Landscapes that look like heaven on earth, 700 islands, islets, reefs and cays, 30 territories that include sovereign states, overseas departments, and dependencies and a huge cultural diversity are some of the things we might think of when we look at the Caribbean region located in Central America.
But that's not all it is for business owners looking to expand their operations abroad. In this article, we'll try to summarize the main aspects to consider when looking to do business inside this region.
The first footsteps given by Columbus in America took place in this area, where history has had a huge impact on today’s culture. Nos, before diving into any more details, let's look at the countries that compose the Caribbean region:
- Antigua and Barbuda
- The Bahamas
- The British Virgin Islands
- Cayman Islands
- Dominican Republic
- Netherlands Antilles
- Puerto Rico
- Saint Barthelemy
- Saint Kitts & Nevis
- Saint Lucia
- Saint Martin
- Saint Vincent
- Trinidad & Tobago
- Turks & Caicos Islands
- US Virgin Islands
These countries may be classified into 2 different groups: the Greater Antilles that include Cuba, Haiti, Puerto Rico, the Dominican Republic, the Cayman Islands, and Jamaica and the Lesser Antilles that encompass 25 island entities that go from the U.S Virgin Islands in the north to the Venezuelan islands in the south.
Most of these territories share a colonial past, and the legacy of this “metropolitan” influence becomes clear in the formal administrative regulations that shape each country’s internal organization. Some of these places had more than one colonial ruler (Grenada, Guyana, St. Lucia, St. Vincent, and Trinidad and Tobago). Yet, nowadays, the Caribbean region is mainly determined by internal factors.
To comprehend the context of this region it’s important to understand their political and economic reality in terms of individual territories and countries, however small they might seem.
What’s the situation?
A wise first step to check out for a business opportunity in this region is to take awareness of it´s context.
There are 3 administrative categories that apply for the Caribbean countries: independent, “associated” (like Puerto Rico, a free associated state to the U.S.) and “dependent” (such as Aruba). Additionally, there’s a fundamental program to establish a “community” of Caribbean states that has been well reflected on intergovernmental organizations such as the Association of Caribbean States (ACS, founded in 1994]) and the Caribbean Community (CARICOM). Even though they don’t include every Caribbean state, their goal is to promote the cooperation and economic growth of the region.
However, there have been major difficulties to reach an agreement upon a political program, regardless of the common interest areas such as disaster management, tourism, and transport.
It's clear that a far-reaching force affecting the Caribbean is the global economy, specifically, the trade agendas of the European states and the U.S. In fact, the most important foreign influence over the last decade was the U.S. These first world players are now reducing the preferential trade advantages given to Caribbean states to maintain the competitiveness of their own commodity exports. The least developed Caribbean states are the ones who carry more critical consequences.
As we can see, this archipelago made up of almost 700 islands, islets, reefs, and caves give us a scene of great diversity. Thus, on the prospect of doing business here, there are a few negotiation etiquette must-knows...
Pros vs Cons
The first move to move to achieve a successful business deal is to run a SWOT analysis. Strengths, Weaknesses, Opportunities, and Threats. A good place to begin is The World Bank’s Doing Business Indicator.
According to the DBI, a project designed to compare the business environment of different economies all around the world, Puerto Rico and St. Lucia are the best places for doing business in the region. This report quantifies the ease of business regulations so that the resulting ranking will encourage policymakers to improve their country’s norms on development, transparency, job creation, and taxation.
It’s a well-known fact that the Caribbean needs to find ways to improve its human capital just as much as the technological capacity it has to offer to its business environment.
One initiative in this direction was reflected in January 2019 when Minister Marsha Caddle of Barbados announced the creation of a DB subcommittee with the purpose of improving the country’s ranking in the DBI. Jamaica has also announced a clear desire to climb the ranking.
However, even though many countries have started to use the DBI ranking as a policy goal itself, some Caribbean states got left behind in favor of others that have been pursuing reforms more aggressively. Make sure your business project involves one of the latter.
Get to know who’s who
A clever step would be getting familiarized with a simple and sharp description of the country or area within the Caribbean that you’re interested in: what’s the most productive economic activity? What issues are people facing day today? What are some unique features of consumer behavior?
An element that has a business edifying effect in the Caribbean region is the hierarchy. Hierarchy is considered in some markets as a very relevant cultural factor since it defines everyone’s roles and status from a functional perspective. In the context of a business meeting, observing the organized hierarchy is very useful when it comes to understanding the difference between the tasks of the areas of management of a company.
The “How to be a Red-Inker” Protocol
I know. What in the world is a red-inker? A red-inker in cricket is the term for an undefeated or “not out” batsman. See, Barbadians have a lot of their culture attached to the game of cricket. According to Stoddart, B. (2006, 3), cricket draws a massive societal passion…"In Barbados cricket is more than a game which inspires enthusiasm as a cultural institution, it is a way of life in itself". Actually, when crucial matches take place, offices and schools are closed and even businesses come to a full stop...
One of the things that play a crucial role in the outcome of business activities in every market is cultural factors. The key isn’t to ignore them but to perceive and acknowledge them. A set of beliefs, moral values, cultural elements, these are all aspects that hold a vital influence on any particular community and their people’s behavior. And a fundamental goal for today’s international business executives and managers is that of understanding cultural diversity.
When it comes to doing business, we’re not dealing with artificial institutions, we’re dealing with people. Learning about small things can bring huge revenue. Take Barbados. The dress code, for example, is influenced by the two coexisting cultures in the territory: British and African. Suit, shirt, tie for men and dresses for women are the standard office work outfit. Also, they have festival periods on which a variety of music and dances are performed and have become a major tourist attraction.
Caribbean business and national culture are inseparable, so we should take etiquette into consideration. For instance, making eye contact is important to build trust and credibility. It’s not just about verbal communication. The way we look and the way we sound send a message as well. A good example of this is clothing. It’s important to dress accordingly to the occasion, especially in Carribean areas where there’s so much entertainment and so many places to visit: business may take place in a relaxed environment, it’s not necessary to be too formal 100% of the time. Moderation on this is a key element.
Networking and Relationships
With globalization came the development of wider business networks and the need for international cooperation. To prosper in an economically volatile XXI century, relationships have become a top priority.
Relationships have to be built on the basis of mutual trust and respect to transcend different cultural regions. Within the confines of the Caribbean business culture, the objective of maintaining a long-standing personal relationship in order to conduct business is wise. This is how good personal skills enable anyone to work and build ideal business relationships.
Some of these skills might be encouraging other workmates, giving them space to feel comfortable, trying to forge strong ties with important local actors in the specific network of interest, researching carefully anything there is to know about that network. Also, reading through the existing web of relationships so as to place yourself in that web (first, in a hypothetical way) and considering prospective partners is a good idea. Networks are one of the indicators that a business will endure within Caribbean countries.
It is a lot more important investing time in learning how to say things rather than deciding what to say. We can’t emphasize this enough. Even if the essence of business is to concentrate on both aspects, if there’s a problem with the delivery, the content will probably get lost.
Consider business translations services, in order to upgrade the results of business meetings. The translation of documents and emails, coupled with an interpreter specialized in the business at hand will be key in the fight for breaking the cultural barrier.
As stated before, it’s prudent to understand the local values of the targeted market and the language is the main communication channel.
What to do?
When looking at the Caribbean from a business and a financial point of view, it’s recommended to focus on the most profitable areas. Some are shared among the countries of the region like tourism and some others are a lot more particular.
The Dominican Republic gets more visitors than any other Caribbean island (around 4.3 million people every year, to be more specific). Thanks to touristic enterprises, this is one of the wealthiest countries in the Caribbean.
There's also alcohol production. More than seventy brands of rum are produced in Caribbean distilleries.
Nonetheless, agriculture is one of the most lucrative activities. The Caribbean economy has always held the export sector in a high standard.
There´s a broad variety of scenarios involving working in the Caribbean. Self- employment via the internet is one of the most recent. Telecommunications allow becoming an employee for a company in a remote way, as a freelancer or consultant for a foreign enterprise. Clients might be located in any other country while you could run an internet-based business from your computer.
In fact, some Caribbean- based companies hire freelancers rather than employees to avoid oy foreign employment restrictions. It’s important to verify with an expert whether a work visa is necessary or not, although Caribbean countries sometimes reward investments through relaxed residency and citizenship requirements.