CARICOM | Region Should diversify Banking Sector; Pursue intra-regional Investment; Consider South-South Cruise Tourism Says Mottley

Nassau, Bahamas, June 16, 2024 - Barbados Prime Minister Mia Mottley has identified three critical elements of the Caribbean’s economic reality that ought to be addressed in order to achieve sustainable regional growth. 

Speaking at the closing of the 31st Afreximbank Annual Meeting and the Third AfriCaribbean Trade and Investment Forum, Mottley emphasized the need for greater diversity and competition in the regional banking sector, reforming the global financial architecture, and pursuing investment opportunities within the South.

Banking Sector Reform

Prime Minister Mottley called for increased diversity and competition in the Caribbean banking sector. She highlighted the impact of de-risking banks, which has made opening accounts a cumbersome process in the region. "In Canada, someone can open a bank account in 10 minutes. In contrast, it takes two to three months in the Caribbean, even for individuals heading organizations," Mottley said. She described this situation as "unacceptable" and stressed that the region's citizens should not be treated as "financial lepers."

Mottley shared her personal experience of opening a bank account at the Royal Bank of Canada when she was 16, without the extensive scrutiny faced today. She acknowledged the importance of due diligence but insisted it could be conducted more efficiently with increased competition. "We can treat ourselves far better," she asserted.

Global Financial Architecture

Mottley also proposed a significant shift in the criteria for accessing developmental financing. She argued that gross national income (GNI) should replace gross domestic product (GDP) as the determining factor. This change, she believes, would more accurately reflect the financial needs of Caribbean countries. Mottley underscored the potential for mobilizing capital within the South and emphasized the need for intra-regional investments to support green transformation initiatives. "We have a date with destiny, particularly in those countries on the front line of the climate crisis," she noted.

Investment Opportunities

Prime Minister Mottley stressed the importance of shifting the Caribbean's investment focus from North Atlantic countries to South-South collaborations. She highlighted the untapped potential for year-round tourism, noting that the traditional division of tourism into "summer" and "winter" seasons is irrelevant for the Caribbean. "We need to look within and across for investment," Mottley stated. She pointed to a recent deal where Barbadian businessman Mark Maloney secured a US$100 million loan from Afreximbank for hotel construction and cement business expansion as a positive example of South-South investment.

Mottley proposed that Caribbean and African investors collaborate to lease cruise ships tailored to their cultures and preferences. "There is an amazing opportunity in cruise tourism that remains untapped," she said, emphasizing that this initiative should be led by and for the people of the Caribbean and Africa. By initially leasing vessels, the region can build capacity and eventually own these assets, she suggested.

Conclusion

Prime Minister Mia Mottley's vision for the Caribbean's economic future involves tackling three key areas: diversifying and enhancing competition in the banking sector, reforming the global financial architecture to better suit the region's needs, and fostering investment opportunities within the South. These measures, she believes, are crucial for achieving sustainable growth and resilience, especially in the face of climate challenges. As Barbados prepares to chair the Climate Vulnerable Forum, Mottley's proposals underscore the urgency of addressing these economic realities to secure a prosperous future for the Caribbean.