By Kimberly Ramkhalawan
November 29, 2022
US One billion dollars! That’s the price tag the Jamaican Government is putting on its investment invites if companies want to enjoy a suite of incentives and have access to the country’s top resources.
The latest strategy was put forward by its Finance Minister, Nigel Clarke even as the country hosted its Invest Jamaica two-day forum this week. Clarke likened Jamaica to potential investors as a matter of “knowing the value of an investment is when passes through a stress test, recovering stronger, differentiating itself by how it has handled itself during the COVID-19 Pandemic”.
It’s in this track record established by Jamaica and the macroeconomic fundamentals in place, Clarke presented an open invitation to investors, willing to put a billion US dollars into the country. He says long gone were the days on incentivizing investments, but the act to encourage such bold moves, will include provisions that allow Jamaica to offer serious investors, making that kind of commitment to the country with a minimum level of jobs created as well, which will allow investors entering this category of business, Jamaica the chance to offer certain benefits done in a transparent manner.
All of this is expected to be laid in parliament as an Act at the end of the current fiscal year, with several investors Clarke says are already lined up in the pipeline.
The Act is expected to come with accompanying regulations that set out in advance the criteria for investing, with no limits to nationality once prospects have met the laid out conditions. Clarke says the resources the country “will be giving up will be so significant, it will be required to be laid in parliament”, ensuring transparency, and counting the costs to ensure it is consistent, going forward in line with the fiscal and debt sustainability framework.
Backing this latest measure, Jamaican Prime Minister Andrew Holness says such an act comes with confidence in its stability of its political system, stability and certainty of its economic and fiscal policies.
And while he mentions that it has not been an easy road to reach this position, Prime Minister Holness, says they are grateful to be in the current position,.
He adds that in improving Jamaica’s business environment entails not just making it “fiscally sustainable, where businesses will not be subject to arbitrary taxation or policies, but an efficient place to do business, with a large part of this efficiency including improving public bureaucracy”. To gain this, Holness says it has adopted and internalized this mainstream in government, and the notion of Jamaica becoming a digital society. Seamlessness, is something he remarks being just as important as stability and sustainability in business, and with its eyes set on becoming the most advanced country in the region in terms of digital platforms, interconnectivity and ICT, Holness says it has put out a plan to build out its broadband infrastructure through the National Broadband Initiative, and to ensure that everyone in Jamaica has reliable fast and consistent service. The Prime Minister shared also on its plans is to include a National Identification System, NIDS, which looks at providing a national digital number for every Jamaican, with the first pilot registration carded to take place later this year. Through this measure, Holness says they envision offering the opportunity to participate in the digital e-commerce sector, functioning online, with government enabled to bring more ease of access its services while encouraging the digital culture. A move that comes after the Bank of Jamaica launched its digital currency earlier this year, opening up payment services and other strategies for ease of digital transactions.
Clarke spoke of the pivotal role the IDB has played in the country reaching this point, and apart from being “the largest creditor Jamaica took a change of course in recent years, while it will need to borrow to roll over debt, and repay debt, it does not envision the stock of debt relative to the size of its economy, growing at the rate it used to grow.”
Clarke says the new partnership with the IDB, gives Jamaica the chance to tell a different story, putting the country in front of investors translating what it is doing into the vision it has for the country, resulting in the birth of the INVEST Jamaica conference.
Tariq Ali, General Manager of the IDB’s Caribbean Country Department and IDB Country Representative for Jamaica, says the country continues to thrive because it continues to focus on implementing macro-economic measures that have allowed Jamaica to advance even in during the pandemic, with the view of coming into an even better position than it was before.
He says while it has suffered immense loses during the lockdown, economic activity have nevertheless been stronger since, with 4.6 percent GDP growth in 2021 according to the IMF, while such economic rebound is also seen in the unemployment rate declining to as low as six percent in April 2021.
This he adds has resulted in the nation getting global praise for its economic shocks while implementing institutional reforms. Proving to be responsive and resilient through actions taken by the government and private sector. However, Ali says in order to maintain this upward progress and longer term economic recovery, it must continue to attract investors and look at diversification, facilitating private sector expansion. Disturbances that continue to be faced globally, Ali says Jamaica remains poised to welcome nearshoring digital activities.
Over 65 companies have set up shop with the intention of providing outsourcing services, with a variety of skilled labour to add to the pool, including ICT enabled sectors.
Ali shared that between 2016 and 2021, total investment and policy-based disbursements from the bank has amounted to US$912m, playing a pivotal role in growing the economy, while providing transformational employment opportunities to its skilled and academic labour resources through investment partnerships locally.
He adds that the IDB has offered a toolkit that offers restrictive trade policies, deficiencies, transportation and logistics infrastructure, along with available financing to help attract this investment and foster SMEs international trade.
All these things tie into supporting government’s objective of faster investment growth and durable debt reduction, helping to realize the IDB’s and Jamaica’s joint vision of a post pandemic recovery sustainable and driven by the private sector.
However, Clarke says critical policies include creating an environment that incentivizes the risk rating of assets to provide more information in the market place, so that decisions can be made, this includes, promoting the policy of privatization of assets, as he says the government views assets being under-utilized or rather perform core functions when better placed in the private sector, this he says include Public Private sector Partnership. One such example he says is the partnership to fund a four-lane 60km highway from Ocho Rios to Montego Bay at the tune of US$800M. This undertaking is expected to come onstream in the next few years, but to be done utilizing an open transparent process with investors.
The finance minister shared that “deepening the role of the private sector he says government recognizes that Jamaica is an open economy, where trade and goods both visible and invisible, account for 80 percent of the GDP in any one year, with every component of every economic activity has a nexus to the border, ports of entry”.
Meanwhile, Jamaica is positioning itself as a logistics hub for the growth and expansion of the oil and gas sector in CARICOM neighbour, Guyana, on the heels of its announcement of finding some 16 Billion barrels of oil, until it builds out its ports. This was just one of the many selling points put forward by Jamaica’s Senator Aubyn Hill, Minister of Industry, Investment and Commerce, as he opened the 2022 Invest Jamaica two-day conference.
Coming of its fiscal budget presentation, Minister Hill says an allocation of an increased $60Billion in expenditure is expected to covered by tax revenues generated from inflows into industries in the country, monies raised without having to tax its population. He adds this is also proof that the country has been able to manage itself well during the pandemic, with its economy remaining buoyant.
Consumer report shows that in the three months to September 2022, business confidence grew by 19.6 percent, marking the highest growth achieved in over 20 years, while the minister remarked that Jamaica had positioned itself below eight other global nations as emerging markets to look at, siting below countries like the United States, Qatar, China, Korea, Israel, Saudi Arabia, Indonesia and the Philippines.
He remarked all of this could not be possible without the business community established in Jamaica, while he championed Jamaica’s Caymanas Special Economic Zone (CSEZ) 650 acres of land for development with access to a nearby port.
While this was just Day one of “The Invest Jamaica 2022 Conference under the theme: “Jamaica, the Nearshore Delivery Hub of the Caribbean””, the forum will feature Jamaica’s investment potential, its global market opportunities, and competitive advantages of key sectors: agribusiness, global digital services, logistics/special economic zones, manufacturing, tourism and finance.