Happy New Year everyone. I am certain that this year will be a far more progressive and prosperous year than 2018. Now, 2018 as Julian (Robinson) would agree, was a very good year for Jamaica but this year we’re looking forward to even greater things and since you were wondering Julian why you were not appointed now that I know that you have an interest….
Let me do the protocol by first of all acknowledging the singer of the national anthem who did such an inspirational job.
Father who prayed for us
Let me acknowledge the minister without portfolio in the Office of the Prime Minister responsible for Environment, Lands and many other things.
Mr Daryl Vaz and his wife AnnMarie who as you know Julian has stepped into the political fold as well and I’m expecting great things from her, I know you’re not.
Our friend His Excellency the High Commissioner of the United Kingdom Asif Ahmad
The Venerable Worshipful Mayor Senator and my friend Delroy Williams, the Mayor of the KSAMC
And then, of course, Mr Julian Robinson, the Member of Parliament for this constituency and I’ll be meeting upon him quite regularly at these events. You know we have to address that Julian because it cannot appear that all the prosperity is happening just within your constituency.
And then, of course, Jackie, Diana and Duncan and indeed the entire Stewart family, our hosts here today.
I’m pleased to be here because it is a sign of the confidence that the private sector is having in the economy. Let me say clearly for everyone that this is not a simple matter for someone or a group of people to take up their savings or other people savings to put themselves in debt to take a risk because there is no certainty or surety or guarantee in business, it is a risk. Obviously, entrepreneurs, enterprising people are not reckless people. They would have sat, and they would have calculated the risk, they would have done their assessment. Now, Julian pointed out euphemistically that much progress started under his administration and that we’re building on it and that’s a good thing. That is not something that should be denied. That indeed is the definition of progress and prosperity, when you build on what was there and do better than what was there; but in this regard, I take note of Jackie’s statement that this project was actually conceived in 2008. So, you see it is passing through administrations but in the sense as well there is a certain sadness because it has taken so long and that my friends is the challenge with doing business in Jamaica; it takes far too long.
We have to do things obviously to make it easier to do business and Minister Vaz has charge of that with ensuring that all the various elements that go into the ease of doing business that those elements are improved and we are strategically focused on that but doing business is also a function of the general macro-economic environment so the ease of doing business are usually micro-economic considerations but the macro-economy is also very important, things such as interest rates, things such as certainty with taxes- what will the government do with its tax policy and how will that affect your income streams when you make the investment.
It is quite clear that from the fiscal standpoint, from the macro standpoint government has acted in such a way as to give greater certainty to the economic environment to allow businesses to take future decisions and not just short-term future but long-term future decisions and to bring forward or actualize their investment decisions. This would be a perfect example of that. So, I believe Jamaicans can feel satisfied in their government that the continued sacrifice for fiscal discipline has resulted in an economic environment in which businesses can take decisions and risks about investments but we still need to make even greater progress on the micro issues, for example, how long does it take a business to get electricity, how long does it take you to get titling, how long does it take you to approvals to do all of this and the Mayor of Kingston and St Andrew, my good friend is here and he knows the government’s grave concern about how quickly we get the simple things done to make big investments happen.
On another note, I observed keenly the last out-turn on growth, 1.8%. Like most Jamaicans, I am not impressed. We want more growth, but we look at the glass for where it is, and the truth is that we have been growing consistently, not the level of growth that we want. I certainly don’t consider it take-off growth. When we get over 2% then we will be in that range to start to take off but as Julian knows, the investment decisions that you take today as business people do not have an immediate effect on growth. There is a lag and that lag period in Jamaica what we call the transmission of the growth, takes some take again, because of systemic weakness in our system; the lag between making the actual investment and that investment turning out and showing up in the growth figures takes some time, so you will see growth going into the future.
People always say to me ” we see all these investments going on”, as Julian was saying that the national bird is going to become the crane because we see so many cranes around Jamaica particularly here in Kingston new buildings being constructed so it is a puzzle to many as to why is it that the growth numbers are not larger. There are many explanations and I seek to prefer one to be considered.
For many years there has been a disinvestment in capital. In other words, capital formation in Jamaica over the past few decades have been negative so in the National Accounting Systems, the disinvestment and the negative capital formation would mean that your ability to grow and grow rapidly would be limited. What you’re seeing happening now is a return to investment in capital goods. A building especially a plant is considered to be a capital investment and you can measure that in many ways.
- You can see movement in the Stock Market
- You can see movement in the Private Equity and Debt Market because usually those kinds of movements and liveliness in that market, would signal that people are borrowing to make capital investments and we’re seeing that happening now in Jamaica so the preconditions for significant growth is being set but you’re not going to see it happen just yet right now.
Again, the transmission, the lag is there, and I’ve been to many groundbreakings of similar nature and immediate effect on the economy is that it creates jobs and I’m very happy for that because it is one thing to have growth but growth without jobs, is immiseration. So, we are happy that the growth that we’re seeing even though it is not at the level at which we want it to be, it is creating significant employment.
In fact, I’m proud to say there are more Jamaicans employed today than ever in the history of the Employment Statistics; that is the case and I’ve said it before and I say it again that Jamaica can and will achieve full employment. We need to continue this pace of capital formation. We need to continue this pace of investment and we will achieve full employment which in itself will create a larger demand which in itself will drive consumption which in itself will drive economic growth but there is another element to growth which I would want our nation to consider and that is innovation.
Innovation is absolutely critical, absolutely important to economic growth and other countries have turned innovation into a business. Indeed, where we see where Microsoft and Apple are coming from out of somebody’s garage into being two of the largest corporations in the world, we see what innovation is.
We are not at a genetic disadvantage. We too can innovate. We too can create new ideas that we turn into a product and monetize in a market and I’m saying to all Jamaicans don’t be afraid to explore new ideas. You will never know what the next big thing is, and we have some natural advantages as well. We should never demeanour natural abilities in culture, entertainment and arts because those are big income earners, we’ve just not necessarily found a way to truly market and capitalize on the creative industries as an asset. Far more needs to be done but in technology, we can do far better than we are presently doing in technology and the government is working on ways in which we can improve that. I know the former minister; your current member of parliament was a big advocate of STEM and the government continues to push science technology and Math in education as an important precondition for the development of an innovative society, so I wanted to point out those two things.
In addition, I like the fact that this building will have space for not just the showroom and other facilities to do with the business at hand, but you will have space for rental and I heard you say that there would be the possibility of space for BPO operations; that is great. That generates significant employment and we take note that you’re beside an educational institution, a tertiary level institution that would be able to supply you immediately with the employment that you need and it’s just a great symbiosis for the two to be side by side so all in all this is such a great development for this area in particular, for Kingston and for Jamaica.
I wish to congratulate the Stewart family and encourage them to keep on investing. The Government gives the commitment that we will continue to ensure that the environment for business is friendly, is conducive, that it gives you the ability to make even greater investment decisions and take even greater risks. The only disappointment is that I was expecting you to tell me that this is ten stories, but we will settle for five for now. God bless you and all the best for the new year.