Export Free Zones Act
The Export Free Zones Act No. 15 of 1999, was passed in the House of Assembly on June 24th 1999.
Information services is one of the prescribed activities which may be carried out in the Free Zone and items that may imported free of customs duty in the Free Zone are computer hardware, software and other information technology materials and equipment.  The Act refers to "Authority", meaning the  port authority established under the St. Vincent and the Grenadines Port Authority Act, having the right to enter into contracts with public utilities or other service provides to provide for the supply of the following services, such as water, light, power, telecommunications and any other public utilities.  This implies that those companies setting up informatics facilities in the Free Trade Zone (which most likely will be at Diamond Industrial Estates discussed in the IT Geographics section of this report) will have the authority to contract with whomever they desire for telecommunications services. (2) This was mentioned as well by Apollo Knights of the Ministry of Communications and Works (MCW). According to the MCW, with respect to the Free Zone, consideration should be given to the provision of direct satellite links through earth stations, direct connection to the fiber optic network and placing the "free zone" on a critical grid (3)
Another important aspect of this act states that "The Authority may provide for the reception, storage, processing and transmission of data other than those goods or data which are prohibited for importation, storage, or manufacture in a Free Zone". (4)
 

Governmental plan through the Ministry of Communication and Works (MCW)
The MCW seeks to develop the sector as part of its overall economic plan.  The Ministry recognizes the  importance of the IT sector, most specifically in the area of Informatics, based on currents trends in global trade and in telecommunications, and as well has recognized the need for the diversification of small island economies such as SVG.  The Ministry believes that SVG can effectively compete in knowledge intensive industries and thus has included in its strategy the development of an "Informatics Sector".  The main players of such an initiative would be the SVG Chamber of Industry and Commerce,  C&W, and DEVCO, the Development Corporation.  The Ministry has defined informatics as the application of IT to information processing, transformation, transmittal and use.  Informatics services utilize information processing, manipulation, or presentation as the core activity creating value.  The strategy undertaken by the MCW will focus on improving the strength of the sector  through a  public-private sector partnership which addresses the following:
1. Increasing computer literacy and creating a pool of workers for the industry (through Informatics Training Program which is currently under development as part of the World Bank Project).
2. Revising the laws or policies that impede or could impede foreign investment or participation.
3. Making telecommunications competitive.
4. Marketing SVG as a site for informatics operations.  This would done in conjunction with other OECS countries. (5)

In a telephone conversation with Apollo Knights, I asked him to comment in December 1999, in writing, as to what the government's initiatives were at the moment regarding information technology.  He responded in a subsequent email:
"Regarding Diamond, The government has already passed a free trade zone act.  It should be signed by The Governor General this month. As soon as it is signed it will be available to the public and become law. With this act it will be possible for companies that are operating within the trade zone to establish their own external communications links to facilitate their operations e.g. Vsats, Earth stations. This will provide direct links with countries such as the U.S, hence bypassing C&W and their high rates. The Trade zone will looking to attract companies that are operating Call centers, Data processing, software engineering etc.
Please note that our new telecom legislation will be introduced in the first quarter of 2000.  In summary this will provide the framework for a regional regulatory body in the OECS along with national commissions in the five member countries involved in the telecom reform project. Certain services will be liberalized as soon as the legislation is enacted, with full liberalization in 18 months.  The new telecom legislation along with the free trade zone act will set the stage for proper development of the Informatics and IT sectors in the member countries. We will also be passing new legislation for Fair trade and E-commerce in 2000."(6)

Meeting with Mr. Claude Leach, Executive Director, Development Corporation (DEVCO)
DEVCO is a one-stop shop for promoting local and foreign investment in SVG.  It promotes join ventures between Vincention nationals and non-nationals by identifying reputable, efficient and compatible partners.  Mr. Leach expressed his views on the idea of marketing SVG as an offshore information processing location.  He believes that informatics will work in SVG with some adjustments in physical infrastructure (there is presently no existing physical structures to house these operations) and although  no legislation has been passed yet, except for the Free Zone act, he says the government will follow  the recommendations of the World Bank study in its legislation. 
The World Bank study, which was for all the countries in the Eastern Caribbean,  suggested that the countries interested in  promoting increased investment in the IT area, needed to introduce legislation as well as practices that would support the expansion of such an area.  The areas of "constraint" and suggestions were as follows:

• Clear and concise guidelines need to be established and published on the issue of work permits.  Most of the OECS governments lack these things which makes the process seem arbitrary and subject to factors outside the normal legal requirements.
• Land and stock ownership restrictions need to be based on objective standards and criteria need to be set out in legislation.  At the moment, each Islands ALien Landholding Act prevents non-nationals (individuals and companies) from from owning certain amounts of land, or entering into a lease for a period of more than one year without a license issued by government.   Again, as in the case of work permits, there needs to be a certain amount of transparency.  Furthermore, the financial burden of obtaining such a license is high and the cost is incurred before the applicant knows whether they will be approved. 
• Tax incentive programs need to be established in a context other than the free zone act. 
• Free trade zones established (done for SVG)
• Eliminate restrictive biases that confer unequal costs and benefits upon particular types of information processing companies. (7)

Mr. Leach's only real concern was that the marketing efforts not focus mainly on data processing, and  that SVG try to market itself as well to more value-added activities such as software development.  His concern was mostly due to the fact that data-processing companies tend to focus mainly on cost of labor and the minute they locate another area that costs less, they would relocate.  He feels that hosting more knowledge intensive industries, like offshore software development, would enable a technology transfer and offer more benefits to the economy and people of SVG.   (8)