‘Butch’ Stewart cautions against sitting and waiting for an IMF deal
‘Borrowing only buys us a few months’
BY DESMOND ALLEN Executive Editor - operations firstname.lastname@example.org
GORDON 'Butch' Stewart yesterday urged Jamaicans to stop sitting around waiting for an International Monetary Fund (IMF) deal and to get on with the job of moving Jamaica forward through export earning.
"We are all sitting around waiting for an IMF deal to draw down on funds from various sources. All that
represents is borrowing, borrowing, and more borrowing," the business mogul said.
He noted that the country's debt stock based on 2012 figures was US$8.6 billion or J$1.7 trillion, and that the ratio of debt to gross domestic product (GDP) had grown from 18 per cent in 1973 to 128 per cent in 2012.
"We have borrowed out our souls, and sold everything else, without achieving the prosperous Jamaica we all want," Stewart said in an interview with the Jamaica Observer of which he is chairman.
In terms of per capita income, the average earning of each Jamaican (US$5,402 nominal), he said, only Haiti in the region was worse off than Jamaica.
"Dominica is way ahead. The Bahamas is five times ahead, Barbados, St Lucia, everybody really, except Haiti, is ahead."
Since the beginning of the year, Stewart has been sharing ideas drawn from his vast experience as the Caribbean's leading hotelier to help spur Jamaica forward in 2013.
Yesterday, he reminded Jamaicans that it would not be an IMF agreement that would bring prosperity, but "the things we do to earn our way out of our difficulties".
"If we get the policies right and offer Jamaicans the right environment and the right incentives, our investors will export. There was such a time when we placed more emphasis on exports. When did Jamaica change from being a country with a will to do everything to earn hard currency to being a country that is dependent on borrowing?
"When did we lose sight of the need to balance our budget by trying to earn in order to create our own prosperity and lift our citizens to the aspirational standard that everybody craves?" he asked.
"Borrowing only buys us a few months. We have to ensure that Jamaicans are persuaded that risk-taking in export ventures is worth it. Let's stop being a basket case when we can do so much better."
The Sandals Resorts International chairman said if he sounded impatient it might be because he had just returned from a business trip to England.
"Being on that side of the world is almost like looking into a prism and seeing the world from a different perspective. Every country has its challenges, but every country is talking about increasing exports and doing everything they could to increase exports.
"For our part, I have to wonder when did we stop thinking exports and started to concentrate our efforts on borrowing as the way forward? This is the biggest fallacy of the day. Not having our own earnings is why the Jamaican dollar is 94 to one (US dollar) and falling," Stewart argued.
He described as laughable all the talk about tax reform, noting that "all we have really done is to maintain the status quo".
Stewart, who had persuaded late Prime Minister Michael Manley in the 90s that export was the way out for Jamaica, leading to his famous declaration that Jamaica must "export or die", said it was the only thing that could save Jamaica now.
"We just have to be radical and aggressive about incentivising export. Frankly, export performance cannot be worse than it is right now. Let's begin by crafting the necessary policies, many of which can be done overnight, to develop an export economy."
He pointed to the Asian Tiger countries, saying Jamaica has more natural resources than some of them, including our ability to feed ourselves. Yet they had surged ahead based on developing export economies almost overnight.
Suggesting that whenever the chips were down, with good leadership and direction, Jamaicans had always shown their creative best, Stewart said: "We become the most talented and awesome achievers at such times. We are in a position now where we can't afford to fail. And fail we must if we don't start rolling the dice and going for broke on exports."
He said it was important that when Jamaicans invested in the country that they get "the first bite at the cherry".
"We do have a tendency to bend over backwards for the foreigner and diss our local superstars," he added. "Taxing will be the death of us. Let's get smart, like everybody else."
Stewart pointed to Fort Lauderdale, Florida, where businesses are being lured with serious concessions to move their offices and investments to the US borough. Here in Jamaica 'waivers' had become a dirty word while the rest of the world understands the wisdom of incentivising investments.
"You cannot tax the system into success," the business mogul cautioned. "Give Jamaicans a worthwhile incentive and they'd never let you down. In all modern economies, they recognise that unless you incentivise, you'll never be successul in the export domain."