Guideline for doing

Business in the O.E.C.S.

with an Emphasis on
Grenada

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Guideline for doing business in the OECS Caribbean Islands with an emphasis on Grenada

Historical perspective of Grenada and the Region

Christopher Columbus landed on the first of many small islands 1492, there were three groups of
native Amerindian peoples inhabiting in the Caribbean the Arawak, the Carib, and the Ciboney. These
Amerindians had migrated earlier from the mainland of what we now called South America.

From 1536 to 1814 there were numerous battles between Britain, France and Spain over the
Caribbean Islands, during this time there was an almost complete depopulation of the Amerindians in
the West Indies. The Islands changed hands many times, but eventually the British claimed most of
what is today the English speaking Islands.

In the 1640's Sugar came to be known as "brown gold", which led to an estimated 10 million slaves
being brought from West Africa to the Caribbean to work on these estates, thus repopulating this
region. Slavery was abolished in the region between 1833-80; with Cuba being the last of the islands.
After emancipation in the British colonies plantation labour was sought from various sources;
Portugal, China and India. The largest number of indentured servants came from India who settled
mainly in Trinidad and Guyana.

Caribbean Independence & OECS

Jamaica and Trinidad & Tobago were the first British colonies to gain independence in 1962, followed
by the other English speaking islands over the next 21 years. In 1974 Grenada gained independence
and like all the other Islands have since been governed on a Westminster Democratic System of
Government.

The OECS was established 1981 in an effort to deepen the sub-regional arrangements among the
smaller English speaking Islands. The OECS is comprised of Antigua and Barbuda, Dominica, Grenada,
Montserrat, St Kitts and Nevis, Saint Lucia, Anguilla and St Vincent and the Grenadines.

The Objectives of the OECS are to: “promote co-operation among its members and defend their
sovereignty, territorial integrity; promote economic integration; assist them in meeting their
international obligations and responsibilities; and establish wherever possible, arrangements for joint
overseas representation and common services.”[ CITATION Car09 \n \l 9225 ].

Grenada’s Political Overview

From 1974 to 1978 Grenada enjoyed a democratic government, on March 13, 1979, the people's
revolutionary government (PRG) ousted the existing Government and established a Marxist-
Leninist regime and established close ties with Cuba, the Soviet Union, and other communist-bloc

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countries. In October 1983, a power struggle within the government ensued, which let to the
intervention of the U.S Military and Caribbean forces , general elections were held in December 1984
democracy was restored.

Grenada's Profile at a Glance

Lies 12 degrees north of the equator and is made up of Grenada,
Country
Carriacou and Petit Martinique
120 Sq. Miles mainland Grenada with Carriacou and Petite Martinique
Area
13sq miles collectively
Terrain Volcanic and mountainous terrain, Avg Temperature of 80 degrees F,

Population 103,000 people. 47% of the population is 15yrs – 25yrs

Airports 1 International Airport on Grenada and a small airport in Carriacou

Ethnic profile Blacks 90%, Whites 1%, East Indians 3%, and other 6%
Three main deep harbour sea ports, and several yacht berthing
Sea Airports
facilities
Education Compulsory Education, Adult Literacy rate: 96%
Roman Catholic denomination dominates; among others are Anglican,
Presbyterian, Methodist, Baptist, Seven Day Adventist, Jehovah
Religion
Witness, Menonite, Penticostical, Evangelical, Christian Scientist and
Islamist.
Free health care is offered by the Government Hospitals and there are 3
Health care
private hospitals
Unemployment Rate 28%
Processed food, Beverages, Machinery, Fuel, Equipment, Chemicals,
Principle Imports
Pharmaceuticals, Transportation, Building Materials
Nutmegs, Cocoa, Fruits, vegetables, Horticultural plants, Apparel, Spices
Principle Exports
and Condiments, Paints, Paper products, Malt, Animal feed and Fish.
Main Industry Agriculture and Tourism

 Services St. Georges University – Directly contributes 12% of the island’s GDP
Water charges are comparable to other Countries. Energy costs in
Utilities Grenada are amongst the highest in the region $0.95 per kilowatt per
hour for commercial installations.
Modern telecommunications system includes digital technology and
fibre optic systems, international direct dialling and satellite
Telecommunications
telecommunications. High speed Internet is reliable and readily
available in business places and most homes.
Infrastructure Well maintained and networked road system

Commercial rental space Rentals average is ECD $9.00 per square foot
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 Application submitted to Ministry of labour. Fees charged are ECD
Work Permits $500.00 for Caricom nationals, $1000.00 for Commonwealth nationals,
and for rest of world citizens $5,000.00
Apart from the 5 commercial banks, Grenada has a number of licensed
Banking
Trusts, Co-operatives, Finance and Merchant banks
Business Grenada Volume 05/2010/11

Overview of the Most Productive Industries:

(a) Agriculture

In recent years in the Caribbean this sector has been faced with many issues presented by the current
International trends and subsequent requirements.

 Challenges - Trade Liberalisation and technical barriers; increased use of sanitary and
phystosanitary barriers, and natural disasters.
 Concerns - Food safety, quality and pests.
 Opportunities- Rising food prices as a result of increased demand related to global
population, possible diversification into high value products; agro-processing, and expansion
of niche markets, such as organic and fair trade products.

The OECS islands like Grenada, have found it difficult to compete against the world market due to the
high cost of production (labour and utilities), low levels of mechanised and technological systems
used in farming. The absence of those made the cost of production too high and thus Grenada and
the region are unable to compete against the world market prices. Low export of crops, a lack of
economies of scale and available funds for research and developmental support has drastically
reduced the foreign income from agriculture produce to the region.

As a result of Trade Liberalisation, and mainly the WTO ruling against the preferential treatment
offered to bananas from the Caribbean by the European Union, Grenada has experienced a decline in
foreign exchange earnings. Added to that, Grenada experienced a category 3 hurricane in 2004 which
led to the destruction of the Nutmeg industry. Some short crop vegetables and fruit crops are
exported within the region, however small quantities and high production costs currently do not
allow the island to compete on the world market. The Government is now working with farmers to
increase the agricultural production and adding value to the primary products by engaging persons
into manufacturing agro-products.

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 (b) Tourism

The global economic crisis caused decreased travel to Caribbean; however, the Caribbean tourism
industry is now beginning to see a steady increase in numbers. Yahoo news reports that more than 23
million tourists visited the region in 2010, [ CITATION DAN11 \l 9225 ]. This is close to a 5 percent
increase from 2009.

In Grenada the increase has been minimal. The contribution to GDP in 2009 was 71% which is a
decrease over 92% in 2008; any increase seen in 2010 is largely due to the cruise ship passengers
who spend less money when visiting compared to stay over visitors.

Over the last few years there has been an emphasis to enhance the tourist product by adding Eco
tourism which focuses on dive tourism, whale watching, river rafting and inline cable mountain tours.

(c) Trade

Grenada’s export is only 7% of its’ Gross Domestic Product (GDP), most of the business is generated
by importing and trading goods and services. Between 1950 and 1997 Bananas were the main export
if the Island, however USA and Chiquita bananas led the successful challenge against the World Trade
Organization (WTO) with regards to General Agreement of Trade and Tariffs (GATT) and the Most
Favoured Nation (MFN) clause which led to the decline of the banana industry in Grenada and the
region.

The Caribbean has embarked on a number of integration processes to better allow the region to
compete with a global market. Overall the objective of these processes is to enhance competitiveness
and to put the region at a better position to deal with International Trade.

Doing Business In Grenada

The People
The social structure of Grenada is predominantly middle class and can be found throughout the
island. The pockets of very low income persons are mainly in the rural areas and on the outskirts of
the city, likewise there are a few affluent areas made up of expatriates and Grenadians themselves.

The family structure is basically nuclear family structure with some being headed by the father;
however the percentage of single families headed by women has increased over the last 10 years.
This trend is mainly due to the decline in traditional values where persons entered into wedlock
before starting a family, for these reasons most women work outside the home. It is customary for

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adult children to live in the household until they marry; this is due to the loyalty to the family and for
economic reasons.

Many of the values in Grenada stem from the traditional European colonisers, high respect and
regard is given to elders and senior persons in society, there is community collectivism in the rural
smaller communities such as maroons (community clearing of land), the elderly are looked after by
younger family members, and any negative social habits have a long lasting stigma against a family.
There is an acceptance of sexual interaction between members of the opposite sex, however sexual
activities within family members and of the same sex is not accepted.

The racial profile of Grenada is Blacks 90%, Whites 1%, East Indians 3%, other races 6%; these races
are a product of slavery, European colonization and later the indentured servants. However despite
the mixture of races there is no prominent racism or ethnic divisions between groups in Grenada and
most of the Caribbean Islands, except for Trinidad and Guyana who had larger quantities of
Indentured servants from India. Generally Grenadians will reciprocate to the type of greeting
extended to them.

Religion plays an important role in the lives of Grenadians and Caribbean people as a whole. The
predominant religion is Roman Catholic which was introduced by the French and Spanish colonisers
and the other orthodox churches are scattered around the Island. Due to the historic British
Colonisation of the Island the Anglican Church (Church of England) is the official church of Grenada.
Religious values continue to govern the way of life, laws, and influence the public holidays. Sunday is
considered a religious day of rest and most Business and services are closed.

Education
Education in Grenada is modelled on the British system. Education is mandatory and is free from pre-
primary to tertiary levels in public schools; in addition there are a number of private institutions that
offer education from the primary to secondary levels. Approximately 80% of children leaving school
complete the secondary education with a further 50% of these going onto tertiary levels.

There are two universities on the Island, University of the West Indies (UWI) which offers distance
and classroom learning, also the St George’s University (SGU) which is mainly an on campus facility.
Education is valued by the people and seen as an opportunity to improve personal and economic
growth. Currently the SGU enrols approximately 500 regional undergraduates each year with
enrolments increasing in their post graduate programs.

Cultural Characteristics of Business

Grenada lies within the southern chain of islands and in close proximity to the South American
Boarders namely Venezuela, there is a common assumption that the Caribbean and Latin America

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are similar, however, the ascendants are different and as a result the two cultures are differ
completely.

Doing business in Grenada can be challenging due to the many bureautic procedures, inflation, high
tax and duty structures and ‘laissez aux faire’ business approach.

Greetings
In the Caribbean an acceptable business greeting for both male and female is to shake hands, if
persons are familiar they may embrace or kiss each other usually on one cheek. Men generally shake
hands and in familiar situations will tap each other’s shoulders. In a more casual situation greetings
vary among the younger generation of males (due to influences from North America) they will
bounce fists and or give a brief half hug.

Names and Titles

Traditionally Grenada and the region adopted a more formal European business greeting. Persons
who are senior in age and position were greeted by their title (Mr. Mrs. Dr or Miss). In recent years
due to global influences a more casual approach has been taken to calling persons by their first name,
this is widely accepted but not for an initial business meeting or when dealing with senior citizens.

Hospitality/ Entertaining/ Eating Habits

West Indians are generally known as being hospitable and fun loving people. It is not unusual for a
business associate to invite you for a drink (alcohol) or a meal, this is seen as a friendly and
welcoming gesture. If invited to a home it would be considered polite to take a gift in the form of a
bottle of drink or sweets. If invited out for drinks (usually alcohol), it is considered polite if you offer
to purchase alternate rounds of drinks and toasts are acceptable by saying “Cheers”.

Traditionally there are three meals consumed in a day. Breakfast consists of cereals, grains and
breads; lunch is the heaviest meal consisting of starch, protein and vegetables. Dinner is taken is
similar to breakfast. Knife and forks is the cutlery used for dining and the British table protocols are
observed when eating.

Although the different ethnic races exist within the region, the greatest influence on the food has
come from the Africans and Indians. Heavy starched meals (Oil down -National dish) were required
for field slaves and Indian curries and roti’s continue to be a favourite Caribbean dish.

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Appearance and Dress
Due to the proximity of the Eastern Caribbean to the USA, there has been an American influence in
the appearance and dress. Generally due to the climate, a shirt and tie is accepted as business attire,
while women will wear skirts or dresses at knee length or trousers with shirts covering their
shoulders.

It is acceptable for men to wear trousers and a polo or short sleeve shirt in casual situations; women
will wear dresses or trousers in these instances. In formal situations males will wear a dark suit and
tie and women will wear an elegant dress.

Gifts and Bribes

It is not expected for visitors or business associates to give gifts. Most Companies and institutions
have established guidelines regarding gift giving and receiving, generally gifts can be accepted with
the knowledge of the Company and within the parameters of the set policies and guidelines. Gifts are
the form of Souvenirs is often exchanged as an acceptable gift between diplomats.

Time Management
In Grenada like the rest of the Caribbean time is not rigid, while established financial corporations
operate on schedule many of the other business organisations and Government institutions are more
flexible. Workers are usually relaxed, and being a few minutes late is not unusual. The occurrence of
rain usually creates a delay. In social situations it is considered rude to arrive earlier than the
appointed time however, it is not uncommon for persons to be up to half an hour late, and this is not
considered rude to the host/hostess.

Communication (Verbal and non verbal)

English is the official language of Grenada and our written word follows the established English styles.
in rural and informal situations a dialect of broken English/French/ is spoken. Due to the French
influence many expressions are so derived ( i.e. Oui papa- my father, mama guy- to make a fool).

Animated hand movements, facial gesticulations, and head movements are used frequently in
everyday communication. The communication level within Grenada and the Caribbean is a ‘low-
context’, most communication is very explicit and the speaker attempts to verify the listener’s

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understanding of the conversation by repeating and asking questions. Eye contact is generally
maintained, and the fast speaking may cause a visitor to ask the speaker to repeat oneself.

Customs

Manners Generally loud boisterous behaviour is seen as rude in business environment Unacceptable

Tone Warm pleasant and friendly Acceptable

Popular
Entertainment Dancing, Cricket, Football and Movies Acceptable

Music Calypso and Reggae (more recently pop music from 1st world influences ) Acceptable

Health Generally health conscious and exercise is a daily part of life Acceptable
Carnival, Rainbow Emancipation, Independence, ( all marked by public
Festivals holidays and accompanied by food and music)  
Christmas, Easter, Carnival, Corpus Christi, Emancipation, Thanksgiving,
Business Holidays Independence, New Years, Whit Monday  

Driving Left hand side, buses do not observe road courtesy  

Competitiveness  Very low competitiveness, generally motivated by social aspects and not
C monetary gains.  
Attitudes toward  Caribbean People “work to live” J not live to work. Social importance takes
work equal priority to work, works hours are normally fixed.  

Women’s Roles and ‘Male’ outlook

Women play crucial roles in the community as mothers, educators, and provide health care and
emotional support to the family. Traditionally women in Caribbean have been ‘micro enterprisers’,
this still exists in the majority but with more access to education women have seen this as being an
effective means for improving their economic wellbeing.

In families where two parents are present the male is still seen as the head of the household
(influenced on our cultural and religious upbringing). Improvement in the status of women has
influenced children to be raised recognising the equality of gender. This realization and the Global
drive for women’s rights have afforded women in Grenada participation in all business fields. Women
in Grenada can be found in upper management levels, directorships, and in political positions,
however, it is still rare to find women in Chairmanship positions of larger Companies.

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Today Grenada’s Labour laws outline procedures and the Ministry of Women’s & social affairs assist
women ensuring that women and their families receive fair treatment as regards to child care,
equal pay for equal work, maternity entitlements and other such matters. The International labour
Organisation (ILO) has influenced these changes by sensitisation through organisations and by setting
certain criteria within loans and grants.

Business Environment

Business in Grenada at a Glance

Energy costs are the highest in the region, applications take up to
Utilities
approximately 3 weeks for new connections
Commercial rental space Average cost is $EC9.00 per square foot
Application submitted to Ministry of labour. Fees charged ECD $500.00
Work Permits Caricom Nationals, $1000.00 Commonwealth Nationals, Rest of World
citizens $5,000.00
Graduates with at least a Bachelors degree are allowed to move freely
in the region for work purposes, with no work permits required. Others
Caribbean Single Market
allowed free movement are Media Workers, Musicians, Artists, and
Economy (CSME)
Sports Persons)
Crime in Grenada mostly opportunistic, relatively low compared to
Crime
neighbouring Islands and other countries.
There are available for new business start up costs, application must be
Duty Free Concessions
made to the Grenada Industrial Development Corporation (GIDC).
Consumers are charged 15% on goods and services, which is payable to
Value Added Tax (VAT)
Government by the proprietors
A published customs tariff outlines the duties to be paid on port of entry
Port Duties
for various classifications of goods. ( EVL 1% , CSC 5%, CSE 2%)
Employment 40% jobs in Grenada are generated from small and medium enterprises.

Major Trading Partners OECS countries, Caricom Countries, EEC Countries, USA, and China

Business Grenada Volume 05/2010/11

Economics
Grenada is an open economy and is structurally dependent and vulnerable to any downturn in the
world economy. The economy is based mainly on export of services and agricultural products as the
island lack any form of natural resources. The export however, consists of primary products and does
which has potential to increase revenue once value is added to the products. At the moment the
country’s import far exceeds its’ export and as a result the debt owed by the country is 95% of its’
Gross Domestic Product (GDP) way above the recommended 60% by the WTO and other
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international financial institutions. Grenada like most third world country depends largely on foreign
aid from donor organisations.

Environmental Changes Influencing Change in Business in Grenada

Businesses or
Influences Changes Occurring
Industries Affected
Business are seeking produce from non-domestic sources
Poultry, chocolate
Global Sourcing because of cost & quality even though it may be produced
and Coffee
locally/regionally
Eco Tourism i.e.
River rafting and
New Markets Providing unique and different business opportunities
inline mountain
sports
Grenada has been unable to meet the quantities that would Farming &
Economies of Scale give them the competitive advantages in price. Unable to Agriculture &
compete with prices. Shipping containers
Grenada's was negatively affected when the USA
successfully challenged World Trade Organization (WTO)
Government Tariffs with regards to GATT under the Fair Trade act and won the
Banana Industry
and Taxes ruling that the West Indies Bananas could no longer receive
protection by being the primary supplier of bananas to the
UK.
Falling prices and improved services as a result of new
technologies and competition ( 10 years ago there was only Lime, Digicel and
Telecommunications
one provider and the prices were 60% more costly than it is Flow
today).
This has been costly for Grenada as many int'l standards have
Homogeneous been introduced and systems and equipment need to be Agriculture, export,
Technical Standards purchased and training programs developed to satisfy these manufacturing and
requirements.

     

Human Resource
The government has recognised the need to develop a Human Resource policy that is in line with
global business needs. Various training programs have been developed to address this at the tertiary
school level and skills training continue between the private sector and public sector programs

Technical Professional less available, due to the brain drain that these small Islands suffer (educated
persons leave Islands for larger Countries perceived as having more opportunities).

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New Business projects can source upper level management by advertising these positions or by
networking. Rarely would employment agencies contain portfolios for available upper level
management.

New Business
The Grenada Government and the Caribbean are generally very welcoming to new investment
projects. The injections of funds into the small economies by foreign investors are viewed as
opportunities to circulate new monies into the small economies.

In Grenada due to the various laws and berauuracy that exist, the Government has developed
agencies to assist new businesses and investors in opening and operating businesses on the Island.
The Grenada Industrial Development Corporation and The Business development unit within the
Ministry of finance will work with investors to assist in this process.

It is also advisable that investors dialogue with business groups and the Chamber of Commerce to get
the support and business information as current statistics may not always be readily available and
many of the guidelines need to be updated.

Negotiating
Rules governing negotiating are flexible especially within the private sector. However, Government
has some standards procedures regarding negotiations and often select a negotiating team which
may include one or two political ministers along with personnel who has expertise in the field or area
of potential business. Government’s interest is often in the quality and number of jobs which can be
generated from a project and also the viability and the linkages the project can contribute to other
sectors of the economy.

Socio –Political
Grenada has enjoyed a stable political environment for almost the last three decades.
Residents enjoy a democratic environment where two main parties dominate. Persons do not
shy away from voicing their political opinions or show their preference to a political party,
freedom of the press is enjoyed by all.

Prior to the global economic downturn the average Grenadian fell into the lower spectrum of
the middle-class. Today the poverty level of the population is 37.7% with an additional 14.8 %
in the vulnerable line. The economic crisis has had a significant impact on the lives of
Grenadians and major investments are sought after to generate jobs and economic activities
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 within the country. Grenada is considered as one of the few countries that “live outdoors”.
This is said in light of the low crime rate and the level of security that is generally enjoyed
within the island.

What is needed to do business in your Country / Region

Business negotiation Direct and always in person

Understanding Pride
Understanding of costs
Do not speak down to or of negatives of Country to a businessman
especially on first meeting
Learn and appreciate the Taxes and costs structures of commodities
and utilities. This will give you a good reference of the costs of
goods and not cause you to be suspicious when quoted prices that
you would seem unusually high compared to your home Country.

is ‘low-context’, most communication is very explicit in the words

spoken and the speaker attempts to verify the listener’s
understanding of the conversation by repeating and asking
Communication questions.
Friendly and open, relatively informal do not adhere to explicit
Protocol codes of behaviour
Polychromic time setters - Stresses on completion of task rather
Value of came than stress on the schedule time
Usually very centralized, head of Companies or Business make the
Decision making decisions.
Generally trust the accuracy and assume desirable negotiations,
however more recently becoming sceptical due to numerous
Bases of trust scammers.

Risk taking propensity Very conservative risk takers

Deals can be concluded with a handshake but are always
Conclusion of contracts formalized by written agreements.

Body language meetings Loud Boisterous banter and bartering is not desirable.

Competitiveness Conservative and not inclined to "close the deal" at whatever costs

   

Conclusion
This was done to give a brief insight to potential business investors of the, culture and social structure
of the people within the region. The OECS is a democratic, religious and small economy compared to
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Asia, North America and Europe. Grenada like most of the other countries economy is based on
agriculture, tourism and services and has a small production capacity.

As a small undeveloped country there are certain challenges with regards to trade like the economies
of scale, technology and adequate human resource. However, investors can tap into the region and
develop the potential that lies within thus assisting small economies to place themselves in a better
position to complete globally.

Global links have made foreign investment and business alternatives more accessible such
opportunities have facilitated changes in the economy offering improved services and competitive
pricing for consumers. This competition has also diminished local market share and profits of existing
business.

According to Drucker one must know the business environment he or she will be engaged in. He also
went on to say that effective management is about coaching than managing and if this is applied in
any work environment it should be rewarding.

Another world renowned management leadership expert Max De Pree says to be successful in
business “one must understand the mission, the competition and the environment; both the human
environment and the physical environment.” The Challenge for the region and Grenada is to be able
to compete successfully in the global market place and to make Grenada the number one place for
doing business in the region.

Definitions

Westminster parliamentary system: based on the British ) model, with a governor general appointed
by and representing the British monarch (head of state) and a prime minister who is both leader of
the majority party and the head of government.

Oil down -National dish consisting of breadfruit, dumplings, coconut milk, salt meat and callaloo
(green leafy vegetable)

Oui papa- my father,

Mama guy- to make a fool off

EVL – environmental Levi

CSC - customs service charge , CSE 2%

O.E.C.S. – Organisation of Eastern Caribbean States

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