Thank you very much Garth.
Allow me to acknowledge our Minister of Education, Fayval Williams, and, allow me as well to express a few thoughts on the co-founders of Quantas.
Now, when Adrian took the stage and he started to pace, it reminded me of a lecturer in a classroom and he delivered probably one of the best explanations I have heard so far of the actions of the FEDS in the United States, I have not heard a better explanation. And so immediately I said, you know, I need to participate in whatever offerings they have and then I remember that I don’t have much with which to participate but that was how good he was. And I’m certain based upon the response that many of you thought so as well, that clearly Adrian knows the financial craft very well and that is usually a good sign and a good basis on which to make judgment and determination regarding these financial institutions.
And I was, before taking the stage, making the point to both Adrian and Jackie that they come from a good school. They are alumni of one of our oldest banks, Scotia Bank and therefore you would have… Financial intermediation is a good sign of a developing economy. It’s a signal of increasing complexity in the economy and the more financial intermediation you get, firms like Quantas coming into the marketplace, the greater will be the allocative efficiency in your economy. Capital, which is stuck somewhere in an underperforming or underutilized asset, or in an asset class where it is just not doing what it could do, now gets an opportunity to be unlocked and channeled into areas where it can yield greater results. So I’m always very to see more financial intermediation coming into the market.
Why has this happened? It is happening because one, there is greater policy stability in our economy and that’s probably the main reason. When the budget is read each year, there is not so much trepidation and worry that there will be unprecedented policy shifts, new taxes to contemplate, and new changes in regulations to contemplate. For the last seven years, there has been significant stability in our financial markets and in our economy. So policy stability is one reason.
Now I’m not here to make a political commercial for the policies of the government, but if you interpret it so, I’m happy. The second reason for the emergence of greater financial intermediation would be the regulatory environment and having had the experience of FINSAC and having gone through to strengthen our regulatory environment, but more than that in the last few years, to not just strengthen, but to deepen it, make it more appropriate for the times and indeed, we have taken actions such as creating an independent central bank and that has created the environment in which financial intermediation can grow, that entrepreneurs can truly plan and take risks and develop firms such as Quantas but there is also another reason, and that is there is an increasing demand for investment funds.
In the last uh, decade, we could say there is an increasing appetite for investments in Jamaica, and we are seeing that expressed in investment in infrastructure, we’re seeing it expressed in investment in construction and housing and real estate market in particular, we are seeing that in the expansion of BPOs, we are seeing that in the expansion of several other industries, so there is a demand for the services that Quantas will supply.
Generally, this paints a very good story for Jamaica, a story that is not told very often and not explained as widely as it should be for the general public to understand the rebirth of Jamaica, the resurgence of Jamaica within the region, the growth and development of Jamaica will start with our financial industry- well not will, has started with the growth of our financial industry.
When we look at our CARICOM region, clearly Jamaica has the strongest financial market, and when I talk to friends and colleagues in Trinidad and in Barbados, they look at Jamaica with great admiration, and they want to come and participate in Jamaica’s market and that in itself is a good sign and that ought to be encouraged. And I’m saying this to say to Quantas that your marketplace should not only be Jamaica and that you ought to be looking regionally because there is a market to be served regionally.
Jamaica’s economy grew by 5.9% in the third quarter of this financial year. This would be our sixth consecutive quarter of growth, that’s significant and this is coming against overlapping crises. The pandemic, which we have all seemed to forgotten about, the increase in prices, shipping prices that we had, the supply chain crisis, but Jamaica has done this amazing thing that we have recovered quickly and we are growing but more than that, we now have the lowest unemployment rate in our history. It’s not as low as the United States, but we’re getting there and the truth is that in another year or two, we probably will get closer to full employment in Jamaica which creates its own problems, but it’s a good problem to have, to have all our people employed. Yes, it will have an impact on wages and there are other issues as well that it will raise, but it’s a good problem to have.
The truth is, we have never had that contemplation or consideration before in the history of Jamaica. Our economy is strong, still many challenges, but the core of the economy is strong, and the recovery is also very strong. It’s strong to the point where
Jamaica would be considered to access the Resilience and Sustainable Facility of the IMF. This is a powerful signal of the strength of the fundamentals of Jamaica and this Facility will allow us to access up to 763 million US dollars at an interest rate of approximately 3.8% with a repayment period of 20 years with no principal repayment for the first 10 years.
Yes, this is amazing. The countries that qualify for this clearly would be countries that have strong economic fundamentals. In addition, we took the decision to access the IMF’S Precautionary Liquidity Line, which is an instrument offered by the IMF to countries with very strong economic fundamentals. So, although we have enough reserves, the government is being prudent even though our fundamentals are strong, even though we are growing and it is showing in our employment rate, we are continuing our policy of prudence, so we are taking out this insurance policy nonetheless which further strengthens the fiscal outlook, strengthens how the government is perceived and how investors perceive current conditions and future conditions. So, in the event of any shocks to our economy, we have enough buffers in place to maintain stability which gives you, many of you here are principals of financial institutions, which gives that added comfort.
So, I wanted to make the between Quantas launching its services today and government policy. Government policy is working and it is creating the basis and the opportunities for firms and entrepreneurs to take risks, to invest, and to continue to grow our economy but there are other policies which I think would be very useful, very helpful to firms like Quantas, which we need to move with greater speed and alacrity and now I’m talking about JIFSA.
Some of you would know that the Jamaica International Financial Services Authority, (JIFSA), which is a statutory body which was established in 2011 with the primary role of promoting and marketing Jamaica as a jurisdiction for international and financial business services, that this agency has done quite a bit of work so far in creating this new domain for Jamaica as an international business and financial centre. For example, we have passed the Trust and Corporate Services Providers Act and the associated regulations which were a gazetted in April 2022 and this Act seeks to promote and maintain high standards of conduct, ethics and competence in the provision of international, corporate and trust services, and it allows for the professional service providers to act as a fiduciary intermediary between their clients and the Company’s Office.
This piece of legislation creates even more opportunities for firms like Quantas or other firms that are operating in the financial space to take advantage of this regulatory environment. Under JIFSA we passed the Partnership General Act in 2017 and its associated regulations. We also passed the Partnership Limited Act in 2017 and associated regulations and there are other legislations which we are contemplating, and the Trust Act as well was passed in 2019, which replaced the outdated Trustee Act and updates the trustee’s duties.
Now, all of this goes towards creating Jamaica as an international financial and business centre, which further compliments the activities of Quantas, giving greater vehicles through which your services can be executed. So again, government policies at play. It is not yet a complete framework. There is still some fine-tuning to do especially to ensure that it aligns with international financial regulations but this is being done and so I want to point out to those of you gathered here today, that there is still the intention of the government to create, promote, and develop Jamaica in the international business space in a way that is compliant with international financial obligations and regulations.
So, ladies and gentlemen, it is indeed my great pleasure to have been here to participate in this launch. I see this as a further positive sign of Jamaica’s economic recovery and a further sign of the strength of Jamaica’s financial and capital market. Ladies and gentlemen, Happy New Year and congratulations to Quantas.