Caribbean Countries of the Future 2007/08

Published: August 06, 2007

Puerto Rico once again outshines its Caribbean neighbours in fDi’s Countries of the Future competition, with Jamaica coming in as runner up. Charles Piggott reports.

Puerto Rico remains fDi’s top destination for Caribbean investment for 2007/08. The self-governing US territory has been a favourite for multinational investment since the late 1990s thanks to continued strong economic performance and excellent human resources. It has the highest regional level of FDI inflows in fDi’s competition and ranks highly for economic performance (first), human resources (first), business friendliness (second), development and investment strategy (second) and infrastructure (equal second).

The country’s development agency, the Puerto Rico Industrial Development Company (PRIDCO), has notched up success after success in the past two years. PRIDCO’s head of marketing told fDi: “PRIDCO has promoted close to 100 foreign industrial projects in 2006 and 2007, with an investment commitment of more than $4bn and signed deals for 48 foreign industrial projects in the past 12 months with an investment commitment of more than $2.2bn.”

Puerto Rico impressed fDi’s judges with a string of major biotech investments since the start of last year. These include commitments from Amgen (an expansion estimated to cost $2bn), Eli Lily (an estimated $850m expansion) and Bristol Myers Squibb (a $400m expansion).

fDi’s runner up Caribbean Country of the Future is Jamaica. Until recently, Jamaica was better known as a destination for tourists rather than multinational companies. However, its investment promotion agency, Jamaica Trade and Invest, has put forward an effective international strategy and competitive incentive structure, and Jamaica now ranks top for its investment and development strategy.

Jamaica has enjoyed recent economic growth and healthy FDI inflows in each of the past two years. Its FDI inflows were the third highest in the competition (after Puerto Rico and the Dominican Republic) and reached an estimated $850m in 2006, up from $682.5m in 2005. Rents for office space remain low, and the well-educated population also helped the country to make it into second place in fDi’s biennial ranking.

METHODOLOGY

fDi’s Locations of the Future competition covers each region once every two years. The next Central American and Caribbean Countries of the Future competitions will be published in 2009.

fDi’s shortlists are created in much the same way that investors screen locations to decide which are suitable for capital investment projects. fDi asks each location to provide data on 46 criteria.

In the first half of 2007, fDi invited countries across Central America and the Caribbean to answer 46 questions in the seven broad categories listed below. Fifteen countries were considered by fDi’s panel of judges, which scored each one according the criteria within these categories.

Countries scored up to three points for each criteria. The winners in each category are the countries that scored the most points in that category, and the overall winner is the country that scored the most points across all seven categories.

Countries were scored by members of fDi’s editorial team and by independent guest judges.

THE JUDGING PANEL

Dr Henry Loewendahl, president, OCO Consulting

Alfredo Coutino, senior economist, Economy.com

Lyndon Guiseppi, RBTT Merchant Bank managing director and board member of the British Caribbean Chamber of Commerce

JUDGING CRITERIA

Economic potential

• Economic potential

• GDP growth

• GDP/capita

• GDP/capita growth

• Total inward investment 2006

• Total inward investment 2005

• Inward investment per capita 2006

• Inward investment per capita 2005

• Number of FDI deals in past 12 months

• Significant inward investment projects in past two years

Business friendliness

• Basic level of corporate taxation

• Business-related taxes

• Property transaction tax

• Number of foreign companies

• Number of jobs created by foreign companies

• Mandatory employer contributions (eg. welfare taxes, healthcare benefits)

Cost effectiveness

• Town centre office rental costs

• Out of town office rental costs

• Industrial premises rental costs

• Secretarial salaries

• Middle manager salaries

• Manual worker wages

• Cost of a one minute call to the US

Human resources

• Percentage of population with a university degree

• Number of university-level educational institutions

• Quality of leading universities and research institutions

• Government-sponsored worker training programmes

Transport system

• Transport links (eg. strategic transport links, major transport hubs, number of airports, ports, rail terminals, major highways, airport passenger numbers, cargo tonnage)

IT and communications

• Number of telephone lines per 1000 people

• Mobile phone ownership (percentage of adult population)

• Internet access percentage of population)

• Internet connection speeds (maximum available bandwidth)

Quality of life

• Best housing areas

• Average residential property purchase price

• Average residential rental costs

• Public and private healthcare facilities

• Leading schools, especially international schools

• Incidents of crime per 1000 people