For its per capita income, Singapore is in the world's top five countries. Their success was not by accident, but by the deliberate, purposeful policies of Lee Kuan Yew on education, government integrity, and increasing their value-added services globally. Today their people enjoy a per capita income that exceeds US$72,000.
Even though Jamaica and Singapore were once British colonies, receiving our independence three years apart — Jamaica in 1962 and Singapore in 1965 — our per capita income is approximately US$5,200. Now the average person from Singapore can purchase almost 14 times more than the average Jamaican.
Some would justifiably argue that Jamaica has not genuinely developed like our counterparts. Our literacy trails in the Caribbean, Jamaicans perceive their politicians as corrupt, and foreigners now own and control many of our iconic local brands across all sectors.
Most of our banking and insurance sector is foreign-owned, along with most of our hotels, which affects the level of profits that stay in the country for development. For example, one bank earns approximately US$200 million annually.
Many young Jamaicans are unaware that corporate titans Red Stripe, Appleton Rum, Carib Cement, Sagicor (formerly Life of Jamaica), and Guardian Life (once a business of Mutual Life) are not Jamaican-owned. I do not want to see another iconic Jamaican brand in the hands of a foreigner, especially when the opportunity exists to keep it owned by Jamaicans. Furthermore, although we have welcomed record foreign direct investments over the years, it has not directly benefited the livelihood of most Jamaicans; it's time to examine our comprehensive cost-benefit analysis approaches to our country and people.
We must ensure these investments help build rather than exploit our people and country. So we must do more to put Jamaicans at the centre of our investment activities.
It's time to do things differently
In the Standing Finance Committee of Parliament this week I questioned our tourism minister, Edmund Bartlett, on the status of the Milk River Bath and Spa. He responded that there was a party interested in the property and the Government was not seeking to run the economy's commanding heights. He advised that the Government would divest the entity through an request for proposal and invite bids. However, our track record in these divestments has not been effective. The standard producer is for the Government to appoint a committee to review and evaluate the bids. There is no transparency in the process. Unlike in other countries, where the government assets to be divested are subject to public presentations, the committee's report is available for public review. Also, there are follow-ups of the commitment made by the successful bidder to ensure they are honoured, and penalties are applied if they are not.
Many people in Jamaica view this process as a 'fren ting'. We need to do things differently.
I certainly was not advocating that the Government keep and run the place. After all, they have been doing an abysmal job based on the facility's 2020 annual report, which presented earnings of $51.3 million. Of this amount, the Government gives a $18-million subvention. These earnings pay $24.5 million in salaries, $16.8 million for goods and services, and $348,000 for capital expenditure. All told, Milk River Hotel and Spa generated a profit of $2.7 million.
However, we all know that ownership of a business and the management of a business are two very different things. Marriott, the world's largest hotel company, does not own hotels; it manage the properties on behalf of the property owners. Therefore, what I was recommending was a change in the policy of how we divest our assets, which would involve an attractive business plan, an agreement with a qualified management company that would be required to subscribe to at least 20 per cent of the shareholding, and then an appropriate initial public offering (IPO) to be listed for Jamaicans to be able to purchase the majority shares to provide the adequate capital.
After all, if it is profitable for foreigners, it should also be advantageous for Jamaicans. Therefore, we should implement a new policy that gives the majority ownership of Jamaican assets to Jamaicans first.
For example, our Jamaican pension funds have very few local options for investment. With interest rates relatively low; the local stock market capital base limited; and real estate prices out of reach for most Jamaicans, when an IPO is issued, most are oversubscribed, as Jamaicans are short of opportunities to invest in value-added options.
Furthermore, it's not as if we are even breaking new ground. The second-largest shareholder in the Seprod Group is the Coconut Industry Board, which receives dividends regularly. Recently, the Airports Authority of Jamaica made considerable investments in the IPO of FirstRock, a startup company.
As a nation, we should invest in becoming globally competitive in the wellness market by developing our mineral springs and medical tourism avenues. The Global Wellness Industry generated US$4.4 trillion in 2020. At the same time, tourism wellness did US$463 billion.
Everywhere, health, fitness, nutrition, and cosmetics are big global businesses and revenue earners as purveyors seek worldwide relaxation, beauty, and peace of mind. For example, the global cosmetics industry will grow to approximately US$465 billion by 2027.
Jamaica has three known mineral springs — Milk River in Clarendon, Bath in St Thomas, and Rockfort in Kingston. These springs are unique as they possess varying levels of calcium, magnesium, sodium, sulfate, potassium, bicarbonate, silica, chloride, iron, and copper. Evidence suggests the Milk River is more "radioactive than leading European spas in France, Italy, and Hungary. Being 54 times more active than Baden in Switzerland, and five times as active as Karlsbad, Austria, reputed to cure numerous ailments, including rheumatism, gout, neuralgia, sciatica, lumbago, nerve conditions, and liver disorders.
Our economy has had anaemic growth since our Independence. Perhaps we are failing because we haven't diversified our economic base and grossly underperformed in global trade, which has not done anything dynamic with our gross domestic product (GDP). Surprisingly, Jamaica started producing rum in 1749, and almost 300 years later it's still our primary manufacture export. Sad! But what's worse is the fact that our significant domestic export earnings have also remained relatively the same for decades.
Guess which industries still account for our traditional domestic export earnings? Rum, alumina, bauxite, coffee, mining, and quarrying.
In 2021 rum accounted for US$56 million of our exports, the most significant single manufactured item earnings (Planning Institute of Jamaica, 2021). Our largest producer and exporter of rum used to be Jamaican-owned. No longer. So the profits are also exported. Our total imports, approximately US$5.97 billion, were four times larger than our exports — nearly US$1.44 billion.
Several countries in the Caribbean demand that ownership in specific industries and businesses must be 51 per cent or more by their nationals. For these countries, all are welcome to invest, but they place priorities on their citizens.
Our Government needs to act as a catalyst for value-added investments. Jamaicans are eager to participate in the ownership and growth of our country. We look forward to investing in properly structured companies in casinos, cannabis, wellness, medical tourism, and agri-processing.
Let us begin creating opportunities for Jamaicans to increase their wealth in their own country by giving them priority to own Jamaican value-added industries that can compete with the best in the world.
Lisa Hanna is Member of Parliament for St Ann South Eastern, People’s National Party spokesperson on foreign affairs and foreign trade, and a former Cabinet member.