FOREIGN DIRECT INVESTMENT
Because in the Caribbean we generally run fiscal deficits, this behaviour drives deficits on the current account of the balance of payments. The net outflow of USD as reflected in the current account deficit, is financed on the capital account of the balance of payments, usually via sovereign debt and by foreign direct investment. It is argued that in the region we do not benefit from FDI to the extent that we should, based on concessions granted, inadequate transfer of knowledge, etc. We propose an FDI-driven growth model which does not rely on concessions. Instead, the foreign investor pays the usual corporate tax rate, and instead of paying it all in cash, they can pay it partly in equity, which the state then places in a sovereign wealth fund. This sovereign wealth fund over time can be used / leveraged to finance development projects.