Biography

Donald Taylor MSc, CPA, LLB is currently a full time lecturer at the University of Aruba in the Financial Hospitality and Tourism Management Faculty . This is a recent transition from hotel industry to academia which took place in 2009. Prior to that, he had several years of extensive experience in the hospitality industry in senior executive positions on various islands in the Caribbean for large multi-national companies. Originally from Jamaica, he has worked in Bonaire, St Maarten, Aruba, the Dominican Republic and was among those responsible for the opening of the Marriott Vacation Clubs sales office in St Kitts. At the University of Aruba, Mr. Taylor lectures in Corporate Finance, International Finance, Business Economics, and other related subjects in Finance and Accounting. Mr. Taylor is now in the process of pursuing his PhD on Economic Development at Salise (St Augustine Campus) with a focus on financial intermediaries and their role in promoting self-sustaining economic growth for small island developing states.

Article Title

Financial Sophistication of SIDS

Abstract

The Caribbean Dependency Thought (CDT) school has influenced much of post-modern intellectualism in the Caribbean since the 1960s. Yet there is an evolution of thought as old intellectuals fade away and theories of resilience and independence without disengagement from the metrople becomes the mantra of pragmatism in an increasingly connected world. This paper intends to examine the role of financial intermediaries in the Caribbean as leading alternatives to the structural dependency on tourism, commodities and offshore finance. It favors growth that is endogenous and that drives local entrepreneurship and innovation in an island based self-sustainable manner.

Small island developing states are characterized by under developed financial structures that can place limits on small island economic development. Underdeveloped financial structures are often manifested by the relative shallowness of the local financial system and foreign ownership of those financial institutions and in fact the entire financial system that may not be responsive to local needs for long term investment capital. There is no current research on whether the lack of endogeneity in local financial intermediaries has restricted access to capital or resulted in more expensive capital with the potential dampening effect on economic growth for small islands.

The basis of this paper is to identify and call out those barriers to capital sourcing on SIDS. This research will be confined to the Caribbean. It is hoped that this paper will add to the body of knowledge as it relates to economic and financial structures and development as it relates to SIDS. In addition, the aim of this paper is to inform the basis of policy guidelines to encourage entrepreneurship development in SIDS and to reduce the dependence on foreign direct investment flows (FDI) which leaves the islands vulnerable to external shocks, in the absence of resource capacities.