Investment incentives plain common sense

Sunday, May 12, 2019

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The World Bank's commitment to Jamaica, as outlined in Mr Axel van Trotsenburg's article on this page, is most encouraging.

According to Mr van Trotsenburg, the World Bank's vice-president for Latin America and the Caribbean, the bank will expand its financing by US$140 million in order to further support Jamaica's efforts to strengthen the economy, build resilience, and support human capital development.

“This financing package will be for a series of two operations to help Jamaica be better prepared to mitigate the financial impact of natural disasters and build stronger infrastructure, and an additional project to strengthen social protection,” Mr van Trotsenburg states in the article that largely commends Jamaica on its positive economic growth performance for 16 consecutive quarters.

Indeed, as Mr van Trotsenburg so correctly states, “Jamaica has shown a macroeconomic turnaround that is quite extraordinary” after decades of high debt and low growth.

We all know that getting to this point was not easy. Much sacrifice was made by the populace and the Government, therefore we need to take great care to avoid eroding the gains that have basically placed us on the launch pad for the kind of economic growth that will be meaningful to all Jamaicans.

That point was made by Mr van Trotsenburg who argued that bringing greater prosperity to all will necessitate a further boost to the investment climate, strengthening of economic and climate resilience and more investment in people to build human capital.

While Mr van Trotsenburg has pointed out that the National Competitiveness Council has adopted a road map to fast-track reforms to improve the business environment, we must reiterate our advocacy of incentives being offered to investors that are mutually beneficial.

We have, in this space, pointed to a number of such initiatives in the United States, among them New Jersey convincing Forbes magazine to move 350 jobs from New York with an offer of US$21.1 million in tax incentives over 10 years. The New Jersey Economic Development Agency had calculated that Forbes' move would result in a net estimated benefit to the state of US$72 million over 20 years.

Here in the Caribbean, we have seen the Government of St Vincent and the Grenadines defending its decision to grant a 15-year tax break and other concessions to Jamaican-based firm, Rainforest Seafoods SVG Ltd, that has promised to invest EC$10 million in a fish-processing facility there.

St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves made it clear that almost all the concessions given to Rainforest are concessions given to manufacturers in his country and to hoteliers, “people who invest” he emphasised, adding that under the arrangement Rainforest must purchase fish and other seafood from local fisher folk.

It's not rocket science. It's just plan common sense.

Mr van Trotsenburg has pointed out that World Bank's 2019 Doing Business report ranks Jamaica among the best countries globally in the area of starting a business.

Our aim must be to top that list.

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