While overall foreign direct investment (FDI) inflows to Central America and the Caribbean fell by 17 per cent in 2012 compared to 2011, FDI coming into T&T grew by 38 per cent over the same period, according to figures from the World Investment Report 2013 released by the United Nations Conference on Trade and Development (UNCTAD) yesterday at Lok Jack GSB in Mt Hope.
Total FDI flowing into T&T in 2012 was US$2.527 billion, the highest since 2008 when RBC of Canada re-acquired RBTT for US$2.2 billion.FDI flows into T&T in 2011 totalled US$1.831 billion. It was US$549 million in 2010 and US$709 million in 2009. The pre-crisis annual average for T&T was US$884 million between 2005 and 2007.
However, T&T is not only a destination for FDI. Money from T&T was also invested internationally. Total FDI flows from T&T to the rest of the world in 2012 was US$1.332 billion, up from US$1.06 billion in 2011. Interestingly, T&T's pre-crisis annual average for outgoing FDI over the period 2005 to 2007 was US$237.
Total FDI to the Latin America and Caribbean in 2012 was US$244 billion, the report said. Flows into Central America and the Caribbean came to US$99 billion, and FDI directed to South America reached US$144 billion. The overall figure for the Caribbean was US$77.725 billion incoming FDI and US$53.972 billion outgoing. To compare T&T to a fellow Caribbean nation, FDI going into Jamaica in 2012 was US$326 million and leaving Jamaica was US$17 million.
InvestTT Investor Sourcing manager Sekou Alleyne, who presented the results of the UN study, said T&T as a country was yet to implement a national investment policy. He said the policy is before the Ministry of Trade, Industry and Investment.Sekou said the policy will benefit the country because T&T will be able to attract investments in a sustainable way and not just because of oil and gas.
RBC Financial Caribbean Group Economist Marla Dukharan, one of the guest speakers at the event, said "gross domestic product (GDP) is growing faster than FDI, which is a good thing." She said FDI is increasing but "when the numerator is FDI and the denominator is GDP, you're seeing a different trend, which means GDP is growing faster than FDI." Dukharan said however, T&T's investment in its productive capacity is declining.
Sekou agreed that T&T needed to grow its productive capacity but added that it needed to be done "in the right places, so we don't have a shot gun approach."
The other speaker, who teleconferenced into the auditorium, was Calvin Wilson, executive director of the Caribbean Financial Action Task Force (CFATF). Wilson said the FATF compliance level in the Caribbean averages between 40 and 45 per cent, which is too low. He said Caribbean countries cannot act in silos anymore and warned that investors could adopt a wait and see approach.