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Jamaica News - Real Estate - Finance (May 19, 2004)
Trade, business development should take centre stage in diaspora talks
Final plans are being made for the conference on the Jamaican diaspora to be held in Kingston in mid-June.

Judging by the issues that are to be discussed, the organisers appear to be giving priority to public-service delivery, education, health and business development. Thus, presentations are expected from such local agencies as the Passport Office, the Registrar General's Department, the Titles Office and the Customs Department as the traditional providers of critical services to the overseas communities of Jamaicans.

While these services are in high demand and necessary for the many daily functions related to the lives of Jamaicans at home and abroad, they ought to have become more easily accessible after the significant reforms that were carried out in the 1990s. Furthermore, the advent of electronic communication has made possible 24-hour per day access to information and direct access to these local agencies by people living overseas. While the systems remain dependent on some manual processes, there will, of course, be hitches that will require continuing close monitoring in terms of consumer services. One such area is that of registration of births.

Far greater emphasis, however, needs to be placed on investment services and business development as well as transfer of knowledge and skills in education and health. Over a span of more than 60 years of large-scale migration by Jamaicans to the USA, Canada and the United Kingdom, the economic links with home have been seen through welfare lenses - remittances. And the flow of remittances has risen dramatically in recent years moving from US$170.7 million in 1982 to only US$184.2 million in 1990 but to US$1.36 billion in 2003. It is this flow that has saved us from a gaping hole in our external accounts and that now surpasses the net combined proceeds from bauxite and tourism. Indeed, Jamaica has the highest per capita flows of remittances among the countries of the Latin American and Caribbean region.

This matter of remittances has become so important to our region in recent years that special studies have been undertaken to measure its economic impact, and steps taken to re-orient it to more investment-driven activities. According to one study by the Inter-American Development Bank (IDB) in 2001, US$20 billion per year is transferred to countries in our region and this figure represents roughly five cents in every $1.00 of income earned by migrants in the USA, Japan, Europe and other countries who are from this part of the world.

The value of remittances also had by 2001 exceeded official development assistance to our countries, reached nearly one-third of the foreign direct investment flowing into the region and accounted for at least 10 per cent of GDP in Haiti, Nicaragua, El Salvador, Jamaica, Dominican Republic and Ecuador. The highest level was in Haiti at 17 per cent, with Jamaica at 11.7 per cent and the Dominican Republic at 10 per cent. Some other interesting observations of the IDB study were that remittances were equal to Mexico's tourism revenues and more than two-thirds of its oil exports. In the case of Ecuador, those flows were twice the country's foreign direct investment and three times its revenues from tourism. One of the key challenges identified was that of developing and testing new financial mechanisms to direct a portion of the funds into productive investments.

In the rest of the region especially in those countries from which the bulk of the foreign-born Hispanic population in the USA originates, the challenges also include increased participation of formal financial institutions in the transmission of remittances and lowering of the costs of transactions. Jamaica has made much progress in this respect and hence our focus must be on finding innovative and reliable mechanisms to mobilise remittances as a source of investment capital to a greater extent than now obtains.

Having regard to the regulatory reforms that have been carried out in the financial sector, real estate and the operation of companies, a more predictable environment exists. Combined with the clear investment programme especially in tourism and infrastructure, investors among the Jamaican diaspora are more interested in opportunities for doing business in Jamaica. This changed situation requires that private bodies, which have done a great deal of work among them, become even more creative. But they will need the help of the investment promotion arms of the government, including JAMPRO, which should make this aspect of their work a priority.

As Jamaica is poised for an investment take-off, it is the trade and business development item of the agenda that should take centre stage in a serious discussion with the Jamaican diaspora. This is not to downplay public service delivery or the political and cultural dimensions that are key elements of the relationship, including the economic element. But it is vital that both Jamaicans at home and abroad treat seriously the transforming power of the economic potential waiting to be unleashed.

 


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