The STAR Businessweek - Business Incubators

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THE BUSINESS OF

BUSINESS INCUBATORS

Start-ups often turn to business incubators to grow, develop and position themselves for profit but this template has been under-used in the Caribbean

China pledges $60bn for Africa as Xi rejects ‘debt trap’ claims Xi Jinping, China’s president, has pledged $60bn for African development over the next three years while countering criticism that Beijing is trying to ensnare African governments in a debt trap Page 3

Faced with an unforgiving business landscape, many of the Caribbean’s entrepreneurs could use a helping hand. This help is usually delivered piecemeal, however, through development agencies offering technical support and financial assistance such as grants or loans. Dedicated business incubators are few and far between yet they have the potential to bridge the skills gap, create sustainable employment and deliver specialised services.

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT Continued on page 4

Sri Lanka sinks deeper into China’s grasp as debt woes spiral Sri Lanka has again turned to China for a fresh injection of cash, which will come during the final quarter of 2018, as it prepares for a crippling debt repayment cycle that will begin in 2019 Page 7

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The Windrush Generation: RECONCILIATION AND WHEN GOVERNMENTS SAY SORRY

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

The STAR Businessweek

BY CHRISTIAN WAYNE – EDITOR AT LARGE

This week we have quite the cross-pollination of stories to share with you. Our cover story focuses on a personal passion of mine— supporting entrepreneurship and nurturing a true culture of innovation in Saint Lucia.

Of course, this is easier said than done, but nonetheless a worthy pursuit in my opinion.

In “The Business of Business Incubators” I share my thoughts on the topic of accelerating growth for Caribbean entrepreneurs and why the typical copy/paste models of start-up incubation have gained such little traction in our region—and what we can do to fix it.

Immigration, particularly UK immigration, is another focus area this week. STAR Businessweek correspondent Ed Kennedy draws striking comparisons between the UK’s flip-flop apology to the Windrush Generation with similarly tepid sorry-campaigns led in countries such as Australia and Canada.

On the heels of last week’s story discussing the real risks of Citizenship by Investment Progammes becoming conduits from criminal activity—or safe havens for it—we’ve decided to syndicate a fascinating piece recently published by Investment Migration Insider titled “Alleged Drug Lords and Billion-Dollar Fraudsters – The CIP-Country Response”.

As the saying goes, where there is sugar, there are bound to be ants. Read page 6 for more.

Finally, it’s my pleasure to share that the STAR Businessweek article published in our June 16 2018 edition entitled “An Agricultural Revolution – How GreenTech is transforming the agricultural industry in Saint Lucia and beyond” has taken 2nd place in the 17th annual Massey Ferguson awards held in Brazil!

Congratulations to the author Catherine Morris and a special thank you to our readers and advertisers who allow us to do this work week after week. We share this award with you all.

It’s Nothing Personal. It’s Business.

Stay connected with us at: Web: www.stluciastar.com Social: www.facebook.com/stluciastar Email: starbusinessweek@stluciastar.com

Sajid Javid, UK home secretary, apologised to 18 out of 11,800 people whose cases have been reviewed so far to identify if they had been wrongfully detained or removed from the UK © Reuters

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t’s often remarked, “It’s not hard to say sorry” yet the longstanding reluctance of many governments of former British colonies to say sorry as nations for the damage done to their most vulnerable people has long shown otherwise. Such a fact needs be acknowledged alongside the reality that where prior generations failed, more recent ones have indeed made good and sincere inroads in attempting to right wrongs.

That’s why the British government’s recent reckoning with the Windrush Generation scandal is being observed closely, to not only see justice sought for the Windrush Generation, but to see what nations who share a British heritage and history of government abuse have done to pursue reconciliation.

So how does the treatment of the Windrush apology and redress compare to similar examples seen in Australia and Canada? And what does it really mean to say sorry to victims of government abuse? Let’s look now.

THE WINDRUSH SCANDAL

The Windrush story has been covered extensively locally. But if anyone somehow missed it (or a reader abroad is yet to hear about it) the scandal

concerns the UK government’s wrongful detainment, and unlawful denial of legal rights, and ultimately deportation, of individuals (especially from the Caribbean) prior to 1973, now known as the Windrush Generation.

Not only had many of those affected legally travelled from Caribbean nations to the UK to start a new life after World War II, but many had in fact been born British subjects.

An apology has now been issued, by then-UK interior minister Amber Rudd in April of this year, and while each apology is unique and must be treated as such, there is a difference in approach to apologies depending on which former British nation it was made in. In turn, the expectation must always be that an apology comes with a promise of redress to right a wrong — and to be more than words alone, however meaningful they may be.

AUSTRALIA SAYS SORRY, SEEKS TO START ANEW

On February 13, 2008 the prime minister of Australia, Kevin Rudd, made an official apology to the Stolen Generation — Australian Aboriginal and Torres Strait Islander children forcibly removed from their parents between 1910 and 1970 by Australian

federal and state governments. This was one of the landmark acts of his newly elected government.

Rudd’s apology statement saw him say sorry six times. He indicated after that the apology wasn’t just overdue, but a matter of urgency. In saying sorry soon after taking office (being officially sworn in in December 2007) the Rudd government looked to close one chapter of indigenous relations symbolically, so it could have a ‘new start’ in its policy-based programmes.

One such programme is the Closing the Gap (CTG) initiative — aimed at reducing the gap between quality of life outcomes of indigenous Australians and non-indigenous Australians — devised by the the Council of Australian Governments (COAG). For the first time in seven years, as of 2018, COAG is on track to meeting three of the seven CTG targets. Arguably not enough meaningful progress, but indeed some, given the big goals of CTG.

CANADA AND MULTIPLE APOLOGIES

2008 was also a notable year for reconciliation in Canada. In June of that year, Prime Minister Stephen Harper made an official apology to students of Indian residential schools, for the historical practice of numerous abuses, including forcibly removing Indian children from their own families, and seeking to forcibly assimilate them into the ‘dominant’ Canadian culture.

Canada’s experience here is particularly significant, not only for current Prime Minister Justin Trudeau’s rejection of a dominant Canadian culture (famously saying, ‘‘There is no core identity, no mainstream in Canada”), but also the numerous official apologies he’s given as prime minister, having issued four since coming to office in November 2015.

Supporters claim this is a sign of a truly progressive leader but critics hold that the risk of numerous apologies so soon is they lose their significance, and do more harm than good because a fair period of time for a nation’s proper recognition of, and reconciliation with, history is lost.

Continued on page 5

AFRICA

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CHINA PLEDGES $60BN FOR AFRICA AS XI REJECTS ‘DEBT TRAP’ CLAIMS The $5bn for imports comes amid claims Beijing is engaging in ‘debt diplomacy’

BY DAVID PILLING IN LONDON AND LUCY HORNBY IN BEIJING, FT CORRESPONDENTS

X

i Jinping, China’s president, has pledged $60bn for African development over the next three years while countering criticism that Beijing is trying to ensnare African governments in a debt trap.

At the start of the three-day triennial Forum on China-Africa Co-operation in Beijing, Mr Xi said China would not finance “vanity projects” but would concentrate on commercially viable, sustainable and green investments.

Speaking to representatives of 54 African countries — including several heads of state — in the Great Hall of the People, he said: “Only Chinese and African people have a say when judging if the co-operation is good or not between China and Africa. No one should malign it based on imagination or assumptions.”

Mr Xi was reacting to criticism that China had been engaging in “debt diplomacy” by loading countries up with debt so they became politically beholden to Beijing.

In an editorial in Time magazine last week, Grant Harris, Barack Obama’s former adviser on Africa, accused China of setting “a carefully laid debt trap” for unwary African governments.

“Chinese debt has become the methamphetamines of infrastructure finance: highly addictive, readily available, and with long-term negative effects that far outweigh any temporary high,” he wrote. “Massive

A Chinese engineer and a local construction worker work on a section of the Mombasa-Nairobi standard gauge railway (SGR) in Emali, Kenya October 10, 2015 © Reuters

loans can come with steep and opaque conditions.”

Such criticism has also been voiced in Africa. “I think we are becoming like a client state of China,” said Patrick Gathara, a political commentator in Kenya, where the $3.3bn price tag for a Chinese-built railway prompted accusations of high-level corruption. “Beijing is buying off the guys who run the country.”

China lent African countries about $125bn between 2006 and 2016, according to data from the China-Africa Research Initiative at Johns Hopkins University in Washington.

China surpassed the US as Africa’s biggest trading partner in 2009.

Mr Xi said the $60bn in new money would include a $5bn special fund for

Razia Khan, chief Africa economist at Standard Chartered Bank, said she saw the $5bn earmarked for African imports as a broad commitment to rebalance trade, including by importing noncommodity goods

African imports. The funds, which match a $60bn pledge made three years ago at the previous Focac summit in Johannesburg, include $15bn in aid, interest free loans and concessional loans, a $20bn line of credit and $10bn in a special fund for China-Africa development.

Chinese companies would also be “encouraged” to invest $10bn in the continent over the next three years, Mr Xi said.

Razia Khan, chief Africa economist at Standard Chartered Bank, said she saw the $5bn earmarked for African imports as a broad commitment to rebalance trade, including by importing non-commodity goods. That could be read as a commitment to help kick-start African manufacturing, she said.

The pledge follows concerns by some African leaders, including Uhuru Kenyatta, president of Kenya, about China’s hefty trade surplus with Africa.

Although this has declined in recent years, Mr Kenyatta has said that China must try harder to import more valueadded goods from its African partners.

Mr Xi said that China would increase efforts to import African merchandise and invest in African agriculture to ensure African food security by 2030.

Ms Khan also noted Mr Xi’s commitment to exempt some very poor countries from debt payments due in 2018. She said markets would watch carefully to see whether China was prepared to restructure mediumterm loans, particularly those owed by Zambia.

Africa’s second-biggest copper producer, which borrowed heavily from Beijing and the capital markets, has indicated it will need to restructure nearly $10bn in debt.

Additional reporting by Archie Zhang in Beijing

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THE BUSINESS OF BUSINESS INCUBATORS Continued from page 1

WHAT IS A BUSINESS INCUBATOR?

Incubators are, first and foremost, concerned with nurturing ideas. While technical workshops and grant schemes focus on providing specific instruction or one-off financial support, incubators are in it for the long haul, throughout the entire lifecycle of an idea.

From a start-up’s inception to its first entry into the market, incubators can help with legal requirements, book-keeping, networking, mentorship, marketing and promotion. Incubators are usually housed in a single facility that provides earlystage companies with everything they need including office space, wifi and equipment.

In many cases, incubators host more than one start-up in the same building - giving the businesses a chance to share, network and learn from each other in a collaborative and open environment.

Incubators can be funded privately or through public financing, and operated at a regional level or even internationally. In the Caribbean they can be drivers of south-south co-operation as the region’s entrepreneurs battle similar issues and social obstacles.

The model can also be used to target certain industries and has proven very successful in the field of emerging tech as companies on the cutting-edge have the chance to test their platforms in a flexible environment.

Incubators can also be used to address social problems, such as a lack of women entering the entrepreneurial industries, by inviting applicants from certain backgrounds or groups.

As incubators help entrepreneurs develop their ideas into a workable product, they pave the way for further funding. Having honed their skills and talents in a businessfriendly setting, entrepreneurs are often more capable and confident when it comes to connecting with angel investors or financial institutions down the road.

Being part of a business incubator scheme could be the difference between success

and failure for SMEs – most of which fail in their first three years. Using an incubator can cut the costs of launching and starting a business by 40 to 50 per cent, according to business advocacy group The Innovation Cluster, and the five-year survival rate for incubator clients is as high as 87 per cent.

And the benefits of incubators extend beyond entrepreneurs. Providing a supportive space for start-ups allows them to reach their potential and become profitable companies, employing local workers and providing services to their communities.

Those entrepreneurs that target specialised niches encourage the acquisition of new skills in the local job market, bridging skills gaps and enhancing a country’s reputation within that industry.

A LOCAL APPROACH

Despite the obvious advantages, business incubators in the Caribbean have a discouraging history. In 2009 the World Bank Group launched the region’s first incubator network through its development agency, infoDev. Intitally funded by infoDev, the European Commission and the Commonwealth Secretariat, the Caribbean Business Incubation Association soon stalled and is now dormant due to lack of interest and funding. Accelerate Caribbean, created in 2014 by the Entrepreneurship Program for Innovation in the Caribbean, met the same fate just two years later.

While success has been muted at the regional level, work is progressing in Saint Lucia on an incubator scheme to benefit local entrepreneurs. Startup St Lucia, an accelerator for early-stage tech companies created by TeleCarib Labs, hopes to launch next year and will offer product and business development, access to mentors from tech hubs around the world and assistance with accessing finance. Founder and Director of TeleCarib Labs Christian Wayne says the facility will act as “a sanctuary for learners, professionals, start-ups and corporates to be able to co-mingle in an engaging,

Organisations like Hacker Hostel (www.hackerhostel.com.jm) are playing an important role in connecting corporations with high-potential talent through coupling intensive training, mentorship and employer exposure to build a culture of innovation in the Caribbean

professional atmosphere”.

Open to tech entrepreneurs with a viable product and customer base, the accelerator will link start-ups with established companies who have a need for their services. These corporate professionals will help to fund the incubator, paying to attach their brand to the scheme and becoming pilot customers for the end products and services. The team behind Startup St Lucia hopes to expand its efforts across the Eastern Caribbean, with Saint Lucia serving as a hub and a template for the rest of the region.

The focus of Startup St Lucia is very much education, according to Wayne who says: “Primarily, tech incubation/ acceleration thrives in markets where there is an inherent culture of innovation. This is fundamental and something that tends to be lacking in the Caribbean. Here in Saint Lucia we have zero universities, so there

is a significant level of capacity-building which needs to take place. The truth is that many of our entrepreneurs are just not ready to take on investor money.”

Startup St Lucia will aim to get its participants investor-ready through an intensive two-tier system. Early stage companies will have their business models rigorously tested and vetted before ‘graduating’ and moving on to a corporate accelerator which will give them direct access to the need in the market. It’s a win-win for both entrepreneurs and industry, according to Wayne who adds: “Caribbean corporations have tended to view working with local entrepreneurs and start-ups from a philanthropic perspective [but] working with innovators and start-ups can increase their competitive edge in the marketplace, as opposed to just being part of their Corporate Social Responsibility.”

You are never too young to start saving money or planning for tomorrow St. Lucia Workers Credit Union Young Dreamers Account offers special features and incentives to help keep our children financially fit

• Parent must provide their ID and the child’s birth certificate upon opening account • No withdrawal policy (Except under special or emergency circumstances) • Parent/guardian must be a member of the credit union

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The Windrush Generation:

RECONCILIATION AND WHEN GOVERNMENTS SAY SORRY Continued from page 2

also ensuring all parties feel encouraged by the potential to progress. In the UK and elsewhere, that’s the challenge ahead.

WHAT NOW FOR WINDRUSH RECONCILIATION?

Protestors in the UK demonstrating against the Home Department’s treatment of the Windrush Generation

Jake Weissbourd, Co-Founder of TeleCarib Labs and higher education specialist, hosting an alternative education workshop in Vieux Fort, Saint Lucia

Christian Wayne (right), Executive Director of TeleCarib Labs, hosting a skills development workshop in Anse La Raye, Saint Lucia

THE CHALLENGE OF DEFINING PROGRESS BEFORE PROGRESSING IT

Certainly, in numerous nations the failures of government to properly reconcile with history have been immense, and there remains much work to be done, including sober recognition that the progress so far has simply not been enough.

Yet to truly understand where progress can be made, the many shades of grey in identifying the right path forward also needs to be acknowledged. It means those seeking to truly see progress made must avoid the easy temptation of defeatism, and needless derision of those trying to pursue sincere restitution.

There can be no doubt these issues are not

easy, especially because it can remain a challenge to find common ground that’s agreeable to all parties when it comes to reconciliation and restitution. The old adage ‘honourable people can differ’ can apply, as even all stakeholders working in good faith (whether victims of wrongs done or officials who now lead a government that inherited wrongs done) may find a shared vision hard to identify, and so progress stalls.

It’s also true that there are many people across all areas of society (including, most commendably, those who’ve been victims) that most of all just aspire to work in good faith to bring about greater fairness and a future that sees all people of a nation progress.

Ultimately, reconciliation requires all parties to progress, and that means

Words are good, and their importance in such matters as these shouldn’t be understated.

Even if restitution and remedy is pursued for victims of government abuse, in the absence of any expression of regret there is not only an inability for wounds to heal, but for a nation to move forward.

Those rare few at the extreme outliers of political debate who can find no meaning in saying sorry to others for harm done, surely have something to be sorry for. Yet words alone are simply not enough. The real value of an apology surely comes not with the act, but with the undertaking that it is the beginning of a new direction.

For the British government, just saying sorry for what happened to the Windrush Generation is not enough, but it now has a chance to work for real progress to be made, with meaningful action to tend to the open wounds. In the Caribbean, the UK and around the globe, many will be watching this process closely.

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CITIZENSHIP BY INVESTMENT

ALLEGED DRUG LORDS AND BILLION-DOLLAR FRAUDSTERS – THE CIP -COUNTRY RESPONSE

BY CHRISTIAN HENRIK NESHEIM, EDITOR - INVESTMENT MIGRATION INSIDER

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hree purported criminals have made headlines for their reported connections to CIPcountries this week. We’ve summarized the stories.

Mehul Choksi – Alleged perpetrator of India’s biggest ever bank-fraud India’s Central Bureau of Investigation wants Antigua & Barbuda’s authorities – who have confirmed that the man is a citizen of and currently present in the country – to arrest and extradite Mr. Choksi, who they say is the mastermind behind the biggest bank-fraud case in India’s history.

Choksi’s Antiguan lawyer says the businessman is a victim of political persecution, that his client has received no formal communication on the extradition request, and that, furthermore, conditions in

Indian prisons are so poor as to constitute a human rights violation.

While Antigua & Barbuda has promised to cooperate with any lawful request from the Indian government, Prime Minister Gaston Browne has also said that the matter is for the courts to decide, insisting that due process be adhered to.

“This idea that they can force us to take any decision and go against the laws and constitution of our country and one in which they are trying to force the executive to meddle in the domain of the judiciary, that is something that will not be tolerated,” Browne told the Antigua Observer.

The case will test Antigua’s resolve against the (perhaps illegitimate) requests of a much larger country, its commitment and ability to protect the inalienable rights of its citizens,

Low Taek Jho – alleged “mastermind” behind Malaysia’s 1MDB money laundering scandal (left); Jabir Motiwala AKA Jabir Saddiq – alleged right-hand-man to Mumbai mafia-boss (centre); Mehul Choksi – alleged perpetrator of India’s biggest ever bank fraud (right)

as well the degree to which it takes seriously the principle of due process and division of political powers.

Whatever the outcome, prospective applicants to the country’s CIP will surely pay close attention.

Low Taek Jho AKA Jho Low – Alleged “mastermind” behind Malaysia’s 1MDB money laundering scandal Malaysian authorities are seeking Mr. Low’s arrest for his purported involvement in the embezzlement of several billion dollars from the Malaysia 1MDB sovereign wealth fund. US prosecutors allege Low is the brains behind the money laundering/misappropriation scandal, which is still ongoing in Malaysia.

Several reports have claimed Mr. Low is an economic citizen of Saint Kitts & Nevis, claims the government of that country has neither denied nor confirmed as a matter of policy.

The Kittitian government, though, has been known to apply this policy selectively as it did deny similar allegations when media reports in February this year speculated that the above-mentioned diamondmerchant Mehul Choksi had obtained citizenship in their country.

Jabir Motiwala AKA Jabir Saddiq – Alleged right-hand-man to Mumbai mafia-boss The Citizenship by Investment Unit (CIU) of Antigua & Barbuda this week denied that one Mr. Jabir Motiwala – sometimes known as Jabir Saddiq – had become a citizen through its CIP. Motiwala is accused of being a “key aide” to Kaskar Dawood Ibrahim, a man wanted not only for building a drug empire rivaling that of Pablo Escobar and “El Chapo” but also for acts of terrorism that included the 1993 Mumbai bombings that killed hundreds of people.

“The claim is utterly false,” said the Antigua CIU and further noted that it had “thoroughly reviewed its files and confirms that is has not granted citizenship to anyone by the name of Jabir Motiwala or Jabir Siddiq”.

The CIU further chastised WIC

News, the originator of the claims, for not seeking verification before publishing such a damaging claim and also speculated as to the motivations for broadcasting it in the first place.

“We are left to assume that the [unidentified] “source” of the claim benefits in some way from smearing Antigua & Barbuda’s Citizenship by Investment Programme,” said the CIU.

The Saint Lucia Government Gazette Company Registration Name: Danyliu & Mann (SC) Ltd. Description: Property holding Directors: Kenna-Lynn Danyliu; David Mann Date Incorporated: 14-Aug-18 Chamber: Peter I. Foster & Associates Chambers, Saint Lucia Name: West Indies Investment Ltd. Description: Tourism Directors: Henri Riveti Date Incorporated: 14-Aug-18 Chamber: Amicus Legal Chambers, Saint Lucia Name: Blue Escapes Ltd. Description: Tourism Directors: Dan Galesanu; Daniela Galesanu; Catalin Cojanu-Calinescu; Liliana Cojanu-Calinescu Date Incorporated: 20-Aug-18 Chamber: Jacobian Law Office Chambers, Saint Lucia Name: Limers Gear Ltd. Description: Manufacturing Directors: Marva Paul Date Incorporated: 21-Aug-18 Chamber: Brickstone Law Chambers, Saint Lucia Name: Caribbean Limes Ltd. Description: Transportation services Directors: Niameki Charles Date Incorporated: 21-Aug-18 Chamber: Brickstone Law Chambers, Saint Lucia

SRI LANKA

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SRI LANKA SINKS DEEPER INTO CHINA’S GRASP AS DEBT WOES SPIRAL

Colombo to borrow $1bn from China and issue $250m Panda bonds before year-end

BY MARWAAN MACAN-MARKAR, ASIA REGIONAL FT CORRESPONDENT

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ri Lanka has again turned to China for a fresh injection of cash, which will come during the final quarter of 2018, as it prepares for a crippling debt repayment cycle that will begin in 2019. But the $1.25bn in loans will push Sri Lanka deeper into Beijing’s grasp.

China is already the largest lender to the south Asian island.

The Central Bank of Sri Lanka is working with its Chinese counterpart, the People’s Bank of China, to issue the equivalent of $250m worth of renminbi-denominated Panda bonds. Sri Lanka has already secured a $1bn syndicated loan from the China Development Bank on terms the central bank says were more favourable than those Western international lenders were offering.

The first $500m tranche is due to be transferred this week.

Sri Lanka retains an affinity for Chinese loans rather than international sovereign bonds, loans from the International Monetary Fund or other funding options. At the same time, it is being warned that its foreign reserves, now at $8.5bn, are inadequate.

Between 2019 and 2023, Sri Lanka has to come up with $17bn for maturing foreign loans and debt servicing. Its lenders include the China Development Bank, the governments of Japan and India as well as multilateral institutions such as the World Bank and Asian Development Bank.

Indrajit Coomaraswamy, governor of the central bank, said Sri Lanka diversified away from a tradition of only raising money through dollardenominated international sovereign bonds in an effort to better handle external debt pressure.

“Our debt dynamics are challenging, but manageable,” Mr Coomaraswamy told the Nikkei Asian Review. “The debt servicing next year will be a little over $4bn, including an ISB of $1.5bn, Sri Lanka development bonds and payments for bilateral and multilateral debts.”

Sri Lanka, which has an $87bn economy, will actually have to grapple with more debt payments in 2019. Its current-account deficit of 2.2 per cent of gross domestic product will push its total debt burden to be paid for the

Sri Lankan prime minister Ranil Wickremesinghe (left) meets Chinese president Xi Jinping before a meeting at the Great Hall of the People in Beijing © Getty

year to $7bn.

“We are an outlier in terms of our debt indicators amongst our ratings peers,” Mr Coomaraswamy said, referring to central bank figures that say the country’s debt is 77 per cent of its GDP. This is higher than the debt-to-GDP ratio of neighbours India, Pakistan, Malaysia and Thailand.

The country’s accumulated foreign debt is estimated at $55bn. Chinese lenders hold 10 per cent of this total, Japan accounts for 12 per cent, the Asian Development Bank 14 per cent and the World Bank 11 per cent.

Sri Lanka’s mounting burden has earned it some notoriety, with some observers saying the country is falling into a debt trap of Chinese design. This view gained currency last year, after $1.1bn in debt was written off in exchange for a long-term lease on the deepwater port of Hambantota, near the southern tip of Sri Lanka. Chinese loans worth $1.5bn were used to build the port, the lease to which is held by a state-owned Chinese company.

Mahinda Rajapaksa, the former president of Sri Lanka who presided over the end of a near 30-year civil war, opened the door to Chinese lenders.

From 2010 till 2015, Mr Rajapaksa’s final years in office, China poured $4.8bn worth of loans into building the Hambantota port, a new airport, a coal-fired power plant and highways. By 2016, the Chinese had loaned Sri Lanka $6bn, fuelling an infrastructurebuilding spree.

But the largest slice of debt that will mature over the next five years predates the Chinese lending boom. Multilateral institutions gave Sri Lanka 10-year grace periods and 30- to 40-year maturities on loan deals signed when the Indian Ocean nation was considered to have successfully embraced an open, liberal economy.

“We were a bit of a donor darling because, after Chile in 1974, we were second, and got a lot of concessional loans from the World

Bank and the Asian Development Bank as a low-income country that had opted to liberalise,” Mr Coomaraswamy said. A “significant portion of the debt

stock is that concessional money that came from multilateral and bilateral financial sources.”

Sri Lanka’s debt has dogged the coalition government of President Maithripala Sirisena. After nearly four years in office, the government has little to show in the way of foreign direct investment. It attracted $1.7bn worth of FDI in 2017, far lower than the ambitious target of $2.5bn. Likewise, the government has failed to improve the country’s global ranking for ease of doing business. Sri Lanka sits in 111th place.

Its multibillion dollar trade deficit has been another drag.

Equally troubling, the government has made little headway against burdensome state-owned enterprises. They include Ceylon Petroleum Corporation, Ceylon Electricity Board, the Sri Lanka Ports Authority and Sri Lankan, the national carrier, whose combined debt is estimated at $7.93bn, according to the IMF. Mr Coomaraswamy is banking on government policies beyond fiscal commitments to slow the rising tide of red ink. “To overcome the situation we need to get non-debt creating inflows,” he said. “We need to get more FDI and to boost export growth.”

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CLIMATE RESILIENCE

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CARIBBEAN MUST ADDRESS LOW-INCOME RESILIENCE

BY KENDRIA FERGUSON, ENVIRONMENTAL OFFICER, BAHAMAS MINISTRY OF ENVIRONMENT

N

assau, The Bahamas — Since the end of the 2017 hurricane season, the region has been actively developing mitigation strategies to address climate-related vulnerabilities. The lack of access to post-disaster relief funding and the increasing need for climate-related assistance from developed countries have been hot topics of discussion, as government officials throughout the region attend a plethora of international and regional summits on climate change. With the many conversations being had, along the way we have somehow forgotten to address the social welfare of climate change and how it shapes low-income resilience.

Backtrack to September 2004 when Grenada was hit by Hurricane Ivan, a Category 3 storm with gusts up to 135 mph that caused a tremendous amount of damage: Ivan drastically impacted the economy of Grenada which was projected to grow by 4.7 per cent that year as a result of an increase in agriculture, tourism and construction development projects. Following Ivan, which left 28 people dead and 90 per cent of homes and hotel guest rooms damaged, there was an economic productivity decline of -1.4 per cent, representing a 60 per cent loss in employment opportunities.

Eric Lindberg wrote in January 2017 that climate change was a major issue for social workers – that is, climate change is not just an environmental issue but it is also a social and economic issue. Reviewing the destruction caused by Ivan, its affect on poverty rate, health care availability and unemployment were evident. Post-economic assessments conducted by the Organization of Eastern Caribbean States (OECS) revealed that 52 per cent of the households in Grenada were headed by men and 48 per cent by women, but among those living below the poverty line, women accounted for 52 per cent of household headships. At local shelters, officials also found that those families who lived below the poverty line had more children within a single

Low-income communities are hardest hit by hurricanes. (Source: Food for the Poor)

household than their counterparts, and were impacted the most post-storm by the slow food distribution operations.

Complex linkages between poverty, high crime rates, low economic growth and diversity, environmental degradation and skewed family structures have all been investigated from a social aspect, but rarely within the context of improving climate resilience.

Attending the Commonwealth Heads of Government Meetings in London (April 2018), leaders noted that without “urgent action to mitigate climate change, reduce vulnerability and increase resilience, the impacts of climate change could push an additional 100 million people into poverty by 2030.”

The reality is that low-income households and those living below the poverty line have very little resources needed to adequately prepare and recover from hurricane damage

Due to the region’s small economies, social inequalities remain, but in the wake of climate change and the increasing occurrence of hurricanes, one must take the time to rethink resilience in the context of low-income communities and their social welfare.

The reality is that low-income households and those living below the poverty line have very little resources needed to adequately prepare and recover from hurricane damage. While at the national level we speak about improving resilience and post-recovery time, there is a proportionate part of our population that will continue to fall deeper into the constraints of poverty if we fail to integrate climate-related strategies in the context of ongoing social ills.

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