The Mexican Hotel Group That Wants To Dominate The Caribbean

THE STAR Businessweek MAY 4, 2019

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in this edition of

The Mexican Hotel Group That Wants to Dominate the Caribbean

By ED Kennedy, STAR Businessweek Correspondent

The Caribbean will soon have a new, big player in the accommodation industry. A giant of the Mexican hotel industry, Grupo Posadas is set to make a big splash in the region with the launch of two new hotels in Cuba (the all-inclusive Fiesta Americana Punta Varadero and Fiesta Americana Holguin Costa Verdein Cuba) and the Grand Fiesta Americana Punta Cana Los Corales in the Dominican Republic.

SBW THE STAR Businessweek

CARICOM Free Movement: Does it help or hurt member islands?

When CARICOM formed over four decades ago it had a noble goal in mind — to deepen integration so that the islands’ individual strengths could uplift the region as a whole.

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Continued on page 4

The Grand Fiesta Americana Punta Cana Los Corales is the first of several hotels that the Mexican chain Grupo Posadas intends to open in the Caribbean.

Countdown to CARIFESTA This summer thousands of artists, art-lovers and creative entrepreneurs from across 19 Caribbean countries will descend on Trinidad and Tobago for the region’s biggest arts festival.

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MAY 4, 2019

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The STAR Businessweek

BY Christian Wayne – Editor at Large

W

hile Sandals CEO Adam Stewart continues to court Wall Street with the possibility of taking the Sandals Resorts International brand to the next level — by leveraging American capital markets to accelerate the company’s physical presence in the region — another hospitality firebrand is setting its sights on the Caribbean: Grupo Posadas. The Mexican-based hospitality group with over 150 properties in its portfolio has announced ambitious growth plans to push into the Caribbean, encroaching on territory historically dominated by well-known North American hospitality companies like Starwood Hotels & Resorts, Hilton, Royalton and their regional counterparts like the Sandals and Beaches resorts. With plans to open hotels in the Dominican Republic and Cuba, the company is focusing on the larger Spanish-speaking Caribbean isles before expanding into the anglophone market. For more on Grupo Posadas, read this week’s cover story “The Mexican Hotel Group That Wants to Dominate the Caribbean”. More competition in the hospitality sector is definitely a welcome development in a region where governments are often extorted into gluttonous taxfree arrangements with hoteliers in exchange for the local jobs their luxury developments promise to bring. But Posadas may be facing more difficulties than it previously bargained for, with America proposing a slew of economic sanctions on the island-nation of Cuba, including added restrictions on Americans planning travel to the embargoed nation. While this backstep in Cuban-American relations is sure to spell additional hardship for the Cuban people, there are undoubtedly pockets of Caribbean hoteliers and rum producers — who are weary of increased competitions from the Cubans — that are rejoicing at Trump’s newest round of sanctions.

For more on the Cuban angle, see David Jessop’s write-up on page 6.

Also in this edition of Businessweek, we look at the free movement of people within the CARICOM Single Market Economy and posit why the ‘people’ part of the CSME has historically been so difficult to implement in “CARICOM Free Movement: Does it help or hurt member islands?” on page 3. Further to the concept of unencumbered migration, though surely on its fringes, is the ‘seasteading’ movement. In a news story published in Thailand last month, our writers caught wind of an eccentric American entrepreneur who was seeking to assert his territorial integrity by occupying an abandoned open-water sea platform located off the coast of Phuket.

In an awkward dispute, the Thai navy declared the seasteader had threatened their nation’s territorial sovereignty, a crime punishable by death. Seasteading proponents, known as seasteaders, are part of a movement aimed at “creating permanent dwellings at sea, called seasteads, outside the territory claimed by any government”.

Proposed structures have included modified cruise ships, refitted oil platforms, decommissioned antiaircraft platforms, and custom-built floating islands. While no country has actually recognized the territorial sovereignty of any seasteads, we still found the concept interesting as we considered its implications for countries that are currently experimenting with the historical concept of ‘sovereignty’ and ‘citizenship’ as the CIP countries of the Caribbean most certainly are. More on seasteading and the evolving concept of state sovereignty on page 4.

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free movement - CSME

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CARICOM Free Movement: Does it help or hurt member islands?

By Catherine Morris, STAR Businessweek Correspondent

W

hen CARICOM formed over four decades ago it had a noble goal in mind — to deepen integration so that the islands’ individual strengths could uplift the region as a whole.

Four decades later and fractures have appeared in that united front. Deep division over the role of the Caribbean Court of Justice, condemnation from some quarters about Haiti’s admission to membership, and the uneven political power of smaller islands versus their larger neighbours have all resulted in a community that faces serious challenges.

Heading into election year, the United States has seen immigration become one of the primary political battlegrounds while in Europe free movement of people was one of the major issues for voters in Britain as they ushered in Brexit.

Naysayers One of the most vocal critics of the CSME’s freedom of movement provisions is The Bahamas which has steadfastly rejected joining the single market despite remaining a member of CARICOM. Chief among the country’s concerns is the fear that its 400,000 population could not sustain an influx of workers from other nations, in particular Haiti which has a long and difficult history of

CARICOM leaders adopted the St Ann’s Declaration which states that countries should move towards full freedom of movement within the next three years and widens the ‘skilled workers’ category to include agricultural workers, beauty service practitioners, barbers and security guards. The existing provisions already applied to university graduates, musicians, artists, media professionals, sportspeople, nurses, teachers and technicians.

Practical problems Even supporters of the freedom of movement enshrined in the CSME would admit that there are problems implementing the provisions on the

May 4, 2019

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fake certificates were held by Jamaicans and submitted in six member states, including Saint Lucia.

It can be difficult to track skills certificate holders. Policies such as free movement require adoption at both the regional and country levels and efforts

by CSME members to harmonise their domestic legislation with regional practices has put a burden on island nations’ resources.

The future of free movement The recent expansion of categories within the movement of skilled workers is a clear indication that the policy is here to stay. CARICOM is resolute in pushing ahead with the CSME and is adamant that the teething problems are worth the end result. With renewed commitment to economic integration the community is focusing on compliance as it moves forward.

Welcoming its Caribbean cousins is

CARICOM Heads of Government held a Special Meeting on the CARICOM Single Market and Economy (CSME) in Port of Spain, Trinidad and Tobago from December 3 to 4, 2018. The meeting looked at increasing the rate of implementation of the CSME.

One of the most contentious issues on the table is the CARICOM Single Market and Economy (CSME) which came into being in 2006 and to which Saint Lucia is a signatory alongside Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St Kitts and Nevis, St Vincent and the Grenadines, Suriname, and Trinidad and Tobago.

The CSME allows for the free movement of goods, skills, labour and services across the Caribbean Community. A cornerstone of CARICOM, the ability of skilled professionals and workers to move unhindered around the Caribbean member states is designed to facilitate business, generate economic opportunities and allow for improved technical and training capacity across the region.

The policy proved contentious, greeted with approval in some states but horror in others. And the debate is still raging, making the Caribbean very much in keeping with the times.

illegal immigration into the Bahamian archipelago.

The Bahamas is not alone in its caution.

While all Caribbean states recognise the value of liberalised trade, the free movement of people is often met with scepticism as wary nations cite concerns over immigration, employment and security. Even those nations who are a part of the CSME baulk at the thought of a stream of workers crossing their borders.

At a recent inter-sessional meeting held in St Kitts and Nevis, two members requested (and were granted) a five-year deferral on the provocative policy. Prime Minister of Trinidad and Tobago Dr Keith Rowley told a press conference after the meeting that the sticking point for those countries was their size relative to the rest of the Caribbean and the fear that their populations would be swamped. He declined to confirm which states received the deferral but authorities in Antigua and Barbuda signalled that they were one of the two.

The two defectors were likely motivated by a recent expansion of the free movement policy. In December

ground. Translating the policy from regulation to reality has been far from seamless.

In theory a skills certificate issued by one CSME member country should be recognised in all member states, allowing workers to pass from one jurisdiction to another without the time and expense of acquiring new qualifications or translating their existing documentation. In practice, cumbersome bureaucracy and inefficiencies within the public service from island to island have hampered progress. For example, Guyana has long complained that its skills certificate, issued by the Ministry of Foreign Affairs, has not been recognised in Trinidad and Tobago. Elsewhere, CARICOM has seen poor implementation with some countries failing to recognise some worker categories.

And the skills certificate system is far from secure, with a recent report from the CARICOM Secretariat showing that corruption and fraud is rife among applicants. Around 168 fraudulent certificates have been detected or seized by authorities to date. All but one of these

nothing new to Saint Lucia, which has been permitting citizens of the Eastern Caribbean to live and work unhindered within its borders for almost a decade. In 2011 Saint Lucia and five other members of the Organisation of Eastern Caribbean States (OECS) officially adopted their own free movement policy. This type of freedom of movement (done in a subregion and on a smaller scale) is a largely positive development which has enhanced business, increased job opportunities and allowed members to share skills and capacities.

Taking the concept to the entire region is a step too far for some, and it remains to be seen whether CARICOM can iron out the issues encountered so far. The topic was up for discussion at the Council for Trade and Economic Development (COTED) meeting held in Guyana 29-30April, 2019.

COTED gave an update on CSME implementation so far and shared plans on enhanced security and verification strategies in relation SBW to skills certificates.

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May 4, 2019

Hospitality Titans

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The Mexican Hotel Group That Wants to Dominate the Caribbean Continued from page 1

“Seasteading” an

By ED Kennedy, STAR Businessweek Correspondent

José Carlos Azcárraga, CEO of Grupo Posadas.

Photo: Arturo Luna / Forbes Mexico.

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o what does Posadas seek in the Caribbean? And what does the Caribbean family need to know about this new entry into the tourism industry? Let’s look now.

Posadas Looks to the Future Posadas has been pursuing aggressive expansion in the US during recent years. Announcing its plans in 2017 for expansion into five major US cities, the addition of the US locations was intended to complement Posadas’ existing roster of over 150 hotels, and provide an avenue for the company to become a truly global identity in the accommodation marketplace.

As well as the expansion plans, Posadas has also signalled its ambitions to grow further in Mexico and, in particular, to drive development of two new brands that are separate to, yet in complement of, their Posadas banner.

This is a natural byproduct of the group’s longstanding success, and offers a path for the company to go from strength to strength in its home nation.

Just as it’s often said of the American economy, that ‘when the US sneezes, the rest of the world catches a cold’, so too does Posadas have a unique consideration here. Not only does the company seek to expand aggressively, but it also wants to retain a mainline presence in its native nation. By no means are the concepts of growing abroad and remaining strong at home mutually exclusive. However, they can create a particular challenge for business; one where an episode in the global economy can forestall growth and drive setbacks, just as any downturn in the domestic market can weaken the foundations for expansion. It is an audacious path to pursue as the company arrives in the Caribbean.

Accommodating Posadas Regionally The nature of Posadas’ operations in Mexico affirms that it can enter the Caribbean marketplace with real impact. However, it will do so not only behind the pace of existing providers like Sandals and Royalton, but with the recognition that the competitors have not been standing still. Around the same time in 2017 that Posadas was beginning its US expansion, Royalton added four all-inclusive resorts to its stable, with the adults-only resort here in Cap Estate complemented by properties along Jamaica’s famous Seven Mile Beach. And just this week, on May 1, Royalton Antigua opened — the latest glittering addition within that nation’s beautiful Deep Bay. Also in 2017, Sandals’ CEO Adam Stewart opted to bypass the traditional route of funding that company’s expansion via use of Caribbean banks, and instead looked to Wall Street for a capital raise that aimed for twelve new hotels to be built. This marked a sharp break from the previous strategy of pursuing only one new hotel per year, and signified ‘game on’ to all competitors in the region.

Posadas’ remarkable growth can be seen by the shift from owning over 130 hotels in 2015 to claiming 172 within its stable as of September 2018. The group is aiming for 300 hotels by 2020.

Pursuing this goal has required some flexibility when it comes to what can be deemed a Posadas hotel, and even a Posadas hotel room.

At the core of its US strategy was an aspiration to pursue agreements similar to franchising arrangements, whereby the owners of Posadas-branded US hotels would manage the day-to-day running of their properties yet have them retain a Latin identity, theme and presence across all hotel branding and

customer interaction.

Although many hoteliers consider the rise of Airbnb with trepidation and fear, the Posadas CEO, Jose Carlos Azcarraga, has signified his team’s readiness to work with Airbnb in future, signifying a pragmatic outlook that seeks to provide the most competitive offering to a customer with the strongest business model.

Unquestionably, Posadas is a strong brand, but anyone fearing the end is near due to the arrival of this giant in the region could find this is simply the latest chapter in a long line of entries where a huge name does indeed perform well, yet not to the point of wiping out all competition.

A Mexican Connection in the Caribbean Where Posadas has a unique advantage is the strength of its Mexican presence. Mexico is Latin America’s second biggest economy after Brazil, and the 15th biggest in the world. Certainly, successful expansion in the Caribbean will take time for Posadas but, with its existing strengths in Mexico, there is an opportunity for it to build tourism links between Mexico and the Caribbean in a way that no other provider can. This advantage will be one to watch with interest, not only as Posadas seeks a unique selling point in the region but, in doing so, it could help drive a new chapter of growth between Mexico and the Caribbean for the benefit of all, and far beyond the new hotels in Cuba and the Dominican Republic.

With an ambitious expansion plan, the Mexican hotel chain seeks to capture Caribbean territory and settle more than 70 new hotels under its banner in the next five years.

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ecent weeks have seen an incident occur off the coast of Thailand that has sparked new debate in the international community, with implications for all nations near and far. Depending on your perspective, the skirmish between Thailand’s navy and the American self-proclaimed ‘seasteader’ and prominent Bitcoin trader Chad Elwartowski, alongside his partner, the Thai national Supranee Thepdet, is either a disproportionate reaction by Bangkok, or the expected consequence for this libertarian couple who have tempted fate in trying to drive change.

While (as detailed below) this particular incident occurred in the waters of Asia, it’s one that has direct implications for the open seas all around the world, with the Caribbean’s unique identity and commercial drawcards ensuring it could become the next frontier for seasteading in future, for better or worse.

Stonewalled in Thailand Thailand is popularly known the world over as a holiday destination of freedom, fun and beauty but the past week saw a sharp reminder that behind tourism PR is a nation intent on enforcing its sovereignty. It began when Mr Elwartowski and Ms Thepdet declared themselves independent of all nations and jurisdictions while living in their small aquatic home on top of an oil-rig structure.

To the couple, their seasteading lifestyle was about achieving freedom of traditional institutions — something that longtime cryptocurrency trader Mr Elwartowski, like so many in the crypto world, felt was an extension of libertarian

Territorial Sovereignty

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nd National Sovereignty in the Caribbean Thai naval officers inspecting a ‘seastead’ in the Andaman Sea. Photo: EPA-EFE

ideals. But, for Thailand’s navy, it was a potential threat to that country’s borders.

This scenario encapsulates the essential tension in seasteading. Individuals wish to create structures where they can enjoy more personal freedom and flexibility, in the same way that cryptocurrency can offer greater monetary freedom to people than traditional fiat currency does. But, as distinct from a houseboat or larger vessel that may have de facto freedom at the seas yet still must call a port in a nation home, seasteading structures, like oil-rig structures converted into homes, seek perpetual independence.

The Question for Freedom in the Caribbean By many measures the Caribbean region offers more freedom to aspiring ‘citizens of the world’ than anywhere else on the planet. From Citizenship by Investment Programmes (CIPs) to offshore banking, and the prominence of aspiring crypto

capitals like San Juan in Puerto Rico, this region is one that not only offers the lure of rich culture, sunshine and sparkling seas, but also flexibility.

For nations that have already introduced CIPs and maintained an offshore banking sector then, notwithstanding the concerns surrounding both of these industries, it’s not impossible to envision a local government’s receptiveness to something within the seasteading vision.

The Caribbean also has a unique advantage here due its high level of political and regional stability. This means there is less concern about offshore stations becoming de facto military bases for rival nations, as there is in other island-nations such as the Philippines.

Permitting a form of seasteading locally could be a profitable avenue for Caribbean nations, and perhaps tie in well to a ‘package deal’ with a CIP, but it would not be without risks. Drug running,

human trafficking and other crimes can all thrive when unchecked on the open seas, and providing an offshore base in any form grows the risk of misuse if not properly secured and regulated.

Stormy Seas For those aspiring to a seasteading lifestyle, the idea is not as simple as a floating structure with some canned food and running water. A key part of establishing an independent nation state is not simply what you do at home — however ‘home’ is defined — but also the relationship you have with other nations.

As Taiwan’s quest for diplomatic recognition among Latin American nations has shown, a nation state’s validity depends upon other countries recognising it. It’s here that any aspiring seasteader has a big mountain to climb.

And, thanks to the open nature of the sea, even if pursued via novel mechanisms (such as how the government of Japan has long practiced traditional whaling, in defiance of the international community, under the auspices of ‘scientific research’), there are already high barriers in place.

Article 259 of the United Nations’ Convention on the Law of the Sea (UNCLOS) provides, when referring to the status of scientific research stations and other equipment on the open seas, that “they [these structures] have no territorial sea of their own, and their presence does not affect the delimitation of the territorial sea, the exclusive economic zone or the continental shelf.”

Striking a Balance with Seasteading It may not be appealing to seasteaders who are ‘purists’ but, ultimately, the best way right now to go about achieving their dreams appears to be by pursuing a simple yet strong agreement with any nation that is receptive. Such an agreement could require an accord not to breach any laws of the nation, such as engaging in drug running or any other illicit activity, and, in turn,

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a nation’s emergency resources would be made available. After all, if you begin seasteading and declare yourself independent of all nations, can you then expect a nearby coast guard or navy to come to your rescue if you get attacked by pirates? It is here that the value of citizenship and the protection of a nation’s defence forces become a benefit, even if done under the auspices of a CIP or seasteading agreement.

There are also very practical concerns.

It’s much easier to set up a company or run a business when you have a country of domicile with a chance to use a local bank account, and so on. Anyone seasteading may hold lofty ideals of freedom from all nations but the realities of daily life and business persist globally.

For local nations, if seasteading is considered with pragmatism and a common sense approach, it would be possible to take advantage of a market here, and for the Caribbean family to potentially pitch the blue waters of the region as the perfect new locale for seasteading.

Looking Out to Sea Seasteading as a concept is currently in its earliest days. It’s also something that, like any new phenomenon, will have its mix of genuine pioneers and kooky prophets who blur the lines between what is an option versus what is impossible. Given its close links to the global crypto community, it’s also a concept that could see its fortunes rise and fall alongside this emerging technology.

But while simply doing away with centuries of international law surrounding borders will not occur, ultimately our world is becoming more borderless, and our understanding of citizenship is changing. Several Caribbean nations are at the forefront of driving this change via CIPs and offshore banking initiatives.

Where pioneers seek to make a practical and plausible case for seasteading, over time advocates may find nations receptive to it, especially if the goal of seasteading is pursued not in defiance of nations and territories around the seasteading communities, but instead in observance of them, and with a readiness to forge a common sense partnership accordingly.

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may 4, 2019

The Troubling Consequences Of Washington’s New Cuba Policy

By David Jessop

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ust before Easter, the Trump administration announced multiple new sanctions on Cuba.

In doing so, senior United States officials made clear that Washington was not just trying to break Havana’s close economic and political ties with Venezuela but intended the measures to bring about fundamental political change.

It is a position that stands in stark contrast to that of the EU, Canada, Mexico and most other nations worldwide that believe the only way to encourage change in Cuba is through dialogue, calibrated support and the exploration of the potential that generational change offers.

Speaking on April 17 to Bay of Pigs veterans in Miami, the US National Security Adviser, John Bolton, could not have been clearer about US intentions.

US policy in the Americas, he observed in a speech high on aggressive rhetoric against Cuba, now ends with the removal of communism and socialism from the hemisphere.

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AP - In this May 2, 2016 file photo, Yaney Cajigal, left, holds out an American flag, and Dalwin Valdes holds a Cuban national flag, as they watch the arrival of Carnival’s Adonia cruise ship from Miami, in Havana, Cuba.

Relations between Cuba and the US have deteriorated under the Trump administration.

“We proudly proclaim for all to hear: the Monroe Doctrine is alive and well,” he declared in remarks that anticipated “the coming of the first free hemisphere in human history”.

The same day, in significantly more measured terms, Mike Pompeo, the US Secretary of State, suggested that the sanctions were intended to advance “human

rights and democracy on behalf of the Cuban people”.

The new measures allow, as of May 2, US lawsuits against anyone, including US companies, ‘trafficking’ ( that is, making use of) expropriated US property in Cuba, by ceasing to waive Title III of the 1996 Helms-Burton legislation.

More potently, the State Department will now actively use Title IV of the bill to deny US visas to any foreign nationals who ‘traffic’ in confiscated property or who are corporate officers or shareholders of involved entities.

The Trump administration also said that it will halt ‘U-turn’ financial transactions to Cuban entities made through US banks and will cap previously unlimited personal transfers to US$ 1,000 per quarter, a measure expected to drastically reduce the US$ 4bn a year that ordinary Cubans receive in remittances largely from the US. In addition, Washington will impose new restrictions on non-family travel to Cuba in ways that are as yet unclear but likely to impair significantly all US travel to the island.

It will also add additional Cuban enterprises and individuals to the State Department’s restricted list.

Other measures are also planned.

Speaking after Mr Pompeo, the US Assistant Secretary for the Western Hemisphere, Kim Brier, said that the US is exploring further options and that the measures announced were just the beginning of a new process.

Although the detail has yet to be spelled out, an “on background” interview with two senior-level Trump administration officials conducted by the US-Cuba Trade and Economic Council Inc provides several clues.

The business group, which works with US and other investors in Cuba, quoted its interlocutors as saying that while they did not expect sanctions to result in immediate political change in Cuba, one intended outcome would be to alter the structure of the Cuban economy by removing the subsidised oil exports the country receives from Venezuela. “That means permitting more of a market-based economy. They won’t like it, but their ability to derail (sanctions) is pretty fast moving beyond their control,” the official was reported as saying.

The same individuals also said that a unique confluence of events now offers the US the opportunity to bring about change in Cuba.

“For President Trump, the stars have aligned, and Venezuela is the tool that we believe can provide change within two countries,” one of the officials was quoted on the organisation’s website as saying.

How effective such an approach might be is unclear. Cuba has a fifty-year-plus history of resistance and no inclination to back down in the face of US pressure.

Moreover, there are already signs

of a significant deepening in Havana’s economic and political relationship with Russia, which both sides now publicly refer to as being ‘strategic’.

Washington’s latest announcements, however, come at a difficult moment for the Cuban government. It is continuing to struggle to reform its over-centralised, bureaucratic and inefficient planned economy in the hope that decentralisation and individual responsibility might deliver a more modern, productive, socially oriented economy.

Speaking recently to Cuba’s National Assembly as First Secretary of the country’s Communist Party, Raúl Castro stated that the government was preparing for what may be an extended period of hardship.

He said that, faced with the “increasingly threatening tone” of the US, equal importance was being placed on “preparing for the country’s defence and the national economy’s development”.

He warned legislators that while the country was not in danger of returning to the hardships that followed the collapse of the Soviet Union, Cuba could face additional economic challenges that could worsen in coming months.

He also said that measures were under way to reinforce the combat capacity of the country’s armed forces in accordance with its strategic doctrine of a “war of all the people”.

What comes next is a period of uncertainty in relation to investment, trade and travel, and a growing international divide between Washington and its allies over Cuba.

In a joint letter to Mr Pompeo, the EU High Representative, Federica Mogherini, and the EU Trade Commissioner, Cecelia Malmstrom, made clear that the US decision on Helms-Burton broke commitments made by Washington in 1997 and 1998, and should not be conflated with shared concerns about human rights and democracy in Cuba, or the need to urgently find a solution to the crisis in Venezuela.

Subsequently the EU and Canada issued a joint statement expressing concern about the impact of US policy on legitimate EU and Canadian business activity in Cuba.

They also indicated they would work together to offset any extra-territorial effect by introducing countervailing sanctions against US entities, and introduce actions at the World Trade Organization.

Recent statements make it hard to escape the conclusion that President Trump and his most senior advisers have embarked on a strategy intended to engineer change in Cuba through economic hardship and the creation of discontent. If this is so, it is policy that has unpredictable political, social, economic and migratory consequences for the wider region, placing ideology above realpolitik and what is humane.

David Jessop is a consultant to the Caribbean Council.

CARIFESTA

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Countdown to CARIFESTA

By Catherine Morris, STAR Businessweek Correspondent

T

his summer thousands of artists, art-lovers and creative entrepreneurs from across 19 Caribbean countries will descend on Trinidad and Tobago for the region’s biggest arts festival.

CARIFESTA XIV aims to celebrate the Caribbean’s rich and varied cultural heritage while providing employment and networking opportunities for those in the cultural and creative industries, boosting tourism and showcasing the best of the region’s talent.

This year’s event promises to be bigger and better than ever, according to Arlene Holman, Marketing Manager for CARIFESTA XIV who says: “In every hosting of the festival, each host country is encouraged to innovate. Trinidad and Tobago have introduced a number of new activities and events with a view to widening the target market and reach of the festival. This year patrons will experience some new events on the calendar of activities: a Caribbean Jazz show, J’Ouvert, Food & Rum Festival, Gospel Showcase and other exciting shows.”

A long history Long before economists were throwing around the term ‘orange economy’, leaders in the Caribbean understood that the region’s creative entrepreneurs needed support, fellowship and an opportunity to shine. CARIFESTA dates back to 1970 when attendees at a writers’ and artists’ convention in Guyana decided that a large-scale festival would inject new energy into the regional arts community. Two years later, Guyana hosted the first Caribbean Festival of Arts. This first embodiment of CARIFESTA attracted more than 1,000 artists from over 30 countries.

Given its success, stakeholders decided to institutionalise the event — handing over its management to a unit within the CARICOM Secretariat — in the hope that it would broaden its impact and influence.

Head of Culture and Community Development at CARICOM, Dr Hilary Brown. CARIFESTA XIV will be held in Trinidad and Tobago August 16-25, 2019 under the theme ‘The Tangible and Intangible – Connect, Share, Invest’.

Today the festival retains its core aims: to maximise participation in the arts, to encourage Caribbean unity through culture, to expose young people to the creative arts and to promote the region’s cultural industries. The last festival was held in Barbados in 2017. This year’s event, taking place August 16-25, will be the fourteenth CARIFESTA and organisers are predicting a huge turnout with 19 countries attending. Participants include Saint Lucia which, as a member country, will be sending its own delegation.

“In addition to its artistic and trade aspects, cultural diplomacy is integral to the festival, given that governmentsponsored delegates are the main participants, and in view of the support required from the highest political levels in the Caribbean community,” says Dr Hilary Brown, Programme Manager for Culture and Community Development at the CARICOM Secretariat. “The festival is a unifying force in regionalism and contributes to strengthening CARICOM identity and spirit.”

The Orange Economy CARIFESTA XIV’s packed line-up may include a “super concert” headlined

by homegrown legends such as Machel Montano and Shaggy, food and drink festivals and daily performances but the festival isn’t just one big party. It’s also a business boon that helps small island economies diversify and grow.

According to Dr Brown: “For countries hosting the festival, participating contingents of artists as well as visitors and the local audience lead to an increase in demand for goods and services related to tourism and cultural industries. For participating countries, the festival provides a regional platform for showcasing their respective culture and arts with an opportunity to generate business.”

The Caribbean’s cultural and creative industries, also known as the ‘orange economy’, are on the rise. In 2011 the Latin American and Caribbean orange economy was worth US$ 175bn according to the Inter-American Development Bank, and had exports totalling US$ 18.8bn. Saint Lucia had one of the strongest creative sectors in the Caribbean, contributing 8 per cent to the country’s overall economy and boosting employment by 4.4 per cent.

A lot has changed since CARIFESTA began in 1972, not least the advances

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in technology which can now be leveraged to extend the festival’s exposure and target markets.

Recognising the need to ensure the event keeps up with the times, CARICOM restructured CARIFESTA in 2004 with a new strategic plan.

“The new model seeks to provide more opportunities for professional and artistic development for the region’s artists,” says Dr Brown, “opening up the festival for more artists to participate, leveraging the intellectual property value through merchandising and media rights, measuring the economic impact and stimulating more action on the part of policy makers.”

Following that restructuring, the festival is now held every two years (instead of every four) and has a marketplace component where international buyers can network with entrepreneurs. There is also more emphasis on the online potential with a new website and greater use of social media in promotion and marketing.

Small countries, big talent Trinidad and Tobago is especially eager to focus on new talent at this year’s event and began searching out the region’s undiscovered artists in January with a talent search and casting call roadshow. New talent will perform alongside established veterans such as Jamaican reggae superstar Shaggy, Guadeloupe performers Kassav, soca legend Machel Montano and calypso singer Calypso Rose.

Dr Brown says there is a wealth of talent in the Caribbean, and wants those artists to have the tools to monetise their skills. “CARICOM is known for its rich, cultural diversity that has distinguished the region internationally. The region’s historical legacies in relation to heritage, diverse cultures, languages and peoples, the development of uniquely Caribbean genres of music and legendary creative talent provide unlimited possibilities to generate revenue.

“The Caribbean has tremendous resources in terms of creative and cultural content. These industries represent leverage points for building competitive exports and driving the development of national innovation systems SBW and employment.”

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URBAN DEVELOPMENT

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The Globalization Of Fast Food, Public Health And Why We Should Have An Eye On Jamaica

By Daphne Ewing-Chow

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n early April I visited Jamaica to attend the Destination Experience Visionaries Summit, an international business conference focused on inclusive, diverse and culturally authentic growth strategies. The theme of the event was timely, given Jamaica’s recent push for the expansion of “untapped” economic sectors, including food and agriculture.

Food is especially significant in the history of globalization. Global integration of food markets has been responsible for the earliest forms of cultural interchange, economic linkages and diplomacy, while simultaneously providing jobs and boosting national economies. Food globalization has concurrently raised a number of concerns in the international development community; among these, the marginalization of locally grown foods and the proliferation of unhealthy, high sodium, high fat, highly processed diets.

On my way to attend the Masters of Industry Reception in Kingston, to listen to an address

by Jamaica’s Minister of Finance and Public Service, the Honourable Dr Nigel Clarke, I was fascinated by the array of food on offer on Knutsford Boulevard. I witnessed students spooning whipped cream into their mouths

The Honourable Nigel Clarke, Jamaica’s Minister of Finance and Public Service, speaking at the Masters of Industry Reception of the Destination Experience Visionaries Summit.

(Source: Destination Experience)

through the New York-esque Starbucks storefront, tourists walking out with their jerk chicken takeout from the Sweetwood Jerk Joint, mothers with excited children in line at Burger King and a woman in a business suit biting into a fried fish and bammy (fried bread) from Island Grill.

In Jamaica quick service restaurants are the fastest growing segment of the restaurant sub-sector, with 50 per cent of the market comprised of US fast-food franchises (FAO, 2016). This trend is no doubt a direct response to increasing incomes, urbanization, market deregulation and foreign direct investment.

According to the World Investment Report,

Jamaica is the leading recipient of foreign direct investment inflows in the Englishspeaking Caribbean.

At the time of publication, there were 19 Burger Kings, 16 Dominos, 11 Pizza Huts, 7 Little Caesars, 36 KFCs, 9 Popeyes Louisiana Kitchens, 4 Subways, 9 Wendy’s and 2 TGI Fridays facing direct competition from local outlets such as 18 Island Grills, 61 Juici Patties and 32 Tastees, among others. This is a great deal of fast food competition for a 4,213 square mile island.

The primary area in which food globalization has raised concerns within the international development community is in the area of public health. The expansion of multinational food companies has been a major worry when tied to concerns like the spread of obesity and non-communicable diseases. The 2017 Jamaica School Health Survey, which looked at risk factors among 1,667 students aged 13 to 17 years old in 41 schools across the island, revealed that 24 per cent of students were overweight and 9 per cent were obese. The survey also revealed that 68 per cent of the students were drinking carbonated drinks at least once per day, while more than half ate fast food one or more days per week. Other studies have shown that there are more than 10,000 Jamaican children currently living with diabetes.

The chief medical officer in the Ministry of Health, Dr. Jacqueline Bisasor-McKenzie, has stated that these concerns have been addressed via health promotion strategies that “create a supportive environment for healthy eating” by engaging fast-food restaurants to make the healthier choice “the more convenient choice” by providing more healthy, affordable options to consumers.

This approach is supported by Dr Madhuvanti Murphy, Deputy Dean and Senior Lecturer of Public Health in the Faculty of Medical Sciences at the University of the West Indies, Cave Hill, Barbados.

According to Dr Murphy, “The reality is fast foods aren’t going anywhere. Our busy lifestyles necessitate convenience but these food chains can produce healthy options — and consumers will buy them! A perfect example of this in Jamaica is the locally owned Island Grill fast-food chain that has successfully ‘gone healthy’. They source local ingredients, show calorie counts on their meals, have healthy meal options, and have swapped sugar-sweetened beverages for healthy veggie juices, which are very popular.

Many of the foreign fast-food chains in developed countries now have healthy options on their menus and do not use trans-fats in their preparation in their home countries, so we should hold them to at least that standard when they come here.”

In July 2018, under the leadership of Founder and CEO Thalia Lyn, Island Grill launched Supaah Food, making it the first Jamaican fast-food chain to introduce local foods as a menu option. This was a timely

accompaniment to “earth-friendly packaging” which it introduced a month prior.

Local restaurant Juici Patties has also made adjustments to its menu, including local produce such as callaloo, yam, sweet potato, banana and ackee in its offering. The company has also replaced animal fat with plant-based oil and provides a vegan crust option.

According to the Food and Agriculture Organization, 20-50 per cent of the products used in Jamaica’s fast-food sector are imported; among them, potatoes, French fries, vegetable oils, ketchup, sauces, bakery products, chicken fillet and cheeses. This means that 50-80 per cent of the ingredients used by Jamaica’s fastfood industry are obtained locally, including local meats, dairy products, fruits, vegetables and eggs. Many sauces and condiments are also sourced locally in order to meet Jamaican consumers’ taste preferences, while establishments such as KFC have integrated local produce into their menus. The sector also attracts local services, thus integrating local companies into the supply chain.

In 2017 Jamaica’s total consumer foodservice sector generated an estimated $ 700mn in sales, 5 per cent higher than the previous year (USDA). Chain establishments, including US fast-food chains, generated 40 per cent of these sales. Quick service restaurants are also a significant source of employment opportunities, with KFC providing approximately 2,000 jobs in 2018. The sector clearly provides a valuable contribution to the local economy — and it is a win-win.

According to Mark Myers, Managing Director of Restaurants of Jamaica (ROJ), the franchise operator for KFC and Pizza Hut and one of USbased Yum! brand’s leading global franchisers, “I am so bullish now that the sky’s the limit.”

The group is planning investment of more than J$ 2.8bn by 2021.

So is there a sweet spot in the financial-moral puzzle?

In his speech at the Masters of Industry reception, Finance Minister, Dr Nigel Clarke indicated, “We have had a lot of foreign investment, but I don’t think domestic investment has yet been unleashed in the way that it can and ultimately will.”

Perhaps this is the answer.

According to Dr Murphy, “The middle ground would be having the fast-food industry (whether foreign or local) support local food sources which helps the local economy, and encourage healthy eating by widening their healthy options to consumers.”

Rather than vilifying the sector that feeds Jamaicans both financially and nutritionally, public policy has the power to make the fastfood sector “slower” by drawing in local goods and expanding the availability of healthy and affordable options.

Changes in public policies, fast-food marketing and menus have had positive impacts in restaurant revenues elsewhere. In the UK, for example, Pizza Hut has had an excellent response to its vegan, jack fruit-based ‘Jack ‘n’ Ch**se’ pizza.

If foreign fast-food chains are unable to respond to the global trend of healthy offerings in their Jamaican restaurants, this is an opportune time for local chains to amp up the competition.

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