Growth prospects for Jamaica, says Ross
Published:Friday | January 28, 2011 | 12:00 AM
Sabrina Gordon, Business Reporter
Carl Ross, managing director of Oppenheimer and Company, believes that the growth prospects for Jamaica and the Caribbean region lies in forging linkages with growing markets, coupled with new financial inflows.
Absent that, Ross does not have a precise outlook on the region's economic prospects.
"The outlook for the Caribbean is mixed," he said. "If you look at it, the linkages are towards the countries that are losing global market share which has a dampening effect; plus higher commodity prices," said the emerging markets expert at the opening session of this year's Jamaica Stock Exchange regional conference on investment and the capital markets.
As for prospects for expansion, said Ross, the islands must "look for marginal growth by forming new linkages with emerging countries such as China and India."
This strategy, although may not immediately result in tourist inflows, it is the next best thing to leverage growth through financial inflows, he said.
The January 25-27 regional conference, its sixth annual staging, examined the impact of the recent economic upheaval and potential for growth under the theme: 'Revival of the fittest'.
A timely theme, remarked Marlene Street-Forrest, general manager of the JSE, who said it cannot be business as usual; now being the time to take advantage of prospective opportunities for growth.
So with emerging markets set to grow at twice the rate of developed countries, gaining more market share in the global GDP pie, the Caribbean should take advantage of these linkages even more now, Ross said.
"This pattern is going to stay with us for a while, as emerging markets gain market share," he said, a sentiment shared by Prime Minister Bruce Golding, who was special guest at the JSE conference.
"We are at a point where we need to change. Every recession has to have a recovery, new opportunity or business and we have to look ahead at what can be discern and start preparing," said Golding, "looking to new markets and broadening out scope and linkages so that we don't continue to tremor."
Reform of the tax system, he suggested, was an important element in that. While the forecast for emerging economies such as India and China are positive and strong, for the developed regions it is weak. The United States, for example, said Ross, is living on borrowed future growth as fiscal stimulus to the economy remains high. The US is Jamaica's largest market.
"They will be stuck in a period of slow growth," said Ross.
Similarly, Europe is in a survival mode with growth centred around 1.5 per cent; still not yet a strong recovery.
Intertwined in the forging of linkages is the access to financing, said Ross.
"The financial market outlook is not bad. We see money going into equities, fixed income, high-yield funds, corporate bonds, anything with spreads; and the Caribbean can take advantage," he said.