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THE STAR BUSINESSWEEK NOVEMBER 9, 2019

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IN THIS EDITION OF

Prime Minister Allen Chastanet signs the MOU alongside David Candib, Vice President, Development & Operations, Carnival Corporation and Miguel Reyna, Associate Vice President, Commercial Development, Royal Caribbean Cruises Ltd. (Photo courtesy Carnival Corporation)

SBW THE STAR BUSINESSWEEK

Inside St. Lucia’s Country Financing Roadmap: Island is first to trial new financing model

When Saint Lucia’s prime minister addressed the United Nations in late September he focused heavily on an issue that has long been a concern of Caribbean nations – obstacles to sustainable development. Page 3

ST LUCIA TEAMS UP WITH CRUISE GIANTS

Saint Lucia has joined forces with two of the world’s biggest cruise companies in a move that government hopes will further boost the already thriving tourism sector, create scores of new jobs and lay the groundwork for bigger and more innovative ships to dock at the island as the global cruise market expands. The prime minister signed an “historic” Memorandum of Understanding with Carnival Corporation and Royal Caribbean Cruises on the sidelines of last week’s Florida-Caribbean Cruise Association conference in Puerto Rico. The agreement consists of a joint venture between all parties to manage the current cruise facilities in Castries and design, construct and manage a new port in Vieux Fort. BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT Continued on page 4

Discussions at the World Economic Forum 2019 centred on the environment and building sustainability

Is Brexit Brilliant or Bad for Caribbean Students?

When Boris Johnson became the UK’s prime minister in July he vowed that the country would leave the EU by October 31, ‘do or die’. Despite many twists and turns in the months since, it’s now clear that the commitment won’t be kept. Page 5


THE STAR BUSINESSWEEK

NOVEMBER 9, 2019

MARINE TOURISM

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PROUDLY PRODUCED BY STAR PUBLISHING CO (1987)

CASTING OFF WITH YACHT TOURISM BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

13 th December 2019 PRESENTED BY

Royal Saint Lucia Turf Club Vieux Fort www.rsltc.com

Thoroughbred Racing in the Helen of the West including The Pitons Cup -The Caribbean’s Richest Prize at US$150,000!

Plus Free Concert immediately after featuring Meshach

Jah Cure

Patrice Roberts and

Teddyson John Project

feat. Ezra d Fun Machine & Ricky T

Tickets available online at

stlucia.org and at The Cell outlets island-wide

Yacht tourism offers a great opportunity for tourism growth in Caribbean waters (Source: Pixabay)

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he growing popularity of tourism-by-yacht offers an immense opportunity for tourism in the Caribbean. But enticing visitors on a yacht to make port in a particular destination is more complicated than simply offering a dock and cocktail upon arrival, especially with the number of competing ports and attractions on offer within the region and beyond. The work required to make a nation enticing to yachting tourists isn’t as complex as the calculations required for arrival by plane or cruise ship, but consideration must be given to the broader economic and environmental factors that form the full picture of this growing industry, alongside the benefits it can bring.

CLEAR SAILING IN THE CARIBBEAN For many nearby major markets, the Caribbean is the perfect destination for yacht tourism. Islands within the region are at a sufficient distance from Mexico, the US and Canada to make any journey a real adventure, while also providing the assurance that help is never far away in the event of a mishap. What’s more, the opportunity to pursue inter-regional sailing and go island-hopping ensures that any sailor has an abundance of local ports from which to choose. The growth of yacht tourism has not only delivered a cash injection to

the Caribbean but, at times, has been a saving grace. Following the savagery of Hurricanes Irma and Maria in 2017, estimates that up to 90 per cent of the British Virgin Islands’ charter fleet of yachts was damaged were made more harrowing by the prediction that up to 60 per cent of them would be writeoffs. But the staging of the BVI Spring Regatta and Sailing Festival thereafter saw over 70 yachts and their crew take to the waters, some journeying from as far away as the UK and France. This event did not undo all the damage of the hurricanes, but it helped keep businesses in operation, confirm that the Caribbean remains an iconic destination for tourism, and that it was once more ‘open for business’.

CERTAINTY SURROUNDING THE OFFER Alongside the global citizen set, yacht tourism appeals to adventurers. Travellers who arrive with more modest budgets and more humble vessels (think sailboats with a tall mast instead of glamorous yachts with a jacuzzi on deck) bring immense enthusiasm just the same. Then there’s also the ‘once in a lifetime’ market – those who may charter a boat for US$ 10,000 a week from a hub like Yachtico in Boca Raton, Florida, that has 5,000 yachts in its inventory, and set sail for a Caribbean island. Continued on page 6


SUSTAINABLE DEVELOPMENT

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NOVEMBER 9, 2019

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INSIDE ST. LUCIA’S COUNTRY FINANCING ROADMAP: Island is first to trial new financing model BY CATHERINE MORRIS, STAR BUSINESSWEEK CORRESPONDENT

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hen Saint Lucia’s prime minister addressed the United Nations in late September he focused heavily on an issue that has long been a concern of Caribbean nations – obstacles to sustainable development. He also announced that Saint Lucia would be the first country to partner with the World Economic Forum (WEF) to develop a Country Financing Roadmap (CFR) and shared his hope that, by developing such a plan, Saint Lucia would become a model for other countries in the region struggling to meet their Sustainable Development Goals (SDGs). Saint Lucia has seen a myriad of development strategies over the years, assisted by a range of both regional and international agencies, which leaves many wondering how the CFR is different, and how it will deliver real and lasting change. WHAT IS THE CFR? SIDS like Saint Lucia have a complicated relationship with development financing. Seemingly generous programmes that come with heavy political and financial strings attached; inadequate delivery mechanisms that swallow up funds before they can be dispersed where they are most needed; costly projects that merely add to a country’s already significant public debt – these forms of financial support can come with a heavy cost. And yet they remain a vital component of SIDS’ survival. Extremely vulnerable to weather events and economic global shocks, island nations cannot go it alone. “A lot has been done on development finance but there is still a persistent US$ 2.5tn gap annually to meet the SDGs by 2030,” says Terri Toyota, deputy head of the Centre for Global Goods at the WEF. “We believe there are two key conditions to fix this mismatch: improve co-ordination and put countries and governments back at the centre. It is not about the money, but about how to ensure the money gets where it is most needed.” The CFR intends to bridge the SDG financing gap. Aimed at mobilising capital, the plan looks to broaden sources of financial support and develop an integrated approach with the backing of all parties, from government agencies to private sector bodies. Toyota calls it a “pivot from funding

The CFR is a collaborative effort between the Saint Lucian government and the World Economic Forum (Photo courtesy World Economic Forum)

to financing” and says that, rather than moving towards attaining the SDGs by one project at a time, the CFR seeks to take a more holistic approach, creating the right enabling environment to attract high-quality investment and private capital. “Instead of focusing on Official Development Assistance and public finance for SDG-related projects, it considers all sources of capital (domestic and foreign, public and private) that can be mobilized and how they can be better allocated and blended for greater impact and sustainability,” she explains. “It entails a more comprehensive and interlinked understanding of the pipeline of projects, programmes and policy interventions that are aligned with, and can facilitate, the achievement of the country’s SDGs. Instead of having many different projects operating in silos, it strives to improve internal and external co-ordination so that all efforts are geared in the same direction and towards systemic change, maximizing positive externalities and spill-overs.”

THE ROLE OF FDI Foreign Direct Investment is a key element of the strategy, and Toyota believes Saint Lucia’s best opportunities for overseas capital lie in infrastructure, renewable energies and sectors relating to the blue and green economies. But if FDI is to deliver on its potential, Saint Lucia must first ensure these investors are greeted with a welcoming, business-friendly environment. Given that the country is sliding down the World Bank’s Ease of Doing Business

rankings – from 91 in 2017 to 93 in 2019 – there is obviously need for improvement in many areas. Toyota says the WEF and Saint Lucian government have begun consultation with the private sector and international players to assess the strengths and weaknesses of Saint Lucia’s investment landscape and adds: “We believe measures can be taken to improve both the enabling environment and the instruments available to investors. One way through which the Country Financing Roadmap helps create a more investor-friendly environment is by improving communication and co-ordination for effective action and targeted innovation. The Country Financing Roadmap strives to be a bridge connecting thought-leadership on the global architecture for development finance and the concrete realities and needs at the local level.” The team behind the CFR is hoping that the Global Future Councils meeting in Dubai in November, hosted by WEF, will also help chart the way forward as discussions will centre around enabling smaller investment opportunities in developing markets. While it is still gathering information, the WEF remains determined that Saint Lucia’s CFR will translate into tangible benefits at the grassroots level. Toyota says: “The Country Financing Roadmap is not an academic nor an analytical exercise. It has a very pragmatic approach to engage stakeholders, co-ordinate efforts, amplify initiatives that are working, and foster multi-stakeholder agreements to overcome some of the major bottlenecks preventing capital to flow to Saint Lucia.”

REGIONAL LEADERSHIP It is very early days for the CFR. The team will conduct a “baseline assessment” on SDG financing over the next year. This will be followed by a series of roundtable discussions with stakeholders and, eventually, the development of an action plan. At every step, the initiative will be driven by Saint Lucia’s government. Toyota explains: “A critical element for a successful holistic strategy is that the government is at the centre of it, determining which are the priorities, and putting the interests of the country and its people as the main goal for all.” Saint Lucia’s drive towards financial self-determination was, in part, why the country was chosen as the region’s CFR test case, according to Toyota who says: “The successful development of the Country Financing Roadmap requires political will, commitment, and alignment of national priorities to SDG. We found it all in Saint Lucia.” The WEF is hoping other Caribbean nations will follow suit once they are able to identify and track Saint Lucia’s successes under the CFR, particularly given the prime minister’s current role as Chair of CARICOM. Toyota says: “Saint Lucia is an excellent prototype for Small Island Developing States. We hope the development of Country Financing Roadmaps in Saint Lucia will generate cross-cutting learnings and innovations that can be impactful for other SIDS as SBW well.”

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INFRASTRUCTURE DEVELOPMENT / CRUISING

ST LUCIA TEAMS UP WITH CRUISE GIANTS Continued from page 1

Prime Minister Chastanet signed the MOU during a ceremony on October 21 at the annual Florida-Caribbean Cruise Association (FCCA) Cruise Conference & Trade Show in San Juan, Puerto Rico (Photo courtesy Carnival Corporation)

ACCOMMODATING GROWTH Overhauling Saint Lucia’s cruise product is not just a matter of aesthetics. Given the country’s soaring cruise numbers, it is only a matter of time before the current facilities become overwhelmed and insufficient. This year Saint Lucia welcomed a record-breaking number of visitors with over 36,000 stay-over arrivals in August alone. The cruise sector fared even better, recording over 140,000 cruise visitors in March. Saint Lucia’s tourism boom is in line with overall growth in the cruise sector as a whole. Both Carnival and Royal Caribbean have enjoyed healthy profits in recent years which is good news for Saint Lucia as 75 per cent of its cruise business comes from those two companies. According to Royal Caribbean, cruise tourism is the fastest growing segment in the market and Caribbean cruises in particular are expected to grow by 50 per cent in the coming decade. Around 30 million passengers are expected to take to the seas in 2019, with more than a third of that number destined for the Caribbean. The market is now worth around US$ 60bn globally, according to Cruise Industry News’ 2019 Report which comments: “The industry

was launched on Caribbean cruises and the foreseeable trend is that the region will continue to dominate.” Accommodating this year-round and steadily expanding industry, many Caribbean islands are in the process of extensively upgrading their ports. The Bahamas, which recently welcomed Royal Caribbean’s CocoCay private island, will partner with Carnival to develop a new port in Grand Bahama; St Maarten is building a new terminal and renovating its current facilities to help pick up more business in 2020 and St Kitts is nearing completion of its second cruise pier. Montserrat has chosen to avail itself of development financing, rather than the standard privatisation model, to address issues at its port. The government of Montserrat is partnering with the Caribbean Development Bank and the UK Caribbean Infrastructure Fund to finance its US$ 19.5mn port development. The first phase is expected to be completed in 2020 and the new port open for business in 2022. Additional funding will be provided by the European Union. While admittedly a smaller-scale project than the total overhaul of ports seen around the region in recent years, the work will allow

bigger cruise ships to dock more securely at Montserrat’s difficult-to-navigate harbour.

PRIVATISING PORTS Cruise infrastructure is a costly business. Out of reach for island governments with budgets in the red, it is hardly surprising that the terminal transformations around the Caribbean are largely bankrolled by the cruise industry behemoths. These giants of the seas have staggering profits and a vested interest in ensuring their

The exact terms of the joint venture between Saint Lucia, Royal Caribbean and Carnival have not been released so the details of how it will be financed and operated are not in the public sphere

passengers are greeted by well-equipped and inviting ports. The relationship between Caribbean nations and their cruise company benefactors is depicted as a win-win for island tourism, but is this really the case? While much of the financial burden is transferred to private sector partners, this is typically balanced by concessions from government in terms of taxes and regulatory requirements. Private partners run ports as commercial enterprises, protecting them from the political whims of governments yet they also have a history of squeezing local businesses – charging high rents on port properties and/or demanding fees for promoting local operators to passengers. The cruise business is no stranger to controversy thanks to its predatory practices in destinations throughout the region and the accompanying problems such as pollution and over-tourism. Despite this, the fact remains that companies such as Carnival and Royal Caribbean have the spending power, the experience and the expertise to deliver modern, efficient cruise terminals in destinations that haven’t upgraded their infrastructure to keep pace with market demand. The exact terms of the joint venture between Saint Lucia, Royal Caribbean and Carnival have not been released so the details of how it will be financed and operated are not in the public sphere. Given the uneasy relationship between island governments and cruise ship firms, and the unequal bargaining power around the negotiating table, transparency and communication will be key as the project progresses. ENSURING GAINS Another challenge, going forward, will be luring those passengers off the ships. The government is hoping that creating a new port in Vieux Fort will help disburse some of the predicted tourism revenue into the deprived communities of the south – creating employment, supporting small operators and encouraging new, long-term business. The average cruise ship visitor spends US$ 116-158 a day, compared to the US$ 200-250 a day from air arrivals, according to the Caribbean Council. If Saint Lucia is to reap the rewards of a privatised port, that spend must be maximised onshore. In this, the government is hoping its efforts to transform and grow the alreadyestablished cruise sector will neatly align with its recent push towards so-called “village tourism”. Offering something uniquely Saint Lucian to tourists – showcasing the island’s culture, history and heritage – is particularly vital for cruisers who are accustomed to seeing the Caribbean from the rail of a ship. Those who sail from island port to island port need to see something truly unique if they are to be enticed into the communities where their dollars are most needed.


STUDENT IMMIGRATION

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IS BREXIT BRILLIANT OR BAD FOR CARIBBEAN STUDENTS? BY ED KENNEDY, STAR BUSINESSWEEK CORRESPONDENT

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hen Boris Johnson became the UK’s prime minister in July he vowed that the country would leave the EU by October 31, ‘do or die’. Despite many twists and turns in the months since, it’s now clear that the commitment won’t be kept. It’s the latest chapter in a series of deadlines missed on the UK’s path to leaving the EU. After failures by UK lawmakers to pass a Brexit Bill, another extension was obtained with the EU, and a national election called. The new Brexit date is tentatively January 31, 2020 if the Bill is passed, but it remains unclear whether the journey to this deadline will play out any differently from all the others prior. What is certain is that upon Brexit occurring there will be implications for foreign students from the Caribbean who seek to pursue higher education in the UK. In the interim, the ongoing turmoil of a looming Brexit is having a damaging impact. Even if an October 31 Brexit is not to be, now is a good time to consider this issue in context.

UK EDUCATION BY THE NUMBERS The UK currently has around 460,000 foreign students studying within its borders, generating US$ 25bn annually. For many in the Caribbean, the UK has long been an attractive destination for study given the shared political links, in complement to the family heritage and other connections many students from the region hold. Foreign students are also a growing demographic generally. The UK Higher Education International Unit counted 2,071,963 foreign students worldwide enrolled outside their country of citizenship in the year 2000. By 2011 that number had more than doubled to 4,265,579. The rising personal wealth and economic power of rapidly growing nations in Asia ensures that the opportunity for international study outside a university student’s nation of origin will continue to grow in years ahead. Brexit has delivered some good news for such students as the UK government looks to a post-EU existence, with the announcement in September of a twoyear post-work study visa. This will offer successful applicants who have studied in the UK the opportunity to remain for two years after graduation while they look for work and start their careers. It also promises to be something of a stopgap for the UK government as it braces for the likelihood of a brain drain of EU talent post-Brexit. Although this new visa will entice some students, the prospect of Brexit as a whole deters others. According to a study by higher education company QS, one in five

Oxford University is one among many UK universities that may be negatively impacted by Brexit (Source: Pixabay)

prospective international students would be put off studying in the EU if Brexit occurs, just as one third would be more likely to consider the UK for study if it does not.

OTHER OPTIONS ABROAD Unlike professionals who may look to the UK and dream of working there ‘one day’ with an indefinite fixed date that could occur anytime in adulthood when the stars align, most students considering university immediately following high school don’t have the desire or chance to simply sit back and wait year after year until the Brexit issue is concluded. So, if not the UK, where may these students look to study? North America has always been popular. So too Latin America, with nations like Brazil where, in 2017, five of the region’s top ten universities were located, according to the Times Higher Education Latin American University Ranking. Increasingly, nations in the Asian region are also fostering closer ties, with Latin America now the fastest growing source market for foreign university students in Australia. Higher education institutions don’t exist simply to grant credentials, but also to advance research and cultural ties, and drive innovation and new commercial opportunities. For an institution like

the University of Leicester, which in 2015-16 played host to 18 students from the Caribbean, or the University of Southampton which played host to 13 students from Trinidad and Tobago during 2016-17, the contribution they can make to academic and student life from a national and regional perspective is important. Any diminishment of their relatively small numbers can do a disservice to their communities internationally, as well as see them and others at UK universities miss out on invaluable cultural engagement and exchange. So even if other nations and regions

This will offer successful applicants who’ve studied in the UK the opportunity to remain for two years after graduation while they look for work and start their careers.

benefit from additional demand, owing to a diminished interest in British study, ultimately all have an interest in seeing the UK performing well within this sector internationally. In the end though, action here all comes down to London and Brussels.

AN ACTUAL EXIT OF THE BREXIT ERA? Whatever happens going forward, recent years of British politics will surely be looked on by history as something akin to the ‘Lost Years’ that Japan has experienced since the early 1990s. It is estimated that between 2016 and 2018 the UK lost US$ 30bn, a sum in excess of the budgetary contributions it has been making to the EU that Brexiters hoped to reclaim. Now there is an election set for December 12, 2019 with Britons hoping it will break the stalemate. Polls at the time of writing suggest the Johnson government will win with a large majority, but polls have been wrong before – they were for the Brexit vote. The risk is real that the election will deliver ‘more of the same’. If that’s the case, the long-term prospects of work and study post-Brexit for members of the Caribbean family could be promising, but the ongoing uncertainty of Brexit will do no favours meantime to students near or far.


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CASTING OFF WITH YACHT TOURISM Continued from page 2

change, and its potential to diminish the tourism industry in the years ahead. One of the greatest challenges in this sphere is the pursuit of a uniform policy. In other regions of the world, like Europe, or in major nations like the United States, there’s an easier avenue for the development of a region-wide framework (allowing for the fact that continental US adjoins both the Atlantic and Pacific Oceans) that encourages a consistent approach to environmental regulation and conservation. Even if some critics would say the EU and US are not yet doing all they should, the mechanism exists for such a policy to be pursued. The path to a uniform policy on yacht tourism regulations and sustainable sailing is far more complex in a Caribbean region with nearly 30 nations.

The Marina at Christophe Harbour in St. Kitts offers secure, alongside mooring, 24/7 dockage access, a deepwater harbour with wide turning basin, in-slip fuelling, and ample power for superyachts up to 250 ft. The marina provides onsite customs clearance and immigration services — a warm welcome to owners, captains and crew visiting or homeporting at Christophe Harbour.

In targeting this market, a nation like Saint Lucia could increasingly appeal to the same audience that is enticed by the country’s abundant water sports activities and its hiking. But consistency from one year to the next will be critical. This is something the nation has had some challenges with over the past decade. In 2011 yachting restrictions were eased, but in 2014 tightened again. Certainly Saint Lucia isn’t alone in this space. There’s also the issue of docking fees. Although the Caribbean can generally offer a more attractive price than ports outside the region, with early 2017 reportedly seeing the Hemingway Marina in Havana charge around US$ 1.60 per foot of boat compared to US$ 7.50 per foot in Miami, once a yacht is in the region there’s no shortage of ports from which to choose. A key part of a nation’s challenge in leveraging its tourism assets is deciding what else it wishes to offer (or not offer)

alongside yacht tourism. For example, the Isle of Man has generated substantial media attention for its tax concessions offered to HNWIs who import private jets into Europe for lease. In recent years it has allowed owners of such jets to receive 100% VAT refunds, and the scheme has proved lucrative, seeing over US$ 100mn claimed back in 2018. Yet there has been criticism by the EU, with legal experts flagging such an arrangement as being open to legal challenge. For any Caribbean nation envisioning a ‘package deal’ that provides mooring for a yacht in complement to easy banking and even a CIP offering, the Isle of Man is a case study for better or worse in what unfolds when luxury transport and favourable local taxation arrangements are combined.

THE LAW OF THE SEAS Although the growth of yacht tourism has some real promise for the region’s

tourism economy, it needs to be considered alongside the environmental impacts of increased traffic. For Caribbean nations this is a particularly critical issue given the threat of climate

Christophe Harbour in St Kitts is an example of this opportunity turned into action, with the launch of six new berths in October 2018, created in response to growing demand, and thereafter offered for sale for US$ 6.25mn-7mn

SMALL INVESTMENT FOR STRONG RETURNS For Caribbean nations to continue growing yacht tourism offerings, it must be recognised that it’s not only the beauty of the waterways or the attractions onshore that entice sailors, but the ease of mooring and resources available for refuelling and repair. Recent years have seen numerous Mediterranean nations engage in infrastructure upgrades to service their growing yacht tourism industry. Although any maritime infrastructure build is never a small undertaking, the advantage of upgrades for yacht tourism – over developing more substantial facilities such as cruise ship amenities – is they can be smaller in scale, and more rapidly created. Christophe Harbour in St Kitts is an example of this opportunity turned into action, with the launch of six new berths in October 2018, created in response to growing demand, and thereafter offered for sale for US$ 6.25mn-7mn. For Caribbean communities and nations without the inclination or finance to upgrade cruise amenities, upgrading yacht facilities offers a way to make a small investment that taps into a growing market that should continue to grow substantially. Star Businessweek will be watching with interest to see which regional ports are next to get underway with such works.


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St Lucia Teams Up With Cruise Giants  

Saint Lucia has joined forces with two of the world’s biggest cruise companies in a move that government hopes will further boost the alread...

St Lucia Teams Up With Cruise Giants  

Saint Lucia has joined forces with two of the world’s biggest cruise companies in a move that government hopes will further boost the alread...

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