STAR Businessweek - 2 December 2017

THE STAR BUSINESSWEEK DECEMBER 2, 2017

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CUBA LIBRE

NEW ERA FOR CUBA AS CASTRO BROTHERS’ REIGN ENDS

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

In 2018, for the first time in almost 60 years, Cuba will not be led by a Castro. Raul Castro, the President of Cuba, will stand down after serving ten years, following his brother and former president Fidel’s resignation in 2008. The two brothers were instrumental in the 1959 revolution that saw Fulgencio Batista overthrown.

Continued on page 4

LatAm, Caribbean exports rebound in first half after 25 months of contraction

Latin America and the Caribbean left behind the longest trade downturn in recent history in the first half of this year, with exports rising 13.2 per cent after shrinking 3.3 per cent in 2016, the Inter-American Development Bank said in a new study.

Page 3

Hunt for yield drives record sales of longdated EM debt

Emerging market countries, banks and companies are selling long-dated debt in record volumes as investors’ search for yield pushes them to expand their appetite for risk.

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A FINTECH FUTURE Innovative technology is transforming the banking sector but are Caribbean banks ready for the digital revolution?

BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

The STAR Businessweek

BY CHRISTIAN WAYNE – EDITOR AT LARGE

The finale of 2017 is but 29 days away.

It’s been a hectic past few months for the Caribbean as the vagaries of Climate Change have sparked a systemic reprioritization among Caribbean leaders in building ‘sustainable’ economies.

Only time will tell whether the many cross-legged, panel-discussion proclamations made by the political leaders of Small Island Developing States during last month’s COP23 Climate Change conference in Bonn, Germany will amount to any more than diplomatic rhetoric.

One thing, however, is certain: there is more change yet still on the horizon.

In early 2018 Cubans are set to experience a monumental change in the political leadership of their nation.

According to ‘Cuba Libre: New Era for Cuba as Castro Brothers’ Reign Ends´, 2018 will mark the first time in almost 60 years that the country has not been led by one of the Castro brothers.

Read more on this nation’s transition, starting on page 1.

Though Cuba may be lagging behind the rest of the Caribbean as it begins its long overdue journey of liberalization and economic openness, the region as a whole still leaves much to be desired in the realm of financial technology.

Our story ‘A Fintech Future’, here on page 2, takes a closer look at technology-enabled financial innovation in the Caribbean and how entrepreneurs can identify pain-points worth solving.

It also turns out that the Caribbean experienced an increase of nearly 18% in exports during the latter part of 2017, according to a new World Bank report.

On this and more are the writers from The Financial Times in London in this weekend’s edition of The STAR Businessweek.

The STAR Businessweek Nothing Personal. It’s Just Business.

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Just a decade ago it would’ve been hard to imagine paying bills with bitcoin or taking investment tips from a ‘robo-adviser’. Now such services are commonplace in the global financial marketplace. Ever-advancing technology, combined with millennial clients more willing to embrace digital data, has led to a boom in Financial Technology, or FinTech.

In 2015 global investment in FinTech reached US$22.3bn. While the industry first made inroads in just a few basic services, it has now diversified to take a foothold in almost all aspects of financial services, from banking and corporate finance to trading and SME lending.

“FinTech emerged post financial crisis and started off initially in four areas: lending, payments, blockchain and wealth management,” says Ray Ruga, Founder of FinTech Americas. “This crop of young, startup companies started offering these financial products that were very fast and very userfriendly. The banks, who were recovering from the crisis, were behind the curve and started losing a lot of business. Banks used to have no idea what FinTech was but today most know it is happening because competitors are coming into the marketplace and banks are getting squeezed.”

“There is a fair amount of awareness but a lot of banks are stuck on where to go from here,” he says and recommends that financial institutions work first on appointing a multi-disciplinary team to lead the FinTech strategy with the support of management.

Adopting a forward-looking FinTech approach sometimes requires a shift in the bank’s culture, according to Ruga, and this can only be achieved if all stakeholders are onboard. Once the team is in place, banks should then carry out an appraisal of their strengths and weaknesses, identifying areas where they are performing well, and those that could be improved. Ruga says: “Start with an easy win. Pick something critical to your bank’s mission and then try to simplify it. Each Caribbean country will be different but banks need to look at their position in the market and what they are good at.

Start small and learn what is out there and what has worked. Look at examples of best practice.”

DEVELOPING A FINTECH STRATEGY

Media technology entrepreneur Ruga works with banks throughout the US, Latin America and the Caribbean to help them become more technologically savvy. He says Caribbean banks have a steep learning curve when it comes to FinTech but there is a growing awareness in the region about how the industry should respond and some institutions have begun to lead the way. “From what we have seen there are leaders in the Caribbean,” he says. “Banks are beginning to figure it out.

They are looking for ways on how they are going to become more efficient and responsive.

Some Caribbean banks have made changes and are beginning to address it but they all have a way to go.”

Ruga points to the National Commercial Bank of Jamaica, which launched its mobile banking e-platform last year, as a pacesetter in the region, and adds that several banks in the Dominican Republic have also developed solid FinTech strategies.

Mapping out a strategy is crucial, according to Ruga who says it is a good first step for banks who are hesitant to dive into such a complex and rapidly-changing environment.

PLAYING CATCH-UP

Unfortunately, banks don’t have the luxury of time when it comes to developing their FinTech roadmap. With new technologies being developed constantly, financial institutions are left playing catch-up in an ever-evolving environment - an environment where the cards are stacked against them.

Being subject to a heavy burden of regulation, banks cannot be as nimble as FinTech companies, nor are they as willing to innovate. Wary of falling foul of regulators, banks are cautious and slow, hanging back where FinTech start-ups are diving in. Ruga says: “A lot of banks do not want to make aggressive technology moves unless the regulators allow it. The regulatory process is bottlenecking a lot of the process of innovation, which is the way it has to be - it has to be done in a safe way.”

With an increasing amount of sensitive financial information being stored online, it’s no wonder safety is a top concern, not just for banks but for everyone involved in the sector. As Ruga points out, however,

security has always been at the forefront of banking. “Security is a huge risk, there’s no question about that. It is an area of major focus for industry, for government, for everyone. Banks have always had to continuously improve their security, whether physical or digital; that is not going to stop.”

COLLABORATING, NOT COMPETING

Traditional banking may be undergoing a serious facelift to wrestle business back from FinTech firms, but it is far from obsolete. “Banks have two major advantages: trust and the cost of capital,” says Ruga. “The cost of capital is very expensive and customer acqusition is very expensive. Banks have these inherent operational advantages. FinTechs are finding that scaling their operations to bank size is very hard and very expensive.”

As FinTechs grab more market share they are also catching the attention of regulators and soon will face just as heavy a regulatory burden as the banks but without the operational structure to shoulder it. This will level the playing field, and attitudes among FinTechs have already started to shift in response. Ruga, who works with both banks and FinTech companies, says the relationship between the two is now softening and becoming less adversarial.

“FinTech companies do not want to compete with the banks; they want there to be more collaboration [and] banks are beginning to view them as potential collaborators as well. I like to say they are going to become ‘frenemies’.”

As banks and FinTechs move towards a collaborative approach, customers can expect the best of both. Ruga says: “A lot of FinTech is moving to the back office and that allows banks to mimic the user experience and speed of a FinTech company. We are seeing more solutions for banks that are inspired by FinTech capabilities. A lot of the investment and focus now is going away from what people see to the way in which banks operate and are structured. A lot of the major work is behind the scenes.”

With the latest technology at their fingertips, banks will have ever more creative solutions at their disposal.

The emergence of blockchain, artificial intelligence, innovation in document storage and regulatory technology (‘RegTech’) - all are poised to transform the banking industry.

For those banks who do not get onboard with the changes, Ruga has a word of warning: “Major players are going to emerge and set the pace for the rest of the pack. If the others do not adapt, their viability is going to be strongly in question going forward.”

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LATAM, CARIBBEAN EXPORTS REBOUND IN FIRST HALF AFTER 25 MONTHS OF CONTRACTION

BY FT CORRESPONDENT

loss of $14.3bn for the region. The loss of market share was not only due to the region’s limited number of export commodities but also reduced competitiveness.

Interestingly, Mexico was the only country in the region that managed to increase its market share significantly – by 30.4 per cent, accounting for nearly 40 per cent of total regional exports in 2015.

“Beyond the recovery, Latin America and the Caribbean is facing a trade scenario that is substantially less favourable than before the global financial crisis. The region needs a new generation of international integration policies. It is all about boosting competitiveness, regaining global share and making the most of the opportunities that come with

Crack open the champagne? Not yet.

That bright figure hides the fact that Latin America is lagging the rest of the world and suffering a growing lack of competitiveness, the bank said in its Trade and Integration Monitor 2017.

Beyond the recovery, Latin America and the Caribbean is facing a trade scenario that is substantially less favourable than before the global financial crisis

Latin America and the Caribbean left behind the longest trade downturn in recent history in the first half of this year, with exports rising 13.2 per cent after shrinking 3.3 per cent in 2016, the Inter-American Development Bank said in a new study.

Crack open the champagne? Not yet.

That bright figure hides the fact that Latin America is lagging behind the rest of the world and suffering a growing lack of competitiveness, the bank said in its Trade and Integration Monitor 2017.

First the good news: After 25 months of uninterrupted contraction, exports

of goods from Latin America and the Caribbean rose 13.2 per cent in the first half and exports of services rose 9.7 per cent. The trend was most marked in South America, where exports rose 16.1 per cent, and the Caribbean, where they rose 17.9 per cent. “A lot of this is due to an increase in commodities prices,” Paolo Giordano, principal economist in the IDB’s Trade and Integration Sector and the report’s editor, told FastFT. Mexico saw a 10.4 per cent rise in exports in the first half driven by fears over the future of the North American Free Trade Agreement, which the US,

Canada and Mexico are struggling to update.

“What we’re seeing is very different to the rest of Latin America . . . Anticipating changes in trade policy in the US [it appears] companies have moved inventory to the US [early],” he said. Much of that was in manufacturing. “It’s hard to tell if it will continue but that was an unusual movement for the time of year,” he added.

But the bad news for the region is that, despite the growth, Latin America is getting left behind. Between 2010 and 2015, in the wake of the global financial crisis, regional exports rose 2.5 per cent while global trade rose 4.1 per cent. That translates into a

TOURISM PULSE!

disruptive technologies like e-commerce,” Mr Giordano said.

One of those hot prospects is e-commerce, which remains small in the region but is growing fast. Businessto-consumer sales grew by a quarter in 2015 compared with 2014. Brazil, Argentina and Mexico, the region’s top three economies, concentrate 70 per cent of e-commerce in the region. “In the context of low growth, both of GDP in the region and world trade, e-commerce emerges as a potential revitalizing force,” the report said.

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CUBA LIBRE:

New Era for Cuba as Castro Brothers’ Reign Ends

BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

Cuba. The USSR as a communist force has been replaced by China, as the Communist Party of China has sought to expand its influence domestically and around the world. Even if China has ambitions to be a global superpower, its next few years are likely to be focussed at home on navigating growing domestic challenges such as the rich-poor gap, and attending to strategic issues within the Asian region. Any Cuban revolutionaries who hope that China’s rise would deliver a return to Cold War-style communism are sure to be disappointed.

NORMALISATION OF RELATIONS WITH THE US

Left: Raul Castro – Leader of Cuba from 2008 to present Right: Fidel Castro – Leader of Cuba from 1959 to 2008

Continued from page 1

RAUL CASTRO TO RETIRE

Even before his death on November 25, 2016, it was clear that history would record Fidel Castro as the most significant figure in post-Batista Cuba, serving as revolutionary leader, president for over 50 years and, globally, as one of the few remaining figureheads of Cold War communism after the USSR’s fall. Yet, it is at the end of Raul Castro’s tenure that Cuba is perhaps set to undergo its greatest shift since the Castros came to power on January 1, 1959.

NEW ERA FOR CUBA

Caribbean nations have changed substantially since 1959, many having gained independence, but Cuba has famously changed little. Much of this can be attributed to the US embargo and other trade sanctions that prevented the country from expanding its economy.

Sanctions notwithstanding, the narrative of the Castros remained defiant and, with it, the Cuban economy remained stagnant.

Other nations, like the People’s Republic of China, while retaining an authoritarian

bent and disinterest in democracy or greater recognition of human rights, nonetheless shifted towards a greater free market economy.

The Castros’ grip on power in Cuba proved unshakeable. Now, though, there is momentum for substantive change in Cuba within its government and society. A number of external and domestic factors suggest that when Raul Castro’s tenure comes to an end in February 2018, so, too, may some of the hallmarks of the Castro brothers’ reign.

Compared to the world of 1959, 2017 presents a dramatically different picture for

While the Castros were stubborn in their resistance to the outside world during their almost 60 years of rule, it is undoubted that changes within the Caribbean and the wider world diminished some of the revolutionaries’ rallying cries. Opposition to intrusion from Europe in local affairs has long been a feature of Caribbean regional identity, yet independence gained by many nations in the region eroded the strength of the Castros’ anti-colonial narrative.

The end of the Cold War saw a step back from Washington’s more hawkish attitude towards the Caribbean, with the strategic threat of USSR-backed communism removed. Further, while Mikhail Gorbachev’s Perestroika reforms saw economic ties weaken between Havana and Moscow during the 1980s, the Soviet collapse saw an official end to any prospect of Soviet-led global communism. At the start of the 1990s Cuba looked isolated indeed, and it remained that way for years.

It was with the election of Barack Obama in 2008, and Raul Castro’s replacement of his brother Fidel as president, that a substantial shift occurred. After many years of overtures and secret negotiations between the Obama Administration and Castro’s government, on July 20, 2015 diplomatic relations between the two nations were restored, and a number of US sanctions lifted.

This normalisation was not to last. Outcry among many US politicians (led by US Senators Marco Rubio and Ted Cruz, both children of Cuban emigrants), saw newlyelected US President Trump suspend what he called a ‘One-Sided Deal With Cuba’ and restore many sanctions.

Despite this, diplomatic relations between the two nations, and embassies, have remained open. The US’s evacuation of non-essential personnel in September

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DECEMBER 2, 2017

2017 after a number of American diplomats came down with mysterious health issues, feared to be the result of a sonic attack, was a setback. Yet, overall, the presence of a US Embassy in Havana, and a Cuban one in Washington, is a vivid display of closer ties between the two nations in the post-Fidel era.

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Raul Castro (left) and Miguel Díaz-Canel, First Vice President of the Council of Ministers since 2013

UPCOMING CHANGE OF LEADERSHIP

Cuba’s future will now be its own to determine, free of allegiance to a larger communist state seeking an ally in Cold War geopolitics, and free of a Washington that regards Havana as an immediate threat ‘just 90 miles from Florida’. So how may Cuba progress, and reconcile its future with its revolutionary past?

While many presumed Fidel would rule till death, Raul’s succession of his brother, at the age of 75, meant that not only would he serve for a far shorter tenure, but the succession by the next generation of Cuban leaders would be delayed. This has increased odds that the leadership change in 2018 will come with some major shifts in policy.

Attention centres on Cuban Vice President Miguel Diaz-Canel. An engineer and teacher before fully turning his attention to politics, Diaz-Canel is held to have achieved a rapid rise through the party by keeping his head down and not overshadowing the Castro brothers as a potential ‘leader in waiting’.

Aged 57, he has only ever known a Castroled Cuba and does not have a personal connection to the events of January 1, 1959, as do revolutionaries.

POSSIBLE INTERNET AND MEDIA REFORM

Diaz-Canel has shown some recognition that governance in Cuba cannot remain ‘business as usual’ and has cited reforms to the nation’s state-run media and improvement of its internet access as key goals for Cuba’s future. Somewhat paradoxically for a leader in an authoritarian state, Diaz-Canel has acknowledged that the internet is full of real and fake news - a small but significant step in placing emphasis on the power of people over politicans in determining what information to believe.

Diaz-Canel justifies improved internet access on the basis of its importance as a tool for human development. These remarks may seem minor to some - especially if seeking from Diaz-Canel a commitment to democratic reform and greater human rights recognition - but it is with the internet that

the greatest potential for progress in Cuba may reside. Even if the regime continues to censor what it deems to be contentious political content, the popularity of VPNs and other workarounds means ‘free and fair’ internet access could quickly thrive in Cuba, if only in an unofficial capacity.

Just as many Eastern Europeans sought to demolish the Berlin Wall and bring an end to the USSR due to the economic opportunities they saw in the West, so, too, would DiazCanel face increasing opposition if seeking to suppress Cubans’ pursuit of opportunities in the online era. Greater internet access for Cuba’s business community would offer it the chance to build stronger in the Caribbean and around the world. Given the potential for eCommerce growth, and the innovations in the digital world that many Cubans have already displayed, Cuban business clearly has a bright future ahead of it online, provided that the government does not obstruct it.

WHAT DOES THIS MEAN FOR THE CARIBBEAN ECONOMY?

A more open Cuba would mean a more active contributor to life in the Caribbean, and to its regional identity, but the exact areas of influence are unclear. The experience of the Cuban cigar is illustrative of this: though the end of a US import ban on the cigars brought with it expectations of greater demand,

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doubts endured surrounding the capacity of Cuba’s cigar industry to meet a large increase in orders.

A Cuban economy that has greater transparency, a more open market, and operates free of sanctions could indeed draw dollars away from other nations, including in the lucrative tourism industry, but it is unlikely that the Cuban economy as a whole is ‘shovel ready’ for its new era.

Even if it is, the potential for Cuba to outperform the longstanding tourism industries of other nations like Saint Lucia appears minimal; the experience of American tourists following the restoration of relations evidences this: though the lifting of travel sanctions saw an initial surge in American tourists to the nation, this interest subsequently waned.

Further, while Diaz-Canel’s government may seek to project a more open and touristfriendly Cuba, any scandal out of Havana that resembles a return to Fidel Castro’s era, or any strong response by an overseas nation, such as the Trump administration’s restoration of sanctions, will trigger a sharp decline in tourism.

CONCLUSION

In 2018 Cuba will see a change of leadership and an end to the Castro brothers’ rule. If Miguel Diaz-Canel does become president, he

will be the leader of a nation that is primed for economic growth and reform.

In 1959 it may have been possible to keep the world at bay beyond Cuban shores but we now live in a world that is more globalised, interconnected and free than ever before.

The Cuban people long for freedom and reforms, and it appears that Diaz-Canel recognises this. If he is to lead a government that aspires to ‘Power to the People’ and greater prosperity for Cuba - as promised by the Castro brothers’ revolutionary ethos - then ensuring that the Cuban people have their rights to personal and internet freedom observed and recognised, and that the Cuban business community can thrive in the digital era, will go a long way to creating a foundation for Cuba’s economic growth and the improvement of its people’s lives.

Movement towards greater freedom for the Cuban people is essential. Recent years have shown that the global community is ready to work with the Cuban government if such changes are made. Never has the potential to quickly bring about an improvement and greater prosperity in the Cuban people’s lives been so great. No matter what, the end of the Castro brothers’ rule in Cuba will be historic. If Diaz-Canel is to be Cuba’s next leader, it will be up to him to earn the love of the Cuban people and the support of other nations by delivering on the opportunities on offer.

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EU PROVIDES ADDITIONAL €500,000 IN HUMANITARIAN AID TO DOMINICA Bridgetown, Barbados - The European Union is providing an additional €500,000 (EC$1,600,000) in humanitarian aid to Dominica, following the severe destruction caused by Hurricane María on September 18, 2017, via the European Commission’s Directorate-General for European Civil Protection and Humanitarian Aid Operations (ECHO).

María, a category 5 hurricane, hit Dominica leaving more than 70,000 people in need of urgent relief.

“We aim to increase our support to families who are displaced and living in collective centres or with host families since the hurricane, and are in need of shelter, food and water,” said Androulla Kaminara, ECHO’s Director of Operations for Latin America and the Caribbean.

The additional aid will provide immediate shelter and household material for 5,000 vulnerable families in Dominica. Shelter kits, as well as housing repair materials, training and technical support will be provided to

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A walk through Dominica, hours after Hurricane Maria

the most vulnerable whose homes have been damaged.

Daniela Tramacere, EU Ambassador to the Organisation of Eastern Caribbean States said, “The EU has been committed since the very beginning to support Dominica after the tragedy.

We are now committed to further assist Dominica in early recovery and reconstruction.”

This additional humanitarian aid complements an initial grant of €250,000 (EC$800,000) which was allocated in September to alleviate the affected population’s most urgent needs: basic kits for survival, clean water and food, shelter material and fuel, as well as logistical support to reach isolated communities.

Since 1999, the European Commission has provided € 2,919,216 in humanitarian aid to Dominica, including emergency relief after Tropical Storm Erika severely damaged the island in August 2015, leaving 30 people dead.

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© The Financial Times Limited [2017]. All Rights Reserved. Not to be redistributed, copied or modified in anyway. Star Publishing Company is solely responsible for providing this translated content and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation

HUNT FOR YIELD DRIVES RECORD SALES OF LONG-DATED EM DEBT

BY FT CORRESPONDENT

Emerging market countries, banks and companies are selling long-dated debt in record volumes as investors’ search for yield pushes them to expand their appetite for risk.

With markets set to remain open for business for another couple of weeks before winding down to year-end,

syndicated sales of paper with maturities of 10 years and more has hit a record high in emerging economies, topping US$500bn for the first time according to figures from Dealogic, a data provider.

Around a third of the total finance raised came from sovereigns and related entities,

while 37 per cent came from EM corporates and a quarter from financial institutions, according to Dealogic.

Ultra-low interest rates in developed economies have channelled a wave of money towards higher-yielding assets, pushing up prices in EMs. Angus Bell, a senior portfolio manager at Goldman Sachs Asset Management, said the search for yield “has contributed to demand for higher duration and lower credit quality, or in this case a combination of both”.

However, he argued, EM’s economic fundamentals were “very well supported”, benefitting from a “tailwind” from the current wave of global growth.

Longer-dated debt heightens the level of risk investors take on when issued at rates that are low by historic standards because of its long duration — the amount of time it takes for a bond’s coupon payments to recompense an investor for the initial purchase price.

But Will Weaver, Emea head of debt capital markets at Citi, argued relatively high yields available for long-dated EM debt — in comparison to bonds issued in developed economies — mitigate duration risk. For example, investors in the century bond that Argentina raised this summer will recoup their initial investment in around 12 years, given its 7.9 per cent yield.

Other notable long-dated issuance this year included Austria’s €3.5bn century bond, and

30-year debt sales by Russia, Egypt, Saudi Arabia, Abu Dhabi and Kuwait.

The recent wobble in EM assets has aided investor appetite, he added, as pricing cooled slightly — some buyers “were a little relieved that the EM rally took a breather”. Nigeria brought its first 30-year paper to market just after that and saw strong demand, Mr Weaver noted.

Local EM institutions such as pension funds and insurers comprise a growing share of investor demand, Mr Bell said, offering an additional support for asset pricing, in particular “for longer duration issues to match liabilities”.

The rise in long-dated debt could push the total overall amount raised

by EM bond issuers this year to top last year’s record. EM issuers have raised US$1.54tn in debt — only slightly lower than the 2016 total of US$1.67tn.

Mr Weaver said the rising tide of EM bond issuance was partly being driven by an increasing volume of existing debt maturing, and noted that the trend was likely to continue as “next year is also set to be a big year for redemptions”.

The figures include both foreign and local currency-denominated issuance, but do not capture sales of debt by auction.

FINANCIALLY SPEAKING Financial Literacy 101 presented by Bank of Saint Lucia

THE BUSINESS OF FINANCIAL INCLUSION According to the World Bank, “Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.”

Recent statistics published by the Wall Street Journal, revealed that in developing countries, 60% of the population do not possess bank accounts.

Access to affordable banking and financial services is necessary to enable saving, facilitate larger purchases, and to further invest, for example in much needed healthcare and educational goals. For business owners, accessing additional credit begins with satisfactorily operating an account.

Financial inclusion:

Builds capacity for future growth, improved GDP. Fosters greater productive employment opportunities

The ultimate goal of ‘financial inclusion’ is to improve the overall quality of life by addressing poverty in a sustainable way. The support of financial inclusion however, requires the collaborative efforts of all stakeholders including banks and financial institutions, investors, policy makers, regulators and local governments. Strategies required for the advancement of a financial inclusion agenda include: Leadership: cultivating a broad based government commitment to financial inclusion as a catalyst to alleviating poverty.

Diversity: Implementing policy approaches which promote competition and provide market based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers Innovation: Promoting technological and institutional innovation as a means to expand financial system access and usage, inclusive of addressing infrastructural weaknesses.

Facilitates day to day banking Enables savings and investment, e.g. education or healthcare Provides access to credit Fosters entrepreneurship Supports individual and small enterprise planning and risk management Builds stronger financial institutions which in turn support the markets and fosters a more system sustainability Facilitates economic development

Faster, safer, more convenient

Protection: Encouraging a comprehensive approach to consumer protection that recognizes the roles of government, providers and consumers.

Empowerment: Developing financial literacy and financial capability at the local, sub regional and regional level.

Policy: Create a policy that is proportionate with the risks involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation.

Framework: Create a framework which reflects international standards, national circumstances and support for a competitive landscape.

The achievement of financial inclusion does present significant challenges, including high maintenance costs and risks to financial institutions, particularly indigenous ones; however discussions must be advanced on the above mentioned strategies. The key is to implement indicators to monitor and measure progress and to adjust where necessary. The benefits of financial inclusion are substantial, not only to the individual consumer but for the developing economy as well.

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8

THE STAR BUSINESSWEEK

DECEMBER 2, 2017

MAKING

WWW.STLUCIASTAR.COM

A TRULY ‘GREEN’ CARIBBEAN NOT SO FAR-FETCHED!

A

WHAT ARE YOUR THOUGHTS ON LUCELEC’S SOLAR FARM? DENELL: We love the idea that LUCELEC

is going green. From a personal perspective we understand it is imperative for them to do so, and to make the strides to do so, and we must commend them on that. With regards to the price of energy going down, it’s yet to be determined, but we love what LUCELEC is doing. They are the biggest player in the energy space and, like we all know, we cannot go against LUCELEC. We choose to work with them in developing Saint Lucia’s renewable energy framework, and also to develop the country to basically take full advantage of the smart energy future.

BY KAYRA WILLIAMS, STAR BUSINESSWEEK CORRESPONDENT

ll it took was a ride in an electric car to convince Denell Florius of what the next move in his professional journey needed to be. Since then, he’s been immersed in a world propelled by green energy. He’s even started his own green energy-saving and service company, Eco Carib Inc, with his business partner, Zaina Pamphile. Notably, the company was nominated in two categories for the 2016 Saint Lucia Business Awards, namely, the ‘Green Award’ and ‘Entrepreneur of the Year’.

According to Denell, the ultimate goal of Eco Carib is to provide the Caribbean with solar energy technologies, and to help people ‘go green’ and save money. Eco Carib offers financing solutions for solar technologies such as solar lighting and pumps. Currently, the company focuses on both residential and commercial projects implementing over 100 kilowatts of solar in Saint Lucia thus far, with its eyes set on expansion!

Denell Florius, CEO & Founder of Eco Carib Inc.

HOW CAN SAINT LUCIA’S ENERGY INDUSTRY DEVELOP? DENELL: One of the things we’ve

noticed that is missing in Saint Lucia is the incentives to small energy companies.

In other places around the world you have zero-rated tax incentives for companies.

You also have things like discounts that run from the government’s side of things, and it makes a major difference for us, the smaller energy companies. LUCELEC currently gets discounts on imports, and one thing we have to notice is, LUCELEC is a castle.

The government needs to understand that you cannot build a wall around the castle, and expect other small emerging energy companies around this space to help Saint Lucians as much as possible. We need the support that LUCELEC is getting, and I think that’s something that is necessary for us to develop the policy framework on the island.

HOW DID YOU GET THE IDEA FOR THIS BUSINESS? DENELL: It was actually the first time I

got a ride in an electric car. Basically I knew this was the future from the time I got that ride - it was like nothing I’d ever experienced.

We’ve since studied renewable energies from all around the world; trends in the market as well. Knowing the Caribbean has some of the highest energy costs on the planet, we had to do something.

WHAT IS YOUR EDUCATIONAL BACKGROUND? DENELL: I’m a science guy. I went to Saint

Mary’s College and, from there, went to A Level. I’ve recently been doing some studies online as well, in engineering and technology.

I started my career in engineering as an engineering manager, at the age of 19. From there, I moved into the energy space at 22. It’s been a remarkable journey. I must commend my team as well, for helping us along this journey.

HOW DID YOU GET THE BUSINESS OFF THE GROUND? DENELL: The process was fairly simple

and straightforward. We had some help from the Small Business Development Centre (SBDC) and they really helped us in starting

MOVES

HOW EASY IS IT TO DO BUSINESS IN SAINT LUCIA? DENELL: One of the major things I would up the company and pushing things forward.

With regards to development of the business, we had to leave Saint Lucia to get help. We’ve been to Trinidad many times, also Jamaica, and many other places throughout the Caribbean just to get the support we need to grow the company. We’ve realized that things are really improving in Saint Lucia in that regard. I must commend SEDU, in particular, and the Chamber of Commerce as well, for helping in the development of small and medium sized businesses on the island.

WHICH ORGANISATIONS HAVE ASSISTED YOU? DENELL: We’ve worked with The World

Bank, Caribbean Export, the OECS, the Caribbean Research Industrial Institute, Start Up Jamaica, Branson Centre, Caribbean Tech Entrepreneurship programme, Caribbean

Climate Innovation Centre, and plenty more.

We’ve been putting ourselves out there to receive this kind of assistance, and it’s necessary. A lot of the time people say they want to be in business but they come in with one foot in and one foot out. You have to just jump in and do it because that’s where you get the support and respect from the NGOs.

IS YOUR COMPANY SEEKING INVESTMENT? DENELL: We are. We’ve already reached

out to a bunch of investors. There is a lot of money available in this area. The only issue is getting access to it – you have to be able to show the ability to be credible within the NGO space, and to execute. That’s what the investors want to see, that you have a track record and you have a strong team; that’s very important.

change is basically access to investment.

You shouldn’t have to leave Saint Lucia to get access to investment. Most of the investment has been happening in Trinidad and Jamaica, and the rest of the region has basically been at four percent, where Jamaica has been at almost 60 per cent. We really need more access to finance. I think Dominica rolled out something similar to help out small and medium enterprises, by investing in them directly. I think from a perspective of investing in Saint Lucia, as opposed to investing mostly in the expats, government needs to help the small and medium enterprises in the island to get investment and grow their businesses to help everyone.

Readers can get in touch with Eco Carib at consultecocarib@gmail.com or www.ecocarib.com

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