The Hon. Andrew Holness ON, MP
at The Hampshire Ground-breaking Ceremony
Guardian Life Limited
June 14, 2017
Thank you Master of Ceremonies Mr Michael Anthony Cuffe
Reverend Dr David Henry, Swallowfield Chapel
Honourable Dr Horace Chang, Minister without Portfolio, Ministry of Economic Growth and Job Creation
Mr Julian Robinson, Member of Parliament South Eastern St Andrew
His Worship the Mayor Senator Councillor Delroy Williams, Mayor of Kingston & St Andrew
Mr Eric Hosin, President, Guardian Life Limited
Mrs Karen Bhoorasingh, President of Guardian General Insurance
Mr Patrick Hylton, Director Guardian Group & President & CEO NCB Financial Group
Mr Michael Lake, Architect
Directors and other Members of Staff of Guardian Life Limited and Guardian General Insurance
Professionals Associated with the Project
Heads of Agencies and Departments
Members of the Private Sector
Members of the Media
Ladies and Gentlemen
A pleasant good morning. I am delighted to be sharing in this special occasion and I applaud Guardian Life and the Guardian Group for making this bold step into their very first real estate development project.
Guardian Life’s decision to make this major investment is confirming confidence that Jamaica is taking the right decisions as it moves along its path to growth and prosperity and progress; we’re inclusive.
It is also confirming the willingness to take calculated risks embedded in a long-term vision. We’ve gone through many years as a country, as an economy where we have had a strong risk aversion in our entrepreneurs and in our business class generally.
As I’ve said on numerous occasions and I’m certain that Patrick will agree, business people, entrepreneurs can’t take risks willingly but you have to take risk otherwise there will be no reward. The two things go hand in hand; risks and reward but what differentiates business people, entrepreneurs – I was about to say capitalists but that’s not a good term – but people who manage capital is that they take calculated risks.
They study their environment, they research, they gather information, they access the market, they set up a model of the situation – as you said Patrick, they draw a diagram, they plan and based on that they take risks. I am certain that the board of Guardian would have sat down and they would have looked at the economic environment in Jamaica, they would have listened to what the governor of the Bank of Jamaica has said, they would have paid some attention to my own salesman work, they would hear what the common man on the road has to say, they would look at the budgets presented and they would see a particular number; this number has a particular ring to it, 1.5 and they would say that there now exists a market in that 1.5 where they could market their product and your price is coming out from the US figures quoted. It comes out nicely in a ball park around someone earning in that region should be able to afford the mortgage on these units.
It is clear that the group would have sat down, assessed, done their studies and would have thought that this is now the right time to make the investment. We’re very happy that the group is making this investment.
In 1999, when the backers of Guardian Life took the decision to purchase the pension; as well as the individual and group life portfolios of Jamaica Mutual Life, Crown Eagle, Horizon and Dyoll; they clearly foresaw the successful and highly profitable company that Guardian Life would become. Our country needs this type of foresight and vision. Our country needs business leaders and institutions to demonstrate their confidence in Jamaica, by ploughing-back profits earned here back into the Jamaican economy. This signals to the investment community that Jamaica is the right place to invest.
Indeed, as recently as in the media yesterday, Jamaica was lauded internationally for its investment performance. Among other publications, it was cited where the Financial Times’ investment publication, FDI Intelligence has recognized Jamaica as the top performing island economy globally in business friendliness in its “Island Economies of the Future” report released on June 12. In the FDI’s inaugural study of island economies; Jamaica is also named among the top ten in connectivity, human capital and lifestyle. The world is taking notice about what is right with Jamaica. The only obstacle in the way of our growth potential is crime which we will tackle decisively to secure a better future Jamaica.
In this area which is poised for more development and sometimes from a particular point I can see a few cranes rising. I see about three or new developments going on. You don’t need cranes for two or three story or even four stories. You really need cranes when you start to go five and six and seven so clearly there is a new spirit of development within the New Kingston area. That development will bring with it new attention. It will bring with it people who are not always of the best intention and I’ve paid special attention to the prayer that there will be no movements of extortion and other kinds of evil plots to affect your construction site. We know that crime is a significant drag on the economy, a significant drag on people who are working hard and making their investment but do not be deterred. The government will stand with you and provide you with the necessary security so that this investment can become a reality on time.
It is good that the area is being developed because it gives us an opportunity to develop along with the infrastructure, the housing development, a security plan. You have now literally taken over a block. You have other properties which you own which you plan to develop. Now is the time for us to sit down together to plan out not just traffic flow, not just water and sewage but let us have a plan for the security of the New Kingston because in the regeneration of the area we can now build with security in mind. This now when we start to talk about the cameras, the access points, the security posts, how we build fencing. This is the time when that conversation should be had and I would encourage you to work with the police and I will have word with the (Police) Commissioner because I think it is absolutely critical that if you’re going to make this kind of investment and people are going to come and build their homes here, live here that they should feel secure.
Jamaica is in a new paradigm of economic development; with broad macroeconomic stability, low inflation, a sustainable current account, a stable and competitive exchange rate, falling interest rates and expanding credit to businesses and households. The environment is conducive to doing what businesses must do and is best capable of doing – innovating, adapting and implementing and in doing so creating jobs and growing the economy.
Positive strides are being made each quarter and I can recall that the Bank of Jamaica’s Quarterly Press Briefing held in February 2017 for the October to December 2016 quarter was titled “Crowding Out has Ended”. And for the bankers in the room, this is a profound statement because for many years alongside the risk aversion of entrepreneurs was also the excessive appetite of government for borrowing which literally took away the oxygen from private investment.
As was noted then, for too long, an insatiable appetite for borrowing by the Government and its agencies diverted the flow of financial resources from the private sector and made investment harder and more costly, thus impeding growth i.e. private sector investment was “crowded out” by Government borrowing. Now, with several quarters of “crowding in”, we are witnessing a long overdue correction. The era of Government crowding out has come to an end and this ground breaking today is another demonstration of this fact.
In fact I would say that a few months ago we broke ground at another property nearby and that too was an indication and from what I’m seeing coming across my desk is that there are several other major developments planned for this area and the beauty of it is that the role of government is just to approve; make sure you have water, make sure you have the sewage and then the last variable in the equation, security.
The private sector is stepping up to the plate and using their resources to make the investment and that has to be the growth model for the country. A country that has a high debt to GDP ratio has no fiscal space really to undertake any growth- the term that is often used, the government cannot engage in any growth stimulation expenditure. What the government has to stimulate is confidence. What the government has to stimulate is safety and security. What the government has to stimulate is a plan in which the business sector can have a long term vision for them to make long term investment decisions. I think that this government has made significant investments in building the confidence of the business sector because that is how Jamaica will get growth.
I want to say a final word on this growth strategy. We’re gathered here at this site to break ground for a new building. It will obviously add to the business stock; no doubt but you might then wonder why is it that we’re not seeing growth reflected in far more dramatic ways in the actual statistics.
I want you to consider that if you look at just this area, this is one development, another here and a few scattered around the place but the entire area is in need of this kind of development. There are other pieces of property adjoining close-by that have depreciated. The utilization of those assets are at such a point where they’re not contributing as much as they could to economic growth and development.
Yes we’re making new investments but at the same time the investments that were made forty/ fifty years ago when many of the buildings in these areas were built, they have now depreciated to a point where their utilization and what they can actually contribute to the economy is sometimes negative and so the process of growth has to spread right across the investment landscape. It’s not just having Guardian Life doing one building here and having Sandals doing another building there; we really need to create that critical mass of investment and so I’m using this platform today to encourage other investors, come on board. Once we start to have that critical mass where we’re taking assets that are under-utilized and increasing their utilization by making investments in them to make them more productive that is when the velocity of growth starts to take place.
We’re having growth, very slow because it’s squatted all over the country. What we now need to have is the network of growth creating that critical mass of the connectivity of the growth so yes we’re building housing solutions here, well the people who are going to live here, they need to work. What are the employment possibilities? BPOs?
BPO’s require ten thousand persons to be employed. That’s the growth projection for this year. Where are we going to house them? Where are the spaces for the BPO’s? We need people to come to actually be building BPO spaces. Connectivity, housing is here, space for BPO is building somewhere else and the executives are going to come, where are they going to stay? Do we have enough hotel rooms to keep them? Well there is a hotel going up there but is that enough? We need another and that is the critical mass for getting growth.
I’m happy to be here. I see this as a good start. It will add a tick to the growth counter but I need to have many more ticks to move that dial in a significant way.
I want to congratulate the Guardian Group for this investment and I also want to say – and I’m now talking to one of the major investors in the country, that now is the time to truly start to channel the resources that are in Pension Funds and Insurance Funds to channel those out of government paper and into real assets, into real investments. Don’t miss out on all the infrastructure development that is taking place. Start to use some of these resources. Place them into real estate development and housing development. We can build our own ecosystem of growth.
It is important to note that the development of the 190 megawatt plant was financed exclusively out of Jamaican resources, from the Jamaican banking system. We have the money. Take the money out of paper and put it into concrete. Put it into tangible things. Put it into things that are going to employ people. Put it into things that are going to create products that we can sell and earn. Let us together create our ecosystem of growth and this is a very good example.
Thank you and god bless you.