The government wants to focus on local direct investment (LDI) to improve the country’s Foreign Direct Investment (FDI).

The rationale is that foreign investors look for locals to lead the way.

“We know that FDI is important to grow our economies because we do not have the local savings,” stated permanent Secretary Ministry of Industry and Commerce Reginald Budhan at a workshop geared to improve Foreign Direct Investment (FDI) on Wednesday in Kingston Jamaica. “But I am of the view that people will not invest in a country unless locals do it.”

He explained that “LDI creates the environment for FDI” in part because local entrepreneurs help to lobby for improvements in the investment climate.

“So they roll the wicket for the FDIs,” he analogised.

Supporting LDI Budhan said would not only attract import led FDI but also foster export led FDI by Jamaican companies.

“So both go hand in hand,” he said.

FDI into Jamaica fell by 26 per cent in 2009 to just over US$1 billion, according to figures released in July by the United Nations Conference on Trade and Development (UNCTAD).

However, Jamaica still ranks highest in FDI per capita in the Caribbean at US$530 followed by Trinidad & Tobago at US$391 and Dominica Republic at US$214 (based on averages between 2003-2010), according to Spanish consultant Celia Ortega analysing data from the World Bank at the workshop held at the Pegasus Hotel. Ortega is an investment promotion officer with the World Bank with responsibility for the Global Investment Promotion Benchmarking (GIPB)report.

Ortega said that the big investors in the region over the period included Sol Melia Hotels and Restaurants (Spain), The Bank of Nova Scotia (Canada) and British Petroleum (UK). She doesn’t expect Spain to be a big player in the region for the near future due its own economic downturn. However she noted that resilient sectors included those in alternative & renewable energy, financial & business services and communications. Whilst declining sectors included software & information technology services, transportation, metals, coal, oil and gas.

Ortega is part of the Investment Climate Advisory Services of the World Bank Group which hosted the three-day workshop attended by 14 Caribbean nations. The workshop aimed to increase FDI by upgrading skills and systems at national investment promotion agencies and helping them improve their scores in the GIPB 2011. Jamaica received a 65 per cent score in the latest GIPB report for 2009 which equates to offering “good practises” but above 80 per cent would have been considered as offering “best practises” at an investment promotion intermediaries (IPIs). Jamaica’s score has however improved from some 48 per cent in the 2006 report.

The report also stated that a potential investor has a 50 per cent chance of getting a response when he calls a Caribbean investment promotion agency requesting information and assistance. “As a result, the investment promotion centers in the region scored poorly relative to those in Latin America,” stated a World Bank release on the workshop.

Sancia Bennett-Templer, president of Jamaica Promotions Corporation said better investor services could help the Caribbean attract much more foreign direct investment. “The Caribbean has much to offer international markets and production chains, but we have to do a better job of marketing it,” she said.

The workshop brought together representatives from Antigua and Barbuda, Bahamas, Belize, Curacao, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago. The initiative was supported by the Jampro, the Caribbean Association of Investment Promotion Agencies and ProInvest, a partnership programme developed and undertaken by the European Commission on behalf of several countries in Africa, the Caribbean, and the Pacific.

“Small countries like those in the Caribbean cannot succeed alone,” said Dixie Rampersad, Caribbean Association of Investment Promotion Agencies Senior Investment Promotion Advisor quoted in the release. “Only together we can create industrial clusters, attractive markets, and business networks needed to draw the levels which can bring lasting economic transformation. And, building that cooperation is an important function of the workshop.”