Sweet Success by STAR Publishing

THE STAR Businessweek FEBRUARY 23, 2019

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in this edition of

SBW THE STAR Businessweek

People Power Nothing less than complete systemic reform throughout the Caribbean is necessary to address gaps in education and soaring unemployment Page 3

Participants attend the regional workshop for national co-ordinators for the implementation, co-ordination and monitoring of the CARICOM HRD 2030 Strategy

Sweet Success Saint Lucia delights chocolate-lovers with tree-to-bar brands that are breathing new life into cocoa farming By Catherine Morris, STAR Businessweek Correspondent

Valentine’s Day may be over but there’s love for chocolate year-round in Saint Lucia as small producers capture the booming boutique market with high-quality products made entirely on-island. “The boutique chocolate business is growing by leaps and bounds,” says chocolatier Allen Susser, Consulting Chef at Jade Mountain and Anse Chastanet Resorts. “People really appreciate quality ingredients and quality processes. That is why fine wines do well and fine olive oils do well. Chocolate is finding its home out there in that niche. There is a big difference between candy and fine chocolate.” Continued on page 4

Seeking a New Level for Gaming in the Caribbean Gaming today exists at a new frontier: one where decades of traditional gambling and entertainment is intersecting with the borderless digital world. There’s also the growing convergence between gambling and gaming, as the rise of online poker and other games has expanded the reach of casinos, just as video games now increasingly ask their players for real world and ongoing currency transactions after an initial purchase. Page 7

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FEBRUARY 23, 2019

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The Future of Caribbean Fishing aMID Climate Change By ED Kennedy, STAR Businessweek Correspondent

The STAR Businessweek BY Christian Wayne – Editor at Large

As Editor-at-Large of STAR Businessweek, I often pen these weekly commentaries from abroad. This week, I am writing from the Swiss capital of Bern, and since today is Entrepreneurs’ Day in Switzerland, I thought it only fitting to focus this editor’s letter on — you guessed it — entrepreneurship. I’ve finally got around to reading a little-known book published by two Harvard Business School professors — teachers of a popular MBA course entitled “Entrepreneurship Through Acquisition”. In 2019, when we think of entrepreneurship, we usually think of an illustrious start-up archetype like a Mark Zuckerberg, a Steve Jobs, a Larry Paige or an Elon Musk — intelligent and ruthlessly gritty founders who go on to grow fledgling garagebased start-ups into billion-dollar enterprises, otherwise known as “unicorns” by the hip kids. That’s not what this book is about. The big idea put forth by Ruback and Yudkoff, our two HBS professors, is instead of embarking on the risky, and often expensive, journey of founding and hopefully growing a scrappy start-up into an enormously successful company, aspiring CEOs should instead consider purchasing an “enduringly profitable small business”. According to the authors: the more boring the business, the better. I found their underlying logic fascinating: as they near retirement, most founders of marginally successful small businesses often have little choice but to try to sell their business. In most cases, unlike people who earn their income through a job that comes with a salary and retirement benefits, the income of small business owners is usually tied directly to their business — meaning that once they stop working, their income stops as well. Therefore, their incentive to cash-out is quite high. Secondly, the market for buyers of small businesses is fragmented with only a limited number of people who are actually interested in buying a boring small business. These two dynamics, eager sellers and a small number of buyers, result in a buyer’s market for would-be owners of enduringly profitable, boring small businesses. As a millennial and a child of small business owners, the first part of the book’s premise — the difficulty of small business owners to transition into retirement — rings true. Owners

of profitable yet boring businesses often have no succession plans. Usually their retirement plans are as follows: either transition the management of the business to their offspring, or just continue working and figure out the retirement bit when they physically can’t work anymore. As the book aptly states, however, millennials often choose markedly different career paths to their entrepreneurial parents — hence the necessity to sell the business once little Johnny decides he would much rather be a lawyer or a software developer than run his father’s auto mechanics business. I don’t have figures on this, but I would be willing to wager that the vast majority of enduringly profitable, boring small businesses in Saint Lucia are mom and pop operations, much like the ones described above, run by owners who are nearing retirement age and struggling to figure out what to do with their companies. As is common in our region, the children of those business owners are probably somewhere overseas pursuing higher education with little to no plans of returning home. So, if you’re one of those business owners, consider retaining a business broker. You can begin that journey by visiting an online marketplace like www.axial.net to get an idea of what that process looks like. In the USA, these types of businesses typically sell for 4X EBITA. Your boring yet profitable business may be more attractive than you think. And if you’re an aspiring entrepreneur, consider buying a proven small business. They’re much less risky than that food-delivery start-up you’re thinking about. For anyone interested in reading more about this subject, check out the book “HBR Guide To Buying A Small Business”, available on Amazon. Before you go, read our lead story on Saint Lucia’s cocoa industry in “Sweet Success” starting on page 1 and our thought-provoking piece on the evolution of gambling and gaming in “Seeking a New Level for Gaming in the Caribbean” on page 7.

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

Between 1994 and 2014 alone, regional fishing production declined by 40 per cent among the Caribbean Small Island Developing States

aint Lucia and the Caribbean region has historically been an idyllic and enticing place. Not only is the fishing terrific but the tropical climate and culture lure people from around the world. For keen fishers especially, the Caribbean can deliver anglers an ‘all in one’ package of great fishing, beautiful weather and first class holiday amenities. But today, challenges are bearing down on the industry unlike anything the fishing tourism industry has experienced prior. As with any shift in the landscape, many professionals and entrepreneurs will find avenues to pivot their businesses, and even identify new opportunities among them. But doing this requires a clear recognition of the road that lies ahead.

Fishing in the Caribbean Throughout the Years

Given the longstanding presence of fishing throughout the Caribbean, many may think the trials and tribulations the industry has faced in recent years has been a modern issue. Yet the data bears out the reality. Between 1994 and 2014 alone, regional fishing production declined by 40 per cent among the Caribbean Small Island Developing States (SIDS). In that same period, a UN report into The Sustainable Intensification of

Caribbean Fisheries and Aquaculture found 55 per cent of SIDS’ fishing grounds were overexploited — among the highest rate in the world. Promising inroads have been made with the fostering of aquaculture throughout the SIDS states, but the overarching issue of climate change and growing impact on the Caribbean family’s day-to-day life has redefined the playing field. For small businesses that operate outside commercial fishing, recent years have seen especially difficult challenges.

A Sinking Feeling

For many fishing businesses that depend on the tourism dollar, a depletion in fishing stocks can deal a savage blow to profitability from one season to the next. But just as dolphin and whale sightseeing tours cannot guarantee that the mammals will be spotted on each and every trip, fishing businesses cannot guarantee that tourists will catch fish. Yet when a depletion of fish stocks occurs, it can create a backlog of tourists, adding to the operations costs of a fishing business without providing new income. This as many fishing providers, if no fish are Continued on page 5

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Education

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People Power

CARICOM is focusing on the region’s best resource – its people – in a wide-ranging strategy that looks at reducing unemployment, improving education and alleviating poverty By Catherine Morris, STAR Businessweek Correspondent

othing less than complete systemic reform throughout the Caribbean is necessary to address gaps in education and soaring unemployment. That’s the message from CARICOM’s Commission on Human Resource Development which spent over 18 months researching and creating a new roadmap designed to uplift all island communities. The Human Resource Development (HRD) 2030 Strategy is a framework that views learning as a journey, looking at every stage of the education lifecycle from basic schooling, through tertiary education and into life skills. At the core of the initiative is the desire to help Caribbean citizens reach their potential. While developing skill sets is obviously advantageous for the region’s economic fortunes, CARICOM heads are also keen to emphasize personal development, hoping to create a citizenry that is more engaged, more aware and more capable in the ever-evolving environment of the 21st century. Programme Manager for Human Resource Development at the CARICOM Secretariat Dr Laurette Bristol says: “The objective is to develop for youth the knowledge, skills and competencies needed in the pursuit of workforce development and better citizenship in civil society.”

Tech skills

There are 19 million people living in the CARICOM bloc, encompassing a variety of different cultural backgrounds, socio-economic status and race. The population is growing at around 1.5 per cent each year,

putting increasing strain on the physical, economic and social infrastructure. In Saint Lucia the birth rate may be rising but opportunities for young people are not. The country has one of the highest unemployment rates in the region at around 20 per cent, and youth unemployment of around 36 per cent. In his New Year’s address to the nation last month, Prime Minister Chastanet acknowledged that young Saint Lucians are often woefully underprepared for the workforce, saying: “One of the major challenges we face as a nation that impacts directly on our future development is the field of education. We have to face the fact that our education system is in need of a massive overhaul if we are to prepare our people for the opportunities ahead and to be globally competitive.” Caribbean nations have no hope of competing globally if they are not up to speed with how technology is transforming business. This is a key priority area for the HRD 2030 Strategy which recognises that the demands of the fourth industrial revolution cannot be ignored. While the Caribbean cannot be transformed into a robotics or cybernetics hub overnight, the strategy aims to start small, by bringing tech into the classroom. Learning via handheld devices and using innovative software to deliver course materials will help the next generation become more familiar with digital disruptors. Efforts in this vein are underway in Saint Lucia with computer coding, robotics and digital literacy courses now available to students. In addition, the Caribbean Development Bank launched the US$ 16.2mn St Lucia Education Quality Improvement Project (EQuIP) at the end of last year to improve teacher training and upgrade educational institutions. Furthering these plans, Minister of Education Dr Gale Rigobert announced the launch of ‘smart

classrooms’ in December, saying: “We need to ensure our schools are retrofitted with smart classrooms and accompanying curricula so as to enhance the digital competency of our students.”

Gender Gap

Aside from gaps in technological competence, the HRD 2030 Strategy also identifies another problematic divide – a gender gap. According to the HRD Commission, “female youth unemployment is usually significantly higher than that for the males, even in spite of generally better education achievement.” There are now more female graduates than male at the secondary and tertiary levels, but more women at that level has not translated into a corresponding increase in access to job opportunities, higher incomes or leadership and management roles. On the other side of the divide, boys and young men tend to be more disengaged from the education system. Men tend to leave education earlier than female students, and are more likely to become disillusioned and frustrated with the lack of job opportunities, making them vulnerable to violence. “Gender in education must be equally concerned with the educational experiences and empowerment of both boys and girls at all levels of the education sector,” says Dr Bristol. “Male disempowerment through education only leads to increased social fragmentation, hyper masculine identities and increased genderbased violence against women. Thus, gender in education must give high regard to the social, economic and political infrastructure that supports the education experience for both boys and girls, characterised by principles of access, equity, relevance and quality.”

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Delivering change

The HRD 2030 Strategy is designed to help Caribbean countries progress on their United Nations Sustainable Development Goals (SDGs) such as those relating to crime and poverty. But if it’s going to tackle the big issues, the strategy needs buy-in from every level of society, from grassroots community leaders and youth groups through the various levels of the public sector. “The implementation of the strategy is challenged by limited financial resources and limited human capacity to support reform, innovation and implementation at the local level,” says Dr Bristol. “Its success depends on the collective will of stakeholders in member states. This requires investment at the level of member states, where an increased portion of GDP is allocated to education, training and development. In some cases, it requires legislative change. It requires political will and action.” Strategies delivered from on-high are often viewed with scepticism as translating words into action is rarely easy. To counter resistance, ineffective implementation and slow processes, CARICOM has built delivery methods into the plan which will carefully monitor every stage of its implementation. Progress will be reviewed and assessed in increments as each stage is put into action. These assessments are due to take place in 2020, 2025 and 2030. A team of Regional Network Planning Officers, made up of planners within Ministries of Education, will help focus the strategy at the national level while CARICOM’s Human Resource Development Cluster will guide and support the roll-out across the region. It’s a significant undertaking, as Dr Bristol indicates, saying: “Simply put, regional economic development hangs on a quality system of education and training. Nothing moves, nothing happens without that. There will be no strengthened economy without strengthened investments and infrastructures SBW in education and training.”

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Sweet Success: Saint Lucia breathes new life into cocoa farming Continued from page 1

Stefan Goehcke, Executive Chef at Jade Mountain, hosting the hotel’s intimate ‘Chocolate Discovery’ experience. In addition to plenty of tastings, guests learn, alongside an expert, how to temper chocolate and make truffles

Susser appreciates that difference more than most through his work with Emerald Estate, a cocoa plantation and farm owned and operated by Anse Chastanet Resort. Emerald Estate produces tree-to-bar chocolate that is handcrafted at every stage. “The trees are pruned by hand, the beans are harvested by hand, the chocolate is made by hand. It is a labour of love,” Susser says. Nestled in the Soufriere Hills, Emerald Estate is home to around 1,000 cocoa trees. When the beans are ripe, they’re plucked from the trees and taken to the Chocolate Lab where they are sorted, roasted and winnowed (to separate the cocoa nib from the hard outer shell). The nibs are then ground in small-batch stone

grinders for 48 hours. Sugar is added and the resulting mixture is poured into a block where it ‘ages’ for 4 to 5 months before being tempered and then moulded into bars. It’s a delicate process, and one that has been used since humans first developed a sweet tooth. “This is the way people have made chocolate for hundreds of years,” says Susser. “It is really interesting, and it has a huge impact on the flavour. Our chocolate is very fresh, very high-quality.” The unique flavour of Emerald Estate chocolate, which Susser describes as “very tropical, with a citrus blossom”, comes from the care taken during the whole process. Every stage has an impact on the final flavour, from harvesting when perfectly ripe to roasting time and temperature. Customers

can choose from 60%, 70%, 78% and 92% varieties, and new flavours are sometimes added to the range, such as cashew, lemongrass or coffee, depending on what’s in season on the farm. Every year Emerald Estate harvests between 3,000 and 4,000 cocoa beans, and sells around 15,000 bars of chocolate.

Shortening the supply chain

Latin America and the Caribbean produce 80 per cent of the world’s fine flavour cocoa market, which is worth US$ 4bn annually. While Trinidad has traditionally been the largest producer, cocoa farmers can be found all over the Caribbean, including Barbados, Jamaica, Antigua,

Dominica and Grenada. Typical cocoa value chains involve many layers from the cocoa farmer through to exporters, buyers and retailers. Chef Susser says: “Chocolate making usually happens in some northern countries like Belgium or Switzerland where they are not growing it. They are buying in their beans so they are dealing with these big buying consortiums.” Emerald Estate is proud to be a smallscale, boutique operation but bigger market players are also looking at the tree-to-bar model. In 2006, when British chocolatier, Hotel Chocolat decided to shorten its supply chain and source its own beans, the company came to Saint Lucia and acquired the 140-acre Rabot Estate. Hotel Chocolat revived the distressed plantation and organised farming, fermenting and manufacturing all at the one site, therefore putting more profits back into the hands of Saint Lucian growers. “We are one of the few chocolate makers in the world who actually grow our own cocoa and have created a blueprint for sustainable cocoa growing in Saint Lucia,” said Hotel Chocolat CEO and Co-founder Angus Thirlwell. “As growers and producers, we have been able to bridge the vast disconnect between raw agriculture and fine chocolate.”

Tours and tastings

Artisan chocolates are savoured by connoisseurs in the same way that winelovers have their favourite vintage or grape. They want flavour, and they want to know exactly where their bar comes from. “To discover what chocolate is and where it comes from, the process of it; it is an amazing thing to learn about,” says Susser. “We take guests to the farm and do tours so we show them what it looks and tastes like as a raw product. They love it.” Another popular destination for chocolateloving tourists is the Fond Doux Plantation & Resort, a luxury eco-resort that is also a working plantation. Cocoa trees cover around 20 per cent of the 135-acre property in Soufriere, which was first established by the French in the 1700s. Although the emphasis has now shifted to hospitality

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with luxury cottages, restaurants and a spa, chocolate is still a huge part of the Fond Doux experience. Guests can not only view and participate in the cocoa production process, they can also purchase chocolate made at the site. The Fond Doux range includes 60%, 70% and 80% chocolate, with sales of around 100 bars a day. The resort’s Executive Director Eroline Lamontagne says: “The response is very, very good. We get chocaholics from all over the world. We have different varieties — nuts, cinnamon, spices — so you can experience the flavours of Saint Lucia.” Lamontagne, who says Saint Lucia’s chocolate has a “heavenly” and “authentic” taste, is happy to see chocolate being embraced as a part of Saint Lucia’s tourism product. She welcomes efforts by the Saint Lucia Hotel & Tourism Association to launch and promote chocolate-themed events and festivals. “The tourism board has been doing an excellent job in terms of marketing the various flavours of Saint Lucia. Saint Lucia has that unique charm, and our chocolate is also unique.”

Building capacity

Growth in Saint Lucia’s chocolate sector has mainly come from either large-scale plantations such as Hotel Chocolat’s Rabot Estate or those savvy enough to combine tourism offerings with cocoa production such as Emerald Estate and Fond Doux, but industry leaders are now working to help smaller producers.

At the end of last year, the Saint Lucia Trade Export and Promotion Agency (TEPA) applied to development agency Compete Caribbean for funding earmarked for the island’s cocoa industry. The proposal is seeking financial support to help eliminate barriers to trade, and enhance training and quality standards. Opening up the market and making conditions advantageous for farmers at all levels will help entice more Saint Lucians into the chocolate business. With youth unemployment high, and interest in agriculture low, cocoa could be the means to entice a new generation of farmers into working the land. Lamontagne says one of her biggest challenges at Fond Doux is capacity. As business expands at the eco-resort, she struggles to find enough cocoa beans and cocoa farmers to keep up. “You always need to be planting. We cannot get enough plants and we cannot get enough people who are knowledgeable about it. It is almost a dying thing.” She believes the key to reviving the industry is to get younger people engaged in chocolate production and cocoa farming, saying: “It is something that should be taught in schools. We have the perfect soil and the perfect climatic conditions for it, so why are we not maximising the opportunities? We are just at the starting point. I’m excited, but cocoa can be even bigger and even more exciting as the demand increases.”

Through the resort’s authentic tree-to-bar production process, Fond Doux Plantation & Resort celebrates Saint Lucia’s history of chocolate production which dates back to the 1700s

FEBRUARY 23, 2019

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The Future of Caribbean Fishing aMID Climate Change Continued from page 2

caught on a client’s initial trip, offer a complimentary journey (or more) until the customer does receive a good outcome. At worst, discerning tourists will have read beforehand the state of the fishing in the local waters, and decided to avoid altogether going on a trip.

A Shared Responsibility

In this scenario it is not hard to have a sympathetic interpretation for local tourism operators; certainly, the disruption faced by many, through no fault of their own, warrants it. A key frustration is not only the occurrence of climate change but the necessity of a truly global approach to effectively combat it — something that for many years has been elusive. Equally, the other factors that impact the industry need to be acknowledged, as well as the role that fishing itself can play in this. That is why the rise of sustainable fishing has become such an important movement in recent years. The concept is not new, nor those who dismiss it as needless. All the way back in 1883 the English biologist Thomas Huxley gave an address in London that decried

the notion of sustainable fishing on the basis that “all the great sea fisheries are inexhaustible”. But climate change is just one threat to Caribbean fishing in the future. It is indeed the key one, but cannot be permitted to overshadow any and all others. The exploitation and exhaustion of local fishing grounds becomes more consequential in the face of growing demand in years ahead as Earth’s population is predicted to be over 9 billion by 2050. But that demand can only be met if existing fisheries and maritime ecosystems sustain into the future. Just as everyone has a role to play in ensuring that the fishing industry sustains, so too does the fishing industry have a responsibility to prevent a rise in overfishing and eradication of marine habitats.

One Day at a Time, with Hope Ahead

For Caribbean fishing businesses (and all others which have a livelihood linked to effective action on climate change), recent years have placed hurdles in their path that could only be defined as infuriating. Major causes and blame may lie beyond the region but locals must confront the challenges. The owner of a fishing business operating today

would be forgiven for having a cynical outlook surrounding the long-term future of its operations. Despite this, there is hope in the road ahead. Recent times have seen millenials in a number of nations around the world begin to challenge older generations for the title of the biggest voting bloc in elections. While climate change is certainly an intergenerational issue, it is millennials who are regularly recorded as harbouring the greatest concern about it, and desire for action on it. This increasingly places pressure on politicians near and far who have previously dragged their feet. Strong, new action will not occur immediately but it looks more promising day by day, and year by year. In the meantime, the continued progress of aquaculture and supporting initiatives offers an avenue to ensure that even if enduring solutions are not available today, options do exist to sustain and resist the worst effects of climate change. Undoubtedly this is a bruising and dispiriting era for fishing businesses, but there is also room for optimism about the next era, and how it may just arrive sooner than expected.

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ECCU MEMBER STATES REMOVED FROM EU FINANCIAL BLACKLIST By Linda Straker

93rd Meeting of the Eastern Caribbean Central Bank Monetary Council, Basseterre, St Kitts and Nevis, 15 February, 2019

rime Minister Dr Keith Mitchell, who is presently serving as Chairman of the Eastern Caribbean Currency Union (ECCU), said that he is very pleased that none of the Organisation of Eastern Caribbean States (OECS) was placed on the European Union 2019 financial blacklist of countries with weak anti-money laundering and terrorist

Regional

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financing regimes. Issued last week, the aim of the list is to protect the EU financial system by better preventing money laundering and terrorist financing risks. Trinidad and Tobago along with the Bahamas are the two CARICOM nations which continue to be on the list that contains 23 countries from different jurisdictions, including the USA, Asia and Africa.

A news release from the EU said that as a result of the listing, banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks or due diligence on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows. “We know we are living in a world in which we cannot afford not to undertake certain fundamental responsibilities, but we are all happy to be removed from the list,” said Prime Minister Mitchell who confirmed that each territory has received notice that it is being monitored by the EU to ensure that compliance is maintained. One of the main actions taken by Grenada to ensure removal from the list, was the repealing of several pieces of financial legislation which provide for international businesses to receive special concession and treatment, that was described by the EU as unfair. The news release from the EU said that on the basis of a new methodology, which reflects the stricter criteria of the 5th antimoney laundering directive in force since July 2018, the list has been established following an in-depth analysis. The list has been established based on an analysis of 54 priority jurisdictions, which was prepared by the commission in consultation with the member states and made public on 13 November, 2018. The countries assessed meet at least one of the following criteria: • they have systemic impact on the integrity of the EU financial system, • they are reviewed by the International Monetary Fund (IMF) as international offshore financial centres

For each country, the commission assessed the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation. The commission also considered the work of the Financial Action Task Force (FATF), the international standard-setter in this field. The commission concluded that 23 countries have strategic deficiencies in their anti-money laundering/ counterterrorist financing regimes.

“We know we are living in a world in which we cannot afford not to undertake certain fundamental responsibilities, but we are all happy to be removed from the list,” said Prime Minister Mitchell who confirmed that each territory has received notice that it is being monitored by the EU to ensure that compliance is maintained

• they have economic relevance and strong economic ties with the EU.

The Saint Lucia Registry of Companies & Intellectual Property Company Incorporations Name: 758 Finest Inc.

Directors: Delbert Theophill Bynoe, Jamal Francis,

Description: Holding Company

Orjan Joe Lindberg

Directors: Jervone Antoine

Date Incorporated: 1/25/19

Date Incorporated: 10/10/18

Chamber: ACE Corporate Services

Chamber: Self incorporated Name: Hennecka Security Services Ltd. Name: Show the World Inc

Description: To provide security services

Description: Scouting and recruiting

Directors: Hennecka Louis

and performing talent

Date Incorporated: 1/29/19

Directors: Ronald Hinkson,

Chamber: McNamara & Co., Chambers

Mc Naughton Mc Lean, Donna Hinkson Date Incorporated: 1/17/19

Name: Lyenn Dous Inc.

Chamber: Pierre, Mondesir & Associates

Description: Knowledge process outsourcing Directors: Ross Cadasse

Name: The Design House Ltd.

Date Incorporated: 2/8/19

Description: For architectural and related services

Chamber: Timothy Antoine Partners

gAMBLING & GAMING

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Seeking A New Level for Gaming in the Caribbean Gaming today exists at a new frontier: one where decades of traditional gambling and entertainment is intersecting with the borderless digital world. By ED Kennedy, STAR Businessweek Correspondent

Of course these examples are rare, but neither geographic location nor amount of resources available are the sole factors in determining the success of a game’s development. Instead, these examples affirm that ultimately, if it’s fun that gamers want, many are willing to pay for it.

here’s also the growing convergence between gambling and gaming, as the rise of online poker and other games has expanded the reach of casinos, just as video games now increasingly ask their players for real world and ongoing currency transactions after an initial purchase. Within this dynamic there are new opportunities for business, but also new complications. It’s a fitting time to review the state of gaming in the Caribbean.

Crime — the Elephant in the Room

From Gambling to Gaming

Casinos have long been a key draw across many nations in the Caribbean. Yet translating the in-person, profitable returns into the online era has historically been difficult, especially given the restrictions that many nations can place upon online gambling within their own borders. These restrictions can be enforced digitally, and doing so limits the capacity for Caribbean-based businesses to access them. This can be a particularly big hurdle to growth given the small domestic audience found across most Caribbean nations. Yet with gaming, the same georestrictions have traditionally not been as high, given the clear historical difference between the two. But this is increasingly changing.

Targeting a Truly Global Market

Yes, there is a difference between gaming and gambling, but the lines can blur. The rapid growth of online gaming can easily outpace existing local laws which were chiefly set up in a time and for a place that dealt with traditional gambling done in person, not remote gaming done online. Chief among this has been the rise of digital material like downloadable content (DLC) and microtransactions — commonly seen as in-app purchases on mobile devices — which, in certain circumstances, could constitute gambling when they represent an increase in the odds of a successful outcome in gaming. This trend has seen even video gaming powerhouses draw the ire of lawmakers and authorities, like Electronic Arts — which is most famous for its sporting titles like FIFA — for its initial plans (before a rollback) for ‘loot boxes’ in its Star Wars Battlefront 2 title. Given the child-friendly nature of the Star

The highest concentration of casinos found in the Caribbean is in the Dominican Republic, followed by Puerto Rico

Wars brand and video games, this also drew criticism for its potential enticement of children to gambling. The need to avoid such mis-steps notwithstanding, unquestionably the gaming industry is becoming more global. This means that even local businesses which today find solid success in the Caribbean market must increasingly consider outreach across the world. And gaming is ultimately a great leveller, with proof of talent shown by expertise in gaming skills. If the world’s best gamers can be drawn to tournaments in the Caribbean, there is no question that global gamers of lesser levels will be enticed to follow. Just as a world poker tournament can draw the best players globally to one location, the same attraction applies in gaming. What’s more, given that the Caribbean has previously been subject to geo-restrictions (such as to the US market), drawing gaming tourists here provides an avenue to engage in this market in a way previously unexplored. This sits alongside the opportunity for building Brand Caribbean in

the gaming industry as a whole.

Getting Local Developers in the Game There are countless games out there in mobile app stores and across other gaming devices that are forgettable. To those who have played them, you’d understand why many long-time gamers feel the reliable creation of new titles is best left to major studios with big budgets. Yet some revolutionary titles have emerged from unexpected places. The mobile hit Flappy Bird was famously launched by Vietnamese developer Dong Nguyen in 2013 before he ultimately deleted it, seeking to return to a more private life. Yet numerous clones of the game exist, with one ultimately requiring just 18 lines of code to create! As well as titles like Flappy Bird on mobile, the Swedish game developer Markus Persson’s quiet release of an indie title, Minecraft, in 2011 would see him become a billionaire with Microsoft’s purchase of the title for US$ 2.5bn.

The combination of gaming and gambling comes with the wider risks that can be at play in the region. As we’ve covered previously at STAR Businessweek, the Caribbean is an epicentre of offshore banking, Citizenship by Investment Programmes, and also cryptocurrency ventures. There’s no suggestion that the presence of these factors is a bad thing but the potential exists to use these mechanics for more dubious aims. Casino investors and promoters may concentrate on advertising the entertainment and elegance of a new gambling venue but research suggests that, even if a clear-cut link between a new casino and crime is not always correlated, it does occur in some instances, and so cannot be ruled out. Then there are the broader social issues that can arise, like problems with gambling addiction. Ultimately this means that any aspiration for a clearcut blending of one existing industry into a new one is unlikely to occur. Yet there is a new phenomenon on the rise that, by many measures, can offer the best of both worlds, drawing huge crowds to brick and mortar venues, while sidestepping the hassles that can come with a new gambling venue.

A Sporting Chance: The Future Rise of eSports

Right now eSports is not big enough to offer an ‘alternative’ to a traditional casino, but it is a rapidly expanding field. For Caribbean nations that may be reticent to add another casino — or that simply wish to target a new and growing tourism audience — the statistics surrounding eSports bear out its future potential. Having risen from a value of US$ 130mn in 2012 to US$ 906mn during 2018, the explosive growth of the industry is currently on course to be worth a whopping US$1.65bn in just two years’ time. There is more that can be said on a greater growth of eSports locally but, given the rapid expansion it is seeing, it’s game SBW on right now!

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CIPA Appoints Saint Lucia CIU-Head Nestor Alfred as Chairman: Closer Cooperation Top of Agenda By Investment Migration Daily

he Citizenship by Investment Programme Association (CIPA) has appointed Nestor Alfred, CEO of the Saint Lucia Citizenship by Investment Unit, as its chairman, CIPA informs IMI. CIPA is a regional body made up of the CIU-heads of the Caribbean’s five citizenship by investment programmes — Antigua & Barbuda, Dominica, Grenada, Saint Kitts & Nevis, and Saint Lucia — as a means to forge closer co-operation and co-ordination. In a statement, CIPA clarifies that Alfred’s peers — the CEOs of the four other CIUs in the association — appointed him chairman on 31 January, replacing erstwhile chairman Les Khan, who passes the baton after some 18 months at the head of the table. The chairmanship, Alfred tells IMI, has a one-year tenure. As to why CIPA is only making the news public now, Alfred explains to IMI that certain formalities needed to be in place before the appointment could be finalized.

By Christian Nesheim

Nestor Alfred, CEO of the Saint Lucia Citizenship by Investment Unit, and freshly minted chairman of the Caribbean-based Citizenship by Investment Programme Association (CIPA)

Sharing information will be “crucial”

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The statement goes on to say that Alfred believes “there is no other body that can lead the charge in fostering and maintaining the integrity of the individual islands’ programmes than this Association,” and that, during his chairmanship, he intends to “work towards seeing how the CIPs within the region can collaborate in several areas,

such as the sharing of information”, a matter he considers “crucial in moving forward”. Alfred says it will be “very important for the Association to have a voice and be able to make its representation towards the myriad of issues which now confront the programmes within the region”. Speaking to IMI, Alfred gives hints as to what will be his first order of business. “I am taking over the chairmanship at a time when there is so much negativity surrounding the industry. The obvious question is: What role can I play to turn this into a positive? My answer would be that, collectively, as heads of the respective CIUs, we must work tirelessly in ensuring there is a sustained level of integrity within the programmes. We must be prepared to share information; we must be prepared to talk honestly and openly and we must be prepared to speak with the policymakers in bringing about the right legislative changes,” says the new chairman, also expressing elation at the prospect of working more closely with his counterparts. “I can safely say that I have the opportunity to work with some wonderful CIU-leaders”.

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Finally Cooking With Gas: Saint Lucia CIP Applications Grow Tenfold on Year

Caribbean leaders, both in the CIUs and in the respective PM’s offices, have long extolled the virtues of, and need for, deeper regional integration and harmonization, both in terms of due diligence and pricing. Initial steps saw some progress in this respect but a flurry of deadly hurricanes in 2017 gave rise to derailments and setbacks for the multilateral approach. The nominal commitment to co-operation did not stand the test of tough times; in a CIP prisoner’s dilemma of sorts, hurricane season saw programmes successively cut their prices to prevent a haemorrhaging of their applications to neighbouring programmes. Avowed proponents of harmonization quickly abandoned such lofty ideals when faced with a real threat to their own revenue streams. In his efforts to further unify Caribbean CIP policy, Alfred has his work cut out for him and will have to extract tangible and binding commitments. This time around, we’ll need more than just handshakes.

fter suffering teething pains for the better part of 2016, the Caribbean’s youngest citizenship by investment programme — the Saint Lucia CIP — has found its bearings and is finally putting the processing pedal to the metal. In its annual report, covering fiscal-year 2017-18, the Saint Lucia Citizenship by Investment Board reveals the programme raised some EC$ 28mn in its second full year of operations. The Citizenship by Investment Unit (CIU) received 345 applications during the period, 188 of which had been approved, while 27 had been rejected. This resulted in 282 naturalizations during the same period. The results show a remarkable acceleration from the previous fiscal year, in which the programme received a mere 36 applications, of which more than half were rejected. While the CIU is obliged to deliver a report on its performance, it has not previously been available to the public, and only became known after the Saint Lucia STAR shared excerpts from it last week. The full report is available to the public at the Parliament Library in Castries. All told, Saint Lucia has naturalized 343 individuals since the scheme’s inception although it later revoked the citizenship of six individuals upon discovering they had engaged in activities that might “bring Saint Lucia into disrepute”. The Chinese make up the largest applicant constituent, followed by Syria, Iran and Iraq. Christian Nesheim is the founder and editor of Investment Migration Insider

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