May 15th, 2007 05:38 EST
Investment in Caribbean Basin On The Up
Washington -- Foreign direct investment in the Caribbean Basin is rising, with some of the increase attributed to a U.S. free trade agreement with the region, according to the Overseas Private Investment Corporation (OPIC).
OPIC, in announcing its sponsorship of a May 15-17 international conference on foreign investment to be held in El Salvador, said the Central America Free Trade Agreement-Dominican Republic (CAFTA-DR) laid the foundation for significant economic growth in 2006 in such nations as Guatemala and Honduras.
OPIC is the primary U.S. government agency that supports private sector investment in emerging economies.
OPIC said the trade pact also spurred strong foreign investment in the tourism and mining industries in several Caribbean countries. The increase in foreign investment is part of the Caribbean Basin`s overall positive economic outlook, said OPIC.
In a sign of that positive growth, OPIC said exports from Central America in 2006 grew 10.4 percent from 2005 to 2006, amounting to $20.4 billion.
Lawrence Spinelli, OPIC`s public affairs director, told USINFO May 10 that his agency is seeing a strong upwards trend " of U.S. businesspeople seeking to invest in the Caribbean Basin. This huge " interest from investors, he said, is noticeable not just in the five Central American nations in CAFTA-DR (El Salvador, Honduras, Guatemala, Costa Rica and Nicaragua), but throughout the Caribbean Basin. The Caribbean Basin is the general term used to describe an area encompassing the countries of Central America and the island nations of the Caribbean.
U.S. businesspeople, Spinelli said, are coming to OPIC looking either for finance or risk insurance, as part of his agency`s mandate. OPIC also helps businesses manage the risks associated with investing in foreign markets.
In 2006, OPIC itself supported nearly $33 million in new U.S. investment in Central America and the Caribbean.
A report by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) said foreign direct investment for the region amounted to $72.44 billion in 2006, a 1.5 percent increase over the $71.36 billion total in 2005, and a 9.8 percent increase over the $66 billion registered in 2004.
In its May 3 report, ECLAC said the top recipient countries for foreign investment in the Caribbean Basin in 2006 were Panama, Costa Rica and the Dominican Republic. Foreign direct investment is defined as an investment made by a foreign individual or company in another country such as the purchasing or construction of a factory.
Spinelli said OPIC`s conference in El Salvador is designed to show U.S. companies that the Caribbean Basin is an increasingly lucrative destination for their investment capital. "
Spinelli said conference objectives include enabling U.S. companies to capitalize " on the upward economic trends in the region.
Scheduled participants at the conference include Charles Glazer, U.S. ambassador to El Salvador; OPIC President Robert Mosbacher Jr.; and Ruben Rosales, Latin America project manager for the U.S. Army Corps of Engineers.
The Salvadoran conference is modeled after similar OPIC-sponsored events held in Bucharest, Romania, in 2004; Marrakesh, Morocco, in 2005 and Cape Town, South Africa, in May 2006.
Spinelli said that although the Dominican Republic, as part of CAFTA-DR, has shown a surge in foreign investment, most of the Caribbean is not increasing at the same level as in Central America, and we`d like to see that change. "
Haiti has proved a particular challenge because of the country`s political turmoil, Spinelli said. The unsettled situation has discouraged foreign investment, but Spinelli said he hopes the business community will give the country a second look and take advantage of some investment opportunities " existing in the Caribbean nation.
ENERGY CONFERENCE IN HONDURAS
The United States also is sponsoring another event on attracting foreign investment in the Caribbean Basin, the May 24-25 Central American Energy and Competitiveness Conference " in Tegucigalpa, Honduras.
The conference will focus on national and regional regulations that could be enacted to bring more investment to the Caribbean Basin`s energy sector.
One of the groups helping to organize the event, Washington-based Caribbean-Central American Action (CCAA), said the Caribbean Basin has the unique opportunity to take full advantage of the economic opportunities presented " by CAFTA-DR. But the group added that to turn opportunity into reality, the region must overcome challenges " to its competitiveness profile, such as the availability of a reliable energy supply.
The conference will include release of a white paper funded by the U.S. Trade and Development Agency (USTDA). The white paper offers a synopsis of the current energy regulatory framework of each country in the Caribbean Basin.
The U.S. Agency for International Development is funding the Tegucigalpa event, with support from the USTDA, the U.S. Energy Department and the Central American Bank for Economic Integration.
More information on the Tegucigalpa conference is available on the CCAA Web site.
More information on the OPIC conference is available on the agency`s Web site.
The full text of the ECLAC report, Foreign Investment in Latin America and the Caribbean, 2006, is available on the agency`s Web site.
Source:By Eric Green
USINFO Staff Writer