KINGSTON – I feel a great sense of pride to be able to welcome all of you, both local and overseas investors, fellow members of the Cabinet and Parliament, members of the Diplomatic Corps and public officials, to the Business and Investment Forum.
This Forum, in which we will explore Today’s Opportunities, Tomorrow’s Success is, in an era of openness and transparency, really the monthly meeting for February of the Development Council.
I established the Development Council as a sub-committee of Cabinet to coordinate all aspects of the country’s policies and programs to spur economic growth and job creation. In 1996 it was established to provide central direction, co-ordination and monitoring of the implementation of the National Industrial Policy. Meetings of the Council are normally restricted to members of the Cabinet, key public sector officials, and more recently, private sector representatives. I am especially happy to see key players in the local and business community, and foreign investors, who are involved in critical areas of our economy.
This special Forum is meant to expose you, the media, political representatives and other public sector officials, to the positive developments taking place by way of investments in various sectors, and the wide range of opportunities that they offer for growth.
This Forum has been organized to:
– Sensitize investors [local, regional and international] to the wealth of investment opportunities available in Jamaica.
– Demonstrate to the audience the direct benefits arising from on-going initiatives, including linkage and supply chain opportunities, improved market access, broadened knowledge and skill base, and increased employment.
– Outline the progress made in re-positioning Jamaica within the broader international market, as a preferred business and trade partner, based on our strengths and advantages.
– To highlight the importance of Jamaican corporate entities, professionals, providers of services and skilled workers, to recognize the many opportunities that arises with the advent of the CSM [E].
– Instill confidence in the local business community especially, so that it can become more active in investment activity and grasp the available opportunities.
– To raise public awareness as to the country’s positive development prospects and benefits that will accrue.
All indications show that we are now experiencing record levels of investment flows and a robust business environment, as we enter what is the third phase of the National Industrial Policy. Some of the indicators are:
– 17th place ranking as a destination for foreign direct investment [World Investment Report], which has made us the Caribbean’s investment mecca.
– A US$3.5 billion portfolio of projects covering tourism, mining, ICT, manufacturing, infrastructure and educational services. It does not include a number of capital large investments, required for the energy sector but are currently at the planning stage.
– 12th place in terms of technology transfer from foreign direct investment [World Investment Report].
– 10th place in ease of regulations in doing business [The World Bank].
– 16th place in financial structure according to A. T. Kearney.
– 1st place in the Caribbean for near-shore operations serving the US.
– Increased demand for a wide range of goods and services from sectors that are linked to tourism and other growth sectors.
These positive prospects have not come about by accident, but are the direct results of the clear, coherent and consistent policy framework laid out in the National Industrial Policy, which I launched in 1996.
Under the Policy, we had identified, through an intensive process of consultation with all social partners, 5 strategic industry clusters that cover the major sectors, and which would lead the thrust to put Jamaica on a path of high investment and rapid economic development. Investment is the main driver of economic growth in Jamaica.
The journey to this point where we are now in an investment boom, has not been as easy and has taken somewhat longer than we had originally contemplated.
Quite frankly, the sequence of steps that we had planned, including the stabilization of the macro economy, had not anticipated certain serious challenges which we experienced, particularly the problems in the financial sector that caused a setback.
We are now, however, at a very favorable point, where:
– the macro-economic reforms have delivered a functioning, efficient, liberalized foreign exchange market; foreign exchange controls are a thing of the past;
– our large foreign reserves have contributed to a sharply reduced external volatility factor for the economy, allowing us to have been able to cope with the disruptions of several hurricanes, floods and even drought simultaneous with sharp increases in oil prices;
– we have enjoyed the longest period of price stability in several decades, due to prudent monetary policies;
– we are well on the way to balancing the budget through fiscal restraint and with the cooperation of all sides, as reflected in the MOU.
These factors have given rise to increasing levels of confidence by the financial markets. This is reflected in lower interest rates in Jamaica and better terms for recent bond issues by the government.
Two recent issues of GOJ global bonds have been heavily oversubscribed at lower interest rates and with longer maturity.
The one issued earlier this week was gobbled up at an even lower interest rate for a 30-year period, the most favorable instrument issued by the government.
The strategies to stimulate investment and growth have also included liberalization of key economic activities and a framework for competition that has allowed for increased private sector participation in the economy.
The divestment of state assets has also spurred private investment in infrastructure such as water, airports, highways, traditionally the preserve of the State. It is evident in telecommunications, where we now boast a state-of-the-art system in a competitive marketplace.
Reform of the public sector through the modernization program has raised efficiency levels of agencies that facilitate business, leading to Jamaica being ranked #10 by the World Bank in its “Doing Business” Report.
The promotion of brand Jamaica and the reputation of our island as a leader in the tourist industry are bringing us rich rewards. The massive infrastructure development program has created a secure platform to enhance the profitability of investments in tourism and other major sectors.
Incentives for the targeted strategic industries have helped to improve our competitiveness. The provision of incentives for tourist attractions, for the first time, has generated increasing interest, which will complement the investments in hotels and other accommodation in the industry.
The system of skills training by HEART-NTA, with its emphasis on meeting the requirements of the market, is providing a trained workforce in a range of industries, including tourism, ICT, mining, and a range of other services.
The boom has been made possible by the efforts to promote investment according to a clear strategy of targeting those industries and activities such as tourism and mining where we had competitive advantage, and others where we could develop that advantage based on the talent and creativity of our people.
In this strategy of targeting industries for investment, we emphasize our advantage:
1. A strategic geographic location in relation to the sea lanes that makes us the ideal Caribbean hub, linking North America and Europe to the Caribbean and Latin America, for efficient transportation of people and goods.
2. A state-of-the-art telecommunications infrastructure that offers an environment for sustainable development.
3. The port of Kingston which is in the forefront of industry trends, with a technological, secure and well managed world-class port facility.
4. Two conveniently located international airports, which are being transformed to handle vastly increased numbers of tourist and business travelers.
5. Modern, reliable utility services.
6. An affordable, trainable, and highly adaptable English-speaking workforce. 7. A modern and efficient financial services sector, underpinned by a strong legislative and regulatory framework.
8. The natural talents of our creative Jamaican people which account for the renowned and international acclaim of our performers in the fields of sports and entertainment.
In a short period of time, the port of Kingston has rapidly expanded its capacity, and with its 5th expansion phase now underway, is about to double its capacity to 3.2 million TEUs as it moves up quickly in the ranks of the world’s leading ports. In its planned next phase that will involve the Fort Augusta development, its capacity will move to 5 million TEUs, which will then allow it to achieve the state of a World Mega-Transshipment Hub.
We now have a distinctive niche to become an international financial services sector based on the physical infrastructure already in place. This embraces the telecommunication system, a program for training highly skilled and certified human resources, and a financial services sector with the appropriate regulatory framework. Indeed, we already have major firms undertaking knowledge services in Jamaica and this is a foundation on which this new sector can be developed.
The developments which I have outlined clearly demonstrate that the economy is in an expansion mode, and that business opportunities will abound for both local and foreign investors.
The tourism sector, which has become the lead driver of the economy in terms of investment, employment and foreign exchange earnings, accounts for the largest share of new investments taking place and which are planned for the next five years.
Others will spell out the specifics in terms of number of rooms, value of investment, and number of direct and indirect jobs to be created by the new investment activity.
I can simply point out what we all know, which is that tourism is linked to nearly every other sector, and therefore, with an anticipated 50% increase in its room capacity we can expect to see huge growth in demand for a wide range of goods and services, e.g.:
– Agricultural products and processed foods
– Manufactured products, including chemicals, furniture, beverages, etc.
– Ground transportation and tours
– Landscaping services
– Art and craft
– Personal services
– Financial services
– Housing and real estate
– Cultural heritage products
These opportunities are available to micro, small, medium and large Jamaican enterprises, but they must properly position themselves to grasp them. Already, JAMPRO has organized linkage seminars to put investors in touch with local providers of goods and services.
Expansion in tourism will offer a platform for the re-development of our cultural heritage sites: Spanish Town, Port Royal, Seville, Falmouth, Lucea and so on. These represent serious investment opportunities for local businesses and private-public sector partnership. They are critical to the diversification of our product offerings, the competitiveness of the industry and to its earnings and employment-generation capabilities.
In tourism our producers have on their doorstep, the market for goods and services. This represents a vehicle for diversification of our agriculture, particularly in the areas formerly limited to the production of traditional export crops, where we enjoyed preferential treatment, but which are fast disappearing.
Cricket World Cup 2007 offers yet another set of opportunities for local producers, as visitors from across the globe will come to Jamaica. It will offer unprecedented exposure. I invite our producers to become more involved in the structured program being led by the local organizing committee and Jampro, to ensure that they meet the required standards and qualify to be providers of goods and services.
The Caribbean Single Market, which came into being last month, is opening new economic space for our producers of goods and especially services, where we have competitive advantage. The increased market size and the freedom to establish businesses and for labor to move freely will bring exciting prospects for Caribbean economies and peoples.
Over the years, we have been building a modern competitive economy in the global marketplace. Let us capitalize on today’s opportunities to guarantee tomorrow’s success.