The cries of pregnant cancer patient Melissa Evans echoed throughout the Port-of-Spain Magistrate’s Court yesterday after she was told she had to spend a night in prison after being denied bail in
You are here
Howai: Economic potential in venture capital
For restoration of economic growth and achievement of economic transformation, Caribbean countries must be innovative and move beyond conventional economic expansion and stimulation, says Finance Minister Larry Howai. “We have to challenge ourselves to facilitate a complete change from the usual way of doing things, much like the old adage which advocates that ‘different times call for different solutions,’” he said as he recommended venture capital as one method for the region to realise its true potential. In the feature address at the Third Caribbean Business Executive Seminar at the Hyatt Regency, Port-of-Spain, Howai described venture capital as a unique asset class with a unique ability to drive innovation and competitiveness.
The minister, who focused on the theme of the seminar, Growth and Competitiveness—The Role of Venture Capital in the Caribbean Transformation Agenda, told participants venture capital financing was “a policy initiative with invaluable economic potential for job creation, innovation and overall economic performance. “While it is important that Caribbean economies focus on key macroeconomic objectives of economic growth, job creation, price stability and external viability, it is imperative that our focus does not omit economic transformation and sustainable development. “We can no longer ignore the profound impact that major transformations in the global economy, climate change and new information and communication technologies will have on the region’s future, and how inseparably connected our fortunes will continue to be to these developments beyond our shores,” Howai said.
He added that it was now an opportune time to re-examine the region’s financial ecosystem to ensure it remained relevant to the needs of economic development but it was also important to understand the realities of the venture capital industry. The minister said: “I am aware of at least one venture capital operation which has closed because of the inability to attract suitable projects that meet their commercial criteria. “The solution therefore also requires us to step out of our strict venture capital regime and embrace additional structures, including business incubator schemes and angel financing and, at a different level of sophistication, private equity funds, to name a few.”
Howai said Government was an essential player in creating a conducive financial ecosystem. He added that the Caribbean’s venture capital ecosystem was undeveloped compared to Latin America where there was the legal, tax and regulatory framework: fund managers with track records, developed capital markets and vibranch and attractive SMEs and entrepreneurship cultures. He urged stakeholders to “work collaboratively to reinvigorate strategies aimed at building a robust venture capital ecosystem in the Caribbean. “Thus, the region’s venture capital experience would be able to mirror some of the success stories internationally, making the Caribbean home to some of the most unique knowledge-based industries in the world.” The seminar was organised jointly by the Caribbean Centre for Money and Finance, the Caribbean Development Bank, the T&T International Finance Centre and First Citizens Bank. The aim was to develop a more in-depth understanding of venture capital and its use as an effective complementary financing tool to accelerate entrepreneurial development.