Diasporic Entrepreneurship in the Caribbean - Firm Profiles.pdf Vol 2 | Page 33

Agro-processing Firms

Policy Recommendation to enhance to
Caribbean Diaspora entrepreneurs in the
diaspora markets:
Government
1. Reduce cost of energy for manufacturing
enterprises.
a. For Caribbean businesses to be
competitive input costs must also be
competitive; this does not only refer to
labor costs.
b. Energy cost should be competitive.
Example: Businesses cannot operate
competitively, where energy costs per
kilowatt-hour are 5 times that of main
competitors.
2. Create a buffer to reduce the exorbitant
interest rates that exist across the
Caribbean region that directly Impact
Company’s operating costs. Competitors in
many markets enjoy very low interest rates
that reduce production costs.
3. Assist in the creation of a regional
competitive domestic packaging and
industries.
4. GFI views the creation of a diaspora
investment fund as a “very interesting
approach”, stating that GKCO would
benefit from a much more dynamic Stock
Exchange, and also where there are funds
readily available for venture capital in
companies that are smaller (start-ups).
Many times, the restrictions on business
expansion are due to scarcity of equity.

Firms:
1. Businesses must carefully examine
component costs of production; failure to do
so will remove any competitive advantage
and limit opportunities to compete
effectively in global markets.
2. Firms must ensure that they are sufficiently
financed because:
a. Shipping costs also impact operating
costs and price competiveness.
b. Typical manufactured product in
the Caribbean has to be financed for
about 240 days. Impact of interest
rates/borrowing costs are high and this
impacts overall costs of production.
c. Businesses have to finance raw
materials, stockpiling of inventories,
finance storage of finished products to
meet the customer demands, etc.
d. Also finance of credit duration, while
customer waits to pay within 30 days.
e. Suggests that for Caribbean
businesses, there is an extremely long
duration time to finance international
businesses as opposed to importing
products.

5. Views on Subsidiaries/Grants:
a. GFI suggests need for an environment
where interest rates are low. There is
need to create a macro- economic policy
environment that allows interest rates
to be reduced. Creating an environment
where government is fiscally prudent
is generally beneficial to the public,
rather than subsidizing loans of a few
entrepreneurs at a cost to others.

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