The world’s citizens have always been beset by risks of different types, but the frequency and intensity of risks from a variety of sources are increasing, especially for emerging economies in Latin America and the Caribbean. Insurance is the preferred recourse for those suffering from unfortunate events beyond their control, but even insurance has its limitations. What are the most effective risk-management tools available today?
The West Indies nation of Barbados offers everything for which an investor could ask: a warm and sunny climate, magnificent Caribbean beaches, opportunities to score substantial profit in rental properties and real estate prices moving in a decidedly upward direction. A quick look at a few of the luxury properties currently available on the Barbados market reveals that this island nation may just be the most attractive path around to enduring prosperity.
It’s not news that many economies of the developing world face barriers to financial inclusion, making it difficult for citizens to both borrow and save; but the good news is that help has arrived in the linking of mobile payments with remittances. From sub-Saharan Africa to Latin America and the Caribbean, mobile money is bringing the previously underbanked into the fold.
As economic conditions return to “normal” in the industrial world, policy interest rates will inevitably rise from zero to “normal”—but not necessarily in Latin America and the Caribbean. Central banks in LAC will need to tailor their monetary-policy decisions to tackle the three-pronged challenge of currency depreciation, higher inflation and deceleration in economic activity, as capital flies away from emerging markets.
Royal Bank of Canada, Canada’s largest financial institution by most measures, is in the process of closing many, if not all, of its wealth-management offices in the Caribbean Community and in other parts of Latin America.
The Caribbean Basin has been famed for its offshore financial services, but they are now, together with the banking systems of the countries in the region, increasingly threatened by international sanctions and legislation that is requiring new levels of transparency in transaction-reporting that could significantly diminish the appeal of the Caribbean for investors.