Bankers warns against use of pension funds to support small business
MANDEVILLE, Manchester – Banker and president of the Manchester Chamber of Commerce, Winston Lawson, has repeated concerns about the Jamaican Government’s use of pension funds to support small business, arguing that at the very least there should be “a suitable guarantee” as a form of protection for pensioners.
In the absence of a guarantee, said Lawson, the Bruce Golding-led Jamaica Labour Party (JLP) Government should discontinue the use of National Insurance Scheme (NIS) funds as a source of loans for small businesses and turn instead to other options, perhaps including the Venezuela-sourced PetroCaribe arrangement.
The Portia Simpson Miller-led People’s National Party (PNP) Government which lost narrowly to Golding’s JLP in the parliamentary elections of September 3, initiated the use of funds from the National Insurance Fund (NIF) as a boost for small business. In the face of widespread criticism, the then government insisted at the time that the pension funds would be adequately protected.
But while noting that traditional funding for small business “is priced at unbearable levels” resulting in a “cycle” of “an almost no win for small businesses”, Lawson argued that the high-risk factor associated with small business made pension funds unsuitable as a source of funding.
“Now whilst we welcome cheaper sources of funding from the Government of Jamaica. pension funds should really not be unduly exposed to high risk investments,” Lawson, who heads the Mandeville branch of NCB, told the Rotary Club of Mandeville at a luncheon/meeting at the Golf View Hotel recently.
“So we face yet again another quandary,” said Lawson. “I would suggest therefore, given the importance of the small business sector and the need for cheaper funding. (that the government) look at two options, either:
. Eliminate the risk exposure to the pension funds by providing a suitable guarantee to the NIF. If such is already in place then they should confirm so and appease those concerned.
. In the absence of a guarantee or the possibility of one, they should discontinue the NIS as a source of funds for the sector and find ways, say within the PetroCaribe Agreement, to assist with the cheaper funding”.
The PetroCaribe facility allows Jamaica and several of its Caribbean and Latin American neighbours to access long-term soft loans linked to the purchase of oil from Venezuela.
In a wide-ranging address, Lawson who is leading a Chamber of Commerce’s Closed to Crime Initiative (CTCI) to assist the anti-crime fight in Manchester urged that people step out of their “quiet corners” and move proactively to combat criminality.
“We would be foolish to believe that our crime problem will be solved solely by the actions of the police. Any model to fight crime in the Parish must be a fully collaborative one to include all of us as stakeholders in the parish.
“We cannot afford to stay in our own little corners and do nothing. For too many of us, crime is never a real issue until we become victims.
“Too many of us are resistant to dip in pockets and utilise our own resources to help with crime fighting, only up until we are the ones staring down the barrel of a gun. and by then it could very well be too late,” he said.
In a progress report on the chamber’s anti-crime initiative, Lawson announced that an “intelligence unit” majority-funded by the bauxite/alumina company Windalco to the tune of $600,000 to be located at the Mandeville Police Station would soon be in place.
Another Manchester Chamber of Commerce initiative involving an entrepreneurial training scheme “Operation Entrepreneurism” through a partnership with the Northern Caribbean University’s Morris Entrepreneurism Centre and the HEART Trust Entrepreneurial Skills Development Centre was also going well, Lawson said.
Fifty existing and aspiring businessmen and women had already been trained of a targeted 500 in Manchester by July 31, 2008 he said.
The entrepreneurial training project was central to the drive to reduce unemployment which in turn would lead to a reduction in crime levels, Lawson said.
Turning to indiscipline among motorists, Lawson said the Manchester Chamber had started preliminary work with taxi associations in Manchester in a bid to bring greater order to road use and in the process reduce traffic accidents.
“We met and agreed on the concept of Manchester being the model in the area of discipline on the roads. We want to look at uniforms for taxi drivers, training, clear and enforced policy procedure for recommending renewals of licences by the associations to the Transport Authority. We want to look at a process for complaints against indisciplined drivers and appropriate sanctions and implementation of such,” said Lawson.
He also threw his support behind calls for the development of a major airport at Vernamfield in south central Jamaica as a viable alternative to the Norman Manley International Airport on the Palisadoes strip in Kingston.
Some say the susceptibility of the Palisadoes to sea surges will make it increasingly unviable as an airport location.