MTI ColumnPUBLISHED IN APRIL 2005 | |
THE DO'S AND DON'T'S OF ATTRACTING FOREIGN INVESTMENT"EVEN AS IT ACTIVELY SEEKS new sources of foreign investment, Trinidad & Tobago must strive to maintain an excellent working relationship with existing foreign investors. This will ensure that these investors expand their current investment, and even look for altogether new opportunities, in the T&T economy." That's the advice to all government ministries and agencies involved in the never-ending quest for foreign investment, from investment specialist, Richard Banks, Founder and Managing Director of LCI Investment Marketing. According to Mr. Banks: "It is critical that host countries continue to support their established foreign investors. This goes a long way towards developing trust and confidence between the foreign investor and the host country, and encouraging new investors to come." The Importance of "After Care" He notes that many developing countries do not focus enough on "after care" of foreign investors, which is critical to keeping them happy and encouraging them to expand their business interests. Mr. Banks says this is a proactive approach, because efforts at investment promotion will be more effective if focussed on investors already located in the host country. He underscores the importance of having clear guidelines about the investment process and the roles of investment promotion agencies, as well as a stated policy on "after care" for foreign investors. "A clear policy guideline leads to transparency, and clarity in expectations on the part of the investor," he explains, "with regard to the responsibilities of the investment promotion agency." It takes time…
Information is key Another critical element in the process is providing potential investors with as much information, in advance, about the investment approval and regulatory requirements. "This gives the investor a better idea of how long the entire process would take. But," Mr. Banks cautions, "host countries need to ensure that the process won't take too long. Delayed decision-making on the part of public officials is very frustrating for investors, particularly if they have met all the necessary requirements stipulated by the host country." Market your country right In addition to pitching potential projects when wooing an investor, host countries (such as Trinidad & Tobago) need to market themselves effectively, based on the key needs of the investors. Mr. Banks points out that in today's world, most investors are efficiency seekers - driven by the need to operate at lower costs, while obtaining higher productivity and using new technology. ?
| |
For further information, contact: Corporate Communications Specialist |
Mr. Banks says a major mistake made by investment seeking countries is to equate the decision to invest in a country with automatic start-up for the project at hand. He explained that it takes at least two years to successfully woo an investor and bring them to the point where they decide to make an investment in your country. He noted though, that if it takes an investor more than two years to make up their mind about investing in your country, following the initial wooing, marketing and promotion, it might simply be that they are not really all that interested in the venture. "Once an investor's mind is made up, it would take another two to five years before the investment is off the ground, in terms of site selection, establishing a plant, hiring a workforce, etc.," he says, "and this comes once the investor survives all the red tape inherent in the process, and receives favourable results on his feasibility studies." According to Mr. Banks, the way that the public sector interacts and treats with investors goes a long way towards speeding up the decision to invest in a particular country, and getting that investment on the ground. The investment specialist says project-driven investment initiatives are a country's best bet in wooing investors. His advice, therefore, is for host countries to pitch potential projects and ideas when courting foreign investors, in order to immediately capture their attention.
Richard Banks recently acted as facilitator at a one-day investment seminar titled: Investor Targeting and Corporate Development Support, jointly hosted by the Ministry of Trade and Industry. The participants were drawn from various government ministries including: Agriculture, Finance, Foreign Affairs, and Trade and Industry; as well as from state agencies, such as TIDCO, E-Teck and the National Gas Company. Mr. Banks served as a facilitator and moderator at many of the Discussion Panels at the recently concluded 2005 Euromoney/LatinFinance Caribbean Investment Forum, held during April 4th and 5th at the Hilton Trinidad and Conference Centre, which saw roughly 600 participants.