zamora, Head and Deputy-Head, respectively, of the Latin America and the Caribbean Unit. Co-ordination was led by Luis Cecchi, Policy Analyst at the Latin America and the Caribbean Unit, under the guidance of Ragnheiður Elín Árnadóttir, Director, and Federico Bonaglia, Deputy Director. IDB’s contribution was led by David Rosenblatt, Regional Economic Advisor for the Caribbean Country Department and Ian Mills, Unit Chief of the One Caribbean Coordination Unit, under the guidance of Anton Edmunds, Manager for the Caribbean Country Department. Co-ordination was led by Fazia Pusterla, representative of the IDB Group Office in Europe; Carolyn Robert, Strategic Advisor for the Vice-President for Countries; Carina Cockburn, Country Representative in Barbados; Carla Fernández-Durán, Strategic Partnerships and Resource Mobilization Senior Specialist; Bernardo Deregibus, Partnerships and Resource Mobilization Specialist; Daniel Hernaiz Diez de Medina, Strategic Task Force Lead Economist; Nadia Rocha, Principal Advisor and Alejandra Quiñonez, Executive Coordinator, both at the Vice Presidency for Countries; under the guidance of Anabel González, Vice President for Countries and Matias Bendersky, Manager of the Office of Outreach and Partnerships. The report benefited from the research, drafting and fruitful collaboration among various authors across these organisations, including: Gerard Alleng (IDB), Jose Antonio Ardavin (OECD), Andrew Auerbach (OECD), Severine Baranger (OECD), Dieter Beuermann (IDB), Federico Bonaglia (OECD), Steve Brito Hernandez (IDB), Adriana Caicedo (OECD), Olivier Cattaneo (OECD), Luis Cecchi (OECD), Rita Da Costa (OECD), Victoria de la Puente (OECD), Bernardo Deregibus (IDB), Ben Dickinson (OECD), Gabriel Di Paolantonio (OECD), Saleh El Kadre (OECD), Abdoulaye Fabregas (OECD), Carla Fernández-Durán (IDB), María Garcin Zaldívar (OECD), Paolo Giordano (IDB), Diego Gonzalez-Bendiksen de Zaldivar (OECD), Laura Gutiérrez Cadena (OECD), Hamadi Hakim (OECD), Daniel Hernaiz Diez de Medina (IDB), Tomas Hos (OECD), Martina Lejtreger (OECD), Zayda Manatta (OECD), Thomas Manfredi (OECD), Nathalia Montoya González (OECD), Mariana Navarro (OECD), Sebastián Nieto Parra (OECD), René Orozco (OECD), Lorenzo Pavone (OECD), Cécilia Piemonte (OECD), Arturo Pita Gussoni (IDB), Joan Prats Cabrera (IDB), Fazia Pusterla (IDB), David Rosenblatt (IDB), Ben Roseth (IDB), Callum Ryan (OECD), Harry Tonino (OECD), Piera Tortora (OECD), Juan Vázquez Zamora (OECD) and Pia Zanetti Balparda (IDB). Rosario Hernando Cruz (OECD), Julia Peppino (OECD) and Javier de Ramón (IDB) provided invaluable administrative support throughout the elaboration of the report. The content of the report was enriched by the constructive feedback received during the consultation meeting held virtually on the 21st of March and the Caribbean Development Dynamics Working Lunch, held at the OECD on the 22nd of May, at the margins of the International Economic Forum on Latin America and the Caribbean 2024, and with the presence of Enrique Iglesias, President, Fundación Astur, as a special invitee. In addition to the LAC delegates to the Governing Board of the OECD Development Centre, we are grateful to the experts, academics, private-sector representatives and other public servants who joined us during the consultation meeting, the working lunch and bilateral meetings: Olga Julissa Anzueto  5 Aguilar (Guatemala), Seema Baldewsingh (Suriname), Bevon Bernard-Henry (ACS), Symone Betton Nayo (Jamaica), Mauricio Cabrera Leal (Colombia), Rodrigo Cifuentes (CAF), Monica Colomer (Spain), Colin Michael Connelly (Trinidad and Tobago), Ignacio Corlazzoli (CAF), Joseph Cox (CARICOM), Amélie de Montchalin (France), Lisa Douglas-Paul (ACS), David P. Doyle (Saint Kitts and Nevis), María Durán (CAF), Almudena Fernández (UNDP), Félix Fernández-Shaw (European Commission), Cynthia Filártiga (Paraguay), Malcolm Geere (Foreign, Commonwealth and Development Office), Paul Gomez (Bahamas), Cleviston Haynes (Barbados), Karen Hernández (Dominican Republic), Rafael Hoyuela (CAF), Daniela Ibarra (OAS), Len Ishmael (OECS), Raphael Joseph (Grenade), Florian Luetticken (EEAS in Barbados), Luis Fernando Medina (Colombia), Johakson Moncada (ACS), Natalia Moreno Rigollot (Telefonica), Keith Nurse (College of Science Technology and Applied Arts, Trinidad and Tobago), Nahuel Oddone (ECLAC), Joaquim Pedro Penna (Brazil), Miguel Posadas Arias (AECID), Edgar Picon-Prado (Tony Blair Institute for Global Change), Rodolfo Sabonge (ACS), Issamary Sanchez Ortega (Panama), Jo Spalburg (Caribbean Chamber of Commerce in Europe), Charles Trottmann (AFD) and Maria José Zambrano (AFD). Finally, many thanks go to the Publications and Communications Division of the OECD Development Centre, notably to Aida Buendia, Delphine Grandrieux, Elizabeth Nash and Henri-Bernard Solignac-Lecomte, for their steadfast patience and expedient work on the production of this report and associated materials. The authors also sincerely appreciate the editing and proofreading activities undertaken by Mark Foss and Clara Young, respectively. 6  #### Editorial The Caribbean is a region rich in opportunities, with immense development potential. Home to almost 10% of the world’s coral reefs, approximately 45% of the fish species and 25% of the coral species, its unique biodiversity is an invaluable asset not only for the region, but for the world. While the region faces challenges such as exposure to climate change, limited access to external financing, and connectivity issues, the region’s natural resources and potential for growth offer significant prospects for development. The Caribbean Development Dynamics is a new flagship report of the IDB and OECD that highlights the region’s development potential and informs national policies and international co-operation. The report calls for a shift in perspective – from seeing Caribbean challenges as limitations to recognising the opportunities they present. The Caribbean is part of the solution to our global challenges. But, unlocking this potential will require bold policy actions, at both national and regional levels, together with stronger international partnerships. First, at the national level, the report offers a comprehensive approach to challenges and opportunities. It draws on examples from within and beyond the Caribbean to guide efforts in diversifying economies, strengthening climate adaptation, and promoting job formalisation. Second, at the regional level, the report highlights the potential benefits of deeper integration in areas like transport connectivity, renewable energies, and disaster risk reduction. The region’s diversity is an asset, with opportunities to learn from each other’s experiences and comparative advantages. With its integrated view of the Caribbean, the report aims to contribute to crafting a renewed regional perspective. Finally, at the international level, more inclusive partnerships can bring the Caribbean perspective to the forefront. Though contributing little to climate change, the region faces its greatest impacts. The world should support the Caribbean in protecting its citizens and extraordinary biodiversity. Access to affordable financing remains a challenge, but the region is leading innovative climate finance solutions and shaping global discussions on international financial architecture. Multilateral institutions like the IDB and OECD have been working increasingly as a system and partnering with Caribbean countries in deploying new financial tools and providing policy guidance to mobilise climate finance to help the region strengthen its climate change resilience. We hope that the report’s comparative analysis and policy recommendations, developed in close partnership with regional actors, will help the Caribbean advance a home-grown path towards a more prosperous, resilient and inclusive development. The report also reflects our collective engagement with the Caribbean. The OECD Development Centre has been expanding its analytical work and membership in the region. The Inter-American Development, for its part, continues to be a significant partner in regional development, recently launching One Caribbean – a regional programme to address common challenges in resilience, citizen and food security, and private sector growth. We are committed to continue delivering this annual flagship report, in the belief that it will contribute to improving the lives of the Caribbeans. Mathias Cormann Secretary-General Organisation for Economic Co-operation and Development Ilan Goldfajn President Inter-American Development Bank  7 #### Table of contents Foreword 3 Acknowledgements 4 Editorial 6 Abbreviations and acronyms 12 Executive summary 15 Overview 17 Notes 37 References 37 1 Understanding macro-structural conditions 43 Introduction 44 Macroeconomic conditions are characterised by modest potential growth, coupled with volatility and vulnerability to external shocks 44 The economic structure reflects low levels of productivity and limited diversification and upgrading of the production matrix 53 Key policy messages 60 References 61 2 Improving social conditions 65 Introduction 66 Poverty and inequality remain high, although with large disparities across countries and significant information gaps 66 Labour markets remain largely informal, resulting in poor working conditions and heightened social vulnerability for many 70 Social protection and healthcare systems must be strengthened and adapted to climate vulnerabilities and emerging challenges 75 Education systems have improved in recent decades, yet with challenges in access and completion after lower secondary and in overall learning outcomes 80 Key policy messages 84 Notes 85 References 85 3 Environmental challenges and opportunities for sustainable development 89 Introduction 90 Caribbean countries face unique challenges linked to their geographical location and the vulnerabilities associated with Small Island Developing States 90 8  Adaptation measures are central to tackling climate vulnerabilities and fostering climate resilience in the Caribbean 97 Harnessing the potential of unique biodiversity and natural endowments: From vulnerabilities to opportunities in the Caribbean 101 Key policy messages 114 Notes 114 References 115 Annex 3.A. 124 4 Stronger institutions for a renewed social contract 127 Introduction 128 Understanding citizens’ perceptions to improve policy outcomes 128 Advancing more effective and inclusive institutions in the Caribbean 135 Towards a renewed social contract 143 Key policy messages 149 Notes 151 References 152 5 Financing the development agenda 159 Introduction 160 Tax revenues in the Caribbean can be strengthened to finance the development agenda 160 Rethinking debt management and strengthening fiscal frameworks will help Caribbean countries cope with high debt levels 168 Innovative debt financing mechanisms can mobilise resources to support environmental, social and ocean-related objectives 171 Financial markets need development to improve access to financing 178 Key policy messages 182 Notes 183 References 184 6 Regional integration and international partnerships 191 Introduction 192 Targeted regional strategies can improve trade outcomes for the Caribbean 192 Harnessing the potential of regional co-operation to address common challenges and opportunities 201 International partnerships to support financing for development and climate action in the Caribbean 207 Notes 217 References 217 FIGURES Figure 1. Average annual economic losses linked to climate-related extreme weather events in the Caribbean (1980-2020) 18 Figure 2. Infrastructure Vulnerability Index 2021: Caribbean and Latin American selected countries 19 Figure 3. Prevalence of moderate or severe food insecurity in Caribbean countries, 2022 21 Figure 4. Distribution of population by household informality, latest available year 22 Figure 5. Potential GDP per capita growth in the Caribbean, Latin America and advanced economies 24 Figure 6. Central government total public debt, selected Caribbean countries and regional averages, 2012 and 2022 25 Figure 7. Debt service-to-tax revenues ratio, 2012 and 2022 25 Figure 8. Contribution of economic sectors to total GDP, 2022 26  9 CARIBBEAN DEVELOPMENT DYNAMICS 2025 © OECD/IDB 2024 Figure 9. Intentional homicides rate in the Caribbean, 2022 28 Figure 10. Women’s political representation in Caribbean countries, 2022 29 Figure 11. Tax structure in selected Caribbean economies and Latin America and OECD averages, 2022 30 Figure 12. International GSSSB bond issuance in the Caribbean by type and issuer, 2019 - August 2024 32 Figure 13. Domestic credit to private sector by region 2000-22 and domestic bank credit and deposits as percentage of GDP in the Caribbean, 2022 33 Figure 14. Participation in world exports (percentage) of the Caribbean, Latin America and ASEAN, 1981-2022 34 Figure 15. Transport cost intensity, selected regions and country groups (2016-21) 35 Figure 16. Main external financial flows to the Caribbean, 2000-23 36 Figure 1.1. Potential GDP per capita growth in the Caribbean, Latin America and advanced economies (as estimated by different methods since 1980) 45 Figure 1.2. Evolution of GDP per capita by region and GDP growth standard deviations in the Caribbean, 2000-23 46 Figure 1.3. Labour productivity in the Caribbean and Latin America as a share of the OECD, 1991-2023 47 Figure 1.4. Central government fiscal balance as percentage of GDP, 2013-23 average 48 Figure 1.5. Central government total public debt as a percentage of GDP, selected Caribbean countries and regional averages, 2012 and 2022 49 Figure 1.6. Average inflation rate by monetary regimes in the Caribbean, 2000-23 50 Figure 1.7. Total investment as a percentage of GDP, 2015-23 51 Figure 1.8. Public investment in infrastructure in selected Caribbean countries as a percentage of GDP, 2015-21 52 Figure 1.9. Foreign direct investment net inflows (percentage of GDP), 2013-23 53 Figure 1.10. Contribution of economic sectors to total GDP, 2022 54 Figure 1.11. Tourist arrivals and tourism expenditure as percentage of GDP, 1995-2022 54 Figure 1.12. Current account balance in the Caribbean, 2012-22 55 Figure 1.13. Share of services exports in total exports, 2022 56 Figure 1.14. Goods trade structure by technology intensity in the Caribbean, 2022 57 Figure 1.15. Areas of innovation at the firm level in the Caribbean 58 Figure 1.16. Green innovation at the firm level in Caribbean countries 59 Figure 1.17. Main obstacles affecting firms’ operation in Caribbean economies 60 Figure 2.1. Monetary poverty in Caribbean countries, latest year available 67 Figure 2.2. Human Development Index, 1990-2022 68 Figure 2.3. Prevalence of moderate or severe food insecurity (%) in Caribbean countries, 2022 69 Figure 2.4. Employment to population rate, by gender, Caribbean countries 70 Figure 2.5. Young people not in education, employment or training by gender, in selected Caribbean countries, 2020 71 Figure 2.6. Informality rates in selected Caribbean countries, late

## Women’s Power and Community Resilience Rotating Savings and Credit Associations in Barbados and The Bahamas Brent W. Stoffle Richard W. Stoffle Jessica Minnis Kathleen Van Vlack Abstract Rotating Savings and Credit Associations or ROSCA are perceived by many in the Caribbean as derived from West Africa where they were a traditional (pre-colonial) means of accumulating and distributing resources. Brought to the Caribbean as part of the non-material culture of African people, ROSCAs were reestablished and adapted to the new social, economic, and political conditions. Also a challenge for African ancestry peoples was the creation of new communities in a suppressive social environment where such communities were perceived as a threat to established colonial order. This paper is based on historic documents and two separate ethnographic studies involving more than a thousand direct interviews. Although the two studies in Barbados and the central Bahamas had different purposes, both documented that these associa tions emerged as historically and contemporarily important to women and a foundation of their communities. The findings argue that begin ning during slavery ROSCAs were used by women to achieve power (agency) and in so doing provided resilience to their community. Keywords: Rotating Savings and Credit Associations, Barbados, Baha mas, micro-credit Resumen Las Rotativas de Ahorro y Crédito o ROSCA son percibidas por muchos en el Caribe como derivadas de África Occidental, donde eran un tradicional (pre-colonial ) medio de acumulación y distribución de recursos. Transportadas al Caribe como parte de la cultura inmaterial de los pueblos africanos, las ROSCA se restablecieron y se adaptaron a las nuevas condiciones sociales, económicas y políticas. Un desafío para los pueblos de ascendencia africana fue la creación de nuevas comunidades en un entorno social represivo que en dichas comunida des se percibía como una amenaza al orden colonial establecido. Este Caribbean Studies Vol. 42, No. 1 (January - June 2014), 45-69 trabajo se basa en documentos históricos y dos estudios etnográficos separados basados en más de mil entrevistas directas. Aunque los dos estudios realizados en Barbados y las Bahamas centrales tuvieron diferentes propósitos, ambos documentaron que estas asociaciones surgieron históricamente y fueron al mismo tiempo importantes para las mujeres y un pilar para sus comunidades. Los hallazgos sostienen que en tiempos de la esclavitud las ROSCA fueron utilizadas por las mujeres para aumentar su poder (agencia) y al hacerlo, proporcionaron resistencia a su comunidad. Palabras clave: Rotación de Ahorro y Crédito, Barbados, Bahamas, micro-crédito Résumé Beaucoup de gens dans les Caraïbes perçoivent les associations rotatives d’epargne et de crédit ou AREC comme étant originaires d’Afrique de l’ouest où elles étaient un moyen traditionell (pré-colo nial) d’accumulation et de répartitions des ressources. Importées dans les Caraïbes en tant que culture immatérielle du peuple africain, les AREC ont été rétablies et adaptées aux nouvelles conditions sociales, politiques et économiques. Le défi pour les descendants d’Africains, a été la création de nouvelles communautés dans un environnement social suppresif où lesdites communautés étaient perçues comme una menace de l’ordre colonial établi. Cet article s’appuie sur des docu ments historiques et deux études ethnographiques distinctes incluant plus d’une centaine d’entrevues directes. Bien que les deux études menées l’une à la Barbade et l’autre dans le centre des Bahamas ont des objectifs différents, ces dernières convergent pour attester de l’impor tance de ces associations pour les femmes tant sur le plan historique que contemporain. Ce système de coopérative constitue la base de leurs communautés. Les résultats soutiennent que durant l’esclavage les AREC étaient utilisées par les femmes comme moyen d’atteindre le pouvoir (l’agentivité) et, ce faisant procurer de la résilience à leur communauté. Mots-clés : Association rotatives d’epargne et de crédit, La Barbade, les Bahamas, microcrédit T his paper brings interview, oral history, and document data to the question of how women acquired power (often called agency) during the British colonial period in the Caribbean and the extent that their efforts brought integrative social organization, values, and resilience to emergent African-ancestry communities. This paper argues that rotating savings and credit associations (ROSCA) arrived from West Africa in the minds of African people who were brought against their will to the islands of Barbados and Bahamas. This traditional African pattern of savings and credit (Miracle, Miracle, and Cohen 1980; van den Brink and Chavez 197l) was largely controlled by women who created what is called here a creole social space, a concept that is modeled after Olwig (1993:201-208; 1999:377). With the support of men, ROSCAs have become a foundation of the African-ancestry community in the Caribbean. After perhaps as much as 300 years of use and adaptation to personal and community needs, ROSCAs came into the post-colonial period (about 1834) as part of the cultural heritage of the people of Barbados and The Bahamas. ROSCAs are still useful, but have an emergent role since independence from the British Empire (1966 for Barbados and 1973 for The Bahamas) in the formation of national identities—it is how our ancestors survived and thrived—is a sentiment commonly expressed in Barbadian and Bahamian interviews. Olwig (1985, 1993, 1999) argues that opposition to the colonial society and culture was both how and why the unfree laborers created what we are calling here a creole social space where they could satisfy values and needs defined for and by them. Olwig (1985:227) observes for St. John that drawing on cultural resources brought with them, they built an Afro-Caribbean culture in an attempt to create their own autonomy and an independent existence. Many slaves were capable of cultivating a surplus, as well as raising pigs and fowl for sale. This led to an extensive exchange of goods, not just informally on St. John, but also, through a more formal system of trade, with the neighboring island of St. Thomas where, unlike on St. John, there was a market (Olwig 1985:218). Olwig observed (1999:377) that most oral traditions on St. John do not concern monumental events, such as the dramatic slave uprising, but rather the various ways in which the ancestors, through determined efforts, claimed a place for themselves at the margins of St. John’s plantation society. They thereby created the basis of an African Caribbean community. This analysis is built upon the question “How did people taken from their homes in Africa make social spaces for themselves in a totally repressive society?” Answering this question requires us to further ask, “Whether or not current patterns of Caribbean culture came from Africa and were retained because of their utility and resistance to the system, or whether they were made afterwards in the Caribbean?” The former is called the African Retention perspective and the latter is called the Americanist (or Creole) perspective (Yelvington 2001). Some scholars question the probability that African cultural patterns survived the experience of slavery. Mintz in 1974 (1989:111) maintained that Afro-Americans could not transfer their cultures to the New World intact…because they were prevented from bringing with them the per sonnel who maintained their homeland institutions (including) markets. He goes on to say that institutions require patterns of and behavior in social groupings and these were not permitted by the colonial society and thus beyond the ability of the isolated representatives of African societ ies. Later, however, Mintz and Price (1976:22) argued that the charac teristics of situations (spheres or nodes of contact) within which African peoples found themselves dealing with the colonial system during slavery made it more or less possible to maintain African derived cultural pat terns. So while apparently improbable, it is argued here that African ROSCAs were transferred and thrived because women carved out the social space(s) (or spheres of contact) where they could use ROSCAs for themselves and their emerging communities. ROSCAs were widely understood especially in West Africa (see Miracle, Miracle, and Cohen 1980) and so even though women in a particular slave context probably were isolated by ethnic background, language, and the system itself, the notion of ROSCA was a traditional African cultural trait complex that could be built upon by women if they could find or make the social space to do it. We argue here that they chose the market as their creole social space. Finally, we ask, given the great differences in the life chances and roles of men and women during the slave period, “How did women especially utilize and adapt this former African cultural pattern to their unique Caribbean situations?” This begs the reverse question, “What else might women have done during slavery to provide themselves with agency and their communities with structure?” Mintz and Price (1976:22) suggest that the true beginnings of Afro-American culture and society (and community) were initiated with significant cooperative efforts (their emphasis). Methods and Assumptions The analysis is informed by more than thirty years of research conducted by the authors among the residents of coastal communities in the Caribbean. These research projects occurred along coasts in Barbados, The Bahamas, Antigua, St. Lucia, the U.S. Virgin Islands, and the Dominican Republic (Rubino and Stoffle 1990; B. Stoffle et al. 1994; B. Stoffle and R. Stoffle 2007; R. Stoffle et al. 1994). This paper, however, is primarily based on more than a thousand quantitative and qualitative interviews collected in two areas—the island of Barbados and the Exumas Islands and Cays in the central Bahamas. The Barbados interviews were conducted in the early 2000s during a three-year study of traditional microeconomic systems of exchange, especially those focused on ROSCA. During five field sessions a single researcher (B. Stoffle 2000) conducted 500 interviews in Barbados; of these interviews 120 were with the people of the rural Bath Plantation area and the rest were with people living in urban Bridgetown. Initial interview findings were presented through a well-attended public speech at the central library in Bridgetown and the final analysis became a Ph.D. dissertation at the University of South Florida (B. Stoffle 2001). The Bahamian study was conducted in the early 2000s and involved 572 interviews conducted with 193 people from six traditional communi ties in the Exumas. Many people were interviewed multiple times with various instruments. Gender balance was approached in the 352 formal interviews but an imbalance towards males occurred in the 221 informal interviews. Approximately the same percentage of each community was formally interviewed with an overall sample size of 34% of the census recorded population. The Bahamas research is (a) inductive, (b) iterative, (c) mixed methodologically, (d) collaborative, and (e) consultative. The broadest research goal was to understand how potential Marine Protected Areas (MPA) could impact local communities and which of these impacts would best predict local community responses to the MPAs. Conducted over six years, the eight field sessions permitted an iterative cycle of collecting data, analyzing findings, and returning to the field with new and revised data collection instruments. During these interviews Exumian people noted that The Bahamian ROSCA, called Asue, was and continues to be an essential aspect of how people work together to strengthen their communities and make them resilient. The study team conducted inter views specifically about Asue as well as learned about it during other interviews and in depth oral histories. The latter often involved dozens of interview hours by multiple researchers. Each case study presented in this paper has two distinct sections (1) an ethnohistorical reconstruction and (2) a contemporary ethnography. Confidence in the findings presented in the two sections varies from well grounded ethnological interpretation to ethnographic description that is confirmed by extensive interview data. Women’s activities during slavery were poorly documented, especially those activities which were not legal and counter to the goals of the dominant society, thus here we must hypothesize based on some documents, contemporary oral histories, and interviews about what was happening during those days of slavery. The oral history accounts of using ROSCAs during slavery are based on less than 200-year-old memories (1834 was the end of English slavery in the two colonies). In Barbados we recorded two ROSCAs that have operated continuously for at least 100 years. These memory time lines are well within the accepted standards of accuracy. In fact, Stoffle and Zedeño (2001) document accurate oral history accounts going back thousands of years. From an ethnological perspective the slave-period interpretation is robust given that many people in both Barbados and The Bahamas say the same things about their past. The role of ROSCAs during contemporary times is well documented by more than a thousand ethnographic interviews. This analysis of the contemporary meaning of ROSCAs uses a synthesis of the findings and a qualitative ethnographic style (Bernard 2006). More details on the study methodologies can be found in earlier publications (B. Stoffle 2001; B. Stoffle et al. 2009; B. Stoffle and R. Stoffle 2007; R. Stoffle and Minnis 2007; R. Stoffle and Minnis 2008). A qualitative presentation was chosen for this analysis because it is both an appropriate means of representing ethnographic conclusions via a process termed “homing in” (Schoepfle, Topper, and Fisher 1974) and stylistically best represents the data which were gathered with “mixed methods” (Tashakkori and Teddlie 1998; Beebe 2001) and analyzed with a process termed “triangulation” (Campbell and Fisk 1959). This paper builds on an article published in Ethnology (Stoffle et al. 2009) that focused on the contemporary description and importance of ROSCAs in Barbados and The Bahamas. Here, however, we primarily address the origin(s) and social implications of ROSCAs during slavery. Critical to the present analysis is the mother of Professor Purcell (one of the authors of that article) who provided the interpretative founda tion for both analyses based on her knowledge as head of a Jamaican ROSCA (called there Partner). Contemporary ROSCA descriptions from the Caribbean and West Africa are used to extrapolate back into the slave period. Rotating Saving and Credit Associations This analysis addresses three questions regarding ROSCAs: (1) what are they, (2) where did they come from, and (3) when did they arrive. Like the ethnohistorical and contemporary ethnography sections of each case, these discussions use different kinds of data. What Are ROSCAs? ROSCAs are a form of savings and microcredit that involves people Vol. 42, No. 1 (January - June 2014), 45-69 Caribbean Studies who come together based on interpersonal knowledge and trust. Mem bers tend to belong for life and join ROSCAs that were supported by their parents (especially their mothers), thus ROSCAs tend to be mul tigenerational and pass through female relationships. The behavior of members reflects on both their ancestors and future generations and can impact their social respect in the community and in their society at large. For example, a ROSCA that runs on an annual cycle tends to involve 12 members. Each member places a sum of money in a common pool, the total of which is given each month to a member based on a predetermined rotating schedule. Each ROSCA has a head, called an organizer (B. Stoffle 2001) or meeting holder in Barbados (Gmelch and Gmelch 1997) and the keeper in The Bahamas (Eneas 1976). In Trinidad, according to Yelvington (1995:217), the head is called a sou-sou captain. The person who is cap tain does change occasionally. The sou-sou dissolves once all members have received their hands and a new captain is selected to throw another sou-sou. The sou-sou captain is always an older woman but there is no group that is excluded from membership because of department affili ation, age, ethnicity, or gender (Yelvington 1995:217). Shifting cycles or the inability to make a payment involves a significant change and is negotiated by organizer, who hears the request to change a hand rotation and then explains it to members. A change can only be made with the approval of the head and affected members. Stability results in predict able amounts of money becoming available to individuals at agreed upon times. Flexibility of the ROSCA to meet unanticipated crises makes individuals and communities more resilient to perturbations. Where Did ROSCAs Come From? Determining the origin of Caribbean ROSCAs is difficult because there is little direct evidence that identifies a place, group, or time as the point of origin. Similarities in linguistic and organizational structure and ideology suggest a link between Caribbean ROSCAs and those from West Africa and Asia (Ardener 1964; Ardener and Berman 1995; Geertz 1962). Ardener (1964) states that while no one knows precisely how ROSCAs began in Africa, indications are that the institutions in West Africa are indigenous. People such as the Yoruba in Sierra Leone and Cameroon are said to have had rotating funds that predated the arrival of European currency and were operated in kind. Among the Yoruba of Nigeria, contributions were made in cowries (Ardener 1964). Purcell (2000) suggests, without speculating on the specific institutional roots of ROSCAs, the elements of cooperation, communality, and reciprocity are shared characteristic of various indigenous African social organizations. For this reason, it is argued that historic and contemporary Caribbean ROSCAs are culturally adapted creole associations that are based on traditional African cultural organizations. Linguistic comparisons further support the argument that some Caribbean ROSCAs are linked to African ROSCAs. For example the susu in Trinidad (Herskovits and Herskovits 1947), the sousou in Marti nique (Laguerre 1990), and asue (asu or esu) in The Bahamas (Craton and Saunders 2000:116), are all linguistically similar to the esusu, susu, and isusu in the West African countries of Benin, the Gambia, Ghana, Ivory Coast, Liberia, Niger, Nigeria, and Sierra Leone. In Africa, 33 countries are recorded as having ROSCAs, but only names from West Africa match those used in the Caribbean (Bouman 1995). Names for ROSCAs from 20 Asian countries do not match linguistically. The combination of linguistic similarities and dissimilarities, as well as the fact that many of the people in the Caribbean were from African ethnic groups, suggests that meeting turn in Barbados (which is also called sou sou) and asue in The Bahamas are derivatives of traditional West African cultural patterns. Contemporary studies conducted in West Africa support the notion that ROSCAs had a pre-colonial traditional role in the lives of people from many African cultures. From their fieldwork in Africa, Miracle, Miracle, and Cohen (1980:701) conclude that the great bulk of the African population make little or no use of formal savings and lending institutions. Instead, drawing upon both their own research and that of numerous other field studies, they further conclude that nearly all adults in every area where studies were conducted tend to be members of ROSCAs (Miracle, Miracle, and Cohen 1980:703). ROSCAs par

The Joint Effect of Emigration and Remittances on Economic Growth and Labor Force Participation in Latin America and the Caribbean #### Loading component... # IMF Working Papers #### Loading component... #### Loading component...

Skilled Migration and the Growth of Caribbean Nations Lucas Zavala∗ September 2023 Abstract This note explores the conditions under which skilled migration can facilitate the growth of small nations. A simplified model is developed to link migration and growth through two key mechanisms: the evolution of domestic skilled labor and the contribu tion of foreign earnings to local demand and investment. A review of existing evidence in the Caribbean reveals substantial frictions in both channels. Future research can help alleviate these frictions by gathering data on remittances and migration from sending countries, as well as evaluating policies that encourage return migration. ∗World Bank Development Impact Department (DIME). This note was prepared for the Office of the Chief Economist, Latin America and the Caribbean. ## Introduction Joseph is a student in Saint Kitts. His parents both work in the tourism industry, the largest by far on the island, but Joseph has always loved science. He is an avid runner and dreams of combining his passions to become a sports doctor. The medical school on the island is excellent, and Joseph has managed to earn a scholarship to offset the expensive tuition. American hospital systems recruit at the school, and Joseph soon receives an offer for sports medicine in nearby Miami. Joseph would rather open his own clinic close to home, but the Miami offer is lucrative, and the small island population can only sustain a handful of specialty doctors. The recruiter tells Joseph that Miami is one of the fastest growing healthcare markets in the United States, and he wonders if this growth is the key to achieving his dreams. The migration of Joseph and other skilled workers links the growth of small island nations like St Kitts to fluctuations in destination markets like Miami. What determines whether small island nations share in the growth of destination markets? Does Joseph’s story end in “brain drain” or “brain gain?” These are first order questions for Caribbean nations, which experience high outmigration rates of skilled workers in addition to low economic growth and diversification. In Jamaica, for instance, an estimated 80% of nurses emigrate. Meanwhile, the local economy is dominated by tourism and agriculture, growing just 1-2% per year over the past decade. This note explores the conditions under which skilled migration can facilitate the growth of small island nations. Section 1 outlines a conceptual model of skilled migration adapted from Khanna et al. (2022). The model captures the major channels linking growth of sending nations to economic shocks in destination markets, such as remittances and costs of edu cation. Section 2 summarizes our general understanding of each channel based on frontier research in economics. Section 3 examines each channels’s importance in the Caribbean con text, drawing on a broader body of evidence, including from health and sociology. Section 4 examines policies to strengthen some of these channels, such as remittance taxes and skills partnerships. Section 5 charts a path for the research agenda on skilled migration and local growth in the Caribbean. Section 6 concludes. ## 1 Model of skilled migration This section presents a simplified model linking migration and growth of sending nations, adapted from Khanna et al. (2022). 1.1 Modelling migration decisions The earnings of worker i vary based on their origin market o, destination market d, the skill level s (high-skilled or unskilled), and the year t. Workers consider wages, migration costs, and idiosyncratic preferences for each destination. They choose the destination that provides the highest indirect utility, which may be the origin. The model is static, although it is can be interpreted as the steady state of a dynamic model in which workers choose a destination each period to maximize expected lifetime utility. Mathematically, the indirect utility V of worker i with skill level s = { h, u} migrating from origin o to destination d in year t is: Viodst = wdstϵodtRdtqid • w is the (real) wage at the destination, expressed in destination currency units • ϵ is any factor affecting the earnings of workers in the destination. This can include both factors that increase worker productivity, such as a common language and a large diaspora, and migration costs, such as immigration procedures and travel. • R is the exchange rate • q is the worker’s idiosyncratic preference for the destination, such as family connections. These are assumed to follow a Frechet distribution with parameter θ. The higher is θ, the more substitutable are destinations from the point of view of workers, and the more sensitive migration decisions will be to earnings. This could be the case if family connections are not important, for instance. The Frechet assumption delivers a gravity equation for the share of workers with skill level s migrating from origin o to destination d in year t: πodst = (wodstRdt) θ P k(wokstRkt) θ where wodst = wdstϵodt is the wage of migrants, net of migration costs. This expression suggests that a large share of Caribbean workers should migrate to the USA, where wages are better (high wdst), the language barrier is low (high ϵodt), and idiosyncratic preferences are not important (high θ). 1.2 Linking migration and growth Following Khanna et al. (2022), we consider the impact of a shock to exchange rates at the destination (Rdt) on the income of workers who remain at the origin. The results hold for any shock to earnings at the destination, as long as the shock is exogenous from the point of view of the origin. This includes fluctuations in the growth rate of large destination markets. Total income per capita (including income earned abroad by migrants and domestically by non-migrants) can be written as follows: Yot =X s={ h,u}h lostX d (πodstwodstRdt)i where l is the share of workers of each skill type. Domestic income per capita is given by the terms of this expression where d = o: Wot = lohtπoohtwooht + loutπooutwoout Following a shock to the destination market, we can decompose the change in domestic income into four components: ∆Wot =X s ∆lost(wos0πoos0) +X s ∆wost(los0πoos0) +X s ∆πoost(wos0los0) − indirect effects • Changes in the skill distribution, captured by ∆l: Returns to migration are typically higher for skilled workers. This means that higher destination wages increase the returns to education, and therefore the share of skilled workers. Some of these workers stay behind and earn the skill premium at the origin • Changes in wages at the origin, captured by ∆w: A portion of migrant income is spent at the origin. Higher wages at the destination therefore increase demand and wages for workers of both skill types who stay behind. • Changes in migration outflows, captures by ∆π: Since wages at the origin rise, the return to staying behind also rises, and fewer workers may leave. • Indirect migration effects: A shock to earnings at any given destination raises the return to migrating to that destination, which indirectly lowers the share of workers who stay behind and hence domestic income. We assume these indirect effects are small and ignore them from now on. However, these forces influence wages in general equilibrium, as discussed below. Using (a) the fact that an increase in the share of skilled workers corresponds to a decrease in the share of unskilled workers and (b) the expression for migration shares as a function of wages above, we can simplify the decomposition: ∆Wot = ∆loht(woh0πooh0 − wou0πoou0) + (1 + θ)X s los0πoos0∆wost This simplified expression reveals two key intermediate outcomes: ∆loht and ∆wost. The first, ∆loht, summarizes the change in the share of skilled workers at the origin. 1 This is a function of the change in income per capita induced by the shock, under the assumption that increases in income either raise the returns to education and/or ease liquidity constraints for investing in education: ∆loht = ψ∆Yot where ψ is the effect of income shocks on the share of high-skilled workers. A low value of ψ could reflect high costs of education. The second, ∆wost, summarizes the change in wages of each skill type at the origin. 2 These equilibrium objects react to changes in aggregate demand, investment in local busi nesses, and the price of local goods: los0πoos0∆wost = ζs∆Yot where ζs is the demand or investment multiplier. A high value of ζs could reflect strong investment in local businesses. The parameter is indexed by s to indicate that the link be tween migrant income and local wages may differ across skill types. For example, differences in labor mobility can lead local skilled wages to be more responsive to international shocks, so that ζu < ζh. On the other hand, unskilled wages may be more sensitive to aggregate demand if investments are concentrated in tourism, so that ζu > ζh. Finally, ζs also includes effects that are common across skill types, such as changes in local prices. Using the definition of Yot, we can write the change in per capita income induced by the exchange rate shock as a shift-share instrument: ∆Yot =X s lostX d πodstwodst∆Rdt =X d ∆RdtP s Lodstwodst Lot =X d ∆Rdtωodt • ∆Rdt is the exchange rate shock — the “shift” in a shift-share design. 1This is determined by production function for skilled labor. 2These are determined in equilibrium by the labor market clearing condition, which equalizes the supply of labor (which depends on migration decisions across all destinations) and the demand for labor (which depends on firm decisions at the origin). • ωodt is migrant income per capita at the destination — the exposure weight or “share” in a shift-share design. Substituting into the expression for changes in domestic income yields the change in domestic income as a function of the shock and model parameters: ∆Wot = ψβ∆Yot + (1 + θ)(ζu + ζh)∆Yot = [ψβ + (1 + θ)(ζu + ζh)]X d ωodt∆Rdt where β = woh0πooh0 − wou0πoou0 is the domestic skill premium. 3 ## 2 Discussion of mechanisms In this section, we discuss the channels linking migration and local growth, summarizing the state of the academic literature. 4 To simplify the discussion, assume there is only one destination, d, and define ζ = ζu +ζh The change in domestic income is now: ∆Wot = [ψβ + (1 + θ)ζ)]ωodt∆Rdt The two components in brackets represent the two key channels linking shocks at migra tion destinations, ∆Rdt, to growth in domestic income at the origin, ∆Wot. 2.1 Skills channel The first term in brackets captures how incomes abroad change the local distribution of skills and therefore the income of skilled workers. We refer to this as the skills channel. • ψ represents the relationship between migration opportunities and the share of skilled labor. A low value could indicate barriers to education, such as poor public education and liquidity constraints to better private education. – Gibson and McKenzie (2012) survey skilled workers in Micronesia, Tonga, and Papua New Guinea. The majority of them moved abroad to complete their higher education, indicating some barriers to local education. 3Note that β, ζs, and ωodt all depend on the distribution of labor across skill types. 4See Gibson and McKenzie (2011a) for an in-depth review. 6 – Bhargava et al. (2011) find that higher returns to migration for physicians do increase the number of locally-trained physicians across 69 origin countries. How ever, this does not result in a net brain gain, suggesting that domestic returns for skilled workers are low. • β is the wage premium for skilled workers in the domestic economy. For a given shift in the skill share, a low value could indicate a lack of job opportunities for skilled workers in the domestic economy. – The low skill premium in developing countries is well-documented. Gibson and McKenzie (2011b) further document that long-term non-pecuniary career con cerns, such as leadership opportunities, are important drivers of skilled migration from small islands. – Using data on skilled migrants from more than 150 origin countries, Docquier et al. (2007) calculate brain drain rates — the share of skilled workers from each origin living abroad. The strongest predictor of brain drain is the population of sending countries, with small nations experiencing the highest rates. This suggests a particular lack of opportunity in small labor markets. 2.2 Demand channel The second term in brackets captures how incomes abroad change overall demand in the local economy and therefore the income of all workers. We call this the demand channel. • ζ represents the aggregate demand multiplier. A low value could indicate low levels of spending or re-investment in the local economy. – Gibson and McKenzie (2012) estimate that return migration rates are high for small island nations. However, this does not translate to greater involvement of migrants in trade, FDI, local entrepreneurship, or government. – Similarly, remittance rates are high for small island nations (Gibson and McKen zie, 2012), but it is unclear whether these remittances are spent on basic necessities or long-term investments (Yang, 2006). – Taxing remittances has a negative direct effect on aggregate demand (lower ζ), but reinvesting these taxes in local education (raising ψ) or business (raising ζ) may more than offset the lost income. Gibson and McKenzie (2012) calculate that remittances to small island nations are of the same order of magnitude as fiscal losses, so the elasticity of local investments to tax revenue is crucial. – This channel can also capture externalities to skilled migration, such as reduced availability of healthcare providers. Gibson and McKenzie (2012) estimate low production externalities in small island nations. Similarly, Bhargava et al. (2011) find no evidence of externalities from medical brain drain on child mortality and vaccinations. – Finally, this channel captures changes to local prices. If the consumption basket contains goods whose prices change as a result of shocks at the destination – such as imported goods or skilled services – this will offset increases to aggregate demand. Narayan et al. (2011) show that remittances generate inflation in a sample of 54 developing countries. • θ represents the sensitivity of migration decisions to wages in any given location. In this case, lower sensitivity means that few workers return to the origin following the boost in local demand, possibly because of idiosyncratic location preferences. – Recall that ω contains wodst = wdstϵodt, so that systematic factors reducing migrant earnings at the destination, such as migration costs, enter outside of the brackets. Gibson and McKenzie (2011b) find low levels of migration despite large differences in wages, indicating high migration costs. Return migration rates are driven by family and lifestyle concerns rather than wage changes, further indicating non monetary costs of moving. ## 3 Evidence from the Caribbean Shocks to foreign labor markets affect domestic income through the skills channel and the demand channel. The strength of the skills channel is governed by the local education response, ψ, and the local skill premium, β. The strength of the demand channel is governed by the local demand multiplier, ζ, and the responsiveness of return migration, θ. Together, these four parameters determine how migrant income translates to local growth. In this section, we examine evidence on these parameters specifically in the Caribbean context. 3.1 Skills channel Shocks to skilled wages abroad can increase the returns to schooling and ease liquidity constraints for education. As long as some of these newly skilled workers stay behind, migration can lead to brain gain. Elasticity of skilled workers to skilled wages, ψ: • In the Caribbean, there is some evidence that barriers to education prevent the skilled workforce from growing. Jamaican nursing schools cannot train nurses quickly enough to stop the shortages driven by migration (Salmon et al., 2007). In Haiti, migration can have a positive impact on educational attainment, but only in communities that already have access to good schools (Amuedo-Dorantes et al., 2010). Overall, the relative educational attainment of Caribbean workers has declined over the past 30 years (Rivera-Batiz, 2007; Docquier and Rapoport, 2009), despite heavy subsidies of tertiary education (Mishra, 2007). Domestic skill premium, β: • Low domestic returns to education represent an even greater challenge than lack of access. Despite the shortage of nurses in Jamaica, wages remain low because healthcare services generate little revenue (Carpio and Bench, 2015). A Jamaican nurse would make four times as much working in the USA, even after adjusting for differences in cost of living (George et al., 2019). As a result, an estimated two-thirds of nurses trained in Jamaica over the past 30 years have emigrated (Lowell and Findlay, 2001). A survey of healthcare workers across the Caribbean revealed that most migrants left for higher salaries and better working conditions (Almeida, 2019). Most workers who stayed behind said they would leave if given the opportunity. These patterns hold beyond the healthcare sector: an estimated 70% of the tertiary-educated labor force has left the Caribbean for OECD countries (Mishra, 2007). 3.2 Demand channel Shocks to skilled wages abroad can boost aggregate demand at home, even without any change in the skill composition of the workforce. Remittances can fuel the creation of local businesses, and migrants can transfer knowledge as entrepreneurs. Aggregate demand multiplier, ζ: • Evidence on migrant income and entrepreneurship in the Caribbean is mixed. Some surveys suggest that return migrants are more likely to start small businesses and introduce innovations (Gmelch, 1987; Chevannes and Ricketts, 1996). Other studies note that entrepreneurship is concentrated in tourism and other services, with limited impacts on productivity (Plaza, 2008). Finally, the majority of returning migrants are retired (Thomas-Hope, 1999). • The link between remittances and local demand seems definitively weak. Caribbean migrants only remit about 1.5% of their income on average (Bidawi et al., 2022). Although these remittances are typically not taxed, they face transaction costs of more than 6% (Beaton et al., 2017). The majority of remittances are used to pay for basic necessities, limiting the potential for investment (Orozco, 2004). In some cases, remittances are even associated with declines in local demand and investment (Jaupart, 2023). At a macroeconomic level, estimated spending multipliers for remittances are low (Economics, 2021), and remittance flows are countercyclical (Beaton et al., 2017). Other capital flows from migrants, such as Foreign Direct Investment, have declined in recent years (Mishra, 2007). • There is some evidence that remittances increase inflation in the Caribbean (Beaton et al., 2017). Given the weak link between remittances and local demand, inflation is likely cost-based. One possibility is that changes in remittances are correlated with changes to the skilled wage, which in turn raises the price index. Elasticity of migration to wages, θ: • Migration from the Caribbean is characterized by persistent, high outflows to the United States, as well as return flows concentrated among retired workers (Jaupart, 2023). Together with the geographic proximity, language similarities, and large dias pora, this suggests a limited role for migration costs and migration elasticities relative to other contexts. 3.3 Other factors A few additional factors can act to reinforce the above channels: • β, ζ, and ω all depend on the baseline skill distribution. Large differences in mobility lead to skill-biased migration. As a resul

TECHNICAL NOTE N oIDB-TN-3243 ### Remittances to Latin America and the Caribbean in 2025 ##### Adaptations in a Context of Uncertainty René Maldonado Jeremy Harris Pablo Cortés-Sánchez Inter-American Development Bank Migration Unit November 2025 ### Remittances to Latin America and the Caribbean in 2025 ##### Adaptations in a Context of Uncertainty René Maldonado Jeremy Harris Pablo Cortés-Sánchez Inter-American Development Bank Migration Unit November 2025 Remittances to Latin America and the Caribbean in 2025 Adaptations in a Context of Uncertainty Series on Migration Statistics This report is a product of the Migration Unit of the Inter-American Development Bank, under the coordination of Felipe Muñoz Gómez, Chief of the Unit. The document was prepared by René Maldonado, Jeremy Harris, and Pablo Cortés Sánchez. Data visualization and analysis were supported by Mauro de Oliveira. The team acknowledges the comments provided by Cynthia van der Werf and Marcela Rubio, and the editorial support of Eugenio Monjeau. Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library Remittances to Latin America and the Caribbean in 2025: adaptations in a context of uncertainty / René Maldonado, Jeremy Harris, Pablo Cortés Sánchez. p. cm. — (IDB Technical Note ; 3243) Includes bibliographical references. 1. Emigrant remittances-Latin America. 2. Emigrant remittances-Caribbean Area. I. Harris, Jeremy. II. Cortés Sánchez, Pablo. III. Inter-American Development Bank. Migration Unit. IV. Title. V. Series. IDB-TN-3243 JEL codes: F24, F22, J61, O15, R23 Keywords: Remittances, Latin America, Caribbean, Migrants Design: Souvenirme Studio Consult our database and statistics on remittances on our website: https://datamig.iadb.org/en/remittance http://www.iadb.org Copyright © 2025 Inter-American Development Bank (“IDB”). This work is subject to a Creative Commons license CC BY 3.0 IGO (https://creativecommons.org/licenses/by/3.0/igo/legalcode). The terms and con-ditions indicated in the URL link must be met and the respective recognition must be granted to the IDB. Further to section 8 of the above license, any mediation relating to disputes arising under such license shall be conducted in accordance with the WIPO Mediation Rules. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the United Nations Commission on International Trade Law (UNCITRAL) rules. The use of the IDB’s name for any purpose other than for attribution, and the use of IDB’s logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this license. Note that the URL link includes terms and conditions that are an integral part of this license. The opinions expressed in this work are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. We thank the Ministry of Economy, Commerce and Business of Spain, which through technical cooperation RG-T4434 supported the research, systematization and publication of this report. By René Maldonado, Jeremy Harris, and Pablo Cortés Sánchez #### Remittances to Latin America and the Caribbean in 2025 CONTENTS Introduction 4 I. Regional Dynamics of Remittances in 2025 6 Mexico 9 Central America 12 Caribbean 14 South America 15 II. Determinants of Remittances 16 United States 18 Spain 21 At the origin: Latin America and the Caribbean 23 III. A conceptual experiment: the impact of remittances on poverty 26 ##### IV. Conclusions 36 Methodological Annex 37 ## Introduction The objective of this report is to analyze the behavior of remittance flows to Latin America and the Caribbean (LAC) during the first three quarters of 2025 and to provide a projection of the results for the 2025 as a whole. The available data and projection calculations allow us to forecast that the region is once again heading towards a record total of remittances, marking 16 years of continuous growth. These flows have demonstrated resilience amid economic, social, and political transformations not only in the region but worldwide. During 2022 and 2023, remittance flows continued to grow (10.9% and 7.3%, respectively). They re covered pre-pandemic trend values and further strengthened their role as a key component of the region’s economies. In 2023, growth was mainly driven by increases in Central America (13.2%, with Nicaragua standing out), Mexico (9.8%), and South America (7.9%, mainly in Argentina and Paraguay), with more modest growth in the Caribbean (2.6%, mostly Trinidad and Tobago). However, in 2024, growth slowed to just 6.0%, the smallest increase in nearly a decade. This slower pace is largely explained by minimal growth in remittances received by Mexico (only 2.3%) and moderate growth in Central America (7.5%). For 2025, the data reflect mixed trends: on one hand, a 4.5% decrease in remittances to Mexico, which remains the region’s main recipient with 35.4% of the total; on the other hand, significant growth in Central America, averaging 20.4%, mainly driven by Honduras, Guatemala, Nicaragua, and El Salvador. Mexico’s decline in remittances stands out and can be explained by several factors. First, a 1.2% reduction in the Mexican-born US labor force, along with changes in the composition of that workforce, may have played a role. Changes in the Mexican peso exchange rate might also have influenced the size of these transfers. However, we estimate that the decline in remittances received by Mexico is mainly due to the so-called base effect 1 following 2024 peaks in flows to Mexico, which will be further detailed in this document. The response of migrants to some changes in the migration policies of host countries—along with discussions like the remittance tax in the US— partly explains the overall growth trend: initially, migrants used their savings to make extraordinary remittances (a 9.9% increase regionally in the first quarter), and in the third quarter, they increased working hours to generate higher income. For example, between April and July, Central American women in the US increased their participation in part-time work by 11.8%, and in full-time work by 2.3% 2. Such movements reflect migrants’ strategies in a changing environment and their perception of risks to their families in different countries, particularly those receiving significant remittances from the US. 1 The base effect (sometimes called “statistical carryover”) is a statistical phenomenon that occurs when growth rates appear unusually high or low due to the exceptional level of the period they are compared with. In the case of remittances, this effect appears when current flows are contrasted with a previous period in which they had deviated from their usual trend. Thus, if one year shows exceptional increases, the same period in the following year could record a negative rate that simply reflects a return to the variable’s normal trajectory (see box later). 2 Based on data from the Current Population Survey. Our analysis has two parts. The first details remi ttance behavior by subregion—Mexico, Central America, Caribbean, and South America—and examines key determinants: migration flows, employment, and wages. The second presents a conceptual experiment on the potential impact of these flows on poverty reduction, along with key differences between recipient and non-recipient households. Remittances can imply leaving poverty behind for millions of people in recipient countries; more than four million people across the seven analyzed countries move from extreme poverty to relative poverty or reach income levels above the poverty line. A simple static analysis shows the importance of these flows in improving living conditions in several countries. However, there is a bias in the distribution of remittances: most are directed to households that are not poor but could become poor if they did not receive them. In Guatemala, 80% of total remittances go to households that do not live in poverty. The figure exceeds 90% in Colombia, El Salvador, and the Dominican Republic. Extremely poor households receive a very small share of the total; in some cases, remittances help certain households escape extreme poverty, but in others, amounts are too small or are spread among too many people to have such an impact. Finally, many households do not receive remittances simply because none of their members have migrated abroad; since migrating requires investment, it is often the poorest households that find themselves in this situation. Remittance flows remain an essential component of the regional economy, demonstrating notable resilience in the face of uncertainty. However, this resilience cannot be assumed to be unlimited: in many countries within the region, potential declines in migration flows or increased barriers to sending remittances could significantly impact household income and consumption. Consult our database and statistics on remittances on our website: https://datamig.iadb.org/en/remittance 3 In our previous publication from November 2024 (Jeremy Harris and René Maldonado, Remittances to Latin America and the Caribbean in 2024, available online), we had estimated that remittance flows received by Latin America and the Caribbean during 2024 would reach US$160.9 billion. The figure has been revised to US$162.7 billion in this publication, based on official information from the recipient countries (a difference of 1.1%). ## I. Regional Dynamics of Remittances in 2025 According to our analysis and review of historical seasonal behavior, we expect that once again, by the end of 2025, a new peak in remittanc es received in Latin America and the Caribbe an (LAC) will be observed, marking 16 years of uninterrupted growth. Based on our forecasts, re mittances received in 2025 will total approximately US$174.4 billion (Figure 1), which is US$11.7 billion more than what was received in 2024 3. FIGURE 1: Remittances to Latin America and the Caribbean (2005-2025*) Billions of US dollars. Source: Own elaboration based on data from central banks. * For the last quarter of 2025, estimates were made based on available information. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* 4 6 .8 5 5 .5 5 9 .4 6 0 . 1 5 2 .8 5 4 .7 5 8 . 1 5 8 .3 5 9 .4 6 2 .2 6 6 .2 7 1 . 1 7 9 .3 8 7 .3 9 4 .0 1 0 1 .9 1 2 8 .9 1 4 3 .0 1 5 3 .2 1 6 2 .7 1 7 4 .4 The available data for the third quarter allow us to estimate that, by the end of the year, remittances received in Latin America and the Caribbean (LAC) will see a growth rate of 7.2% compared to last year (Figure 2). This growth slightly reverses the slowing trend that had been observed since 2021. When migrants face periods of uncertainty, as occurred in 2008 or during the COVID-19 pandemic, two reactions related to remittances can be observed: a) using savings to make extraordinary transfers while those savings are still available; and b) increasing working hours as a means to earn higher income, build precautionary funds, and send resources to their families more sustainably 4. The first quarter of the year showed an exceptionally high growth of 9.9%, contrasting with what was observed the previous year. The response of migrants to the uncertainty they face in their host countries was to send larger remittances, both in higher amounts and more frequently, making use of the savings they had. During the second quarter, a lower growth rate of 3.3% was observed, likely related to the exhaustion of savings. However, in the third quarter, there was a rebound in remittance flows, with a growth rate of 7.5%, driven by an increase in migrants’ working hours. For the fourth quarter, this behavior is expected to continue; remittance growth is projected to be 8.6% compared to the same period the previous year. For our analysis of remittance income evolution, we divided the Latin America and Caribbean region into four subregions: Mexico, Central America, the Caribbean, and South America. FIGURE 2: Remittances to Latin America and the Caribbean (2006-2025*) Annual percentage variation. Source: Own elaboration based on data from central banks. * Estimates based on available information. 2006 2007 2008 2009 2010 3.5% -12.1% 1.1% 7.0% 18.6% 6.3% 0.1% 2.0% 4.6% 6.6% 7.3% 11.5% 10.1% 7.8% 8.3% 26.5% 10.9% 7.3% 7.2% 6.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* 4 The increases in “hours worked” consist of rises in the number of people working full-time or part-time and a reduction in the number of unemployed individuals. FIGURE 3: Remittances to Latin America and the Caribbean (2018-2025*) Quarterly percentage variation. Source: Own elaboration based on data from central banks. * Estimates based on available information. I II III IV 2021 I II III IV 2020 I II III IV 2019 I II III IV 2018 I II III IV 2025* I II III IV 2024 I II III IV 2023 I II III IV 2022 12.2% 13.0% 23.6% 20.3% 41.3% 22.8% 16.6% 11.7% -3.7% 8.3% 5.4% 12.5% 5.6% 7.7% 10.3% 8.7% 14.5% 6.6% 10.9% 7.5% 8.1% 10.7% 6.6% 5.0% 7.3% 3.4% 6.2% 6.8% 9.9% 3.3% 7.5% 8.6% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% FIGURE 4: Remittances to Latin America and the Caribbean (2016-2025*) Source: Own elaboration based on data from central banks. * Based on available information through October 2025. 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* 2 6 ,9 9 3 3 0 ,2 9 1 3 3 ,6 7 7 3 6 ,4 3 9 4 0 ,6 0 5 5 1 ,5 8 6 5 8 ,8 6 8 6 3 ,3 1 9 6 4 ,7 4 6 6 1 ,8 1 0 1 7 ,8 4 3 1 9 ,9 3 3 2 1 ,9 8 5 2 4 ,3 3 8 2 5 ,7 0 7 3 3 ,4 1 0 3 8 ,6 6 6 4 2 ,7 9 7 4 6 ,0 2 6 5 5 ,3 9 5 1 0 ,4 0 7 1 1 ,7 8 8 1 2 ,6 1 2 1 2 ,8 1 4 1 5 , 1 6 1 1 8 ,6 7 2 1 7 ,6 3 2 1 8 , 1 7 6 1 9 , 1 2 5 2 0 ,8 8 3 1 5 ,8 5 7 1 7 ,2 5 4 1 8 ,9 9 9 2 0 ,4 5 4 2 0 ,3 8 9 2 5 ,2 2 6 2 7 ,8 3 0 2 9 , 1 7 6 3 2 ,7 7 7 3 6 ,3 3 9 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Mexico Central America Caribbean South America Millions of US dollars. During 2024, remittances received in Mexico experienced significant year-on-year increases in several months; therefore, when compared to the flows of the same months in 2025, lower or even negative growth rates can be observed. This is mainly a base effect (see the box “The base effect in Mexico between 2024 and 2025” later). In 2024, the peaks were associated with the incentive to take advantage of the depreciation of the Mexican peso; for 2025, some analysts speculate that a stronger peso could have discouraged migrants from sending remittances 5. However, the logic is not so clear: an appreciation of the peso could also boost remittance growth measured in dollars, since migrants’ family commitments are often measured in pesos. Although remittances grew by 1.2% in the first quarter of 2025 compared to the same period last year—an annual increase slightly higher than that of the fourth quarter of 2024—a sharp decline of 11.2% was observed in the second quarter. The third quarter was also slowed by the base effect recorded in August, and a similar phenomenon is expected in the fourth quarter, especially in November. The flows Mexico receives show their own behavior, with smaller remittances this year compared to 2024. We estimate that, by the end of 2025, Mexico’s remittances will show an annual decline of around 4.5% (Figure 5), with a total estimated income of US$61,810 million (Figure 4), US$2,936 million less than last year. Mexico In addition to the base effect and the possible influence of the appreciation of the Mexican peso, the decrease in remittances received by Mexico could also be linked to the slowdown in the growth of the population of Mexican migrants in the United States—a trend observed in recent years that turned negative in 2025, with a 1.2% reduction in the Mexican workforce. This contraction is accompanied by a change in the composition of migrant workers. Between 2020 and 2024, the number of first-generation Mexicans in the United States increased by 93,000 people, but this flow of new migrants, combined with the decline in the previous stock, seems to have altered the employment structure: the proportion of Mexicans in full-time jobs decreased, while those working part-time increased. Recent arrivals are likely to initially access part-time positions, whereas those leaving the labor market do so from full-time jobs with higher pay. Overall, the decline in the total income of Mexican migrants limits their capacity to send remittances. Despite the observed decline in remittances received by Mexico, the country remains the region’s main recipient: it accounts for 35.4% of the total remittances sent to Latin America and the Caribbean (a percentage that is lower than the 41% recorded in previous years, as seen in Figure 8). Most of the remittances to Mexico come from the United States (96%), followed by Canada (1.8%). 5 National Population Council, BBVA Foundation, & BBVA Research. 2025. Mexico Migration and Remittances Yearbook 2025. Conapo–BBVA Foundation–BBVA Research. FIGURE 5: Remittances to Latin America and the Caribbean by Subregion (2018-2025*) Annual percentage variation. Source: Own elaboration based on data from central banks. * Estimates based on available information. 2018 2019 2020 2021 2022 2023 2024 2025* 28% 23% 18% 13% 8% 3% -2% -7% 1 1 .2 % 8 .2 % 1 1 .4 % 2 7 .0 % 1 4 . 1% 7 .6 % 1 0 .3 % 1 0 .7 % 5 .6 % 3 0 .0 % 1 5 .7 % 1 0 .7 % 7 .5 % 2 0 .4 % 7 .0 % 1 .6 % 1 8 .3 % 2 3 . 1% 5 .2 % 9 .2 % 1 0 . 1% 2 3 .7 % 1 0 .3 % 4 .8 % 1 2 .3 % 1 0 .9 % Mexico Central America Caribbean South America The growth rates of remittances received by Mexico during 2025 were unusually negative, beyond what can be explained by exchange rate fluctuations or changes in migration or employment among this diaspora. These markedly negative growth rates are explained by a phenomenon known as the “base effect,” whereby unusually high growth in the base year (2024) affects the growth rates calculated in the following year (2025). In 2024, Mexico experienced unusual growth in at least four months of the year, related to exchange rate variations that boosted remittances. The first of these unusual increases occurred in April 2024, caused by an exchange rate change from 16.6 to 17.1 pesos per dollar. The same happened in June (from 16.6 to 18.7 pesos per dollar), August (from 17.7 to 19.4 pesos per dollar), and November (from 18.6 to 20.1 pesos per dollar) (points A, B, C, and D, in Figure 6). These movements were associated with year-over-year remittance growth rates of 8.2%, 11.1%, 9.2%, and 10.6%, respectively. When calculating growth rates for 2025, it is observed that, due to the base effect, these same months (April, June, and August) show significantly negative growth rates. This could suggest a sharp decline in remittance flows due to fundamental changes in these flows, when in fact it is only a return to previous trend values. The Base Effect in Mexico between 2024 and 2025 FIGURE 6: The Base Effect in Mexico Year-over-Year Growth Rates (Jul 2023-Aug 2025) Source: The calculations on the Mexican population and labor force in the United States are based on the Current Population Survey from the United States Census Bureau. The additional remittances during the four months mentioned in 2024, carried out by Mexican migrants to take advanta

Investing Back Home: The Potential Economic Role of the Caribbean Diaspora © 2016 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. Photo Credit: World Bank Photo Library April 2016 2 Investing Back Home: The Potential Economic Role of the Caribbean Diaspora Table of Contents Acronyms and Abbreviations........................................................................................................................... 5 Acknowledgments.............................................................................................................................................. 8 Executive Summary........................................................................................................................................... 9 I. Objective of the Study, Scope, and Methodology................................................................................... 16 II. Context........................................................................................................................................................... 18 Overview of the Caribbean Region............................................................................................................ 21 Defining the Overall Problem: Lack of Private Investment in the Caribbean..................................25 III. Diaspora and the Potential for a Diaspora-Focused Finance Initiative..........................................28 Sizing the Diaspora Population.................................................................................................................29 Assessing the Diaspora Population’s Potential to Invest....................................................................33 Investable Assets for the Diaspora: Need vs. Demand.........................................................................39 Current Investment Landscape in the Region................................................................................................... 39 Current Modes of Diaspora Investment...............................................................................................................60 Market Drivers and Impediments for the Diaspora..............................................................................58 Legal and Regulatory Impediments and Drivers for the Diaspora....................................................65 U.S. Investment Regulation and Taxation............................................................................................................68 Canada Investment Regulation and Taxation.................................................................................................... 70 United Kingdom Investment Regulation and Taxation—Executive Summary..................................... 73 The Business Environment......................................................................................................................... 75 Current Diaspora Convening Platforms and Distribution Channels.................................................78 IV. Recommendations......................................................................................................................................82 Framing the Recommendations................................................................................................................83 Recommendations for Implementation...................................................................................................84 Annex I. In-Depth Case Studies.....................................................................................................................87 Country Analysis: Barbados.......................................................................................................................87 Country Analysis: Jamaica.........................................................................................................................93 Country Analysis: St. Lucia....................................................................................................................... 111 Country Analysis: Trinidad and Tobago..................................................................................................117 Annex II: Country Macroeconomic Profiles...............................................................................................129 Annex III: Current Regional Investment Landscape................................................................................136 Annex IV. Related World Bank Group Initiatives in the Caribbean Region.........................................151 Table of Contents 3 Annex V. Estimating the Size and Geographic Distribution of the Jamaican Diaspora..................153 Annex VI. Diagrams of Relevant Government Institutions in Case Study Countries...................... 157 Annex VII. Legal and Regulatory Drivers and Impediments.................................................................. 161 Annex VIII. Typology of Diaspora Initiatives............................................................................................. 179 Annex IX. Interviews Conducted..................................................................................................................183 Annex X. References....................................................................................................................................... 187 Endnotes...........................................................................................................................................................193 List of Boxes Box 1: The South Africa Green X Infrastructure Debt Fund..................................................................... 51 List of Figures Figure 1: FDI Inflow to GDP Ratio...................................................................................................................25 Figure 2: Share of Firms Using Banks to Finance Investment (2010)...................................................39 Figure 3: Performance of the Jamaica and Trinidad and Tobago Stock Markets since 2007..........41 Figure 4: Unlisted Infrastructure Assets under Management December 2004 to June 2013........50 Figure 5: Snapshot of Private Equity in the Caribbean............................................................................54 Figure 6: Share of Caribbean Domestic Financial Sector Assets (2013)............................................139 Figure 7: Share of Firms Using Banks to Finance Investment (2010).................................................140 List of Tables Table 1: Geographic Scope of the Caribbean Prefeasibility Study..........................................................17 Table 2: Economic Activity, Viability, and Potential Impact................................................................... 19 Table 3: Macroeconomic Indicators for Four Select Caribbean Countries...........................................22 Table 4: Country Profiles of Mapping Study Nations (2013)...................................................................24 Table 5: FDI Inflow Trends 2009–2013 (US$ million)................................................................................26 Table 6: Total Migrant Stocks (2013)...........................................................................................................29 Table 7: U.S. Migrant Stocks (2013).............................................................................................................. 31 Table 8: European Migrant Stocks (2013)................................................................................................... 31 Table 9: Canada Migrant Stock (2013) ....................................................................................................... 31 Table 10: Citizenship Status of Black Caribbean Immigrants to the United States, 2006–2008.......................................................................................................................................................32 Table 11: Median Annual Earnings for Caribbean Migrants vs. Overall U.S. Workers........................33 Table 12: Trends in Remittances (2012–2013): Dominican Republic and Jamaica Dominate.........35 4 Investing Back Home: The Potential Economic Role of the Caribbean Diaspora Table 13: Geographical Source for the three Dominant Remittance-Receiving Nations..................36 Table 14: Snapshot of the Junior Market of the JSE..................................................................................42 Table 15: Public Debt and Equity Overview (2012)....................................................................................43 Table 16: Investment with Private Participation by Sector (US$ million)............................................45 Table 17: PPP Policy and Institutional Architecture in the Caribbean..................................................45 Table 18: Sovereign Ratings in the Caribbean Region.............................................................................. 47 Table 19: Responses Suggesting 13 Percent of Individuals Have Invested “Back Home”.................62 Table 20: Responses Suggesting 23 Percent of Individuals Have Funded Caribbean Startups.....63 Table 21: infoDev’s Findings Regarding Investor Profiles within the Caribbean Diaspora...............63 Table 22: Impediments to Engagement in the Caribbean........................................................................66 Table 23: Ease of Doing Business Rankings................................................................................................76 Table 24: Economic Freedom Favors St. Lucia, Eschews Corruption in Largest Economies............ 77 Table 25: Corruption Perception Index......................................................................................................... 77 Table 26: Total Size of Barbados Diaspora (UN Estimate Midyear 2013)........................................... 88 Table 27: Comparison of Firm Lending in Barbados, Select Caribbean Nations, and the LAC region.......................................................................................................................................... 90 Table 28: Comparative Turnover of the Barbados Stock Exchange...................................................... 91 Table 29: Total Size of the Jamaican Diaspora—JDI Working Estimate...............................................95 Table 30: Comparison of Firm Lending in Jamaica, Select Caribbean Nations, and the LAC Region....................................................................................................................................... 100 Table 31: Comparative Turnover of the Jamaica Stock Exchange.......................................................102 Table 32: Concessions and Qualifications for Investors under St. Lucia’s Diaspora Policy............112 Table 33: Total Size of the St. Lucia Diaspora ..........................................................................................113 Table 34: Comparative Turnover of the OECS Stock Exchange.............................................................115 Table 35: Comparison of Firm Lending in Trinidad and Tobago, Select Caribbean Nations, and the LAC Region........................................................................................................................................ 122 Table 36: Breakdown of SMEs Self-Reported Credit Needs.................................................................. 122 Table 37: Snapshot of TTSE Market in 2013 and 2014 .........................................................................123 Table 38: Comparative Turnover of the TTSE...........................................................................................123 Table 39: General Trends in TTSE Trading (2010–2014)........................................................................ 124 Table 40: Financial Sector Overview.......................................................................................................... 142 Acronyms and Abbreviations 5 Acronyms and Abbreviations AFI Approved Financial Institution BoP Bottom of the Pyramid BP British Petroleum BPO Business Process Outsourcing BSE Barbados Stock Exchange CARICOM Caribbean Community CARIFORUM Caribbean Forum CBI Citizenship By Investment CDB Caribbean Development Bank CDC Commonwealth Development Corp. CEO Chief Executive Officer CIBC Canadian Imperial Bank of Commerce CIF Caribbean Investment Fund CIM Caribbean Idea Marketplace CMIP Caribbean Mobile Innovation Project CORFO Chilean Economic Development Agency DBJ Development Bank of Jamaica DCI Development Corporation of Israel DFATD/EPIC Department of Foreign Affairs, Trade and Development/Entrepreneurship Program for Innovation in the Caribbean (Canada) DFI Development Finance Institution DFID Department for International Development ECCB Eastern Caribbean Central Bank ECCU Eastern Caribbean Currency Union ECLAC Economic Commission for Latin America and the Caribbean ECSE Eastern Caribbean Stock Exchange EFF Extended Fund Facility EGFL Enterprise Growth Fund Ltd ELP English Limited Partnership EMDE Emerging Markets and Developing Economies EPIC Entrepreneurship Program for Innovation in the Caribbean FAJ First Angels Jamaica FATCA Foreign Account Tax Compliance Act FCA Financial Conduct Authority FDI Foreign Direct Investment FI Financial Institution 6 Investing Back Home: The Potential Economic Role of the Caribbean Diaspora FY Fiscal Year GDP Gross Domestic Product GHL Guardian Holdings Limited GP General Partner HNW High Net Worth IABD Inter-American Development Bank IBC International Business Company ICT Information and Communications Technology IFC International Finance Corporation IFI International Financial Institution IMF International Monetary Fund infoDev Information for Development Program IOM Institute of Migration IPO Initial Public Offering IPP Independent Power Producer IRC Incubator and Resource Center IRR Internal Rate of Return IT Information Technology JAMPRO Jamaican Promotions Corporation JBDC Jamaica Business Development Center JDI Jamaica Diaspora Institute JM Junior Market JN Jamaica National Building Society JSE Jamaica Stock Exchange JVCP Jamaica Venture Capital Program JVF Jamaica Venture Fund LAC Latin America and the Caribbean LAVCA Latin America Venture Capital Association LNG Liquefied Natural Gas LP Limited Partner MBSS Mona Business Support Services MIF Multilateral Investment Fund of the IADB MoFA Minister of Foreign Affairs MPI Migration Policy Institute MSME Micro, Small, and Medium Enterprises NBFI Nonbank Financial Institution NPL Nonperforming Loan OECS Organization of Eastern Caribbean States OFC Offshore Financial Center OM Offering Memorandum Acronyms and Abbreviations 7 PAJ Port Authority of Jamaica PE Private Equity PFIC Passive Foreign Investment Company PPP Public Private Partnership RBC Royal Bank of Canada REIPPPP Renewable Energy IPP Procurement Process RFP Request For Proposal RIB Resurgent India Bonds SEAF Small Enterprise Assistance Fund SEC Securities and Exchange Commission SIDF Sugar Investment Diversification Fund SIF Strategic Investment Fund SLDB St. Lucia Development Bank SME Small and Medium Enterprise SOE State-Owned Enterprise SPV Special Purpose Vehicle SUJ Start-Up Jamaica SWF Sovereign Wealth Fund TA Technical Assistance THA Tobago House of Assembly TRIPS Trade Related Aspects of Intellectual Property Rights TTFZ Trinidad and Tobago Free Zones Company TTIFC Trinidad and Tobago International Financial Center TTSE Trinidad and Tobago Stock Exchange TTSEC Trinidad and Tobago Securities and Exchange Commission UNDP United Nations Development Programme UWI University of the West Indies VC Venture Capital VF Venture Fund WTO World Trade Organization 8 Investing Back Home: The Potential Economic Role of the Caribbean Diaspora Acknowledgments This report was prepared by a team consisting of Cecile Niang (Program Lead), Leonardo Lemes Shanthi Divakaran (Team Leader, Senior Financial (Operations Officer), Asha Johnson (Operations Sector Specialist), Michel Noel (Head of Investment Officer, Jamaica country office), Zahra Alleyne Funds), Patrick McGinnis (Expert Consultant and (Operations Officer, Trinidad and Tobago country head writer), Sam Schneider (Consultant), Sam office), Caroline Vagneron (Caribbean CMU), and Raymond (Consultant, infoDev), and Erik Huitfeldt a number of other colleagues in the Caribbean (Legal Expert). The report was co-financed by the Country Management Unit provided excellent World Bank’s Caribbean Country Management guidance toward this study. Aun Rahman Unit, the World Bank’s Finance and Markets (Financial Sector Specialist, infoDev), Michelle Global Practice and the World Bank’s Trade Ottey (Investment Officer, IFC) and Qahir and Competitiveness Global Practice through Dhanani (infoDev) provided valuable input into the Entrepreneurship Program for Innovation the report. Thelma Ayamel, Marilyn Benjamin, in the Caribbean (EPIC) which is funded by the and Kendra Colleen Carberry-Walters provided Government of Canada. It was prepared under the critical logistical support. general guidance of David Crush (Practice Manager, The report was peer reviewed by Fiona Stewart F&M GP–Caribbean) and Sophie Sirtaine (Country (Senior Pensions Specialist) and Sona Varma Director, Caribbean Region). (Senior Country Officer, Jamaica). Aichin Jones The team is grateful for the multiple government, and the Arvyst Group provided design, layout, and academia, and private sector players across the production service. Caribbean region as well as Caribbean Diaspora who met with us and contributed to the findings of this study. Executive Summary 9 Executive Summary This study was initiated as a result of interest small and medium enterprises (SMEs) or for large expressed by Caribbean Governors attending the infrastructure projects, remains elusive. 2014 World Bank–International Monetary Fund Annual Meetings to tap into the regional Diaspora Despite these headwinds, the region also enjoys investor community to fund investment needs across some inherent strengths, including a largely the region. The overall development objective of the untapped resource: Given high levels of migrat

Caribbean Investment Forum 2026 | Caribbean Export Skip to main content Invest. Innovate. Accelerate CIF 2027 is heading to the Dominican Republic. 2027 Dominican Republic Explore the projects Partners and sponsors Caribbean Export Development Agency in collaboration with the European Union and the Government of Barbados presented CIF 2026. Partners and Platinum sponsors View all partners and sponsors WHY ATTEND? The Caribbean Investment Forum is where opportunity meets action. Discover Investment Opportunities Explore a curated pipeline of high-potential projects across the Caribbean’s priority growth sectors. Meet the Right People Connect with investors, business leaders, policymakers and development partners. Build Strategic Partnerships Identify opportunities for co-investment, joint ventures, market entry, technical collaboration and regional expansion. Gain Regional Intelligence Hear from industry leaders and decision-makers on the trends, policies, financing models and innovations shaping investment and economic growth. Move from Conversation to Action CIF is designed to facilitate meaningful engagement around real business and investment opportunities—not simply discussion. Leave with new connections, stronger market insights and clear opportunities for follow-up. Invest. Innovate. Accelerate. Be part of the Caribbean’s premier investment platform and help unlock the partnerships, capital and innovation needed to build a more competitive, sustainable and resilient region. Investment Sectors 01 Sustainable Agriculture Champion climate-resilient food security by investing in cutting-edge agritech solutions. 02 Green Economy Transition Seize the high-growth potential of the renewable energy sector, driving long-term value. 03 Technology & Innovation Unlock immense scalability by funding the modernization of regional digital services. 04 Logistics & Transportation Accelerate regional commerce by backing world-class infrastructure projects Three days The Programme 1 Monday 5 October CIF2026 Capital Connections Reception CIF2026 opened with an evening welcome reception, where delegates met fellow participants before the formal programme began. Connect with investors and project owners Engage business and industry leaders Meet government representatives and decision-makers Build relationships with regional and international partners 2 Tuesday 6 October Insights, Investment Opportunities and Connections The first full day of the Forum focused on the trends, opportunities and solutions shaping investment across the Caribbean. Engaging sessions exploring key sectors and regional investment priorities Presentations of selected investment projects and business opportunities Networking with investors, entrepreneurs, policymakers and industry leaders Access to the CIF Deal Room for targeted discussions and potential partnerships. 3 Wednesday 7 October Advancing Partnerships and Accelerating Investment The final day continued with sector-focused discussions, investment project presentations and meetings in the Deal Room. Take part in sector-focused discussions and investment project presentations Connect with project promoters, investors and potential partners Explore collaboration opportunities and advance Deal Room conversations View full agenda → Get involved For capital Explore the projects → Download the 2025 Investment Catalogue → Featured speakers 2026 Speakers The Honourable Mia Amor Mottley, S.C., M.P. Prime Minister of Barbados, Government of Barbados Read bio → Piers Linney MBE Former investor on Dragons’ Den (Shark Tank) | Co-founder of Implement AI I Co-founder of Atherton Bikes Read bio → The Honourable Kerrie D. Symmonds, M.P. Minister of Energy, Business Development and Commerce Senior Minister coordinating the Productive Sector, Government of Barbados Read bio → Daniel Best President, Caribbean Development Bank Read bio → James McLetchie President & Group Chief Executive Officer, Massy Holdings Ltd. Read bio → Latest News from the Forum CIF 2026 Showcases US$39 Million in Bankable Projects as Caribbean Export Sets Out Year-Round Investment Agenda Read → A $6 Billion Opportunity Read → Barbados to Host Caribbean Investment Forum 2026 as Region Unveils Bold Vision for Global Investment Read →

Investment Explorer # Explore Caribbean investment opportunities Featured projects Jamaica · Logistics and Transport Caymanas Special Economic Zone US$250M Other The proposed CSEZ is situated as part of a 10,000-acre (4,046.86 hectares) Caymanas Estates development which includes: the Caymanas Golf and Country Club, polo club, newly built housing communities (New Era Homes), other planned commercial, recreational and retail areas, and the newly constructed 6 lane Mandela Highway traverses through the middle of the site. Trinidad and Tobago · ICT Digitising Regional Healthcare Data and Services US$1M Equity XHUMA Healthcare Ltd. is about Digitizing Healthcare Data and Services in the Caribbean and the Developing World. Jamaica · ICT Doctor on Call US$1.5M Equity Doctor on Call was created to address the issue of the application of modern information and communication technology for the delivery of health and medical care services by qualified providers on demand (telemedicine). Jamaica · Agricultural Technology ECOAID Biotechnology Organic Farm & Carbonization Products US$1.5M Equity This project has been in development for four years. We believe that we can demonstrate a green project that can deliver a robust margin from waste and renewable materials and create valuable products for both commercial and residential consumers. #### Baobab Tower, Warrens, St. Michael, Barbados P.O. Box 5050 Postal code BB22026 Tel:+1 (246) 436-0578 (+12464360578) Fax:+1 (246) 436-9999 (+12464369999) E-mail: info@carib-export.com #### Av. Pedro Henríquez Ureña No. 138 Av. Pedro Henríquez Ureña No. 138 Torre Empresarial Reyna II Piso 5 Santo Domingo, República Dominicana

2026 Invest in The Caribbean Prepared by PROPRIETARY AND CONFIDENTIAL Any use of this material within specific permission from FT Locations is strictly prohibited INVEST IN THE CARIBBEAN We are the Caribbean, a region of opportunity and untapped potential for investment CAIPA regional member investment promotion agencies Anguilla Antigua & Barbuda Aruba Bahamas Barbados Belize Bermuda British Virgin Islands Cayman Islands Curacao Dominica Dominican Republic Grenada Guyana Haiti Jamaica Montserrat Nevis Saint Lucia Saint Vincent & The Grenadines St. Kitts St. Maarten Suriname Trinidad & Tobago Turks & Caicos “ CAIPA alongside its 25-member state partners are working together to develop opportunities that drive economic growth across the Caribbean. Suzette Hudson, Secretariat, CAIPA INVEST IN THE CARIBBEAN Why invest in The Caribbean? Capture high-growth opportunities across priority sectors Connections from the Caribbean to the world The Caribbean has quickly grown as a diverse opportunity for investment across several priority sectors. Our strategic location, modern logistics network, and large domestic and tourism market create strong opportunities in agribusiness, logistics, renewable energy and many other industries. The Caribbean is a global region, our connectivity has enabled bilateral trade and investment to flourish in our market with direct flight connections to the US, Canada, and Europe, and trade access to over 170 countries around the world via the Panama Canal. Stable and pro-investment business climates across the region Access to a regional talent pool and workforce with a range of skills levels The Caribbean is a stable market with a proinvestment business climate underpinned by strong and favourable economic and sectoral policy, foreign investment frameworks and incentives programs aimed at supporting foreign investment. Investors benefit from a growing and diverse talent pool with supported by world class educational institutes across the region ensuring a future proofed skilled workforce at competitive costs. “ The Caribbean is more than just a tourism destination - CAIPA and its extensive network of regional members are here to help you identify high-growth sectors ripe for investment. 4 1. A favourable business environment INVEST IN THE CARIBBEAN Strong fundamentals for long-term investment FDI friendly policy frameworks Across the CAIPA region, governments have modernised investment legislation, streamlined approval processes and expanded Special Economic Zone (SEZ) regimes thus offering clearer rules, faster permitting and targeted incentives for foreign investors. Extensive trade and market access CAIPA economies benefit from tarifffree or preferential access to major global markets through the CARICOM Single Market, the EU–CARIFORUM Economic Partnership Agreement and the US CBERA, providing duty-free access to markets representing hundreds of millions of consumers. Strengthening macroeconomic fundamentals Macroeconomic conditions across the region show greater inflation stability, improving sovereign credit profiles, and economies that are increasingly services-driven, supporting resilience and predictable operating environments. Improving ease of doing business Ongoing reforms include digital business registration, online tax filing and payment systems, and the establishment of single investment windows, reducing administrative burden as well as improving transparency for investors. The Caribbean region offers an open and increasingly integrated environment for long-term foreign investment. 6 2. Regional connectivity and infrastructure INVEST IN THE CARIBBEAN Market access and reliable infrastructure to support you 1bn+ Global consumer reach 30+ Regional international airports The Caribbean offers significant market accessibility, with world-class flight connectivity to the USA, Canada, South America and Europe and Panama Canal access to 180 maritime routes serving 170 countries. Global and regional trade agreements supporting consumer market Duty-free access to the US market from 17 eligible Caribbean countries One-way, duty-free access for goods for most CARICOM countries Canada (Vancouver) 7.5hrs USA (California) 6.5hrs US (Boston) 4.5hrs US (Miami) 2hrs 170 Trade agreements have been in place between the EU and 14 CARIFORUM member states since 2008 Countries served via the Panama Canal The CARICOM Single Market and Economy (CSME) is promoting intra-regional trade and investment between member states UK (London) 10hrs China (Beijing) 17.5hrs Ghana (Accra) 10.5hrs Brazil (Brasilia) 6hrs Source: World Bank Group and US Census Bureau, 2024, Rentech Digital, 2025, Canal de Panama, 2025, Travelmath, 2025 Australia (Canberra) 19hrs 8 3. Access to competitive talent INVEST IN THE CARIBBEAN Access to a skilled regional talent pipeline Why consider the Caribbean for talent? The Caribbean combines favourable demographics, multilingual talent and strong tertiary education systems to deliver a young, adaptable and sector-aligned workforce that supports scalable investment across the region. Multilingual talent base Favourable workforce demographics The Caribbean has a median age of approximately 35.3 years, indicating a relatively young population that supports sustained labour availability and long-term workforce renewal1. Source: 1 World Health Organization The region offers a strong English-speaking foundation, complemented by widespread Spanish and French proficiency across different country clusters, enabling investors to serve North American, European and Latin American markets. Established tertiary education networks Leading institutions such as the University of the West Indies and the Universidad Autonoma de Santo Domingo support a strong regional pipeline of graduates in business, ICT, engineering, logistics, agriculture, and hospitality. “ A young, multilingual, and sectorready workforce supporting scalable investment INVEST IN THE CARIBBEAN Access to talent at a competitive cost advantage Across key roles, labour costs in CAIPA economies are typically 70–85% lower than in the USA, offering a substantial cost advantage for scalable operations. Caribbean average vs USA: Total annual labour costs comparison by role1 Role Caribbean average cost (USD) USA average cost (USD) Caribbean average vs USA Engineer $28,746 $111,338 -74% Engineer Technician $19,082 $88,291 -78.4% Warehouse Manager $19,842 $91,459 -78% Warehouse and Distribution Operative $8,986 $52,657 -82.9% Agriculture Manager $16,060 $50,305 -68.1% Agriculture Worker $7,327 $36,399 -79.9% Source: 1 fDi Benchmark analysis based on available data for Barbados, Dominican Republic, Guyana, Jamaica and Trinidad & Tobago 11 4. Investment opportunities INVEST IN THE CARIBBEAN $4.3bn Tourism revenue in 2024, driving demand for food Unlocking growth in value-added and sustainable agribusiness Invest in expanding value-added processing and agritech ventures that reduce import dependence across the Caribbean and support new market entry. The region offers a wide range of investment potential in the value-added agriculture sector, including in processing of regional raw agriculture products and in sustainable agritech and climate smart agriculture. Key regional anchor firms and business associations Proximity To North and South America Value-added processing Agritech 35% Of exports are set for the North American Market Regional agribusiness associations and partners Source: CAIPA, CARICOM Food Security Imitative and The Caribbean Tourism Organization INVEST IN THE CARIBBEAN Unlocking growth in value-added and sustainable agribusiness Key Investment Opportunities Value-added agriculture processing The Caribbean’s agribusiness sector spans a wide range of value chains including fruits (e.g. bananas, papayas, pineapples, and avocados), livestock, cereals, and high-value crops such as spices and coffee. With the global market increasingly favoring tropical and organic products, the region offers vast opportunities for both primary production and value-added processing. Agritech and innovative agriculture systems Investments in smart farming, hydroponics, and precision agriculture are transforming traditional farming practices, improving yields, and reducing costs. Countries across the region have initiated projects to integrate technology into farming with support from the private sector, and academic innovation clusters. Sustainable and certified organic food production The Caribbean has made sustainability a core priority in its agribusiness sector, focusing on environmentally friendly practices, reducing food waste, and promoting food security. Initiatives are underway to reduce the region’s environmental footprint, including organic farming and reducing carbon emissions. Source: CAIPA INVEST IN THE CARIBBEAN 44.7bn Total population in the Caribbean Invest in a growing and wellconnected region for logistics Capitalise on major infrastructure projects and growing demand for logistics services across multiple sectors in the Caribbean. The Caribbean offers significant potential for logistics operations to serve the growing market demand. The Caribbean has a growing population of nearly 45 million alongside an extended North and South American consumer market of more than 1 billion individuals supported by bilateral trade agreements. 12% Expected growth in ecommerce in 2025 Strategically located on major shipping, trade, and air routes, the Caribbean offers seamless access to the Americas, Europe, Asia, and the Panama Canal—making it a vital hub for global trade. Key regional anchor firms and business associations Major logistics MNCs 170 Countries served via The Panama Canal Key regional stakeholders and partners Source: CAIPA, Worldometer and Statista INVEST IN THE CARIBBEAN Invest in a high demand region for transport and logistics Key Investment Opportunities Transport and logistics focused infrastructure development The Caribbean offers a wide range of investment project opportunities within transport and logistics infrastructure development, including major upgrades and investment into enhancing regional and international connectivity through air and seaports, road infrastructure development and in the development and build-out of new free trade and special economic zones across the region. Warehousing, cold-storage and distribution including ecommerce Demand for on-time access to goods across the region is growing, driven largely by increased toruism and locally driven demand for access to products. Cold-storage and logistics is essential for ensuring access to regionally produced and processed food products, and ecommerce growth particularly in electronics and fashion products is driving requirements for fulfilment and distribution networks to be enhanced. Freight tech and innovative logistics solutions The Caribbean is quickly becoming a world-recognised logistics hub thanks to its strategic location, highly connected infrastructure and increasing adoption of innovative technologies in supply chain management. There is a growing demand for innovative solutions like real-time tracking, digital freight platforms, and automated logistics systems to enhance efficiency and reduce logistics costs in the Caribbean. Source: CAIPA INVEST IN THE CARIBBEAN 2.3% Average annual growth in demand for electricity ~4GW Energy gap in the region requiring new investment Powering the region with sustainable and renewable energy The Caribbean is primed for renewable energy investments, particularly in solar, wind, hydropower and bioenergy. The Caribbean offers and increasingly diverse renewable energy ecosystem seeking new investments to support the in the build of renewable energy components and technologies in the region to ensure seamless integration from production to market including the development of grid infrastructure including storage and transmission. Regional organizations such as CARICOM and CCREE are advocating for regional renewable energy policy developments that align with SDGs. Key regional anchor firms and business associations Major renewable energy MNCs 47% 2027 CARICOM Renewable energy target Key regional stakeholders and partners Source: CAIPA, CARICOM INVEST IN THE CARIBBEAN Key opportunities in the Caribbean for renewable energy Key Investment Opportunities Utility-scale solar power infrastructure The Caribbean region receives substantial solar resources averaging at 5.5 kW/m2 of solar irradiation and 7.73 hours of sunlight per day, making it an ideal location for solar energy projects. The World Bank estimates the average solar power potential in the region lies at an impressive 1900 kWh per year. Wind energy developments The Caribbean has high wind speeds, with many islands experiencing high wind power density and average wind speeds. The has an average wind speed of 4.2 metres per second with the World Bank Group estimating that the region offers approximately 751GW of offshore wind energy potential. Hydropower Hydropower represents an opportunity for renewable energy projects in the Caribbean due to its abundant water resources and topography and provides flexibility, reliability and energy storage services to support and balance variable renewables such as wind and solar power. Biomass energy potential The Caribbean offers a strategic advantage for biomass investments due its rich agricultural heritage rooted in sugar plantations. Key waste-by products from local agricultural activity has grown biomass potential in the region to approximately three times the global average. Source: CAIPA, IRENA and World Bank Group 18 5. Incentives and support INVEST IN THE CARIBBEAN Regional incentives and support mechanisms Investors in the region benefit from competitive incentive programs that make it easier to establish your business, expand and thrive in the Caribbean. Corporate income tax reductions Access a range of income tax reduction and tax holidays across the region within qualifying sectors and export focused activities. Free-trade and special economic zone incentives Tap into a wide range incentives for operations residing in a free-trade or special economic zone including Preferential tax agreements, relief on approved imports and simplified customs facilitation and permitting Duty-free imports and exemptions Capitalise on trade related import exemptions for a wide range of operational assets and resources including machinery, equipment and key raw materials for your business. Investment allowances and accelerated depreciation Enables your business to establish and become operational quicker through tax deductions on qualifying capital costs and higher allowance rates for capital expenditure write-off. “ The Caribbean provides access to a range of incentives tailored to your next investment INVEST IN THE CARIBBEAN CAIPA: your regional partner in the Caribbean Clear point of contact for regional enquiries Market intelligence & tailored research CAIPA serves as the regional point of contact for businesses seeking to explore opportunities for growth across the Caribbean. Customised access to sector data and opportunity insights to help investors assess and shape their project across CAIPA member locations. Regional member partner introductions Policy and regulatory advocacy CAIPA can facilitate direct introductions to our member investment promotion agencies so that your business can speak directly with in-market support during your duediligence and location shortlisting operations. Branding and marketing responsibility CAIPA serves as a regional voice supporting the advocacy for beneficial regional policy and regulatory change to enhance the business environment within the Caribbean. CAIPA has the responsibility of enhancing the regional brand of the Caribbean and effectively marketing the investment potential, including the promotion of investment successes. INVEST IN THE CARIBBEAN 21 Contact us Contact CAIPA Email: secretariat@investincaribbean.org Website: Investincaribbean.org About CAIPA CAIPA is the regional investment promotion agency for the Caribbean, serving as a key first point of contact for international and domestic businesses, sustainability-focused organizations, and global and regional stakeholders who require strategic support to explore growth and investment opportunities in the region. Prepared by PROPRIETARY AND CONFIDENTIAL Any use of this material within specific permission from FT Locations is strictly prohibited