Investing in Jamaica

The considerations that go into making an investment have some fundamentals that are a given. The combination of labour with skill, availability and wage rates is absolutely essential. So, too, is the availability of reasonably priced capital, the ability to find suitable lasting accommodation, and the managerial ability to successfully combine all of the above.

The host country must also have a receptive attitude to the proposed investor. Investment is to be courted in a competitive world and one must question JAMPRO as to the environment it has created to welcome investors.

Jamaica, as a host for investment, has a great many other factors to be considered. Each of these will have varying degrees of impact on the success of any commercial enterprise: the people they represent, the gamut of employees, market for goods and services, and the base with disposable income.

The Jamaican comes with a reputation of being dextrous, trainable, a quick learner and having educational accomplishments up to the tertiary level.

The people are also of questionable discipline and a less-than-focused attitude. The reliance on the union is always right beneath the surface.

Every investor should be aware that the trade unions are affiliated with the political parties. This offers the unions a platform with greater impact than should exist where the registered membership is only 17 per cent of the labour force. Union leaders are candidates in parliamentary general elections. Retaining jobs at almost any cost is the prime objective.

Do the research yourself on the impact of the unions on the public service. Productivity has declined by 1.5 per cent each year in Jamaica for the last four decades. The investor needs to be very aware that unions pay lip service to the partnership between employee and employer, but will resist all attempts to manage cost, especially labour cost.

The climate can be very significant, especially for the agro-industry. The climate can be rated among the best in the world: there is abundant sunshine, and temperature ranges usually within 10 degrees, with few extremes. Just thinking about this elicits a wow.

Geography and location: Seventh best natural harbour in the world; adjacent to major sea lanes; within one day's flight of an 800-million consumer market of North, South and Central America. Yes, there are language differences, but remember, English is the language of international commerce. Time zone alignment is very good.

Jamaica's information technology platform is comparable to First-World standards. Voice and data transmission is readily accommodated. The skill to set up, administer and maintain these programmes is available with varying degrees of expertise and competence. As a people, we have adapted this technology and this bodes well for future growth and expansion.

modern financial infrastructure

The financial infrastructure and services are modern. We are served by international banks, insurance companies and hybrid financial firms. The regulatory framework has a presence through the Financial Services Commission and the Bank of Jamaica. We have, in the recent past, been through a domestic financial crisis. The outcome was marked by the regulatory reforms that were subsequently introduced.

The rule of law is of great importance. We never change governments by the bullet, only the ballot. The judiciary is robust and independent and the judgments fair, with very few reconsidered in the highest appellate court. There is a developed alternative dispute resolution mechanism, easily accessible in the form of arbitration and mediation. Fully staffed law firms with international reach are part of the legal framework. The judicial backlog is more a function of restricted funding than any other factor.

The professional services offered in accord with world-class standards are readily available. Multinational accounting firms, persons certified to international standards, engineers trained overseas, health care offered by First-World graduates and actuarial services are also available.

We have many pluses for the investor, but challenges also coexist. It would be advisable to consider the following:

Jamaica suffers from a lack of enlightened political leadership. The political parties, though wedded to the principles of democracy, are more mindful of their individual prospects for re-election. The Parliament, in the face of pressing national concerns, has only managed to pass 25 pieces of legislation this past legislative year. Redistribution of the society's wealth and assets is more important than the growth and creation of the country's assets.

Government has ownership or control of more than 200 companies. Until recently, Government dominated borrowings in the financial markets, crowding out the private sector. This is likely to change because of the facility extended by the International Monetary Fund for four years, which commenced this month. You must be vigilant, as old habits die hard.

The police are underfunded and inadequately equipped and trained. Crime is loose on the land. We have not made progress on the international rating regarding corruption. As a foreign investor, you will soon come to appreciate that is how the 'runnings go'.

There is a less-than-desirable education outcome, particularly at the early stages. We have few early childhood institutions that meet the internationally accepted benchmark standards. Our companies spend heavily on staff training as the people have the aptitude but not the appropriate early intervention. They are trainable.

Given the above, would you invest in Jamaica? Your thoughts.

Ronald Mason is an attorney-at-law specialising in US immigration. Email feedback to columns@gleanerjm.com and nationsagenda@gmail.com.