Speech by the Prime Minister

Official Opening Ceremony New Brunswick Village


Official Opening Ceremony New Brunswick Village

Keynote Address

By

The Most Honourable Andrew Holness ON, PC, MP

Prime Minister of Jamaica

At the

Official Opening Ceremony New Brunswick Village

June 19, 2024

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Thank you. I did not grow up in a place called De La Vega.  In fact, I was born at the Spanish Town Hospital and then I spent my formative years growing up just down the road there on Cumberland Road and then my mother was lucky enough to get a NHT house and we moved to Ensom City. This is where I started life and I remember many, many, many, many, many days walking from in Ensom City to St Catherine High School, going to look for my great grandmother who was alive at the time. I was fortunate to have my great grandmother, my grandmother and my mother so I couldn’t go wrong, and my family home is just up the road here on Brunswick Avenue in front of the Seventh Day Adventist Church, so I know this area very well. In fact, there was an old theatre here called the Astor. It’s a church. Can you imagine the transformation?

My heart is full to finally see this piece of land developed and I think that there are still many undeveloped pieces of land and indeed lands that are in use which could be developed as well. Spanish Town has great potential, exceptional potential. I don’t want to go into all the challenges, Chris, which would have prevented us from realizing the true value of Spanish Town; crime being the major obstacle but I’m here to say that the government has developed a plan, which it is already executing, where it intends to take over all our urban spaces and redevelop them. The challenge is not crime. The challenge I want to put to you today for your consideration, the real cause of our urban decay is that we have allowed the spaces to deteriorate, and the deterioration happened because we simply did not have the wherewithal to invest and to continue the reinvestment in the development of our spaces. I give you an example and an explanation.

Most buildings have a useful life of maximum 50 years. They will last longer than that. Buildings will last even 100 years, but they may not be functional after 50 years. It means, therefore, that whatever you build no matter how well you build it, you must maintain it.  And as you look at the buildings in Spanish Town, they all lack maintenance. If you take the square in Spanish Town and you look at the old museum, the old archives; these were well-built structures coming from colonial times. Well built, but if you don’t maintain them, they will fall apart. As you come into the town, you see the lovely Georgian buildings; they are all falling apart and disappearing simply because we have not maintained them.

Now, I know that there are persons listening to this and the immediate thing is a careless government not spending on maintaining infrastructure. That may be so, but what is the root cause of all of this? The root cause of all of this is that our economy was not growing. The root cause of all of this is that we simply did not have an economy that generated the revenues for government to maintain or the opportunities for businesses to invest.

So, what is it that we need to fix first? We must fix our economy. Regardless of what our ambitions are, regardless of how we feel about the infrastructure and the frustration, unless we fix the economy, we will not have the resources to maintain our infrastructure.  We fall in a trap, however, that having not paid attention to fixing the economy, governments are forced to borrow in order to be able to respond to the demands of a population. Borrowing is only pushing the problem of a weak economy down the road. Eventually, you’re going to have to contend with that weak economy.

Jamaica had its point of contention with a weak economy a decade ago when we were all forced to accept the need for fiscal responsibility. The acceptance of fiscal responsibility by both government and opposition, whichever political party may form that, is a watershed period in Jamaica’s development. The reason why we can now have a strategy in place for urban renewal rests squarely on the fact that our economy is doing fairly well. I’m not here today for an economic lesson. I’m here today to heap praises on SAGICOR and its partners, and to say what a wonderful development this is but since I have this lovely audience here, it is very important for me to make some connections in the minds of our public.

The first of our Urban Renewal Programmes, which is built on our economic platform is a property pretty much like this, which it’s a very good example. It was a former factory. It produced tires not just for Jamaica, but for the region. It was a flagship factory in Jamaica, the Goodyear factory and as economic conditions changed globally, but as economic conditions changed in Jamaica, the factory was closed like many other factories of its kind. It sat on 25 acres of land. Governments before tried to resuscitate the factories, spent a hundred and twenty-five million dollars on refitting, and it didn’t work. I will say one thing to you today, the laws of economics are as immutable as the laws of physics. Meaning that if you throw something up, the engineer in the room will tell you, it must come down, but some politicians like to make wild promises and say, they’re going to return a factory to production when there is no market. Who is going to pay for that? You, the taxpayers, but you, the voter feel good because a factory is going to come back but you, the taxpayer, you’re going to feel the burden of 125 million dollars spent on refurbishing which didn’t make sense.

My job, though I’m a politician, is not to give you wild and unrealistic promises that may make you feel good as a voter but affect you terribly as a taxpayer. My job is to ensure that you understand your role as a voter is inextricably linked to your role as a taxpayer. You must ensure you have a good economy, and it pains me to hear people who should know better sometimes speak of our economic improvements and the establishment of stability in the economy as something to be swept aside in the grand consideration as to where Jamaica is in its development.

Nothing that you want, whether it is better roads, more garbage collection, more water supply, whatever it is, better security, you can only achieve that when your economy is doing well. And until the Jamaican voter start to think in this way, they will continue to vote for policies that will make them feel good today, but they will have to pay for tomorrow. We must break that. And if I am to be frank with you, my tenure as your prime minister has been wholly and solely dedicated to breaking that. This administration came under tremendous pressure politically to break our fiscal responsibility to spend carelessly, and we did not. The fact that we did not means that we have now started to entrench fiscal responsibility, not just in laws, but also in the political economy of the people. It is in your interest to have a government that maintains fiscal responsibility.

So, why is this development possible? Why is it that we are now able to develop 25 acres of land in St Thomas, the old Goodyear Factory into a brand-new urban centre in a sustainable way. Mr Bailey, you have pointed out that you have persons who have already purchased or leased some of these properties in Morant Bay, everything is gone; already bought out. It is because persons who have resources to invest realize that they can make good investment in Jamaica, that they don’t have to convert their Jamaican money into US dollars to invest in a safer market overseas, that they can take a risk on Jamaica and invest in Jamaica.  When your economy is doing well, people choose Jamaica.

Think about it. Mr Bailey, Danny Williams, yourself Chris, you made a choice to invest in an area where I’m sure people looking on will say, “bwoy dem man ya, dem know wha dem a do?” They might be very skeptical about investing in Spanish Town but once the economy starts to turn, every businessperson knows that the time to invest is as the economy starts to pick up. And you can see many more investments like that coming into areas like Spanish Town. The question now is, how do we get this now to operate at scale?

I’m happy for this one. I consider this almost like an anchor investment. I am certain that property owners along the stretch and in the environment are now going to take a second look at Spanish Town in the same way that investors are now taking a second, third, fourth, fifth look at St Thomas as an area for investment. They see the roads there, they see the water, the internet, they see the development of the urban centre and they are putting their resources there. There are at least three or four housing developments including a hotel development which will take place in St Thomas, an area which previously nobody paid any attention to just like Spanish Town maybe except the native of Spanish Town. I see Mr Robotham here. You have always been a Spanish Town investor but now Spanish Town is becoming an area where investors are going to pay attention.

The truth is that after 50 years of poor economic performance, after 50 years of infrastructure deteriorating, there is now an incredible opportunity for businesses to come and re-invest in the existing infrastructure. Mark my words, you’re going to see developers, financing companies start to look at communities like Brunswick Avenue, Ensom City, Greendale, Hampton Green; all these are communities with fairly good infrastructure. Roads are in, some have sewer, some have water mains; what is needed is for an investor to come and buy all the properties and redevelop them. The only challenge that I see with this is that we are all building what is called aspirational housing.

I’m trying to use my terms very carefully, but I hope I convey the meaning. It’s aspirational. It’s a middle-class pursuit relative to a middle income, or upper middle income, even lower middle income, pursuit for housing but the real deficit in housing, and I’m saying this in the hearing of… I see an extensive audience of real estate, bankers, and developers here. The real need for housing is in what I am going to be terming achievable housing, otherwise, affordable or low-income housing; that is where the real deficit for housing is.

We have launched a housing development called Catherine Estate not too far from here.  We’ve put out sometimes a hundred, two hundred units. At one of our advertised lots for sale, we had 26,000 applying for something like 500 units. That is the level of demand that exists in that segment of the market and so whilst I have this platform celebrating this development, which is very aspirational, which will transform this area, I wish to remind business people so yes, the NHT is in that era of the markets, the housing agency is in that era of the market, but the HHT and the HAJ will not be able to build all the affordable and achievable housing that we’re in need of. We need a private sector to go into that segment of the market and I see the chairman nodding because he is on the threshold of that market. He’s just between aspirational and achievable.

And yes, we must get the prices down so that the bartenders, the hairdressers, the gardeners, the mechanics; those persons need houses too. We must get the prices down. Now, it’s not just for me to just talk it down. I mean, there’s so much I can do with moral suasion, but we have to get the interest rates aligned.

We have to get the approvals and permitting process, Mr Councillor representing the mayor.  We have to get those things moving quickly. That’s part of the productivity agenda and we have to integrate technology because there are many new building methodologies now which can reduce costs but possibly the best way for us to improve the affordability of housing is for government to make lands available for housing development.

This is a private development. The investors bought the land, and so government could not in any way seek to say these houses here must be available at a price lower than what the market would be willing to pay, absolutely not. Private investors, you have made your decision but the government can through certain policy activities, influence and we have been influencing market prices through the availability of financing, through joint ventures, through the developers programme, through the Guaranteed Purchase Programme (GPP) with the NHT and all of those have been working to moderate prices, not necessarily to reduce them, but to keep the prices in a range that people can afford. But for us to get to the next level of bringing the prices of housing down so that the average hardworking Jamaican who is contributing but can’t get a benefit can get a benefit, we will have to dig deep in our land back and make lands available where the price of the land is considered  to the total value of the house, but subtracted from the total value of the house when the house is sold. We have started to look at that. We are very much down the wicket and at the appropriate time, we’ll make an announcement as to how this programme will be executed but I just wanted to use this opportunity to make the points which I have belaboured and in summary and closing, I will restate them.

Firstly, everything that we want to achieve, whether as a voter or a taxpayer, we must have a good economy. If you don’t have a good economy, a political promise is a mere mirage. It just looks good, but it will not be achieved or if you do get it, it is not sustainable.  The element of a good economy is that the government must manage the public’s resources with frugality and accountability but on the other hand, it must use the public’s resources to promote productivity and efficiency. I think we have managed the frugality part through the fiscal responsibility. The next part of our Jamaican journey is to get our country productive and efficient.

Productivity and efficiency is not a stranger to us. When we go overseas, we are the most productive and most efficient persons. We need to adopt the same attitude towards work here as we adopt to work overseas. The issue of compensation is always a sore point because the view is you get better compensation overseas, therefore, you put out greater work and as the government of today, we are desperately trying to demonstrate to the people of Jamaica by increasing the compensation for public sector workers and consistently trying to move up the minimum wage that we also believe that if you work, you must be rewarded but the reward doesn’t come magically. The reward comes from productivity and efficiency and so I have to stress that point every single time that I speak, because as a nation, we tend to get distracted by things that are not material to our success and as prime minister, my job is to bring back the conversations to what is important to your household and your pocket.

And finally, housing is one of the entitlements of the Jamaican citizen and the government has a duty through policy to use whatever resources that are placed in its control, either through the NHT or through legislation, to influence the housing market. We have been doing so, but we agree, more needs to be done to fill that segment of the housing market for persons earning minimum wage or just above or just below middle income because that segment of the housing market is underserved and the government will, in short order, announce other plans that will accelerate and scale up the provision of housing for our low income earners; housing that is affordable and achievable.

So, with those few points, let me thank… Minister Grange is saying I need to say something about Spanish Town. I was hoping to save that for my budget presentation but what to be said about Spanish Town, Minister Grange? This is my town. I love Spanish Town. I have many memories here and I would never be in office and not have something done substantial for Spanish Town. We have already started.  You’re seeing the new hospital. In a couple weeks’ time you’re going to see the groundbreaking for a new divisional headquarters for the police. We’re going to be doing some other things for education. You mentioned that we were considering this site for a school, we have another site granted. It is in Portmore, but it will serve this population and we have other projects coming to deal with water. We’ve just put in a major water project up here for Content. I believe SAGICOR is a part of that or was a part of that so there are there are many big game changing projects happening in and around Spanish Town but in terms of the announcement for the comprehensive plan, this wouldn’t be the place to do it. But yes, Spanish Town there is a comprehensive plan. A part of that plan is to have an intervention to save what’s left of our precious history that can be so valuable to us.

So, ladies and gentlemen, you have been a good audience. Thank you for listening to my lecture.