Jamaica: land of the Brave (Few)
TWO weeks ago, I read a published report on data from the United Nations that in 2011, Jamaica outperformed the Caribbean in foreign direct investments. According to the report, Jamaica received US$242 million in Foreign Direct Investments in 2011, a 5.8 per cent increase over the US$228 million in 2010.
And I have to ask myself why are foreigners lining up to invest in this country when most Jamaicans are seeing doom and gloom? Most, being the operative word.
Entrepreneurs such as Gordon ‘Butch’ Stewart and Lascelles Chin have revved up their organisations to take advantage of opportunities while many run for cover. The Stewart-led ATL Group has embarked on an expansive buildout in Kingston and Montego Bay. The company’s “Unbeatable” campaign covers its media, electronics and tourism interests and speaks to their vision for Jamaica – unbeatable.
The Chin-led Lasco Affliated Group of Companies have similarly expanded its physical foot print in St Catherine to the tune of US$24 million and added 250 jobs. Why are Butch and Lascelles so confident? I would hazard a guess that they know what our foreign investors also know — that markets are cyclical and not linear. Change is inevitable and investors must learn to recognise change in market conditions. And even more important, investors must learn to adapt to change to protect their wealth and possibly profit from it.
Part of the problem is that scared entrepreneurs don't want to back what they perceive to be a stagnant economy where the prospective financial returns are so low, in part because the still high exchange rate makes our relative wage costs high, and in part because growth prospects are so poor. But this state of affairs is reinforced by their own collective decision not to invest.
One of the ways many scared business persons react is to hold USD. However, what if we get the IMF agreement and the same scared business persons have to sell their USD at a loss or have to buy goods from the people that were investing? This is not farfetched given that in the June 2012 Moody’s Investor Service report, the international ratings agency gave an outlook that was positive. Interestingly, Moody’s reaffirmed Jamaica’s stable debt rating after the 2012/2013 fiscal budget was read in May.
So what does that mean? Are foreign entrepreneurs and a few local entrepreneurs seeing things opportunities that don’t exist for the average business person? I don’t think so. What they see is the Jamaica we have, warts and all, presenting opportunity for the brave. The way ahead is mission hard, but not mission impossible. The way ahead requires a shared vision by our political, financial and business leadership and then the willingness to make common cause and take the risks to achieve it.
Gary Peart is the chief executive officer of Mayberry Investments Limited. Contact him at email@example.com