Thank you very much, Michael Anthony Cuffe.
Let me acknowledge Pastor Adrian Johnson for his prayers earlier on. I know you probably have online the Honourable Phillip Pierre, Prime Minister of St Lucia and there might be other dignitaries online.
Let me acknowledge Senator the Honourable Aubyn Hill, Minister of Industry, Investment and Commerce.
Mr Denzel Douglas, Leader of the Opposition of St Kitts and Nevis.
Paula Cox, Minister of Finance, former premier of Bermuda
Other members of the diplomatic corps and the consular corps
Mr Julian Mair, Chairman of the Jamaica Stock Exchange
Members of the board of the Jamaica Stock Exchange
And the Jamaica Central Securities Depository (JCSD) Mr Steven Gooden, Chief Executive Officer, NCB Capital Markets
Dr Marlene Street Forrest, Managing Director of the Jamaica Stock Exchange
Our good friend, Mr Gregory Fisher, managing director and head of Emerging Markets, Fixed Income & Wealth Management at Jefferies
And Mr David Zervos, Managing Director Chief Market Strategist of Jeffries
Heads of regional stock exchanges, executive chairmen and heads of private sector groups
Mr Andre Gooden, Group Business Development Manager of the Jamaica Stock Exchange
Specially invited guests
Members of the media
Ladies and gentlemen, good evening.
And you thought I was going to do this, keep my mask on throughout the delivery; that would be almost impossible though, I have been doing that and I do encourage everyone to keep the DRMAs, that is the order to wear the masks. It is I believe one of the greatest protections against the virus.
I’m pleased to be here at the 17th Regional Investment Capital Markets Conference and I want to congratulate the JSE for being consistent with this for such a long time. I gather you’re doing this now from 2006 and I have been coming for probably eight or seven years of the time you’ve held it. For the past two years, however, it has been modified to a hybrid format and the message from that is we have to adjust. Indeed, this is the message of the government, our society must adapt to living with COVID-19. Almost two years into the pandemic, we have both the knowledge and the means to protect ourselves.
Citizens have access to enough reliable information and resources to assess their own health and risks, as well as their own economic and social circumstances and make their own personal decisions. Having armed the population with information on how the virus spreads and the infection prevention and control protocols that have proven to be effective such as, as I was saying earlier, wearing a mask, sanitizing and physical distancing and having multiple vaccines widely available; the balance of responsibility for protection now shifts from the government to the individuals and families.
It is therefore no longer appropriate or necessary for the government to use crude blanket measures such as lockdowns to shield the population from the virus. These crude measures are designed to restrict movement which spreads the virus, however, these restrictions ultimately and inevitably put a stranglehold on economic and social activity. They keep our children out of school. They have a devastating impact on livelihoods, particularly for the poor and vulnerable. They also have severe psychosocial impacts therefore barring any extreme change in circumstances; our approach will be to gradually scale back the restrictive measures once we get out of the fourth wave that we are now experiencing. We will not keep the measures longer than is necessary.
It is not just about sun, sea, and sand anymore. Travelers today are seeking experiences, they want to connect with a place on an emotional level and of course, they still want the convenience of technology. For many, travel is a way of understanding and appreciating alternative ways of life, learning new things about culture and natural landscapes and even a means of self-discovery but the traveller still wants to be connected. We therefore must differentiate our tourism product to infuse our culture, our cuisine, and other aspects that are uniquely Jamaican.
We are taking decisive steps towards achieving our vision of becoming a digital society and making Jamaica the technology hub of innovation, the Silicon Valley of the region. We are on track to implement the national digital identification system, (NIDS), this year. This is a critical key element for financial inclusion. It is a critical and a key element for the virtualization of services and if there is one good thing that came out of the pandemic is that it has forced us to adopt and to adapt technology in the delivery of services.
Some estimate that Jamaica would have advanced between three and five years in the adoption of technologies because of the pandemic. That is indeed I think one of the benefits that when we look back at this era, we can note, we are expanding broadband internet access to underserved communities across the island and pursuing plans to create a broadband fibre backbone to facilitate island-wide coverage.
We recently launched the coding in schools programme. Coding will now be taught from grades one to 13 across public high schools in Jamaica along with the acquisition of basic numeracy language and problem-solving skills which are prerequisites for coding. We are advancing plans to build six new stem schools and one new performing arts school in Jamaica.
The bank of Jamaica will roll out as we said before, our own digital currency in the first quarter of 2022 after a successful pilot in 2021. In addition to allocating and deploying capital to transform existing industries and create new ones, there is need for synergy between public and private sector capital. The public and private sectors need to work closely together in making transformational investments. The reality is that public investment alone will not be able to increase the stock and quality of infrastructure to adequate levels. My Administration has always believed that the role of the government is to create the right macro-economic environment to catalyse and unleash private sector led investments and growth.
Our philosophy has never been for government to control the commanding heights of the economy. The Government understands that in order to catalyse private investment, it is critical to address perceived risks and barriers. We see ourselves as facilitating business and investment. Traditional approaches to risk mitigation have predominantly focused on deploying financial risk sharing instruments such as credit guarantees and insurance to transfer part of the risk premium associated with specific transactions to the government or to multilateral agencies. These mitigation products impose a financial cost onto a transaction which is invariably passed on to the end-user through higher tariffs.
Additionally, private investors often seek financial incentives usually in the form of tax concessions to mitigate against the impact of these perceived risks. Rather than offer specific transaction related risk mitigation or incentives, the government’s approach has been to focus on macro fiscal reforms and business climate improvements that make it easier to do business for all investors, large or small, level the playing field making government bureaucracy more efficient; there is a premium for that.
These reforms focus on removing underlying barriers that are the root cause of specific risks at a transactional level. The ultimate objective of the government is to lower the risk perception of investors when assessing the investment attractiveness of this country. We have been working to create a stable macro fiscal and regulatory environment that will position Jamaica as the financial capital of the region.
The Jamaica Stock Exchange is the oldest most active and most liquid public capital market in the Caribbean. It is the vehicle of choice for cross-listing and for large scale divestment of public assets. Earlier today, I met with the Chairman and group CEO of the Massey Group who will be listing on the Jamaica Stock Exchange later this week.
Last year we had Guardian Holdings cross-listing so we are attracting large regional enterprises to create the critical mass needed to place us on the path to becoming the financial capital of the Caribbean. Now, if you take those two things together, what Stephen spoke about, FinTech industry integrating that, mainstreaming that in our financial sector along with our capital market, the JSC and attracting new investors into that market, Jamaica is well-placed to be the hub, the financial market hub that is technologically driven with innovation both on the technology side and on the financing side and I believe that we are well on our way to achieve this. The addition of supportive well-thought-out government policy, particularly certainty from our fiscal management will allow this dream, this vision to become a reality. There is the opportunity for Jamaica and the government will be working assiduously in partnership with the visionaries of the private sector, with the entrepreneurs and the creators in the private sector to ensure that Jamaica becomes the financial hub of the region.
We have established a programme of attractive investment opportunities for private sector investors to acquire non-core government assets and participate in creating and improving public infrastructure. We have structured these opportunities using a variety of mechanisms including asset sales through listing on the Jamaica Stock Exchange and direct sales to strategic investors, development leases, and public-private partnerships.
The PPP and privatization programme is a key pillar to support our economic recovery. Privatization of non-core assets releases revenues to the government to fund the budget and to undertake well needed post-COVID social and other core priorities and interventions. PPPs have in the past often been viewed by governments as a modality to solve public sector budget constraints or financing gaps. Our macro-fiscal position has fundamentally changed and we now have the wherewithal to undertake significant capital investment within the public sector budget. However, PPPs remain our preferred modality for infrastructure development.
The primary reason today it’s not just financing, it is to leverage the expertise of the private sector to assess, price and manage certain types of risks. The government, therefore, regards PPPs as a tool to deliver effective cost-efficient world-class resilient infrastructure and associated services. The government’s objectives for the programme also include widening the base of ownership and direct equity participation in the economy and stimulating the local capital markets which are key drivers of private sector led economic growth. Jamaica has an enviable track record of executing large scale PPPs and privatization transactions; the east, west and North-South Highway, the Sangster International Airport and the Norman Manley International Airport, the Kingston Container Terminal, Wigton Windfarm and Trans Jamaica Highway are some examples.
Specific transactions have been recognized internationally and we have won Structuring Awards; the Kingston Container Terminal transaction was recognized in 2017 by Infrastructure Journal and Project Finance Magazine, (IJGlobal), as the port deal of the year. Latin Finance recognized the US$225-million international bond raise for the Trans Jamaica Highway Limited with the infrastructure financing of the year award in 2020. Trans Jamaica Highway Limited raised 14.1 billion Jamaican dollars, the largest amount raised from an IPO on the JSE to date.
In 2021, Sangster International Airport copped the prestigious World Travel Award for the Caribbean’s leading airport for the 14th time and the 13th consecutive year. Of note, as of 2019, Jamaica’s PPP programme was ranked fourth in Latin America and the Caribbean by Infrascope. From 2001 to date, PPPs in infrastructure have generated over US$455 million in revenues via concession fees and over US$2 billion in investments in the economy.
In addition to generating revenues for the government and investments in the economy, improve operational efficiencies and service delivery have been achieved through PPPS. For example, since 2003, Sangster International Airport generated over 7,500 jobs and recorded investments of approximately US$283 million to date with approximately US$200 million in additional investments expected over the remaining concession period and traffic levels increased since 2013 from 2.9 million to 4.7 million passengers in 2019 pre-COVID.
The Kingston Container Terminal has registered increased operating capacity since 2016 when it was handed over to the concessionaire. The access channel has been widened and dredged and equipment and technology acquired to accommodate some of the largest shipping vessels. The concessionaire has invested approximately US$332 in the terminal since taking over operations in July 2016 and the rated capacity of the terminal moved from 2.8 million 20 foot equivalent units TEUs to 3.2 million TEUs by June 2021 but more importantly, as a result of this PPP employment increased by 34%.
Looking forward, we have an attractive portfolio of projects in various stages of execution covering important sectors, which will have substantial economic and social impact. We have five investors so far have been selected for phase one of the Greater Bernard Lodge Development which will see $19.2billion in investment in residential and commercial real estate development creating an entirely new township on former sugar lands.
Phase two of this project is now being advertised to identify developers for the construction of the urban centre and development of residential and commercial lands. The government is continuing to work on divesting our shares in the Jamaica Public Service Company Limited and the Jamaica Mortgage Bank. I’m sure Marlene; you are looking out for these two major divestments. There are several infrastructure projects at advanced stages of development, either completing their business case and due diligence or finalizing terms with private partners and these projects are in water, in wastewater, in renewable energies and solid waste management and we are conducting feasibility studies on the development of judicial and correctional infrastructure using private investment. So, you see the Jamaican economic landscape looks bright. We have an innovative financial sector. We have an attractive stock exchange, very liquid financial capital market. You have government policy that is aligned and supportive.
We have recently launched the education transformation report. The strategy behind that is to allocate capital to education to generate the innovativeness that is necessary to create the opportunities to be peered with the capital and technology that exists, so we’re going to solve that part of it and the government is ensuring that assets in its portfolio that it cannot use to its best and fullest means, that those assets be made available to the private sector. I think that is an excellent mix and will put us on a good track for the next decade, however, there are some risks and our private sector, I believe, has to act with great discernment and understanding of the social context within which this highly potential economy exists. We have to be very considerate of the social circumstances in which the economic potential exists because if we are not, the potential may not be realized.
We have seen that the pace transformation in the banking sector a movement towards digital provisioning of services is causing a serious fall out particularly in rural communities. There needs to be greater engagement of the banking sector with its traditional customers. Yes, there is great take-up particularly of young people who are technology natives but our older persons, our elderlies, they need banking services too and they may not readily absorb and adapt and so we have to be cognizant of that. And I was listening today, one of our major banks put out an ad explaining of how they are transitioning; I thought that was good but there needs to be more work done as we transition our financial industry to being a technology-based one and one that is delivering services digitally.
The financial inclusion is not only getting persons into the banking system with a bank account, but we also have to ensure that those who are already there, know how to use the technology and that the technology is easy for them to use.
Of course, the second thing that we have to pay attention to is that whilst I am looking forward to the end of the pandemic and to ending the measures of the pandemic, we are still in a pandemic and it is not just a pandemic of a threat of a virus, persons whose income disappeared or was significantly reduce still have mortgages piling upon them, still have credit card bills that they didn’t or were not able to pay. Children are now going back to school so fees are now coming back in. Bus fares and lunch money have to be paid and then they have to now hear about increases in bank fees.
I repeat, this great potential economy that we have existed in a social context and the leaders of the economy must pay close attention to the social context. My job as the leader of the government is to facilitate as much with market-based approaches and solutions but I have a higher duty to protect the equity of the country, to protect the vulnerable of the country. I am not here appealing to your conscience. It makes good business sense to protect the people of the country.
As I close, the message I want to leave with you is this, we have come through the worst global health and economic crisis in our lifetime. While it is not yet over, I believe we have come through the worst of it. It has been a test of our resilience and we have done well. In our 60th year of independence, it is time to get back to the task of building and growing Jamaica to secure our economic independence and charting a course to achieving full political independence.
The public sector, the private sector, the small businessman, the big businessman, the MSME, the little man, everyone, every Jamaican has to play a part and we must be fair and conscientious to everyone. I cannot preside over a Jamaica where the existing inequalities and unequal endowments follow us into our future. The future is prosperity for everyone, not a continuation of the existing social and economic structure. We are unleashing business, not to create a wealth gap, we’re unleashing business to lift everyone’s income prospects, opportunities and prosperity.
Jamaica is open for business. We want everyone to get involved in business. We want everyone to become innovators. We want everyone to look at things as they are, accept them, question them but go one step further. Let us start to vision things that don’t now exist and ask ourselves why not create them; that is the essence of growth and development, prosperity.
God bless you and thank you.