Yesterday, the Pension Industry Association of Jamaica (PIAJ) held its annual luncheon, with Prime Minister Dr Andrew Holness as its guest speaker.

In her opening remarks, the organisation’s energetic president, Sanya Goffe, articulated the noble purpose of the industry: to ensure that working Jamaicans can retire with financial security. She noted this is not easy, as “it requires sound investment decisions, strong governance, prudent risk management, and a regulatory framework that is both rigorous and responsive”.

She added, “It requires administrators, managers, and trustees who take their responsibilities seriously, and an industry that holds itself to high standards.”

Critically, she observed that the deeper challenge is one of reach and adequacy. “Too many Jamaicans remain outside the formal pension system altogether. And too many of those who are within it are contributing at levels that will leave them with savings that fall well short of what they will need in retirement. These are uncomfortable facts, and they deserve to be stated plainly. Expanding coverage and improving retirement outcomes must be priorities, not aspirations that we revisit periodically, but concrete goals that shape how we approach policy and regulation in the years ahead.”

Her point that these are not problems the industry can solve alone is key. Widening participation will require policy intervention, a critical role for incentives to encourage long-term saving, and a genuine collaboration between industry and Government, due to the complexity of the issues involved.

Long-term capital is key to Jamaica’s economic development. The pension sector manages Jamaica’s largest pool of long-term capital. With the right investment framework, as Goffe noted, that capital can both provide for individual retirement and contribute to Jamaica’s development. “Infrastructure, productive enterprise, and the deepening of local capital markets are all areas where pension investment can play a critical role,” she said.

A similar set of issues exists with the National Reconstruction and Resilience Authority (NaRRA). Jamaica’s reconstruction from Hurricane Melissa is not a problem the Government can solve alone, and NaRRA will require a true revolution to succeed.

Instead of the current siloed approach, it must drive a new framework for how existing ministries work with each other. Melissa has shown the urgent need for their collaboration to all Jamaica, and the unprecedented US$6.7-billion funding package from the multilateral development banks will require mammoth changes if it is to be fully used, as the multilaterals will not change their procurement rules just to suit NaRRA. In short, NaRRA’s success requires a revolution in the public service.

To make the vision described in his budget speech a reality, the prime minister will also need to finally achieve the long-awaited “social partnership for transformation”, widening the participation in decision-making beyond just the political directorate and a few individuals — from the traditional major actors to a more community-driven approach.

Critical issues include creating the right incentives to encourage long-term investment, with the nearly 50 years of waiting for the downtown renaissance being exhibit one — one of the potential counterparts for the long-term savings of the pension funds.

The complexity of the issues involved demand genuine collaboration between industry and Government in a long-term problem-solving approach — not a talk shop — focused on solutions. The inhabitants of the parishes devastated by Melissa demand no less, not to mention Jamaica’s urgent need to adapt to climate change.

Indeed, these issues of capital market mobilisation and new governance for development are in no sense unique to Jamaica, they exist right across the English-speaking Caribbean basin, where the alarm clock is ringing ever more loudly.

In my July 9 Jamaica Observer article last year, ‘Will the ringing of the alarm clock cure Caricom’s deficiency?’, in commenting on the 49th Regular Meeting of the Conference of Heads of Government of the Caribbean Community (Caricom), I noted that former St Vincent and the Grenadines Prime Minister Dr Ralph Gonsalves urged the Caribbean to “learn from Jamaica”. While Dr Gonsalves was referring to the crime rate, Jamaica’s capital market development can also be an example for the region. This now needs to be accelerated, however, as the prime minister stated in his speech yesterday, and urgently include the rest of the Caribbean.

‘A Time for Action’ is the title of an over-30-year-old Caricom report and a key theme of Afrexim Bank’s conference in The Bahamas two years ago, which, incidentally, is scheduled to be in St Kitts this year (Jamaica next year?).

The Bahamas Government faces an election on May 12 in which it will be judged as to whether it has achieved enough on a set of issues very similar to those facing Jamaica, such as energy, debt, productivity, public sector wage and transformation, as well as the upgrading of its tourism product, to name only a few.

The original Caricom report is based on the example of the European Union, which celebrates its integration achievements this week as Europe Day. The analogy of the “alarm clock” was the new US Administration waking Europe up, which, if true for mighty Europe, is many more times the case for our small region.

Jamaica should adopt a ‘Give First’ strategy with its Caricom partners to encourage a regional Caricom capital market in pursuit of the creation of a virtual Caribbean Sea. Caricom, and Jamaica in particular, needs to take a Usain Bolt-type approach to getting things done by becoming the alternative “Gateway to the Americas” as the leader in implementing digital technology, artificial intelligence, and creating a true culture of entrepreneurial innovation supported by our own regional capital market.

Last year, US tech entrepreneur and author Brad Feld, in an interview with fellow tech entrepreneur Martin Babinec (see my article ‘EAB shows the way forward’ last week on his founding of Entrepreneurs Across Borders for more on Babinec), stated that in creating a technology innovation system, one needs to be willing to put energy into the system without knowing what you will get back, which, he argues, is fundamentally different from paying it forward, “defined as somebody did something for you so you did something for them”, perhaps better described by the African word “Ubuntu”.

More anon.

Keith Collisters