Keith Duncan recommends JMMB model to gov’t
NOTED local money manager, Keith Duncan, says the Government is applying stop-gap measures to counter Jamaica’s economic problems instead of implementing a long-term development plan and is recommending the formula used by his firm, Jamaica Money Market Brokers (JMMB), that has made it one of the Caribbean’s leading financial services companies.
“The Government needs to run the country like a business, so that the budget is framed within the context of some long-term perspective that can give Jamaicans something to look forward to… then the pressure would be more bearable,” Duncan told the Kiwanis Club of Stony Hill’s 15th anniversary meeting held at the Knutsford Court Hotel Monday evening.
“The Government seems to have forgotten about the National Industrial Development Plan that had been produced some years ago,” Duncan added, “because, when we met for our summit at the Ritz Carlton some months ago, there was no articulation of a long-term perspective that said ‘this is what we need to do to take us from here to there’.”
The summit to which Duncan referred was held in March this year between top Government officials and about 50 senior private sector executives. It was designed to encourage investment by corporate Jamaica and to enlist their backing for tough measures that the administration was preparing to impose in this year’s budget as a start to closing a public sector deficit that is running at about eight per cent of gross domestic product (GDP).
The deficit was projected at the start of the last fiscal year, which closed on March 31, to run at about two per cent of GDP. It was revised to 4.2 per cent of GDP in the face of increased expenditure to repair flood damage, but in December, Finance Minister Omar Davies revealed that the gap between Government’s spending and all its revenues would be more likely 8.4 per cent of GDP.
He subsequently announced that he would keep the deficit to eight per cent of GDP and reported at the Ritz Carlton retreat that he was on target — the first move to closing the gap by 2006. Davies has signalled a deficit of six per cent of GDP for 2003/04.
But since he tabled the $262-billion budget last month, 60 per cent of which has been earmarked for debt servicing, Davies and the administration have been soaking up a lot of criticism for failing to cut Government spending.
The private sector has also chastised the administration for imposing a four per cent cess on imports which, the sector insists, will stifle business.
On Monday, Duncan, the deputy managing director of JMMB, recommended that the Government adopts JMMB’s business model that has seen it grow from an initial capitalisation of $20 million in 1992 when it was founded by his late mother, Joan Duncan, to $54 billion today.
“The JMMB model begins with a vision that we and all our stakeholders want to buy into and from there, we set ourselves goals and develop a plan to achieve those goals,” Duncan said.
“In the same way, the Government needs to share the vision of all Jamaicans for prosperity, less crime, more employment, equal opportunity and mutual respect. With that vision in mind, all sectors can make inputs into the development of a national plan.”
Duncan told his attentive audience that “the national plan should be operationalised in the same way we pursue our business plan at the JMMB”.
He also recommended that the Government picks winners or areas of priority such as tourism, agri-business, information technology, bauxite/alumina and shipping.
A “strategy map”, he said, should be drawn up for each area of priority with specific targets identified so that “report cards” can be used to track performance of all sectors involved in achieving the national objectives.
“We want to be able to track how much is being achieved and what more we may need to do,” Duncan said, adding that “the sectoral report cards are essential for promoting accountability and transparency while countering corruption”.
He also noted that targets should not only be set and monitored for Government ministries, “but for all agencies, private sector entities, non-governmental organisations and citizens’ groups who have an input into the success of achieving specific goals in an area of priority”.
Duncan advised the Government to “set big, airy audacious goals” as the JMMB was doing by planning to expand throughout the Caribbean and into North America, Europe and Asia. He gave as an example, the conversion of some sugar-cane lands to golf courses.
Said Duncan: “Such a bold step would achieve several goals at once — convert sugar into a more viable industry; target the up-scale tourism market in order to boost hotel occupancy; and reposition Jamaica as the Caribbean’s finest golf destination.”
“We are all shareholders in Jamaica, and all of us share common goals”, Duncan said. “It should, therefore, not be difficult for the Government to come up with a vision statement around which we can all unite for achievable goals”.