The Caribbean nations have a permanent population of 39 million and another floating population of 27 million tourists, plus one of the region’s highest per capita incomes.
The region’s highest income per capita countries aren’t Brazil or Argentina. They are three Caribbean islands: the Bahamas, Trinidad and Tobago, and Barbados. A ranking by Latin Business Chronicle, Latin Trade’s sister publication, shows that the Bahamas has an average annual per capita income of $24,300, while Trinidad and Tobago comes in at $18,500, and Barbados at $16,900.
Those numbers are far below the $48,400 the International Monetary Fund (IMF) reports as per capita income in the United States, but they easily surpass the richest countries in continental Latin America– Uruguay, with $15,500 per capita and Chile, with $15,400.
In fact, the per capita income of the Bahamas is almost double Brazil’s $12,500, is more than double Argentina’s $11,400 or Mexico’s $10,500, and is almost triple Colombia’s $8,100.
The islands figure so prominently in these rankings that five of the region’s ten richest nations in per capita income are in the Caribbean. The other two are Antigua and Barbuda with $14,300 and Saint Kitts and Nevis with $12,900 per person per year.
But are these figures enough to make the islands attractive for exporters and investors? Maybe not. For one thing, the economies are growing at a rate of just 2 percent to 3 percent per year, and IMF forecasts indicate they will continue at that rate until 2015. That’s well below the Latin American average, which is close to 4 percent. None of the islands is very big, either. Barbados has a population of 273,000, the Bahamas 345,000, and one of the biggest, Trinidad and Tobago, has 1,350,000 inhabitants.
On the other hand, the 7,000 islands, islets and cays of the Caribbean have more than 39 million permanent residents, plus a floating population of 27 million tourists with equally high incomes. Taken as a group, they are very interesting.
There are problems negotiating in the Caribbean. The vice-president of the northern region of the food products multilatin Nutresa, Alberto Hoyos, can name a few. Language differences makes it troublesome to have uniform labels for all products, and the smaller volumes force him to consolidate shipments. There are also serious tariff and non-tariff barriers. Caricom customs duties range between 14 percent and 20 percent.
Still, there are success stories. Producers who go there generally choose to sell to the entire region and not to a select group of islands. They know they must compete against products from the United States and Asia that dominate the zone and they must be able to deliver on short notice. Companies from Brazil, Costa Rica, Mexico and Colombia, which are the most active ones in this market, have become the mom-and-pop stores of the Caribbean. Islanders place their large volume orders to Asia, and though they must wait 45 days, they get low prices. What’s left over is ordered from Latin America at higher prices than China charges, but arrives in three days. In the case of perishables, they are delivered after having been consolidated in Miami– the islands’ big storehouse.
Another difficulty is the precarious state of infrastructure. The United Nations Human Development Indicator classifies Barbados as having “very high” human development and Trinidad and Tobago and the Bahamas as “high.” But these ratings conceal some major shortcomings in infrastructure development needed to do business.
All the same, whoever decides to embark on the adventure of selling or investing in the Caribbean knows he will be in a good neighborhood. The Perception of Corruption Index published by Transparency International, for example, puts Barbados in 16th place among 183 nations, and the Bahamas comes in at number 21– one slot above Chile. Throw in the sun and the beaches, and this market takes on the appeal of a fantasy place to do business.
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